i

The effect of brand experience and customer satisfaction on brand loyalty:

a case study of True Coffee in Bangkok, Thailand

Nut-Arin Musikapart

A Thesis Submitted in Partial Fulfillment of the Requirements for the Degree of

Master of Business Administration
Prince of Songkla University
2013
Copyright of Prince of Songkla University
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Thesis Title The effect of brand experience and customer satisfaction on brand
loyalty: a case study of True Coffee in Bangkok, Thailand
Author Ms.Nut-Arin Musikapart
Major Program Master of Business Administration (International)

Major Advisor : Examining Committee :

…………………………………… ………………...…………… Chairperson

(Assoc.Prof.Sasiwemon Sukhabot) (Dr.Walapa Patana)

…..........…………………….……………
(Dr.Teerasak Jindabot)

…..........…………………….……………
(Asst.Prof.Sasiwemon Sukhabot)

The Graduate School, Prince of Songkla University, has approved this

thesis as partial fulfillment of the requirements for the Master of Business
Administration (International Program)

……………………………………
(Assoc.Prof.Dr.Teerapol Srichana)
Dean of Graduate School
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This is to certify that the work here submitted is the result of the candidate’s own
investigations. Due acknowledgement has been made of any assistance received.

…………………………………..Signature
(Assoc.Prof.Sasiwemon Sukhabot)
Major Advisor

…………………………………..Signature
(Ms.Nutarin Musikapart)
Candidate
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I hereby certify that this work has not been accepted in substance for any degree, and
is not being currently submitted in candidature for any degree.

………………………………….Signature

(Ms.Nutarin Musikapart)

Candidate
 v

Thesis Title The effect of brand experience and customer satisfaction on

brand loyalty: a case study of True Coffee in Bangkok, Thailand
Author Ms.Nut-Arin Musikapart
Major Program Master of Business Administration (International)
Academic Year 2012

ABSTRACT

The objective of this research was to study and understand the

relationships between brand experience, customer satisfaction and brand loyalty in the
Thai coffee shop market. There were three main objectives in this research: 1) to
investigate the effect between brand experience, customer satisfaction and brand
loyalty at a True coffee chain store in Bangkok, 2) to describe the effect of brand
experience on customer satisfaction and 3) to describe the effect of brand experience
and customer satisfaction on brand loyalty.
The quantitative research approach was employed in this study as a
research strategy. The study samples 250 consumers of one outlet of True coffee in
Bangkok as the case study. Data analysis for this study was conducted using SPSS
(Statistical Package for the Social Sciences) software. The analysis used descriptive
statistics such as mean, frequency, percentage and standard deviation, as well as
inferential statistics (regression analysis) to facilitate meaningful analysis.
The findings indicated that there was a statistically significant,
predictive relationship between the brand experience (β = 0.673) of the True Coffee
brand and the customer satisfaction (R2=.269, F=91.121, p< 0.001). The result also
showed that brand experience is a (slightly) stronger influence than customer
satisfaction in formation of brand loyalty. Overall, the results of this analysis support
a modest, positive predictive relationship between the two predictor variables brand
experience (β = 0.517) and customer satisfaction (β = 0.501) on brand loyalty
(R2=.359, F=69.233, p< 0.001).
Keyword: Brand Experience; Customer Satisfaction; Brand Loyalty; Service
Marketing; True Coffee; Thailand
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ACKNOWLEDGEMENT

My first and profoundest gratitude goes to my thesis advisor, Professor

Sasiwemon Sukhabot for her guidance during preliminary stage of this process to
formulate appropriate subject. Professor Sasiwemon Sukhabot offers her unreserved
help; assistance and encouragement lead me to complete this study step by step.
Without her patient instruction, it is impossible for me to complete the study.
Moreover, I want to express my gratitude to Professor Teerasak Jindabot and
Professor Walapa Patana who give valuable suggestion during my proposal and thesis
defense. I would also like to thank True Coffee at Siam Paragon in cooperating and
allowing me to collect data to complete the quantitative analysis of this study.
Finally, I’m grateful to my mum who provides a carefree environment
for me, so that I can concentrate on my study. Although they hardly understand about
the content of this thesis but she give unconditional support to my study emotionally
and financially.

Nut-Arin Musikapart
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Content

Page
Abstract......................................................................................................................................... v
Acknowledgement........................................................................................................................ vi
Content......................................................................................................................................... vii
List of Tables................................................................................................................................ ix
List of Figures ............................................................................................................................... x
CHAPTER
1: INTRODUCTION................................................................................................................. 1
1.1 BACKGROUND OF THE RESEARCH...................................................................... 1
1.2 STATEMENT OF PROBLEM..................................................................................... 7
1.3 OBJECTIVES OF THE RESEARCH........................................................................... 8
1.4 SCOPE OF THE RESEARCH...................................................................................... 8
1.5 SIGNIFICANCE OF THE RESEARCH....................................................................... 8
1.6 RESEARCH OUTLINE................................................................................................ 9
1.7 DEFINITION OF TERMS............................................................................................ 10
2: LITERATURE REVIEW...................................................................................................... 11
2.1 BRAND......................................................................................................................... 11
2.2 BRAND LOYALTY..................................................................................................... 12
2.3 BRAND EXPERIENCE................................................................................................ 16
2.4 CUSTOMER SATISFACTION.................................................................................... 18
2.5 RELATIONSHIP BETWEEN BRAND EXPERIENCE, CUSTOMER
SATIAFCATION AND BRAND LOYALTY.............................................................. 19
3: RESEARCH METHODOLOGY.......................................................................................... 28
3.1 RESEARCH APPROACH............................................................................................ 28
3.2 RESEARCH STRATEGY............................................................................................ 29
3.3 DATA COLLECTION.................................................................................................. 29
3.4 SAMPLE AND SAMPLING PROCEDURE................................................................ 34
3.5 DATA ANALYSIS........................................................................................................ 35
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Content (continue)

CHAPTER Page
4: RESEARCH FINDINGS...................................................................................................... 36
4.1 PILOT TEST................................................................................................................. 36
4.2 DESCRIPTIVE RESULTS........................................................................................... 37
4.3 HYPOTHESIS RESULTS............................................................................................ 45
5: DISCUSSION........................................................................................................................ 49
5.1 DISCUSSION................................................................................................................ 49
5.2 CONCLUSION............................................................................................................. 52
5.3 RECCOMENDATIONS............................................................................................... 54
REFERENCES............................................................................................................................. 59
APPENDIX.................................................................................................................................. 66
VITAE.......................................................................................................................................... 72
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LIST OF TABLES

Page
TABLE 1 Growth of coffee shop market in Thailand (Passport GMID, 2012).................... 2
TABLE 2 FACTS ABOUT TRUE COFFEE........................................................................ 6
TABLE 3 QUESTIONNAIRE SCLAE AND MEASURMENT.......................................... 32
TABLE 4 RELIABILITY RESULT..................................................................................... 36
TABLE 5 DEMOGRAPHIC INFORMATION.................................................................... 37
TABLE 6 DEMOGRAPHIC INFORMATION (Continued)................................................ 38
TABLE 7 FREQUENCY OF PURCHASING TRUE COFFEE.......................................... 38
TABLE 8 TYPE OF COFFEE PURCHASE AT TRUE COFFEE....................................... 39
TABLE 9 PURCHASE OTHER BEVERAGE AT TRUE COFFEE................................... 39
TABLE 10 PURCHASE COFFEE BEAN AT TRUE COFFEE FOR DRINKING
AT HOME............................................................................................................ 40
TABLE 11 MEAN VALUE OF BRAND EXPERIENCE..................................................... 42
TABLE 12 MEAN VALUE OF CUSTOMER SATISFACTION.......................................... 44
TABLE 13 MEAN VALUE OF BRAND LOYALTY........................................................... 45
TABLE 14 REGRESSION RESULT OF CUSTOMER SATISFACTION VS BRAND
EXPERIENCE...................................................................................................... 47
TABLE 15 REGRESSION RESULT OF BRAND LOYALTY VS CUSTOMER
SATISFACTION AND BRAND EXPERIENCE................................................ 48
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LIST OF FIGURES

FIGURE Page
1 CONCEPTUAL MODEL FOR THE STUDY.................................................................. 27
 CHAPTER 1: INTRODUCTION

1.1 BACKGROUND OF THE RESEARCH

Coffee served from a coffee bar or other establishment is increasingly popular in

the Bangkok area, although most coffee sold in Thailand continues to be sold in instant form
(Siamturakij, 2012). This change is demonstrative of the types of change that are ongoing in
Thailand and how these changes could affect Thai consumer society. They are also important for
the coffee business, since this affects the ways in which coffee shops and bars can compete with
each other and against substitute products. By examining a single example of the coffee business,
one that the researcher believes is typical for the region, this research will identify key
competitive issues and determine how this competition may occur.
Northern Thailand is an agricultural region with a strong reputation for growing
coffee, with products like civet coffee as well as organic and ordinary coffee being grown in the
area (Angkasith, 2002). This product is both an export cash crop and, increasingly, consumed
domestically at home or in coffee shops. The ready-to-drink coffee market has grown by 5% to
7% in recent years, achieving a market value of approximately 8 billion baht, with room for
growth in premium blends (Food Industry Thailand, n.d.). Fierce competition is anticipated
within the coffee segment, as well as an expanding customer base in the near future (Food
Industry Thailand, n.d.). Coffee consumption has increased dramatically in Thailand in recent
years, and this skyrocketing demand has led to the proliferation of coffee shops, particularly in
larger cities and key tourist destinations. Thailand is home not only to franchises of the world’s
major players, but also many local coffee shops and independent chains (Discovery Thailand,
2012). Table 1 shows the growth in the number of chain and independent coffee outlets and the
transaction value in these outlets from 2005-2010. This shows that there has been an overall
upward trend in growth, although there was a small downturn in 2009 (probably associated with
the economic downturn). As of 2010, there were almost 1,400 chain and independent coffee
shops in Thailand.

1
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TABLE 1 Growth of coffee shop market in Thailand (Passport GMID, 2012)

2005 2006 2007 2008 2009 2010

Total Outlets
Chain coffee shops 459 522 605 670 657 742
Independent coffee shops 440 563 676 750 690 655
Total 899 1085 1281 1420 1347 1397
Outlet growth 20.7% 18.1% 10.9% -5.1% 3.7%
Value of Transactions (Bt mn.)
Chain coffee shops 2,077.6 2,472.4 3,350.1 3,762.1 3,882.5 4,212.5
Independent coffee shops 853.9 1,067.3 1,259.4 1,385.4 1,246.8 1,147.1
Total 2,931.5 3,539.7 4,609.5 5,147.5 5,129.3 5,359.6
Value growth 20.7% 30.2% 11.7% -0.4% 4.5%

American coffee shop company Starbucks, which entered Thailand in 1998, now
has 82 shops in the country, mostly in and around Bangkok (James, 2009). However, Starbucks is
significantly more expensive than domestic coffee chains like True Coffee, many of which have
superior coffee at much lower prices (James, 2009). With a wide variety of drinks and high-
quality baked goods and other foods, as well as free or inexpensive WiFi and other amenities,
Thai coffee shops are increasingly competitive against Starbucks and other formulaic global
brands (James, 2009).
Rapid growth in coffee sales, the proliferation of coffee shops and fierce
competition in the space makes brand loyalty more important than ever for companies to compete
effectively. As consumers enjoy a rapidly expanding range of options, it becomes increasingly
critical for companies to differentiate their brands in order to thrive in a saturated marketplace.
Thus, branding activities designed to enhance brand experience and customer satisfaction will
become more necessary for the success, or even survival, of coffee shops in Thailand. This
research examines how Thai coffee shops encourage repeat business, using the example of
domestic chain True Coffee.
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According to Kapferer (2008), selling to existing customers who make repeat

purchases is the biggest source of revenue for most companies. It is not possible for a company or
brand to sustain itself entirely on new customers because the supply of new customers within a
focal market will eventually decline. This means that companies need customers to repeatedly
buy their products rather than simply trying the products once. For this reason, companies should
build a loyal customer base in order to maximize revenue and sustain businesses. Once this is
established, the company will have a competitive advantage in many other areas, such as
expansion into new products and markets. This is particularly important with fast-moving
consumer goods for which repeat purchases and the low cost of products provide a means to
penetrate a given market.
Kapferer (2008) asserts that, one of most important assets that a company can
have is brand loyalty, which precedes customer repurchase behavior. Brand loyalty does not
necessarily imply that a customer will purchase a given brand every time, even though some
consumers may purchase the same brand constantly. Instead, it implies that a customer has
positive associations with the brand and a preference for repurchasing it. The brand-loyal
customer will also verbally support the brand by recommending it to others. Thus, generating
brand loyalty helps companies both retain repeat business and gain new customers.
However, Bulik (2012) reports on the results of a global study of over 10,000
consumers conducted by Accenture, which found that despite increasing levels of customer
satisfaction, brand loyalty has been declining. The study, encompassing 10 industries and
measuring satisfaction with key attributes such as wait times, issue resolution and service hours,
found that despite higher levels of satisfaction with brands overall, two-thirds of consumers had
switched brands over the past year due to a bad customer experience, a significant increase over
the prior year. The results of this study suggest that consumer standards are increasing and that
customers are becoming more demanding. This conjecture is supported by the fact that nearly half
of the survey respondents (44%) said that they expect more than they did the prior year from the
same brands (Bulik, 2012). This trend suggests that businesses, particularly those providing
services, must meet higher standard than they did in the past in order to promote brand loyalty.
 4

