KEY FACTORS AFFECTING CONSUMER PURCHASE INTENTION A STUDY OF SAFE VEGETABLE IN HO CHI MINH CITY, VIETNAM

This research is to find out the key factors affecting consumer purchase intention for safe vegetable product and result shows that the reason is because of safe vegetables’ price and co

International School of Business

-

Nguyen Thanh Huong

KEY FACTORS AFFECTING CONSUMER PURCHASE INTENTION

A STUDY OF SAFE VEGETABLE IN

HO CHI MINH CITY, VIETNAM

ID: 60340102

MASTER OF BUSINESS (Honours)

SUPERVISOR: Dr Dinh Cong Khai

Ho Chi Minh City – Year 2012

ACKNOWLEDGEMENT

First, I would like to express my gratitude and deepest appreciation to my research supervisor, Dr Dinh Cong Khai for his intensive support, valuable suggestions, guidance and encouragement during the course of my dissertation

Second, it is my very much gratitude to Prof Nguyen Dinh Tho who exerts every effort in guiding me as well as ISB students to implement research

Third, I would like to thank all the participants as well as my colleagues, my friends who did contribute to this research

Last but not least, my sincere thanks are also to all the members of ISB School who are always trying to create the best convenience for me as well as ISB students during the course

Ho Chi Minh City, January 2nd 2012

Nguyen Thanh Huong

Abstract

The food hygiene and safeness is a very serious problem in Vietnam currently Many cases of food poising throughout years, especially from vegetable with high content of pesticides and prohibited toxics, make consumers really worried The overusing pesticides and prohibited toxics in vegetable production is extremely worrying consumers Understanding the problem

as well as the potential of safe vegetable market, many investors are trying to bring safe vegetable product to consumers However, reality shows that consumers are not really passionate with this product despite of they are really demanding for safe vegetable sources

This research is to find out the key factors affecting consumer purchase intention for safe vegetable product and result shows that the reason is because of safe vegetables’ price and consumers’ trust for this product Consumers perceive safe vegetable as high price product as well as they don’t fully trust in safe vegetable product and that lower their purchase intention for this product

Keywords: Safe vegetable, purchase intention, trust, price perception, Ho Chi Minh City,

Vietnam

LIST OF FIGURES

Figure 1 Research model 14 

Figure 2 Research process 16 

LIST OF TABLES

Table 1 Hypothesis summary 15 

Table 2 Masurement scales for trust 16 

Table 3 Measurement scales for price perception 17 

Table 4 Measurement scales for appearance 17 

Table 5 Measurement scales for purchase intention 18 

Table 6 Sample specification 21 

Table 7 Data coding 22 

Table 8 Cronbach’s alpha result 24 

Table 9 EFA result of independent variables 25 

Table 10 EFA result of dependent variables 26 

Table 11 Regression analysis for gender, Income and purchase intention 27 

Table 12 Compare mean of purchase intention for income 28 

Table 13 Compare mean of purchase intention for gender 29 

Table 14 Test the impact of demographic factors 29 

Table 15 Correlation among factors 29 

Table 16 Regression analysis for Trust, Price, Appearance & Purchase intention 30 

Table 17 Regression analysis for Trust, Price and Purchase intention 31 

Table 18 Appearance and Purchase intention 33 

Table 19 Correlation of Purchase intention and Price 35 

TABLE OF CONTENTS

CHAPTER 1 NTRODUCTION 1 

1.1  RESEARCH BACKGROUND 1 

1.2  PROBLEM STATEMENT AND RESEARCH OBJECTIVE 2 

1.3  BENIFIT OF RESEARCH 3 

1.4  RESEARCH METHOD AND STRUCTURE 3 

CHAPTER 2 LITERATURE REVIEW AND RESEARCH MODEL 5  2.1  FUNDAMENTAL BEHAVIOUR THEORIES 5 

2.2  PREVIOUS RESEARCHES REVIEW AND HYPOTHESES 8 

2.2.1  Trust 9 

2.2.2  Price perception 11 

2.2.3  Safe vegetable appearance and consumers’ gender, income 12 

2.3  RESEARCH MODEL 14 

CHAPTER 3 RESEARCH METHODLOGY 16 

3.1  RESEARCH PROCESS 16 

3.2  DEFINING MEASUREMENT SCALES 17 

3.2.1  Measurement scale for consumers’ trust on safe vegetable 17 

3.2.2  Measurement scale for consumers’ price perception of safe vegetable 17  3.2.3  Measurement scale for safe vegetable’s appearance 18 

