Factors affecting customers purchasing decision for consumer goods brands in ho chi minh city in the integration competition

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY HCMC NGUYEN TRAN MAI VY FACTORS AFFECTING CUSTOMER’S PURCHASING DECISION FOR CONSUMER GOODS BRANDS IN HO CHI MINH CITY IN THE INTEGRATION COMPETITION BACHELOR THESIS MAJOR: BUSINESS ADMINISTRATION CODE: 52340101 INSTRUCTOR: M.S DANG TRUONG THANH NHAN Ho Chi Minh City, 2018 ABSTRACT The purpose of this research is to analyze the factors affecting customer‟s purchasing decision for consumer goods brands in Ho Chi Minh City in the integration competition, also help Ho Chi Minh City business owners orient and define the strategy and competitiveness of their brands and find solutions to promote the brand and develop the business This study collected data from the survey of the factors affecting customer‟s purchasing decision for consumer goods brands in Ho Chi Minh City in integration competition After the data being analyzed by concurrent data on SPSS software, the main objectives of this study are to:  First, identify the factors affecting customer‟s purchasing decision for consumer goods brands in HCMC in integration competition  Second, determine the priority order of the impact level these factors affecting customer‟s purchasing decision for consumer goods brands in HCMC in integration competition  Third, propose solutions to improve Ho Chi Minh City consumer goods brands in integration competition BACHELOR THESIS NGUYEN TRAN MAI VY COMMITMENT AND THANKS This thesis is the researcher's own work, the research result is honest, in which no previously published content or content of other researchers are presented, except for citations are fully cited in the thesis After a period of time studying, the researcher was helped by all the teachers and friends in support of implementing the knowledge more and more abundant With deepest gratitude, the researcher would like to sincerely thank all the teachers of the Business Administration Department who use their knowledge and enthusiasm to convey the precious knowledge to students during the study period at Banking University HCMC In particular, the researcher would like to give a special thank to Ph.D Dang Truong Thanh Nhan for spending time in guidance and support for the researcher‟s bachelor thesis Due to the researcher‟s limited knowledge and many more, the researcher will not be able to avoid the shortcomings Consequently, the researcher would like to receive valuable comments from teachers and classmates so that the knowledge in this field will be enhanced and improved BACHELOR THESIS NGUYEN TRAN MAI VY IMPLEMENTATION SCHEDULE Table Implementation schedule From Jan / 2018 To Dec / 2018 11 + + + + + + 10 12 Expect the content Develop thesis outline Collecting materials for basic definitions, literature review, and survey building Develop questionnaire surveys, complete the questionnaire and collect information from experts and people Processing and analyzing survey information Essay writing Ask for guidance from instructors, complete thesis Thesis defense BACHELOR THESIS NGUYEN TRAN MAI VY TABLE OF CONTENTS LIST OF ACRONYMS LIST OF TABLES AND FIGURES CHAPTER I INTRODUCTION 13 1.1 The urgency of the research: 13 1.2 Purpose and target of the research: 17 1.2.1 Purpose: 17 1.2.2 Target: 17 1.3 Object and scope of the research: 17 1.3.1 Object of study: 17 1.3.2 Scope of study: 17 CHAPTER II 2.1 LITERATURE REVIEW 18 Overview of the brand: 18 2.1.1 History of the brand: （Matt, 2014） 18 2.1.2 Definition of the brand: 19 2.1.3 Component of the brand: 19 2.1.4 Scale of the brand: 20 2.2 Overview of the consumer goods industry in Vietnam: 25 2.3 Overview of marketing: 38 2.4 Overview of brand marketing: 44 2.4.1 Definition of brand marketing: （Kotler, Armstrong, Trifts, Peggy, 2004) 44 2.4.2 2.5 Using marketing in establishing and developing business's brand: 45 Overview of customer: （Hitesh, 2018） 46 2.5.1 Starting point 48 2.5.2 Focus 48 2.5.3 Means 48 2.5.4 Ends 48 2.6 Consumer behavior: 49 2.7 The decision to buy from consumers: 51 BACHELOR THESIS NGUYEN TRAN MAI VY 2.7.1 The progress of decision to buy from consumers: 51 2.7.2 The factors affect the decision to buy from consumers: 53 2.8 2.7.2.1 Factors of cultural level: 54 2.7.2.2 Elements of social nature: 54 2.7.2.3 Factors of a personal nature: 55 2.7.2.4 Factors of psychological nature: 56 The views of researchers on perceived value: 57 2.9 Proposed model about factors affecting customer‟s purchasing decision to consumer goods brand in Ho Chi Minh City: 64 CHAPTER III RESEARCH METHODOLOGY 68 3.1 Overview: 68 3.2 Research