An investigation of customer value and patronage in retailing vending machine sector in vietnam

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGO TRONG TRUNG AN INVESTIGATION OF CUSTOMER VALUE AND PATRONAGE IN RETAILING VENDING MACHINE SECTOR IN VIETNAM MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGO TRONG TRUNG AN INVESTIGATION OF CUSTOMER VALUE AND PATRONAGE IN RETAILING VENDING MACHINE SECTOR IN VIETNAM ID: 22120143 MASTER OF BUSINESS (Honours) SUPERVISOR: LE NHAT HANH, PhD Ho Chi Minh City – Year 2014 ACKNOWLEDGEMENT I would like to thank my supervisor, Dr Hanh Nguyen for her encouragement and guidance throughout the process of conducting this thesis I would also like to thank other members of my advisor committee, Dr Tho Nguyen, Dr Nguyen, Dr Quan, Dr Phong, and Dr Thao for helping me to understand the process and theoretical foundations of the research Many others also deserve my gratitude Among them, Mr Doanh, Mr Tuan, Ms Kim Yen, Master Mai Thien Tam, Ms Nguyet Anh, Mr Huy, Master Nguyen Thi Nguyet and Master Nguyen Huy Khai, helped me to obtain final questionnaire being suitable in the context of Vietnam My colleagues, friends and all of respondents supported to conduct the questionnaire at the best reliability Finally, I would like to express my gratitude to my family for their love and support, and they are always there when I need them Without their emotional and financial support, this study would not be completed i ABSTRACT Although Vending machine was predicted would become one of the most important non-store marketing channels, many retailers using vending machine have a difficult time in developing business in Vietnam If vending machine-retailers want to attract more and more shoppers, they need to know what evaluative criteria consumers use when selecting a vending machine-retailer The past researches demonstrated that Customer value and Retail patronage could enhance retail performance This study investigated the relationship between Customer value and Retailing vending machine patronage, and examines the relationships of antecedents including Customization, Functionality and Perceived Risk with Customer Value By utilizing literature review, a research model was proposed to identify the relationships above Additionally, a convenient sample of 247 respondents in Ho Chi Minh City was surveyed to test the theoretical model Structure Equation Modeling (SEM) was used to analyzed the data The final result indicated that Customization and Functionality are positively related to Customer value, but perceived risk was not supported Customer value is positively related to retailing vending machine patronage ii TABLE OF CONTENTS ACKNOWLEDGEMENT i ABSTRACT ii TABLE OF CONTENTS iii LIST OF TABLES .v LIST OF FIGURES vi CHAPTER 1: INTRODUCTION 1.1 Research background 1.2 Research Problem 1.3 Research Objective 1.4 Significance of the Study 1.5 Research methodology and scope 1.6 The structure of the study CHAPTER 2: LITERATURE REVIEW AND HYPOTHESES 2.1 Vending machine 2.2 Customer value 2.3 Customization and Functionality 2.4 Perceived risk 2.5 Customer value and retail patronage 10 2.6 Research model 11 CHAPTER 3: METHODOLOGY 13 3.1 Research process 13 3.1.1 Qualitative research 13 3.1.2 Quantitative research 13 3.2 Research design 17 3.3 Measurements of constructs 18 3.4 Data analysis method 21 3.4.1 Descriptive Statistics 21 3.4.1.1 Test of Skewness 22 3.4.1.2 Test of Kurtosis 22 3.4.2 Confirmatory factors Analysis (CFA) 22 3.4.2.1 Reliability testing 22 3.4.2.2 Convergent validity 22 iii 3.4.2.3 Discriminant validity 23 3.4.3 Structure Equation Modeling (SEM) 23 3.4.4 Bootstrap 23 CHAPTER 4: DATA ANALYSIS AND RESULTS 25 4.1 Sample characteristic 25 4.2 Descriptive statistics 26 4.3 Confirmatory Factor Analysis (CFA) 28 4.4 Structural Equation Modeling (SEM) 38 4.5 Bootstrap analysis 40 4.6 Explanation for finding result of