Elements influencing on toyota automobile purchase decision of customers in ho chi minh city

RESEARCH PROJECT (BMBR5103) ELEMENTS INFLUENCING ON TOYOTA AUTOMOBILE PURCHASE DECISION OF CUSTOMERS IN HO CHI MINH CITY STUDENT ‘S FULL NAME : PHAM LY THIEN STUDENT ID : CGS00018497 INTAKE : MBAOUMK15A ADVISOR’S NAME & TITLE : A Prof PHAN DINH NGUYEN December 2015 ADVISOR’S ASSESSMENT Advisor’s signature ACKNOWLEDGEMENTS This research paper is made because of my passionate dedication to the continually growing Automobile industry in Vietnam in the year to come I would reserve a special thanks to Mr Aruth, who took me to the Automobile business industry in Vietnam 10 years ago and whom I lost contact My thankful words would fly to Assoc Pro Dr Nguyen Phan, who has instructed me during the course of this research I also express my thankfulness to Hutech and Malaysia Open University without whom my dream of getting an MBA would not have come true This research would not have been done without great sacrifices from my family members, who have been unconditionally motivating and supporting me during the last 15 months of the MBA program Besides, all the classmates are another stream of encouragement for me to get inspired of this program Pham Ly Thien December 2015 ABSTRACT The main goal of the study was to examine main elements influencing consumer purchasing decisions in Ho Chi Minh City‟s Automotive industry The study was instruted by the following specific goals: to determine the economic factors affecting consumer purchasing decisions in Ho Chi Minh city‟s automotive industry; to examine the psychological factors affecting consumer purchasing decisions in Ho Chi Minh city‟s automotive industry; to examine the social-cultural factors affecting consumer purchasing decisions in Ho Chi Minh City‟s industry, and; to analyze the demographic factors affecting consumer purchasing decisions in Ho Chi Minh city‟s automotive industry The study concludes that psychological factors, social-cultural factors, economic factors, as well as demographic factors affect consumer purchasing decisions in Automotive industry in Ho Chi Minh city It was important to understand the little things that consumers use as the basis for making a judgment of when it comes to purchasing decisions The study recommends the need for automobile companies to consider consumers‟ demographic characteristics such as age, gender, marital status, occupation, education and income when designing the products to offer into the Ho Chi Minh city market This is because demography factors are vital and measurable statistics of a population that helps to locate target market, they are easier to measure and are suitable for psychographic and socio-cultural studies Additionally demographic factors have a huge impact on the assessment of different features which are generally associated with consumer behaviour CONTENTS ADVISOR‟S ASSESSMENT ACKNOWLEDGEMENTS ABSTRACT LIST OF TABLE CHAPTER INTRODUCTION 1.1 BACKGROUND 1.2 PROBLEM STATEMENT 10 1.3 RESEARCH OBJECTIVES 12 1.4 RESEARCH QUESTIONS 13 1.5 SCOPE OF STUDY 13 1.6 DEFINITION OF TERM 14 1.7 RESEARCH STRUCTURE 15 1.8 CHAPTER OVERVIEW 15 CHAPTER LITERATURE REVIEW 17 2.1 INTRODUCTION 17 2.2 ECONOMIC FACTORS 17 2.2.1 Level of Income 17 2.2.2 Interest Rate 19 2.2.3 Fuel Prices 20 2.2.4 Price of Car 20 2.3 PSYCHOLOGICAL FACTORS 22 2.3.1 Perception 25 2.3.2 Learning 26 2.3.2 Related Utilities 26 2.4 SOCIAL – CUTURAL FACTORS 27 2.4.1 Religion 29 2.4.2 Family 29 2.5 DEMOGRAPHIC FACTORS 30 2.5.1 Gender Differences 31 2.5.2 Age Differences 32 2.5.3 Changing Life Events 33 2.6 PURCHASE DECISION 34 2.7 CONCEPTUAL FRAMEWORK 34 2.8 CHAPTER SUMMARY 35 CHAPTER RESEARCH METHODOLOGY 36 3.1 INTRODUCTION 36 3.2 REASEARCH DESIGN 36 3.3 POPULATION AND SAMPLING DESIGN 37 3.3.1 Population 37 3.3.2 Sampling Design 37 3.4 DATA COLLECTION METHODS 38 3.5 RESEARCH PROCEDURES 39 3.6 DATA ANALYSIS METHODS 39 3.7 CHAPTER SUMMARY 40 CHAPTER RESULTS AND FINDINGS 41 4.1 INTRODUCTION 41 4.2 BACKGROUND INFORMATION 41 4.3 ECONOMIC FACTORS AND PURCHASING DECISION 47 4.4 PSYCHOLOGICAL FACTORS AND PURCHASE DECISION 49 4.5 SOCIAL-CULTURAL FACTORS AND PURCHASE DECISION 51 4.6 DEMOGRAPHIC FACTORS AND PURCHASE DECISION 53 4.7 HYPOTHESES