Effects of packaging on millennials’ buying behaviour towards food products in fmcg sector in ho chi minh city

GRADUATION THESIS EFFECTS OF PACKAGING ON MILLENNIALS’ BUYING BEHAVIOUR TOWARDS FOOD PRODUCTS IN FMCG SECTOR IN HO CHI MINH CITY Ho Chi Minh City, May 2020 TABLE OF CONTENTS 1CHAPTER 1 INTRODUCTION 11[.]

EFFECTS OF PACKAGING ON MILLENNIALS’ BUYING BEHAVIOUR TOWARDS FOOD

PRODUCTS IN FMCG SECTOR IN HO CHI MINH

CITY

CHAPTER 1: INTRODUCTION 1

1.1 Rationale of the research 1

1.2 An overview of related research 3

1.2.1 International research 3

1.2.2 Domestic research 8

1.3 Research aims and research objectives 9

1.3.1 Research aims 9

1.3.2 Research objectives 9

1.4 Research questions 10

1.5 Research methodology 10

1.5.1 Collecting data 10

1.5.2 Analyzing data 11

1.6 Contribution of the research 11

1.7 Research structure 12

SUMMARY OF CHAPTER 1 13

CHAPTER 2: LITERATURE REVIEW 14

2.1 Theoretical basis of food products in FMCG sector 14

2.2 Theoretical basis of millennials’ buying behavior 16

2.2.1 Definition of consumer buying behavior 16

2.2.2 Factors affecting consumer buying behavior 17

2.2.3 Millennials’ buying behavior 18

2.3 Theoretical basis of product packaging 20

2.3.1 Definition product packaging 20

2.3.2 History and innovation of product packaging 21

2.3.3 Functions of product packaging 23

2.4.1 Packaging material 25

2.4.2 Packaging color 27

2.4.3 Packaging size and shape 29

2.4.4 Graphics 30

2.4.5 Label information 31

2.5 Research model and research hypothesis 33

2.5.1 Research model 33

2.5.2 Research hypothesis 34

SUMMARY OF CHAPTER 2 34

CHAPTER 3: RESEARCH METHODOLOGY 36

3.1.1 Research process description 36

3.1.2 Preliminary research 37

3.1.3 Official research 37

3.2 Measurement scale for research 37

3.3 Sample size determination and methods of data collection 40

3.3.1 Questionnaire design 40

3.3.2 Sample size determination 40

3.3.3 Data collection 41

3.3.4 Data analysis method 42

SUMMARY OF CHAPTER 3 46

CHAPTER 4: RESEARCH OUTCOME 47

CHAPTER 1: INTRODUCTION 1.1 Rationale of the research

In the market economy as today, the expansion of international trade integrationalong with technological advances and the improvement in living standards, etc.have diversified people’s buying options As stated by Keller (2008), consumersare exposed to more than 20,000 product choices within a 30-minute shoppingsession This actual situation is true to the fast moving consumer goods (FMCG)which are in demand and purchased every single day by various types ofcustomers from children to the elderly For instance, when a housewife needs tobuy a pack of chocolate for her kids, she can choose among numerous relevantbrands such as Snickers, Kit Kat, Hershey’s, or Milo, etc.; not to mention that eachbrand provides hundreds of products varying in flavors including milk chocolate,dark chocolate, matcha, etc.; and also in functions like chocolate for people withdiabetes, or for people on diet, etc However, the more choices they have, the morecomplicated their buying behaviour is, and the more competitive the FMCGmarket becomes These days, because of such fierce competition among brands,there arises an issue for all companies in the sector, which is how to differentiatetheir products from other substitute goods in the market in order to capturecustomers In fact, there are many powerful tactics for them to win the customerbuying behavior; and one of them is the product packaging which is believed to bethe fifth P of marketing mix by Kotler & Keller (2008)

Hardly could any global brand deny the important roles of packaging which arebeyond containing or protecting products against damages In reality, packagingsupports organizations in their marketing efforts (Marinac, 2015) and plays a keyrole in the success of products, particularly in the FMCG industry (Wansink andHuffman, 2001) Besides, since the packaging imparts unique value to productsand works as a tool of differentiation; it can stimulate consumer buying behavior(Underwood, Klein & Burke, 2001; Silayoi & Speece, 2004) and drive theirpurchasing decision at the point of sale (Schifferstein, 1999) According toNielsen’s 2016 U.S Packaging and Attitudes Survey, 68% of attendees answeredthat they had purchased a product solely based on its appearance This isunderstandable as when customers start to search for products, engage inadvertisements, or when they stand amid store shelves full of goods, the only thingvisible to them will not be the real quality of products, but the product packaging.Hence, when product packaging is optimized, it can generate an average 5.5% lift

in sales revenue for organisations (Nielsen, 2015)

