The elements affecting the customer-oriented brand equity of tourism establishments in Hanoi

THE ELEMENTS AFFECTING THE CUSTOMER-ORIENTED
BRAND EQUITY OF TOURISM ESTABLISHMENTS IN HANOI
Dr. Bui Hung

Faculty of Urban & Environmental Economics and Management,
National Economics University, Hanoi, Vietnam
PhD student Vu Thi Thu Ha

Hanoi University of Industry
Abstract
The study aims to develop a model for measuring and verifying the relationship
between dimensions of brand equity and brand equity as a whole. The study uses
quantitative methods to formally evaluate the scale and the impact of the factors on the
customer-oriented brand equity of travel agencies in Hanoi. The samples were randomly
selected from 215 questionnaires which were distributed and collected. The finding is that
dimensions of brand value include brand awareness, brand association, perceived quality,
brand loyalty, which have a strong impact on the brand equity of tour operator. This result
implies that travel agencies should promote branding to improve brand awareness and
brand loyalty in order to improve perceived quality and brand loyalty, thereby increase the
brand value and competitive advantages.
Keywords: Brand equity, travel agency.
1. Introduction
The concept of brand equity has drawn so much attention of many scientists in the
world since the 1980s. These studies showed the extremely important role of the brand.
Building brand to increase competitive advantage has been proposed by many researchers
such as Aaker (1991,1996), Keller (193, 1998, 2003), Yoo et al. (2000, 2001) or Atilgan et
al. (2005,2009) ... If the brand is considered as the tip of an iceberg, the brand equity is the
sink which helps the businesses survive and stand out in the market among fierce
competition. Particularly, in the service sector where the product is invisible, the quality is
only perceived in the process of using, the process of production and consumption takes
place simultaneously, the brand is the first factor to help the customers aware and encourage

them to use the service. In the context of economic integration and extensive development,
Hanoi in general and tourism in particular have the opportunity to develop their great
potential. However, the competition is also extremely fierce among domestic enterprises and
between domestic and foreign enterprises. Therefore, branding is extremely necessary and
urgent. With the understanding of the factors affecting brand equity of travel agencies in
Hanoi, the managers can make the right decisions towards the criteria that customers prefer.

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However, the assessment of brand equity in the service sector is relatively new;
most of the studies focus on tangible products and there is no formal study about the
factors affecting brand equity of travel agencies in Hanoi. Thus, the paper focuses on the
factors affecting the brand equity of travel agencies in Hanoi to provide the managers and
policy makers of travel agencies with a more holistic view.
The author identifies three main approaches: Finance-oriented approach, Businessoriented approach, and Customer-oriented approach. Customer-based approach (a concept
of brand equity) is considered in the context of making the marketing decision.
The brand equity in the financial sense (the value of financial assets which brand
equity creates for the business) is defined as the cash flow that accumulates for the branded
product compared with non-branded products (Simon and Sullivan, 1993). Buil et al.
(2008) argue that brand creates profit for the brand and money flow for the organization.
Brand equity is the added cash flow created by the investments in the brand (Srinivasan
and Associate (2005)). However, this approach does not help the managers utilize and
develop the brand values (Kim et al., 2008).
Business-oriented approach and customer-oriented approach was studied by
Farquhar (1989), Aaker (1991a), Srivastava et al. (1991)). Farquhar (1989) defines brand
equity as the value added to the business, distributor, or the consumer by what the brand
brings to the product. Brand equity is a set of assets and liabilities associated to a brand
name and its symbols that add to or subtract from the value provided by a product/service
to a firm or to its customers (Aaker (1991a). Brand equity is the association and behavior