3.2.4  Measurement scale for consumers’ income and consumers’ gender 18 

3.2.5  Measurement scale for consumer purchase intention for safe vegetable 18  3.3  QUALITATIVE RESEARCH 19 

3.4  QUANTITATIVE RESEARCH 19 

3.4.1  Sample for research 20 

3.4.2  Data collection 20 

3.4.3  Data analysis 21 

CHAPTER 4 RESEACH RESULT AND FINDING DISCUSSION 22  4.1 SAMPLE SPECIFICATION 22 

4.2 DATA CODING 23 

4.3 EVALUATION OF MEASUREMENT SCALES 24 

4.3.1 Reliability evaluation – Cronbach’s alpha 24 

4.3.2 Exploratory Factor Analysis (EFA) 25 

4.3.2.1  Exploratory Factor Analysis for measurement scales of independent factors (trust, price perception, appearance) 26 

4.3.2.2  Exploratory Factor Analysis for measurement scales of dependent factor (purchase intention) 27 

4.4 REGRESSION ANALYSIS 28 

4.4.1 Testing the impact of demographic factors (gender, income) 28 

4.4.2 Testing relationship of trust, price, appearance and purchasing intention 30  4.4.4 Regression analysis results 33 

4.5  FINDING DISCUSSION 33 

CHAPTER 5 CONCLUSION, IMPLICATION, LIMITATION AND FUTURE RESEARCH 36 

5.1 CONCLUSION 36 

5.2 IMPLICATION 36 

5.3 LIMITATION 37 

5.4 FUTURE RESEARCH 38 

APPENDIX 1: DETAILS OF INTERVIEWED CONSUMERS 45 

APPENDIX 2: CRONBACH’S ALPHA RESULT 46 

APPENDIX 3: EFA RESULT OF INDEPENDENT VARIABLES 49 

APPENDIX 4: EFA RESULT OF DEPENDENT VARIABLES 51 

APPENDIX 5: IMPACTION OF DEMOGRAPHIC FACTORS 52 

APPENDIX 6: REGRESSION ANALYSIS RESULT 55 

APPENDIX 7: QUESTIONAIRE FORM 57 

Polluted environment, unsafe agricultural products and human health under threat are the result of the overuse of pesticides for weeding and it becomes a very serious problem in Vietnam currently (Khanh, as cited in Takuro et al., 2009, p.286) It was reported in The Baomoi (“Safe vegetable problem”) that according to an authority department, up to 80% of vegetable in the market does not meet food safety and hygiene standards A major concern today is the very popular abusing of pesticides in Vietnam causing environment pollution, poisoned farm The farmers due to lacking of knowledge or for their own interest overuse pesticides or non-origin pesticides A study reported that Mekong Delta farmers do not only overuse pesticides but also abuse several banned or restricted products in their vegetable weeding (Nguyen and Tran, as cited in Luke and Steffanie, 2007, p.1)

Food safety issue becomes more and more serious Reported by Samira (2012) that there were 51 death cases from 175 food poisoning cases in Vietnam in 2010 in which 33,2% is from micro organization, 25,2% is from toxin, 10.4% is from chemical and 31.2% is unknown It is also advised by a hospital in Ho Chi Minh city that 30% – 35% of the hospital’s cancer victims is from food poisoning

The large numbers of food poisoning cases throughout years in Vietnam together with the citizen’s increasing standard of living as well as the more concern about their health, quality and safety of the food they eat create a strong demand of safe vegetable product That the demand for safe vegetable is growing rapidly over years creates huge marketopportunities for safe vegetable

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1.2 PROBLEM STATEMENT AND RESEARCH OBJECTIVE

Understanding the huge opportunities of safe vegetable market; many investors have begun their investment to this market, however, a surprising reality shows that investors are facing much difficulty in finding the output for this market, especially in the context of safe vegetable supply has not met the demand About supply and demand of safe vegetable, The Fruit and Vegetable Research Institute reports that despite the high demand for safe vegetable, there is only small portion of safe vegetable production compared with ordinary vegetable In 2009, safe vegetable production area only accounted for 8.5% of the total area under vegetable production

in Viet Nam which absolutely could not meet consumers’ demand Added in The Vietnamplus (“high demand but still low consumption”) that the current productivity

of safe vegetable can only meet 20% of consumers’ demand, however, consumption is very unstable and especially with low speed in profuse harvest In the context of supply has not met demand, there should have been no issue for the product output However, the reality of safe vegetable market is totally different that make us confused if consumers don’t care about their health though keep complaining of the safety of vegetable, or if there are factors which strongly impact and restrain their purchasing for this product If those factors are really existing then we worry what they are Therefore, the aim of this research is to find out the key factors affecting consumer purchase intention for safe vegetable The research questions are following:

• What are the key factors affecting consumer purchase intention for safe vegetable in Ho Chi Minh?