Due to its importance, product packaging can bring either victory or failure to anybrand For example, one immense success in product packaging history is thecampaign “Share a coke” launched by Coca Cola in 2011, in which the traditionalwrapping around the Coca Cola bottle was transformed into a very new andunique appearance To be specific, the original red color of Coca Cola was kept, ofcourse; yet the brand name on the bottle was replaced by a saying “Share a cokewith” together with a personal name hugely printed on it Thanks to thiscustomized bottle campaign, whose purpose is to build a more personalrelationship with consumers and widespread moments of happiness throughout thesociety, Coca Cola not only became a global trend at that time; but the companyalso received a significant rise in sales for the first time in more than a decade

(The Wall Street Journal, 2014) Nonetheless, not all changes in packaging can besuccessful; and one of the typical failures is the case of Tropicana In 2009, thePepsiCo-owned brand made a decision to introduce the new packaging for its best-selling orange juice to the North American market Nevertheless, two monthslater, this initiative brought back nothing but the criticism from the public and a20% drop in sales which was equivalent to about 30 million US dollars for thisproduct (Vicenzo, 2009) Consequently, this misstep forced the company tohurriedly give up this costly packaging and come back to the previous one in thesame year with a view to easing the crisis, as well as regaining the customers’favorite for the product.

Notwithstanding the significance of packaging to the success of FMCG brands,there is limited research on the relationship between product packaging andcustomer buying behavior towards FMCG in Vietnam context, let alone in Ho ChiMinh City, which is the economic center and the most populous city in Viet Nam(VOV, 2019) Thus, the study takes this issue as a purpose However, to make theresearch more specific, a wide range of the city’s customers are narrowed down tomillennials who are regarded as an important segment of consumers impacting thefuture of markets (Deloitte, 2016) Furthermore, the study does not focus on allFMCG sectors, but only on the food products which account for the main valueshare in total FMCG in the Vietnam market (Kantar, 2020) In overall, theresearch on “Effects of packaging on millennials’ buying behavior towards foodproducts in FMCG sector in Ho Chi Minh City” is performed to investigate theempirical association between product packaging and buying behavior of animportant group of customer towards packaged food in Ho Chi Minh City; as well

as to find the effective way for companies in the industry to optimize their product

packaging, so that they can succeed in capturing customers in such an intensebusiness battle.

1.2 An overview of related research

For years, conjoint analysis has been accomplished to understand the effects ofproduct packaging on customer buying behavior Although most of the researchaffirms the imperative association between them, there is a deficiency inagreement on the specific classification of packaging elements as well as theimpact level of different elements on customer buying behavior Indeed, thisdiversity may come from the fact that research outcomes depend not only onresearch models and methods employed but also on the research context.Accordingly, some scientific literature summarized hereunder can help reinforcethis difference

1.2.1 International research

The paper “Packaging features and consumer buying behavior towards packagedfood items” by Ansari and Siddiqui (2019) measures the influence of elements

including graphics, color, size, shape, information, and material of packaged food

on consumer buying behavior The research result shows that packaging graphics,color, shape, and size play a more imperative role than the two others as theyenhance the product’s uniqueness, awareness visibility, and attractiveness, whichdirectly drives customers’ attention towards the product and speeds up theirbuying decision process at stores Meanwhile, most of the consumers have noeffect or very low involvement towards packaging material and information

Another study is “The influence of product packaging on the millennial consumerbuying behavior – a case study of the juice, nectar and still drinks category inKenya” (Agata, 2017), in which Agata examines how packaging material, packagefunctionality, and design elements respectively influence the millennial consumerbuying behavior of juices, nectar, and still drinks Ultimately, it is concluded thatpackaging materials which satisfy the consumer’s health and environmentalconcerns as well as enable them to see the product inside have the greatest impact

on purchasing decisions made by millennials In terms of packaging functionality,millennial consumers want packaging which provides them with the basic logisticfunctions, communications, and recycling Finally, when it comes to packagingdesign, this generation is strongly affected by the packaging color, graphicstogether with labeling because they prefer purchasing products with attractiveappearance

The research “Impact of Packaging on Consumers’ Buying Behaviour: A CaseStudy of Mother Dairy, Kolkata”, carried out by Ghosh in 2016, indicates thatvisual appeal is more effective than the qualitative aspect of packaging inattracting customers Specifically, in the case of mother dairy, packaging elementssuch as color, background image, wrapper design, and innovative ideas have a

high positive correlation with consumer buying behavior Conversely, the quality

of packaging materials and the information printed on products do not have anyremarkable bearings on the consumers Thus, this outcome is seen to be similar tothat of Ansari and Siddiqui in 2019

