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1 Student First Name: Supawan Student Second Name Ueacharoenkit Copyright subsists in all papers and content posted on this site. Further copying or distribution by any means without prior permission is prohibited, except for the purposes of non-commercial private study or research, as defined in the Copyright, Designs and Patents Act 1988, or as otherwise authorised by statute. To obtain permission, please contact the author of the relevant paper in the first instance or with details of your request. 1

2 'Investigating the relationship between brand and loyalty: The study of luxury cosmetic brand in Thailand. Abstract The concept of brand has evolved as an imperative area of study within the brand management and marketing discipline. Likewise, with the importance and the attention paid to this concept during the last few years, the theory of brand s has remained vague and there is a lack of enough theoretical support. In addition to this, several scholars pointed out that there is a connection between brand and loyalty. Therefore, this study aims to address the gap of the literature and illustrate better understanding of the concept of brand together with its consequences, which is mainly focussed on consumer loyalty. The objective was to investigate the relationship between brand and consumer loyalty in the luxury cosmetic brand industry (Thailand). This empirical study proceeded with a systematic review of previous literature that led to the development of a theoretical framework. A research method was carried out in only one stage, which is a quantitative method, using a questionnaire to collect data. The questionnaires were tested by Thai customers who have in luxury cosmetic brands. The results of this study demonstrated that sensory, affective, behavioural, intellectual and social are luxury cosmetic brands dimensions. In addition to this, there is a positive direct relationship between luxury cosmetic brand and consumer loyalty. Also, luxury cosmetic brand has a positive indirect relationship with consumer loyalty through brand personality, brand trust and consumer satisfaction; therefore, brand trust is the most significant one. KEYWORDS: luxury cosmetic brand, brand personality, brand, brand trust, consumer satisfaction, consumer loyalty, Thailand 2

3 Introduction This paper starts by introducing a brief background of the present study. Also, it provides a research framework together with the research hypotheses. The next section illustrates the research methodology, thereby; the research result is drawn in the following section. In addition, next section provides a research discussion. Finally, the conclusion of this paper is present. 3

4 Literature review Research background Marketing managers have tried to apply experiential marketing to great success in different industries. New marketing tools such as technology and media seem to be great tools driving products and services. Therefore, there are several reasons why marketing managers should consider in their products or services. The focus on experiential marketing in the area of marketing has been discussed over 20 years; it was researched as early as the late 1900s (Holbrook and Hirschman, 1982). Holbrook and Hirschman (1982) stated experiential marketing is a consumption of fantasies, feelings and fun. The idea of experiential marketing has been widespread in the marketing literature in different contexts including brand, consumption, product, shopping and service (Brakus et al., 2009; Zarantonello and Schmitt, 2010). Generally, the notion of brand was thought of in as early as 1980, but it was first recognised in 1997 by Schmitt. He pointed out that brand originates from a set of interactions between a customer and a brand, a company or a part of the organisation involved (Schmitt, 2009). Later, measures of brand aspects were researched by Brakus et al. (2009). The concept of brand had been studied intensively in Brakus et al. s (2009) research. It presented how consumers a brand, how brand is measured and whether brand affects consumer behaviour (Brakus et al., 2009). Following the emergence of brand, contributions from scholars focusing on brand were attempted to add value for companies (Brakus et al., 2009; Atwal and Williams, 2008; Schmitt, 1999b; Chang and Chieng, 2006; Ha and Perks, 2005). Research framework On the basis of the review of the relevant literature, a set of consequences are hypothesised to be related to luxury cosmetic brand, and luxury cosmetic brand is hypothesised to be related to consumer behaviour in terms of loyalty. Also, luxury cosmetic brands are used to apply in brand theory and used as a context in this study. 4

5 The consequences of luxury cosmetic brand are those factors that are the result or outcome of the perceived luxury cosmetic brand during, before or after consumption. The review of the related literature illustrated that there are many factors that result from brand. The findings indicated that some aspects have a strong relationship with brand such as brand personality, brand trust, consumer satisfaction and consumer loyalty; thereby increasing or decreasing the likelihood of perceiving an outstanding luxury cosmetic brand (Figure1). Figure 1: Research framework Sensory Affective H1a Brand personality H2 Intellectual Luxury cosmetic brand Loyalty Behavioural H1c Satisfaction H4 Social H1b Brand trust H5 Research methodology The aims of this present research are to identify the dimensions of luxury cosmetic brand, and explore the emotional/rational consequences of luxury cosmetic brand and how luxury cosmetic brand contributes to build consumer behaviour (loyalty) in the Thailand context. This present study has been developed on the basis of the existing literature review and conceptual model. 5