• And how do they impact on consumer purchase intention?

The object of the research will be consumers of vegetable market in Ho Chi Minh City

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1.3 BENIFIT OF RESEARCH

With the consumers in this alarming period of food safety and hygiene, they are more and more starving for safe vegetable product With the Vietnamese government, food safety issue related to vegetable is currently a headache to them and the Government has strived to increase the production area as well as productivity of safe vegetable to bring this product to the citizen as much as possible With investors in safe vegetable market, finding ways to solve the problem of their product output is their first priority

to recover their balance in this market Hence, if the factors impacting and restraining consumer purchase intention for safe vegetable can be discovered and among them, if there are some that the government as well as investors can solve then it would in some aspects benefit the society as well as investors Consumers will have more chance of approaching safe vegetable; vegetable related food safety issue become less headache to government; investors can solve problem of their product output as well

as expand their business and market for safe vegetable Hence, it is really necessary that investors as well as the government should understand those factors for their problem solving

1.4 RESEARCH METHOD AND STRUCTURE

This research employs a combined method comprising 5 steps:

• Step 1: Review the literatures on determinants of consumer purchase intention with special attention to those conducted in the context of safe vegetable in Vietnam From this, define a list of possible determinants as well as hypotheses and research model

• Step 2: Define measurement scales for the research concepts

• Step 3: Perform qualitative research to evaluate measurement scales

• Step 4: Perform official quantitative research

• Step 5: Code and analyze data

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Corresponding to this process below structure is proposed for this research:

• Chapter 1: Introduction to introduce research background, research problem, research objective, research question as well as benefit of the research

• Chapter 2: Literature review This chapter reviews theories and selects the research’s factors as well as formulates the research hypotheses and model

• Chapter 3: Research methodology This chapter provides general idea how the research is designed and implemented

• Chapter 4: Data analysis, result and finding discussion This chapter translates data collected from survey, analyses data as well as discusses the result finding

in connection with theory

• Chapter 5: Conclusion, implication, limitation and future research This Chapter concludes the research finding, provides implication, further suggestion as well as research limitation

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CHAPTER 2 LITERATURE REVIEW AND RESEARCH MODEL

2.1 FUNDAMENTAL BEHAVIOUR THEORIES

In order to understand why consumers purchase safe vegetable, we will firstly look at the two very basic behaviour theories called Theory of Reasoned Action (TRA) and Theory of Planned Behaviour (TPB)

The TRA is developed by Ajzen and Fishbein in 1980, and after that the TPB is developed by Ajzen in 1991 Both the two theories explain how a person leads to certain behaviour The central factor in the theories is the individual’s intention to perform a given behaviour

According to Ajzen (1991, p.181) “intentions are assumed to capture the motivational factors that influence a behaviour, they are indications of how hard people are willing

to try, of how much of an effort they are planning to exert, in order to perform the behaviour” And he makes further emphasis that “when people have the stronger intention to engage in the behaviour, they will more likely to perform the behaviour” (Ajzen, 1991, p.181) Added by Samin et al (2012, p.206) that “intention is the person’s motivation in the sense of his or her intention to perform behaviour Further definition for purchase intention is “what we think we will buy” (Park, as cited in Samin et al., 2012, p.206) Purchase intention can also be defined as the decision to act or physiological action that shows an individual’s behaviour according to the product (Wang & Yang, as cited in Samin et al., 2012, p.206) Dodds et al (1991) suggested that purchase intention represents the possibility for consumers to buy a product (as cited in Long and Ching, 2010, p.20) Long and Ching also conclude

“purchase intention stands for what we would like to buy in future” (Long and Ching,

2010, p.20)

According to the TRA, a person’s behavioural intention is determined by the two basis components which are attitude toward behaviour and subjective norm These two factors will directly affect an individual’s behavioural intention and then consequently affect his or her behaviour (Sudin, Geoffrey and Hanudin, 2009, p.68)