Design: 69 3.3 Research Methodology: 70 3.3.1 Methodology of theoretical research: 70 3.3.2 Practical research method: 71 3.4 Determination of the sample selection method: 79 3.5 Build the scale: 80 3.5.1 Scale of Quality Value: 81 3.5.2 Scale of Price Value: 81 3.5.3 Scale of Social Value: 82 3.5.4 Scale of Emotional Value: 82 3.5.5 Scale of Personnel Value: 83 3.5.6 Scale of Distribution Density: 83 3.5.7 Scale of customer‟s purchasing decision to consumer goods brand: 84 3.6 Data processing methods: 85 3.6.1 Cronbach‟s Alpha analysing: 85 3.6.2 EFA Analysing: 86 3.6.3 Regression and ANOVA analysing: 87 CHAPTER IV THE RESEARCH RESULT 89 4.1 Samples descriptions: 89 4.2 Reliability coefficients Cronbach‟s Alpha: 92 BACHELOR THESIS NGUYEN TRAN MAI VY 4.2.1 Quality Value (QV): 92 4.2.2 Price Value (PCV): 93 4.2.3 Social Value (SV): 94 4.2.4 Emotional Value (EV): 95 4.2.5 Personnel Value (PV): 96 4.2.6 Distribution Density (DD): 97 4.2.7 Customer‟s purchasing decision to consumer goods brand: 98 4.3 EFA Analysing (Exploratory Factor Analysis): 99 4.3.1 EFA Analysis result of independent variables: 99 4.3.2 EFA analysis result of dependent variables: 102 4.4 Comparative Analysis: 104 4.5 Analyze Regression model: 106 4.6 Determining the difference by the characteristics of the research object: 109 4.6.1 Gender Differences: 109 4.6.2 Age Differences: 111 4.6.3 Educational Level Differences: 113 4.6.4 Income Differences: 115 4.6.5 Residence Differences: 117 CHAPTER V CONCLUSION 120 BIBLIOGRAPHY 127 REFERENCES 130 BACHELOR THESIS NGUYEN TRAN MAI VY LIST OF ACRONYMS ADB Asian Development Bank ANOVA Analysis of Variance CFA Confirmatory Factor Analysis CRPs Consumer Reach Points CSR Corporate Social Responsibility EFA Exploratory Factor Analysis Etc Et Cetera FMCG Fast Moving Consumer Goods GRI Global Reporting Initiative HCMC Ho Chi Minh City HDI Human Development Index IUCN International Union for Conservation of Nature and Natural Resources KPIs Key Performance Indicators SPSS Statistical Package for Social Sciences SWOT Strengths–Weaknesses–Opportunities–Threats USP Unique Selling Proposition WIPO World Intellectual Property Organization BACHELOR THESIS NGUYEN TRAN MAI VY LIST OF TABLES AND FIGURES  TABLES: Table 2.1.4a Scale of Lacoeuilhe (2000) Page 21 Table 2.1.4b Scale of Thomson and partner (2005) Page 23 Table 2.1.4c Research sample statistics Page 24 Table 2.3 Top 10 most-purchased manufacturers in main cities and rural areas in Vietnam Page 27 Table 2.3a Brand ranking by Health and Beauty Page 29 Table 2.3b Brand ranking by Family care Page 31 Table 2.3c Brand ranking by Foods Page 33 Table 2.3d Brand ranking by Beverages Page 35 Table 2.3e Brand ranking by Diary and Dairy products Page 37 Table 3.3.2b Relationship between the hypothesis and the customers‟ decision to choose consumer goods brands Page 78 Table 3.4 The list of urban and suburbs has been investigated Page 79 Table 3.5.1 Scale of Quality Value Page 81 Table 3.5.2 Scale of Price Value Page 81 Table 3.5.3 Scale of Social Value Page 82 Table 3.5.4 Scale of Emotional Value Page 82 Table 3.5.5 Scale of Personnel Value Page 83 BACHELOR THESIS NGUYEN TRAN MAI VY 10 Table 3.5.6 Scale of Distribution Density Page 83 Table 3.5.7 Scale of customer‟s purchasing decision to consumer goods brand Page 84 Table 4.2.1a Reliability Statistics of Quality Value (QV) Page 92 Table 4.2.1b Item-Total Statistics of Quality Value (QV) Page 92 Table 4.2.2a Reliability Statistics of Price Value (PCV) Page 93 Table 4.2.2b Item-Total Statistics of Price Value (PCV) Page 93 Table 4.2.3a Reliability Statistics of Social Value (SV) Page 94 Table 4.2.3b Item-Total Statistics of Social Value (SV) Page 94 Table 4.2.4a Reliability Statistics of Emotional Value (EV) Page 95 Table 4.2.4b Item-Total Statistics of Emotional Value (EV) Page 95 Table 4.2.5a Reliability Statistics of Personnel Value (PV) Page 96 Table 4.2.5b Item-Total Statistics of Personnel Value (PV) Page 96 Table 4.2.6a Reliability Statistics of Distribution Density (DD) Page 97 Table 4.2.6b Item-Total Statistics of Distribution Density (DD) Page 97 Table 4.2.7a Reliability Statistics of Customer‟s decision (CD) Page 98 Table 4.2.7b Item-Total Statistics of Customer‟s decision (CD) Page 98 Table 4.3.1a KMO and Bartlett‟s Test Page 99 Table 4.3.1b Total Variance Explained Page 100 Table 4.3.1c Rotated Component Matrix Page 101 Table 4.3.2a KMO and Bartlett‟s Test Page 102 Table 4.3.2b Total Variance Explained Page 102 BACHELOR THESIS NGUYEN TRAN MAI VY 120 CHAPTER V CONCLUSION Through this study, the researcher can identify the factors affecting customer‟s purchasing decision for consumer goods brands in