Given the importance of brand loyalty, it is a phenomenon worth studying. For

the purposes of this research, brand loyalty will be examined within the context of the Thai coffee
shop market. This market was chosen because of its rapid expansion. According to a recent
Euromonitor report, coffee in Thailand has continued to enjoy strong growth even during the
recent economic downturn, with sustained growth forecast for the near future, which indicates the
popularity of this beverage in the region. The report notes that both urban and rural Thai
consumers have embraced coffee drinking culture as a social activity, and anticipates that coffee
will maintain its strong growth at an 8% total volume CAGR or Compound Annual Rate Growth
(Euromonitor, 2011).
Brand loyalty is, moreover, important because it can promote sustainable success
to companies. Customers who are loyalty to a company do not only repeatedly purchase a
product, but indicating willingness to pay extra for their preferred brand (Hoyer & MacInnis,
2008; Mohammad, 2012). Those loyalties do also refer their preferred brand to peers and
relatives, making the business more valuable and widely known (Mao, 2010). These benefits of
achieving brand loyalty promote sustainable success for businesses. Given an example of the
leading English football club such as Manchester United, the company seems to already achieve
brand loyalty as it has worldwide supporters who are not only willingness to repeatedly purchase
its football shirt and merchandises continually, but tends to recommend the club to their friends.
Luis Vuitton is also another luxury fashion brand that tends to succeed the concept of brand
loyalty among Thais and global consumers, giving the point that every new collection of its
products (such as handbag) will likely to be purchased by its patronages.
The coffee market in Thailand is growing at approximately 9% per year,
although most of this demand is generated from at-home consumption of instant coffee
(Euromonitor, 2011). The market is valued up to 8 billion baht (Food Industry Thailand, n.d.)
However, a growing portion of the market is demand driven by coffee shops and sales in this
area. Major competitors in the Thailand coffee shop market include Starbucks, Wawee Coffee,
and True Coffee, although much of the market is taken up by independent coffee shops and small
chains (Euromonitor, 2011).
 5

The subject of this research is True Coffee. True Coffee is unusual among
Bangkok coffee shops in that it has active customer loyalty programs including customer loyalty
cards, as well as active branding activities (True Coffee, 2012). True Coffee is a subsidiary of
True Corporation, a conglomerate that primarily operates in television, Internet, and other
communications services (True Corporation, 2012). True Coffee competes directly with Wawee
Coffee and Starbucks, using a combination of company-owned and franchised stores (True
Coffee, 2012). Both True Coffee and Starbucks are positioned in the market as “the third place”,
or the place that one can be at home that is neither home nor work (Marketing Oops!, 2008). This
means that an inviting atmosphere, combined with good quality products and service, is key to its
business model (Marketing Oops!, 2008). True Coffee’s 2010 revenues were approximately 300
million Baht from its 56 outlets, with growth estimated at 20% for 2011 (Bangkok Post, 2010);
detailed financial figures are not available because of True Corporation’s reporting structure. In
addition to outlets in Thailand, True Coffee has also expanded into Laos in 2010 and into China
with the establishment of 15 outlets in 2011 (Bangkok Post, 2010). It has also expanded slightly
into Vietnam, Burma, and Cambodia (Bangkok Post, 2010). This international expansion clearly
shows that True Coffee is one of the most aggressive and rapidly growing firms in the Thai
market and is likely to produce strong insights into the coffee market. It also suggests that it has
been highly successful in Thailand through the encouragement of repeat customers, indicating
that it is likely to be a strong candidate for understanding how Thai coffee shops can encourage
customer loyalty.
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TABLE 2 FACTS ABOUT TRUE COFFEE

True Corporation founded in Growth of Coffee Shop Market

2006 in Thailand
Growth Rate 45% during 2010 to 2011 4.5% in 2010 (Passport GMID, 2012)
20% during 2011 to 2012 N/A
Stores Approx. 70 in Thailand 9.4% of chained outlets in Thailand as
 15 in China of 2010 (Passport GMID, 2012)
 2 in Laos
 1 each in Cambodia, Burma,
and Vietnam
Domestic Revenues 300 million Baht (2010) 7.12% of total transaction value as of
2010 (Passport GMID, 2012)
Source: Kasikorn Bank (2011)

True Coffee was deemed an ideal case study for this research because it is a
well-known brand that has enjoyed rapid growth in recent years. Monkolporn (2007) reports that
True Coffee has a growing following among Thailand’s trendy set and its students. Located in
prime areas and providing a variety of services such as free high-speed Internet access as well as
food and beverages, True Coffee has become a popular phenomenon in Thailand. It has also
expanded to other nations such as China and Laos in recent years, as well as adding to its local
franchises and enjoying significant revenue growth. Given its success in this dynamic
marketplace, True Coffee’s strategies for promoting brand loyalty and customer satisfaction are
worth examining.
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1.2 STATEMENT OF PROBLEM

The current research on business in Thailand is relatively thin, and there is a

significant knowledge gap surrounding consumer behavior. Currently, it is known that coffee is
growing in popularity, particularly in the outside the home coffee segment (Euromonitor, 2011).
However, this does not explain the effects of brand experience, customer satisfaction, and
customer loyalty. In fact, the marketing research does not even explore whether customer loyalty
exists, only considering the problem of market share in the aggregate. Because of this, it is not
possible to determine from the current research what effect the experience of the brand and
through this experience customer loyalty has on repeat customer purchases in Thai coffee shops
(or any other Thai retail establishment). However, there are models of consumer behavior and
branding available in the existing literature (Brakus, et al., 2009; Choi et al., 2011; Goodson,
2011), built primarily from Western brand management activities, which can potentially be used
to describe this relationship. By using these existing models in the context of Thai coffee shops,
this research hopes to solve the problem of how Thai consumers relate to brands and whether
ensuring customer satisfaction is enough to build customer loyalty which is the foundation of
successful long-term business growth as noted by Kapferer (2008). This will offer insight not just
into True Coffee’s operations, but also insight into the role of brand experience and customer
satisfaction in all brands in the Thai consumer market. This research should be generalizable to
external markets, which will help expand knowledge about these markets. In a more general
sense, it will help to determine whether Western models of brand experience and customer
satisfaction are useful for describing Thai consumer experience of brands. This will further
insights into the Thai market, which is growing as a consumer market but is as yet under-explored
as a consumer market by the academic literature.
In addition to the research issue identified above, there is a personal motivation
for undertaking this research. The researcher has a desire to set up a coffee shop in Bangkok, but
in order to do so, there needs to be much more information about market conditions and the
effectiveness of brand experience and how to build brand loyalty available. By undertaking this
research, the researcher hopes to fill this research gap in order to understand the importance of
brand experience and customer satisfaction in a potential future endeavor.
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1.3 OBJECTIVES OF THE RESEARCH

There are three objectives of this study:

1. To investigate the effect between brand experience, customer satisfaction and
brand loyalty at a True coffee chain store in Bangkok.
2. To describe the effect of brand experience on customer satisfaction
3. To describe the effect of brand experience and customer satisfaction on brand
loyalty

1.4 SCOPE OF THE RESEARCH

The main purpose of this research is to understand the relationships between

brand experience, customer satisfaction and brand loyalty in the Thai coffee shop market. The
study samples 250 consumers of one outlet of True coffee in Bangkok as the case study. A
questionnaire survey is used as a data collection tool. The quantitative survey technique was used
because it enables the researcher to generalize the findings across the population, as well as to
prove or disprove hypotheses (which are posed at the end of Chapter 2). This does sacrifice the
in-depth data available through the use of interviews (Sekaran, 2003), but it is also more
consistent with the goals of the research.

1.5 SIGNIFICANCE OF THE RESEARCH

This study will provide valuable information for coffee retailers in Bangkok, and
in Thailand generally, about what aspects of their products and services promote brand loyalty, as
well as what elements of their products and services may reduce brand loyalty. The present
research aims to study the effect of brand experience, customer satisfaction and brand loyalty.
These factors were previously found to have a strong effect with each other (Brakus, Schmitt &
Zarantonello, 2009; Choi, OK & Hyon, 2011; Martisiute, Vilutyte & Grundey, 2010; Tu et al.,
2012). The understanding of such effect should provide valuable benefit to business operators,
particularly in the coffee store market in Thailand. Knowing what brand experience is and how it
 9

is connected to customer satisfaction, and ultimately create brand loyalty, for instance, should
allow business operators to utilize resources more effectively and maximize their ROI. Such
practice should then allow the operators to gain more loyalty customer and create competitive
advantage over competitors.
The understanding of drivers of brand loyalty in Thailand coffee industry,
moreover, will likely to become more important in the coming years due to the growing
popularity of coffee in Thailand. According to recent Euromonitor report, coffee sales are
growing at 9% per year, including retail and wholesale sales of raw beans. Although the majority
of coffee sold in Thailand is instant coffee intended for at-home consumption, there is a growing
demand for coffee purchased from coffee shops (Euromonitor, 2011). In order to take advantage
of this growing market, retailers need to understand why consumers prefer their coffee and how
they can promote their brands within a consumer community (Kapferer, 2008). This study will
provide new information that can help corporations understand consumer preferences and inform
promotional strategies, benefiting coffee retailers as well as other retailers in Thailand’s
developing consumer markets.
Scholars should also find the study useful because such study regarding
measurement of brand loyalty in the market of coffee drinker in Thailand is considerably rare.
During the review of previous literature, the researcher could not find any academic studies that
directly examine the impact of brand experience, customer satisfaction to brand loyalty in the
Thai coffee store context. Scholars then could use the information revealed by this study to either
understand Thai consumer behavior in this market or develop ground theory in order to use in
their future investigation in a similar context.

1.6 RESEARCH OUTLINE

There are five chapters in this research. This first chapter introduces background
and overview and focus of the research, including research aim and objective, conceptual
framework and definition of terms. The second chapter examines theoretical concepts related to
the research as well as reviews related literature that together would lead to development of
hypotheses for further investigation. The third chapter explains and discusses methods used to
 10

conduct this study, for example, research approach, research strategy, data collection and data
analysis. The fourth chapter then presents findings collected by questionnaire survey and analyzes
the data. The final chapter concludes the investigation, fills in answers for research aim and
objectives and offers recommendations of the research.

1.7 DEFINITION OF TERMS

1.7.1 Brand experience-encompasses the full spectrum of involvement with a

product or service, ranging from the initial search for the product to the purchase, receipt and
consumption of it (Choi et al., 2011). Brand experience combines with four dimensions, including
sensory, affective, behavioral and intellectual (Brakus et al., 2009). Definitions of each dimension
are also provided below.
1.7.1.1 Sensory-refers to any passive aspects of brand involvement that
is encoded directly via the senses of sight, hearing, taste, touch and smell (Shim, 2012)
1.7.1.2 Affective-refers to the feelings provoked by brand-related stimuli
(Shim, 2012)
1.7.1.3 Behavioral - involves concrete action of an individual which is
likely to be activated by brand-related stimuli (Shim, 2012)
1.7.1.4 Intellectual-involves brand-related stimuli encourage thinking,
problem solving and overall curiosity (Brakus et al., 2009).
1.7.2 Customer satisfaction - is the extent to which a product or service
pleases the customer and satisfies his or her requirements (Nemati et al., 2011)
1.7.3 Brand loyalty - can be defined as a positive attitude toward the brand on
the part of the consumer that leads to repeated purchasing and overall support for the brand
(Hoyer & MacInnis, 2008).
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CHAPTER 2: LITERATURE REVIEW

This preliminary literature review is divided into two parts. The first provides a definition
of core concepts such as brand, brand loyalty, brand experience and customer satisfaction. The
second discusses prior research that has explored the relationships among these variables.

2.1 BRAND

According to Franzen and Moriarity (2008), a basic definition of “brand” is the

set of signs and symbols (such as brand name, logo and other visual characteristics) that represent
a given product or set of products to consumers. However, the authors note that this definition is
actually too simple because it does not reflect modern branding practices. An expanded definition
of the modern-day brand is that it represents the promise of a given level of quality, service and
social meaning such as status or image that a brand delivers to the consumer.
Although a brand may be associated with an array of visual symbols, its most
important aspects are its intangible qualities. A brand encompasses the perceptions and
expectations held by consumers that relate to a particular product or the company that produces it
(Mohammad, 2012). Brands can be differentiated from products in that brands represent the
unquantifiable assets that shape consumer perceptions of a given product (Martisiute et al., 2010).
This indicates that in terms of branding, it is not the product, but what the product symbolizes to
the consumer, that matters.
Brands go beyond the symbolic to encompass the values of the company from
which they originate. When consumers choose a particular brand, they are also supporting the
values that make up the corporation’s core ethos (Tu et al., 2012).
According to (Trasorras, Weinstein & Abratt, 2008), a brand’s value comprises
four components: quality, image, price and customer service. Of these, there is evidence that
quality is the most salient characteristic (ClickFox, 2012; Nemati, Khan & Iftikhar, 2010)
although customer service, (Choi et al., 2011; Nemati et al., 2011) and image (Mao, 2010) are
also important to brand value and hence, brand loyalty. Price sensitivity, by contrast, is actually
reduced by brand loyalty (Baig & Khan, 2011; Mohammad, 2012). In other words, loyal

11
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customers are willing to pay more for preferred brands. Given the importance of quality and the
difficulty of providing quality at very low prices, it is obvious that creating a brand that inspires
loyalty provides a significant competitive edge.
Brands are very important in marketing services because they provide
differentiation in the minds of consumers, based on the information about quality, social meaning
and other aspects of the brand and what the brand represents (Franzen & Moriarty, 2008). This is
a significant advantage for firms operating within a competitive market who must distinguish
themselves from competitors (Kapferer, 2008).
A company’s brand is a key variable in determining its value as an organization
within a competitive market environment, and thus is among the most valuable assets a company
can develop. A brand not only drives sales in the short term, but also influences long-term
relationships with customers that can drive future sales (Mohammad, 2012). However, for a brand
to be effective in providing its owner with a competitive advantage, brand loyalty is required.
This concept is defined in the section that follows.

2.2 BRAND LOYALTY

To understand brand loyalty, it is first important to understand what a brand is.