hypotheses 41 CHAPTER 5: CONCLUSION, IMPLICATIONS AND LIMITATION 46 5.1 Conclusion 46 5.2 Implications 47 5.3 Limitation 48 REFERENCES 50 APPENDIX 58 iv LIST OF TABLES Table 3.1: The result of collected data 15 Table 3.2: Measurement scales 19 Table 4.1: Sample Characteristic 26 Table 4.2: The result of Skewness and Kurtosis testing 27 Table 4.3: Correlations of components 32 Table 4.4: The result of correlation test 32 Table 4.5: Summary of measurement validation 34 Table 4.6: Correlation of Constructs 36 Table 4.7: Chi-square difference test 37 Table 4.8: Hypotheses Unstandardized Structural Paths 40 Table 4.9: Summary of hypotheses testing result 40 Table 4.10: The result of bootstrap analysis 41 v LIST OF FIGURES Figure 1: Conceptual Model 12 Figure 3: CFA of first-order constructs 29 Figure 4: CFA of second-order construct 31 Figure 5: CFA final 33 Figure 6: Customer value versus retailing vending machine patronage 37 Figure 7: SEM model 39 Figure 8: Structural results (Standardized estimates) 44 vi CHAPTER 1: INTRODUCTION 1.1 Research background More than three decades ago, Quelch and Takeuchi (1981) predicted that vending machine would become one of the most important non-store marketing channels Reality, their prediction has surely materialized Most of countries all over the world used vending machine as retail business There are more than seven millions vending machines in operation in U.S (Leaner 2002), Japan has become a vending-machine-country and Vietnam also has the first vending machines in 2000s Vending machine offers consumer a variety of products including food, snack, beverages, newspaper, cosmetic, CDs, cigarettes and so on Lee (2013) argued that as more people has joined workforce during the past several decades and their busy social life increasingly places more value on time and convenience, vending machine had become an indispensable part of many people daily’s lives In Vietnam, vending machine was deployed in early 2000s when the Vietnam’s Government issued the coins and experts believe that they will be potential market in the future (Kieu Giang, 2004) However, vending machine sector developed slowly during past time There were many investors failed in applying Vending machine for retail business The first main reason can explain for this is technology Most of vending machine at that time integrated used-coin technology, but Vietnam people not have habit keeping the coin available or not like to use coin in transaction This leads usedcoin vending machine to be inconvenient for customer to reach and purchase by vending machine; secondly, retailers using vending machines cannot find the suitable locations to install vending machine, especially two biggest cities in Vietnam: Ho Chi Minh City and Hanoi City for sidewalk and public areas are quite narrow As a result, vending machine cannot operate at the best; finally, most of the companies invested vending machine sector at that time, were small and not enough ability to invest new modern vending machines, while the companies having enough potential did not want to joint into this industry to push the vending machine sector in Vietnam (Hong Phuc, 2005) Fortunately, the business environment has changed in recent years leading to many good signs from vending machine sector First of all, technology is improved, current vending machine can accept both the cash and coin, even consumer can use credit card to purchase some product sold by vending machine This makes vending machine to be more convenient for customer On the other hand, some big brand names in Vietnam: Pepsi, Coca Cola, begin to use vending machine to sell their product at public areas such as hospital, park, railway station, bus station and airport All above things have prompted vending machine sector grow quicker and quicker Based on those, author will conduct a study to investigate about relevant knowledge of vending