TRÖÔØNG ÑAÏI HOÏC MÔÛ TP.HCM UNIVERSITEÙ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BUSINESS SCHOOL MBAVB1 TRAN CAO TUAN INFLUENCING FACTORS TO BUYING DECISION OF CEMENT PRODUCT FOR HOUSING CONSTRUCTION IN HO CHI MINH CITY MASTER PROJECT MASTER IN BUSINESS ADMINISTRATION (PART-TIME) Ho Chi Minh City (2010) Tai Lieu Chat Luong MBAVB - MASTER PROJECT – TRAN CAO TUAN ACKNOWLEDGMENT OF COMMITMENT I, Tran Cao Tuan, would like to confirm that I have prepared and conducted this “Influencing factors to buying decision of cement product for housing construction in Ho Chi Minh City” as the final project of MBAVB program. i MBAVB - MASTER PROJECT – TRAN CAO TUAN ACKNOWLEDGEMENT I sincerely express my deep gratefulness to Professor Michele Allele of Solvay University in Belgium and Doctor Tran Anh Tuan, the program co- director, who have whole-heartedly organized the Vietnam-Belgium management MBAVB1 course successfully. I would like to express my sincere gratitude to Dr. Nguyen Van Phuc, research advisor for the valuable guidance, constructive comments and encouragement through out the research study.
Especially, I would like to give my special thanks to my family who enabled me to complete this project. Ho Chi Minh City, 30th December, 2010 Tran Cao Tuan ii MBAVB - MASTER PROJECT – TRAN CAO TUAN TABLE OF CONTENTS Page LIST OF TABLES x LIST OF FIGURES xii LIST OF ABBREVIATION xiii ABSTRACT 01 CHAPTER 1: INTRODUCTION 02 1.3 Scope of research 02 1.5 Structure of the project 03 CHAPTER 2: LITERATURE REVIEW 05 2.2 Buying decision process 05 2.3 Stages of the buying decision process 08 2.3 Evaluation of alternatives 10 2.5 Post purchase behavior 12 v MBAVB - MASTER PROJECT – TRAN CAO TUAN 2.5 Influcing buyer behaviour 14 2.7 Proposed research model 19 CHAPTER 3: RESEARCH DESIGN 21 3.2 Result of qualitative research 23 3.1 Setting up, building and evaluating the scale of measurement 24 3.1 Scale of variables relative to willingness of buying cement 24 3.2 Scale of the other groups of variables 24 3.2 Evaluating the scale of measurement and filtering data gathered from questionnaire 26 3.1 Evaluating the scale of measurement 26 3.2 Filtering data gathered from questionnaire 26 3.3 Data analysis process 27 3.4 Size of sample 28 CHAPTER 4: OVERVIEW OF CEMENT MARKET IN VN 29 4.1 Overview of Vietnamese economic environment 29 vi MBAVB - MASTER PROJECT – TRAN CAO TUAN 4.2 Overview of cement industry 31 4.4 Cement distribution system 35 CHAPTER 5: ANALYSIS OF RESEARCH DATA & RESULTS 37 5.2 Descriptive statistics result of quantitative variables 38 5.1 Reliability statistic Cronbach’s Alpha for the group of variables relative to brand name of product 41 5.2 Reliability statistic Cronbach’s Alpha for the other groups of variables 41 5.4 Exploratory factor analysis (EFA) 44 5.5 Paired-Samples T Test 47 5.6 Result analysis 50 CHAPTER 6: CONCLUSIONS & RECOMMENDATIONS 53 6.3 The strength, weakness, limitation of this study and recommendation for future study 55 REFERENCES 57 1. English Language Sources 57 2. Vietnamese Language Sources 60 APPENDIX 61 Appendix 1: Discussion framework form 61 Appendix 2: Questionnaire for customer 62 vii MBAVB - MASTER PROJECT – TRAN CAO TUAN Appendix 3: Reliability statistics results (Cronbach’s Alpha) 66 Appendix 4: Result of EFA analysis 69 Appendix 5: Result of Paired-Samples T Test 72 viii MBAVB - MASTER PROJECT – TRAN CAO TUAN LIST OF TABLES Page Table 2.5: Stages in family life cycle 16 Table 2.6: Important level of criteria 18 Table 3.1: Scale of the other groups of variables 25 Table 4.1: Urbanization in Vietnam (1990-2010) 30 Table 4.2: Income growth of Vietnamese 30 Table 4.3: Cement demand in 03 areas of Vietnam 32 Table 4.4: Cement consumption per capital 33 Table 4.5: Market share of main cement manufactures 34 Table 4.6: Cement consumption by Southern market area 34 Table 4.7: Cement Distribution system 36 Table 5.1: Age of respondents 37 Table 5.2: Sex of respondents 37 Table 5.3: Descriptive Statistics 38 Table 5.4: Summary of initial groups of variables will be analyzed 39 Table 5.5: Results of reliability statistics for variables relative to brand 41 name of product Table 5.6: Results of reliability statistics for other groups of variables 42 Table 5.7: Summary of groups of variables after rejecting some variables 42 in the stage of reliability statistics Table 5.8: EFA analysis 44 Table 5.9: Groups of factors after EFA analysis 46 ix MBAVB - MASTER PROJECT – TRAN CAO TUAN Table Descriptive Statistics of new factors by descending mean 47 5.10: Table Results of Paired-Sample T Test comparing with Mean 48 5.11: Table Summary of results of Paired-Sample T Test 49 5.12: Table Result of Paired-Sample T Test 50 5.13: x MBAVB - MASTER PROJECT – TRAN CAO TUAN LIST OF FIGURES Page Figure 2.1: Model of buyer behaviour 06 Figure 2.2: Four types of buying behavior 07 Figure 2.3: Five-stage Model of the Consumer Buying Process 08 Figure 2.4: Steps between evaluation of alternatives and a purchase 11 decision Figure 2.7: Proposed research model 19 Figure 3.2: Data analysis process 27 xi MBAVB - MASTER PROJECT – TRAN CAO TUAN LIST OF ABBREVIATION HCMC: Ho Chi Minh City EFA: Exploratory Factor Analysis FDI: Foreign Direct Investment GDP: Gross Domestic Product OD Official Distributor US$: US dollar xii MBAVB - FINAL PROJECT – TRAN CAO TUAN ABSTRACT Cement is one of the important construction materials.
