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[Podcast] Customer Engagement, Brand Loyalty and AI Moderation on Customer Experience in Fast Moving Consumer Goods (FMCG) Industry in Vietnam

26 September, 2024

Keywords: Customer Engagement, Brand Loyalty, FMCG, AI Experience, FMCG

The fast moving consumer goods (FMCG) industry in Vietnam is witnessing the explosion of artificial intelligence (AI), leading to a revolution in the way customers are approached. Customer engagement and brand loyalty depend not only on product quality but also on personalized experiences through AI. In this research, the author from University of Economics Ho Chi Minh City (UEH) presents the factors affecting customer engagement, the impact of brand loyalty in the FMCG industry, and the moderation role of AI in customer experience.

 In the context of globalization and the current 4.0 Industrial Revolution, the fast moving consumer goods (FMCG) industry in Vietnam is facing constant changes in customer needs and behaviors. Today’s customers not only require good quality products but also demand personalized, convenient and responsive experiences. This poses a great challenge for brands in maintaining customer engagement and loyalty. Artificial intelligence (AI) is emerging as an advanced solution to help FMCG businesses not only accurately capture customer needs but also improve interactions and create better experiences for them. Therefore, researching the moderation of artificial intelligence experiences on customer engagement and brand loyalty becomes urgent, especially in the context of Vietnam – a potential and competitive consumer market.

Factors affecting customer engagement and brand loyalty in the FMCG industry in Vietnam

This study was conducted to investigate the factors affecting Vietnamese customer engagement, the impact of customer engagement on brand loyalty in the FMCG industry, and the moderation role of artificial intelligence in customer experiences listed as: information search, self-consistency, brand activity, social media marketing, brand warmth, social influence, economic advantage, brand attachment, which are recommended factors to promote customer engagement on social media platforms. Specifically:

Information search: is a process of gathering information regarding a product. One of the main drivers of customer engagement in online community brands listed as Facebook brand pages is the ability to search and to receive information related to a business, product or brand. One of the factors that influence a customer’s decision to interact with a company on social media is the information posted on Facebook pages concerning the brand or product.

Self-congruence: is the similarity between the brand personality and the customer’s self-perception that customers feel or experience when they develop a relationship with the brand.

Brand activism: is characterized as a value-driven strategy that businesses use to demonstrate their awareness of the current and future characteristics of society.

Social media marketing: is a type of online marketing that uses social culture to achieve communication and branding goals.

Brand warmth: includes sincerity, friendliness, helpfulness, and enthusiasm. In addition, when customers believe that a business has good intentions, likeprotecting the environment, they tend to perceive it as warm.

Social influence: refers to how others will react when customers choose to adopt and to use certain products and services.

Economic benefits: refers to “the extent to which community members expect to receive utilitarian rewards (e.g., financial rewards, time savings, incentives or perks, goods and prizes through their participation in the community).

Brand attachment: is defined as a specific, emotionally charged connection between a consumer and a particular brand and is based on Bowlby’s attachment theory.

In addition, the study examined the relationship between online customer engagement and brand loyalty, using artificial intelligence as a moderator:

Social customer engagement: refers to creating a connection between customers’ body and mind and allowing them to voluntarily contribute to the image of the brand independent of any physical transaction.

Artificial Intelligence Experience: intelligent actions and behaviors displayed by machines, computers or robots for people and organizations. On social media platforms, customers can move through an interactive environment, personalized experiences thanks to increasingly advanced AI technology.

The moderation of experiences by Artificial Intelligence

Vietnam wants to make artificial intelligence a leading technology in the Fourth Industrial Revolution, according to the National Policy on AI Research, Development and Application to 2030 approved by the Government on January 26, 2021. By 2030, Vietnam aspires to become a hub for AI invention, development and application in ASEAN and beyond.

To reorganize and to promote the AI ​​innovation ecosystem, the Vietnamese Government needs to focus on key strategic initiatives, listed as improving the operational and the management processes of organizations in the field of science and technology (S&T); increasing state spending, giving top priority to national S&T projects and goods and encouraging businesses to invest in S&T development; coordinating the creation of a strong national S&T market with the enforcement of intellectual property laws to promote innovation and technology research and development; enhancing the use of Vietnamese research and technology in the global market.

Policy implications for customer engagement and brand loyalty, along with the moderation role of artificial intelligence (AI) in customer experience

The study by UEH authors provides insightful, novel and profound perspectives on the relationship between brand loyalty and customer engagement on social media platforms, especially in the FMCG industry in Vietnam. The study confirms that Self-consistency, Social Media Marketing, Brand Warmth, Social Influence, Economic Benefits and Brand Attachment are new factors that are relevant and practical in modern consumption trends and have a positive impact on social customer engagement. Moreover, the moderation role of Artificial Intelligence is an important factor in the research model.

In addition, Self-Consistency is an important component of market segmentation, providing marketing managers with information for positioning and advertising research. Marketers can more accurately position their products in a way that appeals to customers if they have deep psychological knowledge of their target customers instead of superficial demographic information. As many as 43% of customers have a more positive opinion of a brand when that brand actively participates in social change. More than half of customer purchasing decisions are influenced by brand activism, making this an important factor for growing businesses.

In addition to creating the perfect brand image to attract customers and to maintain long-term relationships, brands need to focus on brand warmth. It is important to note that expressing warmth improves functional value, promoting communication methods that highlight the brand’s expertise.

Finally, after conducting the study, the authors successfully tested the moderation role of AI in the correlation between customer engagement and brand loyalty. Customers are reached through effective marketing communications at the right time and through the right channel. These areas are the focus of many new AI businesses. A great way to personalize the customer experience and to ensure that customers get quick responses to common problems without having to call customer service is to deploy chatbots, which use AI to have real-time discussions with users. Chatbots can help customers make informed choices by providing customized advice or resolving common sales objections related to products.

The full-text paper on Factors affecting customer engagement and brand loyalty in the FMCG industry in Vietnam: Moderation of artificial intelligence in customer experience can be accessed HERE.

Author: Dr. Hoang Cuu Long – University of Economics Ho Chi Minh City (UEH).

This article is part of the series of articles spreading research and applied knowledge from UEH with the message “Research Contribution For All”. UEH cordially invites readers to read the next UEH Research Insights issue.

News, photos: The Author, UEH Department of Marketing and Communication