TESTING BY MULTIPLE REGRESSION 58 4.8 CHAPTER SUMMARY 58 CHAPTER DISCUSSION, CONCLUSION AND RECEMMENDATIONS 59 5.1 INTRODUCTION 59 5.2 SUMMARY 59 5.3 DISCUSSION 60 REFERENCES 70 Appendix 1: English questionnaire 73 Appendix 1: Vietnamese questionnaire 78 1.0 INTRODUCTION 1.1 BACKGROUND TO THE STUDY Consumer behavior is regarded to be that particular the action which an individual takes in the process of purchasing and using products and services This process also includes the mental as well as the social processes which come before these actions It means therefore that one of the biggest challenges facing businesses is the process of predicting and understanding consumer behavior At present, the competitive market forced producers to produce goods based on customer needs (Tafler, 2014) The study of consumer purchase behavior, which was initially known as consumer behavior, offers relevant information regarding consumers and their consumption patterns An organization can actually survive if it can be able to supply consumer needs and demands with a comprehensive understanding of them This means therefore that there is need to study consumer behavior In this regard, there is need to understand consumer behavior which is not so simple Customers likely not know their own deeper inner motivation or they are likely therefore to react to affecting factors in the last moment, and this can simply change their mind However, marketers need to consider their customers‟ requests, intakes and buying behaviors (Kotler, 2009) Knowledge of consumer behavior is therefore considered to be very essential if organizations seek to gain commercial success The relationship between consumer behavior as well as marketing strategy is very much emphasized since the success of companies‟ marketing strategies depends on how well managers‟ understand of consumer behaviour (Kotler, 2009) Consumer buyer behavior is regarded to be the multi-step decision-making process where people take part in it and it also include the actions consumers take to satisfy their needs and wants in the marketplace The study of customer behaviour is therefore mainly focused on consumer buying behaviour, in that the customer plays three essential roles: user, payer as well as buyer (Kotler, 2009) According to previous studies conducted on consumer behavior it has not been easy to predict what goes through the mind of the consumers during the purchase decision This is because it involves the psychological processes which consumers undergo in recognizing their needs, while seeking ways to solve these needs, making purchase decisions, interpreting information, making plans, and finally implementing these plans One of the most fundamental assumptions in the study of consumer behaviour is that indeed individuals often buy products on the basis of their perceived values as compared to their primary functions (Stávková, Stejskal & Toufarova, 2009) This however is not to say that that the main functions of the products are not essential However it simply means that the contemporary duty of a product is more when compared to its basic use-value In most cases, consumers not rate products in relations to their core attributes but, rather according to the so-called real product as well as the extended product, which simply represents a set of intangible factors, which confer a desired perceived advantage on the consumer and which includes; image consultancy, and after-sale service (Foret & Procházka, 2009) Consumer buying behavior is often unconsciously affected by some factors For instance social factors play an essential role when it comes to the decision of buying certain products, including the most sensitive products such as cars The important social factors are: reference groups, family, role and status There are four important psychological factors affecting the consumer buying behavior: perception, motivation, learning and beliefs and attitudes The economic factors that most commonly affect consumer behavior include occupation, economic situation and personality (Blythe, 2009) Successful businesses are well aware of how to leverage the different factors that influence consumer buying behavior in order to effectively market their products and as