Taketou Tsugumi (Takahashi Aina) and Kirishima Minako and Mikimoto Nozomi and Amagai Shiori and Fujimoto Rika and Hakii Mayu and Nikaidou Yuri]

Based on the Theory of Planned Behavior, the research model was constructed by Attitudes toward Behavior, Subjective Norms and Perceived Behavioral Control aggregating with an additional

HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BRUSSELS SCHOOL

MBAVB4

NGUYEN MANH QUYEN

FACTORS INFLUENCING HOMEBUILDERS’ INTENTION

OF USING READY MIXED CONCRETE WHEN BUILDING PRIVATE HOUSES

MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION

(PART-TIME)

Tutor’s Name: NGUYEN MINH HA, Ph.D

Ho Chi Minh City (2011)

COMMITMENT

I hereby commit that this thesis “Factors influencing homebuilders‟ intention

of using ready mixed concrete when building private houses” has not been previously

submitted for any degree or diploma at any educational institution, and it is my original work for MBAVB4 program All received supports and due reference sources are acknowledged

Ho Chi Minh City, February 14th, 2012

NGUYEN MANH QUYEN

I would like to show my big thanks to Ms Le Phuong Ngoc, Beton Retail Manager, and her team at Holcim Vietnam Co., Ltd for helping me interview homebuilders

Also, I extend my thanks to all beloved classmates of MBA-VB4, who have been with me during the course, for their sharing knowledge and giving great encouragement

Last but not least, I would like to give my special thanks to beloved members in

my family who provide me with great encouragement and support during my study in the past 2 years

ABSTRACT

In parallel with the country‟s economic growth, urbanization occurs in many parts

of Vietnam at high speed, including extension of big cities like Hanoi and HoChiMinh According to a report on strategic housing development to 2020 and vision 2030 by the Ministry of Construction in 2011, the number of current dwelling is about 16.7m2 per capita With the strategic development orientation by 2020, the whole country needs to build more one billion square meters of floor area from now till 2020 to achieve 25m2 per capita by the year 2020 Therefore, there will be more residential projects to come

in which private houses are included Unlike multi-storey buildings that the use of ready mixed (RMX) concrete is compulsory, using RMX or site mixed concrete to build private houses is more likely a volitional choice of homebuilders This study aims

to explore and evaluate factors that impact homebuilders‟ intention of using RMX concrete instead of site mixed concrete A questionnaire was developed and used to interview - with the help of Holcim Beton Retail team - directors of small contractors and their chief engineers who are representatives of homebuilders as a whole for data collection

Based on the Theory of Planned Behavior, the research model was constructed by Attitudes toward Behavior, Subjective Norms and Perceived Behavioral Control aggregating with an additional factor that is Perceived Consequences derived from Theory of Interpersonal Behavior to measure homebuilders‟ intention of using RMX concrete in a direct measurement method Totally, the research model contains four factors Following reliability test, other analyses were conducted to find out factors influencing homebuilders‟ intention toward the use of RMX concrete, comprising Exploratory Factor Analysis (EFA) and Regression Analysis Besides, ANOVA was applied to know whether or not homebuilders‟ intention is statistically significant difference within homebuilder group classified by age, experience and education Overall, the findings showed that no significant difference of the intention towards using RMX concrete by homebuilders‟ characteristics such as age, experience and education, and the homebuilders‟ intention are impacted by all the four factors: Attitude, Subjective Norms, Perceived Behavioral Control and Perceived Consequence Eventually, recommendations for managerial people of RMX concrete suppliers are (1)

to keep RMX concrete quality consistency, (2) to get homeowners‟ awareness of advantageous points of RMX concrete and (3) to improve service on delivery and consultancy on method of concrete pour to save cost for homebuilders

