Key factors influence brand trust and brand loyalty a study on smartphone consumers

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Truong Hong Ky

KEY FACTORS INFLUENCE BRAND TRUST
AND BRAND LOYALTY
A STUDY ON SMARTPHONE CONSUMERS

MASTER OF BUSINESS (Honours)

Ho Chi Minh City – Year 2014


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

Truong Hong Ky

KEY FACTORS INFLUENCE BRAND TRUST
AND BRAND LOYALTY
A STUDY ON SMARTPHONE CONSUMERS

ID: 22110033

MASTER OF BUSINESS (Honours)
SUPERVISOR: Dr. Tran Ha Minh Quan

Ho Chi Minh City – Year 2014

Acknowledgement

I would like to express my sincere gratitude to my supervisor, Dr Tran Ha Minh
Quan for the valuable supervision, the support and encouragement he gave me.
I would like to express my gratitude to my ISB class friends for thesis support and
direction. Your encouragement, friendly guidance and critical comments have
greatly contributed to this thesis.
Finally, I would like to thank all of the respondents without whom, this research
would have been difficult to make.

Truong Hong Ky
July, 2014


Abstract
In each industry, there is a competition between companies to win customers’ trust and make
them become loyal. Customers, after getting the satisfaction of the product/service they
consume, come to ask for value, belief, social status and life style orientation that
company/brand makes.

When do customers become more loyal to the brand? The most important reason is that
product or service meets their expectation and demand. More than that, brand has to come
with distinctive message and build a social status that customers need to fulfill their selfdefining.

This study is conducted to find out the key factors affect brand loyalty and brand trust. This
context of this research is technology equipment smartphone. The factors found have
explaind how customers maintain loyalty with smartphone product. The results indicate all
dependent factors : (1) Brand Identity (BI), (2) Brand Identification (BID), (3) Customer

Satisfaction (CS) have significant impact on dependent variavles (4) Brand Trust (BT) and
(5) Brand Loyalty (BL). Brand Trust also has strong impact on Brand Loyalty.

The last part of this study gives some recommendation to brand executives and marketing
practitioners to gain trust and win loyalty of customers.


Tables Of Content
1. Research Formulation

1

1.1 Background

1

1.2 Research Problem

3

1.3 Research Objective

4

1.4 Research Scope

4

1.5 Significance

4

1.6 Structure Of Thesis

4

2. Literature Review

5

2.1 Brand and Brand Loyalty

5

2.2 Brand Trust

7

2.3 Customer Satisfaction

8

2.4 Brand Identity and Brand Identification

9

2.4.1 Kapferer’s Brand Identity vs Brand Image

9

2.4.2 Brand Identity in other research journal

10

2.4.3 Brand Identification

11

2.5 Research Model and Hypothesis

3. Research Method

12

17

3.1 Research Process

17

3.2 Measurement Scale

20

3.3 Data Analysis Method

21

3.3.1 Source of Data Summary

21

3.3.2 Sampling

22

3.3.3 Data Analysis Method

22

4. Research Result And Discussion

24

4.1 Descriptions of Sample

24

4.2 Measurement Scale Assessment

28


4.3 Exploratory Factor Analysis

30

4.3.1 EFA Analysis results for measurement scales of independent factors
(Brand Identity, Brand Identification, Customer Satisfaction)

31

4.3.2 EFA Analysis results for measurement scales of dependent factor
(Brand Trust, Brand Loyalty)
4.4 Multi-Linear Regression Analysis for hypothesis testing.