such maximize sales Studies have revealed that there are generally four main factors that play a role in the consumer's buying behavior The factors include cultural factors, social factors, personal factors and psychological factors (Blackwell et al., 2001) This study therefore sought to explore of the four main factors that influence consumer buying behavior of the automotive A study done by Havkinze, Roger & Kenth (2009) was able to establish that the consumer‟s disposable income is indeed very essential when it comes to determining what to buy and in what quantities, however this mostly depends on the income elasticity of a certain product In the event that the consumers disposable income increases and that the income elasticity of demand for that good is greater than one then the proportional rise in towards the brand, innovative of the car and brand, personal beliefs as well as knowledge sharing from friends and colleagues 5.4.4 Demographic Factors influencing Consumer Purchase Decision Finally the study concludes that there was a positive significant relationship between demographic factors and purchasing decision This findings imply that the consumer purchasing decision is influenced by demographic factors such as demographic factors such as personality, gender, Age, Changing life, level of education, lifestyle, lifecycle status and occupation 5.5 Recommendation 5.5.1 Recommendations for Improvement 5.5.1.1 Economic Factors influencing Consumer Purchase Decision The study recommends that firms dealing with motor vehicle need to consider the various economic factors that influence consumer decision making such as interest rates, income as well as rising fuel prices In this regard they need to design motor vehicle for different categories of customers in different income brackets in Ho Chi Minh city They should also come up with payment modes that are friendly to the consumer for instance payments through installments as well as car financing to clients Price segmentation would also be key in enhancing consumers attraction and retention 5.5.1.2 Psychological Factors influencing Consumer Purchase Decision Study acknowledges that each human being in the world sees his/her surroundings differently Several people have the same ideas about a specific event As such, automobile companies need to evaluate consumer their needs, values and expectations, when they are designing automobiles meant for the Ho Chi Minh city market This can be enhanced when the company achieves quality on a dimension that consumers 67 consider to be important There is a need to make sure that investments in quality occur in areas that will resonate with customers Finally it is it is important to understand the little things that consumers use as the basis for making a judgment of when it comes to purchasing decisions 5.5.1.3 Social-Cultural Factors influencing Consumer Purchase Decision The study has acknowledged that consumer decisions are likely to be influenced by a number of socio-cultural factors In this sense brands are also considered to be symbols used to convey meanings to consumers The study therefore recommends the need for automobile companies to consider social cultural factors when designing some of their products into the market This is especially so for consumers who have deep roots in their culture and will therefore go for nothing less than what conforms to their cultural practices 5.5.1.4 Demographic Factors influencing Consumer Purchase Decision The study recommends the need for automobile companies to consider consumers‟ demographic characteristics such as age, gender, marital status, occupation, education and income when designing the products to offer into the Ho Chi Minh city market This is because demography factors are vital and measurable statistics of a population that s helps to locate target market, they are easier to measure and are suitable for psychographic and socio- cultural studies Additionally demographic factors have a huge impact on the assessment of different features which are generally associated with consumer behaviour 5.5.2 Recommendations for Further Studies The study recommends for additional studies on this area of study since the motor vehicle industry is one of