machine sector in Vietnam 1.2 Research Problem Given the ever increasing presence and the pervasiveness of vending machines in lives of consumers, it is surprising that there have been to date no studies in marketing and consumer behavior literature that shed light on consumers’ usage behavior with vending machines services in Vietnam Furthermore, most research has focused on purchase intention, which is customer acquisition oriented, little research has examined consumers’ patronage behavior, which is customer retention oriented However, customer retention is more important than customer acquisition, and building customer value is the key to retaining customers (Weinstein, 2002) On the other hand, Customer value has emerged as a crucial instrument for analyzing service quality, customer satisfaction, and consumer behavior (Yieh, Chen, and Wei, 2012) It is not only the antecedent of attitude, intention, and behavior (Gounaris et al 2007; Parasuraman and Grewal 2000; Yang and Peterson 2004) but also a critical factor influencing customer retention and purchase intention (Chang and Wildt, 1994) In addition, customer value is a strategic weapon in attracting and retaining customers and has become one of the most significant factors in the success in service providers (Gale 1994; Parasuraman 1997) Therefore, many previous studies examine relationship between Customer value and consumer’s purchasing intention or satisfaction, but little of studies research about influence of Customer value on Patronage behavior Phần I: Thông tin sơ Xin Anh/chị vui lịng cho biết số thơng tin cá nhân sau Giới tính Nam Nữ Vui lịng cho biết tuổi Anh/Chị 10-17 18-25 26-35 36-45 46-60 Trên 60 Trình độ Dưới phổ thơng trung học Phổ thơng trung học, trung cấp nghề Cử nhân cao đẳng, đại học Cao học Nghề nghiệp Anh/Chị Nhân viên Văn Phòng Học sinh/ Sinh Viên Công nhân Nhà Quản Lý/ Doanh Nhân Nghỉ hưu Khác Thu nhập bình quân tháng Anh/Chị Dưới triệu/tháng Từ triệu đến 10 triệu/tháng Từ 10 triệu đến 15 triệu/ tháng Từ 15 triệu/tháng trở lên Anh/chị sử dụng máy bán hàng tự động (máy bán nước Coca/Pepsi, máy massage tự động máy bán xu tự động phòng game) lần chưa? Chưa Đã sử dụng 59 Trong phần II Anh/Chị vui lòng cho biết mức độ đồng ý, hài lịng thích thú phát biểu theo thang điểm 5, từ thấp đến cao Rất khơng đồng ý/hài lịng/thích thú; Khơng đồng ý/hài lịng/thích thú; Khơng ý kiến/ bình thường; Đồng ý/hài lịng/thích thú; Rất đồng ý/hài lịng/thích thú STT PHẦN II: BẢNG CÂU HỎI KHẢO SÁT BẮT BUỘC CÂU HỎI Tơi nhận đầy đủ dịch vụ với máy bán hàng tự động thời gian ngắn Quá trình phục vụ máy bán hàng tự động rõ ràng Sử dụng máy bán hàng tự động địi hỏi cơng sức Tơi nhận đầy đủ dịch vụ với máy bán hàng tự động mà khơng có trở ngại Mọi tính dịch vụ máy bán hàng tự động không bị lỗi Máy bán hàng tự động hiểu nhu cầu cụ thể Máy bán hàng tự động hữu ích tơi Máy bán hàng tự động có tính tính cá nhân hóa cho tơi Dịch vụ máy bán hàng tự động ổn định 10 Dịch vụ máy bán hàng tự động làm tốt 11 Dịch vụ máy bán hàng tự động có tiêu chuẩn chất lượng chấp nhận 12 13 Dịch vụ máy bán hàng tự động thực cách ổn định Dịch vụ máy bán hàng tự động có chất lượng 60 14 Dịch vụ máy bán hàng tự động trì lâu dài 15 Dịch vụ máy bán hàng tự động định giá hợp lý 16 17 Dịch vụ máy bán hàng tự động mang đến nhiều lợi ích so với chi phí phải bỏ Dịch vụ máy bán hàng tự động có dịch vụ tốt tương ứng với giá 18 Dịch vụ máy bán hàng tự động tiết kiệm 19 20 21 Dịch vụ máy bán hàng tự động điều mà tơi thích thú sử dụng Dịch vụ máy bán hàng tự động làm muốn sử dụng Dịch vụ máy bán hàng tự động điều mà cảm thấy thư giản sử dụng 22 Sử dụng máy bán hàng tự động cho tơi hài lịng 23 Sử dụng máy bán hàng tự động giúp cảm thấy khỏe khoắn Trước sử dụng máy bán hàng tự động, tơi tìm 24 nhiều thơng tin công dụng mẫu mã khác máy bán hàng tự động Trước sử dụng máy bán hàng tự động, học 25 nhiều thông tin công dụng mẫu mã khác máy bán hàng