In 2015, Zekiri and Hasani conducted an analysis of “The role and impact of thepackaging effect on consumer buying behavior” to identify the relationshipbetween consumer buying process as the main variable of the study and someindependent variables comprising of packaging color, printed information,packaging material, design of wrapper, brand image, innovation and practicality.Eventually, the findings signify the four most important factors in productselection are quality of the packaging material, design, along with innovation andpracticality

Additional research on this topic is “Impact of product packaging on consumerbuying behavior: evidence from Karachi” In this study published in 2015,Mazhar, Daud, Bhutto, and Mubin attempt to determine the correlation betweenbuying behavior of consumers in Karachi, Pakistan and four packaging elementsincluding color, material, design of wrappers as well as innovation In conclusion,the co-authors state that except for packaging material, three other elements allhave a positive relation with consumers’ buying behavior Nonetheless, the studyhas a limitation when it eliminates some variables like packaging labeling, size,and shape, which might reduce the generality of the topic

In 2014, Katiyar worked on “Role of packaging as influencing factor of consumerbuying decision: a study of consumer of Kanpur region, U.P, India” in order toexplore the relationship between product packaging and consumer buying

behavior as well as to find out certain factors influencing their buying decision.The work concludes that packaging has a better effect on consumer buyingdecision than advertising does, and can help a brand stand out from itscompetitors Additionally, packaging promotes and reinforces the purchasedecision not only at the selling point but also during the time of using products.The data analysis from 100 survey attendees from Kanpur region, India shows thatthe majority of high-paid workers and people with high education levels focus onprinted information together with packaging material while the rest pay moreattention to the package’s background image when making a buying decision.However, because of the limited number of respondents, the research can hardly

be objective and reliable

Also working on the product packaging is the research paper “Impact of packagingvisual elements of packaged milk on consumer buying behavior” (Adam & Ali,2014), in which independent variables are defined to be color, design, material,size, and graphics; and the dependent one is consumer buying behavior The studyfinds out that regarding packaging design, there is a positive correlation betweenpackaging cap, rectangular packaging design, convenience in handling andconsumer buying behavior towards the mentioned products In terms of materials,glass and plastic bottles are not preferred by consumers whereas Tetrapak is found

to be a good material In addition, concerning packaging color, consumers tend torecognize a brand by its color; the popular ones for milk products are green, blue,and red Further, considering the size, consumers are reported to favor theavailability of packaged milk in all sizes which would cater to their occasionalneeds Last but not least, it is good packaging graphics that not only attractconsumer attention, create positive feelings about the milk brand, but also decoratethe shelf

The research article “An insight into the influence of packaging and presentationformat on consumer purchasing attitudes towards cheese: a qualitative study”(Eldesouky and Mesias, 2014) can be summarized that packaging greatly affectsthe purchasing decision of survey participants, especially in their first purchase ofthe cheese product In terms of five food-packaging characteristics mentioned bythe two authors, packaging color and design are the two most attractive anddecisive factors during the purchasing process because they help customers todistinguish the product based on their preferences, and are substantial tocharacterize the inside product Three other characteristics, in addition, also affectconsumers’ choices Specifically, concerning information displayed on theproducts, many consumers focus on the nutritional substance, ingredients, expirydate and origin Besides, the packaging size and format are reported as afundamental factor in their purchase intention.

Via the work “The effect of packaging on tweens’ purchasing decisions: Anapplication in food industry” issued in 2012, Kaynak identifies the key factorsinfluencing tweens’ preferences of various packaging elements or functions Asurvey on 400 students, all within the age range of 8-14, from a public elementaryschool in Ankara, Turkey comes to a conclusion that several packaging elementsincluding the shape, material, logo, and color of a package have a weighty impact

on tween consumers’ purchasing decisions Moreover, it is noted that teenagersfocus on the convenience of a package and its overall exterior design Besides, age

is witnessed to be a significant variable to attitudes towards different packagingelements and functions whereas gender is insignificant Although the topicconsiders the food industry as the examined subject; only chocolate, cookies, andchips are determined for the study Hence, this may not help express the wholepicture of the Turkish food industry