33
34

4.4.1 Checking Regression Assumptions

35

4.4.2 Hypothesis Testing

38

4.4.2.1 Testing hypothesis on the impact of
independent factors on Brand Trust

39

4.4.2.2 Testing hypothesis on the impact of
independent factors on Brand Loyalty
4.5 Discussion

40
42

4.5.1 Regression analysis result

42

4.5.2 Brand Identity Finding

42

4.5.3 Brand Identitfication Finding

43

4.5.4 Customer Satisfaction Finding

43

4.5.5 Brand Trust Finding

43

4.6 Summary

44

5. Conclusions and Implications

45

5.1 Research Overview

45

5.2 Key finding

45

5.3 Managerial Implication

46

5.4 Contribution of the study

47

5.4.1 Contribution of theory

47

5.4.2 Contribution to practical

47

5.5 Limitation

Reference

Appendix

47

49

LIST OF TABLE
Table 1: List of Hypothesis

15

Table 2: Summary of the concept studied

16

Table 3: Descriptive Statistics of Sample

21

Table 4: Description Table

26

Table 5: Reliability Analysis Results

28

Table 6.1: Correlation Matrix

31

Table 6.2: EFA Analysis for independent variables after running

31

Table 6.3: Total Variance Explained for independent factors

32

Table 6.4: Rotated Component Matrix for independent variables

32

Table 7.1: EFA Analysis for dependent variables after running

33

Table 7.2: Total Variance Explained for dependent factors

33

Table 7.3: Rotated Component Matrix for dependent variables

34

Table 8: Collinearity Statistics for two dependent variables

35

Table 9.1: Multiple Regression result with dependent Brand Trust

39

Table 9.2: Research Result of what positively influence Brand Trust

40

Table 9.3: Multiple Regression result with dependent Brand Loyalty

40

Table 9.4: Research Result of what positively influence Brand Trust

42

LIST OF FIGURE
Figure 1: Proposed Research Model

16

Figure 2: Research Process

19

Figure 3.1: Gender

24

Figure 3.2: Age

25

Figure 3.3: Degree

25

Figure 3.4: Job Position

25

Figure 3.5: Income

26

Figure 3.6: Brand Used

26

Figure 4.1: Normality of the residuals

37

Figure 4.2: Histogram

38

Figure 5 : Research Regression Result

44


Chapter 1: Research Formulation
This chapter indicates the context of this study, including a short introduction of smartphone
industry in Vietnam, the purpose of this study, research problem statement, research scope

and methodology.
1.1 Background
Vietnam smartphone market is growing fast. According to Vietnamese Online Jounal of
Investment, in December of 2013, the International Market Rearch GFK showed a result that
Vietnam’s smartphone market has the rapid growth in the South-East of Asia. Referring to
the result, after 9 months of 2013, the growth rate of this market in Vietnam is 156% to 2012.
According to Google statistics, at the end of quarter 2 of 2013, the number of smartphone
users in Vietnam is 17 millions. This number is rising in the near future. In the middle of
2013, the proportion of smartphone among handphone device is 38%. (*)

This technology industry attract

millions of consumer. Smartphone becomes a very

convenient product with many useful features. A good looking and high-rated smartphone is
an image of life style. In October of 2013, at a Technology Conference, Thinh Pham, Wada
Technological Application Buider Representative, stated that we are watching the age of
smartphone. Many significant facts are shown. First, smartphone users in Vietnam takes 20%
of Vietnam population. Second, smartphone is the popular device to access Internet in
Vietnam. 60% of smartphone users tend to shop online, 97% of them search for information.
Smartphone users tend to access Internet and social media(**). Smartphone industry turns to
be impactful and so potential. In addtion, as the price of a smartphone has become reasonable,
smartphone segment can attract more potential consumer in low-price market.

(*): Retrieved from: />(**): Retrieved from: />
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Within the smartphone market in Vietnam, the competition between handphone
producers/brands become more fiere and vigorous. The prestigous world-wide handphone

producers Apple, Samsung, Nokia, LG, HTC… is competing to take over the market of
Vietnam. Many new-comers like Huawei and Oppo try to get into this potential market.
Some China producers also launch product targeting low-price market.

