Measuring customer- based centers evidence in HoChiMinh City.pdf

Ministry of Education and Training
University of Economics HoChiMinh City
----------------
Nguyễn Thanh Trung
MEASURING CUSTOMER-BASED BRAND EQUITY
OF ENGLISH TRAINING CENTERS:
EVIDENCE IN HOCHIMINH CITY
ECONOMICS MASTER THESIS
HoChiMinh City - 2009

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Ministry of Education and Training
University of Economics HoChiMinh City
----------------
Nguyễn Thanh Trung
MEASURING CUSTOMER-BASED BRAND EQUITY
OF ENGLISH TRAINING CENTERS:
EVIDENCE IN HOCHIMINH CITY
Major: Business Administration
Major Code: 60.34.05
ECONOMICS MASTER THESIS
Supervisor: Dr. Trần Hà Minh Quân
HoChiMinh City - 2009

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Acknowledgement
I would like to express my heartfelt gratitude and deepest appreciation to my
research Supervisor, Dr. Tran Ha Minh Quan for his precious guidance, share of
experience, ceaseless encouragement and highly valuable suggestions throughout the
course of my research.
I would like to extend my sincere thanks to Assistant Prof. Nguyen Dinh Tho, the
chairman of the proposal examination committee and Dr. Vo Thi Quy, member of the
proposal examination committee, for their valuable comments and constructive
suggestions.
My special gratitude is extended to all instructors and staff at Faculty of Business
Administration and Postgraduate Faculty, University of Econimics HoChiMinh City
(UEH) for their support and the valuable knowledge during my study in UEH.
I would also like to avail this opportunity to express my appreciation to Professor
Nguyen Dong Phong and UEH Board of Directors for creating MBA program in English.
Specially, my thanks also go to Lecturer Ms Ly Thi Minh Chau for her comments
of English from early draft of my thesis.
Many thanks to Ms. Dang Hai Yen, Mr. Lam Hong Phong, as well as the other
classmates in MBA class, Batch 16 for their valuable and enthusiastic support for this
research study.
Last but not least, the deepest and most sincere gratitude go to my beloved
parents, my wife, my sons, my nieces, my nephews and my closest friends for their
boundless support, abundant love and encouragement throughout my period of study. I,
therefore, dedicate this work as a gift to them all.

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Abstract
Strong brand equity is significantly correlated with success for English
Training Centers (ETC). In a study 318 respondents gauged the strength of four
ETC brands doing business in HoChiMinh City, Vietnam. The internal
relationship between the individual dimensions of customer-based brand equity
(CBBE) and applicability of the suggested CBBE scale on the ETC industry have
been examined in this study. One unusual finding was that five component
perceived quality scale of Parasuraman (1988) is not applicable. A perceived
quality scale including only two components: tangibles and assurance was
suggested and the assurance component dominated on the relationship to brand
loyalty. One other unusual finding was that although brand equity comprises all
four dimensions being tested, awareness showed the smallest and non-significant
effect on brand loyalty. Dividing the ETCs into high tuition fee group and low
tuition fee group, the researcher found that learners differentiated all four
dimensions of CBBE between the two groups. The most of attributes of
dimensions had significant mean diference, while other attributes did not.
Keywords: brand equity; brand image; brand loyalty; brand awareness;
perceived quality; assurance; tangibles; English training center

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Contents
Acknowledgement......................................................................................................... 1
Abstract.......................................................................................................................... 2
Contents ......................................................................................................................... 3
List of Tables ................................................................................................................. 5
List of Figures................................................................................................................ 6
Chapter 1: Introduction ............................................................................................... 7
1.1 Introduction............................................................................................................... 7
1.2 Research background................................................................................................ 8
1.3 Research questions.................................................................................................. 12
1.4 Scope and Limitation.............................................................................................. 14
1.5 Research method..................................................................................................... 15
1.6 Implications of research.......................................................................................... 16
1.7 Structure of the study.............................................................................................. 17
Chapter 2. Literature Review.................................................................................... 19
2.1 Introduction............................................................................................................. 19
2.2 Branding.................................................................................................................. 20
2.3 Brand equity............................................................................................................ 22
2.3.1 Aaker’s conceptualization of brand equity ..................................................... 26
2.3.2 Keller’s conceptualization of brand equity..................................................... 28
2.4 The measurement of Customer-Based Brand Equity.............................................. 30
2.4.1 Brand awareness ............................................................................................. 31
2.4.2 Brand image.................................................................................................... 32
2.4.3 Brand loyalty................................................................................................... 33
2.4.4 Perceived quality............................................................................................. 33
2.5 Relationships between brand loyalty and other dimensions of CBBE ................... 34
2.6 Summary................................................................................................................. 36
Chapter 3. Methodology............................................................................................. 38
3.1 Introduction............................................................................................................. 38
3.2 Research design ...................................................................................................... 40
3.3 Generation items..................................................................................................... 42
3.3.1 Introduction..................................................................................................... 42
3.3.2 Operationalization of measures....................................................................... 43
3.4 Preliminary study.................................................................................................... 46
3.5 Main study .............................................................................................................. 50
3.5.1 Sample design ................................................................................................. 50
3.5.2 Survey method ................................................................................................ 53

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3.5.3 Data analysis techniques................................................................................. 53
3.6 Conclusion .............................................................................................................. 54
Chapter 4. Research results ....................................................................................... 55
4.1 Introduction............................................................................................................. 55
4.2 Descriptive statistics of sample............................................................................... 56
4.2.1 Final sample.................................................................................................... 56
4.2.2 Characteristics of sample................................................................................ 56
4.2.3 Descriptive statistics ....................................................................................... 58
4.3 The construct measurement scales.......................................................................... 61
4.4 The assessment of customer-based ETC brand equity construct............................ 70
4.5 The assessment of the hypotheses........................................................................... 71
4.5.1 Brand equity rating ......................................................................................... 71
4.5.2 Testing hypotheses.......................................................................................... 72
Chapter 5. Conclusion and Implication.................................................................... 85
5.1 Introduction............................................................................................................. 85
5.2 Conclusions from the research questions................................................................ 87
5.3 Discussion of the research findings ........................................................................ 92
5.4 Contributions of the research findings.................................................................... 94
5.4.1 Theoretical contribution.................................................................................. 94
5.4.2 Methodological contribution........................................................................... 96
5.5 Implications of the research.................................................................................... 97
5.6 Limitations of the research and further research..................................................... 99
5.7 Conclusion .............................................................................................................. 99
List of References...................................................................................................... 101
Appendix 1................................................................................................................. 106

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List of Tables
Table 1. 1 The structure of the study ................................................................................ 18
Table 2. 1 Summary of hypotheses................................................................................... 37
Table 3. 1 Research questions and research hypotheses................................................... 38
Table 3. 2 Measures of brand loyalty................................................................................ 43
Table 3. 3 Measures of brand image................................................................................. 44
Table 3. 4 Measures of brand awareness .......................................................................... 44
Table 3. 5 Measures of perceived quality......................................................................... 45
Table 3. 6 The demographical status of participants ........................................................ 47
Table 3. 7 The final questionnaire .................................................................................... 48
Table 4. 1 Response frequency of each brand .................................................................. 56
Table 4. 2 Characteristics of respondents ......................................................................... 57
Table 4. 3 Descriptive statistics ........................................................................................ 58
Table 4. 4 The result of EFA test with 31 items............................................................... 65
Table 4. 5 The result of EFA with 29 items...................................................................... 66
Table 4. 6 The structure matrix of five factors ................................................................. 67
Table 4. 7 Results of reliability test and EFA test for construct measurement scales...... 68
Table 4. 8 Final construct measurement scales................................................................. 69
Table 4. 9 Dimensions of Brand Equity Structure............................................................ 70
Table 4. 10 Brand equity rating ........................................................................................ 71
Table 4. 11 Brand equity ranking ..................................................................................... 72
Table 4. 12 The correlations among the dimensions of brand equity............................... 73
Table 4. 13 The results of linear regression analysis........................................................ 74
Table 4. 14 The t-test analysis results of four dimensions of brand equity ...................... 77
Table 4. 15 Mean differences of brand awareness between high- and low-tuition ETCs 79
Table 4. 16 Mean differences of tangibles component between high- and low-tuition
ETCs ................................................................................................................................. 80
Table 4. 17 Mean differences of assurance component between high- and low-tuition
ETCs ................................................................................................................................. 81
Table 4. 18 Mean differences of brand image between high- and low-tuition ETCs....... 82
Table 4. 19 Mean differences of brand loyalty between high- and low-tuition ETCs...... 83
Table 4. 20 The summary of the attributes having significant mean differences............. 83
Table 4. 21 The attributes having significant mean differences between two groups...... 84
Table 5. 1 Summary of testing results of hypotheses 4, 5, 6, and 7.................................. 90
Table 5. 2 The summary of the attributes having significant mean differences............... 91
Table 5. 3 Summary of testing result of hypothesis 8....................................................... 91
Table 5. 4 Summary of hypotheses testing results............................................................ 92

