Title

The effect of social media marketing activities on customer loyalty and purchase intention: Evidence from Vietnam’s Millennials and the Cosmetics Industry.

Abstract

Purpose – This paper aims to determine the effect of social media marketing activities on the purchase intention and brand loyalty of Vietnam’s millennials regarding cosmetic products

Design/Methodology/Approach – The deductive approach will be applied to collect quantitative data from an online survey. 100 participants will join the survey through Google Form.

Findings – The responses collected from the interview will present the effect of social media marketing activities on the purchase intention and brand loyalty of Vietnam’s millennials regarding cosmetic products. Additionally, the effect of purchase intention on the brand loyalty of Vietnam’s millennials regarding cosmetic products will be examined

Research limitations/implications – One outstanding limitation is that the total number of the respondents was only 100 people. Though according to Bryman and Bell (2011), a sample size of around 100 should be acceptable, a larger sample size would increase the level of generalizability

Practical implications – In the study, it is proven by primary data that the entertainment and customisation dimensions of social media marketing have an impact on purchase intention.

Acknowledgements

First of all, I would like to express my sincere and heartfelt obligation towards all the personages who have helped me in this endeavour. Without their active guidance, help, cooperation and encouragement, I would not have made headway in the research business project.

I would like to thank my MBA cohort project co-ordinator, Dr. A, who gave detailed guidance, supervisor allocation, and much other helpful support for me and my classmates throughout the last semesters.

I am extremely thankful and pay my gratitude to my beloved supervisor Dr. B for her valuable guidance and enthusiastic support for me to complete this dissertation well.

I extend my gratitude towards my parents and member of my family, who have always supported me morally as well as economically.

Last but not least, I also would like to express my sincere thanks to all my lecturers, tutors, staff, and my classmates at the University of ABC for their teaching, encouragement, understanding, guidance, and insightful support to me throughout the year.

Table of Contents1. INTRODUCTION.......................................................................................................

1.1. Background of the research topic........................................................................1.1.1. An overview of the cosmetics industry in Vietnam.............................................................1.1.2. Vietnamese millennials’ consumer behaviours..................................................................1.1.3. Statement of the research problem........................................................................................

1.2. Research objectives...................................................................................................2. CRITICAL LITERATURE REVIEW......................................................................

2.1. Social media..................................................................................................................2.2. Social media marketing activities.......................................................................

2.1.1. Interaction.................................................................................................................................2.1.2. Entertainment..........................................................................................................................2.1.3. Trendiness.................................................................................................................................2.1.4. Customisation...........................................................................................................................2.1.5. Electronic word-of-mouth.....................................................................................................

2.3. Purchase intention.....................................................................................................2.4. Brand loyalty.................................................................................................................2.5. Hypotheses Development.......................................................................................

3. RESEARCH METHODOLOGY.............................................................................

3.1. Research philosophy.................................................................................................3.2. Research approach.....................................................................................................3.3. Sampling and data collection................................................................................

3.4. Questionnaire development..................................................................................3.5. Steps for data analysis............................................................................................3.6. Ethical consideration................................................................................................

4. DATA ANALYSIS....................................................................................................4.1. Demographic profile and source for access to beauty trends and cosmetic products................................................................................................................4.2. Descriptive analysis...................................................................................................4.3. Reliability........................................................................................................................4.4. Validity.............................................................................................................................4.5. Pearson Correlation...................................................................................................4.6. Linear Regression.......................................................................................................4.7. Summary of Hypotheses Testing........................................................................

5. CONCLUSION..........................................................................................................

6. RECOMMENDATIONS..........................................................................................

6.1. Theoretical and Managerial Implications........................................................6.2. Limitations of the Dissertation............................................................................6.3. Recommendations for Future Research...........................................................

REFERENCES..................................................................................................................APPENDICES...................................................................................................................

Appendix 1: Questionnaire..............................................................................................Appendix 2: Data Results.................................................................................................Appendix 3: Data Analysis...............................................................................................

Abbreviation Meaning PI Purchase intentionBL Brand loyaltyEN Entertainment WM Electronic Word of MouthIN InteractionCU Customisation TR Trendiness

List of Tables and FiguresFigure 1. Sales of beauty and personal care in Vietnam (Euromonitor, 2020)..............................................................................................................................................Figure 2. Products purchased more frequently online during the pandemic (Doan, 2020)...............................................................................................................................Figure 3. Share of social media users by age groups (We Are Social, 2020).......................................................................................................................................................Figure 4. Social Media Marketing - Adapted from Kim and Ko (2012)................Figure 5. The steps for data analysis, adapted from Field (2018).......................Figure 6. The demographic profile of the respondents............................................Figure 7. The primary source for access to beauty trends and cosmetic products......................................................................................................................................Figure 8. Reliability Statistics - Entertainment............................................................Figure 9. Reliability Statistics - Customisation............................................................Figure 10. Reliability Statistics - Interaction.................................................................Figure 11. Reliability Statistics - eWOM..........................................................................Figure 12. Reliability Statistics - Trendiness.................................................................Figure 13. Reliability Statistics - Purchase intention.................................................Figure 14. Reliability Statistics - Brand loyalty............................................................Figure 15. Linear Regression - PI and SMM...................................................................Figure 16. Linear Regression - BL and SMM..................................................................Figure 17. Linear Regression - PI and BL.......................................................................