the fastest growing industries in Ho Chi Minh city Additionally it is important for other researchers to consider carrying out longitudinal studies in this particular area since the present research was merely cross-sectional Finally it will be interesting to examine how the various factors examined in this 68 particular study affect consumer purchasing decisions in other automobile brands such as Nissan, Mitsubishi, Mercedes Benz, Land Rovers, Volkswagen, Isuzu and many others 69 REFERENCES Aaker, D A (1991) Managing brand equity New York: Macmillan Aaker, J L (1999) The malleable self: The role of self-expression in persuasion Journal of Marketing Research, 36 (1), 45-57 Armstrong J, (1991) Prediction of Consumer Behavior by Experts and Novices.Journal of Consumer Research Inc pp 251–256 Arnould, E., Price, L &Zinkhan, G (2004), Consumers New York: McGraw-Hill Bannister, J.P & Saunders, J.A (1978) UK Consumer‟s Attitudes towards Imports: The Measurement of National Stereotype Image European Journal of Marketing, Vol.12, Pp 562-570 Batchelor, A (1998) Brands as financial assets In S Hart, J Murphy Brands: Thenew wealth creators London: Macmillan Press Bennett, P (1995) Dictionary of Marketing, American Marketing Association, Chicago, IL Berger I.E., Ratchford 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K L (1998) Strategic brand management: Building, measuring and managing brand equity London: Prentice Hall International Keller, K L (2003) Building, measuring, and managing brand equity New Jersey: Pearson Education 45 Khachaturian, J L &Morganosky, M A (1990) Quality perceptions by country of origin International Journal of Retail & Distribution Management, 18 (5), 21-30 71 Khosla, Swati (2010) Consumer psychology: The essence of Marketing International Journal of Educational Administration (2): 220-220 Retrieved 16/5/12 Rayport, J F &Jaworski, B J (2003) Introduction to e-commerce New York: McGrawHill 72 APPENDIX 1: QUESTIONAIRE Dear Sir/Madam, I‟m studying a research of Toyota car purchase decision for my MBA program You are invited to participate in a survey of determinants impact on Toyota car demand in Ho Chi Minh City (HCMC) that will help us better understand how people search actual information for Cars as well as influenced factors Your participation in this study is completely voluntary There are no foreseeable risks associated with this project Your survey responses will be strictly confidential and data from this research will be reported only in the aggregate Thank you very much for your time and support Please start with the survey now by ticking your selected numbers described in associated with each answer accordingly Section A: Background Information Kindly, fill all the questions either by ticking () in the boxes or writing in the spaces provided NAME (Optional) …………………………………………………… Gender? Male ( ) Female ( ) Age? (years) 20-25 years  26-30 years  31-35 years   Level of education? Primary Masters Secondary Doctorate Diploma Others Undergraduate Occupation? ……………………………………………………… For how long have you been using Toyota cars? Less than years years  6-10 years   3-5 More than 10 years 73  36 years and over   Section B: The economic factors affecting consumer purchasing decisions in Ho Chi Minh City’s motor vehicle industry Kindly tick as appropriate in the spaces provided the extend to which you think the following factors influence consumer choice The following economic factors influences my decision to purchase motor vehicles I always go for a renowned brand of car regardless of price I am influenced to buy a car based on the location and accessibility My level of income is a critical factor influencing my decision on the car to purchase Price is a determining factor on the choice of car I‟d buy The relation between income growth and quality of car is a fundamental issue in purchasing decision Strongly disagree Dis agree 5 5 One‟s level of income influences the willingness to pay marginally higher prices as a social responsibility towards the motor vehicle Maintenance costs influence my decision of the motor vehicle to select to purchase The resale value of a car is critical factor I‟d consider when purchasing a motor vehicle Payment options(such as hire