This industry keeps on growing fast and the penetration phase is almost over. In order to
maintain competitive advantage, smartphone company has to invest a lot on R&D to meet
many new demands of consumer and follow the technology innovation which keeps
changing over time. As the result, top brand also introduce their newest products to the
consumer in Vietnam as the same time as in other potential markets . Every quarter of the
year, consumer see many new products launched. Consumer now have many choices for
choosing a smartphone more than ever. They are easy to find a smartphone with practical
features and inexpensive price. The switching cost is not so high to change from a brand to
another. In 2014, smartphone users tend to look for big screen design and practical function
for checking health… Price of a premium smartphone is also going down and become less
expensive than before (***)

Besides getting along in the R&D race, main effort of company/brand is to encourage the
consumer to buy their product and maintain their loyalty. There comes the question that,
standing before a many products and brands, what would make the consumer confident to
make the dicision of buying or re-purchasing? One perspective is that with a strong
platform/core value, reasonable price, good after-sale service, a brand can win the market.
Other perspective is that consumer tend to buy the brand that is believed to be prestigeous.
Some people say they base on their acquaintances’ suggestion and advice to make decision.

(***): Retrieved from: />
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1.2 Research Problem
All the top management executives have to find way to make the company profitable and

hold on its competitive advantage. They have to learn their consumer, generate more sale of
their product/service and build their brand stronger over time. Business administration starts
with the organization’s vision and mission and develops with functional department
operation. Marketing department has a role to help build the core value of company, brand
and convey that brand message to customers. One way to achieve competitive advantage
success of a company/brand is how they differentiate themselves in profitable way.

Consumer will consider purchasing and re-purchasing product/service based on their
confidence, trust and the degree of loyalty in the company’s brand name. In another word,
customer has believe that the product or service under that brand name must perform well
and satisfy their needs. So companies, marketers and brand executives have done many
research and learnt the concept of customer satisfaction, customer loyalty and customer’s
perceived value. Today, customers not only get influenced by company’s promotional
programs but also interact with company and other customers. Trust and perceived value
drive customers to make recommendation and participate in the development of the company.

Brand loyalty and trust plays an important role for company success. The more loyalty
customers are generated, the higher value and more profitable that brand would build to
company. As in such a rapid-changing industry like smartphone one, facing the competition
over time, studying of brand loyalty is necessary.

In conclusion, each company/brand should find out what to satisfy their customers and make
them become loyal. Company and brand executives are required to measure customers’
brand value perception. This research is tailored in the smartphone product segment. The
research result contribute to the technology company the way to keep customers loyal to their
brand. Company will also know how they would positioning their brand inside customer’s
mind.

3

1.3 Research Objective
The thesis is to study brand trust and brand loyalty concept and the factors that impact on
brand trust and brand loyalty. Specific objective in this research is to examine the impact of
the construct Brand Identity, Brand Identification, Customer Satisfaction on Brand Trust and
Brand Loyalty.
The industry in which this research design is made to study customer’s brand loyalty is
technology product – smartphone.

1.4 Research Scope


This research study is mainly based on the customer-viewed perspective of the brand
they consume. Research scope is narrowed down into Ho Chi Minh City smartphone
users.



As the focus of this study is on smartphone consumers, technology company’s brand
executive is outside of the scope.

 Some specific research questions are below:
What constructs brand trust and brand loyalty?
Discussed managerial implication should be integrated for company?

1.5 Significance
Research results will indicate the factors that impact on brand trust and brand loyalty.
Company and the marketing managers can base on that to build optimized brand strategy to
win the share of voice and make their company more profitable.

1.6 Structure of thesis
The research report consists of five chapters. Chapter 1 introduces the overview of the
research topic. Chapter 2 revises the concepts to study, literature review, research model and
hypothesis stated. Chapter 3 presents the research methodology to test the measurement scale
and run the research model given. Chater 4 shows the result of the implementation of the
testing and data analysis. In this chapter, conclusion is drawn. Chapter 5 summarizes the
result, discusses the contribution that the research makes, managerial implementation and the
limitation of the research study and some guildance for other following research.
4


Chapter 2: Literature Review
This chapter begins with they key concepts applied in this research study that are Brand
Loyalty, Brand Trust, Customer Satisfaction, Customer’s Perceived Value approached
through two concepts Brand Identity and Brand Identification.

2.1 Brand and Brand Loyalty
Brand is a precious asset of every organization and company. Brand is a big part of
company’s marketing strategy.