Table 1. Descriptive statistics...................................................................17Table 2. The Cronbach’s Alpha values of the variables.............................18Table 3. KMO and Bartlett's Test...............................................................19Table 4. Rotated Component Matrix..........................................................21Table 5. Pearson's Correlations.................................................................25

1. INTRODUCTION1.1. Background of the research topic1.1.1. An overview of the cosmetics industry in Vietnam This section provides an overview of the background of the research topic. Firstly, it is worth discussing the cosmetics industry in Vietnam. Vietnam is still regarded as a potential market for cosmetic products despite the serious consequences of the Covid-19 outbreak. According to the Asian Development Bank (2020), the national GDP growth rate will be 4.8% in 2020, and the figure is projected to increase to 6.8% in 2021. This is a positive sign given the fact that several countries are sent into negative GDP growth as a result of the Covid-19 outbreak.

The 2020 report on beauty and personal care in Vietnam by Euromonitor (2020), while taking into account the impacts of the Covid-19 pandemic, revealed a healthy growth in sales, primarily due to higher living standards, the growing popularity of social networking sites, and the steady increase in household incomes. In particular, there would be a significant increase in the sales volume of beauty and personal care products in Vietnam, from approximately 49,000 to 78,000 billion Vietnam Dong (see Figure 1).

Figure 1. Sales of beauty and personal care in Vietnam (Euromonitor, 2020)

In addition, as stated in a recent survey by Rakuten Insight, in Vietnam, during the Covid-19 pandemic, 58.49% of the participants claimed that they made more online purchases in comparison with the time before the pandemic (Doan, 2020). Notably, cosmetics and beauty products are the fourth most prevalent group of products (33.73%) that Vietnamese consumers purchase during the epidemic (see Figure 2).

Figure 2. Products purchased more frequently online during the pandemic (Doan, 2020)

Additionally, it should be noted that an increasing number of Vietnamese consumers display willingness to purchase beauty and personal care products, even those from premium brands. Indeed, Vietnamese consumers who are from upper middle and high-income social groups, now have the tendency to switch from drugstore skincare products from brands like Maybelline or L’Oréal to more premium ones such as Mac,

Shiseido and Chanel. Most of them are residents of urban cities such as Ho Chi Minh City, Hanoi, Can Tho or Da Nang (Euromonitor, 2020).

1.1.2. Vietnamese millennials’ consumer behavioursSecondly, it is worth discussing the consumer behaviours of the millennials in Vietnam. Millennials are people born between 1980 and 2000, meaning they are aged from 20 to 40 years old as of 2020. There are more than 33 million millennials in Vietnam, which accounts for approximately 35% of the country’s population. The figure for the world is 32% (Kantar World Panel, 2018). Recently, Kantar World Panel (2018) has published a report looking at the minds of millennial shoppers. One of the most interesting findings is that in Vietnam, Generation Y are tech-savvy consumers. They significantly rely on online platforms to keep themselves up to date about the latest trends and information. They are inclined to use digital platforms in every phase of their purchasing journey. They develop the habit of using social networking sites to look for information regarding a particular product or service, read other consumers’ reviews, and distribute their own opinions on the product or service after their purchase (Kantar World Panel, 2018).

As mentioned above, Vietnamese millennials are avid users of social media. In fact, the majority of people in Vietnam are active social media users. According to We Are Social (2020), 65 million Vietnamese people use social networking sites, accounting for 67% of the entire population. Additionally, it should be noted that on average, Internet users aged between 16 and 64 years old spend more than two hours using social media (We Are Social, 2020). The report also stated that the number of Vietnamese social media users increased significantly by 9.6% from April 2019 to January 2020. It can be seen from Figure 2 that most of the social media users in the country are from Generation Y.

Figure 3. Share of social media users by age groups (We Are Social, 2020)

1.1.3. Statement of the research problemThe healthy growth of the cosmetics segment in Vietnam, coupled with the millennials’ heavy use of social media during their purchase journey, have prompted the author to conduct a research on “The effect of social media marketing activities on customer loyalty and purchase intention: Evidence from Vietnam’s Millennials and the Cosmetics Industry”.

1.2. Research objectivesThe dissertation aims at attaining the following objectives:

To determine the effect of social media marketing activities on the purchase intention of Vietnam’s millennials regarding cosmetic products

To investigate the effect of social media marketing activities on the brand loyalty of Vietnam’s millennials regarding cosmetic products

To examine the effect of purchase intention on the brand loyalty of Vietnam’s millennials regarding cosmetic products

2. CRITICAL LITERATURE REVIEW2.1. Social mediaThere have been myriad of research papers looking at the nature of the newly emerged term “social media”. As postulated by Kaplan and Haenlein (2010), social media can be described as a variety of Internet-based applications building on the technological and ideological bases of

the Web 2.0 technology and enabling the production and discussion of user-generated content. The scholars also explained the concept of “user-generated content”, which consists of several forms of media-based content which can be accessed by the public and produced by end-users. Adopting a similar approach, Tredinnick (2006) described social media as sites that contain user-generated content and the active participation of its users.