The demand of cement is increasing rapidly because the development of housing construction in Hochiminh city is increasing, that is the aim of this research to know the important factors influencing decision making in buying cement for housing construction as well as infrastructure in Hochiminh city. This research “ Influencing factors to buying decision of cement product for housing construction in HCMC” aims at analyzing factors influencing decision making in buying cement. The results have 06 groups of influencing factors. These are Brand name, quality, customer services, price, delivery service, manufacturer ‘s capacity.
After finding out groups of influencing factors, Paired-Samples T Test is used to assess the influence level of these groups. Based on the results, we can conclude that important level of these groups from highest to lowest : Price, Delivery service, Quality, Brand name, Customer service and Manufacturer ‘s capacity. 1 MBAVB - FINAL PROJECT – TRAN CAO TUAN CHAPTER 1 INTRODUCTION 1.1 Problem Statement Cement is one of the important construction materials. The development of housing construction in HCMC has increased very quickly at present.
Therefore, the demand of cement as well as other construction material is increasing rapidly. Demand of cement in 2009 was 45.5 Mil ton and 2010 is about 51 Mil ton (11% increased). With severe competition in cement business, it is necessary to know which are the most important factors influencing customer’s decision in buying cement for housing building. So, the objective of this research is to find out these factors.2 Research objectives To find out important factors influencing customer decision.
To recommend some solutions for cement manufacturers to meet customer‘s requirement as well as for new retailers to select better cement manufacturer.3 Scope of research The object of study is cement retailers and small contractors in HCMC. The ones chosen for interviews are those who are the owner and key person who made decision or have influence to buy cement for end user (the owner of house). Because cement product is normally decided by contractor and /or retailer. Therefore, they are represented as customer.
Limit of research place is 2 MBAVB - FINAL PROJECT – TRAN CAO TUAN within HCMC and not big contractor such as state contractor, corporation (as organization buyers).4 Research methodology Desk research : Collecting data as internal data base through public sources such as internet, news paper, relevant books and previous related research. Survey research : There are two stage as follow Qualitative research : face-to-face discussion method, the sample size is from 5 to 8 persons. From the result of the qualitative research, the researcher finds out elements which are needed to modify initial model (if necessary) so that the official model is used to design a questionnaire for the quantitative research. Quantitative research : This research is done by questionnaires in which the result are for analyzing all factors and figure out the level of influencing each factors.
This research is carried out by SPSS software 16.5 Structure of the project There are 06 chapters as follow : Chapter 01: Introduction This chapter provides the problem statement in order to make this research. It also provides the methodology, objective and scope of this research. 3 MBAVB - FINAL PROJECT – TRAN CAO TUAN Chapter 02: Literature review This chapter provides the understanding of the concepts of customer behavior and theories that can propose model research for the study “Influencing factors to buying decision of cement products for housing construction in HCMC” Chapter 03: Research design This chapter provides the implementation of design the research, preliminary research result and research sample. Chapter 04 : Overview of Cement market in Vietnam This chapter provides general information about Vietnamese environment such as economic development situation, demographic factors (average income, GDP) and overview of development of cement industry as well as market share.
Chapter 05: Analysis of research data and result This chapter provides analysis result through Descriptive Statistics, Exploratory Factor Analysis, Reliability evaluation through Cronbach ‘s Alpha, Pair T Test. Chapter 06: Conclusions and recommendations From the research result, this chapter provides the conclusion and some recommendations of some solution and proposes some suggestion which is needed to set up new retailer in near future. This chapter also mentioned the limitation of this project. 4 MBAVB - FINAL PROJECT – TRAN CAO TUAN CHAPTER 2 LITERATURE REVIEW 2.1 Definition According to Richard L.
218), Consumer behavior is the study of when, why, how, and where people do or do not buy products. Belch GE and Belch MA(2007, p. 105) define consumer behavior as 'the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires'. According to Philip Kotler (2002, p.
200), We can distinguish five roles people play in a buying decision : Initiator : the person who first suggests the idea of buying the product or service. Influencer : the person whose view or advice influences the decision. Decider : the person who decides on any component of a buying decision (whether to buy, what to buy, how to buy and where to buy). Buyer : the person who makes the actual purchase.
User : the person who consumes or uses the product or services.2 Buying decision process 2.1 Buying roles According to Philip Kotler (2002, p. 200), it is easy to identify the buyer for many products. In the United State, men normally chose their shaving equipment 5 MBAVB - FINAL PROJECT – TRAN CAO TUAN and women chose pantyhose. But even here marketer must be careful in making their targeting decisions because buying roles change.2 Buying behavior According to Philip Kotler (2002, p.
182), the field of consumer behavior studies how individuals, groups and organizations select, buy, use and dispose of goods, services, ideas or experience to satisfy their needs and desires. Understanding consumer behavior and “knowing customers” is never simple. Customers may say one thing but they do another thing, they may not be in touch with their deeper motivations. They may respond to influences that change their minds at the last minute.
Consumer ‘s buying behavior is influenced by cultural, social, personal and psychological factors. According to Philip Kotler (2002, p. 183), the starting point for understanding buyer behavior is the stimulus –response model shown in Figure 2.