Every organization has their product and service identified different from other by their
brand. A brand can be seen visible on the package of products. In the past, a brand is a name,
term, design, symbol, or any other feature that identifies product and service of a company as
distinct from others. The legal term for brand is a trademark. Peter and Jr. (2011) call for
other attributes to a brand such as its ability to evoke feeling of trust, confidence, security,
strength and other desirable characteristics. Therefore, a brand is not only a name to tell the
product/service apart but also to create sentimental feeling from consumer’s heart and mind.

There are various fields of study concerning brand and branding strategy. Keller (1993)
develop a consumer-based brand equity pyramid. He describes that at the first stage when a

company penetrate the market, all their efforts are about to get customer’s brand awareness.
And the highest level is the Keller’s pyramid is building customer’s brand loyalty and
leading the market.

Every companies have their business performance improved day by day through customer
loyalty. Loyal customers bring many benefits to company as they increase sales by repurchasing products/service, decrease price sensitivity and and retaining positive attitude
towards brand.
In his book “Brand Management”, Le (2010) states that brand loyalty turns in an attaching
bond between customer and brand. The higher loyalty that consumers gain, the more

5


successful company grows. The core benefits of making consumers more loyal are listed
below:
 Reducing marketing cost
In some cases, as some brand is strongly positioned in consumer’s mind, consumer is
easy to recognize and buy/use that product or service. Loyalty consumer care about
brand and what the company is doing to strengthen the brand value and keep their
product/service improve day by day. It can be assumed that those companies will
spend less money than others, i.e. on strategy of penetrating new market,
promotion….
 Gaining more negotiation power
High loyal consumer asserts the prestige and powerfulness of one brand. This gets
that company more advantages when doing business with partner and middle
distribution channel suppliers. A company with many lines of product that win
loyalty of consumers tends to make big contracts with distributors and get more
profit and reduce cost for exhibition, trade fair and promotion…
 Attracting new customers
Prestigious brand bring to its company a stable volume of customer time over time.

Loyal customers are willing to try new product, new feature of the brand, make
recommendation for their friends. When customer hesitates before many products
having same function, they will find the more prestigious brand more convincing to
take.
 Getting over competitors
Switching cost is one factor influence customer’s buying decision. Newcomer of one
market must spend more time and money to get customer. A prestigious brand tend
to be easier to react to its competitors by organizing promoting campaign, sale off,
special offer to loyal customer…..to make its own customers satisfied with their
admiring brand.

Brand loyalty certainly bring many benefits to company. Customers experiences many stages
until they become loyal to one brand name. Customers get their brand loyalty after having
experiences with product and service. Brand loyalty is expressed and determined both by
6


psychological perception and behavioral response (Dick and Basu, 1994). In term of attitude,
loyalty can be described as general and favourable liking for some personalities of a brand.
And behavior of a loyal customer is repurchasing product/service. In definition, brand
loyalty is biased behavior response expressed overtime by some decision-making unit with
respect to one or more alternative brands out of a set of such brands (Jacoby and Chestnut,
1978). Then, standing in front of a bunch of products, services with many brand names, a
loyal consumer would rather decide to buy the brand they know that it not only fulfills his
needs but also evoke his sense of self-definition and share the same value, belief.

In general, when customer is loyal to a brand, they tend to re-purchase the product or re-use
the service that brand offers. They are willing to pay more when the price goes up, spread
out word of mouth or positive recommendation to their acquaintances. In time of crisis, they
can keep buying product and show their gratitude to protect the company.

Studying how to gain customer’s loyalty is important to every organization and marketing
researchers. Some previous studies has proposed the pivot constructs to brand loyalty which
are: trust (Morgan and Hunt, 1994), customer satisfaction (Garbarino and Johnson, 1999),
perceived value (Sirdeshmukh et al, 2002; Sweeney and Soutar,2001).

2. 2 Brand Trust
Brand trust definition comes from the field of social psychology, sociology and marketing.
Morgan and Hunt (1994) defines trust is the confidence one partner has in the other exchange
partner. Brand trust is conceptualized as the confident expectations of a brand’s reliability
and intentions in situation entailing risk to the consumer (Delgado-Ballester, E., ManueraAleman, J. L., & Yague-Guillen, M.J. ,2003). So a cusomer’s trust towards company and
brand would go along with that brand’s reputation, credibility and its ability to fulfill the
promises.