TABLE OF CONTENT

COMMITMENT i

ADVISOR’S COMMENT iii

ABSTRACT iv

TABLE OF CONTENT v

LIST OF FIGURES vii

LIST OF TABLES viii

ABBREVIATION ix

CHAPTER ONE: INTRODUCTION 1

1.1 Rationale of the study 1

1.2 Problem Statement 4

1.3 Research objectives 4

1.4 Research questions 4

1.5 Scope and limitations 5

1.6 Structure of the study 5

CHAPTER TWO: LITERATURE REVIEW 7

2.1 A brief introduction of concrete 7

2.2 Roles of and relationship between homebuilder, design consultant, supervision consultant and homeowner 12

2.3 Theoretical Framework 13

2.3.1 Customer Behavior 13

2.3.2 Organizational Buying 15

2.3.3 Consumer buying decision versus Industrial buying decision 18

2.3.4 Choice of theories constructing research model & hypotheses 19

2.3.5 Theories of Reasoned Action and Planned Behavior 20

2.3.6 Theory of Interpersonal Behavior 25

2.4 Comparison of the theories 26

2.5 Research Model and Hypotheses 27

2.6 Summary 30

CHAPTER THREE: RESEARCH METHODOLOGY 31

3.1 Research Procedure 31

3.2 Research design 32

3.2.1 Qualitative research 32

3.2.2 Quantitative research 33

3.3 Sample size 33

3.3 Data collection 33

3.4 Construction of questionnaire 34

3.5 Data Analysis Criteria 38

CHAPTER FOUR: EMPIRICAL RESULTS 40

4.1 Descriptive analysis 40

4.1.1 Descriptive statistics on variables 40

4.1.2 Sample analysis 42

4.1.2.1 Age of respondents 42

4.1.2.2 Experience 43

4.1.2.3 Education 43

4.1.2.4 Sources to find RMX suppliers 44

4.2 Empirical Results 45

4.2.1 Reliability test (Cronbach Alpha) 45

4.2.2 Exploratory Factor Analysis 49

4.2.3 Test on difference by homebuilders‟ characteristics 54

4.2.4 Regression Analysis 55

4.3 Summary 59

CHAPTER FIVE: CONCLUSION AND RECOMMENDATION 61

5.1 Conclusion 61

5.2 Recommendation 62

5.3 Limitations and Suggestions for future research 65

REFERENCE 66

APPENDIX A 69

APPENDIX B 75

APPENDIX C 83

APPENDIX D 85

LIST OF FIGURES

Figure 1.1: Growth in GDP and construction sector (real rate) in Vietnam 1

Figure 2.1: Photos illustrating site mixed concrete 9

Figure 2.2: Photos depicting Batching plant & RMX concrete 9

Figure 2.3: Formula of site mix concrete 11

Figure 2.4: A Continuum of Buying Decision Behavior 15

Figure 2.5: Major stages of the industrial buying process 16

Figure 2.6: Schematic representation of the TRA 21

Figure 2.7: Schematic representation of the TPB 24

Figure 2.8: Schematic representation of the TIB 25

Figure 2.9: Proposed Research Model 28

Figure 3.1: Research Procedure 31

LIST OF TABLES

Table 2.1: A Specimen of Concrete Mix Design 8

Table 2.2: Summary of hypotheses 30

Table 3.1: Constructs and Items of the Research 37

Table 4.1: Descriptive statistics on variables 40

Table 4.2: Age of respondents 42

Table 4.3: Experience of respondents 43

Table 4.4: Education of respondents 43

Table 4.5: Sources to find RMX suppliers 44

Table 4.6: Reliability test on attitude of homebuilders 45

Table 4.7: Reliability test on subjective norms 46

Table 4.8: Reliability test on perceived consequences 47

Table 4.9: Reliability test on perceived consequences after removing two items PEC4 and PEC6 47

Table 4.10: Reliability test on perceived behavioral control 48

Table 4.11: Summary result of factor reliability test 48

Table 4.12: Result of EFA on Attitude Toward Behavior 49

Table 4.13: Result of EFA on Subjective norms 50

Table 4.14: Result of EFA on Perceived Consequences 51

Table 4.15: Result of EFA on Perceived Behavioral Control 52

Table 4.16: A Summary of Qualified Variables 53

Table 4.17: Summary ANOVA results of respondent groups by age, experience and education 54

Table 4.18: Model Summary 55

Table 4.19: ANOVA 55

Table 4.20: Coefficients 56

Table 4.21: Levels of importance factors toward Intention 58

ABBREVIATION

- ANOVA : Analysis of variance

- ASTM : the American Society for Testing and Materials

- EFA : Exploratory Factor Analysis

- KMO : Kaiser-Meyer-Olkin

- Mpa : Megapascal

- RMX : Ready Mixed

- Sig : Significance

- SPSS : Statistic Package for Social Science

- TBP : Theory of Planned Behavior

- TCVN : Vietnamese Construction Standard (Tiêu Chu n Vi t Nam)

- TIB : Theory of Interpersonal Behavior

- TRA : Theory of Reasoned Action

- VIF : Variance Inflation Factor

- W/C : Water to cement

CHAPTER ONE : INTRODUCTION 1.1 Rationale of the study

Together with the economic development of Vietnam, construction sector had

been growing continuously during the period of 1999-2007, nearly a decade In

general, the growth rate of construction sector was more stable than and averagely over paced Vietnam GDP growth rate in this period

Figure 1.1: Growth in GDP and construction sector (real rate) in Vietnam

Source: General Statistics Office 2010, quoted from Wall Street Securities joint

stock company, November 2010

From 2000 to 2009, total area was built more than 700 million square meters Thanks to a high speed of residential construction, the national average dwelling reached 16.7 m2 / person (http://www.tapchibatdongsanvietnam.vn, January, 2011)

For a specified illustration of construction sector development, HoChiMinh city is taken as an example In the early 1990s, only few RMX (Ready Mixed) suppliers to serve the market demand for concrete such as Hai Au, Soam Vina, Mekong and Lephan Since then, a number of new RMX concrete entrants have been noticeably increasing up to 15 RMX suppliers with more than 40 RMX concrete batching plants in

Proportion of construction sector contributed to GDP

Growth of GDP

Growth of construction sector

Hochiminh city at the moment (Holcim Beton internal report September, 2011) in response to a drastic upward market demand till 2009

High speed of urbanization in HoChiMinh city invited not only more new RMX concrete suppliers participating in the market, but also encouraged existing RXM concrete suppliers to expand their business scale by building new additional batching plants so as to meet bigger volume orders required by contractors, and the need of developing construction sector during the past 20 years The blooming time to RMX concrete suppliers ended in 2010 because of the effect of real estate market slowdown started 2009 Two notable reasons for the real estate slowdown are the consequence of the World‟s financial crisis starting in the second half of 2008 and the tight monetary policy of Vietnam against high inflation that pushed interest rate up to 19%-20% on home loan to investors (CBRE report for quarter 4 of 2010) The effect caused lack of capital investment on real estate market and construction sector With shortage of fund, many residential projects and other construction projects like factories and infra-structures have to be slowdown or delay in progress As a result, it lowered RMX concrete demand in big projects dramatically; for example, average monthly market consumption of RMX concrete in HoChiMinh city around 320,000m3 in 2010 dropped

to 200,000m3 in 2011 Eventually, RMX suppliers are coping with production idle and aging debt situation

Before market demand dropped, RMX concrete suppliers ignored to explore private house segment, the reason is generally attributed to small volume per order Some of them agreed to supply RMX concrete to private houses when their batching plants had no order for production, but none of them had a strategic plan to private house segment It may be true to consider private houses placing a small volume per order; however, the fact that a great number of private houses to be built in HoChiMinh city and suburban areas of the city may bring in a good volume for RMX concrete suppliers‟ consideration According to Savills market report of quarter 2/ 2011, it revealed more than 61,000 land plots for townhouses and villas recorded in 7 key districts (2,7,8,9, Binh Chanh, Nha be and Thu Duc) out of 24 districts in HoChiMinh

there will be 124 projects providing 54,700 villas and townhouses in Hochiminh city in the next 5 years Look at neighboring provinces of HoChiMinh city, there are many projects allocating much part of project area for land lots to build private houses including townhouses and villas To name a few, for example in Long An province, Tan Do Residential project adjacent to Binh Chanh offers land lots for townhouse (29.64 hectares), land lots for villas (7.18 hectares), and allocates only 2,06 hectares to build apartments; other big projects offer land lots for building private house (including townhouses and villas) like Duc Hoa III with area of 67.3 hectares provides 1,069 land lots for townhouses and villas, Nam Long Ecological Residential City has area scale of

