UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Ta Thi Thu Huong FACTORS AFFECT CONSUMER’S BEHAVIORAL INTENTION TOWARD EMAIL MARKETING MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 TIEU LUAN MOI download : skknchat@gmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Ta Thi Thu Huong FACTORS AFFECT CONSUMER’S BEHAVIORAL INTENTION TOWARD EMAIL MARKETING ID: 22110025 MASTER OF BUSINESS (Honours) SUPERVISOR: CAO HAO THI Ho Chi Minh City – Year 2014 TIEU LUAN MOI download : skknchat@gmail.com ACKOWLEDEGMENTS Firstly, I would like to express my deep gratitude to Dr. Cao Hao Thi, my research supervisor, for his patient guidance, enthusiastic encouragement and useful critiques of this research work. My grateful thanks are also extended to thank all of my friends and my colleagues, who help me collecting the survey to do this research. Finally, I wish to thank my family to their supports and encouragement throughout my study.
i TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT Email marketing is one of the most cost-effective marketing tools for businesses especially small companies. However, many Vietnamese companies, especially small businesses have not yet taken advantage of this method. On the other hand, few of studies have investigated about the Vietnamese behavior intention toward email marketing. Hence, this study focuses in measuring relationship between cognitive factors – Attitude towards advertising, Perceived Benefits and Perceived Risk – and customer’s behavioral intention toward email marketing.
To examine research model, information and data is accessed by using questionnaire for respondents who usually use email such as office staff, student. Sample size of this quantitative research is 223 respondents. SPSS software is used to test measurement scale, research model and hypotheses. Results in this study show that customers have intention to accept receiving email marketing if they perceive benefit and their attitude toward advertising is positive.
Among three impact factors, Perceived Benefit has the strongest direct influence, followed by Attitude toward advertising, and the factor Perceived Risk has not any impaction toward customer’s behavioral intention. It shows that the Vietnamese customers are not worry too much about the risk of receiving unwanted email or the disclosure of the personal information. Study results also suggest that in order to increase customer’s behavior intention toward email marketing, should take consideration of increasing benefit of the email content, especially some component such as fun, entertainment. ii TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENT ACKOWLEDEGMENT…………………………………………………………….ii TABLE OF CONTENT…………………………………………………………………….iii LIST OF FIGURES and TABLES…………………………………………………………vi ABBREVIATION………………………………………………………………….viii CHAPTER 1: INTRO DUCTION 1.3 CHAPTER 2: LITERATURE REVIEW 2.1 The effectiveness of email marketing…………………………………………………5 2.2 The theories of Behavioral Intention………………………………………………….1 The Theory of Reasoned Action (TRA)…………………………………………8 2.2 The Theory of Planned Behavior (TPB)……………………………….3 The Theory of Technology Acceptance Model (TAM)……………………….4 Model of consumer’s acceptance toward mobile marketing………………….10 iii TIEU LUAN MOI download : skknchat@gmail.1 Attitude toward advertising……………………………………….
Benefits in receiving…………………………………………………. Attitude toward email marketing……………………………………. Chapter summary……………………………………………………………………18 CHAPTER 3: RESEARCH METHODOLOGY 3. Source data for research………………………………………………….
Sample design and size……………………………………………………. Method of survey data analysis……………………………………………. Pilot survey result……………………………………………………………………23 3. Chapter summary……………………………………………………………………24 CHAPTER 4: DATA ANALYSIS 4.
Exploratory factor analysis (EFA)………………………………………………….32 iv TIEU LUAN MOI download : skknchat@gmail. Results and interpretation. Multiple regression analysis………………………………………………. Summary of hypotheses testing……………………………………………….
Testing the difference on customer characteristic………………………. Testing the difference on age and gender. Testing the difference on education background……………………. Testing the difference on occupation………………………………………….
