UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Lê Thoại Bảo Trân THE IMPACT OF SOCIAL NETWORKING INTEGRATION SERVICE OF ONLINE RETAILER ON CONSUMERS’ PURCHASE INTENT: THE FACEBOOK CASE OF HOCHIMINH CITY, VIETNAM MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Lê Thoại Bảo Trân THE IMPACT OF SOCIAL NETWORKING INTEGRATION SERVICE OF ONLINE RETAILER ON CONSUMERS’ PURCHASE INTENT: THE CASE OF HOCHIMINH CITY, VIETNAM ID: 29110021 MASTER OF BUSINESS (Honours) SUPERVISOR: DR. PHẠM PHÚ QUỐC Ho Chi Minh City – Year 2014 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGMENT To complete this Master of Business Administration associated between Western Sydney University and University of Economics Ho Chi Minh city with the thesis “The impact of social networking integration service of online retailer on consumers’ purchase intent – the case of Hochiminh city, Viet Nam”, beside exerting myself during last time, firstly, I want to thank deeply to my family that always encouraged me throughout studying process and finishing this thesis. Secondly, I also want to give my gratefulness to Professors and lecturers from University of Economics Ho Chi Minh city. They provided to us useful knowledge and also highly valuable experiences within two years.
Especially, I really want to express heartfelt thanks to Dr. Pham Phu Quoc guided me enthusiastically to accomplish the thesis. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT The growth of social networks integration service around the world has created a new place of interaction and communication among people. Web-based social communities, weblogs, online social networks provide features, allow consumers to share their personal experiences, knowledge, opinion with one other by writing reviews, rating reviews, and chatting among trusting members.
This study empirically explores how the social networking integration service of online retailers (Facebook shops) impact on consumers’ purchase intent. Formal quantitative research through survey questionnaire with a sample of 219 consumers who are living and working in Hochiminh city, the result reveal that Website social presence, trust and involvement have positive impact on consumers’ purchase intent. Implications of these finding for e-retailers and future research are outlined. Key words: Website social presence, trust, product attitude, involvement, purchase intent LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS ACKNOWLEDGEMENT ABSTRACT TABLE OF CONTENTS LIST OF FIGURES LIST OF TABLES CHAPTER 1: INTRODUCTION .4 Research methodology and research scope .5 CHAPTER 2: LITERATURE REVIEW .1 Online shopping and social networking services (Facebook case) .2 Consumers’ purchase intent.
Step of a intention process. The impact of online social networks on consumers’ purchase intent .3 Website social presence .14 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.7 The conceptual model and hypotheses of the research .16 CHAPTER 3: RESEARCH METHODOLOGY .3 Data collection procedure .6 Data analysis method .26 CHAPTER 4: DATA ANALYSIS AND RESULTS .1 Descriptive analysis – demographics and variables.3 Exploratory Factor Analysis (EFA).1 Testing assumption of multiple regressions .2 Result of multiple regression analysis.5 Hypotheses testing result and discussion of the findings .37 CHAPTER 5: CONCLUSION, IMPLICATIONS AND LIMITATIONS .42 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.3 Limitations and future research .52 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES Figure 2.18 Figure E1: Histogram of Purchase intent .61 Figure E2: Normal Plot of Purchase intent .61 Figure E3: Scatter Plot of Purchase intent .62 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Table 3.1 Source of data collection.2 Source of measurement scale .2 Reliability test result .3 Rotated component matrix (time 1).4 KMO and Bartlett’s test result .5 Rotated component matrix (time 2) .7 Model Summary of multiple regression analysis .8 ANOVA of multiple regression analysis .9 Coefficients of multiple regression analysis .10 Summary of hypotheses testing results. 40 Table D1: Total Variance Explained of factor analysis .60 Table D2: Model Summary of multiple regression analysis .62 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1 CHAPTER 1: INTRODUCTION 1.1 Research background Internet is a social place where created new forum for customers. Virtual communities, blog, and online social networking sites provide a platform to influence consumers‟ purchase intents (OTX research, 2008).
For more information, Hitwise (2011) indicates that the market share of different online social networking websites has been grown. Online retailers have recently taken care about potential objective of understanding and leveraging social influence in customers‟ purchase intent to improve customer relationship management and increase sales. Therefore, nowadays, we can find that lot of online retailers have begun to connect their websites with social networking sites, such as online shops in Facebook or Facebook shops.com is one of the most popular social networking sites in the world and in Vietnam also.6 million Facebook users in Vietnam by August 2013, accounting for 21.42 percent of the population and 71.4 percent of Internet users. By July 2013, Vietnam is the country ranked 16th in the world for percentage growth of Facebookers.
These impressive numbers in the results of the study Socialbakers & SocialTimes.Me (2013) is announced at the 18th workshop Panorama ICT Vietnam - VIO place in Hochiminh city. Socialbakers study (2013) also points out the growing trend on Facebook in Vietnam. Hence, Facebook is suitable place for retailers; they can open online shops to do business efficiently. There are many applications and in Vietnam website allows retailers to build an online shop quickly.