One definition of a brand is “a set of mental associations, held by the consumer, which add to the
perceived value of a product or service” (Keller, 1998, cited in Kapferer, 2008, p. 10). This
definition of the brand is important, and is widely used, because it distinguishes from the external
characteristics of the brand such as its signs and trademarks, and the cognitive characteristics and
recognition of the brand in the mind of the consumer, which are what give the brand its power
(Kapferer, 2008). More detailed definitions of the brand refer to brand image and brand identity
as determining factors in the brand (Frantzen & Moriarty, 2008). In this case, brand image refers
to the external definition of the brand as promoted by the brand manager, and includes aspects
such as trademarks and marketing efforts. The brand identity, on the other hand, refers to the
deeper definition of the brand as a set of ideals, norms, or social indicators and ideas associated
with the brand (Frantzen & Moriarty, 2008). While the marketer controls brand image, brand
identity is constructed between the consumer, the marketer and the employee. In many respects,
 13

the brand identity is more important than the brand image, because the brand identity represents
the fuller set of associations and cognitions that a consumer makes purchasing decisions from
(Frantzen & Moriarty, 2008).
Brand loyalty can be defined as a positive attitude toward the brand on the part
of the consumer that leads to repeated purchasing and overall support for the brand (Hoyer &
MacInnis, 2008). A formal definition of brand loyalty is “the biased behavioral response,
expressed over time, by some decision making unit with respect to one or more alternative brands
out of a set of brands, and is a function of the psychological (decision-making, evaluative)
processes” (Jacoby & Chestnut, 1978, cited in Anandan, 2009, p. 159). This definition makes the
process of brand loyalty clearer; it is a cognitive process that results in selection of one brand over
another by a given decision unit in the long term (Anandan, 2009). Thus, brand loyalty refers not
just to the selection of a given brand once, but selection of the brand repeatedly over time.
According to Mao (2010), four types of brand loyalty have been identified: captive, convenience,
contented and committed The first two, captive and convenience, are not driven by preference for
the brand, but rather by lack of options altogether or lack of convenient options. Contented
consumers, by contrast, are loyal due to a high level of customer satisfaction and positive attitude
toward the brand, while committed consumers not only like the brand and the associated customer
experience, but will go out of their way to consume the product.
Brand loyalty confers significant benefits for companies. A recent large-scale
survey conducted by ClickFox (2012) found that 78% of brand-loyal consumers will tell others to
buy (or buy more) from the corporation, 69% purchase more products from the company and 54%
actively avoid buying competing products. Brand loyalty is considered a critical feature of overall
brand value because loyal consumers will seek out and even pay more for their preferred brands,
as well as referring additional customers (Mao, 2010). A recent survey found that 87% of
consumers would pay more or drive further to obtain the brands to which they were loyal
(ClickFox, 2012), and this willingness to pay more due to brand loyalty has been confirmed by
other researchers (Mohammad, 2012). However, as both Anandan (2009) and Kapferer (2008)
noted, brand loyalty does not guarantee the same purchase every time, particularly for fast-
moving consumer goods such as dairy products and cleaning products. Consumers may be
 14

generally loyal to a given brand, while at the same time occasionally choosing other brands
because of convenience, price, or a desire for novelty.
According to Hoyer and MacInnis (2008), brand loyalty is important for
consumers because it simplifies the buying decision. For instance, if individuals have had positive
experiences with a branded product in the past, it is likely that they enter the store to purchase the
brand that they are loyal to without long-time consideration. The authors note that brand loyalty is
also important from the retailer’s point of view because it increases the likelihood (though it does
not make it certain) that a consumer will buy the same brand repeatedly. Thus, brand loyalty is
how the branded product builds up a repeat customer base, which it needs for market growth.
It is difficult to objectively measure brand loyalty due to the fact that various
definitions have been used by writers and researchers. Some popular methods of measuring brand
loyalty objectively have included purchasing behaviors and price sensitivity (Mohammed, 2012).
Brand loyalty can be measured more informatively by surveying consumers to determine their
commitment to the brand based on key variables such as bias in favor of the product (or against it)
and stability of consumers’ opinions over time. These factors measure attitudinal loyalty, which
often predicts purchasing behavior (Mohammad, 2012). Mao (2010) provides a simple method
for measuring brand loyalty empirically using a survey methodology. Consumers are divided into
three groups depending on whether their scores on a given measure identify them as promoters
(those with a positive image of the brand), passives (those who are indifferent to the brand) or
detractors (those who dislike the brand). Then the percentage of the entire subject pool that the
promoter group represents is calculated to determine the overall level of brand loyalty. Mao
(2010) notes that the majority of companies receive scores of 10% to 20% on this measure.
However, a number of researchers have agreed that brand loyalty can be
measured through attitudinal loyalty and behavioral loyalty (Bandyopadhyay & Martell 2007,
Chaudhuri & Holbrook, 2001; Gremlera & Brown 1996; Yi & Jeon – 2009). Attitudinal loyalty
can be recognized when an individual expresses a positive feeling, opinion or view toward a
brand itself or products offered by such brand (Gremlera & Brown 1996). It is also related to
commitment toward a brand. This positive attitude usually indicates an individual preference or
intention to support the brand. Behavioral loyalty, on the other hand, is defined as purchase
behavior or repeated purchase of a product offered by the same brand over time (Gremlera &
 15

Brown 1996; Chaudhuri & Holbrook, 2001). Bandyopadhyay and Martell (2007) suggested that
attitudinal loyalty is an aspect that a brand marketer should carefully monitor because it can
explain reasons why an individual expresses behavioral loyalty (or repurchase behavior). For
example, if a consumer perceives that True coffee offers high quality of coffee bean, he/she
would likely to purchase products offered by the brand, and if the perception of such quality is
stable overtime, he/she would likely to be a repeated consumer. Thus, brand loyalty is created.
Although Mao (2010) did provide a method of how to measure brand loyalty, the present study
would consider attitudinal loyalty and behavioral loyalty as the component for measuring brand
loyalty based on the reason that these two components have been widely used by other
researchers as measurement for brand loyalty. However, this combined approach does need to be
critiqued, as it can easily lead to the researcher missing unique facets of the development of brand
loyalty between attitudinal (recommendation) and behavioral (repurchase) behaviors (Söderlund,
2006). This creates a one-dimensional view of consumer loyalty that may miss subtleties in
aspects of brand loyalty (for example, purchase as a preferred brand). Another potential problem
with a combined measurement approach for brand loyalty is that it does not take into account the
developmental aspect of consumer loyalty, where consumers grow gradually more loyal to a
brand based on repeated experience (McMullan, 2005).
A useful set of brand loyalty metrics is provided by Choi et al. (2011), which
integrate attitudinal and behavioral loyalty characteristics. The behavioral characteristics selected
by Choi et al. (2011) include whether the person will continue to buy the product itself, which is
the defining behavioral component of customer loyalty (Bandyopadhyay & Martell 2007,
Chaudhuri & Holbrook, 2001; Gremlera & Brown 1996; Yi & Jeon, 2009). However, as others
have noted, behavioral loyalty can be influenced by other factors such as habit or convenience
rather than true brand loyalty. Because of this, it is necessary to add an attitudinal component to
measure brand loyalty (Choi et al., 2011). Choi et al. (2011) add four attitudinal questions to the
measurement of brand loyalty, including asking about recommendation of the brand, preferred
choice, positive speech, and encouragement of the brand to others. The relative simplicity and
comprehensiveness of this measurement compared to other measurements of brand loyalty make
it useful for this research, despite the potential issues recognized by Söderlund (2006). Choi et
 16

al.’s (2011) measurements of attitudinal and brand loyalty have been adapted for the current
research, and these adaptations are shown in Table 3 in Chapter 3.

2.3 BRAND EXPERIENCE

Brand experience can be defined simply as the consumer’s interaction and

engagement with the brand and associated products on multiple levels (Brakus, et al., 2009).
Brand experience encompasses four dimensions: sensory, affective, behavioral and intellectual
(Brakus et al., 2009; Choi et al., 2011). Sensory brand experience refers to any passive aspects of
brand involvement that is encoded directly via the senses of sight, hearing, taste, touch and smell
(Shim, 2012). Exciting design elements and other tangible qualities of a product are most likely to
trigger sensory effects. However, aspects of design may evoke feelings, trigger behaviors or even
tap into the intellectual dimension as with designs that use complex patterns (Brakus et al., 2009).
This suggests that there are spill-over effects from one dimension to the next. Affective
experience refers to the feelings provoked by brand-related stimuli (Shim, 2012). This domain
can be simply defined as emotional response and arousal, but its effects can be profound. In fact,
attitudes toward a product are largely based on affective reactions to that product or its brand-
related stimuli (Brakus et al, 2009). In other words, if elements associated with the brand trigger
positive feelings, the brand experience will be enhanced. The behavioral domain, which
encompasses concrete actions, may be activated by various brand-related stimuli. For example, a
slogan that encourages action, such as Nike’s “Just Do It,” appeals to the behavioral dimension
(Brakus et al., 2009), which can encompass anything from a single action to an entire lifestyle
change (Shim, 2012). The intellectual dimension, like the behavioral dimension, represents an
active rather than passive reaction. However, the activity takes place in the mind rather than
overtly. This domain is activated when brand-related stimuli encourage thinking, problem solving
and overall curiosity (Brakus et al., 2009). There are many factors that may influence brand
experience, including name, symbols, design elements, packaging, marketing materials and
environments and others (Shim, 2012). More intangible brand-related stimuli such as the
company’s core ethos and the beliefs and attitudes it promotes are also elements of the brand
experience that can significantly influence brand loyalty (Goodson, 2011).
 17

Brand experience is important because it provokes positive feeling among

customers toward a brand (Brakus et al., 2009). Consumers with positive brand experience better
remembers the brand than those who do not positively experience the brand. Companies attempt
to create brand experience as they believe that it could lead to positive attitude toward the brand
and eventually encourage purchase behavior (Goodson, 2011; Mao, 2011). Brand experience
comprises the feelings, cognitions, sensations and behavioral responses triggered by brand-related
stimuli, which may include everything from slogans to brand mascots to symbols (Brakus, et al.,
2009). Brand experience encompasses the full spectrum of involvement with a product or service,
ranging from the initial search for the product to the purchase, receipt and consumption of it
(Choi et al., 2011).
There are a number of studies that have demonstrated the empirical importance
of brand experience. One study focused on the importance of brand experience of a parent brand
in the willingness of consumers to try brand extensions and to continue to purchase them (Kim &
Sullivan, 1998). This study compared consumer response across three consumable goods items,
finding that in each case there was an increased willingness to try brand line extensions (which
are different, though often related, products sold under the same brand) and to keep buying them
(Kim & Sullivan, 1998). The importance of this study is that it supports the relationship between
brand expereince and brand loyalty. Another theoretical discussion that is particularly relevant for
this research found that emotional brand experience is very important for developing a service
brand (Morrison & Crane, 2007). This discussion pointed out that consumers engage with service
brands in large part because of emotional engagement, such as comfort or familiarity with service
workers and service offerings, and not necessarily so much because of differences in the service
offering or quality (Morrison & Crane, 2007). This means that for service brands (such as coffee
shop brands), it is particularly important to encourage the development of positive emotional
brand experience in order to encourage brand loyalty for service brand customers. This both
supports the relationship between brand experience and brand loyalty and reinfroces the
importance of emotional brand experience for the service setting. A third study of Harley-
Davidson consumers in Australia suggests that brand experience represents part of the formation
of identity for consumers (Schembri, 2009). In other words, the act of consuming the brand (or
the experience with the brand) becomes part of how the consumer defines herself or himself as a
 18

social person (Schembri, 2009). The Harley-Davidson consumer experiences the brand not
individually, but as part of a particular social group and setting (Schembri, 2009). Although
motorcycles and coffee are not highly similar, this is still relevant because of the social setting of
the coffee house and the social aspect of coffee consumption. Simply, it is possible that part of the
emotional experience of the True Coffee brand, like Harley-Davidson, is associated with its social
nature and formation of identity, which will need to be considered.
Measurement of brand experience was most clearly undertaken by Brakus et al.
(2009). Brakus et al. (2009) offered a series of 12 items, or three items for each of the four
domains mentioned above (sensory, affective, behavioral and intellectual), that showed
significant connections to the dimensions of brand experience. The modification of the Brakus et
al. (2009) scale for coffee house experience as used in this study is shown in Table 3 in Chapter 3.
This scale was not further modified because few researchers in brand experience have clearly
identified their scaling mechanisms or items.

2.4 CUSTOMER SATISFACTION

Customer satisfaction is the extent to which a product or service pleases the

customer and satisfies his or her requirements (Nemati et al., 2011). Customer satisfaction has
two aspects – the affective and the cognitive. The former relates to a subjective feeling that the
product, service or overall experience in dealing with the company has been positive, while the
latter encompasses thoughts and judgments about the product or service, and by extension, the
brand (Tu et al., 2012). Given that a company’s success depends on its ability not only to attract
customers, but also to satisfy and therefore retain them (Martisiute et al., 2010), the importance of
customer satisfaction is obvious. Retaining customers is particularly beneficial because it costs far
less to serve returning customers than to attract new ones (Baig & Khan, 2010; Tu et al., 2012).
Therefore, in competitive marketplaces, customer satisfaction is a critical differentiating factor.
There are two types of customer satisfaction that can be measured by
researchers: transaction-specific satisfaction and cumulative satisfaction (the degree to which the
consumer is pleased with the product or experience after consumption has occurred). The latter is
more often the focus of research studies (Tu et al., 2012).
 19

Customer satisfaction can promote brand loyalty because satisfied customers are
not only more likely to purchase the product or service again the future (Baig & Khan, 2010;
Choi et al., 2011; Nemati et al., 2011), they are also more inclined to recommend it to their
friends and family (Baig & Khan, 2010; Choi et al., 2011). Bain and Company’s Net Promoter
Score, a measure of the willingness of customers to recommend a brand to others, is positively
correlated with profit growth in the long term (Pringle, 2009). This indicates a direct relationship
between customer satisfaction and company success. How can customer satisfaction be
increased? Mao (2010) makes two overarching recommendations: make customer care a bigger
priority and be honest with consumers. The former can be done by asking customers open-ended
questions to learn about their experiences with the brand and using this feedback to improve
customer care in the future. The second involves being forthright about the things that matter to
customers. Although customer satisfaction is a subjective reaction, it is relatively easy to measure
with questionnaires. As with the other interrelated branding dimensions, researchers tend to
measure customer satisfaction using Likert-scale instruments (Brakus et al., 2009; Nemati et al.,
2011). For the purpose of this study, customer satisfaction will be measured through affective and
cognitive dimensions as these two variables have already been validated by several previous
studies (Homburg, Koschate, & Hoyer, 2006; Oliver, 1993; Tu et al., 2012).

