Tài liệu Factors influencing customers' behavior of butter oil substitute (bos) in ho chi minh city master project in business and marketing management

ii ACKNOWNLEDGEMENT I am grateful to Dr. Ha Nam Khanh Giao for having read several chapters in my thesis and giving me invaluable comments and suggestions. Besides, without his intellectual support and his continuous guidance, full of patience and enthusiasm, my thesis would not have been materialized. I also wish to thank my study group in MBMM4 class, who gave me endless experienced and mental support. Finally, my thanks go to the Professors of Solvay Business School for wonderful program and intellectual support during my MBA program. Ho Chi Minh City, Dec 14th, 2010 ---------------------------------------Signature of the student Tran Anh Tuan Master of Marketing & Business Management iii TUTOR’S COMMENTS The thesis on the topic customer behavior of Butter oil substitute in HCM is high practical significance. Research objectives are properly identified. Student has used the appropriate methodology. Results obtained with the new creation with scientific content as well. In particular, the author highlights the factors that influence customer behavior in coffee industry. The results and conclusions of the thesis with applicable recommendations are useful information for the organizational who want to enter the specialty fats business in Viet Nam. However, the project also has certain limitations, such as only on HCM scale, small samples size … Student tries his best to conduct the thesis and has a lot of efforts to gather information as well as to conduct a research to understand the purchase decision of customers in coffee roasting industry. The thesis meets requirements of MBA thesis. I suggest the committee should allow the author to present it to your kind perusal and consideration. Ho Chi Minh City, Dec 14th, 2010 Dr. Ha Nam Khanh Giao iv CONTENT ASSURANCE .................................................................................................................... i ACKNOWNLEDGEMENT .............................................................................................. ii TUTOR’S COMMENTS .................................................................................................. iii CONTENT ....................................................................................................................... iv LIST OF FIGURES .......................................................................................................... vi LIST OF TABLES .......................................................................................................... vii 1. EXECUTIVE SUMMARY ....................................................................................... 1 2. CHAPTER 1: INTRODUCTION .............................................................................. 2 2.1. Background introduction ..................................................................................... 2 2.2. Problem statement ............................................................................................... 2 2.3. Specialty Fats market .......................................................................................... 3 2.4. Research objectives ............................................................................................. 5 2.5. Research method ................................................................................................. 5 2.6. Scope of the project ............................................................................................. 5 2.7. Research structure ............................................................................................... 6 2.8. Framework of Research ....................................................................................... 6 3. CHAPTER 2: LITERATURE REVIEW ................................................................... 7 3.1. Chapter overview ................................................................................................ 7 3.2. Industrial Buying Behavior.................................................................................. 7 3.3. Buying Process.................................................................................................... 8 3.4. Factors Affecting Buying Process & Buying Center ............................................ 9 3.5. The buying Center ............................................................................................. 10 3.6. Choice Criteria .................................................................................................. 10 3.7. Long-term relationships in industrial markets .................................................... 12 3.8. Scale using in theoretical framework ................................................................. 14 3.9. Research model ................................................................................................. 15 4. CHAPTER 3: RESEARCH DESIGN ...................................................................... 16 4.1. Chapter Overview ............................................................................................. 16 4.2. Qualitative research ........................................................................................... 16 4.2.1. Sampling .................................................................................................... 16 4.2.2. Data collection ........................................................................................... 17 4.2.3. Data analysis .............................................................................................. 17 4.2.4. Interview results ......................................................................................... 17 4.3. Quantitative research ......................................................................................... 18 4.3.1. Questionnaire design .................................................................................. 18 4.3.2. Survey process ........................................................................................... 