In the study “Impact of package elements on consumer’s purchase decision”written by Kuvykaite, Dovaliene, and Navickiene (2009), various elements ofpackaging are categorized into visual elements (graphic, color, size, form,material) and verbal elements (information, producer, country of origin, andbrand) In addition, the impact of those elements on consumer purchase decisionstowards milk and washing powder is also evaluated due to their time pressure.Ultimately, the result reveals that verbal elements are the most notable to theconsumer buying decision, even when they are under the pressure of time.Particularly, the majority of 200 respondents regard packaging size and material asthe main visual elements, while product information and country-of-origin arethought to be the main verbal elements when purchasing milk and washingpowder

1.2.2 Domestic research

In 2018, Hoang Thi Phuong Thao and Le Thi Tu Tram carried out a study on threeelements of the product packaging, comprising of visual appeal, information, andconvenience in the article “Tác động của bao bì sản phẩm đến giá trị cảm nhận và

ý định tiếp tục tiêu dùng đặc sản địa phương” This analysis ascertains that productpackaging is one of the most critical factors adding values to the local specialties.Furthermore, via a survey on 259 participants in HCMC, Ha Noi, Vung Tau, and

Da Lat, the three elements are proved to have a positive correlation to consumerperception and purchase intention towards the mentioned products.

To sum up, it can be witnessed that the research outcomes vary among countries,different customers, and different products First and foremost, whereas somestudies examine the effect of separate packaging elements such as packagingcolor, material, size, shape, label, etc on customer buying behavior (Ansari &Siddiqui, 2019; Ghosh, 2016; Zekiri & Hasani, 2015; Mazhar, Daud, Bhutto &Mubin, 2015; Katiyar, 2014; Adam & Ali, 2014; Eldesouky & Mesias, 2014;Kaynak, 2012); others categorize those elements into visual, informational or evenfunctionality group (Agata, 2017; Kuvykaite, Dovaliene & Navickiene, 2009).Secondly, there are also conflicts arising from the conclusions For instance,meanwhile some findings designate that the packaging information has a moreweighty bearing on customer buying behavior than the packaging appearance does(Katiyar, 2014; Kuvykaite, Dovaliene & Navickiene, 2009); several others findout the opposite results (Ansari & Siddiqui, 2019; Ghosh, 2016; Eldesouky &Mesias, 2014) Because of those reasons, there is a need for this research to clearlyclassify packaging elements and re-examine their effects on customer buyingbehavior in an attempt to explore a suitable application for the case of foodproducts in the FMCG sector in HCMC

1.3 Research aims and research objectives

1.3.1 Research aims

As discussed above, despite the great leverage of product packaging to thecustomer buying behavior towards FMCG products, there has not been anyparticular research on this topic in the Vietnam market yet Therefore, the impact

of product packaging still remains ambiguous for optimizing the effectiveness ofproduct development as well as marketing and branding strategies of FMCGcompanies in general and processed food companies in specific in HCMC.Especially in the dynamic market as today where every brand has to make theirproducts not only stand out from other similar ones but also win the customerperception and preference, this issue has become more imperative than ever As aresult, conducting this thesis, the author attempts to investigate the effect of theproduct packaging has on the millennials’ buying intention towards food products

in the FMCG sector in HCMC Based on that, recommendations and suggestionswill be analyzed and discussed for creating a suitable packaging that canbeneficially support the marketing activities of companies in this sector to capturethis influential generation of customers in the area

1.3.2 Research objectives

The purpose of this exploratory study is to determine the effects of packaging onmillennials’ buying behavior towards food products in the FMCG sector inHCMC More specifically, the principal objectives of the thesis are presented asbelow:

- Providing an overview concerning the importance of product packaging on thecustomer buying behavior that has been previously studied and published;

- Identifying the elements of product packaging that significantly affect the buyingbehavior of HCMC millennials towards food products in the FMCG sector;

- Evaluating the impact of each product packaging element on buying behavior ofHCMC millennials towards food products in the FMCG sector;

- Providing recommendations to better enhance the efficiency of productpackaging in the FMCG food industry in HCMC

1.4 Research object and scope

1.4.1 Research object

The object of this study is the effects of packing on the buying behavior ofmillennials towards food products in the FMCG sector in HCMC

- Which action should be taken by processed food companies in HCMC toimprove the efficiency of their product packaging in order to capture millennialcustomers?