Regarding brand trust, the authors state that in risky condition, trust can influence on choice
and behavior. To have trust in a brand means that consumer thinks of the high probability of
the positive outcomes that brand will give to himself. Contributing to define brand trust,

7


Chaudhuri and Holbrook (2001) mention the brand has to sofly make consumers rely on the
ability of the brand to perform its stated function.

Delgado-Ballester, E., Manuera-Aleman, J. L. (2001) state that trust is a feeling of security
based on the belief that his behavior is guided and motivated by favourable and positive
intentions towards the welfare and interests of the partner. Trust is based on the two general
dimensions : brand reliability and brand intentions towards the individual.
 Brand reliability shows the customer’s belief that the brand has the capacity to
respond to customers’ needs. When brand is trusted by customer, this will increase
his brand repurchase intentions on the next buying occasion.

 Brand intention is the belief that the brand will never take advantage of customer’s
vulnerability. Consumers infer how the brand will behave in case problems arise in
some situations and circumstances.

2.3 Customer Satisfaction
Customer Satisfaction is one important construct to brand loyalty.
There comes a stage that is important for enhancing to brand’s product and its promises to
customer. That is when customer buy product, use the service and have real experiences with
them. Oliver (1981) insists that customer satisfaction assessment must be based on concrete
and real exchange or trade. When customers have the perception of good quality in the firm’s
offerings, they gain their trust and the intention to get loyal. Then, they will have the
response and evaluation for the brand. In the future, they will have their decision of buying
due to their experience with the brand in the past.

Customer satisfaction is an emotional status in which what customer desire and expect from a
company’s product or service are satisfied or exceed their expectation (Brown, 1990). The
outcome of satisfaction are repeated purchasing, loyalty and positive word of mouth.
Anderson et al (2004) describes satisfaction as accumulated general emotional evaluation of
a brand’s products/service over time. In simple words, the degree of satisfaction that

8


customer have is based on their comparison between their previous expectation and actual
performance of product/service, between price and quality.

2.4 Brand Identity and Brand Identification
Perceived Value is one pivot construct to brand loyalty. Sweeney and Soutar (2001)
developed multiple item scale to measure consumer perceived value. According to Sweeney
and Soutar (2001), perceived value has some dimensions that makes it differ from customer

satisfaction. They argued that value perceptions can be generated without the product or
service being bought or used. They also conducted exploratory factor analysis and got 19
items revealing into for dimensions: quality, price, social and emotional.

While quality and price can simply be described as functional value of product and service,
social and emotional factor are exceptionally perceived by customer beyond their satisfaction.
Thus, social value and emotional value is derived from product’s ability to enhance one’s
social self-concept and creates personal feeling.
These values of company are perceived by customer after company’s attempt to build
branding strategy. A brand can be created and viewed as a human being that have many
characteristics and emotions. Up to now, there have been many concepts towards brand on
this view of consumer: brand personality, brand image and brand identity. In this research,
the author refers to focusing on brand identity and brand identification. Time over time,
companies plan and execute many marketing communication mix including activities of
packaging, pricing, advertising, distributing. All these activities will create brand personality
along with brand identity, brand image, brand identification.
2.4.1 Kapferer’s Brand Identity vs Brand Image
Some new learners of branding may be confused between brand identity and brand image.
Some explaination below would clarify this.

Marketing communication is the process in which a company sends out a message and
customers receive it. Strong marketing communication results in positive attitude toward
brand, encouraging customers to purchase products and spread the words. Kapferer (2008)
9


describes the gap between brand identity and brand image. He defines brand identity is brand
message the company sends out to the customers and brand image is the perception of the
customers create about the brand.
On the customer’s side, brand image is the sum of impressions that customers perceive a

brand and identify of differentiate the brand from others (Kapferer, 2008). Brand image is
held in customer’s memory with the effect of brand associations (Keller, 1993).

It

strengthens the link between customer and brand and also intention of customers to buy or
repurchase some products.