18 4.4. Data Analysis .................................................................................................... 19 5. CHAPTER 4: DATA ANALYSIS .......................................................................... 21 5.1. Chapter Overview ............................................................................................. 21 v 5.2. Frequency analysis ............................................................................................ 21 5.3. Descriptive analysis........................................................................................... 23 5.4. Reliability analysis ............................................................................................ 24 5.5. Factor Analysis ................................................................................................. 25 5.6. Multiple regression ............................................................................................ 27 6. CHAPTER 5: FINDINGS, RECOMMENDATIONS AND CONCLUSIONS ......... 30 6.1. Findings ............................................................................................................ 30 6.2. Recommendations ............................................................................................. 31 6.3. Conclusions....................................................................................................... 34 6.4. Limitations of the study and future research ...................................................... 35 REFERENCES................................................................................................................ 37 APPENDIX 1 - Survey questionnaire .............................................................................. 39 APPENDIX 2 – Descriptive Analysis .............................................................................. 43 APPENDIX 3 – Reliability Analysis ............................................................................... 44 APPENDIX 4 – Factor Analysis ...................................................................................... 46 APPENDIX 5 – Regression Analysis .............................................................................. 48 vi LIST OF FIGURES Figure 2.1: BOS and its application ................................................................................... 2 Figure 2.2: Specialty fats market ....................................................................................... 3 Figure 2.3: Calofic sales .................................................................................................... 4 Figure 2.4: Imported products............................................................................................ 4 Figure 3.1: Areas of industrial buying behavior. Adapted from Baptista and Forsberg (1997), p. 22 ...................................................................................................................... 8 Figure 3.2: The conceptual model of selection BOS supplier ........................................... 15 Figure 5.1: Position of respondents .................................................................................. 21 Figure 5.2: BOS volume per month ................................................................................. 22 Figure 5.3: Experience of respondents with BOS in coffee roasting ................................. 22 vii LIST OF TABLES Table 3.1: The importance of different classical decision criteria. .................................... 11 Table 3.2: List of common choice criteria in prior studies ................................................ 12 Table 3.3: Scale using for independence variable ............................................................. 14 Table 5.1: Descriptive analysis of factors influencing customer behavior......................... 24 Table 5.2: Reliability statistic of five independence factors and one dependence factor.... 24 Table 5.3: Factor analysis with Promax method ............................................................... 26 Table 5.4: The list of new factors..................................................................................... 26 Table 5.5: Anova test....................................................................................................... 27 Table 5.6: Liner analysis ................................................................................................. 28 Table 5.7: Model Summary ............................................................................................. 29 1 Solvay Burussels School – MBA Thesis Tutor: Dr. Ha Nam Khanh Giao 1. EXECUTIVE SUMMARY The study was aimed at determining the impacts of factors that influence the customer behavior of Butter Oil Substitute (BOS) in coffee roasting industry. The study was carried out in Ho Chi Minh City on 88 customers using face to face interview and structured questionnaire as the instruments for data collection. Questions were designed to find out how consumers behave in relation to BOS for coffee roasting. The study showed that the purchase of BOS in coffee roasting industry is influenced mostly by the customer’s price consciousness, relationship between buyer and seller, and customer service. Implications of the study used as references for the planning of marketing strategies and as the basis for future researches in the customer behavior with regard to bakery customers (another application of BOS) and specialty fats in general. 2 Solvay Burussels School – MBA Thesis Tutor: Dr. Ha Nam Khanh Giao 2. CHAPTER 1: INTRODUCTION 2.1. Background introduction Vietnamese coffee is roasted differently from coffee in other regions of the world, a unique process, involving butter oil and techniques that bring out the highest development of flavor without over-roasting or burning the coffee. Coffee beans are generally roasted in what is referred to as butter oil substitute (BOS). Butter oil substitute is a replacement for butter oil. BOS is processed from vegetable oil instead of milk therefore it has economic. BOS is widely used in the coffee roasting industry to replace the expensive dairy-based butter oil. The functionality of BOS is similar to that of butter, which is to smoothly, fatty beans. The unique characteristics of the BOS product are its strong butter flavor and a deep yellow color. BOS has being hot in recent years in Vietnam due to low price & convenience for coffee roasting industry. Figure 2.1: BOS and its application There are about 300 coffee roasters in Vietnam. All most all of coffee roasters are using BOS to add in roasting process. Dosage is about 3% - 5%. According to the association’s date, BOS’s volume from import statistic estimates about 7,000mt per year, almost from Malaysia, Indonesia. 