tự động 26 Tơi mong muốn tìm thông tin lạ máy bán hàng tự động 27 Tơi thích tìm kiếm điều khác biệt Sử dụng máy bán hàng tự động cải thiện cách tơi 28 29 30 nhìn nhận Sử dụng máy bán hàng tự động giúp cảm thấy chấp nhận Sử dụng máy bán hàng tự động giúp tạo ấn tượng tốt với người khác 61 31 Sử dụng máy bán hàng tự động mang đến cho người sử dụng chấp nhận xã hội Tôi sử dụng máy bán hàng tự động thay cửa 32 hàng thông thường diều kiện môi trường tệ Tôi sử dụng máy bán hàng tự động thay cửa 33 hàng thơng thường có trợ cấp cho việc sử dụng máy bán hàng tự động Tôi sử dụng máy bán hàng tự động thay 34 cửa hàng thơng thường có giảm giá cho việc sử dụng máy bán hàng tự động chương trình khuyến Tơi sử dụng máy bán hàng tự động thay cửa 35 hàng thông thường máy bán hàng tự động ln có sẳn để phục vụ Tơi mua sản phẩm/dịch vụ với giá cao chút 36 tơi mua chúng thơng qua máy bán hàng tự động 37 Mua sắm/sử dụng dịch vụ thông qua máy bán hàng tự động trải nghiệm thú vị Tôi quan tâm máy bán hàng tự động 38 có nhiều sản phẩm/dịch vụ bán thơng qua Bời quen thuộc máy bán hàng tự động 39 nên tơi thích mua sắm/ sử dụng dịch vụ thơng qua máy bán hàng tự động kênh bán lẻ khác 40 41 Tôi mua sắm/sử dụng dịch vụ thông qua máy bán hàng tự động hàng hóa đa dạng Khi sử dụng máy bán hàng tự động thông tin cá nhân tơi bị người khác sử dụng Việc sử dụng máy bán hàng tự động ảnh hưởng quyền 42 riêng tư cá nhân tơi chi tiết cá nhân bị sử dụng phi pháp 43 44 Thỉnh thoảng, bị căng thẳng không cần thiết sử dụng máy bán hàng tự động Thỉnh thoảng, cảm thấy lo lắng sử dụng máy bán hàng tự động 45 Tôi quan tâm việc lãng phí nhiều thời gian sử dụng máy bán hàng tự động Tôi quan tâm việc phải tốn nhiều thời gian cho 46 thao tác liên quan đến việc sử dụng máy bán hàng tự động 62 47 Sử dụng máy bán hàng tự động làm xấu hình ảnh tơi mắt người khác Sử dụng máy bán hàng tự động khiến cho số người 48 có quan điểm mà tơi đánh giá cao nghĩ không hành động APPENDIX B Questionnaire I am Ngo Trong Trung, a student of master course of ISB - University of Economics Ho Chi Minh City I am undertaking a research to explore the factors affect customer value to retailing vending machine patronage I kindly request you to complete the following short questionnaire regarding your attitude about consumer ethnocentrism, country image and purchase intention on domestic products Your response is extremely important to my research; your participation in this survey is entirely voluntary Your personal information and your response will be kept confidentially and not be disclosed without your permission If you have any concerns or questions about this study, please feel free to contact me with email address: ngotrongtrung84@gmail.com or phone number: 0909 621 013 Description of vending machine Vending machine is a machine which dispenses items such as snacks, beverages, alcohol, cigarettes, consumer products, after the customer insert the currency or credit card into the machine such as Vending soft-drink machine, Vending massage chair, and Vending coin exchange machine 63 Part I: Individual information Gender Male Female Age 10-17 18-25 26-35 36-45 46-60 Over than 60 Education Under high school High school College/university Master Ocupation Office staff Student Woker Manager/ Businessmen Retirement Other Income Less than mil/month Form mil/month to less than 10 mil/Month From 10 mil/month to less than 15 mil/month More than 15mil/month Have you ever used vending machine? (.e.g Vending Soft-drink machine, vending massage chair or vending coin exchange machine) No Yes 64 In Part II, please let me know to what extent you disagree or agree with the statement Strongly disagree; Disagree; Neutral; Agree; Strongly agree No PART II: QUESTIONNAIRE Statements I can get my service done with the vending machine in a short time The service process of the vending machine is clear Using the vending machine requires little effort I can get my service done smoothly with the vending machine Each service item/function of the vending machine is error-free The vending machine understands my specific needs The vending machine has my best interests at heart The vending machine has features that are personalized for me The vending machine service has consistent quality 10 The vending machine service is well made 11 12 13 The vending machine service has an acceptable standard of quality The vending machine service would perform consistently The vending machine service has poor workmanship.