380 hectares, and Five Star Ecological Residential City has area scale of 419 hectares according to the website of Vietnam Association of Architects (http://kienviet.net, July 2010) Similarly, in Binh Duong province there are currently 68 projects in both primary and secondary markets, supplying 22,700 houses and land plots in total The land plot segment continues to prevail, accounting for 56% of all offers with the projects in Thu Dau Mot, Thuan An, Di An, Ben Cat districts of Binh Duong Province (The Saigon Times, August 30, 2011)

As figures shown above, the fact that many projects allocate much part of land area for townhouses and villas partly reflects the majority of Vietnamese people prefer owning a separate house to an apartment Hence, there are reasonable grounds for believing private house will develop together with apartments in newly developed residential projects in the future In spite of small quantity per order, a big deal number

of houses in market deserves RMX concrete suppliers‟ consideration; not only in the current context of less big projects in active due to the economic slowdown, but also it enables RMX concrete suppliers to have more customers and improve cash-flow, because pre-payment and cash on delivery are applicable

To approach this private house segment efficiently, RMX concrete suppliers should understand perception of homebuilders, who constructs private houses, towards RMX concrete, and how to improve their intention of using RMX concrete instead of site mix by finding and intervening key determinants of their intention that is the

1.2 Problem Statement

Understanding customer behavioral intention is necessary to marketers, because intention is described to capture motivational factors affecting a behavior, and to indicate how hard and willingness people try to perform a specific behavior (Ajzen, 1991) For this reason, this research aims to find out “Factors influencing

homebuilders’ intention of using ready mixed concrete when building private houses‖

for RMX concrete suppliers to consider approaching private house segment through homebuilders

1.3 Research objectives

The objectives of this research are:

To understand homebuilders‟ intention of using RMX concrete when building private houses

To analyze and determine main factors affecting homebuilders‟ intention behavioral intention toward using RMX concrete

With findings, implications are discussed for marketing activities in practice

1.4 Research questions

Research questions are indicated below:

What are key determinants impacting on homebuilders‟ intention towards using RMX concrete to build private houses?

Amidst determinants, what is the strongest predictor of homebuilders‟ intention to use RMX concrete?

How to approach household consumers effectively?

1.5 Scope and limitations

The thesis is to focus on how the homebuilders‟ intention of using RMX concrete

is formed and influencing factors drive their perception With limits of resources and time, the survey is carried out in HoChiMinh city

The research has some noticeable limitations that should be addressed First of all, the target respondents are directors of house building companies and their chief engineers who build private houses, therefore the use of findings is limited to private house segment It is unsuitable for big projects which have a complex procedure of purchase in presence of many professionals and experts of different parties (project owner, project management, project supervision consultancy, design consultancy and

so on…) getting involved and influencing Second, RMX concrete is referred as normal concrete for constructing private houses, not special kinds of concrete with particular functions like floor color concrete or light concrete for partition… therefore, the findings is somewhat limited In addition, due to limited resources and time of the researcher, data collection is geographically confined to homebuilders in HoChiMinh city, homebuilders in urban and rural areas might have different perception; it might limit the generalization of findings and implications to homebuilders in rural parts of Vietnam

1.6 Structure of the study

The study is arranged and presented in 5 chapters as below:

Chapter 1 - Introduction presents rationale of the study, research problem,

research objectives, research questions, scope of the study and limitations

Chapter 2 - Literature Review provides a brief introduction of concrete and its

qualities, definitions and roles of homebuilders, design consultant, supervision consultant in construction Theories about attitude – intention – behavior relationship are reviewed, including Theory of Reason Action, Theory of Planned Behavior and Theory of Interpersonal Behavior (Triandis) as theoretical framework Based on the theoretical framework, the proposed model and hypotheses are given

Chapter 3 - Research Methodology describes how the survey is carried out,

including research procedure, research design, sample of data collection, questionnaire design and measurement scale

Chapter 4 - Empirical Results are analyzed collected data and presents findings

of the study

Chapter 5 - Conclusions and Recommendations based on the findings, the

conclusion and recommendations are made

CHAPTER TWO : LITERATURE REVIEW

Chapter 2 provides a brief introduction of concrete and related terms Roles of and relationship between homebuilder, designer, supervision and homeowner are depicted Then, theory of reason, theory of planned behavior and theory of interpersonal behavior (Triandis model) are reviewed as fundamentally theoretical grounds for the proposed research model and hypotheses of this study

2.1 A brief introduction of concrete

In this thesis, RMX concrete is, a kind of technical product, discussed; therefore,

a brief introduction of concrete and definitions of related terms are assumed necessary

Concrete is mixture of hydraulic cement, aggregates, and water, with or without

admixtures, fibers, or other cementitious materials (American Concrete Institute, 2010)

In general, concrete is made up of three basic components: water, aggregates (rock, sand, or gravel) and cement Cement, usually in powder form, acts as a binding agent when mixed with water and aggregates This combination, or concrete mix, will be poured and harden into the durable material (http://www.concretenetwork.com)

Concrete mix design is proportions of materials - including cement, aggregate,

water, and with or without admixture - to produce one cubic meter of concrete The proportion of each material in the concrete mix design affects the properties of the final hardened concrete that determines concrete strength normally measured by Mpa (Megapascal) according to the organization of Cement Concrete & Aggregates Australia (2004) Table 2.1 below illustrates a concrete mix design

Table 2.1: A Specimen of Concrete Mix Design

Source: Holcim Beton, 2009

As illustrated in table 2.1 (see more detail at Appendix D), a concrete mix design

is made to meet a specified strength (concrete grade) and its workability (flow-ability) measured by slump A designed concrete strength is affected by:

- Quality and properties of each kind of materials Pursuant to Vietnamese Construction Standard 2004 (TCVN 2004), specific standards for each kind of materials used to mix concrete are quoted below:

TCVN 6260:1997 for Cement Bended Portland

TCVN 4506-87 for Water

TCVN 1770-86 for Sand (fine aggregate)

TCVN1771-87 for Stone (coarse aggregate)

ASTM C494-99a for Admixture

- A proportional combination of materials in concrete mix design

- Ratio of water to cement (W/C) When the water to cement ratio increases, the

strength and durability of hardened concrete decrease To increase the strength and durability of concrete, decrease the water-cement ratio

For big projects such as multi-floor buildings (apartment, complex functional buildings…) and infra-structure projects, e.g bridges, concrete must meet up the project technical specification For this reason, concrete is supposed to be supplied by one or some selected RMX suppliers after they passed selection procedure including

technical requirements and price Different from the big projects, concrete used to build

a private house could be mixed at site or mix at batching plants If the concrete is mixed at site, it is named site mixed concrete whereas it is mixed at a batching plant and delivered to a job site (location at which construction takes place), it is called ready mixed concrete (RMX concrete) Figure 2.1 and 2.1 below demonstrates site mixed concrete and RMX concrete

Figure 2.1: Photos illustrating site mixed concrete

Figure 2.2: Photos depicting Batching plant & RMX concrete

Batching plant & RMX concrete truck Concrete pump

Basically, every batching plant has its own quality control and quality assurance procedure to control over materials input as well as performance of equipment batching concrete at plant in order to ensure that the proportions of each component in a specific mix design are precisely measured, including water-cement ratio In contrast, a formula

to mix a specified concrete grade at job site could vary from one homebuilder to another, based on homebuilder‟s experience, rules of thumb or their interpretation of cement manufacturer‟s recommendation printed on bag, and it may be different from cement manufacturers‟ recommendation For example, recommendation to mix a concrete grade of 20Mpa is printed on Holcim cement bag with the proportion of cement (293kgs), sand (0.466m3) and stone (0.847m3); and for 25Mpa, the proportion

is cement (341kgs), sand (0.447m3) and stone (0.838m3) recommend by Hoclim and Vicem printed on the bag For ease of measurement at job site, most homebuilders do one concrete batch by mixing one bag of cement (50kgs) with other materials which are measured by a 18-liter paint container For example, to have concrete grade of 20Mpa, some homebuilders use one bag of cement (50kgs) to mix with sand (5 paint containers of sand) and stone (7 paint containers of stone) Quantity of each material is different from the recommendation of Holcim Vietnam, which shows a similar method

of measurement, as Fingure 2.3 below

Figure 2.3: Formula of site mix concrete

Source: Holcim Vietnam, http://www.cungxaytoam.com.vn

Some cement manufacturers recommend the amount of water used for one cubic meter on their bags, for instance, Vicem indicates on its bag that the volume of water used to mix one cubic meter of concrete at site is 195 liters Others don‟t put their recommendation of used water volume, because they take into account effects of other elements on adequately used amount of water, i.e the ambient moisture and moisture

of sand and stones are deliberately considered - how wet they are - before putting water

to mix concrete It is true when every batching plant is checking ambient moisture and raw materials some times in a day, especially when it rains

In practice, when site mixed concrete is batched, amount of water added in a concrete batch precisely, it is visibly estimated by the batching worker who manipulates the mixing drum (see figure 2.1) This leads to a latent risk of failure of concrete strength and durability In addition, producing and placing each batch of site mix concrete, equivalent to 0 2m3 takes about 5-7 minutes; it means completion of one cubic meter takes about 30 minutes In comparison with RMX concrete, one fully loaded mixer truck carries 6m3 of concrete that is mixed at plant for 3-5 minutes RMX concrete is placed with pump at speed up to 30m3/hour at job site; it saves homebuilders a lot of time and higher level of quality control In short, characteristics

of RMX concrete are better quality control, quality consistency and time-saving compared to those of site mixed concrete

2.2 Roles of and relationship between homebuilder, design consultant, supervision consultant and homeowner

Homeowner is a person who owns real estate (http://www.investorwords.com) Real estate is property in form of land or houses (Longman Dictionary of Contemporary English 5th Edition, 2009)

Design consultant is a person or a company who designs a house based on

homeowner‟s idea in both technical and esthetical aspects Depending on homeowner‟s request, design consultant can provide various services, including architecture design, interior/exterior design for renovation and feng shui … (http://kientructhienkieu.com) Design consultant also recommends suitable materials to homeowners for the purpose

of beauty and durability of the house

Homebuilder, also called house-builder, is someone or a company who builds

houses as a business (http://www.thefreedictionary.com) In Vietnam, there are 3 popular forms of agreement between the homebuilder and the homeowner in building a private house First, the “full package” form by which the price covers everything; it means the homebuilder buys materials and constructs the house completely Second, it

is in form of labor supply, the homebuilder is only responsible to build a house with his workforce, all materials are provided by the homeowner Third, that is a partial job of full package construction, i.e it is either structure or finishing; the homebuilder will undertake the contracted job, including purchase of materials used for the job For example, if the contract is signed to build a house structure, the homebuilder will buy materials such as sand, stone, brick, steel… and build the structure of the house (the frame) The homebuilder will not be responsible for painting walls, installing neon-lights, paving titles on floors, these works belong to the job of finishing

give the homeowner an offer enclosing a breakdown list of used materials which indicates material specification like size, grade (A, B…) and origin of materials

(manufacturer‟s name or brand) In this thesis, representatives of homebuilders are the director of house building companies and the chief engineer, who is the authorized person, acts and manages works at job-site on behalf of his director

With respect to price calculation in practice, both the design consultant and the homebuilder work out cost estimate to offer homeowners Unit price will be estimated

on a square meter, total area of floors time unit price will be the cost estimate, i.e total amount offer In practice, many construction companies can play both parts as the design consultant and the homebuilder, if they are legally capable of designing and building a house