2.2. Problem statement Wilmar International Limited is Asia’s leading agribusiness group, and their operations are located in more than 20 countries. Wilmar’s business activities include oil palm cultivation, oilseeds crushing, edible oils refining, consumer pack edible oils processing, 3 Solvay Burussels School – MBA Thesis Tutor: Dr. Ha Nam Khanh Giao specialty fats, oleo chemicals, biodiesel manufacturing, and grains processing. In Viet Nam, Cai Lan Oil & Fats Industries (Calofic) is a market leader in cooking oils industry of Viet Nam, through famous cooking oils brands such as Neptune, Simply, Meizan, Cai Lan, Kiddy and Olivera. Besides, with support from Mother Company, they plan to expand business activities in specialty fats segment. Specialty fats include BOS (butter oil substitute), shortening, Margarine, and Hydrogenated oil. BOS extensively used for top grade cake, cookie making and coffee roasting. In order to exploit the existing distribution network, it is necessary for Calofic to study the factors influencing the customer behaviors of BOS, especially for coffee roasting in Ho Chi Minh City. 2.3. Specialty Fats market The sales volume for the specialty fats segment in Viet Nam has reached $49 million for a volume of 35,000Mt in 2010. Calofic’s volume has shown a steady growth since 2008: an increase of 10.5% (Figure 3), and 5% in 2010. Imported companies are the current market leader with 47% of the market shares in 2010. Calofic is second with 38%, the others belong to local manufactures. Figure 2.3: Specialty fats market 4 Solvay Burussels School – MBA Thesis Tutor: Dr. Ha Nam Khanh Giao Figure 2.3: Calofic sales The imported volume was estimated to account for 47% of the specialty fats market. The table below determines the attractiveness of a market, both now and in the future. 5,901 5,358 5,355 6,000 5,000 4,925 4,560 2,041 3,546 4,000 3,000 2,000 1,000 1,540 1,265 866 532 433 440 830 719 2008 575 2010 367 227 2009 2008 - Figure 2.3 Imported products 2009 2010 5 Solvay Burussels School – MBA Thesis Tutor: Dr. Ha Nam Khanh Giao According to imported statistic, BOS is a fast growing market with an annual growth of approximately 15%. The BOS market in Vietnam is highly competitive and fragmented due to the presence of many trading companies, exclusively distribution of multinational producers. There is no dominating company in the market. Customers have many choices among imported products. In this situation, Calofic have been actively engaged in BOS segment for coffee roasting industry in order to catch the growing demand, and also to increase the sales in other markets where product offerings are quickly maturing. 2.4. Research objectives  Measure the factors influencing the customer behaviors of BOS for coffee roasting industry in Ho Chi Minh City.  Provide recommendations for management to develop marketing strategy. 2.5. Research method  Secondary research: study the customer behavior theory and model to define the factors influencing the customer behaviors.  Primary research: conduct quantitative research to measure the relationship between these factors and study the finding to infer the recommendations. 2.6. Scope of the project This study focuses on coffee roasting customers in Ho Chi Minh City, who buy BOS for coffee roasting process. BOS application in bakery and confectionery are not covered by this research. Customers from other provinces are not chosen to be the subjects of this study because of limit of time. 6 Solvay Burussels School – MBA Thesis Tutor: Dr. Ha Nam Khanh Giao 2.7. Research structure The research paper is arranged into five chapters. Chapter 1 introduces the research background, objectives and rationale as well as the scope of the study. Literature review is presented in chapter 2. Chapter 3 describes the methodology applied in the study. Data analysis is presented in chapter 4. Chapter 5 summarizes the research results, provides recommendations to company and future research. 2.8. Framework of Research This thesis will be followed below stages: Objectives of the Research Literature review Qualitative research Theoretical framework Research design Data analysis Findings, Recommendations and Conclusions Figure 2.5: Research framework 7 Solvay Burussels School – MBA Thesis Tutor: Dr. Ha Nam Khanh Giao 3. CHAPTER 2: LITERATURE REVIEW 3.1. Chapter overview The previous chapter has briefly discussed the general research background, the overview of Vietnam specialty fats market and the key research objectives. This chapter contains an overview of literature on industrial buying behavior. The theories regarding the buying process, buying center, and affecting factors are all divided and presented in smaller parts. Furthermore the concept of decision making units within industries will be discussed and is followed by a brief discussion regarding choice criteria in industrial buying. 3.2. Industrial Buying Behavior Buying behavior in this study will focus on the industrial buying behavior (hereafter IBB). IBB is a complex process over time that involves interaction between several persons, both within and outside an organization (Webster & Wind, 1996). Many authors have researched this issue and there is a general agreement that the major components of industrial buying behavior are: the buying process; the buying center; and factors affecting the buying process and the buying center (Bapista, 2001). Wind and Thomas (1980) have suggested that industrial buying behavior can be divided into three different areas: buying process, buying center, and affecting factors. Each of these areas consists of several parts, which can be seen in figure 5. 