Kietzmann et al. (2011) adopt a more comprehensive and functional approach. They develop a framework that outlines seven functional building blocks of social media. These seven functionalities include the presence, identity, relationships, conversations, reputation, groups, and sharing. Presence involves the capacity of an individual user to be aware of the availability of other social media users. Identity refers to the degree to which users disclose their own identities in a social networking site. Relationship refers to the connections among users on a social networking site. Conversation is defined as the degree of communication a user has with other users. Reputation is the capability of social media users to recognise the position of others within a social networking site. Group refers to the capacity of users to establish communities and sub-communities. Sharing describes the process of exchanging content among users. According to Kietzmann et al., Facebook prioritizes the ‘relationships’ function the most and also places emphasis on identity, presence, conversations, and reputation. Whichever perspectives scholars hold, it can be concluded that a social media platform consists of the following distinctive features: the platform allows user-generated content and user profiles; and enable its users to interact with other users’ accounts and take part in online groups built on the basis of common interests (Ellison, Steinfield and Lampe, 2007; Allmer, 2015).

2.2. Social media marketing activitiesMarketing professionals in Asia increasingly use social media marketing as their main type of marketing strategy, seeking to enhance brand trust, boosting customers’ purchase intention, and fostering their relationship

with brands (Ebrahim, 2019). In the literature, there have been several attempts to identify the components of social media marketing. According to Kim and Ko (2012), social media marketing activities can be categorised into five following groups: entertainment, interaction, trendiness, customisation, and electronic word-of-mouth (see Figure 4). Investigating the social media marketing activities in the airline industry, Seo and Park (2017) argued that there are four constructs of social media marketing, namely trendiness, interaction, perceived risks and customisation. This dissertation will use the framework by Kim and Ko (2012) as this model entails social media marketing activities for products, not services.

Figure 4. Social Media Marketing - Adapted from Kim and Ko (2012)

2.1.1. InteractionAccording to Godey et al. (2016), in the social media landscape, interaction can be defined as the conversation and discussions among users. Several research papers claimed that social media interactions have produced radical changes to how customers and brand communicate. Muntinga, Moorman and Smit (2011) argued that social networking sites are places in which a member can discuss brands and

Social Media Marketing

Trendiness Interaction Customisation Entertainment e-WOM

their products or services with others. Zhu and Chen (2015) proposed that the interaction dimension of social media marketing can be categorised into two groups, content-based and profile-based. While profile-based interactions are central to individual users with relevant pieces of information, content-based interactions are based on content on social media that users like.

2.1.2.EntertainmentEntertainment is regarded as a strong motivator for people to use social media, according to Muntinga, Moorman and Smit (2011). According to Agichtein et al. (2008), entertainment arises when marketing professionals produce experiences which users consider to be playful while using social networking sites. Manthiou et al. (2013) pointed out that such entertainment activities like mini games, are beneficial in making customers take pleasure in their social media experiences, and thereby, encouraging them to take part in brand communities on social media.

2.1.3.TrendinessAs stated by Kietzmann et al. (2011), social media distributes the latest pieces of information. Similarlty, Mangold and Faulds (2009) postulated that social networking sites have gradually emerged as the dominant search platform as people believe that they provide more reliable information than traditional channels do. Accordingly, trendiness refers to the capability of social media to disseminate trendy content (Kim and Ko, 2012; Constantinides, 2014)

2.1.4.CustomisationThe concept of customisation is not new in the literature. As stated by Schemenner (1986, cited in Seo and Park, 2017), customisation can be defined as the degree to which a particular service reflects consumers’ demands to meet their tastes. In the context of social media, according to Godey et al. (2016), this element can be defined as the degree to which marketing messages are tailored to match the preferences of social media users. Chan and Guillet (2011) claimed that in the social media landscape, customisation might involve instantly replying to the enquiries of

customers. This dimension of social media marketing is usually adopted by marketers as a strategy to boost customer satisfaction and positive perceived control (Mangold and Faulds, 2009). Additionally, Erdoğmuş and Çiçek (2012) argued that firms could boost brand loyalty through the customisation of social networking sites.

2.1.5.Electronic word-of-mouthIt was argued by Muntinga, Moorman and Smit (2011) that electronic word of mouth is closely associated with online interactions among users about brands. In the social media landscape, eWOM is defined as the extent to which users distribute information on social media. Godey (2016) referred to eWOM as the act of sharing experiences by users. Kim and Ko (2012) argued that eWOM has a higher level of credibility compared to content produced by marketing professionals. There are three forms of e-WOM, as suggested by Chu and Kim (2011), which include opinion passing, opinion giving and opinion seeking.

2.3. Purchase intentionIn the literature, purchase intention has long been considered to be a predictor of future purchasing behaviour. According to Aaker and Keller (1990, cited in Curvelo, Watanabe and Alfinito, 2019), purchase intention refers to the possibility in which consumers choose to buy products or services from a particular brand frequently, and showcase their resistance towards changing to other brands.