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Ajzen (1991, p.188) defines attitude toward the behaviour as “the degree to which a person has a favourable or unfavourable evaluation or appraisal of the behaviour in question” A person will hold a favourable attitude toward performing the behaviour if

he or she believes that positive outcomes will be mostly achieved if performing a given behaviour and vice versa (Sudin et al., 2009, p.68) The more favourable attitude toward performing a behaviour a person is holding, the stronger intention he

or she will make to perform the behaviour (Ajzen, 1991, p.181 ) Sudin et al (2009, p.68) terms the beliefs that underlie a person’s attitude toward the behaviour are behavioural beliefs

Ajzen also refers subjective norm as “the perceived social pressure to perform or not

to perform the behaviour” (Ajzen, 1991, p.188) Teresa, Bonnie and Yingjiao (2005, p.407) makes more explanation for subjective norm as “a function of an individual’s beliefs that specific individuals or groups think he/she should or should not perform the behaviour” Added by Sudin et al (2009, p.68) that “ a person who believes that most referents with whom he is motivated to comply think he should perform the behaviour will receive social pressure to do so”

In another way, the TRA says that the more favourable attitude a person is holding toward performing behaviour, the higher intention he or she will perform it Or the more a person perceives social pressure to perform behaviour, the more likely his or her intention to perform it will increase

However, the TRA also has its limitation to explain why in some case, a person holds

a very favourable attitude toward performing behaviour as well as perceives a very strong social pressure to perform the behaviour; he or she still does not have intention

or holds a very low intention to perform the behaviour

To solve the TRA’s limitation, Ajzen develops another theory called Theory of Planned Behaviour “Theory of Planned Behaviour (TPB) is an extension of the theory of reasoned action (TRA) made necessary by the original model’s limitations in dealing with behaviours over which people have incomplete volitional control” (Ajzen, 1991, p.181) The TPB is developed by adding one more component which is

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called perceived behavioural control to the TRA Then in the TPB model, an individual’s behavioural intention is a function of three basis components which are attitude toward the behaviour, subjective norm and perceived behavioural control

Ajzen (1991, p.188) refers perceived behavioural control in the TPB model as “people perception of the ease or difficulty of performing the behaviour of interest” The importance of actual behaviour control is self evident: the resources and opportunities available to a person must to some extent dictate the likelihood of behavioural achievement

The TPB solves the limitation of the TRA by its ability to explain why in some scenarios, people hold a great favourable attitude toward performing behaviour as well

as perceive strong social pressure to perform the behaviour but they still don’t perform the behaviour Those scenarios are explained by the TPB that because people perceive obstacles or difficulty in performing the behaviour Or the perception of having low capacity to perform the behaviour also lowers a person’s behavioural intention and consequently makes him or her not performing the behaviour Those TPB calls perceived behavioural control

The TRA and TPB have been applied extensively in food studies as well as in other industries as service, banking They have also been used by many researchers to predict consumer purchase intention for a specific product For example, Teresa et al (2006) uses TRA and TPB to predict purchase intention of a controversial luxury apparel product, Syed (2011) uses TPB to study consumer purchase behaviour for halal food, Anssi and Sanna (2005) also uses them to study consumer’s organic food buying behaviour According to Anssi and Sanna (2005, p.809), in the past studies

on organic food buying behaviour the role of subjective norms, which refers to the perceived social pressure to perform or not to perform the behaviour, has often been neglected or not included in the research model This could be because of its low impact on consumer’s organic food purchasing behaviour Same in this research for consumer purchase intention of safe vegetable, we also neglect subjective norm in our research model

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2.2 PREVIOUS RESEARCHES REVIEW AND HYPOTHESES

In Hsiang-tai, Stephanie and Alan (2000)’s study about factors that influence the purchasing decision for fresh potatoes of consumer in the New England market, the researchers proposes a model of eight key factors affecting consumer purchase decision for fresh potatoes which are: (1)Appearance of the potatoes, (2)Price, (3)Size

of the potatoes, (4)Region where the potatoes were grown, (5)Type of potatoes, (6)Product inspection certification on the bag, (7)Prior experience with the product, (8)A money back guarantee if not satisfying Besides that, demographic factors as consumer’s age, sex, income and household size are also included in his model In general, the research results confirm that product appearance is the most influential characteristic, then types of potatoes and size receive high important rating Price is moderately important but less crucial than appearance, size and type However, the importance rate of those most influential factors is different among respondents’ gender, age, income (Hsiang-tai et al., 2000, p.51-52) Other researches proposes more factors as degree of knowledge of product, purchase place, degree of trust in product certification, price perception, trust in product, product information, package information, brand awareness that could affect purchase intention for a specific product