When using the shops on Facebook, they absolutely do not need to worry about their shops will be destroyed when the user overload or fault of the network service providers. However, Facebook does not support creating a direct online shop, which LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2 is only possible through the application or interact with the Facebook iframe. According to Schiffman, Kamk & Hansen (2008), diverse ranges of people have influence on consumers such as family members, friends, co-workers, and group or individual that consumers would like to compare themselves with them. The members of Facebook can design their profiles and share information with other individual within the group.
Group that may never meet in the physical world but nevertheless they are able to affect purchase intents (Evans, Jamal & Foxall, 2009). This online social network is good place for consumers to get information and give advices. In order to reduce the risk of buying a new product, many cosumers tend to search the opinion of early adopters before making purchase intent. The use of social networks in online shopping provides marketers and business with the new revenue opportunities, while providing consumers with product information and both economic and social rewards for sharing (Hennig-Thurau, Gwinner, Walsh & Gremler, 2004).
As Vietnamese people still have a habit of trust when they can prehensile and direct- viewing goods. The purchase intents are often influenced by people who the consumer knows and trust. However, since internet thriving and the time is more valuable, the e-business in developing economics like Vietnam need to develop more utility shopping for customers. No-one denies the performance of utility online shopping model.
Therefore, the retailer shops in Facebook are more and more popular particularly in Vietnam, especially in big city as Hochiminh city.2 Research gap In the literature, many studies about online shopping environment have been researched (Hassanein & Head, 2006; Hsu & Tsou, 2011; Huang & Chou & Lin, 2010). LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 However, very few scholars do the research about social networking integration service of online shops. For instance, the research of Wu & Lee (2012) studies about the effect of blog Trust, involvement and product attitude on purchase intention in Taiwan. On the other hand, Hassanein & Head (2006) consider about Perceived social presence and its impact on attitude toward online shopping.
These factors could play an important role in the online environment, but did not investigate how these key factors impact on purchase intent of online consumers in Facebook. Thus, in order to fulfill such gap, this research address key factors through a detailed study of the world‟s largest social networks on Facebook, in specifically of online shopping in Hochiminh city, Vietnam. Moreover, the motivation of this study also derives from the lack of studies in terms of online shopping in Facebook in Vietnam. Online shops in Facebook, the social networking integration service in Vietnam is pretty new, but we can see so many social plug-in was integrated by online shopping which can make the users to share the products to their online social networks easily, by not so many people really have the experience of using the service.
Considering the enormous potential of this market, this study aims to investigate and develop the research of the influences of Trust, involvement, website social presence and product attitude on consumers‟ purchase intent towards online shops in Facebook. In addition, this study expands the general understanding of the perceptions of social networking integration service, understands one of the fundamental interests of e-commerce is how social networks are used and how they shape purchase intents.3 Research objectives The purpose of this study is to examine the key factors associated with consumers‟ purchase intent towards online shops in Facebook. Specifically, this research investigates: - The relationship between website social presence and purchase intent. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 4 - The relationship between trust and purchase intent.
- The relationship between involvement and purchase intent. - The relationship between product attitude and purchase intent.4 Research methodology and research scope: This study uses questionnaire to collect data. The survey questionnaire is gotten from credit sources and developed in English and then translate into Vietnamese. In order to make clear of the Vietnamese version questionnaire, the in-depth interviewof five people are conducted before the survey is implemented in mass.
Then the analyzing of the collected data are processed by SPSS software with three main stages. First, Cronbach‟s Alpha is used to test the reliability of the measurement scale. Then, the Exploratory Factor Analysis (EFA) is used to check the validity of the measurement scale. Finally, multiple regression are employed to investigate the relationship between factors in the research model.
This study choses Hochiminh city in Vietnam to examine the online shops in Facebook since Hochiminh city is the big city in Vietnam and is the potential market for study this research. The respondents of this study are the people who live in Hochiminh city and know or have experience in online shopping in Facebook.5 Research contribution This study empirically explores how the social networking integration service of online retailers in Facebook influences on consumers‟ purchase intent. Based on the findings of this research, we hope to give some practical and meaningful contribution to online shopping environment, especially to business people who have the intention to use social networks for online shopping in Vietnam and expand their business in Hochiminh city. Thence, the managers or online retailers can consider effective strategies with maximize opportunities and minimize challenges before enter this potential market.
This study with LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 5 deep research about the key factors impact on consumers‟ purchase intent toward online shopping in Facebook can help the managers get more success in e-commerce applications. In summary, this study suggests some useful theoretical contribution and practical contrubution for business people who want to enter market, to who would like to improve customer relationship management, get more loyalty of consumers and increase sales.6 Research structure The thesis contents are divided into 5 chapters. Chapter one is general Introduction and outlines the content of this study. This chapter presents the background of the research, motivation for doing the research, research objective, research methodology and scope.
Chapter two is literature review of five concepts including website social presence, trust, product attitude, involvement and purchase intent. This chapter also proposes the research model and hypotheses.