purchase, lease) are a concern I‟d consider when purchasing a motor vehicle The ease of finding a mechanic to repair the specific car brand influences my motor vehicle purchase decision Low interest rates are critical in influencing my decision to purchase a motor vehicle Fuel prices influence my choice of motor vehicle 5 5 5 Neut Agree ral Strongly agree Please state any other economic factor that you think in your opinion influences behavior Section C: The psychological factors affecting consumer purchasing decisions in Ho Chi Minh City’s motor vehicle industry 74 Kindly tick as appropriate in the spaces provided the extent to which you think the following factors influence consumer choice Strongly Dis Neu Agree Strongly agree The following psychological factors influences disagree Agree tral my decision to purchase motor vehicles My perception about the car and brand influences my purchase decision of a motor vehicle Motivation from friends and family on a specific brand influences my purchase decision for the motor vehicle My attitude towards the brand of car affects my purchase decision for the motor vehicle My attitude towards the brand of the car affect my purchase decision for the motor vehicle Innovative of the car and brand is a concern I consider when purchasing a motor vehicle My personal beliefs are an important factor in the purchase decision of a motor vehicle Knowledge sharing from friends and colleagues influences my purchase decision of a motor vehicle There is a significant relationship between psychological factors and consumer choice of motor vehicle Please state any other psychological factor that you think in your opinion influences consumer behavior Section D: The social- cultural factors affecting consumer purchasing decisions in Ho Chi Minh City’s Motor Vehicle Industry Kindly tick as appropriate in the spaces provided the extent to which you think the following factors influence consumer choice Strongly The following social cultural factors disagree influences my decision to purchase motor vehicles Different cultures have different buying behavior decisions for motor vehicles Shared values with others influences my motor vehicle purchase decisions 75 Dis Neut Agree Agree ral Strongly agree 5 The social class that I belong to influences my motor vehicle purchase decisions My status in the society influences my motor vehicle purchase decisions Buzz marketing and social media influences the brand of motor vehicle that I would purchase Reference groups like motor vehicle forums that form attitudes and behavior like “top gear” influence the choice of motor vehicle to be purchased Membership groups such as “4X4 enthusiast groups:” influences my purchase decision for a motor vehicle Aspirational groups that we wish to belong inspire the choice of motor vehicle that I would purchase 5 5 5 My religion would influence the choice of motor vehicle that I would purchase The country of origin of the motor vehicle my motor vehicle purchase decisions 5 Please state any other psychological factor that you think in your opinion influences consumer behavior Section E: Demographic factors affecting consumer purchasing decisions in Ho Chi Minh City ‘s Motor Vehicel Industry Kindly tick as approproate in the spaces provided the extent to which you think the following factors influence consumer choice The following demographic factors influences my decision to purchase motor vehicles My personality would impact on my decision on which motor vehicle to purchase My gender would influence the choice of motor vehicle to purchase My Age would influence the choice of motor vehicle to purchase Changing life events would influence the choice of motor vehicle to purchase My level of education would influence the choice of motor vehicle to purchase 76 Strongly disagree Dis Agree Neu tral Agree Strongly agree 5 5 My lifestyle would influence the choice of motor vehicle to purchase Lifecycle status if the motor vehicle model and brand would influence my purchase decision My occupation would help me to make an appropriate choice of what motor vehicle I‟d purchase 5 Please state any other demographic factors that you think in your opinion influences consumer behavior 77 BẢNG CÂU HỎI Xin chào anh /chị, Hiện thực đề tài nghiên cứu nhằm phục vụ cho luận văn cao học Anh / chị mời tham dự khảo sát cung cấp thông tin cách khách quan nhu cầu chọn xe Toyota Tp HCM Từ thông tin phản hồi anh/chị giúp đánh giá yếu tố thực tiễn ảnh hưởng đến định quan tâm người dân mua xe Toyota Việc tham gia vào nghiên cứu anh/chị hồn tồn sở tự nguyện, khơng có rủi ro đến liên quan dự án Tôi cam đoan thông tin anh / chị cung cấp giữ kín sử dụng cho mục đích nghiên cứu khoa hoc Tơi xin chân thành cám ơn hợp tác nhiệt tình Anh/Chị! PHỤ LỤC 1: CÂU HỎI KHẢO SÁT Phần A: Thông tin cá nhân Tên …………………………………………………… Giới tính? Nam ( ) Nữ ( ) Độ tuổi? 20-25 Tuổi  26-30 Tuổi  31-35 Tuổi   Trình độ? Tiểu học Thạc sỹ Trung học Tiến sỹ Dưới Đại học Khác Đại học Nghề nghiệp? ……………………………………………………… Thời gian sử dụng xe Toyota bao lâu? 78 36 Tuổi 36 tuổi   Ít 03 năm  3-5 năm  6-10 năm  Trên 10 năm  Phần B: Những nhân tố kinh tế ảnh hưởng định mua xe HCM Vui long chọn bảng sau: Những nhân tố kinh tế định mua xe Toyota Tơi ln tìm kiếm thương hiệu xe tiếng không quan tâm đến giá thành Tôi bị ảnh hưởng mua xe dựa địa điểm thuận tiện Mức độ thu nhập ảnh hưởng đến định mua xe Tôi Giá xe nhân tố định việc mua xe Rất không đồng ý Không Trung đồng ý hòa Đồng ý Rất đồng ý 5 5 Quan hệ thu nhập tăng chất lượng xe vần đề dẫn đến việc mua xe Tôi Thu nhập tốt sẵn sàng mua xe giá cao đánh giá có trách nhiệm xã hội ảnh hưởng đến định mua xe Tơi Chi phí bảo dưỡng ảnh hưởng định mua xe Tôi Việc bán lại xe ảnh hưởng định mua xe Tôi Những giải pháp toán ảnh hưởng đến định mua xe Tôi 5 5 Dễ dàng việc tìm kiếm thợ máy thương hiệu đặc thù ảnh hưởng định mua xe Tôi Lãi suất thấp ảnh hưởng định mua xe Tôi Giá xăng dầu ảnh hưởng đến định mua xe Tôi Liệt kê yếu tố khác Phần C: Những yếu tố tâm lý ảnh hưởng định mua xe Hồ Chí Minh Vui Lịng chọn Những tác động tâm lý ảnh hưởng đến định mua xe Tôi 79 Rất không Không Trung Đồng ý Rất đồng ý đồng ý đồng ý hòa Nhận thức xe thương hiệu ảnh hưởng định mua xe Tôi Động lực từ bạn bè người thân ảnh hưởng đến định mua xe Tôi Thái độ thương hiệu xe ảnh hưởng đến định mua xe Tôi Sự cải tiến xe thương hiệu ảnh hưởng đến định mua xe Tin tưởng thân ảnh hưởng đến định mua xe Tôi Kiến thức chia sẻ từ bạn bè đồng nghiệp ảnh hưởng đến định mua xe Tôi 5 5 Có mối quan hệ mật thiết yếu tố tâm lý định mu axe Tôi Liệt kê yếu tố khác Phần D: Các yếu tố văn hóa- xã hội ảnh hưởng đến định mua xe khách hàng Hồ Chí Minh Vui Lịng chọn Rất khơng Không Trung Đồng ý Rất đồng ý Những nhân tố văn hóa xã hộ ảnh hưởng đến đồng ý đồng ý hịa định mua xe Khác biệt văn hóa có ảnh hưởng định mua xe Chia sẻ giá trị sống dẫn đến định mua xe Tầng lớp xã hội ảnh hưởng định mua xe Địa vị xã hội ảnh hưởng đến định mua xe Tôi Marketing va quảng cáo mạng xã hội ảnh hưởng định mua xe hiệu Tôi Thành viên nhiệt thành diễn đàn ô tô ảnh hưởng định mua xe Tôi 80 5 5 5 Thành viên hội 4x4 ảnh hưởng đến định mua xe Tôi Sự gia nhập nhóm ảnh hưởng đến định mua xe Tôi Tôn giáo ảnh hưởng đến định mu axe Tôi Xuất xứ ảnh hưởng đến định mua xe Tôi 5 Liệt kê yếu tố khác…………………………………………………………………… Phần E: Các yếu tố nhân học ảnh hưởng đến định mua xe khách hang Hồ Chí Vui lịng chọn Những yếu tố nhân học ảnh hưởng định mu axe Tôi Rất không Không Trung Đồng ý Rất đồng ý đồng ý đồng ý hịa Tính cách ảnh hưởng định mua xe Tôi Giới tính ảnh hưởng đến định mua xe Tơi vehicle tohưởng purchase Tuổi ảnh điến định mua xe Tôi 5 Những kiện thay đổi sống ảnh hưởng định mua xe Tơi Trình độ giáo dục làm ảnh hưởng định mua xe Tôi Lối sống ảnh hưởng định mua xe Tôi 5 Yếu tô thay đổi xe ảnh hướng định mua xe Tôi Nghề nghiệp giúp Tôi chọn xe Tôi cần phải mua 5 Liệt kê yếu tố khác 81 ... affecting consumer purchasing decisions in Ho Chi Minh city for Toyota Automobile 1.3.3 To examine the social-cultural factors affecting consumer purchasing decisions in Ho Chi Minh city for Toyota. .. affecting consumer purchasing decisions in Ho Chi Minh City? ??s Automotive industry then the psychological factors affecting consumer purchasing decisions in Ho Chi Minh city? ??s motor vehicle industry... affecting consumer purchasing decisions in Ho Chi Minh city ‟s Automotive industry and finally the demographic factors affecting consumer purchasing decisions in Ho Chi Minh City? ??s Automotive industry