In Andrew (2006)’s research about “quality and safety in the traditional horticultural marketing chains of Asia”, he concludes appearance is one of the most important factors affecting consumer purchase (Andrew, 2006, p.21) A small survey for consumers in Ho Chi Minh City, Vietnam also conducted by Andrew says that consumers do have intention to purchase safe vegetable; however, consumption of safe vegetable is only 5% of consumer’s total vegetable consumption regardless of past fatalities from consuming conventional vegetables The reasons declared by consumers are there is “a lack of conviction that such vegetables were indeed safer” and safe vegetable has high price (Andrew, 2006, p.22)

Therefore, in our research model, we will only focus on some major factors that could most impact on consumer purchase intention for safe vegetable in Ho Chi Minh city,

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Vietnam They are trust, price perception, safe vegetable appearance, and demographic factors as consumers’ age and income More review for those selected factors will be following

2.2.1 Trust

As cited in Carmina and Carlos (2011, p.283):

Moorman et al (1993) defined trust as “a willingness to rely on an exchange partner in whom one has confidence”, proposing, additionally, trust as a belief, confidence, or expectation about an exchange partner’s trustworthiness that results from the partner’s expertise, reliability, or intentionality

Carmina and Carlos (2011, p.283) also states “in the context of food products, trust is closely linked to other basic concepts of marketing, like safety and perceived risk, and others such as nutrition and health”

Mapping trust to TPB framework, we can say that trust is a belief underlying consumer’s attitude toward their purchase behaviour and therefore, trust can potentially be considered as an important factor that affects consumer purchasing intention Carmina and Carlos (2011)’s research result about “consequences of consumer trust in PDO food products” says that trust affects consumer’s satisfaction and consequently affects consumer purchase intention for PDO food products

In general, we can make assumption that trust plays an impact on consumer purchase intention

Back to Vietnam market, vegetable can be considered as indispensable food product

to every Vietnamese family’s meal and consumers can not stop consuming vegetable However, in Vietnam the food safety issue is extremely alerting consumers currently that causes a strong demand for safe vegetable Many cases of food poisoning caused

by insecticide inside vegetable or high concentrate of existing growth stimulating substances in vegetable According to Young, Miri & Junghoon (2008, p.168) that

“after facing serious food safety incidents, consumers have become increasingly

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concerned with quality and safety of foods they eat”, they will try to look for sufficient information before making food purchase decision Consumers will look at purchasing branded, quality insurance for their risk reducing strategies in their purchasing However, resource of information of safe vegetable in Vietnam is currently so limited that makes consumers very confused when purchasing this product Most of safe vegetable products do not have any certification that causes losing consumers’ trust Currently, only 20% of safe vegetable is sold in supermarkets and safe vegetable shops, the majority is sold in traditional markets in a jumble with ordinary vegetable There is no special figure to distinguish between safe vegetable and ordinary vegetable except that safe vegetable is well packed in nylon pack and labelled with name of production companies There is no figure other than that to convince consumers about safe vegetable is really safe and that make them really worried when purchasing this product Stated by Ms Nguyen Thanh Tam, a consumer in Ho Chi Minh city, that “I usually buy food, vegetable in a traditional market nearby my house, there they are also selling vegetable called safe vegetable packed in nylon pack with label and producer name but I still do worry if they are really safe vegetable I still buy this product only by placing my confidence in the seller’s honest” From this review, we may assume that consumers are holding an unfavourable attitude for safe vegetable product, they don’t really trust in safe vegetable product and that lowers their purchase intention for this product

From literature review together with the current status of safe vegetable in Viet Nam,

we hypothesize that consumer purchase intention for safe vegetable is positively affected by trust The more consumers trust in safe vegetable, the more likely they will increase their purchase intention for this product So our first hypothesis is defined as following:

H1 There is a positive relationship of consumers’ trust in safe vegetable and their safe

vegetable purchase intention

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2.2.2 Price perception

As defined by Ajzen (1991, p.188) in his TPB model, “perceived behavioural control refers to people perception of the ease or difficulty of performing the behaviour of interest” He makes more explanation for perceived behavioural control as “the customer’s personal view of his or her capability to carry out certain behaviour” (Ajzen, as cited in Zeinab and Seyedeh, 2012, p.100) and “can account for considerable variance in behavioural intention and action” (Ajzen, as cited in Anssi and Sanna, 2005, p.810) In the studies of consumer purchase behaviour for organic product, Tregear (1994) concludes that price does high affect in consumer purchase for this product, that the “product’s relative higher price has been practically most important for not buying organic product” (Tregear, as cited in Anssi and Sanna,