Supervision consultant is a person or a company, who has the practicing

certificate of supervision consultancy, hired by an investor (homeowner) to act on behalf of his sake at job site The main job of supervision consultant is to oversee the homebuilder‟s work, to supervise quality, quantity, technical and esthetic aspects in complication with the designed drawings, to monitor progress as planned, and to make report to the investor (homeowner) (http://tuvankiemdinh.com) In Vietnam, supervision consultancy is often used for big projects, but homeowners rarely need supervision consultancy, instead they do it themselves; besides, they can tie the responsibilities of the homebuilders in contract under terms such as construction quality, warranty…

2.3 Theoretical Framework

2.3.1 Customer Behavior

According to Solomon (1996), consumer behavior is a study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires (cited from Khan 2006) The study of consumer behavior focuses on how individuals make decisions to spend their available resources (time, money, effort) on consumption-related items (Schiffman & Kanuk, 1997, cited from Khan 2006) Consumer behavior examines not only what behaviors consumers exercise, but also the reasons behind those behaviors; consumer

behavior involves the use and disposal of products as well as the study of how they are purchased

Basically, the factors that influence consumer behavior are classified into internal factors and external environmental factors (Khan 2006) Internal factors are individual determinants including motivation and involvement, attitudes, personality and self-concept, learning and memory and information processing; external factors are from external environment like cultural influences, sub-cultural influences, social class influences, social group influences, family influences, personal influences, other influences The external factors do not affect the decision process directly, but they percolate or penetrate through the individual determinants to influence the decision process In general, buying decision process consists of five stages that consumers probably passes through: problem recognition, information search, evaluation of alternatives, purchase decision and post-purchase behavior (Kotler 2006), but consumers don‟t always pass through all these five stages; they can skip some stages in buying a product In fact, depending on a particular product that people place the importance on its level of value and risk (Khan, 2006), they will deliberately put more

or less effort in decision process The buying decision behavior is in a continuum of three hierarchical levels, from routine response behavior (the lowest involvement), limited problem solving to extensive problem solving (the highest involvement), (Howard and Sheth 1969; Hansen 1972; Howard 1977; Engel, Blackwell, and Kollat 1978; and Bettman 1979, cited from Bettman et al, 1991) as depicted in Figure 2.4 below

Figure 2.4: A Continuum of Buying Decision Behavior

to be modified; and the new task is a buying situation in which a new product or new service is brought for the first time, the greater the cost or risk is, the more decision making is deliberately considered, and thus the more participants get involved and information search

Similar to consumer buying process but more stages organizational buying process may pass through Eight stages are identified by Robinson et al (1967) for a new-task buying situation as described as follows

Figure 2.5: Major stages of the industrial buying process

Source: Kotler, 2006

Problem recognition: the buying process begins when a problem or a need,

which can be met by acquiring a good or service, is recognized in the company

General need description: when a problem has been recognized, the needed item

is determined in terms of general characteristics and the required quantity

Product Specification: with a general need description in hand, the item‟s technical specifications can be developed Often, a product value analysis will be assessed by an engineering team

Supplier Search: this phase is to identify appropriate suppliers by various ways,

including doing internet search, getting recommendations from acquainted people, looking up directories…

Proposal solicitation: in this stage, qualified suppliers are requested to submit

proposals When the item is complex or expensive, the buyer (organization) will require a detailed written proposal from each qualified supplier

Supplier selection: at this point, the buyer may attempt to negotiate with

preferred suppliers for better prices and terms prior to making the final selection

Order routine specification: after selecting suppliers, the buyer sends the final

order or contract with listed technical specifications, the quantity needed, the delivery schedule, and so on

Performance review: the buyer periodically reviews the performance of the

chosen suppliers The result of performance review may lead the buyer to continue or end the relationship with a particular supplier

In relation to reality, RMX concrete is not a very new product to homebuilders Therefore, stages of buying process are simplified, and the buying situation falls into either the straight re-buy or the modified re-buy The straight re-buy occurs when the homebuilders place repeatedly orders to build the same house, for example, placing concrete for the foundation, the first floor, and the second floor…each time homebuilders place an order As for the modified re-buy, when homebuilders build a new house and the designed concrete grades may be different, homebuilders will contact RMX concrete for a quotation In the modified buying situation, some stages could be skipped in practice; for instances, house building doesn‟t require special concrete type, normally the designed strength is in the range of 20Mpa-30Mpa, and the experienced homebuilders know in their mind which concrete grade is used for a particular structure of the house or they can have a look at the drawing design They

don‟t have to develop technical specification, so the stage of product specification is skipped in most of the time Regarding supplier search, with long time experience in

business a homebuilder may know well most of RMX concrete suppliers and their batching plants; he will not need to spend much time to search information about RMX suppliers Since the requirement of RMX concrete is normal standard for houses, and RMX concrete supply to private house segment is considered “retail channel” in the eyes of RMX concrete suppliers, hence homebuilders tend to be “price taker” rather than “price maker” because they don‟t have much power in price negotiation over

RMX concrete suppliers in supplier selection stage due to small volume

In short, procurement process of RMX concrete for private house building is simple in accordance with industrial buying process

2.3.3 Consumer buying decision versus Industrial buying decision

The obvious difference between individual buyers and industrial buyers is that, instead of purchases being made for individual consumption, industrial buyers make purchases for business use Industrial buying decision tends to have more people of different backgrounds within an organization getting involved in the buying process, and it is more complex (Kotler, 2006; Khan, 2006) However, it is presumed that purchase of specific product types in the organization is the result of a buying decision which is either autonomous to one person or joint among individuals of different departments (Sheth, 1972, 1973) Therefore, when a buying decision of a product is made by a person autonomously, it leads to industrial buying process less complex and similar to consumer buying process

In connection to industrial buying process discussed in the previous section 2.3.2, Determinants of joint vs autonomous decision making in industrial buying behavior are determined by (Sheth, 1973):

Product-specific factors:

Perceived risk: with higher risks, joint decisions are favored

Type of purchase: items involving heavy investments are made jointly, routine and less costly decisions can be made autonomously