2.4.2 Brand Identity in other research journal
Bhattacharya and Sen (2003) and He (2009) suggests that brand identity with its prestige and
distinctiveness leads to stronger customer relationship. It is because brand identity of first
and finest represents strong brand name and get customer’s higher level of trust and
expectation.

According to Bhattacharya and Sen(2003), brand or corporate identity are the characteristics
of being distinctive and relatively enduring of that brand. The more distinctive and
prestigious the brand identity is, the stronger and more attractive it becomes.
Company’s product or service must satisfy the customer’s needs for core value. Beyond this
need, customers express their needs to become unique (Berger and Heath, 2007, Ruvio,
2008; Tian et al., 2001). People have their own motivation and need for distinctiveness in
their identities (Tian et al., 2001). Therefore, a distinctive brand identity fulfills this need of
customer. To get this request fulfilled, customers have the tendency to ignore the rising up
price. For example, Apple Company usually launchs 2 new version of Iphone every year.
Even they change little feature of Iphone, many consumers hung for switching to the new
version. It can be proved that the customers are satisfied with Apple brand identity and
consider the price less.

Customer chooses a brand because of their self-esteem. That means the quality is not enough
without brand status, conspicuity (Kirmani et al., 1999). In Vietnam smartphone market, a
10

smartphone under well-known brand costs more than 12 millions VND. For the intention of
purchasing, consumer would read the review on magazine and online, compare between the
company’s brand performance and ask for advice from friends. Therefore, a brand with
higher distinctive characteristics and more well-known awareness by consumers will come
on top of the intention of buying.

In this research, the author would use individual customers as the unit of analysis. In
other words, we are on the customer’s side and take the customer’s perspective of
brand characteristics. This means brand executives of Vietnamese handphone brand are not
involved. Then, the author bases more on the definition of Bhattacharya and Sen (2003)
which says brand identity is all characteristics of a brand or company that makes the brand
name more differential. So the prestigious and unique manner of these brand characteristics
would be examined through how customers receive/perceive the attempt of marketing
communication from the company.

2.4.3 Brand Identification
Brand executive must learn the relationship between customers and brand to measure and
validate the performance of their marketing communication. Brand management requires this.
Consumer’s identification with brand show the way customer interact with brand, their
behavior and brand commitment. As customer realizes that brand express their identity, they
create a strong relation with brand.
Brand identification is conceptualized as “customer’s identification with a company as an
active, selective, and volitional act motivated by the satisfaction of one or more selfdefinitional needs”(Bhattacharya CB, Sen S.,2003). The authors state that brand
identification is not imposed by company but sought out by customer who question for selfdefinitional need of fulfillment. In other words, consumer perceives brand values as his own.
Consumer identity is expressed and communicated to other people through brand.
Tuskej et al (2013) simply defines consumer’s brand identification as “perception of
sameness” between brand and themselves. As stated above, a brand can be conceived as one
person with personlities and emotions. So a brand can display and evoke a lot of sentiments

11


such as honesty, elegance, excitement, sincerity, creativeness, friendliness…The more
customer identify with a brand, the higher degree between his self-schema and the schema he
holds for that brand.

For example, fashion brand along with the specific concept and design would call for
customer’s desire for fashion, for self-expression and their social role. Those electronic brand,
in another way, would also call for fashionable desire and the professional look. A
smartphone can be conceived as the helpful assistand and a helpful friend.

2.5

Research Model and Hypothesis

In Vietnam smartphone market, companies are on the running race to win customer’s loyalty.
Via some loyalty test and program, they may learn how their brand positions in mind of
customer. There are cognitive side and action response of customer to show their loyalty to
brand. And brand communication must fulfill both of these sides.

There is a strong relationship between Brand Trust and Brand Loyalty. Among all, trust is the
key factor to every long-term relationship. In business, many marketing researches have
proved the positive impact of brand trust on brand loyalty. On his study on brand choice,
Erdem and Swait (2004) points out that brand trust increase probability of inclusion of a
brand in the consideration buying set and brand choice. So brand trust has a direct effect on
customer perceptions and purchase intentions. In addtion, Punniyamoorthy, M.M., & Raj, M.
(2007) came up with the result that brand trust, along with functional value, emotional value,
social value, customer’s satisfaction and commitment, has the significant influence on brand
loyalty.