of the consumers in the distribution channel which can produce sales as well as increase
benefits for branded products compared to non-branded products? In addition, these
associations and behaviors can bring advantages and differences to the business.
Brand equity in customer-oriented approach relates to only consumer perceptions of
the brand rather than other objective indicators (Lassar et al., 1995). ). This approach was
supported by many researchers such as Aaker (1991,1996), Keller (1993,2008), Kapferrer
(1994), Yoo et al. Walfried Lassar, Banwari Mittal and Arun Sharma (1995), Zeithaml,
(1988) Villarejo-Ramos and Sanchez-Franco (2005), Amarette and Hendriana (2011),
Villarejo- Ramos and Sanchez-Franco (2005), Amaretta and Hendriana (2011) ... because
the origin of all activities must come from the customers. This paper is also based on this
approach. The two most prominent researchers for this approach are David Aker and Kevin
Lane Keller, whose two most famous books are Managing Brand Equity published in 1991
and Managing Customer ‒ Based Brand Equity published in 1993. The results of these two
studies were also searched the most. Results from Keller‘s study was based on Aaker's
study but it was more comprehensive and rigorous. According to Aaker, brand equity
consists of brand loyalty, brand association, brand awareness and perceived quality:
Brand loyalty is the core dimension of brand equity. It's like "the binding that a
customer has for a brand".
Brand association is anything in the mind of the consumer when thinking about the
brand. The set of brand associations in a meaningful way is called brand image. Brand

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image plays an important role in differentiating the brand. Brand personality is considered
as the key association of brand image as it creates the identities and durability of the
brand (Aaker D., 1996a; Aaker D., 1996b). Brand association (BAS) is anything in the
customer's memory that "links" to a brand.
Brand awareness refers to the ability of a customer to recognize or remember a
brand as a component of a particular product (Aaker D. 1991).

Perceived quality is the perception of the customer about the quality or overall
superiority of a product in relation to other competitive options.
Therefore, the model of factors affecting brand equity as defined by Aaker is shown
below:
Brand loyalty
Brand association
Brand Equity
Brand awareness
Perceived quality

There are many models of brand equity valuation but the author found that Aaker's
model is the most suitable tool to analyze the factors affecting the customer-oriented brand
asset of travel agencies in Hanoi area.
The following hypotheses are proposed:
H1: There is a positive relationship between brand loyalty and brand value.
H2: There is a positive relationship between brand association and brand value.
H3: There is a positive relationship between the level of brand awareness and
brand value.
H4: There is a positive relationship between perceived quality and brand value.
2. Methodologies
The study uses quantitative methods to formally evaluate the scale and the impact
of the factors influencing the customer-oriented brand equity of travel agencies in Hanoi.
Once the research model and observation variables have been developed,
quantitative research is conducted in four steps:
Step 1: Design survey sheet, carry out survey trial. Questionnaires are delivered
directly and send online to the consumers.
Step 2: Design the official survey sheet.
Step 3: Conduct the official survey.

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- The appropriate sample size for EFA analysis: The study has 24 variables need to
be considered, so the minimum sample size needed is 24 * 5 = 120 observed variables
(Hair & ctg 2006).
- The appropriate sample size to use regression model: For best regression results,
the sample size should be: n> = 8p + 50 (where n is the minimum sample size needed, and
p is the independent variable observed in the model). In this study, there are 19 observed
independent variables with minimum sample size of 8 * 19 + 50 = 202 (Tabachnick &
Fidell, 1996).
Thus, the minimum sample size 202 will help the author to achieve study purposes.
The number of survey sheet delivered is 215, the number of the collected sheet is 215, the
number of valid sheet is 215. Method of sampling is convenience sampling.
The surveyed objects are people in Hanoi.
Step 4: Data collection and processing:
- Statistics to describe the collected data.
- Analyze and process the data with the support of SPSS software version 22 for
window operation.
- Data analysis is performed by measuring the reliability of the scale using
Cronbach'Alpha coefficient, verify the value of the scale by exploratory factor analysis
(EFA) and multivariate regression analysis to find out the importance level of the factors.
3. Results
Descriptive statistics of sample
Gender