2.4. Brand loyalty There were definitions of the term “brand loyalty” several decades ago (Sheth, 1968). According to Bloemer and Kasper (1995), brand loyalty can be defined as a type of customer behaviour towards a specific brand in a certain amount of time. There are two constructs of brand loyalty, behavioural and attitudinal. As posited by Saini and Singh (2020), attitudinal loyalty refers to the consumer’s psychological commitment to a particular brand while evaluating a variety of brands. Such a commitment wields a significant influence on shaping their preferences and purchase intention (Bandyopadhyay and Martell, 2007). On the other hand,

behavioural brand loyalty can be described as repeated purchase behaviour. Aaker (1991) also argued that brand loyalty refers to the likelihood to which a consumer switch to other brands offering similar products and services, especially when the brand that they previously choose is faced with a change related to the features or price of its offerings.

2.5. Hypotheses Development

As mentioned above, social media marketing activities can be categorised into five groups, namely trendiness, customisation, eWOM, interaction, and entertainment (Kim and Ko, 2012). The recent study by Kim and Ko (2012), which involved the social media marketing activities of Louis Vuitton, revealed that every social media marketing activity, especially interaction, can exert a significant effect on customers’ purchase intention. Similarly, Zhu and Zhang (2010) pointed out that social networking sites can have a great impact on the sales performance of a brand. Subsequently, the researcher proposes the hypothesis that:

H1: There is a positive relationship between social media marketing activities and the purchase intention of Vietnam’s millennials.

Due to its practical attributes, social media has emerged as an effective tool in the field of marketing. Laroche et al. (2013) postulated that the integration of social media into marketing strategies could boost brand loyalty. Likewise, the quantitative study by Laksamana (2018) found that social media marketing activities can make customers more loyal to

banking brands. Subsequently, the researcher proposes the hypothesis that:

H2: There is a positive relationship between social media marketing activities and the brand loyalty of Vietnam’s millennials.

In the literature, there are also some papers that verified the relationship between brand loyalty and purchase intention. Keller (2008) argued that the purchasing experience usually stays in the mindset of consumers for a significant amount of time. The researcher also concluded that there is a positive relationship between brand loyalty and purchase intention. Subsequently, the researcher proposes the hypothesis that:

H3: There is a positive relationship between the brand loyalty and purchase intention of Vietnam’s millennials.

3. RESEARCH METHODOLOGY3.1. Research philosophyThis dissertation uses the philosophy of positivism. As argued by Bell, Bryman and Harley (2018), positivism entails the creation of a set of hypotheses through established theoretical frameworks, and the verifying of these hypotheses via quantitative techniques. Additionally, it was pointed out by Saunders, Thornhill and Lewis (2009) that positivism is the type of philosophy that must not entail the researcher’s personal values in order to attain neutral results. In this dissertation, existing frameworks concerning the relationships among social media marketing activities, purchase intention, and brand loyalty will be utilised to develop the hypotheses.

3.2. Research approachThe dissertation adopts the deductive approach. According to Saunders, Thornhill and Lewis (2009), the deductive approach is associated with the development of theories or hypotheses, as well as the involvement of a suitable strategy to verify these theories or hypotheses. In fact, this approach is believed to be suitable for the positivism philosophy and it is regularly embraced in quantitative research (Bell, Bryman and Harley,

2018). Saunders, Thornhill and Lewis (2009)) also claimed that the approach is beneficial in recognising the relationships among varying variables.

3.3. Sampling and data collection The paper adopts the survey method to collect primary data. In particular, an online questionnaire is produced using Google Forms. The questionnaire consists of two parts. The first part seeks to gain basic information about the participants like their gender, age, and so on. However, it should be noted that only Vietnamese millennials can complete the questionnaire. In the next part of the questionnaire, there are questions related to social media marketing activities, purchase intention, and brand loyalty. These questions use the five-point Likert scale, 1 is equivalent to completely disagree, and 5 is equivalent to completely agree.

The author chooses the convenience and snowballing sampling methods. In particular, the sample includes the friends, family members and acquaintances of the author. Then, the author would ask them to distribute the questionnaire to the members of their social circle. To make sure that all of the respondents are millennials, active users of social media and consumers of cosmetics, the author applied the following criteria:

The respondents have purchased a product from a cosmetic store available on social media

The respondents are born between 1980 and 2000

3.4. Questionnaire developmentBased on an extensive literature review, a questionnaire was developed. The questionnaire consists of two parts. The first part is aimed at excluding respondents that were not born between 1980 and 2000 or have not purchased a cosmetic product at a store available on social media. The second part comprises of 25 questions, 24 of which include items related to social media marketing, purchase intention, and brand

loyalty. These 24 questions use the five-point scale. 1 is equal to strongly disagree, and 5 is equal to strongly agree.

