Analyzing the markets opportunity for a new product the case of thread deformed bar steel of vina kyoel steel company

ANALYZING THE MARKET’S OPPORTUNITY FOR A NEW PRODUCT – THE CASE OF “THREAD DEFORMED BAR STEEL” OF VINA KYOEI STEEL COMPANY In Partial Fulfillment of the Requirements of the Degree of MA

ANALYZING THE MARKET’S OPPORTUNITY FOR A NEW PRODUCT – THE CASE OF “THREAD DEFORMED BAR STEEL” OF

VINA KYOEI STEEL COMPANY

In Partial Fulfillment of the Requirements of the Degree of

MASTER OF BUSINESS ADMINISTRATION

ANALYZING THE MARKET’S OPPORTUNITY FOR A NEW PRODUCT – THE CASE OF “THREAD DEFORMED BAR STEEL” OF

VINA KYOEI STEEL COMPANY

In Partial Fulfillment of the Requirements of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Acknowledge

To complete this thesis, I have been benefited from the following people: Dr

Ho Nhut Quang (Thesis Advisor) who has committed to instruct me to accomplish

this thesis, and Mr Tran Ngoc Tuan (General Manager of Vina Kyoei Steel

Company) who helped me to test and support more opinions for my questionnaire

adjusted

Plagiarism Statements

I would like to declare that, apart from the acknowledged references, this

thesis either does not use language, ideas, or other original material from anyone; or

has not been previously submitted to any other educational and research programs or

institutions I fully understand that any writings in this thesis contradicted to the above

statement will automatically lead to the rejection from the MBA program at the

International University – Vietnam National University Hochiminh City

Copyright Statement

This copy of the thesis has been supplied on condition that anyone who

consults it is understood to recognize that its copyright rests with its author and that