Chapter summary……………………………………………………………………51 CHAPTER 5: CONCLUSION AND RECOMMENDATION 5. Limitation and suggestion for further research…………………………….59 v TIEU LUAN MOI download : skknchat@gmail.com LIST OF FIGURE AND TABLES Figure 2.1: The basic theory of reasoned action (TRA)………………………………….2: The model of consumer acceptance toward mobile marketing…………….3: The model of consumer acceptance toward email marketing……….1: Time of using internet each day…………………………………………….3: The reconstructed research model………………………………………….1: SWOT analysis of email marketing………………………………………….2: Compares email to other forms of direct and internet marketing…………….1: Factors and Variables……………………………………………………….1: Gender of respondents……………………………………………………….2: Age of respondents………………………………………………………….3: Occupation of respondents ………………………………………………….4: Age of respondents ………………………………………………………….5: Income of respondents ……………………………………………………….6: Reliability analysis of each variable………………………………………….7: KMO and Barlett’s Test…………………………………………………….8: Total Variance Explained…………………………………………………….35 vi TIEU LUAN MOI download : skknchat@gmail.9: Table of communalities before and after extraction………………………….10: Component matrix before rotation………………………………………….11: Rotated Component Matrix………………………………………….12: The rotation of variables….13: Correlations between groups of variables in Regression Analysis…………44 Table 4.14: Result of regression analysis……………………………………………….15: Result of regression analysis……………………………………………….16: Result of comparing customer’s satisfaction among age………………….17: Result of comparing customer’s behavioral intention among gender.18: Result of comparing among education background……………………….19: Result of comparing among occupation…………………………………….50 vii TIEU LUAN MOI download : skknchat@gmail.com ABBREVIATIONS EFA: Explored factor analysis KMO: Kaiser-Meyer-Olkin SPSS: Statistical Package for the Social Sciences viii TIEU LUAN MOI download : skknchat@gmail.com CHAPTER 1: INTRODUCTION 1.1 Problem statement Email marketing is one of the most cost-effective marketing tools for businesses especially small companies. According to Ascend2 “Marketing Strategy Report” (2013), 55% of marketing professional agree that email marketing is the most effective marketing tactic. In a survey of Marketing Sherpa in 2012, most of marketers also said that they had planned more money for email marketing budget in 2013.
Acxiom Digital and Harris Interactive pointed out in a 2006 report that 75% of adult Internet users would open e-mails from businesses and consider those e-mails as “valuable” or “very valuable”. For retailers, e-mail marketing is an efficient and responsive tool for maintaining customer loyalty. It helps them communicate with customers in meaningful ways, so they can see the results of e-mail marketing reflected on their increased revenue (Shih, 2006). In the background of fast development of internet in Vietnam nowadays, internet marketing as well as email marketing is being more and more important marketing tool.
According to Ministry of Information and Communication of Vietnam (1 December 2012), Vietnam ranks 18th in top 20 countries have the largest number of internet users in the world (36% Vietnamese population are using internet). However, many Vietnamese companies, especially small businesses have not yet taken advantage of this method. According to ICT News (11 November 2012), there is only 5% of Vietnamese’s companies have used internet marketing. A report of Asia Digital Marketing Association (2010) also showed most of Vietnamese companies have not had a professional level in using internet marketing yet.
1 TIEU LUAN MOI download : skknchat@gmail.2 Research objectives The purpose of this thesis is to identify key factors that affect the customer’s behavioral intention toward email marketing. After that, a research will be performed to measure how strength of each factor in relationship with the behavioral intention of customer toward email marketing. Finally, the thesis gives some recommendation to companies for increasing the positive behavior of customers toward email marketing, and then they can use this marketing tool more effectively.3 Research questions To gain the objective, the research focuses to answer following questions: - What are key factors that affect customer’s behavioral intention toward email marketing? - What is measurement scale of the customer’s behavioral intention toward email marketing? - How strength of each factor in the relationship with the behavioral intention of customer toward email marketing? 1.4 Research scope This thesis focuses on individuals who often use email in working as well as in their daily life such as office staff, sole proprietorship, employees, and students. 2 TIEU LUAN MOI download : skknchat@gmail.com The area that the thesis focuses on is Hanoi and Ho Chi Minh City, which are the most dynamic economy in Vietnam with a large number of populations are using internet daily.