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List of Figures
Figure 1. 1 Structure of chapter 1 ....................................................................................... 7
Figure 1. 2 The model of the relationship between brand loyalty and the other dimensions
........................................................................................................................................... 13
Figure 2. 1 The structure of chapter 2............................................................................... 19
Figure 2. 2 The relationship between product and brand.................................................. 22
Figure 2. 3 Two approaches to brand equity..................................................................... 24
Figure 2. 4 How Brand Equity Generates Value (Aaker 1996)........................................ 27
Figure 2. 5 Dimensions of brand knowledge (Kevin Lane Keller 1993).......................... 29
Figure 2. 6 The conceptual model of customer-based brand equity................................. 31
Figure 2. 7 The relationship between brand loyalty and other dimensions ...................... 36
Figure 3. 2 Research process ............................................................................................ 41
Figure 3. 3 Brand selection............................................................................................... 51
Figure 4. 2 Sex of respondents.......................................................................................... 57
Figure 4. 3 Age of respondents......................................................................................... 58
Figure 4. 4 The first stage of the assessment of the construct measurement scales ......... 63
Figure 4. 5 The revised model of the relationship between brand loyalty and the other
dimensions of brand equity............................................................................................... 76
Figure 5. 1 Structure of chapter 5 ..................................................................................... 86
Figure 5. 2 The results of linear regression analysis between brand loyalty and the other
dimensions ....................................................................................................................... 88
Figure 5. 3 The revised model of relationship between brand loyalty and the other
dimensions ........................................................................................................................ 89

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Chapter 1: Introduction
1.1 Introduction
This chapter provides a general introduction for the current study, by
drawing a general picture of the following chapters and the study as a whole,
beginning with a general introduction in section 1.1. Section 1.2 examines the
research background, in which the gaps in the empirical studies on branding
strategies are identified. Section 1.3 defines the research questions and lists the
research hypotheses.
In addition, section 1.4 discusses scope and some limitations of the current
study. Section 1.5 briefly discusses the general aspects of research methodology
such as research types and research design.
Section 1.6 provides implications of this study. Section 1.7 introduces the
structure of the study. The structure of chapter 1 is provided in Figure 1.1.
Figure 1. 1 Structure of chapter 1
1.1 Introduction
1.2 Research background
1.3 Research questions
1.4 Scope and limitations
1.5 Methodology
1.6 Implications of the study
1.7 Structure of the study

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1.2 Research background
Branding and brand equity have been topics of interest to marketing
researchers for many years (Krishnan & Hartline 2001). Traditionally, branding
has been focused on tangible products, but in recent decades the focus has
expanded to also include branding of services. Although branding of services
has started to develop, this has not kept pace with the growth of the service
sector overall. The growth of the service sector has led to increased competition
where brand has become an important tool for gaining competitive advantages.
Branding plays a special role in service companies because strong brands increase
customers’ trust of the invisible purchase. A strong service brand is essentially a
promise of future satisfaction (Berry 2000). Some researchers have also argued
that branding is more critical for services than for goods (Krishnan & Hartline
2001; Brady et al. 2005). A strong brand can help to reduce the risks associated
with the purchase and consumption of many services. Other advantages of a
strong brand are for example that it creates better margins by adding value to the
service, builds stable long-term demand and increases market share.
Consequently, a strong brand offers many advantages in the service industry
and when evaluating the strength of the brand, the concept of brand equity is
used.
Researchers have defined brand equity variously introducing different
viewpoints, but there seems to be a basic agreement on the concept of brand
equity. All these definitions imply that brand equity is the incremental value of a
product due to the brand name (Kim et al. 2003). Brand equity research in
marketing has largely concentrated on customer perception (Kim et al. 2008).
Keller (1993) defined customer-based brand equity as “the differential effect of
brand knowledge on consumer response to the marketing of the brand”. Brand
equity is a multidimensional concept (Aaker 1996a). Nowadays, it is no longer
enough to brand a product just using its name, it is important that all the

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dimensions of brand equity are used in a consistent way in the marketing of the
product. An understanding of the brand equity dimensions/sources offers
managers valuable insights into how brands endow value to the customers and the
firm (Balaji 2009). Therefore the understanding about the extent of the
contribution of each dimension to the brand equity of some industry is vital for
brand managers to create sustainable competitive advantages in today’s
competitive business environment through marketing strategies.
On the other hand, a business is considered successful when that business
reaches its goals in terms of revenue, market share, and brand equity. The results
are usually created through customers’ brand loyalty. Loyalty is the core of brand
equity (Aaker 1996b). When customers are loyal to a brand for a product category,
it would be expected that they would purchase the same brand of that product
category on each purchase occasion. Managers have also rediscovered that the best
kind of loyalty is brand loyalty, not price loyalty or bargain loyalty, even though
as a first step it is useful to create behavioral barriers to exit (Kapferer 2008). It is
well known that it is much more expensive to gain new customers than to keep
existing ones, especially when the existing customer base is satisfied and loyal.
Moreover, loyal customers tend to provide brand exposure to new customers
through “mouth to mouth” communication. Thus, brand loyalty creates value to
the firm by reducing the marketing expenditure, creating strong brand affiliation
and influences others through word-of-mouth (Balaji 2009). According to
Moisescu (2006), a high degree of loyalty among customers provides the firm with
a series of specific competitive advantages, loyalty having a strong positive effect
in two main directions, reducing marketing cost and increasing the brand’s
revenue. Still, brand loyalty can’t be analysed without considering its relationship
to other descriptive dimensions of brand equity like awareness, perceived quality,
or associations (Moisescu 2006). Loyalty is of sufficient importance that other
measures, such as perceived quality and associations, can often be evaluated based

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on their ability to influence it (Aaker 1996b). Thus, it is necessary to empirically
examine the linkages between the brand loyalty and the other dimensions of brand
equity.
Along that line, in fact, brand equity is recently considered one of the top
issues in the English training industry. Most English Training Center (ETC)
chains have recognizable brand identifiers. For an ETC brand name and what the
brand represents are the most important assets, if managed appropriately, branding
augments ETC’s competitive advantage. Beyond visible and tangible factors,
inside attributes, i.e., the meaning of brand is very important to ETCs’ success
because strong brands usually provide primary points of differentiation between
various competitors for learners’ making choice of centers. Learners, especially
new ones, are confused because of the plethora of brands available to them such
as British Council, International Languages Association (ILA), Apollo, Vietnam –
United States Society (VUS), A Au, Dong Au, Viet Uc, Viet My, Au Viet My, Duong
Minh, Space, London, Alpha, etc. Products and services of ETCs do not inherently
have differentiation and channels of distribution are not distinctiveness, learners
usually only have price and brand equity to differentiate one brand from its
competitors. In the absence of strong brands, the only remaining ongoing
marketing mechanism is price manipulation, usually in the form of discounting
(Kim & Kim 2004). Indeed, ETCs’ essential marketing activities are mostly price
promotions such as studying again without tuition fee if examination failure,
concessions for students, seasonal discount, etc. resulting in persistent price wars
that have declined profit and destroyed brand loyalty. On the contrary, the efforts
of establishing brand equity might be the key to building brand value and making
profit not only for ETCs but also for learners. Therefore, an ETC that is managing
brand equity more successfully is likely to maintain its competitive advantage.
Strong brands enable customers to better visualize and understand intangible
products (Berry 2000). In other words, branding would increase ETCs’ attraction

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to learners. For a brand to be strong, the set of perceptions which serve to
differentiate the product from competition has to be created in a way so that
the learners think of the brand in positive terms. ETCs are now interested in
building strong brand, but achieving that goal is not always easy.
Moisescu (2006) suggests that a successful brand strategy must be based on
creating brand loyalty. When learners are loyal to ETC, it would be expected that
they will attend next class of higher level after finishing present class. They would
also recommend the ETC at which they are studying to others time after time, if
possible. For achieving this goal, loyalty’s relationship to other descriptive
dimensions of brand equity must be clearly set out, while target consumers must
be classified on a loyalty basis (Moisescu 2006). In addition, the estimation of the
contribution of each dimension to brand equity allows ETCs to identify their
brand’s positioning relative to competitors, to strengthen brand value, and to build
up corrective marketing strategies if necessary. Consequently, effective marketing
programs on branding cultivate customers’ confidence, which induces customers’
loyalty and their willingness to pay a premium price for the brand (Kim & Kim
2004).
In summary, the particular interest is given to ETCs now because the
quantity of ETCs has been strongly increasing, resulting in even fiercer
competition among existing brands of this segment. ETCs’ brand managers should
know customers’ perceptions to the brand and cultivate customers’ thinking of the
brand in positive terms through suitable marketing activities of branding.
However, not many studies have investigated the relationships among the brand
equity dimensions and their impact on brand equity (Balaji 2009). Thus, by
adopting the customer-based brand equity approach this study is designed to
investigate the differences between high tuition fee ETCs and low tuition fee
ETCs with respect to brand loyalty, brand awareness, perceived quality, and brand