Ages

Income

Married status

Male

33.9%

Female

66.1%

<20

5.3%

20-30

12.8%

30-40

22.2%

40-50

37.3%

>50

22.4%

<5 million/month

17 %

5-10 million/month

24.5%

>10 million/month

58.5%

Not married

43.6%

Married

56.4%

Descriptive statistics of the sample shows that in the total of 215 respondents,
33.9% is male, female accounts for a larger number of 66.1%. People aged 40-50 years old
accounts for the largest proportion of 37.3%, the respondents younger than 20 years old is

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only 5.3%. Income statistics show that over a half of the respondents earn more than 10
million VND/month. In addition, the proportion of the married and unmarried is
approximately equal.
Verify reliability of the scale

Synthesis of observed variables in the model
The number of observed
variables

Type of variable

Brand awareness

3

Independent variable

Brand association

3

Independent variable

Brand loyalty

6

Independent variable

Perceived quality

3

Independent variable

Brand equity

4

Dependent variable

Name of variable

Verify reliability of the scales
Correlation
coefficient
between variable
and total

Cronbach‘Alpha

Source

Variable ―Brand awareness‖ of travel agencies
I am aware of how X looks like

0.603

0.765

I can realize X among other
competitive brands

0.745

0.708

I know the brand X

0.801

0.795

Variable ―Brand association‖ of travel agencies
Some personalities of brand X
appear quickly in my mind

0.635

0.806

I can quickly image the logo,
symbol of brand X

0.553

0.742

I have difficulty in recalling
brand X in my mind

0.604

0.764

Variable ―Perceived quality‖ of travel agencies
X is a high-quality brand

0.684

0.825

Sure that quality of brand X is
extremely high

0.752

0.648

Maybe brand X has many
interesting programs

0.895

0.786

Maybe X is very reliable

0.659

0.702

Yoo et al.
(2000)

Yoo et al.
(2000)

Yoo et al.
(2000)

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Correlation
coefficient
between variable
and total

Cronbach‘Alpha

X must have high quality

0.679

0.748

X seems to have poor quality

0.708

0.729

Variable ―Brand loyalty‖ of travel agencies

Source

Yoo et al.
(2000)

I think I am loyal to X

0.559

0.802

X is my top choice

0.864

0.677

I will not use the tours from
another brand if X has them

0.675

0.735

Variable ―Brand equity‖ of travel agencies
Even if the brands are the same,
the use of X instead of other
brands is still considered
meaningful

0.847

0.759

If another brand is exactly the
same as X, I still choose X

0.865

0.785

If another brand is as good as X,
I still choose X

0.679

0.825

If another brand is not different
from X, choosing X is still a
smart choice

0.723

0.689

Yoo et al.
(2000), Yoo &
Donthu(2001)

X is a particular brand
Souce: Collection of the author
According to Nunally & Burnstein 1994; according to Nguyen Dinh Tho & Nguyen
Thi Mai Trang, 2009, the authors found that: The observed variables are greater than 0.6
which shows that these variables are closely related to each other and these scales are all
selected. Observed variables have correlation coefficient between variable and total greater
than 0.3, all of these variables are accepted and will be included in EFA.
Alpha values: greater than 0.8 means good scale; from 0.7 to 0.8 is usable scale; 0.6
or more is usable in case that the research concept is new or new in the research context
(Nunally, 1978; Peterson, 1994; Slater, 1995, cited by Hoang Trong and Chu Nguyen
Mong Ngoc., 2005).
Result of EFA
With independent variables: Rotatel component Matrix, Kaiser- Meyer – Olkin and
Bartlett‘s test

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Factors
1
NB1

0.756

NB2

0.789

NB3

0.825

2

LT1

0.761

LT2

0.825

LT3

0.679

3

TT1

0.812

TT2

0.723

TT3

0.895

TT4

0.684

TT5

0.748

TT6

0.864

4

CL1

0.748

CL2

0.746

CL3

0.694

KMO

0.866

Chi-Square

10764.302

Df

423

Sig.