- Meanwhile, primary data is collected through the online questionnaire deployed

on social networking sites The target attendee of this survey is millennials whooften buy packaged food products in HCMC In addition, to motivate theinvestigation participation, the description of the survey intention along with theresearch methodology is also attached

1.5.2 Analyzing data

The data collected is processed and analyzed via SPSS Statistics Software version20.0 to get the desired results Subsequently, Cronbach's Alpha reliability analysis,EFA analysis, and Pearson correlation analysis are respectively conducted Thepurpose of these mentioned researches is to evaluate the validity of the measuredvariables and independent variables, eliminating items that do not load on theappropriate high level construct Moreover, multiple linear regression analysis isalso used to figure out the significance of the proposed hypotheses and measurethe influence level of each packaging element on millennials’ buying behaviortowards food products in the FMCG sector in HCMC

1.6 Contribution of the research

Firstly, when learning the previous studies on this topic, the author recognizes thatthe abundance of scientific literature does not provide a unanimous answerconcerning the classification of packaging elements as well as their impact oncustomer buying behavior Such confusion encourages the author to create asuitable model based on the available ones, which cannot only be applied to thethesis context but also help simplify and clarify former findings

Secondly, although product packaging theory has been used to explore consumerbuying behavior for a long time in many countries, there has been little officialresearch about this issue in the context of either millennials’ buying behavior orFMCG and processed food products in HCMC As can be seen, Ho Chi Minh City

is the largest market in the country, where many reputable domestic andmultinational companies such as Masan, Nestle, Pepsico, etc settle theirrepresentative offices Hence, conducting a survey in this area is considered to beindispensable to comprehend the market Nevertheless, related studies in Vietnamand worldwide were carried out several years ago, which creates the need foroutcomes to be updated so that they can adapt to enormous fluctuations in theeconomy and society

Thirdly, even though the millennial consumers are regarded as the largest marketsegment in most countries and substantially influence the growth rate of all sectors

of the industry (Fry & Kim, 2015), their buying behavior is still not fullycomprehended in the scientific literature (Noble et al., 2009; Smith, 2012).According to Talay, 2015, marketers face a real challenge when trying to capturethe attention of this generation Therefore, the research on millennials in theHCMC context can help explore different aspects of their buying behavior as well

as understand their respondents to the product packaging; so that it can providepractical implications for brands in the area

Due to the three reasons, the thesis “Effects of packaging on millennials’ buyingbehavior towards food products in FMCG sector in Ho Chi Minh City” is a newdirection, desiring to determine the influence of packaging elements on buyingbehavior of millennial generation in HCMC This may contribute a reference

source for relevant businesses in Ho Chi Minh City in particular and spread outnationwide in general.

1.7 Research structure

This study is subdivided into five chapters in total:

Chapter 1: Introduction

Chapter 2: Literature review

Chapter 3: Research methodology

Chapter 4: Research results

Chapter 5: Conclusison & Recomendations

SUMMARY OF CHAPTER 1

In this chapter, the author focuses on explaining the reasons for choosing this topicfor the graduation thesis by presenting the rationale of the topic, reviewingprevious literature Further, the author also identifies the research aims andobjectives, points out research scopes, objects, and research methodology to orientthe research direction Subsequently, the new contributions of this study are also

indicated to affirm its economic values Eventually, the research is defined to bestructured with five chapters, which are Introduction, Theoretical basis andresearch model, Research outcome, and Conclusion and recommendationsrespectively.

CHAPTER 2: LITERATURE REVIEW 2.1 Theoretical basis of food products in FMCG sector

2.1.1 Definition of food products in FMCG sector

First and foremost, in order to comprehend the meaning of food products in theFMCG sector as well as the difference between them and other types of food, it isessential to understand the term FMCG, of which the research subject is onesegment In general, Fast Moving Consumer Goods (FMCG), also known asConsumer Packaged Goods (CPG), refer to consumer non-durable products thatare purchased on a daily basis by a wide range of customers, with the minimumeffort (Corney, 2011) Smith (2010) explains further that FMCG are normallyconsumed over a short period of days, weeks, months, or within one year Such ashort life span is probably due to soaring sales volume or because the productoften gets spoilt within a short time (Moolla & Bisschoff, 2012) Besides,Nagarajan and Sheriff (2013) highlight that FMCG have an adequate cost within agiven market and are sold fast According to Malhotra (2014), because the profitmargin made on FMCG is relatively small, profits are made up through thevolume of sales For this reason, the FMCG industry is considered to be a classiccase of the low margin and high volume business Additionally, as the FMCGsector touches every aspect of human life and gets replaced within a year, it covers

a broad range of frequently purchased consumer products To be specific, Leo(2003) classifies the major FMCG subdivisions into:

- Personal care including toothpaste, hair-care, skincare, soap, cosmetics and paperproducts such as tissues and sanitary towels;

- Domestic care including fabric wash (laundry soaps and synthetic detergents)and domestic cleaners (dish/utensil cleaners, air fresheners, and insecticides);