2005, p.811) Price is an obstacle to consumer purchase for organic product; high price will lower consumers’ capacity of purchasing for the product, especially low income consumers, and it makes consumers perceive the impossibility to purchase organic food product, makes them feel uneasy or difficult in performing their purchase decision for the product (Anssi and Sanna, 2005, p.811) In the study of Zeinab and Seyedeh (2012) about “main factors influencing purchasing behaviour of organic product in Malaysia”, he views price as one of the elements of perceived behavioural control for its ability to limit the purchases of consumers, he also says numerous consumers place their purchases mainly base on price (Zienab and Seyedeh, 2012, p.106) Therefore, we can assume that price highly impacts on consumer purchase intention for a product

According to Bich Diep (2012), average income of Vietnamese is 1300 USD/year in

2011 that can be considered low And with the saving habit of the Vietnamese, it is easily to understand that the majority of Vietnamese tend to pay much consideration

in their spending And that safe vegetable’ price is always high, especially much more expensive than conventional vegetable can make it really sensitive to consumers and it could be rated as one of the major obstacle to their purchase intention for this product Andrew (2006, p.22) also reports in his study of consumers in Ho Chi Minh city,

In general assumption for Vietnam, safe vegetable’s high price can be an obstacle to consumer purchase intention However, it is incorrect to mean that consumers perceive safe vegetable as expensive product Every consumer has his or her individual price perception for safe vegetable This leads to assumption that if consumers perceive safe vegetable as expensive product, they will lower their purchase intention for it and vice versa With this assumption, we propose hypothesis

as following:

H2 There is a positive relationship of consumers’ price perception for safe vegetable

and consumer purchase intention The positive relationship is defined in the way that the more inexpensive consumers think safe vegetable is, the more likely they will

increase their purchase intention for safe vegetable

2.2.3 Safe vegetable appearance and consumers’ gender, income

Over years, there were many studies on factors affecting consumer purchase intention for foods consumption The factors as well as their importance may be different from countries to countries, periods to periods However, over the years in food consumption, product appearance and price are considered as “the two most influence factors” (Vance Publications, as cited in Hsiang-tai et al., 2000, p.47) Said by Robert Shewfelt, professor of food science at the University of Georgia's Center for Food Safety and Quality Enhancement, most consumers aren't willing even to consider

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buying something that does not have a pleasant appearance (Pratt, 1993) Andrew (2006, p.21) also concludes that appearance is one of the most important factors affecting consumer purchase for fruit and vegetable in Asian markets Therefore, in this research, we propose hypothesis as following:

H3: There is a positive relationship of safe vegetable’s appearance and consumer

purchase intention

According to Ajzen (1991) says about his TPB model, “attitude toward behaviour, subjective norm and perceived behavioural control are considered to be central for predicting the understanding human behaviour” However, he also proposes some other factors which he calls “external variables” that may affect people behaviour The suggested external variables are personality traits, demographic factors (Ajzen, as cited Teresa et al., 2005, p.408) Hence, in this research, we will consider demographic factors (consumers’ income and gender) as control variables.

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2.3 RESEARCH MODEL

From the literature review and research hypotheses, the model is as follows:

Figure 1 Research model

In which:

Trust: consumers’ trust for safe vegetable

Price perception: consumers’ price perception for safe vegetable whether safe vegetable is inexpensive or not

Appearance: safe vegetable appearance according to consumers’ perception

Income: consumers’ income

Gender: consumers’ gender

Purchase intention: consumer purchase intention for safe vegetable.

Appearance

Purchase intention Price perception

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Table 1

Hypothesis summary

Hypothesis Statement

H1 There is a positive relationship of consumers’ trust in safe vegetable and

their safe vegetable purchase intention The more consumers trust in safe vegetable, the more likely they will increase their purchase intention for this product

H2 There is a positive relationship of consumers’ price perception for safe

vegetable and consumer purchase intention The positive relationship is defined in the way that the more inexpensive consumers think safe vegetable is, the more likely they will increase their purchase intention for safe vegetable

H3 There is a positive relationship of safe vegetable’s appearance and

consumer purchase intention

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CHAPTER 3 RESEARCH METHODLOGY