2.5 RELATIONSHIP BETWEEN BRAND EXPERIENCE, CUSTOMER SATIAFCATION

AND BRAND LOYALTY

The key variables in this study include brand experience, customer satisfaction
and brand loyalty. There has been a large amount of research conducted on the interrelationships
of these factors. The following are some of the more noteworthy recent studies.

The Relationship between Brand Experience and Customer Satisfaction

The findings of a study conducted by Choi et al. (2011) indicate that the
relationship between brand experience and customer satisfaction is bidirectional. The authors
found that brand experience, which encompasses various factors including perception of brand
prestige and trustworthiness, significantly impacts customer satisfaction, and customer
 20

satisfaction impacts brand experience as well. This relationship is positive, in that a more
satisfactory brand experience will result in a positive increase in brand satisfaction. Similarly, a
positive increase in customer satisfaction also results in a positive increase in brand experience.
Thus, this is a positive feedback loop, with good or bad brand experience resulting in good or bad
brand satisfaction and vice versa.
Some dimensions of brand experience may have a greater influence on customer
satisfaction, and by extension, brand loyalty, than other aspects. In particular, consumers’ positive
or negative experiences with a particular product or service trigger emotional responses that
profoundly influence satisfaction. This is a positive relationship. That is, the positive or negative
experience influences satisfaction in the same direction; a positive experience will increase
satisfaction, while a negative experience will decrease satisfaction.
Furthermore, affective customer satisfaction increases the likelihood that
consumers will be willing to pay higher prices and provide free advertising by recommending the
product or service to others (Baig & Khan, 2010). Thus, the affective dimension of brand
experience may play a more important role in customer satisfaction and brand loyalty than other
dimensions such as the sensory, behavioral and intellectual. This is supported by research
showing that people are more loyal to products when the company supports a good cause, even to
the point of enduring inconvenience or higher prices (Crain, 2010). However, other aspects of
brand experience should not be underestimated, particularly for technology-focused products, as
the research conducted by Nemati et al. (2010) has shown.
Using a Likert-scale questionnaire to gauge customer satisfaction, Nemati et al.
(2010) found a positive correlation between corporate innovation and customer satisfaction
among mobile phone consumers. That is, higher levels of satisfaction among mobile phone
consumers were associated with higher levels of corporate innovation and vice versa. This is
unsurprising, given that innovative new products target all of the senses, providing new sights and
sounds, the excitement of novelty and pleasure of owning something new and therefore
prestigious, the behavioral urge to acquire and interact with cutting-edge products and the
intellectual stimulation of learning about a new technological offering. It could also reflect
decreased satisfaction associated with poor innovation which may result in poor products or
services offered by some firms. However, it should be noted that despite the power of brand
 21

experience in influencing customer satisfaction, the researchers found that price was still the most
salient factor in the purchase, rather than customer satisfaction. Therefore, the affective
dimension (the good feeling that comes from obtaining a great deal) may be the most potent force
shaping customer satisfaction, since affective brand experience results in increased customer
satisfaction. Also, the researchers found that innovation does not positively affect brand loyalty,
even though it does influence customer satisfaction. In other words, although customers appear to
be more pleased with innovative mobile phone products, this does not mean that they will
necessarily purchase the same brand in the future. However, this could be due to the rapid
innovation associated with mobile phones and their development
Suh and Yi (2006) conducted a study to evaluate the mediating effect of an
aspect of brand experience (product involvement) on the relationship between customer
satisfaction and brand loyalty among Korean consumers. The authors defined brand experience
primarily as product involvement, although it should be noted that this is not the definition used
by most studies. Product involvement is a degree of consideration a consumer spends before
making a purchase of a particular product (Suh & Yi, 2006). This study focused on household
products and cosmetics. Using a series of Likert scales, the researchers examined aspects of brand
experience such as feelings and attitudes about the brand. They found that there was a positive
relationship between brand experience and brand loyalty, with an increase in brand loyalty
associated with an increase of brand experience. Indicators of brand loyalty included intention to
purchase the brand again and willingness to recommend it to others. As expected, the researchers
found that the relationship between customer satisfaction and brand loyalty was stronger when
brand involvement was low. In other words, when brand experience was not as important,
customer satisfaction was the primary motivator for brand loyalty in the market of household
goods and cosmetics. However, when there was a high level of product involvement, brand
experience played a greater role in the promotion of brand loyalty. This suggests that enhancing
brand experience may be more critical for some products and services than others. This is a
complex relationship, but ultimately it suggests that high-involvement products (which are
commonly more expensive, more indicative of social status, or for some other reason require an
expanded consideration set for consumers) may be more vulnerable to negative brand experience
than those that are not as expensive or relevant.
 22

Brand experience is certainly more relevant for some industries than others. For
example, customers tend to visit coffeehouses more frequently than the purveyors of many other
types of goods and services, which increase interaction with the brand and brand-related stimuli
(Choi et al., 2011). This suggests that the affective dimensions of brand experience may be
particularly relevant in this case, especially since consumers will have extensive contact with the
brand’s representatives (employees), tangible evidence and so on (Morrison & Crane, 2007). The
brand experience may be more based on convenience and emotional comfort rather than on an
absolute assessment of customer satisfaction or quality in this case. Therefore, those in certain
industries will need to pay more attention to building their brands and providing appealing brand-
related experiences. In the case of a service firm such as True Coffee, this means that the firm will
need to focus on providing positive affective and sensory brand experience in particular (good
coffee and good service) in order to make sure that there are positive reactions in customer
satisfaction and brand loyalty.

The Relationship between Customer Satisfaction and Brand Loyalty

Customer satisfaction is a key variable in encouraging brand loyalty. Studies
have shown that customer satisfaction with the brand experience and the product itself has
positive effects on brand loyalty through both direct and indirect routes (Baig & Khan, 2010;
Choi et al., 2011; Martisiute et al., 2010; Song et al., 2012; Suh & Yi, 2006), and that customer
satisfaction precedes brand loyalty (Kapferer, 2008; Martisiute et al., 2010).
A large-scale brand loyalty survey conducted by ClickFox (2012) found that
customer satisfaction was second only to product quality in encouraging brand loyalty, and that
the largest percentage of consumers cited excellent customer service as the greatest motivator to
remain loyal to a brand. This survey used a simple questionnaire in which respondents either
agreed or disagreed with statements about brand perceptions and loyalty-related behaviors such as
repurchase intentions and telling others about the product.
Brakus et al. (2009), using their own rigorously tested scale covering various
aspects of brand experience, found that brand experience directly affects brand loyalty and brand
experience also indirectly affects brand loyalty through customer satisfaction. Their study
emphasizes that brand experience and customer satisfaction are two powerful determinants of
 23

brand loyalty in the U.S. market and the present study will determine whether this claim can be
applied in the Thai coffee market.
Tu et al. (2012) conducted a study of Starbucks coffee drinkers in Taiwan to
examine the relationships between customer satisfaction and brand loyalty. They administered a
questionnaire (a five-point Likert scale) to volunteers at the main entrance of a Taipei Starbucks.
Unsurprisingly, the researchers found that customer service was positively correlated with brand
loyalty. However, they also found that brand image impacted both customer satisfaction and
brand loyalty, which suggests a more complex interplay of factors. Unfortunately, it is difficult to
determine whether the results of this study would be generalizable to other brands, particularly
those that are not as prominent as Starbucks. It is possible that brand image is more or less salient
for lesser known brands than for those that are well-established on a global scale.
According to Suh and Yi (2006), customer service has a much stronger effect on
brand loyalty overall than do advertisements, corporate image and other influences on brand
experience, given that the latter exert only indirect effects. This suggests that ensuring customer
satisfaction, especially with the substantive product offering of the brand, is highly important for
promoting brand loyalty.
With service-based products such as those offered by coffee shops, customer
satisfaction must extend beyond the tangible product to the service offering as well (Morrison &
Crane, 2007). In cases where the service becomes a significant part of the brand experience,
encouraging brand loyalty requires more than simply offering a good product at a reasonable
price.

The Relationship between Brand Experience and Brand Loyalty

Many studies have identified a positive correlation between favorable brand
experience and brand loyalty (Biedenbach & Marell, 2010; Brakus et al, 2009; ClickFox, 2012;
Nemati et al., 2010; Shim, 2012), and the affective dimension of brand experience appears to be
particularly critical to brand loyalty in the modern marketplace. The results of a recent survey of
48,000 consumers conducted by Brand Keys found that among 83 different product and service
categories, emotional response rather than rational analysis was the critical driver of brand loyalty
(Lukovitz, 2012). Another comprehensive study also found that brand experience (specifically
 24

personal experience with a given brand and its parent company, rather than second-hand
knowledge gained from marketing or word of mouth) was one of the key factors in the formation
of brand loyalty (Kim et al., 2008). Kim et al., (2008), comparing consumer responses across
eight categories, found that the influence of brand experience on brand loyalty grew over time as
the consumer gained more positive experiences with the brand. This builds affective and
cognitive connections to the brand, including rational recognition of factors such as the quality of
the brand or its suitability for a given purpose and emotional connections and identification with
the brand (Kim et al., 2008). Thus, not only brand loyalty is based on brand experience, it grows
over time based on the growth of brand experience. This suggests that the relationship between
brand experience and brand loyalty is a self-reinforcing feedback relationship, where long
positive experience of a brand will lead to increasingly intense loyalty to the brand.
Mohammad’s (2012) research found a significant correlation between trust in a
particular brand (which arises as a result of brand experience) and brand loyalty. The study also
found that brand loyalty positively influences perceived value of a product. As with others in the
field, Mohammad used a Likert-scale questionnaire with items adapted from the measurement
instruments of prior researchers. Items designed to measure brand loyalty included statements
such as “The next time I need that product, I will buy the same brand” (Mohammad, 2012: 119).
In the modern marketplace, positive affective experience appears to provide a
competitive edge. The results of the large Brand Keys survey suggest that it is no longer sufficient
to have a solid core value proposition to provide a useful, quality product at a reasonable price.
Consumers want something beyond the rational – they want the brand to evoke positive feelings
via emotional meaningfulness (Lucovitz, 2011). Other surveys have yielded similar results. The
Edelman Goodpurpose survey of 6,000 consumers found that more than half would stay loyal to a
brand, even paying more for it during a recession, if it was associated with a good cause (Crain,
2010).
How does being associated with a good cause build brand loyalty? Crain (2010)
argues that consumers have become more cynical. They are less responsive to slogans that
increasingly resemble those of corrupt politicians. Modern consumers require evidence that a
company has good intentions. In this era of increasing skepticism, a company that allocates some
 25

of its profits to support a good cause is far more likely to create a positive association for its
brand, and hence, a positive brand experience.
Of particular interest in this case is the influence of brand experience in the
service brand. One study suggests that the emotional or affective experience of a service brand is
particularly important for building brand loyalty (Morrison & Crane, 2007). This study found that
for service brands particularly, creating a particular emotional experience associated with the
brand was the major factor in introducing brand loyalty to the service brand. These emotional
factors include good service, especially the feeling that the consumer is recognized and valued by
the provider of the service (Morrison & Crane, 2007). This could be particularly true for a coffee
shop environment, given that emotional factors (as identified by True Coffee’s “third place”
position) are a significant part of the differentiation of the coffee shop. For example, being
recognized as a regular by coffee shop attendants may increase loyalty not just to the brand, but to
the individual shop itself, which will be important for introducing brand loyalty.
Despite the importance of the affective dimension of brand experience, there are
a number of other factors influencing brand loyalty such as cost, as well as perceived quality and
value (Mohammad, 2012). Perceived quality is particularly important because it touches upon all
four components of brand experience. Consumers may gauge quality based on a product’s
sensory attributes (appearance, auditory qualities, smell, taste and or texture), its affective
attributes (how owning or consuming the product makes them feel), its behavioral attributes (what
the brand or its provider actively does for them, as well as how they behave in response to the
brand) and intellectual attributes (rational analysis of a brand’s features and benefits). Given that
quality encompasses all aspects of the brand experience, it is unsurprising that it has been
identified as the primary influence on brand loyalty by various researchers (ClickFox, 2012;
Nemati et al., 2010).
Song et al. (2012) used a Likert-scale instrument to examine the relationship
between brand experience and brand loyalty, with a focus on male consumers and luxury brands.
Their scale encompassed a number of dimensions, including utilitarian value, hedonic value,
brand satisfaction, brand trust, brand affect, brand loyalty and brand risk. Unlike many other
studies, the researchers did not identify a direct positive correlation between brand affect on its
own and brand loyalty, but they did find that positive affect significantly increased brand trust,
 26