For example, in Ho Chi Minh City, the proportion of households used internet is 35% (Dung, 2010). The time to perform this research is in the second six-month period of 2013.5 Research contribution The results of the research will help companies to apply email marketing more effectively. In other words, the research also gives a significant contribution to email marketing researches that is still simple in Vietnam.6 Research structure The study includes five chapters as following: Chapter 1: Introduces conceptual background, a description of research problem, research objectives, scope of the research, and research question. Chapter 2: Literature review is a theoretical background of the previous studies that support to the research, including models that relate to customer’s acceptance and measurement scales.
Based on the models and measurement scale, the study will identify key factors develop the research models, factors and hypothesis. Chapter 3: Research methodology that shows sampling design, sampling frame, 3 TIEU LUAN MOI download : skknchat@gmail.com sample size, sampling method. Furthermore, measurement scales and data collection method is created and run the pilot test. Plan for data analysis is accomplished as such steps: method of data analysis to be used, scales and sample size required for analysis method.
Chapter 4: Data analysis and results is created by transforming statistic results into meaningful statements, discussing the results, hypothesis test or relations among variables under study, comparing to previous researches, and giving comments on unexpected results. Chapter 5: Conclusion and recommendation are based on the finding results to make and provide the limitation and further research. 4 TIEU LUAN MOI download : skknchat@gmail.com CHAPTER 2: LITERATURE REVIEW This chapter will consist of the previous relevant theories and background to the research area. This review aims to analyze previous studies to get a clear understanding on what kinds of factor influent on customer’s behavior toward email marketing.1 The effectiveness of email marketing A large number of authors have recognized the advantages of email marketing.
According to MacPherson (2001), email is the fastest, cheapest and most effective direct marketing channel. This is due to a combination of the technological capabilities of email marketing software, the reach of email, consumers’ preferences and the correct use of email marketing. “There is no marketing medium that is less expensive than email” (Chris Baggott, 2007). According to Simms Jenkins (2008), there are 97 percent of consumers and 94 percent of marketers are using email.
“The fact of the matter is that the greatness of email is not about email itself. It is about ability to build relationships” (Chris Baggott, 2007). It is reason why email is listed as one of the most powerful marketing channels even there are many other digital marketing channels are increasing quickly nowadays. According to Charlesworth (2009), 21% of adult consumers have responded to direct email-marketing communication sent to them in the last month by visiting the sender’s website.
In addition, 75% of consumers have made a purchase as a direct result of receiving commercial email and the most common items purchased were (Business Wire, 2009c) include: Groceries (40%); Personal electronics (38%); Clothing and accessories (82%); Restaurant and coffee shop services (49%). Besides, 73% of consumers would click a link in commercial email and 44% would watch a video embedded in the email when they were expecting such communications, moreover, 43% of those consumers who went to the landing 5 TIEU LUAN MOI download : skknchat@gmail.com page made a purchase online (Fernandez, 2009).1 is the SWOT analysis of email marketing that Marko Heintie (2010) has presented in which briefly summarizes the issues affecting email marketing.1: SWOT analysis of email marketing Strengths Weakness Email is cost-effective Email client systems and hardware Email marketing has a high ROI devices have differences when viewing Ability to customize content, segment content and target customers Volume of email is raising costs Applicable for direct marketing and and saturating consumers inboxes CRM Opportunities Threats In recession businesses focus on low Social media can form into a cost and result oriented marketing tools competing communication channel Consumers communicate more online Spam email limits growth and and their preferred digital communication productivity of email marketing channel is email Table 2.2 compares email to other forms of direct and internet marketing. The basic characteristics of email marketing are low costs, shorter turnaround (in the time involved to prepare, send the messages and receive the responses), high response rates, customizable campaigns.2: Compares email to other forms of direct and internet marketing 6 TIEU LUAN MOI download : skknchat@gmail.com Direct Internet Telemarketing Email SMS Mail Advertising All Most Internet Mobile Reach Internet users households households users users Approx Response rate 10% – 20% 3.