8 Solvay Burussels School – MBA Thesis Buying process Identification of Needs Identification of Alternatives Tutor: Dr. Ha Nam Khanh Giao Buying center Roles in the BC Factors affect BP & BC Environmental Inter-organizational Influence in the BC Organizational Interpersonal Identification of Alternatives Individual Buying situation Set Purchase and Usage Criteria Evaluate Alternative Buying Purchase Decisions Post purchase evaluation Figure 3.2: Areas of industrial buying behavior. Adapted from Baptista and Forsberg (1997), p. 22 3.3. Buying Process Wind and Thomas (1980, p. 242) have described the industrial buying process in the following way: “From the time at which a need arises for a product or service, to the purchase decision and its subsequent evaluation, a complex myriad of activities can take place”. The elements in the buying process are, as mentioned in figure 3.1, overall buying process, identification of needs, identification of alternatives, set purchase and usage criteria, evaluate alternative buying actions, purchase decisions, and post-purchase evaluation. 9 Solvay Burussels School – MBA Thesis Tutor: Dr. Ha Nam Khanh Giao Overall Buying Process The goal with this model is to provide a useful technique of analysis for researchers interested in the theory of decision making as well as for business executives who may wish to review the decision making procedure of their own companies. Identification of Needs The identification of needs is the initiator of the buying process, and can be originated from various sources, within or external to the buying organization (Baptista & Forsberg, 1997). Identification of Alternatives This particular aspect concerns the quotation selection process or rather the identification of alternative suppliers that are selected to submit their bidding, or alternative internal solutions. It also concerns the determination of attribute importance, which influences this process. All these factors combined affect the buying decision. Set Purchase and Usage Criteria Once a set of potential suppliers is selected and the various offers/biddings are presented this phase takes place. “Set purchase and usage criteria” focuses mainly on the assessment of the relative importance of different purchase criteria (Baptista & Forsberg, 1997) 3.4. Factors Affecting Buying Process & Buying Center The major determinants of industrial buying behavior can be divided into four groups of factors. The groups of factors mentioned by the authors are: • Environmental factors (environmental determinants of buying behavior which include physical, technological, economical, political, legal, and cultural influences) • Organizational factors (organizational determinants of buying behavior that include technology, structure, tasks, and people) • Interpersonal factors (interpersonal relationships among the members in the buying center, that is, interpersonal determinants of buying behavior that include different roles played by the participants, how they influence each other, and their relationships) • Individual factors (individual characteristics of the member, including motivation, cognitive structure, personality, learning processes, and perceived roles. 10 Solvay Burussels School – MBA Thesis 3.5. Tutor: Dr. Ha Nam Khanh Giao The buying Center The buying situation has long been recognized as vital in IBB (Webster and Wind, 1972a), they defined the buying center as "The individuals who are related directly to the purchasing process, whether users, buying influencers, decision makers, or actual purchasers”. Webster and Wind (1972a) came to the conclusion that only a subset of the organizational actors is involved in a buying situation. Further, they proposed five roles performed by buying center members:  Users are those in the organization who use the purchased product.  Buyers are those with formal responsibility and authority for contracting with suppliers.  Influencers symbolize those who influence the decision process by providing information and criteria for evaluating alternative buying actions.  Deciders refer to those with authority who choose among alternative buying actions  Gatekeepers designate those who control the flow of information into buying center. The members in the buying center interact, but they are likely to have different interests and perceptions of reality and therefore conflicts might exist. Individuals have different personalities, experience of their role, motivation, cognition of the problem, and expectations. The individuals’ predispositions, preferences, and methods of making decisions will affect the final outcome. 3.6. Choice Criteria In order to make the best choice and succeed in business, organizations should base their choice of supplier upon critical evaluation criteria. Four classical criteria are quality, delivery, price and service, seemingly the importance between these have changed during the years (table 3.6.1) (Lehmann and O’Shaughnessy, 1974; Matthyssens & Faes1985). 11 Solvay Burussels School – MBA Thesis Study Tutor: Dr. Ha Nam Khanh Giao Rank order of decision criteria 1 2 3 4 Lehman & O’Shaughnessy (1974) Delivery Price Quality Service Evans (1981) Delivery Price Quality Service Lehman & O’Shaughnessy (1982) Quality Price Service Delivery Wilson (1994) Quality Service Price Delivery Table 3.6.1: The importance of different classical decision criteria. Lehman & O’Shaughnessy (1974) examined in their study the importance of different choice criteria (attributes). Their study was conducted on the base of 17 attributes (included in table 3.6.2) that are a breakdown of the four classical choice criteria, and thus somewhat interrelated. The authors found that the relevance of the attributes is mainly dependent on product type, the buying situation at hand and the perception of the buyers. These findings were also supported by prior work from Kelly & Coaker (1976) where five of seven investigated choice criteria differed depending on organization as well as Dempsey’s (1978) study of the importance of different attributes in industrial vendor selection (21 attributes where examined and are included in table 3.6.2). Some researchers have found that generally the purely economical factors (including delivery, capability, quality, price, repair service, technical capability and past performance) were the most significant factors (Dempsey, 1978; Kelly & Coaker, 1976; Lehman and O’Shaughnessy, 1974). 