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image as well as the relationship between brand loyalty and the other dimensions
of brand equity.
1.3 Research questions
As above discussed, the current research intends to address three main
issues:
Q1. Is there a relationship between brand loyalty and the other dimensions
of CBBE in the system of English training industry?
Q2. Is there any difference of the brand loyalty, brand awareness, perceived
quality, and brand image of CBBE between high tuition fee ETCs and
low tuition fee ETCs?
Q3. Is there any difference of individual attributes of brand loyalty, brand
awareness, perceived quality, and brand image between high tuition fee
ETCs and low tuition fee ETCs?
Due to the problem of a lack of empirical studies on brand equity in the
education and training industry, based on the review of CBBE theory, it is argued
here that the application of Aaker’s model of customer-based brand equity is the
suitable solution. In the present study, the four key components of CBBE are
indicated as: brand awareness, perceived quality, brand image and brand loyalty.
The first research question addresses the issue of whether there is the effect of
brand awareness, perceived quality and brand image on brand loyalty that can be
used as the foundation and guidance for enhancing target customers’ satisfaction
and making customers’ responsiveness to ETC’s marketing activities positive, in
turn inducing customers’ loyalty.
These three dimensions of brand equity are proposed as being positively
related to brand loyalty in the English training industry. Three hypotheses have

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been developed to investigate the relationship among these four components as
shown in hypotheses H1, H2 and H3.
H1: Brand awareness is positively related to brand loyalty.
H2: Perceived quality is positively related to brand loyalty.
H3: Brand image is positively related to brand loyalty.
These three hypotheses are conceptualized into the model as described in
Figure 1.2
Figure 1. 2 The model of the relationship between brand loyalty and the other
dimensions
The second research question addresses the issue of whether there is the
difference of brand awareness, perceived quality, brand image and brand loyalty
of brand equity respectively between high tuition fee ETCs and low tuition fee
ones that can serve as the foundation and reference for building sustainable
marketing strategies to create brand equity.
Four hypotheses have been developed as follows:
+H2
+H3
+H1
Brand
Loyalty
Perceived
Quality
Brand
Awareness
Brand
Image

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H4: There is the difference of brand awareness of CBBE between high
tuition fee ETCs and low tuition fee ETCs.
H5: There is the difference of perceived quality of CBBE between high
H6: There is the difference of brand image of CBBE between high tuition
fee ETCs and low tuition fee ETCs.
H7: There is the difference of brand loyalty of CBBE between high tuition
The third research question addresses the issue of whether there is the
difference of the attributes of brand awareness, perceived quality, brand image and
brand loyalty respectively between high tuition fee ETCs and low tuition fee ones
that helps managers plan appropriate marketing tactics to create brand equity.
Hypothesis 8 was proposed as follows:
H8: There is the difference of the attributes of the dimensions of CBBE
between high tuition fee ETCs and low tuition fee ETCs.
1.4 Scope and Limitation
This study is conducted with only four brands of ETC chains in
HoChiMinh city. A further research with many more brands and larger scope of
whole country is really necessary to precisely assess the scale and measure brand
equity in education and training industry. On the other hand, researches spreading
on other kinds of education and training industry allow managers to have insights
into the environment that they operate in the terms of marketing. Moreover,
confirmatory factor analysis should be employed to address the issues of
dimensionality, convergent and discriminant validity.

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1.5 Research method
In choosing a research design, Zikmund (1997) discusses three types of
business research: exploratory, descriptive and causal research.
• Exploratory research is usually conducted to clarify and define the
nature of a problem.
• Descriptive research is designed to describe characteristics of a
population or phenomenon.
• Causal research is conducted to identify cause-and-effect relationships
among variables where the research problem has already been narrowly
defined.
Choosing a type of research depends upon the research questions that the
researcher wants to answer. This research study is designed to measure ETCs’
brand equity, evaluate the differences between high tuition fee ETCs and low
tuition fee ETCs in the contribution of individual attributes to the brand equity.
Thus, “descriptive” is viewed as an appropriate research type. Also, this research
is designed to identify the cause-and-effect relationships between the other
dimensions of brand equity and brand loyalty. Thus causal research is also
implemented in combination with descriptive research. In summary, a
combination of descriptive and causal research is chosen for this research.
Selecting research design is the next step after choosing type of research.
There are four types of research design from which to select: survey, experiments,
observation and secondary data (Zikmund 1997). Selection of research design is
based on the advantages and disadvantages of each kind of research designs and
circumstances in which the research problem is defined. In this research, survey
method is used. The reason for choosing the survey method is that surveys provide
a quick, efficient and accurate means of assessing information on a population,
especially in the case of a lack of secondary data (Zikmund 1997). In this case,

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quantitative methods are applied to examine the research questions, using a survey
questionnaire as the tool to measure brand equity and its attributes. Convenience
sampling is used in this research and data is collected using face-to-face interview,
conducted by trained interviewers.
Most foreign languages centers in Vietnam, especially in English language,
are established in a chain and primarily located in HoChiMinh city and HaNoi
capital. In addition, the English language is chosen for investigation, as this is one
of the most popular foreign languages distributed throughout foreign language
training sector. In summary, this study focuses on chains of English Training
Centers in HoChiMinh city. Finally, the data is analyzed using the SPSS Version
16 software program.
1.6 Implications of research
The study brings various practical meanings for the managers in education
and training industry, educators as well as researchers in marketing concretely as
follows:
Firstly, the results of this research aid ETCs to deeply understand the
concept of customer-based brand equity and its dimensions in the context of
service in general and training foreign languages in particular, resulting in
managers’ profound knowledge in designing of marketing programs for building
and broadcasting their brands effectively.
Secondly, the research suggests the construct scales to measure customer-
based brand equity in English training industry to aid checking the brand health.
Thirdly, the findings allow the executives of ETCs to identify important
dimensions of brand equity to set up the suitable activities for improving perceived
quality, brand awareness and brand image, resulting in creating and maintaining
loyalty of learners.

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Fourthly, by dividing the ETCs into high-tuition fee and low-tuition fee
groups, the study identifies dimensions and their attributes that learners
differentiate between the two groups in order to help ETC brand managers build
respective marketing programs.
Fifthly, the results of this research contribute complementarily to the
literature on brand equity on the world. The research is able to be a reference for
researchers, lecturers, and students in marketing and management, in Vietnam and
on the world of brand equity as well as the role of loyalty in Vietnam market.
Finally, the present study could be a reference of research methodology not
only in marketing and management in particular but also the other social sciences.
1.7 Structure of the study
This research is structured into 5 chapters. Chapter 1: Introduction
introduces the research including research background, research questions,
hypotheses, a brief research methodology overview, implications and limitations
of research. Chapter 2: Literature Review provides a literature review of
customer-based brand equity. Chapter 3: Methodology discusses methodology
utilized in the research, details the research methodology design, research
procedures and justification of the data analysis. Chapter 3 also supplies details of
questionnaire and the development of the survey. Chapter 4: Research Results
describes sampling and processing data, presents analyzing the data collected and
the findings of the research. Chapter 5: Conclusion and Implication points out
conclusion and implication from the findings of this research project, based on the
research questions and hypotheses. This chapter also discusses the implications,
contributions and limitations of the research in the world of business
administration. In addition, the recommendations for further research are provided.

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Table 1. 1 The structure of the study
Chapter 1 Introduction
Chapter 2 Literature Review
Chapter 3 Methodology
Chapter 4 Research Results
Chapter 5 Conclusion and Implication

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Chapter 2. Literature Review
2.1 Introduction
This chapter provides a literature review for the current study, by
mentioning the history of the development of brand as well as previous researches
relative to branding and brand equity in aspect of customers, beginning with a
general introduction in section 2.1. Section 2.2 examines the branding, in which
the relationship between brand and product is identified. Section 2.3
conceptualizes the construct as customer-based brand equity. Section 2.4 provides
previous researches on scales of brand equity, especially the scale of perceived
quality. Then, section 2.5, by the discussion on relationships among dimensions of
customer-based brand equity from the individual customer perspective indicates
the key relationships that support to create brand equity. Finally, section 2.6
provides a summary. The structure of chapter 2 is provided in Figure 2.1.
Figure 2. 1 The structure of chapter 2
2.1 Introduction
2.2 Branding
2.3 Brand equity
2.4 The measurement of customer-based
brand equity
2.5 Relationships among four dimensions of
CBBE
2.6 Summary

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2.2 Branding
Nowadays brand plays a necessarily important role so that it is too difficult
to find out any product without brand. Building a strong brand has been shown to
provide numerous financial rewards to firms, and has become a top priority for
many organizations (Keller 2001). Producers have recognized the importance of
brand and are pleasured to pay a large amount of money to build their brands into
famous ones. Brand has experienced changes in terms of meaning.
Branding has been around for centuries as a means to distinguish the goods
of one producer from those of another. Originally, brand is considered a
component of the product to which it is added. According to the American
Marketing Association, a brand is a name, term, sign, symbol, or design, or a
combination of them, intended to identify the goods or services of one seller or
group of sellers and to differentiate them from those of competitors (Keller 1998).
Kotler et al. (2007) elaborated that brands facilitate the identification of products,
services and businesses as well as differentiate them from the competition. They
protect both the customer and the product from imitation of product.
The meaning of brand does not stay at the sphere while market conditions
have changed. The 1980s marked a turning point in the meaning of brands.
Management came to realize that the principal asset of a company was in fact its
brand names (Kapferer 2008). The additional cash flows emerge as the result of
customers’ willingness to buy one brand more than its competitors’, even when
another brand is cheaper because of the beliefs and bonds that are created over
time in their minds through the marketing of the brand. Brand building can
therefore be regarded as part of a company’s capital investment and, as a
consequence, it has been argued that brands should be treated as intangible fixed
asset for financial accounting purposes (Hankinson et al. 1993). Brands have
financial value because they have created assets in the minds and hearts of