Chapter 2 reviewed literature and proposes hypotheses and research model Chapter 3 will present how the research was implemented This chapter composes of three main steps: step (1) defining measurement scales, step (2) performing qualitative research and step (3) implementing quantitative research

in Vietnamese)

Final measurement scale in Vietnamese

Questionnaire forming

Sampling

Data collection

Data analysis

Managerial implications

Figure 2 Research process

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3.2 DEFINING MEASUREMENT SCALES

Measurement scales were defined from research hypotheses and model There are five research concepts in this research which are trust, price perception, appearance, consumers’ gender and income

The measurement scales used to measure the concepts are the existing measurement scales in the world These measurement scales were used in many previous qualified researches which are published in reputed international magazines

3.2.1 Measurement scale for consumers’ trust on safe vegetable

Consumers’ trust on safe vegetable (briefly called trust) was measured by overall evaluating consumers about their trust toward safe vegetable product The measurement scales were adapted from Carmina and Carlos (2011) and Mei-Fang (2009)

Table 2

Measurement scales for trust

1 I think safe vegetable is trustworthy

2 The quality of the safe vegetable is trustworthy

3 I trust safe vegetable have no harmful effects

3.2.2 Measurement scale for consumers’ price perception of safe vegetable

Consumers’ price perception of safe vegetable (briefly called price perception) measures how consumers perceive price of safe vegetable; whether they think safe vegetable is expensive or not expensive The measurement scales for this concept were adapted from Mei-Fang (2009)

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Table 3

Measurement scales for price perception

1 Safe vegetable is not expensive

2 Safe vegetable is cheap

3.2.3 Measurement scale for safe vegetable’s appearance

Safe vegetable’s appearance (briefly called appearance) measures how consumers think about appearance of safe vegetable in the market The measurement scales were adapted from Efthimia, Christina, Yorgos and Kostantinos (2008) and also measured

by 7 Likert point

Table 4

Measurement scales for appearance

1 Safe vegetable does not have spots/marks

2 Safe vegetable has nice shape

3.2.4 Measurement scale for consumers’ income and consumers’ gender

Consumers’ income and consumers’ gender are directly measured by asking

consumers on their gender and income

3.2.5 Measurement scale for consumer purchase intention for safe vegetable

Consumer purchase intention (briefly called purchase intention) was measured by 7 Likert point The measurement scales were adapted from Young et al (2008) which measure how consumers’ intention to purchase a specific product

Table 5

Measurement scales for purchase intention

1 I plan to continue purchasing safe vegetable

2 I intend to increase the size of safe vegetable purchases

3 I intend to increase the frequency of purchasing for safe vegetable product

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3.3 QUALITATIVE RESEARCH

Since the measurement scales are originally in English and translated to Vietnamese

so the purpose of this qualitative research is to ensure the meaning of the measurement scales This qualitative research is to evaluate the use of terminology in questionnaire

as well as to adjust the terminology to be suitable, to keep the meaning of measurement scales unchanged when being translated from English to Vietnamese before the official quantitative research is conducted

The qualitative research was implemented in middle of October 2012 and was done by deep interviewing 10 consumers in Ho Chi Minh City Detail of interviewed consumers is shown in Appendix 1

The interviews were done by asking consumers (1) how they understood about the measurement scales, (2) what the meaning of measurement scales were according to them and (3) what they meant in every point (1 to 7) they gave to each measurement scale

Base on the result of interviewing with 10 consumers, the measurement scales as well

as the questionnaire were then modified a little in wording before implementing quantitative research After modifying the questionnaire in Vietnamese, we again interviewed 2 more consumers to consider again if any pending issue with the measurement scales and their meaning These 2 consumers were asked the same questions as we did in previous interviews with 10 consumers The result showed that their understanding for measurement scales was matched with what we expected The questionnaire was concluded as being clear; consumers understood the content and the meaning of measurement scales’ questions Therefore, these measurement scales in Vietnamese were then used in quantitative research

3.4 QUANTITATIVE RESEARCH

The official quantitative research was then followed with the final questionnaire delivered to consumers

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3.4.1 Sample for research

After conducting qualitative research, the survey via questionnaire in Vietnamese is completed This study includes 10 variables, in which 7 variables are independent and

3 dependent variables According to Hair, Black, Babin, and Anderson (2010), a general rule, the sample size should be 100 or greater and the minimum sample should have a desired ratio of 5 observations per variable

n > 100 samples and n=5k (where k=the number of variables)

Therefore, the minimum sample size is n = 5*10 = 50

For standard multiple regression analysis, Tabachnick and Fidell (1991) proposed that the desired level is:

n > 50 + 8m (where m= number of independent variables)