which in turn increased brand loyalty. The implication is that brand trust is a mediating factor
between brand experience and brand loyalty. This suggests that it is not enough for a company’s
brand to generate positive emotions; it must also promote trust. However, given that the sample
used for this study comprised only well-educated, high-earning males, the results may not be
generalizable to other populations.
A study of brand experience and brand loyalty in e-tailing highlights the
complexities of building brand loyalty (Ha & Perks, 2005). This study found that online retailers
(or e-tailers) made a significant effort to influence consumer behaviors regarding purchases by
managing their brands as carefully as did physical retailers. However, this study also found that
there were several key factors that related brand experience to the construction of brand loyalty.
The first of these factors was simply brand familiarity; consumers had to recognize the brand and
be familiar with it in order for the brand to build customer loyalty. However, customer
satisfaction was also required to build brand loyalty; it was not enough for customers to know
about the brand (which they could do from second-hand information) but also to have personal,
positive experiences with the brand and its outcomes. This satisfaction was based on both
cognitive and affective factors about the brand. Thus, brand experience did lead to brand loyalty,
but brand recognition was also a required prerequisite.
According to Morrison and Crane (2007), research indicates that in service
industries, the brand comprises not just the tangible aspects of the product (in the case of this
research, a cup of coffee), but also intangible and emotional aspects of the brand. As such, it is
not sufficient to ensure that the brand reflects a high quality product; brand managers must also
promote the development of a strong emotional connection to the brand. The authors assert that
the emotional connection or attachment of the consumer is stronger with service brands than
product brands. Thus, paying attention to the brand experience, especially its personal and
emotional aspects, is particularly critical to promoting brand loyalty for industries where service
is a part of the product offering.
It should be noted that most studies of brand loyalty, brand experience and
customer satisfaction must by necessity make use of self-report instruments, which have a number
of inherent limitations, such as the possibility that subjects will provide dishonest answers. They
also must use volunteers, which may lead to a self-selection bias, given that people who are
 27

willing to take the time to fill out a questionnaire may be different in some ways from those who
are unwilling to do so (Olsen, 2008). However, given the large number of studies that have been
conducted in the field, some of which have used large populations, the results of this overall body
of work can still be considered informative.
Based on the review of previous related studies, brand experience, customer
satisfaction and brand loyalty are interrelated in a variety of complex ways. Brand experience,
comprising the sensory, emotional, behavioral and intellectual responses to brand-related stimuli,
influences customer satisfaction (the extent to which customers are pleased with the product or
service). Both brand experience and customer satisfaction impact brand loyalty, which
encompasses the likelihood of repurchasing the same brand, willingness to tolerate higher prices
or inconvenience to obtain the brand and motivation to recommend the brand to others. Therefore,
two hypotheses and conceptual model are developed as below:

 H1: Brand experience has a positive effect on customer satisfaction

 H2: Brand experience and customer satisfaction has a positive effect on
brand loyalty

Brand
Experience

H2
Brand Loyalty
H1

Customer
Satisfaction

FIGURE 1 CONCEPTUAL MODEL FOR THE STUDY

 28

CHAPTER 3: RESEARCH METHODOLOGY

This methodology chapter discusses methods used to construct the research. The
information related research approach and research strategy is provided as the first two sections.
Then, how data is collected, who are the samples of this research and how the data will be
analyzed are subsequently enlightened.

3.1 RESEARCH APPROACH

According to Trochim (2006), inductive reasoning involves using specific

observations to generate theories or broader generalizations. It tends to be an exploratory, open-
ended process that is more inclined to invoke new questions than to provide precise, quantifiable
answers to existing ones. Deductive reasoning, by contrast, starts with the review of related
theories. The researcher using deductive reasoning begins with a theory about the topic of
interest, narrows the focus down to formulate a more specific and testable hypothesis, narrows the
field still further by collecting observations related to the hypothesis and finally gathers data that
can confirm or disconfirm the original theory.
This study will adopt a deductive approach because it involves the collection of
primary data and supplementary secondary research to test two hypotheses regarding the
relationships among three variables: brand experience, customer satisfaction and brand loyalty.
These variables were chosen based on an extensive literature review encompassing past research
and expert observations in the field. Therefore, this methodology represents a progression from a
general search to a theoretical position and finally the collection of data designed to test several
hypotheses. A deductive approach was deemed most suitable for this study because the goal is to
provide definitive answers to specific research questions rather than to generate new theories or
conduct exploratory research.

28
 29

3.2 RESEARCH STRATEGY

This study will employ a quantitative research strategy. Quantitative research

generates a numerical representation of a particular phenomenon. It is an empirical research
method that provides a quantifiable description of the way something is in the real world
(Sukamolson, n.d.).
Quantitative research has a number of advantages, as well as a few limitations.
According to Sukamolson (n.d.), it can quantify attitudes, opinions and behaviors, which makes it
very useful for social research. It can be used to test hypotheses, provide specific answers in the
form of numerical summaries for analysis and statistical comparison, identify trends, measure
occurrences and explain certain phenomenon in an objective manner. Ultimately, it is a more
precise, standardized and definitive approach than qualitative research. However, Sukamolson
(n.d.) notes that it is not particularly useful for exploring a topic in depth or generating new
theories. It is often possible to conduct a more meaningful analysis using qualitative methods,
because the quantitative approach is too shallow for more comprehensive exploration.
There are four commonly used quantitative research methods: survey research,
correlational research, experimental research and causal-comparative research (Sukamolson,
n.d.). This study will use a survey-style questionnaire to collect data. This method was chosen for
a number of reasons. It is a popular and effective method that is used by the majority of other
researchers in the field and it is inexpensive and easy to undertake. Using this approach enables a
research to be conducted that might otherwise be impossible due to cost and logistical constraints.

3.3 DATA COLLECTION

Types of Data
This research will make use of both primary and secondary data. Primary data is
information that comes directly from the source. It can be obtained from a questionnaire, letter,
diary or other first-person source. Secondary data is information that comes from secondary
sources, typically peer-reviewed journal articles, textbooks, news stories and other media in
 30

which the purveyors of the information often provide interpretation or even analysis as well
(Library and Archives Canada, 2010).
This study will derive its primary data from a questionnaire designed to gather
information regarding brand loyalty among coffee drinkers in Thailand, with a particular focus on
the popular True Coffee chain. Secondary data regarding brand loyalty, brand experience,
customer satisfaction and the Thailand coffee shop market will be drawn from peer-reviewed
journal articles, books and other respected sources. The primary data will provide direct
information regarding consumer opinion in a form that allows for the quantification of subjective
opinion. The secondary data will provide context in the form prior research findings, established
theories and expert analysis of factors affecting brand loyalty, brand experience and customer
satisfaction. Secondary data is freely available and easy to collect, so it enables a more
comprehensive analysis of the phenomenon of interest. Both forms of data are essential to this
research because the primary data directly answers the research questions, while the secondary
data enables the results to be analyzed within the framework of accepted theories and facilitates
comparison with prior research findings.
While primary, quantitative data can identify a particular phenomenon or trend,
secondary data can often provide some insight as to why it occurred. This is important when
conducting social research because it is often as useful to identify the social forces that generate a
result as it is to discover the result itself. Essentially, secondary data, particularly sources that
provide qualitative analysis, enable the researcher to explore aspects of a phenomenon that would
not be identified by quantitative primary data (Ospina, 2004).

Research Instrument
Questionnaires designed to record and quantify subjective perceptions are often
used to measure brand experience, along with overall brand loyalty. Researchers typically use
Likert scales that provide a numeric range covering strong agreement through strong
disagreement with statements designed to gauge consumers’ subjective impressions of the brand
and brand-related stimuli (Brakus et al., 2009; Choi et al., 2011; Mohammad, 2012). A 5-point
Likert scale questionnaires will be used to measure the impact between variables. This technique
is typically used to quantify subjective opinions about brand loyalty, as in the research of Brakus
 31

et al., 2009; Choi et al. 2011; Nemati et al., 2011; Song, Hur and Kim, 2012, and many others.
Therefore, it is considered reliable for this research.
This study will use a self-administrative questionnaire to gather primary data.
This is a commonly used measurement instrument for studies of brand loyalty, brand experience
and customer satisfaction. Prior researchers in the field such as Brakus et al. (2009), Choi et al.
(2011), Nemati et al. (2010), Song et al. (2012) and others have used similar instruments.
Self-report instruments have a number of benefits and limitations. Using a
questionnaire is a cost-effective and straightforward way to collect primary data and convert it
into useful quantitative information. A questionnaire is a flexible measurement instrument that
can easily be administered to a relatively large sample of people. Questionnaires can also be
coded rather than using the names of subjects to ensure privacy, and important aspect of research
ethics. However, with self-report instruments, there is a risk that subjects will not answer honestly
for some reason. Also, consulting only subjects willing to complete questionnaires may lead to
self-selection bias (Olsen, 2008). These limitations are factors that the researcher will be
concerned when collecting the primary data.
Moreover, a set of questions used in the survey that relate to brand experience,
customer satisfaction and brand loyalty is directly adopted from the study by Choi et al. (2011).
These researchers previously investigated a similar subject with the present study and their
questionnaire was already validated using confirmatory factor analysis. Like most other
researchers in the field, Choi et al. (2011) used a Likert-scale self-report instrument to collect
their data. Questions were designed to gather information based on each of the brand experience
dimensions. For example, questionnaire statements related to the affective domain included “I
have strong emotions for this coffeehouse brand” and those related to the intellectual domain
included “This coffeehouse brand makes me think,” while customer satisfaction was measured
with statements such as “Using this coffeehouse brand has been a good experience” (Choi et al.,
p. 6). Thus, it is considered reliable for examining consumer behavior in this study. The table
below summarizes questionnaire scale and measurement.
 32

TABLE 3 QUESTIONNAIRE SCLAE AND MEASURMENT

Questionnaire
Variable Indicator Measurement References
scale
Brand  Sensory 1. This coffeehouse brand makes a Choi et al. Likert Scale
experience strong impression on my visual (2011)
sense or other sense.
2. I find this coffeehouse brand
interesting in a sensory way.
3. This coffeehouse brand appeals to
my senses.
 Affective 1. This coffeehouse brand induces Choi et al. Likert Scale
feeling and sentiments. (2011)
2. I have strong emotions for this
coffeehouse brand.
3. This coffeehouse brand is an
emotional brand.
 Behavioral 1. This coffeehouse brand reminds Choi et al. Likert Scale
meof actions and behaviors when I (2011)
use this brand.
2. This coffeehouse brand results in
bodily experience.
3. This coffeehouse brand is action
oriented.
 Intellectual 1. I engage in a lot of thinking when Choi et al. Likert Scale
I encounter this coffee house brand. (2011)
2. This coffeehouse brand makes me
think.
3. This coffeehouse brand stimulates
my curiosity and problem solving.
 33

TABLE 3 QUESTIONNAIRE SCLAE AND MEASURMENT (Continued)

Questionnaire
Variable Indicator Measurement References
scale
Customer 1. I am satisfied with my decision to Choi et al. Likert Scale
Satisfactio buy coffee at this coffee house (2011)
n brand.
2. I have truly enjoyed this
coffeehouse brand.
3. I feel good about my decision to
buy coffee at this coffeehouse
brand.
4. Using this coffeehouse brand has
been a good experience.
5. I am sure it was the right thing to
bea customer of this coffeehouse
brand.
Brand 1. I would recommend this Choi et al. Likert Scale
Loyalty coffeehouse brand to friends and (2011)
relatives.
2. I intend to keep buying coffee at
this coffeehouse brand.
3. If I need coffee, this coffeehouse
brand would be my preferred
choice.
4. I will speak positively about this
coffeehouse brand.
5. I intend to encourage other people
to buy coffee from this coffeehouse
brand.
 34

Reliability Test of the Questionnaire

According to Trochim (2006), when a research instrument produces consistent
outcomes, either on test and retest of the same person, among multiple raters or internally (items
designed to measure the same construct generate similar results), it is said to be reliable.
Cronbach’s alpha, a commonly used measure of internal consistency for questionnaire items, will
be used to test the reliability of the research instrument for this study. A Cronbach’s alpha value
for the research instrument will be generated using SPSS software. The reliable questionnaire
should indicate Cronbach’s alpha value of 0.8 (Hill & Lewicki, 2006). This will be the acceptable
value for the questionnaire survey of this research. Moreover, 30 sets of questionnaire will be
distributed in the Bangkok area in order to test reliability of the question.