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customers, distributors, prescribes opinion leaders (Kapferer 2008). They are an
effective and compelling means to communicate the benefits and value a product
or service can provide. They are a guarantee of quality, origin, and performance,
thereby increasing the perceived value to the customer and reducing the risk and
complexity involved in the buying decisions. On the other hand, according to
Kapferer (2008), in our materialistic societies, people want to give meaning to
their consumption. Only brands that add value to the product and tell a story about
its buyers, or situate their consumption in a ladder of immaterial values, can
provide this meaning. Therefore, a brand is a perceptual entity that is rooted in
reality but reflects the perceptions and perhaps even the idiosyncrasies of
consumers (Keller 1998). A brand is a product or service made distinctive by its
positioning relative to the competition and by its personality (Hankinson et al.
1993). Thus, the term “brand” has multiple meanings and is not only an actual
product, but also the unique property of a specific owner (Kim et al. 2003).
According to Kim et al. (2003), brand has been developed over time so as to
embrace a set of tangible and intangible attributes that appropriately differentiate
products. Arun Sinha, Chief Marketing Officer of Pitney Bowes, said that a brand
is more than a product – it’s shorthand that summarizes a person’s feelings
forward to a business or a product (Kotler et al. 2007). Similarly, Ojasalo (2008)
asserted that brand is the promise for the customer and a bundle of attributes that
someone buys that provides satisfaction. These attributes may be real or illusory,
rational or emotional, tangible or invisible. It means that the product is only one
attribute of the brand that customers decide to buy a product based on their
recognition of the brand rather than reality of the product. Brand has grown up and
covered the product to which it had been added before. In other words, the
relationship between product and brand has changed and is described in Figure 2.2
below.

22
Figure 2. 2 The relationship between product and brand
In summary, brands today play a number of important roles that improve
consumers' lives and enhance the financial value of firms (Kotler et al. 2006). As
economies become global and information more critical, intangible assets have
replaced tangibles as a major source of shareholder value. Of these intangibles,
brands are often the most valuable assets, accounting for approximately one third
of the value of today's Fortune 500 companies (Millward Brown Optimor 2007).
According to Kapferer (2008), brands are one of very few strategic assets
available to a company that can provide a long-lasting competitive advantage.
2.3 Brand equity
Although branding has a long history and brand management practices have
existed for decades, brand equity as a central business concept for many
organizations has only really emerged in the past 20 years (Leone et al. 2006). In
1980s, during the boom of the mergers and acquisitions, the purchase price which
was paid for many firms was higher than book value. By paying very high prices
for companies with brands, buyers are actually purchasing positions in the minds
of potential consumers (Kapferer 2008). It clearly proves that the price includes
value of their brands. The clear implication of these transactions was that brands
were one of the most important intangible assets of a firm (Leone et al. 2006).
Heineken is a case in point. The value of Heineken company is not solely in
knowing how to brew beer; it is that people all over the world want to drink
Heineken. Brand equity is important due to the quality-laden informational content
Brand
Product
Brand Product

23
that it provides when customers process information about a particular product
(Krishnan 2001).
There has been a large amount of published research focused on
conceptualizing the construct of brand equity. According to Keller (1993), there
have been two general motivations for studying brand equity. One is a financially
based motivation to estimate the value of a brand more precisely for accounting
purposes or for merger or acquisition purposes. Several different methods of
brand valuation have been suggested for this approach. For example, a subjective
multiplier of brand profits based on the brand’s performance along seven
dimensions: leadership, stability, market stability, internationality, trend, support,
and protection has been used by Interbrand Group. In Simon and Sullivan’s study,
by decomposing the value of intangible assets, which is one of the components of
the market value of the firm along with tangible assets, brand equity was estimated
based on the financial market value of the firm (Kim et al. 2008).
A second reason for studying brand equity originates from a strategy-based
motivation to improve marketing productivity. All the marketing dollars spent
each year on products and services should be thought of as investments in
consumer brand knowledge (Kotler et al. 2006). Given strict competition, it is a
critical constraint to increase the efficiency of marketing expenses. In other
words, marketers have to improve their marketing activities. As a consequence,
marketers need a more thorough understanding of consumer behavior as a basis
for making better strategic decisions about target market definition and product
positioning, as well as better tactical decisions about specific marketing mix
actions (Keller 1993). Understanding customer brand knowledge – all the
different things that become linked to the brand in the minds of customers – is
thus of paramount importance because it is the foundation of brand equity (Kotler
et al. 2006). The relationship between the consumer and the brand, or more
precisely the customer’s perception of that brand, is the key to the brand’s

24
acceptance (Hankinson 1993). Perhaps a firm’s most valuable asset for
improving marketing productivity is the knowledge that has been created about
the brand in consumers’ minds from the firm’s investment in previous marketing
programs (Keller 1993).
Figure 2. 3 Two approaches to brand equity
Hence with different motivations brand equity has been examined from two
different approaches: financial-based approach and customer-based approach,
respectively (Figure 2.3). The financial approach focuses on financial values such
as potential earning, market value, and replaces cost, whereas the customer brand
equity emphasizes customers’ mindset such as awareness, perceived quality,
attitudes, preferences, attachments, and loyalty (Kim et al. 2008). According to
Kim et al. (2008), although a financial approach may provide a more precise
insight into the valuation of brand, it may not be useful for brand managers to
establish marketing strategies because financial approach is only limited to a
brand’s value estimation. The customer-based brand equity approach is more
practical in a sense that the information offers a strategic vision of customer
behavior and managers can develop brand strategies accordingly. The present
study will not deal with the financial perspective, and the expressions customer-
based brand equity and brand equity will therefore be used interchangeable.
In the customer-based approach, brand equity pertaining to goods has been
well researched in the marketing literature (Kim & Kim 2004). According to
Kotler et al. (2006), brand equity is the added value endowed to products and
Brand equity
Customer-based approach
Financial-based approach

25
services. He says that this value may be reflected in how consumers think, feel,
and act with respect to the brand, as well as the prices, market share, and
profitability that the brand commands for the firm. Not only Kotler et al., but also
many other researchers discuss about the field of branding and customer-based
brand equity. They suggest many different definitions for a number of different
purposes and also share in general meaning that the power of a brand lies in the
minds of consumers and what they have experienced, learned, and felt about the
brand over time. They all acknowledge that there exist many different ways that
value can be created for a brand; that brand equity provided a common
denominator for interpreting marketing strategies and assessing the value of a
brand; and that there exist many different ways that the value of a brand can be
manifested or exploited to benefit the firm (Keller 1998).
According to the Ph.D. thesis of Quan (2006) at the Southern Cross
University, Australia, brand equity can be viewed from two main approaches:
economics and customer psychology. From the economic perspective, the role of
credibility is viewed as a source of equity from an individual consumer. Based on
the assumption of the imperfect and asymmetrical information structure of
markets, brands are used to inform customers about a product’s position and to
signal that the product’s claims are credible. In addition to the economic
perspective, the second perspective based on theories of consumer psychology
frequently adopts associative network memory models to develop theories and
hypotheses. Brand is seen as a node in memory, linked with different associations
of varying strengths, leading to the strength of attitude towards the brand. In other
words, brand equity is a function of associations that have been built and nurtured
in the customer’s mind. This customer psychology approach has dominated the
branding literature. Even though a consensus definition and measurement has not
yet been reached, some models have been widely accepted among academics and
practitioners, such as the brand equity theories of Aaker (1991) and Keller (1993).