6 A quantitative approach is used, as it is one of the relevant approaches that has been used in most of business and social science studies (Kwon, 2008) and a survey questionnaire is used for collecting data. The survey questionnaires were distributed to 520 participants by selfadministered that were selected based on convenient sampling from people to visit luxury cosmetic counters in the particular department stores. Out of 520 questionnaires, 483 were valid which shows 93% of valid questionnaire. In order to analyse the data and to obtain meaningful and relevant statistical measures, the software package SPSS version is used to test the hypotheses and to find out if any relationships between the independent and dependent variables exist. Before the data collection process, a pilot study was conducted in order to measure the reliability and validity of the questions, the language used in the survey and the time needed to complete the survey. Findings After the data screening, linear regression analysis and multiple regression analysis had been employed to test the relationship between independent variable and dependent variables (Table1) (Figure2). Table 1: Research results Research hypotheses β t-value Result H1a: Luxury cosmetic brand affects on brand Supported personality positively. H1b: Luxury cosmetic brand affects brand trust Supported positively. H1c: Luxury cosmetic brand affects consumer Supported satisfaction positively. H2: Brand personality affects consumer loyalty positively Supported H3: Luxury cosmetic brand affects consumer loyalty positively Supported H4: Consumer satisfaction affects consumer loyalty Supported positively. H5: Brand trust affects consumer loyalty positively Supported 6

7 Figure 2: Research results Sensory β =.622 Affective β =.483 Brand personality β =.139 Intellectual Luxury cosmetic brand β =.368 Loyalty Behavioural Social β =.156 β =.412 β =.455 Satisfaction β =.820 Trust β =.299 β =.408 Discussion This section aims to discuss the research hypotheses as well as summarise the hypotheses proposed in previous section. Table 1 demonstrates that all seven hypotheses were tested and supported by the data analysis. Hypothesis 1a: Luxury cosmetic brand affects on brand personality positively. The results tend to agree with the findings of a similar study regarding the relationship between brand and brand personality by Brakus et al. (2009). The findings showed that the luxury cosmetic brand predictor has a statistically significant and positive relationship with brand personality in the Thailand context. It confirms and supports the hypothesis that luxury cosmetic brand affects brand personality positively, with a path coefficient value of It was also indicated that luxury cosmetic brand had a positive relationship with brand personality. This seemed reasonable in the luxury cosmetic brand sector, where consumers received their of brands on the basis of their personality. 7

8 Hypothesis 1b: Luxury cosmetic brand affects brand trust positively. Brand is a key driver of brand trust, especially in sensory and social. The above results show that brand applied in the luxury cosmetic sector had positive and significant relationships with brand trust. This means with luxury cosmetic brand in Thailand (Bangkok), when consumers are committed to a luxury cosmetic brand, they are more likely to consider their of a particular luxury cosmetic brand before developing brand trust. Hypothesis 1c: Luxury cosmetic brand affects consumer satisfaction positively. Brand applied in the luxury cosmetic brand sector has positive and significant relationships with brand satisfaction. This means with luxury cosmetic brand in Thailand (Bangkok), when consumers are committed to a luxury cosmetic brand, they are more likely to perceive a brand including sensory, affective, intellectual, behavioural and social. These above brand s result in a positive influence on brand satisfaction. Hypothesis 2: Brand personality affects consumer loyalty positively. The results tend to agree with the previous research by Upshaw (1995) that brand personality derives from loyal consumers. Also, it supports similar research by Brakus et al. (2009), that there is a positive relationship between brand personality and consumer loyalty. On the other hand, the results seem to be different from the research of Kim et al. (2001), as they claimed that brand personality has no direct relationship with consumer loyalty, whereas there is an indirect relationship between brand personality and consumer loyalty by word-of-mouth. Hypothesis 3: Luxury cosmetic brand affects consumer loyalty positively. The findings from the hypotheses testing recommend that brand has a positive relationship with consumer loyalty in the industry of luxury cosmetic brands in Thailand (Bangkok). That means that Thai luxury cosmetic brand consumers consider brand as one of their criteria before deciding to have brand loyalty. Thus, luxury 8