Time pressure: if goods are urgently required, individual decisions are favored

To link with the discussion at section 2.3.2, RMX concrete is not something special to homebuilders; used concrete grades are similar from house to house in the range of 20-30Mpa; and the purchase is considered a routine basis Therefore, it can be assumed that the perception of risk is relatively low to the use of RMX concrete, it

leads to an assumption that an autonomous decision is made

Company-specific factors:

Organization size: larger the size of organization, the decision making is likely to

be joint among individuals; conversely, it tends to be autonomous in a small organization

Organization orientation: in a manufacturing organization, the decisions will tend

to be autonomous to production people while in a technology oriented organization, the decisions will be mostly autonomous to engineering people

Degree of centralization: the greater degree of centralization in a organization is, the less joint decision making will be

In connection with determinants of joint vs autonomous decision making in an organization, Greory Southey (2011) supported the argument that decision making in small business companies tends to be the domain of a single individual by indicating a number of journal articles (12) of empirical researches that have been conducted with application of theory of reason action (TRA) and theory of planned behavior (TPB) Decision making of these journal articles is categorized into financial decision making, strategic decision making and professional decision making

In light of Southey‟s implication (2011) and other reasons that will be explained

in the next section, it is significantly convinced to choose TRA, TPB and theory of interpersonal behavior as theoretical grounds for this study

2.3.4 Choice of theories constructing research model & hypotheses

With a view to building a research model for this study, it is crucial to find out appropriate theories as theoretical fundamentals Although there are no previous researches, to the best of the researcher‟s knowledge, on RMX concrete or a similar kind of construction materials in Vietnam, it is convinced that constructs of the cognitive models, namely theories of reason action, planned behavior and theory of interpersonal behavior (Triandis model), are applicable for the study by three reasons First, dealing with a house construction, homebuilders are supposed to deliberate use of

or not use of one product; they hold some beliefs about attributes of object for decision making In this aspect, it matches with the assumption of these theories that individuals are rational actors Second, these theories, especially TRA and TPB, have been used successfully to predict and explain in various content domains, including individual behaviors related to health, food, voting, internet use … (Ajzen 1991, 2001), and purchase of household products like consumers‟ repurchase intention towards an

automobile brand (Ranjbarian et al, 2010) and these theories have been applied for small-medium enterprise as indicated by Southey (2011) Lastly, building private houses is a job of engineers and mostly carried out by small construction companies (homebuilders) in practice; thus it is reasonably assumed that the decision making is autonomous (Sheth, 1972, 1973) as discussed in the previous section, and the mentioned cognitive models are applicable

Theories of reason action, planned behavior and theory of interpersonal behavior will be discussed in the following sections in turn

2.3.5 Theories of Reasoned Action and Planned Behavior

Based on Fishbein & Ajzen (1975), Ajzen & Fishbein (1980, 2005) cited in Christine Mitchell & Elin Ring (2010), and Ajzen (1991, 2002) The two theories and conceptual constructs are described below

According to Ajzen & Fishbein (1980) and Ajzen (1991), theories of reasoned action and Planned Behavior make the assumption that people are “rational actors” who will process information and think about the implications of behavioral actions before deciding perform or not to perform a behavior TRA and TPB focus on theoretical constructs concerned with individuals‟ motivational factors as determinants

of the likelihood of performing a specific behavior, and both assume the direct predictor of a behavior is behavioral intention TPB is an extension of the TRA and includes two additional constructs that are control belief and perceived control over performance of the behavior Each of the theories will be presented with more details in the following sections

The Theory of Reasoned Action (TRA)

According to Fishbein & Ajzen (1975) and Ajzen & Fishbein (1980), the ultimate goal of the (TRA) is to predict and understand a person‟s behavior Before examining a person‟s behavior, it is necessary to examine the constructive determinants of the behavior in question The TRA posits that the immediate determinant of behavior is a person‟s intention to either engage in or not to engage in the specific behavior Next, direct determinants of the person‟s behavioral intention are his (her) attitude toward

performing the behavior and his (her) subjective norm associated with the behavior The term attitude toward the behavior simply refers to a person‟s negative or positive evaluation of performing the behavior Subjective norm refers to a person‟s perception

of the social pressures associated with the decision either to perform or not to perform a specific behavior Lastly, a person‟s beliefs are direct determinants of their attitude toward the behavior and their subjective norm Below is the schematic representation

of TRA and the relationships between its components

Figure 2.6: Schematic representation of the TRA

Source: Ajzen and Fishbein 1980

However, the TRA works effectively when being applied to behaviors that are under a person's complete volitional control, that is, a person has a high degree of control over the behavior Theoretical components of TRA are depicted in turn below

Predicting Intentions

The central factor in the TRA is an individual's intention to perform a specific behavior According to Ajzen (1991), intentions are assumed to capture the motivational factors that influence a behavior, and indicate how hard people are willing

to try and how much effort they are willing to put forth in order to perform a given behavior As aforementioned, the theory assumes that an individual‟s intention is a function of two independent variables: attitude toward the behavior and subjective norms Besides, intention is indirectly determined by the person‟s salient beliefs about each one of the two variables - behavioral beliefs and normative beliefs (see figure 2.6)

Attitude toward the behavior

Behavioral Beliefs and Attitudes towards Behaviors

According to Ajzen and Fishbein (1980) behavioral beliefs result in an attitude toward behavior and refer to a person‟s beliefs about the likely negative or positive consequences or outcomes of performing a given behavior It is because an individual holds beliefs about an object by associating it with certain attributes which are valued positively or negatively; therefore, each belief links behavior to a certain outcome either negative or positive In this connection, attitude toward the behavior is generated by a person and refers to the degree to which this person has negative or positive evaluation or appraisal of the behavior Hence, behavioral beliefs are assumed to produce an overall negative or positive attitude toward the behavior (Ajzen and Fishbein, 2005) As a result, people prefer behaviors that bring in favorable consequences and ignore behaviors associated with unfavorable consequences