26
Therefore, following here we introduce Aaker’s and Keller’s definition of brand
equity that is the literature base of this study.
2.3.1 Aaker’s conceptualization of brand equity
According to Aaker (1996), brand equity is a set of assets (and liabilities)
linked to a brand’s name and symbol that adds to (or subtracts from) the value
provided by a product or service to a firm and/or that firm’s customers. The major
asset categories are (a) brand name awareness, (b) brand loyalty, (c) perceived
quality, (d) brand associations. As the definition indicates, first, brand equity is a
set of assets; second, each brand equity asset creates value in a variety of very
different ways; third, brand equity creates value for the customer via enhanced
information processing, purchase decision confidence, and increased use
satisfaction as well as the firm via effectiveness of marketing programs, brand
loyalty, price premiums, favorable environment for brand extensions, etc.; finally,
for assets or liabilities to underline brand equity, they must be linked to the name
and symbol of the brand, if the brand’s name or symbols should change, some or
all of the assets or liabilities could be affected and even lost, although some might
be shifted to the new name and symbol. The following figure will clearly illustrate
the Aaker’s definition and how brand equity generates value. Note that a fifth
category of assets, other proprietary assets (e.g., patents, trademarks, and
channel relationships) is included for completeness in the Figure 2.4.
Other researchers identify similar dimensions (Yoo et al. 2000). Yoo and
Donthu argued that customer-based brand equity represents a measurement of
“cognitive and behavioral brand equity” through a customer survey. The fifth
component of Aaker’s definition is not relevant to consumer perception; therefore
only the first four dimensions should be regarded as customer-based brand equity
(Kim et al. 2008). In empirical studies, Aaker’s conceptual definition has
usually been used to examine and operationally measure brand equity (Cobb-

27
Walgren et al. 1995; Kim & Kim 2004; Washburn & Plank 2002; Yoo et al.
2000).
Figure 2. 4 How Brand Equity Generates Value (Aaker 1996)
Brand
Equity
Brand
Loyalty
Brand
Awareness
Perceived
Quality
Brand
Associations
Other Priority
Brand Assets Competitive Advantage
Help process/ Retrieve
Information
Reason-to-buy
Create positive
attitude/feelings
Extensions
Anchor to which other
associations can be attached
Familiarity-Liking
Signal of
substance/commitment
Brand to be considered
Reason-to-buy
Differentiate/ Position
Price
Channel member interest
Extensions
Provide value to
customer by
enhancing
customer’s:
- interpretation/
processing of
information
- confidence in the
purchase decision
- use satisfaction
Provide value to
firm by enhancing:
- efficiency and
effectiveness of
marketing
programs
- brand loyalty
- Prices/ margins
- brand extensions
- trade leverage
- competitive
advantage
Reduced marketing costs
Trade leverage
Attracting new customers
Time to respond to
competitive threats

28
2.3.2 Keller’s conceptualization of brand equity
Similarly, Keller (1993) defined customer-based brand equity as the
differential effect of brand knowledge on customer response to the marketing of
the brand. According to this view, the premise of the customer-based brand equity
is that the power of a brand is in what resides in the minds of customers (Kim &
Kim 2004). Keller asserted the importance of understanding brand equity from the
customer’s perspective, noting that though the eventual goal of any marketing
program is to increase sales, it is first necessary for consumers to respond
favorably to marketing activities for the brand (Kim et al. 2008). According to
Keller (1993), understanding brand knowledge is important to be able to affect
both the customer’s perception of a brand and the response to a certain
marketing activity. For his part, he suggests brand knowledge framework with
two dimensions described in Figure 2.5 that the first dimension of brand
knowledge, brand awareness, is linked to the customer’s ability to identify the
brand under different circumstances. The second dimension of brand
knowledge is brand image, which is defined as perceptions about a brand
as reflected by the brand associations held in consumer memory. These
associations contain brand meaning to the customers, and it is the strength,
uniqueness and favorability of these that play an important role in the customer’s
response to different marketing activities. The brand image consists of three
categories of associations: attributes, benefits and attitudes.
Attributes are those descriptive features that characterize a product or
service, such as what a consumer thinks the product or service is or has and what
is involved with its purchase or consumption. Attributes can be categorized in a
variety of ways, for example according to how directly they relate to product or
service performance: product –related attributes and non-product-related
attributes.

29
The second main type of associations is benefits. Benefits are the personal
value and meaning that consumers attach to the product or service attributes –
what consumers think the product and service can do for them and what it
represents more broadly. Benefits can be further distinguished into three
categories according to the underlying motivations to which they relate: functional
benefits, symbolic benefits, and experiential benefits.
Figure 2. 5 Dimensions of brand knowledge (Kevin Lane Keller 1993)
The last type is the most abstract and highest-level type of brand
associations. Brand attitudes are defined in terms of consumers’ overall
evaluations of a brand. Brand attitudes are important because they often form the

30
basis for actions and behavior that consumers take with the brand (e.g., brand
choice). Consumers’ brand attitudes generally depend on specific considerations
concerning the attributes and benefits of the brand.
In general, most marketing observers agree that customer-based brand
equity is a multidimensional construct including some common components such
as brand image, brand awareness, perceived quality, and brand loyalty and is
defined in terms of marketing effects uniquely attributable to the brand. Customer-
based brand equity occurs when the customer is familiar with the brand and holds
some favorable, strong and unique brand associations in memory (Keller 1993). A
brand is said to have positive customer-based brand equity when customers react
more favorably to a product and the way it is marketed when the brand is
identified as compared to when it is not. On the other hand, a brand is said to have
negative customer-based brand equity if consumers react less favorably to
marketing activity for the brand, as compared to an unnamed or fictitiously named
version of the product (Keller 1998). This customer-based perspective suggests
both specific guidelines for marketing strategies and tactics and areas where
research can be useful in assisting managerial decision making (Keller 1993).
2.4 The measurement of Customer-Based Brand Equity
Most studies on brand equity focus on customer mindset. Particularly, the
four dimensions of brand equity including brand loyalty, perceived quality, brand
awareness, and brand association, which originate from Aaker’s work, are the
mainstream of customer-based brand equity (Kim et al. 2008). Indeed, a study by
Kim & Kim (2004) measured customer-based restaurant brand equity and
investigated the relationship between brand equity and firm’s performance. In
another research, Kayaman & Arasli (2007) explored interrelations of the four
brand equity components: brand awareness, brand loyalty, perceived quality and
brand image in hotel industry and improve the conceptualization of customer-

31
based hotel brand equity. Then Kim et al. (2008) examined the relationship
between hotel brand equity and guests’ perceived value and revisit intention. The
researchers measured the following four components of brand equity: brand
loyalty, perceived quality, brand awareness, and brand image (Kim et al. 2008). In
this framework, brand image refers to the set of associations linked to the brand
that customers retain in their memories (Kim & Kim 2004).
Adopting two conceptualizations of Aaker (1996) and Keller (1993, 1998)
as well as some other previous research findings (Yoo & Donthu 2001, 2002)
conceptual model comprising brand loyalty, brand awareness, perceived quality,
and brand image dimensions is used in the present research as described in Figure
2.6. For the purpose of our study, these four dimensions of brand equity are
interpreted in following meanings.
Figure 2. 6 The conceptual model of customer-based brand equity
2.4.1 Brand awareness
Brand awareness is related to the strength of the brand node or trace in
memory, as reflected by consumers’ ability to identify the brand under different
conditions (Keller 1993). Awareness refers to the strength of a brand’s presence in
Brand
Equity
Brand Image
Brand
Awareness
Perceived
Quality
Brand
Loyalty

32
the consumer’s mind (Aaker 1996). Brand awareness consists of brand recognition
and brand recall performance.
A “brand recognition” occurs when the brand and its qualities are generally
known by the customers or consumers (Ojasalo et al. 2008). Brand recognition
relates to consumers’ ability to confirm prior exposure to the brand when given the
brand as a cue. In other words, brand recognition requires that consumers correctly
discriminate the brand as having been seen or heard previously (Keller 1993).
Recognition reflects familiarity gained from past exposure. The familiarity factor
can be especially important to the brand that has a familiarity handicap with
respect to more visible and established competitors. In such a case, awareness-
building may be necessary to reduce this liability (Aaker 1996).
A brand is said to have recall if it comes to consumers’ minds when its
product class is mentioned (Aaker 1996). Brand recall relates to consumers’ ability
to retrieve the brand when given the product category, the needs fulfilled by the
category, or some other type of probe as a cue. In other words, brand recall
requires that consumers correctly generate the brand from memory. The relative
importance of brand recall and recognition depends on where the consumer makes
the decision of buying the product (Keller 1993).
In sum, according to Aaker (1996a), awareness is measured according to
the different ways in which consumers remember a brand, ranging from
recognition (Have you been exposed to this brand before?) to recall (What brands
of this product class can you recall?) to “top of mind” (the first brand recalled) to
dominant (the only brand recalled).
2.4.2 Brand image
In his opinion, Keller (1993) considered brand image as customer
perceptions of a brand as reflected by the brand associations that are the other
informational nodes linked to the brand node in consumer memory and contain the
meaning of the brand for consumers. The favorability, strength, and uniqueness of

33
brand associations are the dimensions distinguishing brand knowledge that play an
important role in determining the differential response that makes up brand equity,
especially in high involvement decision settings (Keller 1993). Consequently,
brand image consists of three dimensions of brand associations. The reason for
including brand image as a dimension of customer-based brand equity arises from
its important role in determining the differential response that makes up brand
equity (Kim & Kim 2004).
2.4.3 Brand loyalty
Brand loyalty is closely related to brand equity but is a distinct concept
(Keller 1998). Brand loyalty is a core dimension of brand equity (Aaker 1996)
that Aaker described as the attachment that a customer has to brand (Kim et al.
2008). The attachment here implies the resistance to change and the ability of a
brand to survive in fluctuating environments. Brand loyalty is often measured in a
behavioral sense through the number of repeat purchases (Keller 1998). In that
line, Keller (1998) argued that repeat buying is a necessary but not sufficient
condition for being a brand loyal buyer in an attitudinal sense. Thus, brand loyalty
can be categorized as two types: attitudinal and behavioral loyalty (Kim et al.
2008). Gounaris & Stathakopoulos (2004) suggested that behavioral loyalty refers
to repeated purchases, and attitudinal loyalty refers to a strong internal disposition
toward a brand. According to Gounaris & Stathakopoulos (2004), an increase in
attitudinal brand loyalty should lead to an increase in behavioral brand loyalty.
2.4.4 Perceived quality
According to Zeithaml (1988), perceived quality could be divided into
product quality and service quality. Product quality is comprised of seven
dimensions (performance, features, conformance with specifications, reliability,
durability, serviceability, and fit and finish), whereas service quality dimensions
include tangibles, reliability, competence, responsiveness, and empathy. After
Parasuraman, Zeithaml, and Berry developed a method to measure service quality