(R) 14 The vending machine service would last a long time 15 The vending machine service is reasonably priced 16 The vending machine service offers value for money 17 18 The vending machine service is good product for the price The vending machine service would be economical 65 19 Vending machine service is one that I would enjoy 20 Vending machine service make me want to use it 21 22 Vending machine service is one that I would feel relaxed about using it Using Vending machine service would give me pleasure 23 Using vending machine would make me feel good Before using the vending machine, I would obtain 24 substantial information about the different makes and models of vending machine I would acquire a great deal of information about the 25 different makes and models before using vending machine 26 I am willing to seek out novel information 27 I like to search for the new and different 28 29 30 31 32 Vending machine service would improve the way I am perceived Using vending machine would help me to feel acceptable Vending machine service would help me make a good impression on other people Using Vending machine service would give its users the social approval I would use vending machine instead of conventional stores under worsening environmental conditions I would use vending machine instead of conventional 33 stores when there is a subsidy for using vending machine I would use vending machine instead of conventional 34 stores when there are discount rates for using vending 35 36 37 machine or promotional activity I would use vending machine instead of conventional stores when vending machine is available I will pay slightly more for products if I can buy them through vending machine (never/always) Shopping by vending machine is an enjoyable experience 66 38 I will increase my interest in vending machine when more goods/services are made available through them Because I am more familiar with vending machine, I 39 prefer shopping by vending machine than other retail channels I shop by vending machine even when the 40 selection/variety of goods is poor By using Vending Machine, it is highly likely that 41 my personal information will be used by other people 42 43 Using the vending machine endanger my privacy because of wrongful use of my personal details Sometimes, I experience unnecessary stress while using the vending machine 44 Sometime, when I am using machine I feel anxious 45 I am concerned about wasting too much time using the vending machine I am concerned about having to waste time on tasks 46 related 47 48 to using the vending machine Using vending machine can worsen the image other people have of me Using vending machine makes some people whose opinion I value think that I am not acting correctly 67 ... than seven millions vending machines in operation in U.S (Leaner 2002), Japan has become a vending- machine- country and Vietnam also has the first vending machines in 2000s Vending machine offers... kinds of vending machine which respondents can use in Ho Chi Minh are Vending massage chair, vending soft drink machine, and vending exchange coin machine Thus, only respondents had used one of. .. of vending machine on Customer Value The impact of Functionality of vending machine on Customer Value The impact of Perceived Risk of using vending machine on Customer Value The impact of Customer