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 123doc 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 123doc 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.
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.
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 123doc 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 123doc TABLE OF CONTENTS ACKNOWLEDGEMENT.
ii TABLE OF CONTENTS. iii LIST OF TABLES. v LIST OF FIGURES. vi CHAPTER 1: INTRODUCTION .4 Significance of the Study.5 Research methodology and scope.6 The structure of the study.
4 CHAPTER 2: LITERATURE REVIEW AND HYPOTHESES.3 Customization and Functionality .5 Customer value and retail patronage .3 Measurements of constructs .4 Data analysis method .1 Test of Skewness .2 Test of Kurtosis .2 Confirmatory factors Analysis (CFA).3 Structure Equation Modeling (SEM). 23 CHAPTER 4: DATA ANALYSIS AND RESULTS .3 Confirmatory Factor Analysis (CFA) .4 Structural Equation Modeling (SEM).6 Explanation for finding result of hypotheses. 41 CHAPTER 5: CONCLUSION, IMPLICATIONS AND LIMITATION. 58 iv 123doc LIST OF TABLES Table 3.1: The result of collected data .2: The result of Skewness and Kurtosis testing .3: Correlations of components.4: The result of correlation test .5: Summary of measurement validation .6: Correlation of Constructs .7: Chi-square difference test .8: Hypotheses Unstandardized Structural Paths .9: Summary of hypotheses testing result .10: The result of bootstrap analysis.
41 v 123doc 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 123doc 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 do not have habit keeping the coin available or do not like to use coin in transaction. This leads used-coin 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).
1 123doc 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.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. 2 123doc Thus, in order to fulfill this gap, an investigation of Customer Value and Patronage behavior in retailing vending machine sector is examined, and in an effort to indentify the key factors impacting on customer value in vending machine sector in Vietnam, this study considers the concepts of Functionality, Customization, and Perceived Risk as antecedents of Customer value.3 Research Objective To examine customer value in vending machine situation, it is necessary to focus on identifying key factors affected customer value in using vending machine. These factors are perceived risk, functionality and customization. Each of these can either positively or negatively influence customer value in vending machine sector.
Knowledge about the effect of customer value on consumers’ vending machine patronage behavior provides helpful implications to marketers in executing marketing and business strategy and customer relationship management. Therefore, the overall purpose of this current study is to examine how customer value affects consumers’ retailing vending machine patronage in Vietnam. Particularly, this study investigates: 1. The impact of Customization of vending machine on Customer Value 2.
The impact of Functionality of vending machine on Customer Value 3. The impact of Perceived Risk of using vending machine on Customer Value 4. The impact of Customer value on retailing vending machine patronage 1.4 Significance of the Study The study will provide helpful implications for marketers in executing marketing and business strategy in Vending machine sector in particular and in retail business in general.5 Research methodology and scope The research conducted on consumer in Ho Chi Minh City is one of the biggest cities in Vietnam, where it centralizes all trading activities, people can reach new technologies in business activities soonest, and the author can collect data from people from different provinces and social levels in our country. The main purpose of this research is perceived customer value of consumer in using vending machine.
Therefore, it’s necessary to only focus on the respondents had used the 3 123doc vending machine for purchasing prior. There are three 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 threes kinds of vending machine mentioned above, are chosen to conduct the questionnaires for main survey. The Author applies data analysis tool including Microsoft Excel and SPSS, to handle the collected data and to conduct the research.
The Author also uses Amos 22 software to run Confirmation Factor Analysis (CFA) and Structural Equation Modeling (SEM), and to check relationships between exogenous variables and endogenous variables in the proposed research model.6 The structure of the study This paper is structured into five chapters. Specifically, the contents of each chapter will be presented as follow: Chapter 1: Introduction In this part, research background, research problem, research objective, significant of study, research scope and methodology, and structure of study will be presented subsequently. Chapter 2: Literature review and Hypotheses In this chapter, the definitions of each concept and an extensive literature review will be presented. Then hypotheses are also developed throughout the previous literatures and finally, the research model will be proposed.
Chapter 3: Research Methodology This chapter mentions about the research design, measurement of constructs, illustrate the process of conducting the research, and then, data analysis method is also presented to lay the foundation of chapter 4. Chapter 4: Data Analysis and Result This chapter includes Sample characteristic, descriptive statistic, CFA, SEM and discussion of result. Chapter 5: Conclusion 4 123doc This chapter includes conclusion, Implications and limitation. 5 123doc CHAPTER 2: LITERATURE REVIEW AND HYPOTHESES In this chapter, author presented an extensive literature review, proposed hypothesis and research model.
An literature review focused on knowledge of vending machine, theory related to customer value, retail patronage and relationship of constructs be mentioned by others researches. Then, hypotheses were also argued and developed particularly by previous studies to build a research model in this chapter.