34
(SERVQUAL), a large number of researchers used the scale to assess service
quality of service organizations (Kim et al. 2008). The SERVQUAL instrument
has been the predominant method used to measure consumers’ perceptions of
service quality.
In the present study, the scale instrument by Kayaman & Arasli (2007) was
used mainly for brand loyalty, perceived quality, and brand image because their
scale measurement has been most widely accepted and validated. For the
measurement of the perceived quality component Kayaman & Arasli (2007) based
on SERVQUAL scale with twenty-two items developed by Parasuraman et al.
(1988). For the measurement of brand loyalty and brand image, Kayaman & Arasli
(2007) based on Kim & Kim (2005) study. Specially, for the measurement of the
brand awareness, the scale measurement by Kim, Jin-Sun and Kim (2008) was
employed. Generally, the scale measurements of Kayaman & Arasli (2007) and
Kim, Jin-Sun and Kim (2008) were adopted in the present study because of the fit
setting in consideration of the education and training industry as the service
industry and based on Aaker’s model of customer-based brand equity. Moreover,
they were accepted newly. Four elements of brand equity were measured through
a customer survey.
2.5 Relationships between brand loyalty and other dimensions of CBBE
Brand loyalty is one of the most important competitive survival tools
because loyal customers provide: repeat business, higher market shares and
profits, referrals, and competitive advantage (Tepeci 1999, cited Kayaman &
Arasli 2007).
Firstly, the relationship between brand awareness and brand loyalty is
investigated in this study. Aaker (1991) defines brand loyalty as the attachment
that a customer has to a brand. While Aaker (1991) also suggests that brand

35
awareness refers to the ability for a buyer to recognize or recall a brand is a
member of a certain product category and loyalty begins with the customer’s
becoming aware of the product. Higher levels of brand awareness and positive
brand image should increase the probability of brand choice, as well as produce
greater customer loyalty and decrease vulnerability to competitive marketing
actions (Keller 1993). Hypothesis 1 is therefore constructed as:
Secondly, the relationship between perceived quality and brand loyalty is
investigated. Zeithaml (1998) suggests that service quality is the customer’s
judgment about the overall excellence or superiority of a service. Therefore
perceived quality provides value to customers by providing them with a reason to
buy and by differentiating the brand from competing brands (Kayaman & Arasli
2007). The fact is that customers’ perception of quality will be associated with
their brand loyalty. Kayaman & Arasli (2007) asserts that customer is likely to
perceive the brand as offering superior quality will become more brand loyalty.
Perceived quality and brand loyalty relationship is summarized in the following
hypothesis:
Finally, one of the first steps in maintaining customer brand loyalty is to
build and sustain a positive brand image or vice versa (Kayaman & Arasli 2007).
Based on attitude theory, brand association is proposed to have a positive
relationship with brand trust (Ajzen & Fishbein 1980, cited in Quan 2006). The
fact is that customers would not trust the brand if they wouldn’t hold the image of
the brand. Therefore, the positive image of a brand in customers’ perceptions is a
necessary condition leading to good feelings toward the brand. On the other hand,
brand image is a set of brand associations in customers’ minds. Moreover, based

36
on consumer-based brand equity theories, the positive association held in the
customer’s mind will constitute the positive feeling of customers (Wood 1998,
cited in Quan 2006) that refers to a strong internal disposition toward the brand.
Based on these arguments, hypothesis 3 is stated as follows:
Figure 2. 7 The relationship between brand loyalty and other dimensions
2.6 Summary
The previous discussion has confirmed the importance of brands in terms of
the customer. Customer-based brand equity is defined as the effect of brand
knowledge on the customer’s response to the marketing activities of the brand.
Four components, namely brand awareness, perceived quality, brand image and
brand loyalty, are considered to make up customer-based brand equity. Brand
awareness, perceived quality and brand image act as antecedents of brand loyalty,
firstly. The effect of these components on brand loyalty is investigated. Secondly,
the mean difference of each dimension of brand equity as well as each underlying
+H2
+H3
+H1
Brand
Loyalty
Perceived
Quality
Brand
Awareness
Brand
Image

37
attribute between high and low tuition ETCs respectively needs to identify. Eight
hypotheses have been proposed, and are summarised in Table 2.1. The
methodology utilised to test the eight hypothses is presented in the following
chapter.
Table 2. 1 Summary of hypotheses
tuition fee ETCs and low tuition fee ETCs
H6: There is the difference of brand image of CBBE between high tuition fee
ETCs and low tuition fee ETCs.
H8. There is the difference of attributes of dimensions of CBBE between
high tuition fee ETCs and low tuition fee ETCs.

38
Chapter 3. Methodology
3.1 Introduction
The literature review in the previous chapter introduced and discussed the
theoretical model constructed for this research. Four main constructs are
considered in this study: brand awareness, perceived quality, brand image, and
brand loyalty. The three research questions and eight hypotheses were proposed to
test an empirical study of the English training industry presented in Table 3.1.
Table 3. 1 Research questions and research hypotheses
Q1. Is there a relationship between brand loyalty and the other dimensions of
brand equity in the system of English training industry?
Q2. Is there any difference of the brand awareness, perceived quality, brand
image, and brand loyalty of CBBE between high tuition fee ETCs and low tuition
fee ETCs?
H6: There is the difference of brand image of CBBE between high tuition

39
Q3. Is there any difference of the individual attributes of brand loyalty, brand
awareness, perceived quality, and brand image between high tuition fee ETCs
and low tuition fee ETCs?
H8. There is the difference of attributes of dimensions of CBBE between
high tuition fee ETCs and low tuition fee ETCs.
The purpose of this chapter is to describe and outline the methodology used
to test the hypotheses developed in chapter 2. The structure of this chapter is given
in Figure 3.1.
3.1 Introduction
3.2 Research design
3.3 Generation items
3.4 Preliminary study
3.5 Main study
3.6 Summary

40
3.2 Research design
The research design provides the answers to theories and hypotheses, which
leads to the next research steps. Business research methods can be classified on the
basis of either function or technique (Zikmund 1997). Based on function, there are
three types of research including exploratory, descriptive and causal studies. Based
on technique, business research can be classified into experiments, surveys and
observational studies (Zikmund 1997). As indicated by Zikmund (1997),
descriptive research focuses on the research question starting with who, what,
when, and where with the main purpose of describing characteristics of a
population or a phenomenon, while causal studies are concerned with the ‘why’
question, about how one variable affects another. Consequently, the three research
questions of the current study indicate that this study combines both descriptive
and causal studies.
In seeking to answer the three research questions, the dimensions of brand
equity have been investigated and described from the customer perspective. As
such, descriptive research is more appropriate than exploratory research because
exploratory research is usually conducted to clarify and define the nature of a
problem, whereas descriptive research is designed to describe characteristics of a
population or phenomenon. This study is also seeking to explain how the cause-
and-effect relationships between brand loyalty and the others in the brand equity
model. This concern required a causal design to identify the relationships. Thus,
causal research is implemented in combination with descriptive research in this
study.
In terms of research techniques, survey research was chosen to assess the
research questions for this study, for two reasons. Firstly, surveys provide a quick,
efficient and accurate means of assessing information about a population,
especially in cases where there is a lack of secondary data (Zikmund 1997).

41
Figure 3. 2 Research process
IITEM
GENERATION
Final
questionnaire
Literature search
Back
translation
Revision
Initial
questionnaire
A survey of
318 learners
Reliability
analysis
EFA
Delete low item-total
correlation item (<.30)
Delete low factor
loading item (<.40)
t-test
Linear
regression
Test the hypotheses
Test the hypotheses
PRELIMINARY
SURVEY
MAIN
SURVEY
EFA: Exploratory factor analysis
Focus group
discussion
First draft
questionnaire

42
Secondly, on the measurement of consumer-based brand equity, the survey has
been the most popular method used previously to measure brand equity (Quan
2006). A three-stage approach has been used in the research design: (1) generation
of items; (2) preliminary survey; and (3) the main survey (see Figure 3.2).
3.3 Generation items
3.3.1 Introduction
The first step in the research design process involves item generation. This
was achieved through a literature search which was used to specify how to
measure the constructs and to design the initial questionnaire. The questionnaire
was initially designed in English. The original English version was then translated
into Vietnamese by one translator and then was translated back into English by
another translator, each of whom was fluent in both languages. The original and
back-translated English versions of the questionnaire were compared to ensure the
equivalence of meanings of the items, and were refined where necessary. This was
the first draft of the questionnaire of 45 candidate scale items as described in the
following section 3.3.2.
Then, a focus group discussion (FGD) was used as the methodology for this
study in order to adapt the questionnaire from the previous survey research. We
refined the questionnaire through a FGD of 8 participants. The FGD comprising
learners at ETCs was conducted in order to partly verify items of the previous
studies. These provided a forum through which the items highlighted here could be
further explored and the relevant to learners tested. It also allowed the researchers to
assess learners’ understanding to the proposed questionnaire items and determine
what the weaknesses of wording might be. Finally, after modified, a final
questionnaire of 46 candidate scale items was used in the main survey.