The first hypothesis is:
H1: Brand Trust positively influences Brand Loyalty

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Brand value, brand image, brand personality are identified and perceived by customers. In
this research, we approach the progress of the way customers absorb brand value by studying
two concepts: brand identity and consumer’s brand identification.
A brand which is well-known and has high value results in brand trust. Firstly, a strong brand
identity would reduce customer’s worry of risk. Secondly, there are two cognitive processes
of the development of trust (Doney and Cannon, 1997). The first process is calculative by
means of calculating the costs/rewards of the target brand acting in an untrustworthy manner.
The second process takes place when a brand is capable of fulfilling its value promises.
Berens at al.(2005); Simoes et al.(2005) continued the research on brand identity and
advocated that strong corporate identity engenders trust. This come to a hypothesis proposed
within this research study:
H2: Brand Identity positively influence Brand Trust

Brand loyalty has both psychological/cognitive side and loyal action responses. So customer
must refer to the brand that is more prestigious and valuable to make decision of buying
product. It is assumed that brand identity has a huge impact on customer’s cognitive loyalty
and may greatly influence customer when they re-purchase product or service. Brand identity
certainly affect potential customer when they first consider a new brand to consume. And
loyal customers are willing to pay more for their favourite brand even the price rises up as
the brand positioning and characteristics remain unchanged.
Brand identity includes values, aim and moral image of the company. And when the value
and moral image is getting worse and negative, customer stop buying product from that
company.

Bhattacharya CB, Sen S. (2003) proposed that the link between customer’s perception of
company’s identity and their reaction to company depend on how they know and trust the
identity. So we can draw the following hypothesis:
H3: Brand Identity positively influence Brand Loyalty

Consumer’s identification with the brand means consumer find the sameness between
themselves and brand. Consumer can be inspired by the historical stories about brand.
Consumer can find that brand message, slogan express their lifestyle, belief and value. For
13


example, Levi has a slogan “I will not sit at home collecting dust”. This influences a young
generation who likes to go exploring the world to learn and fulfill their self-defining. In
electronic industry, Sony sends out its message “Make Believe”. Coming from Japan which
is a country of prestige and honor, Sony brand shows the characteristics of a fighter: always
stand up and win the glory.
Consumer’s trust and the relation between consumer and brand remains together. He, H., Li,
Y., Harris, L. (2012) states brand identification represents affective attachment to the brand,
which provides a favorable platform for brand trust development. The following hypothesis
is as below:
H4: Brand Identification positively influence Brand Trust

Brand identification is the key construct in customer-company relationship. Bhattacharya CB,
Sen S.(2003) propose that brand identification can also affect brand loyalty. As the
attachment to brand is strengthened over time, customer repeatly purchase the company’s
product, feel free and confident to try other brand line product, buy the accessories, join the
event of the company.
In the research on brand relationship, Tuskej et al (2013) finds that consumer brand
identification influences positive consumer’s word of mouth. Spreading positive word of
mouth is among brand loyalty actions. It can assume brand identication has an impact on

brand loyalty. The hypothesis is drawn as below:
H5: Brand Identification positively influence Brand Loyalty

Jones and Suh (2000) note that consumer satisfaction can lead to brand loyalty and brand
trust. Consumers becomes more loyal and trustful when there is a perception of good quality
in the firm’s offerings. When consumer meet the inconvenience using product or service,
their trust reduces. Moreover, complaint, negative word of mouth and rumor tend to
negatively impace on consumer trust also.
H6: Customer Satisfaction positively influences Brand Trust

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In the electronic industry, when consumer sees that his expectation before buying a product
is satisfied, he will consider the repeated purchase in the future. Garbarino and
Johnson(1999) ensured customer satisfaction as a key construct to brand loyalty. According
to that research, overall satisfaction will result in future intention. Consumer centainly
changes his product and service when they do not feel happy anymore.
Gustafsson et al. (2005) also shows the effects of satisfaction and commitment on
loyalty.The last hypothesis is:
H7: Customer Satisfaction positively influences Brand Loyalty