0.000

With independent variables: Rotatel component Matrix, Kaiser- Meyer – Olkin and
Bartlett‘s test
Factors
1
TS1

0.811

TS2

0.762

TS3

0.844

TS4

0.648

KMO

0.768

Bartlett‘s test

Chi-Square

2365.768

Df

254

Sig.

0.000
Source: Survey of the author.

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EFA is used to varify the values of the scale. The observed variables with load
factor <0.4 will be rejected (Clack and Watson, 1995). According to the analysis results,
none of the observed variables is eliminated. The components with satisfactory transfer
coefficients (> 0.5) ensure a significant level of factor analysis (Hair et al., 1998). The
KMO coefficients of independent and dependent variables are 0.866 and 0.768
respectively (> 0.5), with mean Sig.=0.000 which reveals that factor analysis is

appropriate, the variables are correlated and satisfy the conditions in factor analysis.
Verify the importance of factors
The results of multivariate regression analysis show the impact level of the factors;
the level of impact expresses by the Beta regression coefficient through the equation:
TSTH = 0.385NBTH + 0.288LTTH + 0.172TTTH + 0.499CLCN
The results tell us:
For a change of brand equity, the travel agency needs 0.172 brand loyalty which
means 0.172 of loyalty that a customer has for a travel brand.
For a change of brand equity, the travel agency needs 0.288 brand association which
means 0.288 of anything in the consumer's mind when thinking about the travel brand.
For a change in brand equity, the travel agency needs 0.385 brand awareness which
means 0.385 of the ability of a customer to recognize or recall a brand as a constituent
element of a particular product.
For a change in brand equity, the travel agency needs 0.499 perceived quality
which means 0.499 customer‘s perception of the quality or superiority of the product in
comparison with other competitive options.
4. Discussion and Conclusion
After analyzing the data, the factors affecting customer-oriented brand equity of
travel agency in Hanoi are assessed. Thereby, we can see that to improve customeroriented brand equity of travel agencies in Hanoi, different solutions should be combined,
specifically:
First: Group of solutions to strengthen and enhance the brand loyalty of travel
agencies‘ customers. Loyalty is a factor depending heavily on feelings and experiences.
Only with good experience, the customer will continue to use the product. Therefore, good
customer care policies are needed. Building and supervising customer satisfaction
indicators on a regular basis are necessary.
Second: Group of solutions to increase brand association of travel agencies‘
customers. Brand association is an important dimension of brand equity. Therefore, if the
travel agency does not have effective solution to improve the brand identity, positioning
and repositioning the brand in customer‘s minds is essential for brand association. Logos,
colors, slogan, etc are the elements that customers find most easy to think about a travel

brand. However, in building the brand, it is important to ensure that these associations can

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create the identity which links to the customer and promote the communication; the design
and spaces of publications should be unified.
Third: Group of solutions affecting the brand awareness of the customer towards
travel agencies in Hanoi. The businesses should focus on building the brand identity that is
different and meaningful in customer‘s mind. The customers can easily recognize the
brand identity of a particular travel agency among other brands. Brand awareness is
evaluated by the customers of travel agencies as the second important factor (the first
important factor is perceived quality), thus the travel agencies should focus on investing in
this group of solutions.
Fourth: Group of solutions to improve the perceived quality of the customer
towards travel agencies in Hanoi. As the travel product consists of two parts which are
tourism and other supporting services (food service, traveling...), product quality depends
on both services and physical products. In order to improve perceived quality, it is
necessary to improve the quality of customer service; improving the level and attitude of
employees also contributes greatly to the quality perception of the customers. As surveyed,
the factor that increases the brand equity of the travel agencies the most is perceived
quality of the customer, thus the businesses should focus on improving product quality by
delivering high-quality product and service packages.
5. References
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