3.4 SAMPLE AND SAMPLING PROCEDURE

The target population of this study will be customers (including loyal customers,
first-time visitors, and others) of True Coffee in Thailand. The target population will not be
differentiated by demographic or other characteristics. The sample will be selected at True
Coffee, Siam Paragon branch. This branch is selected because it is located in one of the busiest
shopping malls in Bangkok, Thailand. The sample will be chosen using convenience sampling
technique. In other words, participants are selected based on their readily and availability
(Wilson, 2010). This sampling technique is chosen as it is the most convenience sampling
technique and it is less time-consuming and cost-effective (Wilson, 2010).
Moreover, according to Roscoe (1975 cited in Sekaran, 2003, p.295 and Wilson,
2010), the appropriate sample size for most of quantitative researches are between 30 and 500.
For instance, two previous academic studies by Tu et al. (2012) and Phau and Teah (2009)
considered a total number of 206 and 211 respondents as appropriate sample size for their study,
respectively. Due to time and budget constraint and evidence of appropriate sample size from
these scholars, the present study then aims to gather information from 250 respondents who
purchase True coffee.
 35

3.5 DATA ANALYSIS

Data analysis for this study will be conducted using SPSS (Statistical Package
for the Social Sciences) software. The analysis will use descriptive statistics such as mean,
frequency, percentage and standard deviation, as well as inferential statistics to facilitate
meaningful analysis.
Descriptive statistics, which simply describe a phenomenon of interest, are
regularly used in quantitative research because they convert large amounts of numeric data into
useful summaries that enable them to be compared with other measures as required. Essentially,
they provide a base from which more meaningful analysis can be undertaken (Trochim, 2006).
The descriptive statistics for this study will be derived from the questionnaire scores.
Inferential statistics enable researchers to identify significant effect between
variables and draw conclusions from the data set (Trochim, 2006). Because this study aims to
examine the effect of brand experience on customer satisfaction and the effect brand experience
and customer satisfaction on brand loyalty – Single and Multiple Regression was deemed
appropriate for the analysis. This method is useful for evaluating the effect of independent
variable on dependent variable (single regression) and the effect of a set of dependent variable on
a dependent variable (multiple regression). It indicates whether there is a significant effect from
one variable on another (Devonish, n.d.). Two hypotheses developed for the purpose of this study
are also shown below;
 H1: Brand experience has a positive effect on customer satisfaction
 H2: Brand experience and customer satisfaction has a positive effect on
brand loyalty
 36

CHAPTER 4: RESEARCH FINDINGS

4.1 PILOT TEST

The pilot test of the questionnaire was undertaken to ensure that the scales were
appropriate and were strong enough based on the Cronbach’s alpha score to be significant. The
pilot test was conducted with the first 30 questionnaires that were collected. Using Hill and
Lewicki’s (2008) criteria, a minimum Cronbach’s alpha score of 0.8 or higher was targeted for
reliability of the scales. The table below shows a summary of the scales and Cronbach’s alpha
coefficients derived from the pilot test. This shows two independent variable scales (Brand
Experience and Customer Satisfaction), as well as the dependent variable scale (Brand Loyalty).
There were 12 items included in the Brand Experience scale, while five items each were included
in Customer Satisfaction and Brand Loyalty. All three of the scales reached an appropriate level
of reliability without elimination of any items. Of these Brand Experience (α = 0.802) was the
weakest scale, while Brand Loyalty (α = 0.849) was the strongest scale. However, all of these
scales can be considered reliable under the testing criteria established in the Methodology chapter.
Following the Cronbach’s alpha testing, the 30 pilot test questionnaires were included in the main
pool of responses for further descriptive analysis.

TABLE 4 RELIABILITY RESULT

Scale Number of Items Cronbach’s Alpha Coefficient

Brand experience 12 .802
 Sensory 3 .688
 Affective 3 .706
 Behavior 3 .764
 Intellectual 3 .804
Customer satisfaction 5 .826
Brand loyalty 5 .849
 37

4.2 DESCRIPTIVE RESULTS

The descriptive statistics were calculated based on a sample of n = 250. This

section provides insight into the descriptive questionnaire and its outcomes. Results are presented
as a combination of tables, graphs, and textual description.

Demographic Profiles
The first type of data collected was demographic data from the respondents. This
information is presented in Table 5. As can be seen, the majority of respondents were female
(63.2%), and the most common age group was 20-39 years old (38.4%). Monthly income was
most commonly between 15,000 and 25,000 Baht, but almost all respondents (85.2%) had income
above 15,000 Baht. Office workers (52.4%) and students (21.2%) were the most frequent
occupations in the response group.

TABLE 5 DEMOGRAPHIC INFORMATION

Detail Frequency (n=250) Percentage (%)

Gender
Male 92 36.8
Female 158 63.2
Age
Less than 20 year old 66 26.4
20 to 39 year old 96 38.4
40 to 60 year old 70 28
More than 60 year old 18 7.2
Monthly Income
Lower than 15,000 baht 37 14.8
Between 15,000 and 25,000 baht 90 36
Between 25,001 and 35,000 baht 71 28.4
More than 35,000 baht 52 20.8
 38

TABLE 6 DEMOGRAPHIC INFORMATION (Continued)

Detail Frequency (n=250) Percentage (%)

Occupations
Student 53 21.2
Office worker 131 52.4
Government agency 26 10.4
Unemployed 8 3.2
Business owner 23 9.2
Others 9 3.6

Consumer Behaviors at True Coffee

The second group of questions focused on consumer behaviors at True Coffee
(shown in Table 7 through 10). Most participants (55%) purchased True Coffee less than two
times a week, while 32% of respondents purchased it two to four times per week. Only 9%
purchased it more than five times a week (which could be considered a daily basis). This suggests
that consumers view the product as an occasional treat, rather than a part of the daily routine, and
that it is not a regular visit for most of them.

TABLE 6 FREQUENCY OF PURCHASING TRUE COFFEE

Detail Frequency (n=250) Percentage (%)
Less than 2 times per week 137 55
2-4 times per week 81 32
More than 5 times per week 23 9
Others 9 4

The next question is about the favorite drinks of visitors. This shows that
traditional drinks are most popular. The café latte (coffee with warm milk) was the most popular
drink (29%), followed by Americano (a shot of espresso watered down with hot water) (26%),
cappuccino (a shot of espresso with steamed milk) (15%), and espresso (a small amount of very
 39

strong steam-extracted coffee) (12%). Less traditional drinks like café mocha and caramel
macchiato had much less support.
Most consumers (66%) purchase only coffee at True Coffee, while only 34%
routinely purchase other drinks like tea or juice
Most consumers are also most interested in purchasing coffee for immediate
consumption, as only 38% indicated that they purchase True Coffee beans or other products for
preparation at home. The focus on traditional coffee house drinks prepared in the store, rather
than any of the other options offered by the True Coffee chain, suggests that consumers are very
interested not just in the coffee product, but also the coffee house experience offered.

TABLE 7 TYPE OF COFFEE PURCHASE AT TRUE COFFEE

Detail Frequency (n=250) Percentage (%)

Espresso 29 12
Americano 66 26
Café latte 73 29
Cappuccino 37 15
Café Mocha 22 9
Caramel Macchiato 8 3

TABLE 8 PURCHASE OTHER BEVERAGE AT TRUE COFFEE

Detail Frequency (n=250) Percentage (%)

Yes 85 34
No 165 66
 40

TABLE 9 PURCHASE COFFEE BEAN AT TRUE COFFEE FOR DRINKING AT HOME

Detail Frequency (n=250) Percentage (%)

Yes 95 38
No 155 62

The final question in this section was an open-ended question about the reasons
for purchasing True Coffee products. There were a variety of responses to this question, which
highlighted a number of aspects of the True Coffee brand. The most frequently cited reasons for
purchasing True Coffee included:
 Price: True Coffee is not the least expensive coffee in the market, but it is
much less expensive than some competitors like Starbucks, a reason that was widely cited as a
reason for purchasing it;
 Quality: The quality of True Coffee products was said to be consistent and
high, letting customers know what they would get;
 Sensory experience: The taste and smell of the coffee, which are its main
sensory characteristics, were routinely cited as reasons for selecting True Coffee products; and
 Convenience: Proximity to workplaces, schools and homes and the large
number of outlets was routinely cited as a reason that customers chose True Coffee.

Brand Experience, Customer Satisfaction and Brand Loyalty

The final section of the descriptive analysis is the mean characteristics for each
of the scales (Brand Experience, Customer Satisfaction, and Brand Loyalty). As previously noted,
each of these sections is made up of Likert-scale questions (ranging from 5 questions for Customer
Satisfaction and Brand Loyalty to 12 questions for Brand Experience). The interpretation of these
questions is based on the formulation below;
 41

“The width of each level = Highest score  Lowest score = 5  1 = 0.8

The number of level 5

The average of 1.00-1.79 means a very low level of agreement

The average of 1.80-2.59 means a low level of agreement
The average of 2.60-3.39 means a moderate level of agreement
The average of 3.40-4.19 means a high level of agreement
The average of 4.20-5.00 means a very high level of agreement (Guven, n.d.)

Brand Experience
The first section of descriptive Likert attitudes is based on brand experience.
This was the most complex section because it comprises four different aspects of experience
(including Sensory, Affective, Behavioral, and Intellectual). Each of these items has three
associated Likert scale items. Each of these four aspects of experience is summarized in Table 11,
including mean, standard deviation, and interpretation of the finding.
The Sensory aspect of brand experience was weakest overall (M = 3.07, SD = .8248).
Particular weak points included visual sense, which was not highly ranked (falling slightly on the
disagree side of neutral). The second weakest aspect of the brand experience was the behavioral
aspect (M = 3.08, SD = .9704). However, this could have been due to inappropriate or vague
definition of questions, which could have confused some customers. Overall, these scales were
just on the numerical side of agreement, but given the standard deviation associated with them
they should be understood as neutral.
The stronger aspects of the brand experience included Affective and Intellectual
aspects of the brand. The Affective subscale was the strongest (M = 3.38, SD = .7497), especially
with customers agreeing that the coffee house brand induces feelings and sentiments (though
customers were far less likely to admit to strong emotions for the coffee house brand). This
suggests that the Affective aspect of the brand experience for True Coffee is strong, although it is
still in the neutral interpretation band. The second strongest aspect was the Intellectual brand
experience (M = 3.36, SD = .7016). The Intellectual experience was marked by particularly
strong agreement that “This coffee house stimulates my curiosity and problem solving”,
 42

suggesting that people are intellectually involved with the True Coffee brand and enjoy the
intellectual and curiosity stimulation offered by the brand.
Although there are some points of agreement, overall the brand experience of the
True Coffee shop seems to be relatively neutral for most respondents (though not negative). This
neutrality could be due to the design of the brand, but it could also be due to comparison with
other brands and other aspects of the brand. Thus, the overall customer experience of the True
Coffee brand is not negative, but it is perhaps not as clearly defined as the brand owners would
prefer it to be.

TABLE 10 MEAN VALUE OF BRAND EXPERIENCE

Mean
No. Brand Experience Mean S.D.
Interpretation
Sensory 3.07 0.82 Moderate
2.1 This coffeehouse brand makes a strong
2.98 1.04 Moderate
feeling on my visual sense or other sense.
2.2 I think this coffeehouse brand is interesting in
3.10 1.08 Moderate
a sensory way.
2.3 This coffeehouse brand appeals my senses. 3.13 0.98 Moderate
Affective 3.38 0.75 Moderate
2.4 This coffeehouse brand induces feelings and
3.94 1.02 High Level
emotions
2.5 I have strong feelings for this coffeehouse
2.97 1.00 Moderate
brand.
2.6 This coffeehouse brand is an expressive
3.26 0.90 Moderate
brand.
 43

TABLE 11 MEAN VALUE OF BRAND EXPERIENCE (Continued)

Mean
No. Brand Experience Mean S.D.
Interpretation
Behavioral 3.08 0.97 Moderate
2.7 This coffeehouse brand reminds me of
3.14 1.06 Moderate
actions and behaviors when I use this brand.
2.8 This coffeehouse brand results physical
2.87 1.18 Moderate
experiences.
2.9 This coffeehouse brand is action oriented. 3.23 1.17 Moderate
Intellectual 3.36 0.70 Moderate
2.10 I’m in connects on a lot of thinking when I
3.31 1.12 Moderate
encounter this coffeehouse brand.
2.11 This coffeehouse brand makes me think. 3.30 0.91 Moderate
2.12 This coffeehouse brand encourages my High level
3.46 0.899
curiosity and problem solving. (agree)
Overall 3.22 0.48 Moderate

Customer Satisfaction
The second aspect of consumer experience at True Coffee that was measured
was customer satisfaction (items 2.13 through 2.17). The mean, standard deviation, and mean
interpretation of this aspect of consumer experience for each item is shown in Table 8 below. This
shows that the customer satisfaction ratings for True Coffee are considerably higher than the
Brand Experience ratings. The highest ranked questions include “I am satisfied with my decision
to buy coffee at this coffee house brand” (M = 3.90, SD = .8114) and “I feel good about my
decision to buy coffee at this coffee house brand” (M = 3.86, SD = .8426). All items in this
section ranked as agreement, though none tipped into strong agreement. The overall mean value
of the Customer Satisfaction scale (M = 3.69, SD = .6288) suggests that customers have a high
 44

level of customer satisfaction associated with True Coffee. Thus, regardless of the relatively
neutral Brand Experience, it is clear that customers are generally satisfied with the brand.

TABLE 12 MEAN VALUE OF CUSTOMER SATISFACTION

Mean
No. Customer Satisfaction Mean S.D.
Interpretation
2.13 I am satisfied with my decision to buy coffee at
3.90 0.81 High level
this coffeehouse brand.
2.14 I have truly enjoyed this coffeehouse brand. 3.65 1.00 High level
2.15 I feel good about my decision to buy coffee at
3.86 0.84 High level
this coffeehouse brand.
2.16 Using this coffeehouse brand has been a good
3.52 1.13 High level
experience.
2.17 I am sure it was the right thing to be a customer
3.54 1.18 High level
of this coffeehouse brand.
Overall 3.69 0.63 High level

Brand Loyalty
The final group of items was the items devoted to Brand Loyalty, the outcome
variable (Items 2.18 to 2.22). The overall interpretation of this scale was neutral, with the only
question that garnered absolute agreement was “I would recommend this coffee house brand to
friends and relatives” (M = 3.52, SD = 1.2725). This suggests that the True Coffee chain can expect
to gain benefits from word of mouth advertising. However, the other questions were primarily
neutral in response. A particularly poor result was I intend to keep buying coffee at this coffee
house brand (M = 2.93, SD = 1.1242), which is low enough that it could actually be trending
away from brand loyalty. This has some potentially damaging implications for the long-term
brand loyalty of the True Coffee brand. Overall, the responses in this area do not support a very
strong degree of brand loyalty to True Coffee, although responses were cautiously positive. The
average results across the scale (M = 3.12, SD = .8234) suggest that there is a general position of
 45

neutrality surrounding the coffee brand. Considering the effort that True Coffee has gone to in
improving its brand loyalty, including the True Coffee Club and other efforts, this suggests that
consumers are not necessarily responding positively to the brand’s loyalty-building efforts. Thus,
overall brand loyalty can be said to be neutral in this case.