Table 1: List of Hypothesis
Hypothesis Statement of Hypothesis
H1

Brand Trust positively influences Brand Loyalty

H2

Brand Identity positively influence Brand Trust

H3

Brand Identity positively influence Brand Loyalty

H4

Brand Identification positively influence Brand Trust

H5

Brand Identification positively influence Brand Loyalty

H6

Customer Satisfaction positively influences Brand Trust

H7

Customer Satisfaction positively influences Brand Loyalty

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Figure 1: Proposed Research Model

Table 2: Summary of the concept studied
No

1

Concept

Brand Identity

Definition

Scale Measurement

(Author/Year)

(Author/Year)

Kapferer, 2008

Bhattacharya and Sen (2003)

Bhattacharya and Sen, 2003
2

Brand Identification

Bhattacharya and Sen, 2003

Bhattacharya and Sen (2003)

Tuskej et al (2013)
3

Customer Satisfaction

Brown, 1990

Anderson et al, 2004

Anderson et al, 2004
4

Brand Trust

Morgan and Hunt, 1994

Chaudhuri and Holbrook, 2001

Chaudhuri and Holbrook, 2001
Delgado-Ballester, E., Manuera-Aleman, J.
L., & Yague-Guillen, M.J. ,2003
5

Brand Loyalty

Jacoby and Chestnut, 1978
Dick and Basu, 1994

16

Jacoby and Chesnut, 1978

Chapter 3: Research Method
This chapter describes the reseach process, methods used, sample design and data collection
method.

3.1 Research Process
Research scope and the context were well identified after research problem and research
objective were defined. Several theories and concept were reviewed. After that, the author
chosed main concept to propose the influences of them on brand trust and brand loyalty
within the industry of communication equipment – smartphone. The draft questionaire was
also designed by choosing the measurement scale from the previous research study. Then,
research design came to the next two phases: a pilot study and main survey.
- Pilot study was made in one round. It was an in-depth interview with some smartphone
users who have strong interest in using a brand of phone. Other people see and tell the
perception of each brand identity means to them. Others have used several brands and
experienced the quality and service. They also helped to edit the wording, improve the
questionaired before sending out the main survey.
- Main survey was conducted via both direct and indirect way:


Direct way: some surveys are completed by interviewing the respondents, some
are sent to the audience.



Indirect way: using email invitation to Internet Survey to conduct the audience
responses with the support of Google Docs Website.

Received data was processed and analyzed by using Exploratory Factor Analysis and
Cronbach alpha reliability analysis to validate data and check the reliability of the
measurement scale. To test hypothesis, the author used multiple regression. Main findings

was reported in chapter 4.

Research procedure is summarized as the following 6 steps:
-

Step 1: Development of research model and consolidated questionaire. Research
model drawed the correlation between the concepts based on literature review.
Measurement scale was adopted from previous study.
17


-

Step 2: Conducting an in-depth interview to get support from the real smartphone
users. This step is to check the relevance of the concept to the interviewee and how
they understand the questionaire. After this, final questionaire was decided. The indep interviewees also recommend the audience for the author to send the questionaire
to. Sample population is created.

-

Step 3: Send the main survey and collect the data after 1 month. Based on the advice
and sugestion from the in-depth interview, the main survey were sent to the sample
population, main via indirect way using Google survey.

-

Step 4: Test the reliability of the measurement scales using Cronbach Alpha Analysis.
This is used to test the internal consistency among variables o the same construct.
Cronbach Alpha coefficient above 0.7 is good.

-

Step 5: Test the validity of the scale with Exploratory Factor Analysis (EFA). This
test is to explored the inter-relationships among set of variables. The inter-correlation
is considered strong when correlation matrix for evidence of coefficients is 0.3.
Barlett’s test is significant (p<0.5) and KMO is good if being greater than 0.6 and
ranging from 0 to 1.

-

Step 6: using the linear regression analysis. After Cronbach Alpha and EFA Test,
multiple regression analysis is employed to test the impact of independent factor on
dependent factor.

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