Hence, the required sample is:

In the meantime, handout survey was also distributed to consumers in super markets, traditional markets, and safe vegetable speciality shops Consumers filled in their answers to the questionnaire form and returned to surveyors

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Electronic survey contributed 220 samples and 250 samples were collected from handout survey However, 68 samples from handout survey were rejected for missing many answers (more than 30% of the total answers) The total number of samples was collected and used for data analysis is 412 samples

3.4.3 Data analysis

Collected data was then analysed with SPSS software The process of data analysis is

as follows:

Step 1: Data coding and entering to SPSS software

Step 2: Test reliability of measurement scales with Cronbach’s alpha analysis

Step 3: Test relationship among factors with Exploratory Factor Analysis (EFA)

Step 4: Regression analysis to see the impact of independent variables to dependent variables Result of data analysis is shown in Chapter 4

Trust_2 The quality of the safe vegetable is trustworthy 1 to 7

Trust_3 I trust safe vegetable have no harmful effects 1 to 7

Appr_1 Safe vegetable does not have spots/marks 1 to 7

PurInt_1 I plan to continue purchasing safe vegetable 1 to 7

PurInt_2 I intend to increase the size of safe vegetable purchases 1 to 7

PurInt_3 I intend to increase the frequency of purchasing for safe vegetable

product

1 to 7

(1 Strongly disagree; 2 Disagree; 3 Disagree somewhat; 4 Neutral; 5 Agree somewhat; 6 Agree; 7 Strongly agree)

Control variables are coded as follows:

2: 3-6M VND 3: 6-10M VND 4: 10-15M VND 5: 15-20M VND 6: > 20M VND

(1=1, 2=0, 3=0,

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4=0, 5=0, 6=0)

(1=0, 2=1, 3=0, 4=0, 5=0, 6=0)

(1=0, 2=0, 3=1, 4=0, 5=0, 6=0)

(1=0, 2=0, 3=0, 4=1, 5=0, 6=0)

(1=0, 2=0, 3=0, 4=0, 5=1, 6=0)

Female = 0

4.3 EVALUATION OF MEASUREMENT SCALES

In this research, Cronbach’s alpha and EFA are used to evaluated the measurement scale

4.3.1 Reliability evaluation – Cronbach’s alpha

Cronbach’s alpha is first used to evaluate the reliability of measurement scales This is

to eliminate garbage items

According to Lynne (2011, p.45) that “Cronbach’s alpha measures the internal consistency of an instrument or scale”, and it measures the correlation between items The higher Cronbach’s alpha is, the higher the items correlate with each other Lynne also mentions Cronbach’s alpha which is above 0.95 indicates “a high degree of consistency between items and low measurement error”, Cronbach’s alpha which is from 0.70 to 0.80 is “regarded as satisfactory” (Lynne, 2011, p.45)

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Cronbach’s alpha is only used when research concepts have from 2 measurement scales Hence in this research, only trust and purchase intention are measured with Cronbach’s alpha Result shows that the items of each concept have internal consistency and reliability (Cronbach’s alpha > 0,7 )

Scale Variance

if Item Deleted

Corrected Item-Total Correlation

Squared Multiple Correlation

Cronbach's Alpha if Item Deleted

Squared Multiple Correlation

Cronbach's Alpha if Item Deleted

See Appendix 2 for more information on Cronbach’s alpha results

4.3.2 Exploratory Factor Analysis (EFA)

After Cronbach’s alpha analysis, the measurement scales were continued to be evaluated by EFA This is to explore the possible underlying factor structure of a set

of observed factors without imposing a preconceived structure on the outcome By performing EFA, the underlying factor structure will be identified

Acording to Urbano and Pere (2006, p.88), EFA composes of four main steps which are “(1) to estimate or extract the factors, (2) to decide how many factors to retain, (3)

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to rotate factors to an interpretable orientation and (4) to obtain individual factor scores”

In this research, we performed EFA using “principal axis factoring” with rotation

“promax” and stop point of extracting factor at factor having “eigenvalue” equals 1

4.3.2.1 Exploratory Factor Analysis for measurement scales of independent

factors (trust, price perception, appearance)

Result of EFA shown in Table 9 KMO = 618 (>0,5) and the total factors extracted are 3 factors All the measurement scales are accepted However, measurement scale

of Appr_1 was rejected due to low loading factor (<0,3)

See Appendix 3 for more information on EFA results