- Packaged food and beverages including soft drinks, cereals, biscuits, snack food,chocolates, ice cream, tea, coffee, vegetables, meat, bottled water, etc

As a part of the FMCG sector, the food products in question are assumed aspackaged food, and undoubtedly inherit all the characteristics of FMCG as well asthe nature of food products Regarding the food products first, they are defined by

US Legal as food that is for sale In particular, the food itself is any substance that

is usually composed of carbohydrates, fats, proteins, and water from plant oranimal origin It can be eaten or drunk by any animal including humans for eithernutrition or pleasure Secondly, besides those features, they are considered to haveall the characteristics of FMCG, which are being consumed at least once a month,being consumed frankly by the final customers, being non-durable, and beingwrapped up by packages (Leo, 2003) In the Nielsen Retail Audit 2018, FMCGpackaged foods in Viet Nam can be categorized into two popular groups The firstone is regular consumed packaged foods which cover instant noodles, soy &oyster sauce, fish sauce, MSG (Mononatri glutamate)-Bouillon Another group isimpulse products including biscuits, cake pie, and snacks

2.1.2 Overview of FMCG and packaged food market in Viet Nam

As stated in the Annual Statistical Information for Socio-economic Situation in

2019 by the General Statistics Office of Viet Nam, the country’s GDP witnessed adesirable result with a growth rate of 7.02% in 2019 Based on the GDP structure

by expenditure category in 2019, the increase of 8.82% in the wholesale and retailtrade of consumer goods along with 7.23% in the final consumption were seen to

be among key drivers for the 2019’s economic development This growth seems to

be an optimistic signal for the FMCG market in Viet Nam; especially when theaverage monthly spending per Vietnamese household for FMCG has beenincreasing year by year since 2012 and reached the amount of 1, 316, 000 VND inurban four cities as well as 776, 000 VND in rural area at the end of 2019 (Kantar,2019) Further, Kantar, one of the world-leading market research agencies, alsoforecasts that these numbers would keep rising with new product offerings in theVietnamese FMCG sector till 2025

According to the Vietnam Insight Handbook 2019 by Kantar, amid five importantFMCG segments including dairy, beverages, packaged foods, personal care, andhome care, packaged food alone accounts for 21.6% in the total FMCG valueshare in the four biggest cities; that figure for other provinces is 28.4%.Specifically, in 2019, the value growth in terms of health and enjoyment benefits

of packaged food climbs up by 3.3% in comparison with the previous year Topgrowing categories for this are rice soup, snack & nuts, ice cream, sauces (oyster,chili & mayonnaise), canned food, and sausage In addition, there is also a rise of4.7% in the evaluation of convenience and hygiene aspects of Vietnamese

packaged foods in 2019 Products that are highly appreciated for this facet aresausage, ice cream, frozen food, snack & nuts, biscuits & cakes, sauces (chili,tomato, oyster) In Vietnam, reputable companies in this segment cane be namedNestle, Masan, Acecook, Oishi, etc.

2.2 Theoretical basis of millennials’ buying behavior

2.2.1 Definition of consumer buying behavior

Approximately three centuries ago today, early economists represented byNicholas Bernoulli, John von Neumann, and Oskar Morgenstern commencedlearning about the basis of consumer decision making (Richarme, 2007).Approaching the topic from an economic perspective, this early work focusedsolely on the buying action (Loudon, 1993) At that time, consumers wereassumed to be only concerned with their own interests and make choices based onthe expected outcomes of their decisions (Schiffman, 2007; Zinkhan, 1992)

However, over the past century, the view of consumer behavior was morecomplete when related studies started to consider more factors impacting buyers,and acknowledge a broad range of consumption activities which were beyondpurchasing (Bray, 2008) Specifically, those activities commonly comprised ofneed recognition, information search, evaluation of alternatives, the establishment

of purchase intention, the act of purchasing, consumption and lastly disposal

After a long time of experience and development, these days, the contemporarydefinition of consumer buying behavior, which covers the more holistic range ofactivities influencing the consumer decision, has responded well to the conceptand growth of modern marketing (Blackwell, 2001) Nowadays, in the economicterm, consumers are defined as individuals or households who buy products fromfirms for their personal consumption purpose (Kotler, 2004) Moreover, theactivities these people undertake when searching, buying, using and evaluatingproducts and services to meet their demands are known as consumer buyingbehavior (Shiffman & Kanuk, 2010) In other words, studying consumer buyingbehavior means getting to know how individuals, groups and organizations select,purchase, use, and dispose of products, services, ideas or experience to satisfytheir needs and desires (Kotler, 2005 & 2012) By the same token, as the processconsumers go through before making the purchase decision is complicated, it isindispensable for every marketer or brand to understand how consumers behavewhen they get exposed to diverse choices in the market, with a purpose of not onlyattracting but also building a long-term relationship with them.