TABLE 13 MEAN VALUE OF BRAND LOYALTY

Mean
No. Brand Loyalty Mean S.D.
Interpretation
2.18 I would recommend this coffeehouse brand to 3.52 1.27 High level
friends and relatives. (agree)
2.19 I intend to keep buying coffee at this 2.93 1.12 Moderate
coffeehouse brand.
2.20 If I need coffee, this coffeehouse brand would 3.07 0.99 Moderate
be my preferred choice.
2.21 I will speak positively about this coffeehouse
3.04 1.10 Moderate
brand.
2.22 I intend to encourage other people to buy
3.01 1.00 Moderate
coffee from this coffeehouse brand.
Overall 3.12 0.82 Moderate

4.3 HYPOTHESIS RESULTS

In this section, the outcomes of hypothesis testing are presented. The two key
hypotheses (described in Chapter 2, Section 2.4, which includes the Hypotheses and Conceptual
Framework) were tested using regression analysis to determine the predictive strength of each of
the relationships. Sections 4.3.1 and 4.3.2 describe the outcomes of the tests for Hypotheses 1 and
2 respectively. The overall results of these hypothesis tests indicate that brand experience does
have a positive effect on customer satisfaction, and that a combination of brand experience and
customer satisfaction has a positive effect on brand loyalty. This indicates that both of the
 46

hypotheses posed in Section 2.4 following a comprehensive review of the literature can be
accepted in the case of True Coffee. This section includes discussion of the outcomes, including
regression line equations as well as estimates of variation of outcomes, and a full reporting of the
linear regression outcomes from the statistical analysis. This presentation serves to demonstrate
the positive outcomes as well as the procedures used to gain them.

Hypothesis 1
Hypothesis 1 stated, “Brand experience has a positive effect on customer
satisfaction.” This was based on a selection of research (reported in Section 2.4) that demonstrates
that there is a connection between these two characteristics in the existing literature, and
assumption that this would be the case in True Coffee’s customer base as well. This was tested
using simple linear regression, which determines the likelihood of a given outcome (the outcome
variable) based on the predictor variable.
The R2 shown is the prediction of future outcome on the basis of other related
information (dependent and independent variables). R2 ranges between 0 and 1. It uses for
describing how well a regression line fits a set of data. R2=1.0 indicates that a regression line fits
the data well, while an R2 closer to 0 indicates a regression line does not fit the data very well. As
Table 10 shows (R2=0.269, F [1, 248] = 92.121, p<0.001) suggests that 26.9% of the variation in
customer satisfaction can be explained by brand experience.
The p-value or Sig. is the significance value that uses for confirming or rejecting
hypothesis (in this case a relationship between variables). One often confirm the relationship
when the p-value is less than the significance level, which is often 0.05. As shown in Table 10,
this is a significant influence (p < 0.001 and F=91.121) which means that brand experience has a
positive effect on customer satisfaction.
 47

TABLE 14 REGRESSION RESULT OF CUSTOMER SATISFACTION VS BRAND

EXPERIENCE

Model Hypothesis 1
Variables
B SE B Beta
Constant 1.522 0.230
Brand Experience 0.673*** 0.071 0.518***
R2= 0.269***; F = 92.121
Note. B = Unstandardized regression coefficient; Beta = Standardized regression coefficient
*** p < 0.001

Finally, Coefficients enables construction of the linear regression equations that

can be derived to describe this relationship. The unstandardised regression equations of the
relationship between customer satisfaction and brand loyalty can be defined as follow:

Customer satisfaction = 0.673 (Brand experience) + 1.522

This means that for each increase point on the brand experience, the level of
customer satisfaction increased by 0.673 points.
These findings suggest that there is a modest, though statistically significant,
predictive relationship between the brand experience of the True Coffee brand and the customer
satisfaction. Given the findings of the regression analysis, Hypothesis 1 is proved. It can be said
that the extent of brand experience with the True Coffee brand influences the customer
satisfaction with the brand.

Hypothesis 2
The second hypothesis posed for the research was “Brand experience and
customer satisfaction has a positive effect on brand loyalty.” This analysis was undertaken using
multiple linear regression analysis, with Brand Experience and Customer Satisfaction being the
predictor variables and Brand Loyalty being the outcome variable. The results of this analysis are
 48

included in Tables 11 showing that (R2=0.359, F [2, 247] = 69.233, p<0.001) this model accounts
for 35.9% of the variation in brand loyalty responses.

TABLE 15 REGRESSION RESULT OF BRAND LOYALTY VS CUSTOMER SATISFACTION

AND BRAND EXPERIENCE

Model Hypothesis 1
Variables B SE B Beta
Constant -0.400 0.306
Brand Experience 0.517*** 0.101 0.304***
Customer Satisfaction 0.501*** 0.078 0.382***
R2= 0.359***; F = 69.233
Note. B = Unstandardized regression coefficient; Beta = Standardized regression coefficient
*** p < 0.001

The result also shows that with the model does describe a statistically significant
relationship between independent variable brand experience and customer satisfaction on brand
loyalty. Using the unstandardised coefficients B, a description of the regression line associated
with these variables is as follow:

Brand Loyalty = 0.517(Brand Experience) + 0.501(Customer Satisfaction) - 0.400

This means that for each increase point on the brand experience and customer
satisfaction, the level of brand loyalty increased by 0.517 and 0.501 points respectively.
This shows that Brand Experience is a (slightly) stronger influence than
Customer Satisfaction in formation of brand loyalty. Overall, the results of this analysis support a
modest, positive predictive relationship between the two predictor variables (Brand Experience
and Customer Satisfaction) and the outcome variable (Brand Loyalty). Thus, Hypothesis 2 is
proved.
 49

CHAPTER 5: DISCUSSION

5.1 DISCUSSION

The hypothesis results can be summarized as follows:

 Hypothesis 1: Brand experience has a positive effect on customer satisfaction
– Proved.
 Hypothesis 2: Brand experience and customer satisfaction has a positive
effect on brand loyalty – Proved.
In this section, each of these two relationships is discussed in some detail,
demonstrating that these findings were consistent with the expected outcomes and identifying
potential reasons why these findings may have been seen.
The first hypothesis was that brand experience would have a positive effect on
customer satisfaction. This hypothesis was posed based on the bulk of the research that supported
the positive relationship between brand experience and customer satisfaction (Baig & Khan,
2010; Choi et al, 2011; Crain, 2010; Nemati et al, 2010; Suh & Yi, 2006). However, the
relationships identified in the literature were not straightforward and had a number of different
dependencies that need to be taken into account to fully understand the situation in regard to this
relationship. First, as Choi et al (2011) noted, this is not a one-way relationship; brand experience
influences customer satisfaction, which in turn encourages the consumer to return and have more
exposure to brand experience. Thus, this can be described as a reinforcement or feedback loop
between brand experience and customer satisfaction. The strength of the affective aspect of True
Coffee’s brand experience is also supported in the literature (Baig & Khan, 2010). The affective
and intellectual aspects were the strongest aspects of brand experience in this case, which is
consistent with Baig and Khan’s (2010) assertion and finding that affective dimensions of the
brand experience are some of the strongest predictors of customer satisfaction. This is also
consistent with the findings of Nemati et al (2010), who found that innovation and the attendant
mental stimulation and excitement associated with the new products or services increased the
affective dimension of brand experience. Overall, these findings support the idea that brand
experience and customer satisfaction are related, with brand experience having a positive impact

49
 50

on customer satisfaction. These findings are entirely consistent with the expectations set with the
literature regarding this relationship.
The second hypothesis was based on the body of research that indicated that
brand experience and customer satisfaction both had positive effects on customer loyalty, and that
they are in fact antecedents to brand loyalty (Baig & Khan, 2010; Biedenbach & Marell, 2010;
Brakus et al, 2009; Choi et al., 2011; ClickFox, 2012; Crain, 2010; Ha & Perks, 2005; Kapferer,
2008; Kim et al, 2008; Lukovitz, 2012; Martisiute et al., 2010; Mohammad, 2012; Morrison &
Crane, 2007; Nemati et al., 2010; Shim, 2012; Song et al., 2012; Suh & Yi, 2006; Tu et al, 2012).
This body of research all supported the positive relationship between brand experience and
customer loyalty and customer satisfaction and customer loyalty. A summary of the reasons for
this relationship according to the literature is that in order to build customer loyalty, customers
must have repeated, satisfactory experience with the brand and its characteristics. Thus, there is a
clear causal relationship between these variables. Of particular interest is the need to build
affective relationships for the service brand (Morrison & Crane, 2007). This finding is
particularly relevant for the coffee shop, which is intended to be a place of friendliness and
comfort rather than simply a service situation. It is particularly notable that the affective aspects
of brand experience are associated with competitive advantages (Lucovitz, 2011). Overall, these
findings suggest that the relationship between brand experience and customer satisfaction on one
hand and brand loyalty are as predicted based on existing models of this relationship in the
academic literature.
The strength of the relationships between brand experience, customer
satisfaction, and loyalty are similar to the strengths of the relationships found within the literature,
insofar as these can be compared directly with R2values. In this study, the relationships included
brand experience and customer satisfaction (R2=0.269) and brand experience and customer
satisfaction and customer loyalty (R2=0.359). Both of the relationships in this study are higher
than those found by Nemati et al (2011) for innovation (R2=0.091), which makes sense since
innovation is just one part of brand experience. They are also around the same or higher than the
values found by Mohammed (2012) for brand trust and perceived value (R2=0.275), a model
which was consistent with the dimensions used for both studies. It is much lower than Oliver
(1993) (R2=0.815), but Oliver used one of the most complete and multi-dimensional models of
 51

customer satisfaction. Finally, the relationship between brand experience and customer
satisfaction and customer loyalty was around the same as Trasorras et al (2009) (R2= 0.357), who
tested the relationship between perceived value and satisfaction and customer loyalty, a similar
relationship. This suggests that the findings are approximately in line with what was expected
from similar analyses in the literature. Although, the R2 value is significant in this study, it also
suggested that there is high possibility of existence of other variable in predicting customer
satisfaction and brand loyalty. A review of literature discovered that there is more on brand other
than brand experience affect customer satisfaction and brand loyalty, namely brand personality,
brand prestige, brand trust (Choi et al,. 2011), innovative, (Nemati et al, 2011) and perceived
value (Mohammed, 2012).
One question is whether there can be said to be an indirect influence between
brand loyalty and brand experience. The relationship between brand experience and brand loyalty
(with customer satisfaction as a moderate variable) was R2=0.269, which is a moderate regression
result and does suggest that there is a relationship of brand experience and brand loyalty.
Customer experience is known to be a major factor in the formation of positive brand equity
(Bidenbach & Marell, 2010), and under the brand equity model the customer experience is the
main determinant of the formation of brand loyalty (Chaudhuri & Holbrook, 2001). This strongly
suggests that there is a reason to believe that brand experience does have a direct effect on brand
loyalty. Brand experience is also routinely found to have an effect on brand loyalty (Brakus, et
al., 2009). However, it should be noted that other studies have also found that brand experience
(and brand experience plus customer satisfaction) are not sufficient to maintain total brand
loyalty, since consumers are also driven by budget constraints, novelty, and other factors (Bulik,
2012). This could be one reason why this relationship is not stronger than it is, given that there
are many other factors.
The findings showed that by adding customer satisfaction to brand experience
there was a much stronger relationship to brand loyalty. This is also consistent with the previous
literature, which has found that it is brand loyalty plus customer satisfaction, rather than either in
isolation, that leads to brand loyalty (Baig & Khan, 2010; Caruana, 2002; Chaudhuri & Holbrook,
2001; Choi, et al., 2011; Ha & Perks, 2005; Kim, et al. 2008; Lucovitz, 2012; Mao, 2010;
Mohammed, 2012). These studies all show a similar relationship between brand experience and
 52

customer satisfaction and brand loyalty as was shown in this research. This suggests that brand
experience and customer satisfaction are paired or complementary constructs, and that without
customer satisfaction the brand experience is not enough to promote loyalty. This has
implications because it suggests that while brand building is important, it is equally as important
to ensure customer satisfaction and meet expectations if the company wants to build a long-term
brand loyal customer base.