3.5. Steps for data analysisAccording to Field (2018), SPSS software is beneficial in analysing quantitative data. Firstly, to evaluate the reliability of the variables, the author uses the Cronbach’s Alpha test. The second step of the data analysis process involved an exploratory factor analysis (EFA). EFA is used for measuring the validity of the questionnaire. To test the proposed framework, the author used the Pearson’s correlations and then the linear regression analysis.

Figure 5. The steps for data analysis, adapted from Field (2018)

3.6. Ethical considerationThe study entails the participation of human subjects. Therefore, it is of utmost importance that the author should take into consideration some ethical issues. Firstly, the dissertation strictly abides by the code of ethics as required by the University. In addition, to protect the information provided by the participants, the related documents are stored in a password-protected folder in the author’s password-protected laptop. Only

Reliability test

Validity test

Pearson correlations

Linear regression

the author can gain access to these documents. The collected data will be immediately deleted after the study is submitted.

4. DATA ANALYSIS 4.1. Demographic profile and source for access to beauty trends and cosmetic productsAfter a few weeks of collecting primary data, the author gathered a total number of 100 valid responses, meaning 100 participants are Vietnamese millennials and have purchased a cosmetic item from a store available on social media. Next, it is essential that the demographic profile of the respondents is created. The respondents were asked to reveal their gender. Data showed that the majority of the survey participants are women (72%). Men account for 28% of the respondents (see Figure 6).

Gender

Female Male

Figure 6. The demographic profile of the respondents

In the fourth question, respondents are asked the primary source they use to gain access to beauty trends and cosmetic products. Data revealed that the most popular source is social media (62%), followed by Google (23%), and recommendations from friends and family members (15%).

Source

Social media Google Friends and Family

Figure 7. The primary source for access to beauty trends and cosmetic products

4.2. Descriptive analysisA descriptive analysis is essential in a quantitative research paper as it gives researchers some fundamental insights into the distribution of the gathered data (Field, 2018). Table 1 showcases the descriptive statistics of the study’s data. 1 is equivalent to extremely disagree and 5 is equivalent to extremely agree. It can be seen from the table that the majority of the respondents are inclined to display positive purchase intentions (mean=3.6133) and brand loyalty behaviours (mean=3.79). The entertainment variable has the highest mean score (mean=3.85), meaning most of the respondents find the content distributed on the social media accounts of X store interesting, enjoying to consume such content, etc. The e-WOM variable has the lowest mean score (mean=3.53), meaning the participants somewhat agree that they want to share information collected from the social media accounts of X store or comment on the quality of the X store's cosmetic products on its social media accounts.

Descriptive Statistics

N Minimum Maximum MeanStd. Deviation

EN 100 1.50 5.00 3.8575 .78436CU 100 1.25 5.00 3.5475 .72273IN 100 1.33 5.00 3.8167 .78048PI 100 1.67 5.00 3.6133 .72586TR 100 1.00 5.00 3.5900 .78618WM 100 1.50 5.00 3.5300 .79715BL 100 2.00 5.00 3.7900 .66101Valid N (listwise) 100Table 1. Descriptive statistics

4.3. ReliabilityIn order to test the identified hypotheses, the first step would be conducting a reliability test. The reliability of the datasets can be tested through the Cronbach’s Alpha values. The Cronbach’s Alpha values of the variables are summarised in Table 2. According to Taber (2017) the Cronbach’s Alpha value is considered to be acceptable if it is 0.7 and above. As can be seen from the Table, all the variables have acceptable Cronbach’s Alpha values. The smallest Cronbach’s Alpha value is 0.75. Additionally, it should be noted that all the items have the corrected item-total correlations of above 0.3 (see Appendix 3). According to Taber (2017), the corrected item-total correlation can be defined as the degree to which an item correlates with the overall questionnaire score. The acceptable value is above 0.3 so that the internal reliability of the questionnaire is ensured (Taber, 2017).

Variable Number of items Cronbach’s Alpha

Entertainment 4 0.871

Customisation 4 0.85

Interaction 3 0.85

Trendiness 3 0.75

Word of Mouth 3 0.795

Purchase Intention 3 0.846

Brand Loyalty 4 0.813

Table 2. The Cronbach’s Alpha values of the variables

4.4. ValidityThe next step would be testing the validity of the questionnaire. As mentioned above, to test the validity of the questionnaire, the researcher conducted an exploratory factor analysis. Prior to extracting the factors, a series of tests need to be varied out to assess the appropriateness of the gathered datasets for factor analysis (Hair et al., 2010).

Specifically, according to Hair et al. (2010), the Bartlett’s test of sphericity and the Kaiser-Meyer-Olkin (KMO) Measure of Sampling Adequacy are conducted. The purpose of the Kaiser-Meyer-Olkin (KMO) test is to measure the adequacy of the sampling. As argued by Field (2018) the KMO value must be 0.6 and over to be considered to be acceptable for analysing the EFA output.

Secondly, the Bartlett’s test of sphericity seeks to test if a matrix differs considerably from an identity matrix (Hair et al., 2010). Besides, in order for factor analysis to be suitable, the Bartlett’s test of sphericity needs to be significant, meaning the p-value must be smaller than 0.05 (Hair et al., 2010). As evident in Table 3, the KMO value is 0.896, and the p-value is 0.000, meaning the Bartlett’s test of sphericity is significant.