12 Solvay Burussels School – MBA Thesis Tutor: Dr. Ha Nam Khanh Giao • Adjustment to company’s needs • Production facilities • Aid and advice • Packaging capability • Attitude toward buyer • Data on reliability of product • Performance history • Technical specifications • Confidence in the salesman • Ease of operation or use • Convenience of placing order • Quality • Control systems • Ability to fill emergency orders • Order cycle time • Geographical location • Reliability of delivery date promised • Delivery capability • Suppliers accuracy in billing • Price • Suppliers accuracy in order handling • Financial position • Financing terms Table 3.6.2: List of common choice criteria in prior studies Factors such as quality, delivery, price and service are often seen as significant buying criteria when choosing suppliers. Whether these are controllable or uncontrollable depends on the situation at hand. The emphasis of these factors changes depending on the buying organization, specific buying situation and the individuals involved in the buying decision (Webster, 1965). Deng and Wortzel (1995) conducted a study of the supplier selection criteria used by US importers in three merchandise categories. In all categories, the most important criteria were price and product quality, followed by on time delivery. The geographical location of the seller and the brand name was of little importance in the supplier selection decision. 3.7. Long-term relationships in industrial markets There are fewer industrial buyers than consumer market customers, but the size of individual orders can be much larger in industrial markets. For this reason individual industrial market customers can be more important to marketers than individual consumer market customers (these have little or no power of leverage over marketers). 13 Solvay Burussels School – MBA Thesis Tutor: Dr. Ha Nam Khanh Giao The importance of industrial customers can mean that they are able to negotiate on price, terms and specifications. (The length of the negotiating period may be longer in industrial markets.) The above two factors mean that it is both important and possible for sellers to form close, long term relationships with buyers. There are other reasons too for the importance of long term relationships between customers and suppliers. This literature review suggests that five variables constitute the main explicative factors of regular and stable industrial buying behaviors. First, it is generally admitted that trust, commitment to the exchange relationship and satisfactory performance, are the important characteristics of a good buyer - seller relationship. Parallel to these variables, the effect of cooperation and non shared dependence (i.e. unilateral dependence of a customer to his supplier) on the length of the relationship have been, too, extensively studied in the literature (Han, et al 1993). Satisfaction appears in the vast majority of the studies on regular and stable buying behavior. It is, very often, considered as the determinant variable of influence on the willingness to continue the relationship (Anderson, et al, 1990). Although some recent studies underline that being satisfied is not enough for a customer to develop regular and stable buying behavior (Henning-Thurau and Klee, 1997, Reicheld, 1996), satisfaction can be considered as a necessary but not sufficient condition for the development of regular and stable buying behavior. Many researches also show that trust is determining in the continuity of industrial relationships. The customer feeling confident won’t have any real reason to switch from his supplier and, in this stable relationship; he will easily become a regular consumer. More, as the length of the relationship increases, the feeling of confidence grows (Anderson and Weitz, 1992). Trust seems, then, to exist for all the long-term relationship. The situation is quite different for commitment. As a desire to develop and maintain the relationship, commitment is a determinant of customer’s behavior only for loyal customers. the concept can be defined as the willingness of the customer to develop and maintain his relationship with a particular supplier (Anderson and Weitz, 1992) 14 Solvay Burussels School – MBA Thesis Tutor: Dr. Ha Nam Khanh Giao In conclusion, when the observed behavior is linked to positive attitudes (satisfaction, trust, commitment), and only in that case, it reflects customer loyalty (Jarvis, Wilcox 1977). 3.8. Scale using in theoretical framework For this study, scale includes items of independence variable and items of dependence variable. The table below explains the factors using in this study and their components: Independence Components variable Trust Relationship Pricing Customer service Channeling Quality of product Explain Satisfaction Promotion Rebate low initial price Debt term Customers’ perception of trust of seller to customers’ choices Customers’ perception of commitment of seller to customers’ choices How satisfaction performance influence customer buying behavior Customers’ buying patterns based one promotion Customers’ buying patterns based one rebate Customers’ buying patterns based one initial low price Influence of debt term to customers’ choices Solve complaint Ability to solve customer's complaint quickly. Commitment Good Attitude Importance of attitude toward customer behavior on time delivery Ability to deliver on time indicated. urgent order Ability to adapt an urgent order toward customer behavior. guarantee Importance of guarantee delivery to customer choice texture Smoothly texture of product affect to customer choice. flavor Unique flavor of product affect to customer choice. packing Packing of product (tin, carton, pail) affect to customer choice. design Design easy to use affect to customer choice. Table 3.3: Scale using for independence variable