Ho Chi Minh City in the integration competition through factor analysis Based on the results of the survey, concurrent data on SPSS software will be used to determine the determinants In addition, the researcher would like to bring a new and comprehensive view on marketing and especially how to establish the business‟s brand effectively Moreover, enhance the value of brand in the process of doing business and operating in the market Based on the results of the research, following conclusions are drawn: i Consumer goods brands should target consumers in the age group of 23 - 50 years old ii Consumers in different gender have different evaluations in quality value and social value iii Consumers in different age have different evaluations in quality value and price value iv Consumers in different educational level have different evaluations in quality value, price value, and social value v Consumers in different evaluations in quality value, price value, social value, emotional value, and personnel value vi Consumers in different educational level have different evaluations in quality value, emotional value, and distribution density BACHELOR THESIS NGUYEN TRAN MAI VY 121 vii All the six factors focused in the research: Quality, Price, Social, Emotion, Personnel, and Distribution have an influence on the customer‟s purchasing decisions in preferring a consumer goods brand The importance of these factors is in order of Quality (rank 1), Price (rank 2), Emotion (rank 3), Personnel (rank 4), Social (rank 5), and Distribution (rank 6) Enterprises that producing consumer goods should take this information in deciding future strategic moves Below are some recommendations of the author after factor analysis: i Consumer goods companies should focus on target customers more to gain advantage They must work to keep the price of their products reasonable and within the reach of their consumers To this, they must look into their design, materials of construction, cost of manpower, delivery cost, process cost etc Every effort should be made to keep the cost low but still maintain a very high quality of the product and customer service ii Consumer goods companies must pay attention on price of its product and should have a continuous quality improvement program They are going to face tough competition from the competitors unless they take timely action in all the issues that can become source of future threats iii They also should keep an eye on the personnel earned by themselves and should make all efforts to improve this factor all the time iv Marketing managers and R&D managers should determine how business models can be adjusted, how new products or services are adjusted, how to change or re-arrange supply chains or research to achieve both business goals and sustainable development goals v Entrepreneurs should establish long term, medium term, and short term goals, targets and implementation plans into production and business activities annually BACHELOR THESIS NGUYEN TRAN MAI VY 122 vi Always improve and update the management system and internal procedures towards the orientation of market trend vii Focus on brand building and brand strategy to enhance brand image in the eyes of consumers viii Update specialized knowledge, and enhance the ability of implementation, monitoring and compliance ix Recognize and evaluate appropriately the achievements and failures, strengths and weaknesses, challenges and opportunities to make improvements and remedies for the next plan BACHELOR THESIS NGUYEN TRAN MAI VY 123 Below are some useful advices to help entrepreneurs build and develop well their brand name:  Develop the brand from business base or from what entrepreneur already has : There is a saying that: “We were born original, don‟t die as a copy “ Building a brand name is the same Many consumers said that they prefer the brand which has its own identity than the others It can be seen that, business need to focus on how to make the brand‟s identity stand out by marketing rather than the mix That will lead to a stable foundation in both revenue increase and brand development  Determine the main purpose and long – term goals of business when establishing and developing the brand: （Allen, 2018） The most important thing in building a brand strategy is that it must come from the business‟s goals in both immediate and long – term Especially in doing marketing because when entrepreneurs make wrong decisions from not having a right determination, they will have no choice in restoring the brand image in customers‟ mind A brand strategy needs to be associated with product strategy, investment strategy, and financial plans of