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .896

Bartlett's Test of Sphericity

Approx. Chi-Square 1277.805

df 210

Sig. .000

Table 3. KMO and Bartlett's Test

Based on the guide by Brown (2015), the next step is deciding factor extraction. According to Hadiam Abdullah and Sentosa (2016), one important criterion is that the cumulative percentage of variance exceeds 50%, and the eigenvalue need to exceed 1. In the case of this dissertation, the cumulative percentage of variance stands at 65.23%, which is higher than 50%, and every eigen value exceeds 1 (see Appendix 3).

Another criterion is that variables need to load considerably on only one factor. Besides, every factor loading must be higher than 0.5 (Hadiam Abdullah and Sentosa, 2016). As evident in Appendix 3, the factor loading of the TR3 item is smaller than 0.5. The same goes for the BL1 item. This indicated that TR3 and BL1 must be removed. Additionally, Appendix 3 showed that WM3 loads on two factors, meaning WM3 must also be excluded. A re-run was therefore conducted with the three above-mentioned items excluded (see Appendix 3). Table 4 revealed the factor loadings of the variables that were not removed.

Rotated Component Matrixa

Component

1 2 3 4

TR1 .705

EN2 .704

WM1 .681

EN3 .655

WM2 .644

EN4 .618

TR2 .589

EN1 .581

CU1 .794

CU2 .735

CU3 .702

PI2 .643

PI1 .632

CU4 .626

PI3 .521

IN1 .837

IN3 .808

IN2 .715

BL4 .849

BL2 .757

BL3 .610

Table 4. Rotated Component Matrix

4.5. Pearson Correlation Pearson’s correlation coefficient, as stated by Hair et al. (2010), is the test aimed at measuring the statistical relationship between two variables. As demonstrated in Table 5, all the correlations between PI and EN, CU, IN, TR, WM, and BL are significant at the 0.01 level. Additionally, all the correlations between BL and EN, CU, I N, TR, WM, and PI are significant at the 0.01 level.

Table 5. Pearson Correlations

4.6. Linear Regression As mentioned above, the linear regression model is an approach to modelling the relationship between a dependent variable and one or more independent variables. In the case of this dissertation, linear regression is used to test the three proposed hypotheses.

H1: There exists a statistically considerable correlation between the purchase intention of Vietnam’s millennials and social media marketing dimensions

The first hypothesis is that there is a significantly statistical relationship between social media marketing activities and customer purchase intention. The author used the linear regression test to model the relationship between each dimension of social media marketing (independent variable) and purchase intention (purchase intention). There are five sub-hypotheses as follows:

H1a: There exists a statistically considerable correlation between the purchase intention of Vietnam’s millennials and entertainment.

H1b: There exists a statistically considerable correlation between the purchase intention of Vietnam’s millennials and customisation.

H1c: There exists a statistically considerable correlation between the purchase intention of Vietnam’s millennials and interaction.

H1d: There exists a statistically considerable correlation between the purchase intention of Vietnam’s millennials and electronic word of mouth.

H1e: There exists a statistically considerable correlation between the purchase intention of Vietnam’s millennials and trendiness.

As can be seen from the table, only the entertainment and customisation dimensions of social media marketing activities can exert an effect on the purchase intention of Vietnamese millennials when it comes to cosmetics products. The p-values are 0.45 (entertainment) and 0.002 (customisation). According to Hair et al. (2010), a p-value worth less than 0.05 means the null hypothesis is rejected, which indicates a significant relationship between the variables in the linear regression model. This means H1a and H1b are supported while H1c, H1d, H1e are rejected.

It is also worth considering the R-squared value. Field (2018) stated that it is the square of correlation between independent and dependent variables. In this case, the R-squared value is 0.508, which suggests that 38.4% of the movements of the purchase intention variable can be elucidated by the entertainment variable. Similarly, 40.4% of the movements of the purchase intention variable can be explained by the customisation variable.

H2: There exists a statistically considerable correlation between the brand loyalty of Vietnam’s millennials and social media marketing dimensions

The researcher also proposed that there is a significantly statistical relationship between social media marketing activities and customer brand loyalty. The dimensions of social media marketing are treated as independent variables and brand loyalty is treated as dependent variable. There are five sub-hypotheses as follows:

H2a: There exists a statistically considerable correlation between the brand loyalty of Vietnam’s millennials and entertainment.

H2b: There exists a statistically considerable correlation between the brand loyalty of Vietnam’s millennials and customisation.

H2c: There exists a statistically considerable correlation between the brand loyalty of Vietnam’s millennials and interaction.

H2d: There exists a statistically considerable correlation between the brand loyalty of Vietnam’s millennials and electronic word of mouth.

H2e: There exists a statistically considerable correlation between the brand loyalty of Vietnam’s millennials and trendiness.

As can be seen from the table, only the customisation dimension of social media marketing activities has an impact on the brand loyalty of Vietnamese millennials when it comes to cosmetics products. The p-value is 0.024. This means H1b is supported while H1a, H1c, H1d, H1e are rejected.