2.2.2 Factors affecting consumer buying behavior

Although great effort has been done to understand the buying behavior (Kotler,Wong, Saunders and Armstrong 2005), Egan (2007) considers consumer buyingbehavior as unstable, which is constantly changing due to the change in theirpurchasing features with respect to time and needs In general, consumers are

proved to be affected by cultural, social, personal, and psychological factors,which are described in figure 2.1 hereunder

Figure 2.1 Factors influencing consumer buying behavior

Source: Pearson 2011

In specific, cultural factors include culture, subculture and social class Thesefactors influence on social factors which are reference groups, family, roles andstatus Similarly, personal factors are formed with elements comprising of age andlife-cycle stage, occupation, economic situation, lifestyle, personality and self-concept Finally, it is psychological factors that directly impacts on consumerbuying behaviour Those factors are made up by motivation, perception, learning,belief and attitudes

2.2.3 Millennials’ buying behavior

Since different consumers have different demands and interests, learning abouttheir unique buying habits and behaviors is fundamental for every marketer tosucceed in the intense market competition Hence, this actual situation has pavedthe way for market segmentation to come into play (Rani, 2014) In marketing,market segmentation involves categorizing customers into groups which havecommon needs and share a similar response to market activities targeted at thegroup (Kerin, Hartley & Rudelius, 2009) Besides, Kotler and Keller (2012) alsoidentify four major criteria of market segmentation, which are geographic,demographic, psychographic and behavior Thanks to these market segments,many brands now have been utilizing their product differentiation strategies totarget different segments with a view to making consumers perceive that theiroffers are better than any others in the market (Goyat, 2011)

Among the main market segmentations aforementioned, demographic in generaland age is specific is the matter this research takes into account Explicitly, age isknown as the period a person was born; it is influenced by certain keycharacteristics in that period and therefore plays a critical role in their buyingbehavior (Williams & Page, 2011) Considering the various range of age,McKinsey (2018), a famous American management consulting firm, believes thatmillennials are a powerful generation that can help rule the disruptive trends in theFMCG industry not only at present but also in the future This is intelligible asmillennials are maturing in the workforce and gradually become the futurebusiness leaders, the largest consumer population, and even a significant pool of

investors due to their accumulated wealth (Weber, 2015) As asserted by Orozpe(2014), recently, millennials alone have represented about 50% of globalconsumption Therefore, lately, this generation has received much attention frommarketers and become a central group to be discovered since they possessdifferent behaviors compared to other generations For this reason, learning aboutthem can obtain importance and relevance (Smith, 2011).

In general, millennials are the young generation born between 1980 and 2000 (Lee

& Kotler, 2016), which means they are currently between 20 and 40 years old Justlike other cohorts born with their own traits, the millennials also exhibit distinctivequalities which make them different from the preceding generations (Fromm &Garton, 2013) Considering their backgrounds, this generation has experiencedmany macro-level social, political and economic fluctuations during their pre-adultyears, which results in a set of values, beliefs, expectations, and behaviorsremaining constant throughout their life (Jackson, Stoel, & Brantley, 2011).Additionally, millennials have grown up in a digital world and are at home with aconstantly connected, consumer-driven, networked world (Howe & Strauss, 2003;Paul, 2001; Sweeney, 2006) As a result, their daily life is enormously influenced

by information and technology; and they get familiar with all forms of socialmedia and communication encompassing television, cell phone use, the Internetuse, computer tablets, laptops, music, text messages, video games and socialprograms (Omar, 2016) Based on such quality, some of their typical buyingbehaviors are discovered by professionals

Firstly, millennials are demanding consumers who expect a large variety of items,personalization, and customization of goods and services, as well as instantsatisfaction (Howe & Strauss, 2003; Paul 2001; Sweeney, 2006) Moreover,

Connaway and Radford (2007) also describe their buying patterns as they preferflexibility or convenience, result-oriented, multi-taskers, digital natives, andnomadic communication styles.