43
3.3.2 Operationalization of measures
As discussed in chapter 2, there are four constructs in the theoretical
model. These are: (1) brand loyalty; (2) brand image; (3) brand awareness; and
(4) perceived quality.
To operationalize brand loyalty and brand image dimensions suggestions
from Kim and Kim (2005) study and Kayaman & Arasli (2007) study are
employed. All items of the measurement scale are modified to be suitable to
objects of the present study.
This study employs five measurement items of brand loyalty that as
described in Table 3.2. Each item was measured with a five point Likert scale
anchored from 1 (strongly disagree) to 5 (strongly agree).
Table 3. 2 Measures of brand loyalty
Item wording Item code
I usually use this center as the first choice compared to other ones LO1
I am satisfied with this studying here LO2
I would recommend this center to others LO3
I would not switch to another center the next time LO4
I am faithful to this center LO5
To measure the second dimension - brand image nine items are employed.
All of these items concerning brand image are measured on a five-point Likert
scale with 1 for ‘‘strongly disagree’’ and 5 for ‘‘strongly agree’’. Here, we
presume that a high scale point of brand image indicates that the brand not only
has a positive image to the customer but also exhibits a greater level of brand
image strength in comparison with others.

44
Table 3. 3 Measures of brand image
Environment at this center is really comfortable IM1
The image of this center in my mind is very enchanting IM2
This center is really luxurious IM3
It is a suitable place for high class IM4
I feel proud of learning at this center IM5
The staff is very kind IM6
It has a long history IM7
It has a differentiated image from other center brands IM8
It is very familiar with me IM9
Brand awareness, the third component of brand equity, refers to the
strength of a brand’s presence in the customer’s mind (Aaker 1996). In this study,
for the measurement of the brand awareness component six scale items are
employed that have been originated in Kim, Jin-Sun, and Kim (2008) study, with a
five point Likert scale anchored from 1 (strongly disagree) to 5 (strongly agree).
Table 3. 4 Measures of brand awareness
I can remember and recognize this center’s name easily AW1
I can remember and recognize this center’s logo easily AW2
I can remember and recognize this center’s promotion gifts easily AW3
I can remember and recognize this center’s architectural style easily AW4
Generally, when this center is mentioned, I can visualize it easily AW5
I can differentiate this center from the others easily AW6
The final component of brand equity—perceived quality—is measured by a
performance-based approach that focused only on customer perception rather than
considering customer expectation as well. For the measurement of perceived
quality in ETCs, SERVQUAL scale with twenty two items developed by
Parasuraman et al. (1988) were employed just as many other studies. Then the

45
scale was adapted to make it simple and detailed with twenty four items. This is a
multidimensional scale with five dimensions labeled as in Table 3.5.
Table 3. 5 Measures of perceived quality
Dimension Item wording Item code
The physical facilities at this center are visually
luxurious and professional
PQ1
Staff at the ETC appear neat and well-dressed PQ2
The equipment for learning of the center is very
modern
PQ3
Learning schedule of the center is very suitable PQ4
Materials associated with training are always updated PQ5
The location of this center is very convenient PQ6
Parking is very convenient PQ7
Class room and rest-room are very clean PQ8
Tangibles
There are many native English teachers with good
pedagogic method
PQ9
When learners have problems, the center shows a
genuine interest in solving them
PQ10
When the center promised to do something by a certain
time, it did it
PQ11
Reliability
The center performs the service right the first time PQ12
Staff at the center are always willing to help learners PQ13
Staff at the center are never too busy to respond to
learners’ requests
PQ14
Responsiveness
Staff at the center always explain all of my questions
promptly
PQ15
The number of learners per class is suitable for learning
foreign language
PQ16
You can trust staff at the center PQ17
Learners feel safe in their learning at the center PQ18
Staff at the center are consistently courteous with
learners
PQ19
Training method of teachers at the center is appealing PQ20
Finishing class, I feel my English greatly improved PQ21
Assurance
The center has interesting extracurricular activities PQ22
The center gives learners individualized attention PQ23
The staff of the center understand the specific needs of
their learners
PQ24
Empathy
The center has the learners best interest at heart PQ25

46
The whole scale consists of 45 variables to capture the four dimensions that
comprise customer based brand equity.
3.4 Preliminary study
The preliminary survey was conducted by a focus group discussion with 8
independent learners at ETCs. It is noted that all of the constructs used in this
study have been developed and empirically tested in developed countries.
Therefore, it was considered that the preliminary survey would be useful in order
to modify measures to suit the context of developing countries. The purpose of the
preliminary test was to eliminate possible weaknesses and flaws in the first draft
questionnaire in order to create the final questionnaire for the main survey. The
preliminary study is a pretest of construct measures. The purpose of this pretest is
to provide a preliminary evaluation and refinement of the measurement scales.
As such, the first step to adapt the scales is to use focus group discussion.
The contents of focus group discussion would be noted, aggregated to edit the
scales. The focus group has been used as a process for gaining information for
questionnaire development. Focus group interviews are also used for testing
wording (unable to understand, difficult to answer, etc), or interpreting
questionnaire items. A focus group is particularly useful for learning about
participants’ conceptualizations of particular phenomena and the language they
use to describe such phenomena.
The focus group discussion for this study was held at the Meeting Room of
Business Administration Faculty, University of Economics, HoChiMinh City.
Finding and recruiting individuals to join the pool of participants for the focus group
initially required careful consideration. The study ran a focus group of 4 males and
4 females. A range of demographics was chosen, covering working status (pupils

47
and students or staff), sex, and ages. It was decided to concentrate on 15-45 years
old. The demographical status of participants is described in Table 3. 6.
Table 3. 6 The demographical status of participants
The result of the focus group discussion is the modified scale of 46
variables as described in Table 3.7. In which, in brand awareness scale, the item
AW6: “I can differentiate this center from the others easily” is omitted due to
redundance.
In the tangibles scale, the item PQ8: “Class room and rest-room are very
clean” was separated into two items, PQ9: “Class rooms are very clean” and
PQ10: ”Rest rooms are very clean”. Similarly, old PQ9: “There are many native
English teachers with good pedagogic method” was separated into two items,
PQ8: “There are many native English teachers” and PQ25: “Teachers of the center
have good pedagogic knowledge” belonged to assurance scale. In reliability scale,
old PQ10: “When learners have problems, the center shows a genuine interest in
solving them” was deleted. PQ11: ”When the center promised to do something by
a certain time, it did it” was changed into “The center always implements what
they have committed”. PQ12: “The center performs the service right the first time”
was changed into the new content as follows: “The center opens courses exactly at
the time announced”. In responsiveness scale, PQ13: “Staff at the center are
always willing to help learners“ was changed into “The center is always ready to
respond my requests”. PQ14: “Staff at the center are never too busy to respond to
learners’ requests” was changed into ”Staff at the center arrange me to the most
suitable class quickly”. PQ15: “Staff at the center always explain all of my
Male Female
Age Student Staff Student Staff
<23 years old 2 2
≥23 years old 2 2

48
questions promptly” was changed to “Teachers at the center always explain all of
my questions promptly”. In assurance scale, PQ17: “You can trust staff at the
center” was changed to “More and more the center makes me believe it”. PQ19:
“Staff at the center are consistently courteous with learners” was changed to “Staff
of the center have the knowledge to answer learners”.
Table 3. 7 The final questionnaire
Dimension Item wording Item code
I can remember and recognize this center’s name easily AW1
I can remember and recognize this center’s logo easily AW2
I can remember and recognize this center’s promotion
gifts easily
AW3
I can remember and recognize this center’s architectural
style easily
AW4
Awareness
Generally, when this center is mentioned, I can
visualize it easily
AW5
The physical facilities at this center are visually
luxurious and professional
PQ1
Staff at the ETC appear neat and well-dressed PQ2
The equipment for learning of the center is very modern PQ3
Learning schedule of the center is very suitable PQ4
Materials associated with training are always updated PQ5
The location of this center is very convenient PQ6
Parking is very convenient PQ7
There are many native English teachers PQ8
Class rooms are very clean PQ9
Tangibles
Rest-rooms are very clean PQ10
The center always implements what they have
committed
PQ11
Reliability
The center opens courses exactly at the time announced PQ12
The center is always ready to respond my requests PQ13
Staff at the center arrange me to the most suitable class
quickly
PQ14
Responsiveness
Teachers at the center always explain all of my
questions promptly
PQ15
The number of learners per class is suitable for learning
foreign language
PQ16
More and more the center makes me believe it PQ17
Learners feel safe in their learning at the center PQ18
Staff of the center have the knowledge to answer
learners
PQ19
Assurance
Training method of teachers at the center is appealing PQ20

