THE EFFECT OF PERCEIVED BRAND GLOBALNESS ON BRAND VALUE AND PURCHASE INTENTION

Quản lý thu BHXH

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

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THE EFFECT OF PERCEIVED BRAND GLOBALNESS ON BRAND VALUE AND PURCHASE INTENTION

 

MASTER OF BUSINESS (Honours)

 

Ho Chi Minh City- Year 2014

ACKNOWLEDGEMENTS

 

First of all, I would like to express my deepest appreciation to Dr. Le Nhat Hanh for her professional guidance from the very first day of research till the finishing. Her helpful advices and encouragement during my research preparation are grateful. Without her help, it would have been impossible for me to complete this research.

I would like to send my appreciation to ISB- UEH professors for their expertise and encouragement during the master course. Also thanks for their valuable time for the proposal examination committee. Their comments and suggestions are significant for my research’s complement.

I am also grateful to my MBUS classmates for their knowledge sharing, expertise and spending great moments together. Besides, I want to say thanks for the participants who filled my questionnaires out. The participants donated their precious time to finish the questionnaires and helped me to acquire the data soon.

Last but not least, I would like to express my gratitude to my parents, family members, colleagues and friends for their support and understanding throughout  my post graduate study. Their unconditional love, sympathy and encouragement have made this research and my MBA course possible.

 

ABSTRACT

 

In recent year, together with globalization of the world market, it is important to understand the competition between local and global brands, and whether customers prefer global brands. This study aims to investigate the effects of perceived brand globalness on brand value, which in turns affect customer purchase intention. Brand value is manifested via brand credibility, brand prestige, and brand quality. The conceptual model is tested by using structural equation modeling. 309 consumers who live in from Ho Chi Minh City were recruited as respondents for this research. From statistical analysis, we find that Perceived brand globalness is positive related to both perceived brand quality and perceived brand prestige, which then significantly increase consumer purchase intention. It also shows the critical role of brand credibility in leading to perceived of the quality of any brand. This research provides important implications for developing global brand in Vietnam market and also for local brand.

Key words: Purchase intention, brand globalness, consumer behaviors, brand quality, brand prestige

 

TABLE OF CONTENTS

 

 

ACKNOWLEDGEMENTS ABSTRACT

TABLE OF CONTENTS LIST OF FIGURES LIST OF TABLES

 

CHAPTER 1: INTRODUCTION…………………………………………………………………………… 1

CHAPTER 2: LITERATURE REVIEW…………………………………………………………………. 7

CHAPTER 3: RESEARCH METHODOLOGY……………………………………………………. 17

CHAPTER 4: DATA ANALYSIS……………………………………………………………………….. 24

CHAPTER 5: CONCLUSION, IMPLICATIONS AND LIMITATIONS………………… 38

REFERENCES…………………………………………………………………………………………………… 42

APPENDICES……………………………………………………………………………………………………. 52

Appendix A: Questionaire (English)………………………………………………………………. 52

Appendix B: Questionaire (Vietnamese)……………………………………………………….. 54

 

 

Figure 2.1 Conceptual model                                                                                  16

 

Figure 3.1 Research procedure                                                                               18

 

Figure 4.1 Standardized CFA model in AMOS                                                    29

 

Figure 4.2 Structural Equation Modeling result                                                   32

 

Figure 4.3 Mediator analysis                                                                                  35

 

 

 

 

 

Table 3.1 Source of measurement scale & Questionnaire                              22

Table 4.1 Respondents’ characteristic                                                              25

Table 4.2 Response frequency of brands                                                          26

Table 4.3 Fit statistics of Confirmatory Factor Analysis                                27

Table 4.4 Standardized Regression Weights                                                    28

Table 4.5 Scale accuracy analysis                                                                      30

Table 4.6 Correlation matrix of research constructs                                       31

Table 4.7 Fit statistics of SEM                                                                            32

Table 4.8 Hypothesis testing result                                                                    33

Table 4.9 Summary of hypotheses testing result                                             37

 

 

 

 

CHAPTER 1: INTRODUCTION

 

1.1   Research background

 

In a globalizing world, many international firms have moved from a multilocal to a global branding strategy (Ozsomer & Altaras, 2008; Steenkamp et al., 2003). Due to Ozsomer et al (2012), global branding is understood as firms market their products on a global basis with only limited adaptation to local markets. It standardizes aspects of its brand communication program like name, logo, image, packaging, positioning and consumers in multiple countries consider to be global (Akaka and Alden, 2010). In contrast, local brand is defined as brand that exists only in one country or in a limited geography area (Wolfe, 1991). Many multinational corporations today are altering their brand portfolios in favor of global brands (Steenkamp, Batra and Alden, 2003) which are brands that consumers can find under the same name in multiple countries with generally similar and centrally coordinated marketing strategies (Yip, 1995; Branch, 2001).

