Abstract
Apparently, brand is now gradually becoming an important intangible asset of the business. It is really a sharp and useful tool to help businesses compete and develop sustainably. Today, many customers choose to buy goods because that product is affixed with a famous brand. Therefore, the brand has brought great value to the business. The article focusses on analysing the factors affecting the expansion of Viettel corporation brand from the perspective of customers, thereby proposing recommendations to help Viettel, in particular, and Vietnamese businesses, in general, to expand their brands successfully.
Introduction
According to Murphy (1990)
A brand is a combination of all the physical, aesthetic and emotional elements of a product, including the product itself, its name, logo, image and expression of that product, which are gradually built over time and have a clear position in the minds of customers.
With this approach, the brand is understood as a being built by enterprises, but the acknowledgement of the brand existence is often from customers. In terms of customers, the brand represents the love that customers give to the product, surpassing both the aesthetics and product quality. Therefore, in order to gain the trust and love of customers, businesses need to study the nature of brand, the expansion and brand development of successful businesses in the world, combined with practical analysis of Vietnam’s business situation and market characteristics to clarify factors affecting products and enterprise brand expansion. As a result, competitive advantages will be created and the reputation and brand value of the business will be improved. Therefore, the case study of Viettel brand is used to clarify factors affecting the expansion of telecommunication brand and make scientific and theoretical contributions in both theoretical and practical terms.
Apparently, brand extension is the business’s use of a brand that has been succeeded with respect to one product category for another product category or in one business area for another one. In fact, brand extension is the interest to many researchers. In 1990, Kotler and Armstrong (1990) made their comments on brand expansion: ‘Brand extension is an expansion strategy in which the company uses a successful brand name to introduce a new or improved product’. This is considered as a pioneering concept of brand expansion. In 1991, Aaker said that ‘Brand extension is the use of an existing brand of one product group associated with another product group’. Thus, the nature of brand extension is understood that from a successful brand, the enterprise will use that successful brand to attach to the new products and new areas that it wants. Actually, brand extension is the business that is taking advantage of the available brand power to connect with the market for new products, and new fields of business. The result of a brand extension can be: the extended brand will add or not add value to the expanded product; brand extensions can benefit or harm an existing product of the business; and businesses lose the opportunity to create effective new brands. Enterprises conduct brand extension activities in the following two cases: (a) Expanded products have the same skills and assets with existing products; (b) Implement each other to form a complete set of products.
Assessing brand extension from the perspective of customers is influenced by many factors such as: brand awareness; conformance in customer perception; perceived quality of the original brand; expansion of the customer cohesion with the product; and customer innovation in product purchase’s options.
Relevance in the perception of an extended brand customer is the similarity between existing branded products and expanded products (Aaker & Keller, 1990). Hence, the higher the relevance of an expanded brand to the original brand, the better it will be to transfer the customer’s trust in the original brand to the expanded one (Boush & Loken, 1991).
The effectiveness of brand expansion depends on the construction and development of a combination of ideal attributes, characteristics, benefits and strengths that the product possesses, but it must be suitable to the needs and desired by target customers. With a distinct and recognisable function, the brand will assist businesses in conducting effective market segmentation. Because, by making a difference and a distinctive identifier in the branding process for a business or product, it will strongly attract the attention of current and potential customers. As a result, it will form each specific product category containing specific brands and correspond to certain customer groups.
Viettel Group is the largest telecommunications and information technology group in Vietnam, one of the fastest growing telecommunications companies in the world and in the top 15 global telecommunications companies in terms of subscribers. Viettel is currently the largest telecommunications service provider in Vietnam, investing and operating in 13 countries in Asia, USA and Africa with a market size of 270 million customers, about three times the population of Vietnam.
Recognising the important role of brand expansion, Viettel has applied the theories of different researchers in the world to achieve the effect of brand extension. It also focusses on customers’ feelings about the original brand when expanding their products and pays attention to the customer’s connection with the products that Viettel provides to the market, the readiness to spread experience of customers towards new products. In reality, all activities that Viettel deploys are based on customers’ wishes and perceptions of the brand, customer satisfaction towards original products and new products that are supplied to the market.