business Consequently, entrepreneurs must to decide wisely and lucidly They also need to have a good vision to forecast what will happen to their businesses in the future, be prepared for it, and make a right choice BACHELOR THESIS NGUYEN TRAN MAI VY 124  Expanding the brand by showing the public how much benefits your business can bring to society: （Jan-Emile, 2017） Doing society activities such as: environmental activities, charitable activities, voluntary activities for children, disabled, or poor people and so on will bring to your business good reputation and chance to be known by customers and the public In addition, the brand will be more sympathetic and be cared by customers That also means the business‟s brand name will be expanded too “Give away is to receive” should become the motto that every business needs to remember and try to spread this message by marketing methods  Building the brand from content related to community: （Sujan, 2017） Content is an important factor that contributes to make a difference for business against other competitors It not only needs to express the brand‟s message exactly, but also relate to community Because a huge amount of consumers will make a community of users and that community will attract the awareness of the public towards the brand and make it easier to identify among thousands of other brands Correspondingly, entrepreneurs need to be really careful with the marketing content they want to show to community unless they don‟t want to see their business collapse  Manifest business’s responsibility to consumers: Manifesting that business is responsible to consumers‟ interests and showing business‟s sustainable commitment towards consumers will make them believe and have faith in the products and the brand message It absolutely receives high evaluation from the consumer community Positive feedbacks of community also make the brand develop and expand With this method, entrepreneurs must to pay attention to factual marketing strategies and try to satisfy customers‟ desire BACHELOR THESIS NGUYEN TRAN MAI VY 125 These above tips somewhat will help entrepreneurs navigate the way in building and developing the business‟s brand name However, the most important thing to make a successful brand depend on their decisions Through broadcast and communication activities and marketing strategy, the brand image will be formed and be developed by recognition of target customers and the public In spite of that, business also needs to pay attention to the brand‟s first impression because it is said that: “You never had a second chance to make the first impression” If you not well at the first time, it is possibly hard to improve or renew your brand image in customers‟ eyes without any previous antipathy For this reason, business should only marketing or participate in PR activities when having overall and thorough plans Businesses also have a helpful tool, which is SWOT matrix, the popular method which is used by many famous successful businesses SWOT is easy to implement in different stages and suitable with any business model Accurately analyzing the elements in SWOT will bring many successes to businesses beyond expectation Entrepreneurs should use this way to analyze both advantages and difficulties of their business to find out the most suitable and efficient direction to lead business to success In conclusion, establishing a brand is a long and enduring process It requires a specific and logical strategy Besides, entrepreneurs should prepare some plans for each situation that maybe occurred in the future by using their creativity, keen intelligence, audacity, and don‟t forget to use marketing activities carefully BACHELOR THESIS NGUYEN TRAN MAI VY 126 Over the time studied at Banking University HCMC, major in Business Administration Department; thanks to the generous help of the principal, teachers, and classmates; the researcher can complete the Bachelor thesis The researcher 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BACHELOR THESIS NGUYEN TRAN MAI VY ... factors affecting customer‟s purchasing decision for consumer goods brands in Ho Chi Minh City in the integration competition - Propose solutions to improve consumer goods brands in Ho Chi Minh City. .. Identify the factors affecting customer‟s purchasing decision for consumer goods brands in Ho Chi Minh City in the integration competition - Determine the priority order of the impact level these factors. .. That‟s the reason why the researcher choose the topic: ? ?Factors affecting customer‟s purchasing decision for consumer goods brands in Ho Chi Minh City in the integration competition? ?? to investigate