H3: There exists a statistically considerable correlation between the brand loyalty of Vietnam’s millennials and their purchase intention

The last hypothesis involved the relationship between brand loyalty and purchase intention of Vietnamese millennials when it comes to cosmetics products. Brand loyalty is treated as dependent variable and purchase intention is treated as independent variable. As evident in the table, there is a significantly statistical relationship between purchase intention and brand loyalty. The p-value is 0.000. In terms of the R-squared measure, it is evident that 27.2% of the movements of the brand loyalty variable can be elucidated by the purchase intention variable.

4.7. Summary of Hypotheses Testing

No Hypothesis Result

H1a There exists a statistically considerable correlation between the purchase intention of Vietnam’s millennials and entertainment.

Supported

H1b There exists a statistically considerable Supported

correlation between the purchase intention of Vietnam’s millennials and customisation.

H1c There exists a statistically considerable correlation between the purchase intention of Vietnam’s millennials and interaction.

Rejected

H1d There exists a statistically considerable correlation between the purchase intention of Vietnam’s millennials and electronic word of mouth.

Rejected

H1e There exists a statistically considerable correlation between the purchase intention of Vietnam’s millennials and trendiness.

Rejected

H2a There exists a statistically considerable correlation between the brand loyalty of Vietnam’s millennials and entertainment.

Rejected

H2b There exists a statistically considerable correlation between the brand loyalty of Vietnam’s millennials and customisation.

Supported

H2c There exists a statistically considerable correlation between the brand loyalty of Vietnam’s millennials and interaction.

Rejected

H2d There exists a statistically considerable correlation between the brand loyalty of Vietnam’s millennials and electronic word

Rejected

of mouth.

H2e There exists a statistically considerable correlation between the brand loyalty of Vietnam’s millennials and trendiness.

Rejected

H3 There exists a statistically considerable correlation between the brand loyalty of Vietnam’s millennials and their purchase intention.

Supported

5. CONCLUSIONThe purpose of the study is to examine the impacts of social media marketing activities on customer purchase intention and brand loyalty, in the context of the cosmetics industry in Vietnam. Based on the work of Kim and Ko (2010) and several scholars, three hypotheses and one research model were proposed. The results were derived through an online questionnaire and a data analysis process enabled by the SPSS software. Research findings reveal that some dimensions of social media marketing efforts have a significant impact on customer purchase intention and brand loyalty. Detailed results and corresponding theoretical and managerial implications are listed as follows.

Firstly, with regard to the impact of each property of social media marketing on purchase intention, entertainment and customization have a positive effect on the purchase intention of Vietnamese millennials when it comes to cosmetics products. Hypotheses H1a and H1b are supported with the significance level of less than 0.05. The finding is consistent with the recent study by Kim and Ko (2010), which revealed that entertainment makes the greatest contribution to customer purchase intention in the context of the luxury segment. In addition, the finding is in line with the research by Nambisan and Watt (2011), which emphasized the close

relationship between customer brand loyalty and social media marketing activities.

Considering the fact that Vietnam is characterised by a young population, the increased popularity of social media and the growth of the cosmetics industry, the researcher decided to investigate the relationships among social media marketing, purchase intention and brand loyalty of Vietnamese millennials when it comes to cosmetics products. After carrying out a systematic literature review regarding related concepts and frameworks, the researcher suggested a model consisting of three hypotheses. Data from a sample of 100 valid participants who were born between 1980 and 2000 and have purchased an item at a cosmetic store available on social media were gathered. Results from a four-step data analysis process revealed that the entertainment and customisation constructs of social media marketing affect the purchase intention of Vietnamese millennials. Additionally, only the entertainment construct affects the brand loyalty of Vietnamese millennials. Results also indicated a statistically significant relationship between purchase intention and brand loyalty.

6. RECOMMENDATIONS6.1. Theoretical and Managerial ImplicationsWith regard to theoretical implications, the dissertation has made some contributions to the literature. Findings revealed that some dimensions of social media marketing could exert an effect customers’ purchase intention as well as their brand loyalty, in the context of the cosmetics industry. Such findings are crucial given the fact that there is a limited number of research papers linking social media marketing, purchase intention, and brand loyalty in this segment and among Generation Y.

With regard to managerial implications, the contributions of this study consist of the following points. It is proven by primary data that the entertainment and customisation dimensions of social media marketing

could exert a significant effect on the purchase intention of cosmetic buyers. This suggests that, in order to boost favourable purchase intention, marketers in the cosmetics industry should take into account the entertainment and customisation aspects when developing social media marketing activities. To be more specific, marketers need to develop social media content that their target audiences view as interesting and enjoyable. This type of content might not be brand-related. In addition, companies should pay great attention to the customisation facet, given the fact that it has an impact on both purchase intention and brand loyalty. This means through social media; firms need to provide customers with customised services and information.

It should also be noted that social media needs to be regarded as an effective and crucial marketing tool (Yadav, 2017). In fact, social media can compete with other traditional marketing channels such as television, broadcast, and so on in the contemporary business landscape (Yadav and Rahman, 2018). Godey et al. (2016) argued that it is never too late to carry out social media marketing activities since the so-called first-mover advantage is absent in the social media landscape. This means marketing professionals in the cosmetic industry need to develop more digital campaigns to reach Vietnamese millennials.