Data Description
Select Sample and Collect Data
The subjects of the study are Viettel customers. In order to make the research sample highly representative, to increase the accuracy of the evaluation of the overall characteristics of the study, and to have convenient implementation and comprehensive data analysis, the author chooses a random sampling method (based on the number of customers with provided services and geographical area).
Sample Size
The reliability of the information will depend on the selected sample size. As the sample size increases, the reliability of the information increases with extra time, resources and huge costs. If the sample size is small, it will be convenient in terms of cost and time, but the information will be poorly reliable. According to Bentler and Chou (1987), determining the sample size is based on the minimum rule: 5 × 3 = 15 samples for a measurement variable. In the above research model, six research hypotheses and 21 observed variables were identified, using the 5-point Likert scale, so the initial number of calculated samples is: 21 × 15 = 315.
Data Collection
To collect information, the author conducted an investigation through the direct distribution of the survey questionnaire to customers and emails, etc.
Method of Data Analysis
The author used SPSS version 20 software to process collected data, test the scale of reliability coefficient, analyse discovery factors, test hypotheses and the model’s relevance to information from the market. With respect to the collected dataset, the first thing is to filter out the inappropriate questionnaires, and then proceed to enter, clean and conduct some of the following analysis methods.
Evaluate the factors scale by assessing the reliability and value of the scales by Cronbach’s alpha reliability coefficient and exploratory factor analysis (EFA) through SPSS 20 processing software to screen filter, remove observed variables that do not meet the criteria (garbage variables). According to Trong and Ngoc (2008) and many researchers, they agree that when Cronbach’s alpha coefficient has a value of 0.8 or up to nearly 1.0, it is a good scale; from 0.7 to nearly 0.8, it is usable. However, many researchers (Nunnally, 1978; Peterson, 1994) suggest that Cronbach’s alpha coefficient of 0.6 or higher can be used in case when the concept under study is new to respondents in the context of research (Anderson & Gerbing, 1988).
In this study, the sample size is quite large (419), so that the analysis results will be reliable, during the analysis process, the author retained the scales with Cronbach’s alpha value ≥0.6 and type of observed variables with total correlation <0.3. In EFA analysis, the author used principal component extraction method with Varimax rotation, eliminated observable variables with the value of factor loading ≤0.5 or deduced into other factors that have weight difference between factors, which is ≤0.3.
In terms of structure by gender: With a sample of 419 observations, female respondents accounted for 62.3% (females were 251), male customers were 149 (making up 37.7% of people participated in the survey) (Table 1).
Individual Characteristics of Research Sample.
On the subject of the structure by age: Customers in most of surveyed samples were aged from 31 to 35 years old (accounting for 28.4%), followed by the age group of 26–30 years (accounting for 27.2% ), the age group of 56–60 and over 60 years old that made up a small percentage (accounting for 0.9%). The results of One-Sample T-test was significant with the level of p-value = 0.000 < 0.05. It can be said that Vietel’s customers’ ages are young. The average age is 30 years.
Regarding structure by educational level: The majority of survey participants have bachelor’s degree, accounting for 67.5% (283 customers). Moreover, the ratio of customers with doctorate degree was 13.8%.
With respect to structure by number of years of using the product: According to the survey results, the number of customers having the highest number of years using the product from one to five years was 165, accounting for 39.4%. In addition, the rate of customers using Viettel products (over 20 years) is a small proportion (2.4%). Based on the results of One-Sample T-test, it can be said that the seniority of customers when using Viettel products is young, an average of 8.6 years. The analysis results by age structure also indicated that the majority of customers in the overall study were young in terms of age and seniority (Table 1).
Model Specification
Research Design
In order to identify the factors affecting Viettel’s brand expansion, the author tested the model and research hypotheses that have been proposed above by qualitative research method together with quantitative research method.
The author conducted previous studies in foreign countries as well as in the country related to brand extension in order to detect research problems, systematise theoretical basis to identify research models and select the scale for variables in the model.
Preliminary research was conducted by the author with qualitative research and quantitative research (small sample size) including (Figure 1):
Qualitative research to screen and determine the relationships among variables in the model that have been established when studying theoretical overview. Since then there are adjustments to the scales of previous studies, meeting the current research conditions of the topic.
Quantitative research (preliminary) to assess the reliability and validity of the scale and standardise some terms to suit the research context before using the scale and survey for official investigation.
