A STUDY ON FACTORS INFLUENCING PROJECT’S PURCHASE INTENTION OF THE ELECTRIC WATER HEATER IN CENTRAL VIET NAM

A STUDY ON FACTORS INFLUENCING PROJECT’S PURCHASE INTENTION OF THE ELECTRIC WATER HEATER IN CENTRAL VIET NAM

A STUDY ON FACTORS INFLUENCING PROJECT’S PURCHASE INTENTION OF THE

ELECTRIC WATER HEATER IN CENTRAL

VIET NAM

Name : Le Duong Tin

ID : 11752317

•Energy companies should not emphasize solely on Electric water heaters’ physical appearance but on the brand image of the manufacturer.

•Key words: Purchase intention, product quality, service

quality, price fairness, electric water heater, customer satisfaction.

Research Background

•The factors that influence purchase intention of the Ferroli electric water heater

in Central Viet Nam.

•Meeting the requirements of market demand

Ferroli Group Snapshot

•Ferroli Group, founded

in San Bonifacio (Verona, Italia) 1958.

•Run by the brothers, Dante, Leonardo, and Luigi Ferroli

FERROLI INDOCHINA

FERROLI INDOCHINA IN VIET NAM

LOCATION Thach That Industrial Zone , Quoc Oai, Ha Noi TOTAL SURFACE 10,000 sqms

PLANT SURFACE 6,500 sqms PRODUCTION The Electric Water Heater, Solar, Heat Pump, Boiler

in Central, Viet Nam.

•Understand impacts of purchasing intention to Projects

in Central Viet Nam (Resort, Hotel, high class apartment)

•Propose a model of purchase intention that leads to the Ferroli Indochina Company’s success

LITERATURE REVIEW (con’t)

Product Quality

• Product quality depends on the expectation of each customer, which is unique Quality can be defined in broad terms as the combination of product attributes, real or imagined, which are held to be most important

in the opinion of the customer in arriving at a subjective assessment of a product worth (Anderson

et al., 1994)

• Product quality is a basic driver of buyer behavior across a wide range of categories in both goods and services markets While the financial impact of product quality has been thoroughly examined in prior studies (Stewart, 2009 )

LITERATURE REVIEW (con’t)

Service quality

• Parasuraman, Zeithaml, and Berry (1985, 1988) conceived that service quality is the difference between customers’ expectation and their perceived performance of a service.

• Parasuraman et al (1988) have also suggested that service quality consists of five generic dimensions: tangibles, reliability, responsiveness, assurance, and empathy.

LITERATURE REVIEW (con’t)

Price Fairness

• Price is defined as any price that a consumer uses as a basis for comparison in judging another price (Schiffman & Kanuk, 2000).

• Price fairness is defined as consumers’ assessments of whether a seller’s price can be reasonably justified (Xia et al., 2004)

• Wilson (1980) first argued that, in a market for lemons with price-setting sellers, trade may occur at a distribution of prices rather than at a unique price

• Price-setting sellers more informed than buyers has been considered by Wilson (1979, 1980)

LITERATURE REVIEW (con’t)

Customer satisfaction

• Customer satisfaction can be defined using the transaction specific perspective or cumulative perspective The transaction specific perspective indicates that customer satisfaction is the evaluation based on the recent purchase experiences (Boulding

et al., 1993).

• The customer satisfaction levels are influenced by image, trust and the importance of a relationship with the customer (Hasnelly, Eddy Yusu, 2012)

• Customer satisfaction has also been defined as the buyer’s cognitive state of being adequately or inadequately rewarded for the sacrifice he has undergone (Howard and Sheth, 1969).

LITERATURES REVIEW (con’

t)

Purchase intention

•Purchase intention is defined as “a person’s degree who has formulated conscious plans to not perform or to perform some specified future behavior” (Warshaw & Davis, 1985).

• Purchase intentions are personal action tendencies relative

to the brand Whereas attitudes are summary evaluations, intentions represent “the person’s motivation in the sense of his or her conscious plan to exert effort to carry out a behavior” (Eagly & Chaiken, 1993)

•Purchase intention is an important factor for an organization and was used routinely to make strategic decisions concerning both new and existing products and the marketing program that supports them (Morwitz, Steckel & Gupta, 2006)

LITERATURE REVIEW (con’t )

Gaps in existing knowledge

•The lack of contextually specific intention measures

•The results may have been influenced by self-selection bias

•Some places more weight on positive aspects while some places

on negative aspects

•The absolute predictive accuracy of purchase intention

•New product forecasting Models

The research is important

•The contribution of the research is to understand the factors that affect customer thus increase customers’ purchase intentions of electric water heater

•The objective is to gain a thorough understanding on customers’ purchase intention in the energy industry.