5.2 CONCLUSION

This research was undertaken to explore the relationship between brand

experience, customer satisfaction, and brand loyalty in a Thai retail service context (the coffee
shop). This is an area where there has not been a substantial amount of research, as Thailand is
generally under-studied in the academic press in terms of business and consumer practices. The
research objectives that were posed for this study were:
1. To investigate the effect between brand experience, customer satisfaction and
brand loyalty at a True coffee chain store in Bangkok.
2. To describe the effect of brand experience on customer satisfaction
3. To describe the effect of brand experience and customer satisfaction on brand
loyalty
These objectives were undertaken using a quantitative survey of 250 customers
of a single True Coffee outlet in Bangkok, using data collected over a period of several days. The
quantitative survey was first analysed descriptively. This determined that customers appeared to
consider True Coffee an occasional treat rather than routine, with most visiting less than twice a
week, and that customers preferred traditional coffee house drinks (like café latte, Americano, and
cappuccino) and did not routinely purchase other products. The findings suggested that while
Customer Satisfaction was strong for True Coffee visitors, Brand Experience could be best
described as Neutral. Brand Loyalty was also Neutral, although relatively positive. Reasons for
visiting the True Coffee chain included price, quality, sensory qualities (like taste and smell), and
convenience.
 53

Objectives 2 and 3 were achieved using linear regression between predictor

variables (Brand Experience and Customer Satisfaction) and the outcome variable (Brand
Loyalty). Hypotheses were posed based on the existing literature on the relationships between
these variables.
Hypothesis 1 proposed a positive relationship between Brand Experience and
Customer Satisfaction. This relationship was shown to be positive, though only moderately
strong. This indicated that Brand Experience did influence Customer Satisfaction. The literature
further suggested that this could be a two-way relationship, with Customer Satisfaction also
building on Brand Experience as customers return to have further experiences with a brand found
to be satisfactory. Thus, this relationship was consistent with the expectations set by the literature.
Hypothesis 2 proposed a positive relationship between Brand Experience and
Customer Satisfaction as predictor variables and Brand Loyalty as the outcome variable. This
relationship was also based on existing literature, which showed that both of these aspects of
experience and emotional interaction were required to build customer loyalty. Once again, linear
regression showed a modest positive relationship between these two variables and customer
loyalty (with brand experience being slightly more important than customer satisfaction).
However, the literature review once again suggested that this could be a two-way or feedback
relationship, with customer loyalty behaviours such as repeat purchase increasing both customer
satisfaction and brand experience. Thus, these findings were consistent with the expectations of
the literature.
Overall, the objectives of the research were effectively accomplished using a
combination of literature search and quantitative research. The findings offered some important
insights into the nature of brand loyalty for the True Coffee chain, as well as findings that could
apply to other areas. The most important finding was of course that brand experience was
important for developing customer satisfaction and brand loyalty. However, perhaps the more
important finding is that brand loyalty, customer satisfaction, and brand experience are not
independent of each other. Instead, they are mutually constituted – it is not possible to build brand
loyalty without brand experience and customer satisfaction, and behaviours associated with brand
loyalty (such as repeated purchases from a given brand) build both brand experience and, if the
brand is properly managed, increased customer satisfaction. This mutually constituted
 54

relationship means that the relationship between brand loyalty and the customer experience is
particularly important. As the literature showed (Morrison & Crane, 2007), the affective aspect of
the customer relationship to the brand is very important for the coffee shop. This has particular
implications for True Coffee, which has pursued an approach of building a “third place” for
customers to be at home. In particular, there is a need to build and encourage the formation of an
affective relationship between True Coffee as a brand and its visitors. This is an area of particular
importance for True Coffee and for coffee shops generally.

5.3 RECCOMENDATIONS

5.3.1 Recommendations for business

This research enables the researcher to generate a number of
recommendations for business, especially for use of True Coffee and other companies in Thailand
that are currently operating in the coffee shop business. The first recommendation is that it is
clear that the quality and sensory aspects of the coffee, convenience, and price are all key aspects
of business competition and coffee shops should focus on these areas as areas for customer
improvement. Without these basic aspects of the coffee shop experience, it could be difficult for
coffee shops to continue to compete, particularly larger brands that must establish multiple
presences. Maintaining these basic competitive advantages will be key to growing coffee shop
chains in a period of intense competition and growth of the industry.
A second and more subtle suggestion generated by this research is that
True Coffee (and perhaps other coffee shop chains) need to find a way to improve the brand
experience of customers in order to generate increased customer loyalty. Currently, True Coffee
ranks well in customer satisfaction, with particularly high ratings for its quality of the coffee.
Regardless, the brand loyalty descriptive figures suggest that something is still missing to really
bring customers into the chain and make them loyal to True Coffee. Of particular concern is that
the sensory aspects of the coffee and related products seem to be mediocre or neutral. In order to
generate true customer loyalty, True Coffee needs to be really good in the substantive product
they are offering. This implies that the taste and smell of the coffee should be improved.
Furthermore, the affective rankings of the coffee chain could also be improved, perhaps by
 55

encouraging workers to recognize and greet regulars or by improving the physical environment of
the coffee shop in order to really encourage visitors to view it as a “third place”.
The viewpoints of customers and their experience of the chain is
obviously the most important factor in recommendations for the firm. In addition to the regression
data, there was also interesting statistical data that was derived. The survey questions 1.5 to 1.9
were specifically targeted to finding out how consumers purchased True Coffee and what their
preferences were in regard to purchasing. This offers some information on how True Coffee can
more carefully target its buyers and how it can provide them with more relevant offerings. One of
the most important pairs of findings in this area was that while consumers were very fond of
traditional coffee house drinks like café latte, Americano, cappuccino, and espresso, they were
not as fond of more elaborate drinks like café mocha (which includes chocolate). Most consumers
also did not purchase many of the non-coffee beverages available at True Coffee like fruit juices
or tea. This suggests that consumers have a strong image of True Coffee as a traditional coffee
shop, rather than as a general meeting place. True Coffee could use this strong image as a means
of differentiating themselves from competitors. For example, the American chain Starbucks is
well known for having a long menu of non-coffee and elaborated coffee drinks. By focusing on
and expanding their Italian-style coffee line, True Coffee could improve their position in the
market as a real coffee shop. Some drinks that True Coffee does not currently offer include
ristretto (or a ‘short’, stronger espresso shot) and caffé macchiato (espresso with a small amount
of milk). By expanding these offerings, True Coffee could build a much stronger brand image.
Eliminating its tea and juice beverage lines would not be desirable, since it would remove options
for social use of the True Coffee space by those that do not care for coffee. However, there is no
real way to differentiate the brand by building on these areas, and they should not be a focus of
the True Coffee brand development.
Furthermore there is a question of whether True Coffee merchandise
products, such as grounded coffee has effective branding mechanism. Most consumers considered
True Coffee Shop as “Third Place” for social experience, merchandise product may not be
consumers’ requirements or intention for patronized. This could be particularly true for
consumers who intended to consume freshly brewed coffee at the shop and not a routine coffee
drinker at home. As consequence of ineffectiveness in term of product branding mechanism, the
 56

company should seriously evaluate the worthiness of maintaining merchandise product in the
shop. One option that True Coffee Shop could consider is placing its merchandise products on
supermarkets and hypermarkets shelves. This will both increase the brand’s national profile and
reduce the amount of space used in its (relatively small) shops for products that do not encourage
satisfaction with the brand.
Another recommendation for the business is to consider the reasons that
customers visit the shop. The four most-cited reasons for visiting True Coffee included moderate
price, consistent quality, the sensory experience (taste and smell), and convenience (proximity to
workplaces and schools). Obviously, the True Coffee can use these characteristics to achieve
competitive advantage and attract more customers but careful consideration is needed. For
example, lowering price is a positive encouragement to buyers but this should not be done to the
point that detriment quality or taste of the coffee. Similarly, opening more shops could make the
chain even more convenient, but in return increase operating cost. The most important factor is
balancing the elements that customers find to be important.
The final recommendation of this report for True Coffee is to continue
building strong brand experience. This can be built with an authentic in-store coffee house
experience, highly quality brewed coffee, consistent taste, and convenience. However, it should
also focus on building a community around the brand and encouraging identification of its
consumers with the brand, rather than just encouraging a functional relationship. True Coffee has
the opportunity to become an international or even global coffee brand if it refines its offering and
improves the quality of its service delivery and other aspects of its brand. By continuous
development of brand image and brand experience, training of staff to achieve high service
quality and product quality.

5.3.2 Recommendations for future research

One recommendation for future research is the issue of the “third place”
and what it means in Thai culture. The third place concept is derived from European (especially
French) coffee house culture, where the coffee house is treated as a place outside the work or
home for socialization. How does this translate to the Thai cultural experience? It is uncertain
(even though it has been adopted by both True Coffee and Starbucks as an aspect of their brand
 57

experience). Determining what the role of the coffee shop is in the Thai social life, and
particularly whether Thai visitors to coffee shops actually view the coffee shop as a third place
(and if so how) could be a base for future market research in this area. In particular, it could
provide a deep foundation for theorizing about the coffee market in Thailand and its development,
as well as provide information to marketers that are undertaking positioning of the coffee shop in
Thailand. This type of information could be best collected using an ethnographic approach,
combining participant observation and interviews in coffee shops in order to understand the
experience of visitors and the meaning attributed to the coffee shop by these visitors.
A second recommendation for future research is engaging in true market
segmentation and targeting research in order to determine who True Coffee’s customers are and
what their needs are. For example, this research could collect data about demographic information
(like age, occupation, gender, educational level, and so on) in order to determine whether there is
a specific demographic profile that True Coffee could target with its products or branding. The
analysis could also focus on identifying attitudes and issues shared by True Coffee drinkers, likes
and dislikes, and other information that could help improve the True Coffee brand and customer
service experience for customers. This type of research is important because it is specific to the
company involved and could help identify the specific needs of the company. However, it could
also be more generally relevant because by tying aspects of this study, like brand experience,
customer satisfaction, and brand loyalty or brand equity, to the demographic and psychographic
profiles of coffee drinkers, it will become easier to understand the implication and meanings of
the coffee shop phenomenon in Thailand.
A third recommendation for future research is to investigate the indirect
impact between brand experience and brand loyalty (customer satisfaction as a moderator) with
the use of Sobel Test. It is a method of testing the significance of a mediation effect.
A related area of research that could be undertaken is comparing coffee
shops to determine differences in brand preference; for example, Starbucks (which has a very
well-established and formulaic global brand) and True Coffee (which is more local, quirkier, and
less well-established). This comparison could help to determine how consumers form opinions
about coffee shops, how they experience different brands, and the role that is played by various
aspects of customer satisfaction and the brand experience on the formation of the brand. It could
 58

also help determine if there are differences between preferences for global and local brands in the
same consumer, which could be useful information for Thai brands generally who have to
compete with international firms using more established brands.
 59

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 66

APPENDIX
 67

APPENNDIX A: QUESTIONNAIRE

“Measurement of Brand Loyalty: A Case Study of True Coffee in Bangkok, Thailand”

This questionnaire survey is developed as partial completion of Master degree
dissertation of a student at Prince of Songkhla University. The questions aim to gather
information related factors that affect brand loyalty of True coffee consumers. It should be noted
that all information gathered by this survey will be treated confidentially and will be used for
academic purpose only.
The survey contains two parts, please tick  in the box that is mostly suit your
answer and fill in the blank where requires.

Part 1: Demographic Information

1.1 Gender
[ ] Male [ ] Female

1.2 Age
[ ] Less than 20 years old [ ] 20 to 39 years old
[ ] 40 to 60 years old [ ] More than 60 years old

1.3 Monthly income

[ ] Lower than 15,000 baht [ ] Between 15,000 and 25,000 baht
[ ] Between 25,001 and 35,000 baht [ ] More than 35,000 baht

1.4 Occupation
[ ] Student [ ] Office worker [ ] Government agency
[ ] Unemployed [ ] Business owner [ ] Others (Please specify) ……

1.5 How often do you purchase True Coffee?

[ ] Less than 2 times per week [ ] 2-4 times per week
[ ] More than 5 times per week [ ] Others (please specific)……
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1.6 What types of coffee do you usually consume at True Coffee?

[ ] Espresso [ ] Americano [ ] Café Latte
[ ] Cappuccino [ ] Cafe Mocha [ ] Caramel Macchiato
[ ] Others (Please indicate) ________________

1.7 Do you also purchase other beverages at True Coffee?

[ ] Yes (Please specify) ________________ [ ] No

1.8 Do you purchase coffee bean at True Coffee for drinking at home as well?
[ ] Yes (Please specify) __________________ [ ] No

1.9 What is the reason for purchase products at True Coffee?

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
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Part 2: The Effect between Brand Experience, Customer Satisfaction and Brand Loyalty
In this section, a five-point Likert scale with anchors ranging from strongly disagree
(1) to strongly agree (5) is used. The items were adopted from previous studies which
most of them adapted from Choi et al. (2011).
Agreement level
Item Statement Strongly Disagree Neutral Agree Strongly
disagree agree
Brand experience
Sensory
2.1 This coffeehouse brand
makes a strong impression
on my visual sense or
other sense.
2.2 I find this coffeehouse
brand interesting in a
sensory way.
2.3 This coffeehouse brand
appeals to my senses.
Affective
2.4 This coffeehouse brand
induces feelings and
sentiments
2.5 I have strong emotions for
this coffeehouse brand.
2.6 This coffeehouse brand is
an emotional brand.
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Agreement level
Item Statement Strongly Disagree Neutral Agree Strongly
disagree agree
Behavioral
2.7 This coffeehouse brand
reminds me of actions and
behaviors when I use this
brand.
2.8 This coffeehouse brand
results in bodily
experiences.
2.9 This coffeehouse brand is
action oriented.
Intellectual
2.10 I engage in a lot of
thinking when I encounter
this coffeehouse brand.
2.11 This coffeehouse brand
makes me think.
2.12 This coffeehouse brand
stimulates my curiosity
and problem solving.
Customer satisfaction
2.13 I am satisfied with my
decision to buy coffee at
this coffeehouse brand.
2.14 I have truly enjoyed this
coffeehouse brand.
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Agreement level
Item Statement Strongly Disagree Neutral Agree Strongly
disagree agree
2.15 I feel good about my
decision to buy coffee at
this coffeehouse brand.
2.16 Using this coffeehouse
brand has been a good
experience.
2.17 I am sure it was the right
thing to be a customer of
this coffeehouse brand.
Brand loyalty
2.18 I would recommend this
coffeehouse brand to
friends and relatives.
2.19 I intend to keep buying
coffee at this coffeehouse
brand.
2.20 If I need coffee, this
coffeehouse brand would
be my preferred choice.
2.21 I will speak positively
about this coffeehouse
brand.
2.22 I intend to encourage other
people to buy coffee from
this coffeehouse brand.
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VITAE

Name Ms. Nut-Arin Musikapart

Student ID 5310520006
Educational Attainment
Degree Name of Institution Year of Graduation
Bachelor of Economics Prince of Songkhla University 2009

Work – Position and Address (If Possible)

Trade Manager, 111 Fishery Co. Ltd., 1/8 Kampangphet Road, T. Boyang, A. Muang,
90000 Songkhla, Thailand

List of Publication and Proceeding (If Possible)

Musikapart, N., Sukhabot, S., The Effect of Brand Experience and Customer
Satisfaction on Brand Loyalty: A Case Study of True Coffee in Bangkok,
Thailand, International Conference on Economics & Business Research,
May 15-16, Penang, Malaysia