In step 3, the author has selected the research model as well as a scale for variables in the model. At the same time, the author conducted a test of the reliability and validity of the pine model. Official quantitative research was conducted by using the questionnaire on the selected sample.
The information collected from quantitative research is the processed data through the usage of SPSS 20 software to analyse, evaluate the value, reliability of the scale and verify research models and research hypotheses. As a result, it helps to draw the overall conclusions for the study. On that basis, the author made suggestions and recommendations.
Quantitative Research Method
The objective of quantitative research is to test the relationship between factors affecting brand expansion. In addition, the study also aims to determine the impact of factors affecting brand expansion. This study was conducted with a large sample size to increase the reliability and achieve the set goals.
Conduct Questionnaire
The content of the questionnaire (Figure 2) includes the following:
Variables and Scales
Variables in the research model are measured through a 5-point Likert scale (1—totally disagree, 2—disagree, 3—no opinion (confused), 4—agree and 5—completely agree). The variables in the research model are measured through 21 observed variables and are denoted by the name.
Hypotheses
The author used multiple linear regression method to determine the significance level and linear correlation of variables in the model, which identify the extent of the independent variables’ influence on the dependent variable. We have the following regression equation:
Y = β0 + β1.X1 + β2.X2 + β3.X3 + … + β7.X7 + ε Y: Brand extension (dependent variable) X (X1, X2, X3,…, X7): Factors affecting business startup (independent variable) β (β1, β2, β3, …, β7): partial regression coefficient ε: independent random variable
The authors hoped that the expectation of the independent variables will change in the same direction as the dependent variable and have the positive sign (+). This means that when the value ofindependent variables is positive (+), the level of the impact on students’ intention to start a business is a positive effect.
Basic Regression Results and Causality
Scale’s Result
According to Table 2, Cronbach’s alpha > 0.6 and above can be used in this study (Nunnally, 1978; Peterson, 1994; cited in Trong and Ngoc, 2008).
Cronbach’s Alpha Analysis for Independent and Dependent Variables.
Exploratory Factor Analysis
The authors used the principal components extraction method with Varimax rotation and stop point when extracting elements with Eigenvalue greater than 1 with the observed variables.
Multivariate Regression Analysis
The author performed multivariate regression analysis with three independent variables and the method selected by the Enter method. The results of multivariate regression analysis are as follows (see details in Appendix).
The model results show that the adjusted R2 is 0.673 (Table 4), which means that 67.3% of the variation of the dependent variable TC is generally explained by the independent variables in the model. Besides, F test also shows that significant value is very small (sig. = 0.000), showing that the model fits the survey dataset (Table 3).
KMO and Bartlett’s Test.
Summary of Regression Model.
The independent variables in the model: TN, PH and CN are statistically significant (sig. < 0.05).
The results show that the acceptance coefficient (Tolerance) is quite high (from 0.631 to 0.693) and the magnification coefficient of VIF is low (from 1,443 to 1,585, <2). Therefore, it can be concluded that the relationship between these independent variables is negligible and does not have multicollinear phenomena.
The multiple regression equation shows the relationship between the success of Viettel brand extension and the following influencing factors:
In which, TC is the dependent variable showing the success of Viettel brand expansion. TN, PH and CN are independent variables in the order of: customer’s willingness to experience new Viettel products, the compatibility between Viettel’s new products and the products of the original Viettel brand and guest’s comments on the original Viettel’s products.
Further Analyses
Results of Multivariate Regression Models
Based on the regression analysis results, the first goal of the topic was answered: there are three factors that affect the success of Viettel brand expansion, namely (a) willingness to experience Viettel’s new products, (b) the compatibility between Viettel’s new products and the products of the original Viettel brand and (c) customer’s comments about the original Viettel’s products.
Among the above three factors, the factor ‘The compatibility between Viettel’s new products and the products of the original Viettel brand’ has the greatest impact on the success of the Viettel brand expansion with a regression coefficient of 0.413, followed by the factor ‘Customer’s willingness to experience new Viettel products’ with regression coefficient of 0.27. The factor‘Customer’s feeling about the original Viettel product’ has a lower impact on the coefficient regression 0.229. This is also the answer to the goal of the topic.