LITERATURE REVIEW (con’t)

Original Model

A Theoretical Framework an Integrated Model for the Effects of Product Quality,

Service Quality, and Price Fairness on Consumer Satisfaction and Consumer Loyalty

Product quality

Service quality

Price Fairness

Customer satisfaction

Customer Loyalty

Adopted from: Bei and Chiao (2001)

Service Quality

Price Fairness

Customer Satisfacti

on

Purchase Intention

Customer Satisfaction

Research Method (Con’t)

Research Question

oDoes Product quality relate to customer satisfaction? oDoes Product service relate to customer satisfaction? oDoes Price fairness relate to customer satisfaction? oDoes Customer satisfaction relation to purchase

intention?

Research Method (Contᾼd)

•Level of Research is theory testing (description & explanation).

•The research described in this study adopts quantitative method.

•Measurement of variable, independent variable and dependent variable

•Measurement scale: five – point likert scale

•I select sample and use SPSS software to analysis

•Sample size : 125 persons

Research Method (Con’t )

• Checking the Reliability of each factor by using Cronbach’s Alpha

o The reliability test under scale measurement plays

an important role in determining the validity and reliability of the survey forms.

o The various constructs were tested for validity using principal component analysis with varimax rotation

o Coefficient Alpha or Cronbach’s Alpha were used

to measure the concept of consistency reliability (Chin Yuk Hoong, Khoo Kim Jing, Liew Zhao Yao, Shim Che We, 2011)

Research Method (Con’t )

• I will use instruments :

 In library of Shute University

 In website, historical data, and annual report of Ferroli Co.,

Research Method (Con’t )

• To collect this data

 Primary data were collected through questionnaire designed referring

 Secondary data were collected data from articles in websites, documents on the historical data and annual reports that provided by Ferroli Indochina Company

• Method of data analysis :

Research Method (Con’t )

Significance of the research

• The research is expected to contribute to the marketing management.

• The findings of Product quality, Service quality, Price Fairness will provide the customer satisfaction with vital information

• It will make a significant contribution to the purchase intention literature by proposing a framework to understand project’s purchase intention via antecedents of purchase intention

• This study provides a framework on the determinants of purchase intention in Viet Nam energy industry for policy makers.

• Act as references for future studies

Concluding Remarks

There are four consumption factors that might influence consumers’ purchase intentions of Ferroli Indochina electric water heater

• Independent variable which is Service quality, product quality, price fairness, customer satisfaction

• The dependent variable is purchase intention

• Parasuraman et al (1985, 1988) state that the higher the service quality, the higher the customer satisfaction

• Teas (1993) also states that perceived service quality is the augmentation of the customer satisfaction

• Parasuraman et al (1994), product quality is equally importance in affecting consumer satisfaction as service quality

Concluding Remarks

• Price has found to be related to perceived product quality and consumer’s product evaluations (Rao & Monroe 1989; Dodds, Monroe & Grewal 1991)

• Price fairness significantly affect customer satisfaction

• Herrmann et al (2007), it was concluded that customer satisfaction indirectly influenced by the perceived price fairness

• Price fairness is positively correlated to customer satisfaction (Bei & Chiao, 2001; Parasuraman et al., 1994; Hanif, Hafeez & Riaz, 2010; Herrmann et al., 2007; Huffman et al., 2001; Yieh et al., 2007).

intentions contribute to accuracy? 383-387.

• Ying-F K., Chi-M W., & Wei-J.D., (2009), The relationships among service quality, perceived value, customer satisfaction, and post-purchase intention in mobile value-added services, Computers in Human Behavior 25, 888-896.

• Cheng L W., Dongjin L., Bradley R B., & Jongseok A,

(2011), Country image, product image and consumer purchase intention: Evidence from an emerging economy, International Business Review, 11.

• Tiffany B W., & Hong Y (2012), Building trust to increase purchase intentions: The signaling impact of low pricing policies, Journal of Consumer Psychology, 384-394.

• May K., & Galen T.T (2009), The effects of service provider employment status and service quality exchange on perceived organizational image and purchase intention, Sport Management Review, 225-230.

• Kotler, P 2000 Marketing Management: Analysis, Planning, Implementation, and Control, 10th ed., New Jersey: Prentice- Hall.

• Josephine, Chu-chi, & Liu , (2006), Virtual experiential marketing on online purchase intention, 325-333.

Section A: Demographic Profile

• In this section, we are interested in your background in brief

Please tick your answer and your answers will be kept strictly confidential

• QA1: Gender: Female Male

• QA2: Age: 18 - 25 years old 26 - 35 years old

36 - 45 years old 46 - 55 years old

56 years old and above

• QA4: Highest level of academic qualification:

Diploma Bachelor Degree Master Degree

• QA5: Employment status:

Employed Unemployed Student

Retired

• QA6: Personal Income:

Below VND 5,000,000 VND 5,000,000 – VND 8,000,000 VND 9,000,000 – VND 14,000,000 VND 15,000,000 – VND 20,000,000 VND 21,000,000 – VND 40,000,000 More than VND 40,000,000

• [(1) = strongly disagree; (2) = disagree; (3) = neutral; (4) = agree; (5) = strongly agree] response framework.

• Please circle one number per line to indicate the extent to which you agree or disagree with the following statements.

APPENDIX

APPENDIX

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