Globalness is perceived in mind of consumers and is called perceived brand globalness (Steenkamp, Batra and Alden, 2003). Perceived brand globalness has been researched mostly in the fast-moving consumer goods sections in highly developed countries, whereas the effect on retailer brand equity in emerging countries remains unclear.

In Vietnamese context, many global brands are very successful compare to other local brands. It began from late 1980s when Vietnam opened its market and welcomed foreign investment and trading. Until now, besides agricultural products, food processing products, textile… which are our domestic strengths products, almost other global productions have greater market share compare to the same local brand productions. The research of International Business Publication (2013, p.130) showed that foreign brand have proliferate in Vietnam over the past decade. Vietnamese consumers also remarkably familiar with foreign products even though they are not available in Vietnam due to internet access and contact to their foreign relative living abroad. Vietnamese consumers, especially young people seem to prefer global brand. An assessment of a big fast- food brand in the world McDonald’s stated that “Vietnam has been at the top of McDonald’s list of the next market to open for a very long time” (Maresca, 2014). Another example is the recent event of Starbucks store in Ho Chi Minh City. On the opening day, it attracted a lot of young customers who were willing to stand in long queues and wait for a long time for their chance to sample the ‘new’ coffee (The Saigon Times, 2013). This also is a value example for the readiness of Vietnamese customer toward foreign product.

Actually, there is the challenge for local brands to get their market share and compete with other global brand within local market. But building our local brand value has just been taken care recently. And it seems that Perceived brand globalness is really a new concept that very few Vietnamese brands have been successful in building an image as a global brand. It is the fact that few Vietnamese corporate reaches the level of multinational company. Moreover, to expand their business to an emerging market, retailers need to build the differentiation to distinguish themselves from local competitors in target market. Some reasons for moving toward global brands are yield economies of scale and scope in Research and Development, manufacturing and marketing (Yip, 1995); increases meaningful segments of consumers around the world develop similar needs and tastes (Hassan and Katsanis, 1994); speed up time to market by reducing time-consuming local modifications (Neff, 1999). Almost Vietnamese businessman should find the way to develop their products and increase sales by exporting.

This research will investigate the ways that global brand and perceived brand globalness affects purchase intention, whether the globalness of a brand play a vital role in determining consumer purchase intention. This is significant for foreign brand when penetrating to Vietnamese market. And also for local brands, which are not recognized by foreign market, consider if they want to bring their products abroad.

1.2   Research gap

 

The concept of Perceived brand globalness and the effects of Perceived brand globalness to Purchase intention were investigated by some researchers with different accesses. Most of the empirical study of Steenkamp (2003), Holt (2004), focused on the pathway through Perceived brand quality and perceived brand prestige. Consumer prefers import products due to their superior quality. It was showed that Purchase intention be affected by customer’s perceived brand globalness toward perceive of its higher quality and brand prestige through word of mouth or observation. This pathway is also moderated by Consumer Ethnocentrism, a well-established bias among many consumers in favor of home-grown productions (Shimp & Sharma, 1987). The next trend of accessing this effect is proving the important of customer- based reputation which implies high quality productions and services offered by company, as well as the certainly that it would treat its customers well (Carmeli & Tishler, 2005; Greenwood, Li, Prakash & Deephouse, 2005). Another point of view, perceived brand globalness affects purchase intention by Brand credibility as a mediating variable. If a brand is view as globally available and, thus, there is global acceptance for the product, consumer may perceive the brand is more credibility than local brands (Ozsomer & Altaras, 2008). But there is no other study concentrated on this mediating effect of Brand credibility on the relationship of perceived brand globalness and purchase likelihood. It is just as an integrated conceptual framework as Ozsomer and Altaras (2008) did suppose.

Moreover, the majority of researches have been conducted in developed countries. Actually perceived brand globalness is not meaningful in advanced economic because consumer tends to perceive local product with higher quality than import one (Dickerson, 1982; Herche, 1994). In contrast, with an emerging market, just few researches worked on this concept, and most of them stated that production quality is the most meaningful attribute to consumers due to experiencing the low-quality of local production. However to evaluate the quality of a production is not an easy task (Nguyen, Nguyen & Barrett, 2008). Moreover, Batra and his colleagues (2000) find a direct relationship between the perceived nonlocalness of the brand and attitude toward the brand, where nonlocalness was measured by perceptions of multimarket reach. And other studies focused on direct relation of different factors while in this study, researcher examine the role of Brand credibility as a mediating variable affect customer  purchase intention in transitional market like Vietnam.

Therefore the conceptual model of this study is showed the effect of perceived brand globalness to brand values which includes brand credibility, perceived brand

 

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