Through the regression analysis results, the impact of the factors on the success of Viettel expansion is as follows:
Through the regression results, there is a correlation between the expansion of Viettel brand and ‘The compatibility between Viettel’s new products and the products of the original Viettel brand’. The regression coefficient is 0.413, which means that while other factors remain unchanged in case there is ‘The compatibility between new products of Viettel and products of the original Viettel brand’, the brand expansion increases by 0.413 units. This result is consistent with the fact that when the new product matches the product of the original brand, it will positively impact Viettel’s brand expansion. If Viettel develops new product categories that have similarities with original brand products or minimise non-conformities between old and new products, the brand expansion will attain good results.
The regression results between Viettel brand extension and ‘customers’ willingness to experience new products under the Viettel brand’ show a correlation. The regression coefficient of 0.27 means that when customers are ready to experience new products (Table 5), the value of Viettel brand increases to 1 unit, the success of brand expansion will go up to 0.27 units. This is entirely consistent with the reality. When customers desire to experience new products with the brand name of the original product, there will be greater chance of success for Viettel brand expansion.
Regression Coefficients.
Regression results between brand extension and ‘customer perception of the original Viettel product’ show a correlation. The regression coefficient is 0.2229, which means that when customers’ perception of the original Viettel product increases by 1 unit, the success of Viettel brand expansion increases to 0.2229 units (Figure 3). This result shows that, when the original product branded Viettel brings good feelings to customers, the probability of success will increase when Viettel proceeds to expand the brand.
Theory Test
The test results show the relationship between the suitability of new products and old products of Viettel brand with the brand extension of 0.413 at a statistically significant level of sig. = 0.000, so H5 is accepted when observations are surveyed. Thus, it can be concluded that the suitability of new and old products under the Viettel brand is the factor that influences the expansion of Viettel brand.
The test results show that the relationship between ‘customers’ willingness to experience new Viettel brand products’ and the success of Viettel brand expansion is 0.27 at the statistical significance sig. = 0.000, so H6 is accepted with the observed survey. Therefore, ‘customers’ willingness to experience new Viettel brand products’ is a factor that affects the successful expansion of Viettel brand.
The testing results show that the relationship between: customer perception of the original Viettel product and the success of Viettel brand extension is 0.222 at a statistical significance of sig. = 0.000, so H7 is accepted with the official surveyed. Hence, ‘customer feeling about the original Viettel product’ is a factor that affects the successful expansion of Viettel brand.
As a result, the most powerful factor affecting the success of Viettel brand expansion is the appropriate factor between the original product and the new product, creating good imagination of customers when using the new products with the original brand.
The policy of expanding the products that Viettel brand creates and develops is based on the business philosophy:
Each customer is a human being—a separate individual, which must be respected, cared for and listened to understand and serve separately. The corporation should constantly innovate, together with customers, to create increasingly perfect products and services.
Therefore, the product system is very diverse and plentiful in order to ‘personalise the needs’ of customers, based on customers’ perceptions that provide services, good support for the construction and development process of Viettel. Especially, it is too positioning in the mind of the target customers, making a difference in the perception of customers compared to VNPT and other competitors. Only with respect to mobile telecommunications services for individual customers, Viettel has designed products with separate packages for each customer such as students, farmers, teachers, journalists, to be suitable with the specific needs and solvency of the respective customers.
For example, with customers who are students still dependent on their parents, the demand for texting and calling is less, so when designing products for this kind of audience, Viettel reduced messaging rates compared to other packages, adding the subscription feature of the callers, parents’ paid subscribers to maximise the benefits and needs of customers, increase the quality of perception and association of Viettel brand when having demand, creating favourable conditions for building and developing the corporation’s brand. In fact, customers appreciate the appropriateness of products and services provided by Viettel and reflected in Table 6.
Customer Reviews of Products and Services Provided by Viettel.
According to Table 6, up to 73.1% of customers rated Viettel’s products as being appropriate to their needs, 22.4% of customers said that the products were well-suited to their needs. Moreover, only 3.8% of customers believe that Viettel’s products do not match their needs. This proves that Viettel’s system of products and services has received great support from customers. This is because Viettel’s products are built on the research on the formation of perceived value from customers about the attributes and benefits of products, from a deep understanding and high appreciation of customers.