49
The various learning program of the center meets
specific needs of learners
PQ21
Finishing class, I feel my English greatly improved PQ22
The center has interesting extracurricular activities PQ23
Teachers of the center have strict discipline in learning PQ24
Teachers of the center have good pedagogic knowledge PQ25
The center gives learners individualized attention PQ26
Empathy
Teachers of the center understand my specific needs PQ27
Learning at this center is very efficient IM1
This center is really luxurious IM2
It is a suitable place for high class IM3
It is a prestige center IM4
It has a long history IM5
The center is a place at which learners are trained into
achievement people
IM6
It is famous IM7
It has a differentiated image from other center brands IM8
Image
It is very familiar with me IM9
I usually use this center as the first choice compared to
other ones
LO1
I am satisfied with this studying here LO2
I would recommend this center to others LO3
I would not switch to another center the next time LO4
Loyalty
I am faithful to this center LO5
These items PQ21: “The various learning program of the center meets
specific needs of learners”, and PQ24: “Teachers of the center have strict
discipline in learning” were added. PQ21, PQ22 and PQ23 were labled new as
PQ22, PQ23 and PQ26 respectively. PQ27: “Teachers of the center understand my
specific needs” was added. Old PQ24 and old PQ25 were deleted.
In the image scale, these items IM1, IM2, IM5 and IM6 were deleted and
four new items were added to such as IM1: “Learning at this center is very
efficient”, IM4: “It is a prestige center”, IM6: “The center is a place at which

50
learners are trained into achievement people”, and IM7: “It is famous”. Old IM3,
IM4 and IM7 were labeled new as IM2, IM3 and IM5, respectively.
After being refined, the measures of constructs were used to finalise the
questionnaire in the main survey (the Vietnamese version of these measures is
included in Appendix 1)
3.5 Main study
3.5.1 Sample design
3.5.1.1 Brand selection
There are several different ways to classify ETCs, based on their target
markets; based on the training methods; or based on their history. The target
market is divided into two parts: popular and super based on tuition. In order to
meet the study’s objectives, target market is focused. All brands of ETCs in Ho
Chi Minh city were categorized into 2 groups based on the criteria of tuition.
ETCs that have requested the tuition of equal or greater than 50 USD per month
were put into the group called high tuition. The others were put into the group low
tuition. Two brands were chosen from each group, one that have operated equal or
exceeded 10 years and one exists less than 10 years. The four brands that meet the
criteria for dividing into two groups of high-tuition group and low-tuition group
are Vietnam United States Society (VUS), International Languages Associate
(ILA), Duong Minh Foreign Language School (DMS) and East Europe Language
School (ELS) as described in Figure 3.3.

51
Figure 3. 3 Brand selection
3.5.1.2 Sampling
Firstly, the population of the study needs to be chosen. Population is
defined as ‘the complete set of units of analysis that are under investigation, while
element is the unit from which the necessary data is collected’ (Davis 2000, cited
in Quan 2006). This study focuses on learners to investigate the differences
between high tuition ETCs and low ones in comparison of the dimensions of
customer-based brand equity, as well as the relationships between brand loyalty
and the other dimensions. Therefore, the population of the study is English
learners, who are in HoChiMinh City, the major commercial city of Vietnam.
Eligible participants in the study have learnt English for at least six months.
The second step in the sampling process is to choose the sampling frame,
which is the list of elements from which a sample may be drawn. In this study, the
sampling frame was based on the list of learners at ILA, VUS, DMS, and ETS in
the age from 15 years old and above.
The next step is to identify the sampling method to be used to select the
sample for the study. According to the methodology literature, there are two main
High tuition
Low tuition
Short history
VUS
ILA
ELS DMS
Long history
10 years

52
sampling methods, probability and non-probability sampling (Tho & Trang 2007).
In this study, the non-probability method was chosen due to the elements in the
population do not have a known or predetermined chance of being selected as
subjects. This means that the findings from the study of the sample cannot be
confidently generalized to the population. When time or other factors rather
generalisabilty become critical, non-probability sampling is generally used
(Canava et al. 2001). There are two main types of non-probability sampling
designs: convenience sampling and purposive sampling. Convenience sampling is
the least reliable of all sampling designs in terms of generalisability, but
sometimes it may be the only viable alternative when quick and timely
information is needed, or for exploratory research purposes (Canava et al. 2001).
The interviews were implemented to learners at the four brands based on
convenience sampling.
3.5.1.3 Sample size
According to Canava et al. (2001), a reliable and valid sample should
enable us to generalize the findings from the sample to the population under
investigation. In other words, the sample statistics should be good estimates and
reflect the population parameters as closely as possible within a narrow margin of
error. The sample size is determined by the level of precision and confidence
desired in estimating the population parameters, as well as the variability in the
population itself (Canava et al. 2001). Tho & Trang (2008, p. 350) suggest that the
issue of ‘how large’ a sample size should be, has not been entirely resolved, but
does depend on the statistical methods used (e.g. Maximum likelihood,
generalized least squares and asymptotically distribution free). However, some
researchers suggested that the minimum sample size should be from 100 to 150
responses if using the Maximum Likelihood (ML) method. Some others suggested
the minimum sample size should be at least five observations per estimates

53
parameter. Following the above, based on the number of parameters to be
estimated, the sample size targeted in this study was from 230 upwards.
3.5.2 Survey method
The literature on research methodology has identified a number of survey
methods such as face-to-face interview, telephone interview, and mail survey.
Among these three methods, the face-to-face survey yields higher response rates
and allows researchers to use physical stimuli to facilitate the interview (Zikmund
1997). It also allows interviewers to clarify the meanings of ambiguous or
complex questions.
This study used face-to-face interviews in order to conduct the research.
Two steps were used to conduct the research. Firstly, interviewers were recruited
and trained. Then, they were assigned to the brands to interview.
The interviews were conducted in May 2009 over a 5 week period. Prior to
beginning the questions, participants were advised that their participation was
voluntary and they were free to discontinue their participation any time during the
completion of the survey. In an attempt to encourage candidness and honesty in
their responses, participants were instructed that their responses would remain
confidential and would be reported in aggregate form only.
3.5.3 Data analysis techniques
After data collection was completed, descriptive statistics were initially
conducted to provide an overview of the sample. Secondly, the reliability tests and
exploratory factor analysis (EFA) were applied to the data of the main survey in
order to conduct a primary test of the validity and reliability of the instrument. The
purpose of this test is to assess the scales used to measure the constructs, i.e. to
refine the measures; the refinement is based on reliability and dimensionality.

54
3.6 Conclusion
This chapter has provided details of the research methodology and
procedures used in this study, and provided a justification of the research
methodology. The focus of this chapter was on the development of the
questionnaire and the analytical methods employed to assess the propositions and
answer the research questions.
This chapter also described the statistical methods employed for data
analysis, including validity, dimensionality and reliability assessments. The next
chapter reports the results of the data analysis.
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55
Chapter 4. Research results
4.1 Introduction
The previous chapter discussed the research methodology including the
operationalisation of the four constructs of the theoretical model developed in
Chapter 2, and the research design of both the preliminary study and the main
study. This chapter presents the results of the main study. The following section
describes the characteristics of the sample and presents descriptive statistics of the
main survey. Next, the study of 318 learners was analysed using exploratory
factor analysis to assess the reliability and validity of the construct measurement
scale. The findings from the survey led to the finalization of the instrument for the
main study. The fourth section presents the assessment of the customer-based ETC
brand equity construct using factor analysis. The fifth section reports the
assessment of the hypotheses using linear regression analysis, and t-test
independent samples analysis. The data analysis software SPSS 16 is used. The
final section supplies a summary. The structure of chapter 4 is presented in Figure
4.1.
4.1 Introduction
4.2 Descriptive statistics of the study
4.3 Construct measurement scale
4.4 The assessment of the customer-based ETC brand equity construct
4.6 Summary
4.5 The assessment of the hypotheses
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56
4.2 Descriptive statistics of sample
4.2.1 Final sample
The main survey was conducted by face-to-face interview through 6 trained
interviewers. The list of brands was chosen from ETC brands around HoChiMinh
City as explained in section 3.5.1 in chapter 3. The missing rate was 9.14 percent,
with the 32 interviewees who refused to return the answers. However, out of the
318 questionnaires completed, all 318 questionnaires were useable. The analyses
reported in this chapter have been conducted on the final sample of 318 surveys.
The useable response rate to the survey interview was therefore 100 percent.
4.2.2 Characteristics of sample
This study was conducted using two groups of brands – high tuition ETC
brands (VUS and ILA) and low tuition ETC brands (DMS and ELS). The number
of responses about each brand is provided in Table 4.1.
Table 4. 1 Response frequency of each brand
Frequency Percent Valid Percent Cumulative Percent
DMS 83 26.1 26.1 26.1
ELS 82 25.8 25.8 51.9
ILA 55 17.3 17.3 69.2
VUS 98 30.8 30.8 100.0
Total 318 100.0 100.0
The characteristics of the respondents are displayed in Table 4.2. Firstly,
respondents were divided into four groups based on career. Of the 318
respondents, 90.9 percent were pupils and students; 5.7 percent were officials; 1.6
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