6.2. Limitations of the Dissertation Although the study brings some managerial and theoretical contributions, it still has some shortcomings which need to be taken into consideration. Firstly, the study has a moderate level of generalisability. As posited by Kerlinger and Lee (2000), generalisability is considered to be a critical criterion for evaluating the quality of a quantitative study. The researcher was faced with the lack of research budget and time. Particularly, the research only took place within a few months. Such challenges made it impossible for the researcher to investigate more meticulously into the research topic and more importantly, to gain a larger sample size. As mentioned above, the total number of the respondents was only 100 people. Though according to Bryman and Bell (2011), a sample size of

around 100 should be acceptable, a larger sample size would increase the level of generalisability. In addition, it is obvious that the researcher only adopted the quantitative approach to research method. A study that uses an online questionnaire and a semi-structured interview to gather primary data may have provided the researcher with more precious insights.

6.3. Recommendations for Future ResearchFor these above reasons, for future research, the researcher encourages other scholars to try to gather data from a larger sample size so that there would be more valuable information concerning the correlations among social media marketing activities, customers’ purchase intention, and their brand loyalty. Future studies can also involve a comparative study among Vietnam’s Generation X, Y and Z to decide if the purchase intention and brand loyalty of each group are affected by the five constructs of social media marketing. In addition, future research papers may replicate the proposed conceptual framework in other industries with positive growth rates in Vietnam.

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APPENDICESAppendix 1: Questionnaire

Section I. General information

Question 1. Gender of participant

Female

Male

Prefer not to say

Question 2. Were you born between 1980 and 2000?

Yes

No (Thank you! You can stop the survey)

Question 3. Have you purchased a cosmetic product at a store that is available on social media before?

Yes

No (Thank you! You can stop the survey)

Question 4. Which way do you mostly approach the newest beauty trends and cosmetic products?

Social media

Friends and family

Google search

Section II. Cosmetics Store

Question 5. Think of a cosmetics store that you have an experience with or you know and then write the name of it below.

......................................................................................................................

.....

Question 6. For the following statements about Social Media Marketing, the store you think of will be called X. Please indicate your level of agreement with each statement as the given scale:

1 – Strongly disagree

2 – Disagree

3 – Neutral

4 – Agree

5 – Strongly agree

The statements about Social media marketing

Entertainment

The content is found on the social media accounts of the X store is interesting and useful.

I can spend a lot of my free time viewing the cosmetic product advertising and marketing content of social networking accounts of the X store.

I enjoy consuming the content found on the social media accounts of the X store.

I always like visiting the social media accounts of the X store because they appear to be more interesting than the social media accounts of other cosmetics stores.

Customisation

The social media accounts of the X store provide me with customised information search I need.

The social media accounts of the X store provide me with customised service.

The social media accounts of the X store provide me customised customer support to accommodate my request.

I receive private social media-based messages on the X store’s new product arrivals and offers.

Interaction It is possible to exchange beauty tips with other social media users through the social media accounts of the X store.

I believe that the social media accounts of the X store interact well with the store’s customers.

My opinion can be expressed through the social media accounts of the X store.

Word of Mouth

I want to share product information from social media accounts of the X store with my acquaintances if they need to.

I want to share useful and interesting information related to social media accounts of the X store on my own social media accounts.

I can rate and comment on the quality of the X store's cosmetic products on its social media accounts.

Trendiness The content is found on the social media accounts of the X store is updated regularly.

I believe that the social media accounts of the X store

always provide new cosmetic products that are on-trend to customers.

Using information gathered from the social media accounts of the X store in line with the world's beauty trends.

Purchase Intention

I plan to buy cosmetic products from the X store in the near future

There is a possibility that I will buy cosmetics if the X store has the right products for me in the near future.

If my cosmetic products run out, I will definitely back to the X store to buy them.

Brand Loyalty I have always trusted cosmetic products of the X store.

I am committed to the X store

Next time if I need a cosmetic product, I will be willing to pay more to buy cosmetic products of the X store even if their price is higher than the other stores.

I plan to keep buying cosmetic products from the X store as always.

Appendix 2: Data Results

SECTION 1: GENERAL INFORMATION

SECTION 2: COSMETIC STORE

6. For the following statements about Social Media Marketing, the store you think of will be called X. Please indicate your level of agreement with each statement as the given scale.

Appendix 3: Data Analysis

Figure 8. Reliability Statistics - Entertainment

Figure 9. Reliability Statistics - Customisation

Figure 10. Reliability Statistics - Interaction

Figure 11. Reliability Statistics - eWOM

Figure 12. Reliability Statistics - Trendiness

Figure 13. Reliability Statistics - Purchase intention

Figure 14. Reliability Statistics - Brand loyalty

Figure 15. Linear Regression - PI and SMM

Figure 16. Linear Regression - BL and SMM

Figure 17. Linear Regression - PI and BL