The supplement of elements to make differences to products from Viettel’s comprehensive research, which is highly appreciated by customers and supplemented towards the development of product quality function and quality management under a comprehensive way to create the best quality for target customers. In fact, Viettel has successfully designed products based on customer understanding, typical packages such as tomatoes which have created a closeness to Viettel’s customers. According to Table 7, up to 55.1% of customers participating in the survey were very satisfied and satisfied with the quality of products provided by Viettel. In addition, 91.7% of customers trusted Viettel’s products and services and 86% were relatively satisfied with Viettel’s after-sales service
Viettel has created a new image for mobile and fixed phone services when implementing a product-driven customer business strategy by changing the charging block in a way that is more beneficial to customers.
Customers’ Comments About the Attributes and Benefits of Viettel’s Products.
In fact, Viettel has successfully designed products based on customer understanding. Block 6s + 1 voice service is a beneficial charging method for customers (Viettel will charge all calls under 6s, from the 7th second, the call charge is charged per second) has changed the way the charge is calculated with previous fixed and mobile voice products that the network operators applied (the charging block is being applied by the operators before Viettel launched a new voice product which is 1 minute + 1 minute block, which means that for calls lasting under 1 minute will still be charged as 1 minute. This means that 1-second call will also be charged as 1 minute. This is detrimental to the clients).
The quality of products that Viettel provides to customers is increasing when focussing on product innovation with technology elements: 2G, 3G and 4G products. Furthermore, high-tech products that Viettel is researching and manufacturing have proved this fact. In order to improve products’ value under customer reviews, creating a basic premise for brand-building and development activities. Over the past years, Viettel has been a pioneer in creating products with new technologies. This is also a way to build an impressive association with Viettel in the minds of customers. In terms of the product innovation strategy associated with technological factors, by the end of 2015, Viettel had installed and tested 4G networks until the first quarter of 2017 with 36,000 4G stations. The corporation is also the first network operator to research and produce telecommunications equipment and billing systems to serve its business and production activities. Besides, many new telecommunication products have been researched, designed, manufactured and introduced by Viettel in Vietnam market such as watches for children with positioning features, journey monitoring devices for transportation businesses, the syntax of registration of ‘individual’ promotions to each subscriber *098 #, etc.
Viettel has provided telecommunication products and services with emotional connection with customers. This is the difference in comparison with the products of VNPT, Mobifone … to create the awareness and loyalty of customers for the Viettel brand
Actually, customers choose Viettel’s telecommunications products and services not only because of the need to exchange, communicate, attain connecting information, have entertainment and serve the work that customers are buying with the trust towards the leading telecom brand of the domestic market. The corporation also provides good quality products, with effective customer service and shares the responsibility of taking care of the community to gain a huge development.
Over the years, Viettel has always made efforts in the process of brand development. This is Viettel’s top priority in its business strategy. Moreover, increasing the level of brand recognition of customers is Viettel’s desire. To accomplish this, Viettel has focussed on expanding the brand. From the original brands of mobile services, Viettel has expanded the product categories associated with its brand such as electronic payment services (Viettel pay), technology products at Viettel stores (Viettel store), cable TV service, etc. It can be said that Viettel has successfully expanded its brand in Vietnam’s telecommunications market. The brand expansion helps Viettel to continuously increase its market share and maintain the number one position in the market in recent years.
The success of Viettel brand expansion is reflected in customers’ willingness to experience new products for the selection and use of Viettel products in recent years. Among 419 customers participating in the survey, 312 customers were willing to buy new products of Viettel when the company launched new products to the market, despite the policy of changing the network to keep the number that was already implemented. However, when being asked whether they have the need to switch to use the service of other businesses, 98.8% of customers did not need to convert. These are positive results reflecting the success of Viettel brand expansion.
Conclusion
Military Industry and Telecommunications Group (Viettel) is one of the Vietnamese enterprises that successfully built and developed the brand, deeply depicting the brand image in the minds of customers. For nearly 30 years, Viettel brand has always been the first choice of individuals and organisations when consuming telecommunications products and services. Viettel is a proud brand of Viettel people. The success of Viettel brand comes from the modern management thinking, methodical implementation process, effective usage tools, successful brand extension, etc. Therefore, the authors proposed a number of solutions helping Vietnamese businesses, in general, and Vietnamese telecommunications businesses to expand their brands after the successful study of Viettel brand as follows:
Businesses should raise awareness about the role and need of brand extension. Moreover, they should organise a division specialised in branding.