In order to assess individual‟s attitude toward behavior, there are two ways: direct

or indirect measure (Ajzen, 2002) The direct way is to ask questions directly in order

to obtain people‟s overall attitude toward behavior By indirect way, Fishbein‟s Expectacy-value model (EVM) is employed to evaluate people‟s attitude toward behavior

The EVM (Fishbein & Ajzen, 1975, Ajzen, 1991) states that an individual‟s attitude toward behavior is determined by outcome‟s subjective value (subjective evaluation) and the strength of belief (subjective probability) Algebraically, the indirect measure of attitude toward behavior is expressed in below equation

=1

In the above equation, the strength of each salient belief (b) is multiplied by the subjective evaluation (e) of the belief‟s attribute A person‟s attitude (A) is directly proportional ( ) to the sum of the resulting products over n salient beliefs (Ajzen, 1991)

Normative Beliefs and Subjective Norms

According to Ajzen and Fishbein (1980), normative beliefs result in subjective norms and reflect the likelihood that important individuals or groups (referents) will

approve or disapprove of the behavior in question Thus, subjective norms refer to social pressures that may arise from performing or not performing a behavior With the same way measuring attitude toward behavior, subjective norms can also be measured directly or indirectly through an equation The equation for subjective norms is presented in the equation below

=1

In the equation, the strength of each normative belief (n) is multiplied by a person‟s motivation to comply (m) with the important referents Subjective norm is directly proportional ( ) to sum of products over n salient referents (Ajzen, 1991)

Theory of Planned Behavior (TPB)

Due to the TRA limitation when predicting behaviors that are not under volitional control, Ajzen (1985) developed TPB (cited in Ajzen 1991), which is considered an extension of the TRA, to overcome the limitation of TRA and improve the predicting power of the model as well as to better explain human intention and behavior As

an extension of the TRA, the TPB comprises all the constructs of the TRA and incorporates two additional constructs; they are control beliefs and perceived behavioral control (PBC) Control beliefs refer to the presence or absence of resources and opportunities that will promote or hinder to carry out a particular behavior Perceived behavioral control is people's perceptions of their ability to perform a given behavior, how difficult or easy people perceive to carry out a particular behavior (Ajzen, 1991) Like the TRA, intention in the TPB is assumed to be the immediate antecedent of the behavior, but intention is determined by attitude toward the behavior, subjective norm and perceived behavior control In addition to intention, PCB can be considered a proxy for actual control and contribute to the predictive power to a particular behavior The following figure 2.7 is a schematic representation of the TPB

Figure 2.7: Schematic representation of the TPB

Source: Ajzen 2002

Control Beliefs and Perceived Behavioral Control (PBC)

Control beliefs are factors that may facilitate or impede a performance of the behavior These control beliefs - in combination with the perceived power of each control factor - generate the perceived behavioral control These control factors may be affected

by past experience with the behavior or by second-hand information about the behavior through other people‟s experience such as acquaintances, friends … (Ajzen, 1991) Generally, the more resources, opportunities and confidence individuals have, and fewer obstacles they feel, then the greater should be their perceived control over the behavior Theoretically, PBC may moderate the effect of intention on behavior, that is, a positive intention will only leads to behaviors when PBC is strong enough

As with measuring an attitude toward the behavior and subjective norms, PBC can also be measured directly or indirectly through an equation The equation for PBC is illustrated in the equation below

Intention Subjective norm

Perceived behavioral control

Actual behavioral control

performance of the behavior The perceived behavioral control is directly proportional ( ) to the sum of products over n control beliefs (Ajzen, 1991)

2.3.6 Theory of Interpersonal Behavior

Similar to TRA and TPB, Theory of Interpesonal Behavior (Triandis,1980) describles an attitude-intention-behavior relationship It comprises seven factors: affect, social factors, perceived consequences, habit, facilitating conditions, intention and behavior (Triandis 1980, quoted from Woon & Pee, 2004) The model, as presented in figure 2.8, postulates that the probability of performing an act (behavior) is a function of Habit, Intention to perform the act and Facilitating Conditions The intention of performing a particular behavior is a function of Perceived Consequences, Social Factors and Affect

Figure 2.8: Schematic representation of the TIB

Source: Woon and Pee, 2004

Generally, TIB contains all components of the TPB; however, it adds a new component that is habit which enables to increase the model‟s predictive power (Orbell, Hodgkins and Sheeran, 1997; Bamberg and Schmidt, 200; cited from Woon

et al, 2004) Each of conceptual constructs is briefly defined below

Affect refers to a person‟s pure emotion that could be favorable feelings such

as joy, elation, pleasure … or unfavorable feelings like depression, distaste, discontentment, or hatred in regards to a particular behavior Affect is similar to

attitude of TRA and TPB, but only combine affective elements while attitude in TRA and TPB contains both cognitive and affective elements

Social Factors refer to a person‟s internalization of the reference group‟s subjective culture, perception, and specific interpersonal agreements on which he (she) has behaved with others, in specific social situations

Perceived Consequences is defined as each act (behavior) is perceived to

generate potential outcomes that have positive or negative value, including a probability that the outcome will occur

Habits refer to behaviors that have been repeatedly made over time, and have

become automatic; therefore they occur without self instruction, cognition and deliberation in response to specific situations Habitual behavior is a form of automatic and routine behavior Habit is a function of individual‟s past experience and ability to perform a specific behavior or act

Facilitating Conditions is defined facilitating conditions as objective factors

within the environment, on which observers can agree, will make performance of the behavior with ease Facilitating conditions are important to individuals with intention

of accomplishing a certain act, but they may be unable to do so because the conditions of environment prevent the act from being carried out

Intention represents “an individual‟s conscious plan or self-instruction to carry out a behavior”

Behavior refers to “the actual physical act of performing a particular behavior”

2.4 Comparison of the theories

From viewing these theories above, it is obvious to realize that TRA, TPB and TIB share many similarities First TRA, TPB and TIB assume that individuals are rational actors and posit an attitude-intention-behavior relationship From which, intention is a key immediate determinant of behavior Second, cognitive and affective beliefs (TRA, TBP) or affective beliefs (TIB) form attitude, which has impact on behavioral intention, and behavioral intention in turn influences actual performance of the behavior Finally, these

theories share very close components of conceptualization that are comparable in pairs: attitude toward behavior (TRA, TPB) vs affect (TIB); subjective norms (TRA, TPB) vs social factors (TIB); behavioral beliefs (TRA, TPB) vs perceived consequences (TIB); and control beliefs (TPB) vs facilitating condition (TIB)