9 cosmetic brand companies in Thailand should put emphasis on how to increase the positive brand of their target consumers in order to build loyal customers and maintain their existing customers. Hypothesis 4: Consumer satisfaction affects consumer loyalty positively. The findings support the results in the literature, which indicate that when a brand meets customer satisfaction, it will lead to brand loyalty (Magin et al., 2003). Also, the previous research suggested that consumer satisfaction contributes a positive effect on consumer loyalty (Yang and Peterson, 2004). Additionally, recent research by Brakus et al. (2009) pointed out that the level of consumer loyalty and brand commitment increases when consumer satisfaction has been met. Hypothesis 5: Brand trust affects consumer loyalty positively. The findings of this research tend to agree with the findings of similar studies by Chaudhuri and Holbrook (2001), O Shaughnessy (1992), Papista and Dimitriadis (2012) and Lau and Lee (1999) about the positive relationship between brand trust and consumer loyalty. Therefore, the findings from the hypotheses testing recommend that brand trust has a positive relationship effect on brand loyalty in the luxury cosmetic brand business in Thailand (Bangkok). That means, Thai luxury cosmetic brand consumers consider brand trust as one of their criteria before deciding to have consumer loyalty. Thus, luxury cosmetic brand companies in Thailand should focus on how to deliver the perception of trust in a brand to their target consumers in order to gain benefits from loyal consumers. Conclusion The research problem aims to focus on the role of brand in building consumer loyalty within the luxury cosmetic brand industry. Also, this study represents the first empirical study of luxury cosmetic brand in Thailand (Bangkok). The research provided only a quantitative approach to obtain and analyse the information. The quantitative method allowed the development of a theoretical framework from the survey questionnaire technique, which was conducted on Thai luxury cosmetic brand consumers. The study used SPSS for Windows: linear regression analysis and multiple regression analysis techniques to analyse the data. The findings showed that luxury cosmetic brand is represented by five dimensions, which are sensory, affective, 9

10 behavioural, intellectual and social. What s more, the relationship between luxury cosmetic brand and consumer loyalty was found to be statistically significant. This study also explained that consumer loyalty not only has a direct effect from luxury cosmetic brand but also has an indirect effect via brand personality, consumer satisfaction and brand trust. In addition to this, the regression analysis illustrated that all pathways were significant, especially brand trust acting as the strongest mediator between luxury cosmetic brand and consumer loyalty. 10

11 References Atwal, G., and Williams, A. (2008). Marketing in postmodern India: Bvglari meets bollywood. Indian Journal of Marketing. 38 (1): 3-7. Brakus, J., Schmitt, B.H., and Zarantonello, L. (2009). Brand Experience: What Is It? How Is It Measured? Does It Affect Loyalty?, Journal of Marketing 73 (May): Chang, P.L., and Chieng, M.H. (2006). Building Consumer Brand Relationship: A Cross- Cultural Experiential View. Psychology & Marketing. 23 (11): Chaudhuri, A., and Holbrook, M.B. (2001). The Chain of Effects from Brand Trust and Brand Affect to Brand Performance: The Role of Brand Loyalty. Journal of Marketing. 65 (April): Ha, H.Y., and Perks, H. (2005). Effects of consumer perceptions of brand on the web: Brand familiarity, satisfaction and brand trust. Journal of Consumer Behaviour. 4 (6): Holbrook, M.B. and Hirschman, E.C. (1982). The experiential aspects of consumption: Consumer fantasies, feelings and fun. Journal of Consumer Research 9: Kim, C.K., Han, D., and Park, S.B. (2001). The effect of brand personality and brand identification on brand loyalty: Applying the theory of social identification. Japanese Psychological Research, 43 (4): Lau, G.T., and Lee, S.H. (1999). Consumers' Trust in a Brand and the Link to Brand Loyalty. Journal of Market - Focused Management. 4 (4): Magin, S., Algesheimer, R., Huber, F., and Herrmann, A. (2003). The Impact of Brand Personality and Customer Satisfaction on Customer's Loyalty: Theoretical Approach and Findings of a Causal Analytical Study in the Sector of Internet Service Providers. Electronic Markets. 13 (4): O Shaughnessy, J. (1992). Explaining Buyer Behaviour, UK: Oxford University Press. Papista, E., and Dimitriadis, S. (2012). Exploring consumer-brand relationship quality and identification: Qualitative evidence from cosmetic brands, Qualitative Market Research: An International Journal. 15 (1): Schmitt, B.H. (1999b). Experiential Marketing: How to Get Customers to SENSE, FEEL, THINK, ACT and RELATE to Your Company and Brands. New York: The Free Press. Schmitt, B.H. (2009). The concept of brand, Journal of Brand Management. 16 (7): Upshaw, L.B. (1995). Building Brand Identity. New York: John Wiley and Sons. Yang, Z., and Peterson, R.T. (2004). Customer Perceived Value, Satisfaction, and Loyalty: The Role of Switching Costs. Psychology & Marketing. 21 (10):

12 Zarantonello, L., and Schmitt, B. H. (2010). Using the brand scale to profile consumers and predict consumer behaviour. Brand Management. 17 (7):

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