It is suggested that Viettel should increase customer experience for new products associated with their brand. Furthermore, they should research carefully the factors affecting brand expansion, especially to control the factors affecting the success of brand expansion.
The company is advised to pay attention to customers’ feelings about the compatibility of new products with old products having original brand names. They should also enhance communication to raise customers’ awareness about their brands.
Always create brand differences that are expanded on the basis of increasing the values that customers receive.
In the brand strategy, Viettel needs to make a difference in the quality of supplied products, prices or customer services or distribution channels. They must be based on adding value to customers and the customers feel to it. Meanwhile, the difference in brand will be felt by customers, selected and became loyal to Viettel brand.
The expanded brand name must be positioned in accordance with the target customers.
The brand chosen by customers is the brand that benefits them while the perception of the quality of each customer’s products and services will be different. Therefore, accurate brand positioning will create a successful brand. In brand positioning, it is necessary to choose a different but beneficial feature for customers, persevere and promote a unique, differentiated positioning message of the brand to target customers.
The expanded brand must always be associated with new science and technology.
Viettel brand in recent years has always created good sentiments in customers’ hearts, thanks to a strategy of proactively investing, researching and applying scientific and technological advances in a synchronised manner to improve infrastructure. As a result, they can create delivery service with good quality. The corporation has also researched terminals with superior technology to create high efficiency in business production and environmental protection. Therefore, in the coming years, Viettel needs to maintain the brand development associated with new technologies to create miraculous steps in the telecommunications market to affirm a strong brand in the minds of customers and the community residents, both in domestic and international market.
Completely improve the diverse, flexible and effective communication channels to support communication, promote and expand the brand: With the desire to approach and serve all the unique needs of different customers, Viettel needs to invest financial resources, human resources and time to continuously improve brand communication channels, and fully exploit the advantages and characteristics of each media tool. The corporation also should combine the use of traditional media channels such as television, magazines, newspapers, events with modern communication channels such as Facebook, YouTube, Website, etc.
Additionally, Viettel needs to establish and maintain good relationship with the media to effectively exploit promotion activities for themselves through these media.
In particular, the enterprise is suggested to continue to maintain events that have a good connection with its brand image such as Heart for You, for the Poor, etc. It should also promote social media activities that are practical and effective to create good brand awareness in the minds of customers. Moreover, it is advised to create an image of a socially responsible corporation to make consumers aware of the brand through programmes that contribute to the community, support social and artistic activities and, in general, to improve social welfare. Actually, this activity meets both the purpose of the business and the customer. The specific characteristic of this communication is that investment is made through the purchases and sales of products between businesses and customers. In addition, the enterprise needs to diversify communication activities through advertising, promotion, etc. to expand the sphere of influence and contribute to brand promotion.
For other businesses
The article provides some recommendations for brand management and marketing management of Vietnamese enterprises, especially those in the business of telecommunications products and services, as follows:
First, businesses need to analyse the target market before expanding the brand to find out the needs of consumers that the business can meet and still have ‘the extent’ to compete or have not been explored.
Second, businesses need to consider the perceived relevance between the original brand and the expanded product in their brand expansion strategy.
Third, in order to expand the brand successfully, the original brand needs to prove its prestige and quality so that it can transfer the attributes of the original brand to the expanded product.
Fourth, in order to improve awareness, as well as to deepen consumer awareness, businesses need to promote their brands through various channels such as advertising, public relations or executing enterprises’ social responsibility, etc.
Fifth, expanding the brand towards young people who desire for innovation may be an easier choice for brand expansion strategies because they are willing to experience new things.
Footnotes
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.
Funding
The authors disclosed receipt of the following financial support for the research, authorship and/or publication of this article: This research is funded by Vietnam National Foundation for Science and Technology Development (NAFOSTED) under grant numbers: 502.02-2018.300 and 603.99-2018.301.
Informed Consent
This study was conducted using secondary data that are freely available; hence, no ethics approval or permission to use the data is needed.