However, existence of significant dissimilarities of the theories that distinguish one from another is notable First, the limitation of TRA to behaviors that people have incomplete behavioral control; for this reason, TPB was developed with two additional components – control belief and perceived behavioral control – to complement the limitation of TRA Second, the factor of perceived consequences in TIB is a direct antecedent of intention and has a direct influence on intention while its counterpart in TRA and TPB, behavioral belief, has an indirect influence on intention through attitude Lastly, prediction of behavior are determined by intention, facilitating conditions and habits in TIB while prediction of behavior is determined by intention only in TRA; and by intention accompanied with perceived behavioral control (a proxy for actual control) in TPB

2.5 Research Model and Hypotheses

The study employs TPB model as theoretical foundation Ajzen (1991) concluded

“attitudes toward the behavior, subjective norms with the respect to the behavior, and perceived control over the behavior are usually found to predict behavioral intentions with

a high degree of accuracy” In contrast, the conclusion also mentioned that issues around the relations, i.e relation between behavioral beliefs and attitudes toward the behavior; relation between normative beliefs and subjective norms; relation between control beliefs and perceived behavioral control, remain unresolved Although nature of these relations is described and widely accepted in terms of expectancy-value model, the exact forms of these relations is still uncertain and much room for improvement

In the light of the said conclusion (Ajzen, 1991), the study uses indirect measures of attitudes, subjective norms and perceived behavioral control to predict the behavioral intention; that is also the research‟s title “Factors influencing homebuilders‟ intention of using ready mixed concrete when building private houses”

Identifying specific consequences of using RMX concrete drive homebuilders‟ intention as a matter of interest Therefore, the factor „perceived consequences‟ is borrowed from Triandis model being incorporated with attitude, subjective norms and perception of behavioral control in TBP - like Lymayem et al (2000) - to form the research model presented in figure 2.9 below

Figure 2.9: Proposed Research Model

Intention: refers to motivational factors that influence a behavior; indications of

how hard people are willing to endeavor and how much effort they put to carry out performance of a given behavior In the research model, intention is in regards to the degree to which homebuilders are willing and planning to use RMX concrete to build private houses

Attitude toward the behavior: “Attitudes can be described a learned predisposition to respond in a consistently favorable or unfavorable manner with respect to a given object” (Fishbein & Ajzen, 1975)

In other words, attitude toward the behavior indicates the degree to which an individual has overall evaluation of the behavior, either favorable or unfavorable (Ajzen, 1991) In connection with the TPB, the more favorably homebuilders evaluate

Attitude toward

the behavior

Intention Subjective norm

Perceived

behavioral control

Perceived

consequences

the use of RMX concrete, the stronger intention they hold about using RMX concrete, and vice versa Therefore, the first hypothesis is proposed below

H1: There is a positive relationship between attitude and intention of using RMX concrete

Subjective norm: is perception of social pressure that a person holds to engage in or

not to engage in a particular behavior Based on TPB, it is supposed that subjective norm will have an influence on homebuilders‟ intention to use RMX concrete Thus, the second hypothesis is assumed below

H2: There is a positive relationship between subjective norm and intention of using RMX concrete

Perceived consequences: each behavior (act) is perceived as having potential

outcomes that are either positive or negative and with probability that the outcome occur (Triandis 1980, cited in Woon & Pee 2004) People tend to exercise the behaviors that they think resulting in positive outcomes, and reject to carry out the behaviors that they think causing negative outcomes According to Triandis model, perceived consequences have a direct impact on intention That is the reason the third hypothesis is proposed as follow

H3: There is a positive relationship between perceived consequences and relationship with intention of using RMX concrete

Perceived behavioral control: is an individual‟s perception about how ease or difficult to perform a behavior in question The higher degree of perceived behavioral control is, the stronger a person‟s intention will be to perform the behavior (Ajzen, 1991) With respect to the study, homebuilders will hold strong intention of using RMX concrete when they perceive to deal with it easily Therefore, the fourth hypothesis is suggested

below

H4: There is a positive relationship between perceived behavior control and intention

of using RMX concrete

Table 2.2: Summary of hypotheses

Hypotheses Expected relationship sign

H1 There is a positive relationship between attitude and intention of using

RMX concrete

H2 There is a positive relationship between subjective norm and intention

of using RMX concrete

H3 There is a positive relationship between perceived consequences and

relationship with intention of using RMX concrete

H4 There is a positive relationship between perceived behavior control

and intention of using RMX concrete

2.6 Summary

No similar previous researches on target research subject of homebuilders using RMX concrete or construction materials in kind are found; however, through literature review, it is reasonable to employ three factors of the TPB and one factor of TIB (Triandis, 1980) to build the proposed research model for the study The proposed research model consists of 4 factors: (1) Attitude toward the behavior; (2) Subjective norm; (3) Perceived consequences; and (4) Perceived behavioral control These four factors are assumed to influence homebuilders‟ intention of using RMX concrete when building private houses To measure and determine factors influence homebuilders‟ intention is the aim of the study

CHAPTER THREE : RESEARCH METHODOLOGY

This chapter presents the process and approaches taken to conduct the research The research methodology poses detailed research procedure, research design, sample size, data collection, questionnaire construction and statistic technique for data analysis

3.1 Research Procedure

Figure 3.1: Research Procedure

Research Problem

Determinants influencing homebuilders‟ intention of

RMX concrete when building private houses

To check respondents‟ understanding of the

questionnaire for adjustment (N=5)

Quantitative Survey

- The questionnaire survey with 125 respondents

- Collected 104 valid responses for data analysis

Report and Recommendations

Find and choose appropriate constructs for the research objectives

Build a draft questionnaire

Adjust wording of questionnaire