Secondly, even though millennials spend more, they have less loyalty to thebrands than previous generations (Ayaydın & Baltaci, 2013) The authors explainfurther that this low loyalty may be because millennials are strongly affected byprice promotions in the market; thus, they can quickly switch to other productswith alluring offers

Thirdly, growing in the technology era where news and information travel freelyacross continents, millennials have been inculcated with a great global socialconsciousness (Cone Communications Inc & AMP Agency, 2006) Particularly,

in terms of food products, these days, this generation is claimed to be the mostconscious about health, wellness and environment compared to other generationsdue to their high education levels, technological reliance, and media exposure(Deloitte, 2016; Nielsen, 2018)

Fourthly, Fry & Kim (2015) regard millennials as “smart consumers’ who areproactive in taking advantage of the Internet and technological gadgets to searchfor product information Junker (2016) makes a further statement that manymillennials get engaged with brands via social networking sites as well as aresomewhat driven by key opinion leaders In addition, related research alsosuggests that with broad experience and knowledge on the Internet, they tend toinfluence the search for family information using Internet marketing means(Moore, 2012)

2.3 Theoretical basis of product packaging

2.3.1 Definition product packaging

In 1980, Packaging is defined by Sacharow & Griffin as a structure designed tocontain a commercial food product to make it easier and safer to transport, toprotect the product against contamination or loss, degradation or damage and toproduce a convenient way to dispense the product However, since 2012, thedefinition of packaging has been simplified to be all the activities of designing andproducing the container for a product, which is regarded to be more suitable forthe marketing view (Kotler & Keller, 2012)

2.3.2 History and innovation of product packaging

Historians suggest that packaging did appear centuries ago when ancients utilizedlarge leaves from plants to wrap meat and to weave baskets with the purpose ofstoring and transporting food (Paine & Paine, 1992) However, it was after WorldWar II that the economic packaging was born with the initiation of the FederalFood, Drug and Cosmetic Act in 1938 (Parcels, 1999) Before this eventhappened, food products had been shipped in bulk and manually re-packed atgrocery stores, which had raised concerns about consumers' health and safety due

to poor quality controls In addition, after the success of war reconstruction, a food

surplus that was no longer used for military purposes became widely available toconsumers This situation not only paved the way for the prosperity of the frozenfood industry (Anonymous, 2002) but also forced manufacturers to develop newpackaging innovations that could improve the life length of food as well as ensuresafe consumption and handling in distribution (Goodman & Redclift, 1991)

Subsequently, products were widely packaged and frozen; nevertheless,manufacturers had to face another issue when their supply outweighed people’sdemand in the market (Heinz, 2011) Furthermore, on that occasion, whileproducers still struggled against dealing with excess inventories as a result of over-supply, both consumers and marketers started to criticize packaging for its lack ofappeal (Paine & Paine, 1992) Consequently, the first significant shift in masspackaging together with the emergence of brands came as a solution for thoseproblems Initially, brands built demand and recognition via advertisingnationwide Gradually, national acceptance, in turn, required consistent masspackaging to be recognized and associated with the brand Until the 1940s, JimNash, a graphic designer, pioneered the idea of printing on all packaging surfaces,which, according to him, would not only help improve a marketer’s shelf visibilitybut also create a unique identity for brands (Parcels, 1999)

During the 1950s to 1960s, the reliance on packaging made from tin and glass,which were seen to be weighty and easily get damaged during the distribution,became less popular than the new packaging alternatives with flexible and newdecorative methods Simultaneously, supermarkets started to be more ubiquitous,which led to more competition among brands and more choices for consumers inthe market (Parcels, 1999)

In the late nineties, the development of innovative and flexible packaging opened anew opportunity for marketers (Paine & Paine, 1992) Thanks to this revolutionwhich helped ensure both the quality and quantity of products, the use of bothpreservatives for longer expiration and artificial color to maintain the originalappearance of food was significantly lessened in its ingredients

Over the past fifty years, innovation in packaging has well responded to thechanges in consumer lifestyles and satisfied their demands (Opperthauser, 2005).Today, packaging comes in all shapes and sizes, innovatively and convenientlywith a view to not only protecting food from harmful bacteria as well as thedamage occurred during the handling process but also lengthening its lifespanwithout adding any chemical substances and providing consumers with essentialinformation about the products (Graham, 2010) Besides, the modern designs ofpackaging have created diversity in the market, which has offered consumers awide range of food to choose all year round regardless of their farming season, andenabled marketers to convey their messages without any sale man at the point ofsales (Paine & Paine, 1992)

Due to changes in the lifestyle and working habits of traditional families, theFMCG industry in response has invented and provided products suitable for thenew social lifestyles and preferences In specific, processed food which isavailable to be enjoyed at any time of the day has been launched to the marketsince the beginning of the 1970s (Park & Capps, 1997) Along with the popularity

of packaged food, supermarket chains have also thriven and become ubiquitous,whereby those products were safely stored and displayed In reality, suchdevelopment has not only made it possible for people to purchase different