no quotation from the thesis and no information derived from it may be published

without the author’s prior consent

© Vu Duy Long / MBA03019 / 2013

Table of Contents

Chapter 1 - Introduction 1

1 Research problem 1

2 Significance of thesis 4

3 Scope and limitation of thesis 5

4 Objectives of thesis 5

5 Research methodology 5

6 Thesis structure 6

Chapter 2 - Literature review 8

1 The market’s opportunity 8

2 Need 8

3 Want 9

4 Industry 9

5 Ability 10

6 Brand 11

7 Intention 11

8 Environment 12

8.1 Political 12

8.2 Economic 13

8.3 Social 13

8.4 Technological 13

8.5 Environmental 13

8.6 Legal 14

8.7 Hedging against the macro environment 14

9 Related research about the market’s opportunity 15

10 Research model and hypotheses 17

Chapter 3 - Research methodology 19

1 Research process 19

2 Research methodology 19

3 Quantitative approach 20

3.1 Sampling 20

3.2 Interview with General Manager of Vina Kyoei Steel Company 21

3.3 Pilot study 22

3.4 Data collection 22

3.5 Data analysis 23

3.5.1 Descriptive statistics 23

3.5.2 Reliability statistics 24

3.5.3 Exploratory factor analysis 24

3.5.4 Correlation testing 25

3.5.5 Regression analysis 26

3.5.6 Crosstabs analysis 26

3.6 The measurement scale 27

Chapter 4 - Data analysis & Research result 30

1 General outlook of economic environment in Vietnam 30

1.1 Macroeconomic environment 30

1.2 Industry 32

2 Sample description 34

3 Descriptive statistics 34

3.1 Need dimension 34

3.2 Want dimension 36

3.3 Industry dimension 37

3.4 Ability dimension 39

3.5 Intention dimension 40

3.6 Opportunity dimension 41

3.7 Brand dimension 42

4 Reliability test 44

5 Exploratory factor statistics 48

6 Correlation testing 53

7 Regression analysis 55

8 Crosstabs analysis 57

9 Hypotheses testing result 60

Chapter 5 - Conclusions and Recommendations 62

1 Conclusion 62

2 Practical implication 64

3 Limitations and recommendations for future researchers 67

List of references 69

List of Tables

Table 1: The related research about the market’s opportunity 15

Table 2: List of Hypotheses 18

Table 3: The measurement scale 27

Table 4: The producing and selling situation of producers in December 2012 33

Table 5: Descriptive Statistics of Need dimension 35

Table 6: Descriptive Statistics of Want dimension 36

Table 7: Descriptive Statistics of Industry dimension 37

Table 8: Statistics of Ability 39

Table 9: Statistics of Intention 40

Table 10: Descriptive Statistics of Opportunity dimension 41

Table 11: Statistics of Brand 42

Table 12: Need dimension reliability test 44

Table 13: Want dimension reliability test 45

Table 14: Industry dimension reliability test 45

Table 15: Industry dimension reliability re-test 46

Table 16: Opportunity dimension reliability test 47

Table 17: Opportunity dimension reliability re-test 47

Table 18: KMO and Bartlett's Test 48

Table 19: Total Variance Explained 49

Table 20: Component Matrixa 50

Table 21: Rotated Component Matrixa 50

Table 22: Correlations 53

Table 23: Correlations re-test 54

Table 24: Model summary 55

Table 25: ANOVA 55

Table 26: Coefficientsa 56

Table 27: Chi-Square Tests (Opportunity – Brand) 57

Table 28: Correlations (Opportunity – Brand) 58

Table 29: Chi-Square Tests (Opportunity – Intention) 59

Table 30: Correlations (Opportunity – Intention) 60

Table 31: Hypotheses testing result 60

Table 32: The final consequences 63

List of Figures

Figure 1: The sales revenue of Vina Kyoei Steel Company from 2010 – 2012 2

Figure 2: Path of Conceptual Frame Work 4

Figure 3: Research Methodology Framework 6

Figure 4: The proposed research model 17

Figure 5: Research process 19

Figure 6: Customer’s ability 39

Figure 7: Customer’s intention 40

Figure 8: Brand awareness 43

Abstract

In the current context of the integrated economy, the competition in the steel

industry became increasingly fierce This is both an opportunity and challenge for the

company as Vina Kyoei to show the ability to adapt to the market’s reality, improve

the technology and the management system in order to create the competitiveness to

other competitors Therefore, Vina Kyoei Steel Company has been studying the

market to offer a new steel product with more advantages over traditional steel

products on the market; this is the pioneer company in Vietnam to produce this new

steel product as well In this study, I will conduct the market research to understand

and clarify opportunities and challenges for this new product In addition, the results

of the study will help the company has a better insight about the market and

customers, and it is the basis for future studies as well

Keywords: thread deformed bar steel, new steel, opportunity, ability, brand

Chapter 1 - Introduction

The first chapter will provide a general introduction for the current study

through 6 sections This chapter presents the problem of this research, the significance

of the thesis, the scope and limitation of the thesis, objectives of the thesis, research

methodology, and thesis structure

1 Research problem

Cost, revenue and profit are three most important factors in determining the

success of your business A business can have high revenue, but if the costs are

higher, it will show no profit and is destined to go out of business when the available

capital runs out Managing costs and revenue to maximize profit is the key for any

entrepreneur

Many businesses are judged on the basis of revenues, not profit For example,

an Internet start-up may show high revenues even in the early stages of the business

but will typically spend far more money than total revenue on business expansion and

marketing This is only possible when investors are available to provide additional

capital (the term for investment money provided to the business that allows it to spend

more money than it brings in) In the long run, a business that requires constant

investment will fail; only a profitable business will be able to pay back its investors

Sometimes, however, an entrepreneur may be able to personally succeed if he can sell

his business while it is unprofitable, if investors believe the chance of future

profitability is high In most cases, however, only profitable businesses can be sold at

reasonable prices to new owners

In general usage, revenue is income received by an organization in the form

of cash or cash equivalents Sales revenue or revenues are the income received from

selling goods or services over a period of time

From the first half 2012, sales revenue of Vina Kyoei Steel Company started

First half 2011 Second half

Figure 1: The sales revenue of Vina Kyoei Steel Company from 2010 – 2012

Nowadays, there are so many steel companies in Vietnam such as: VN Steel,

Pomina Steel, Hoa Phat Steel, and so on Therefore, the competition has been being

very fierce, and especially in Ho Chi Minh City’s market The market’s shares are

narrowing down for many steel makers The question made for each company now is

how to protect and increase the sales

Vina Kyoei Steel Company is one of the leading companies in this industry

However, in order to keep its current market’s share not only stable but also bigger is

always the priority

One of strategies that Vina Kyoei Steel Company used is the marketing

strategy (introduce the new product) On over the world and Vietnam in particular, the

steel which they use for construction normally is Deformed Bar Steel; because mostly

steel producers have been producing this kind of steel commonly But, following the

traditional way to connect or link two steel bars together; constructors normally use

methods such as: welding, overlapping and tightening, or threading which can be

costly, time consuming, labor consuming, or even not stable

Catching up that problem, Vina Kyoei Steel Company plans to launch out the

new product “Thread Deformed Bar Steel” which can hopefully handle those

problems above With this new product, Vina Kyoei Steel Company promisingly can

be successful and gain more market’s share

However, the success of the new product introduction still remains a question

to the company because it has no market information about the customers’ behaviors

toward this new steel There should be a market research to understand more about

the customer’s behavior, and that is the reason why I decide to choose the topic:

ANALYZING THE MARKET’S OPPORTUNITY FOR A NEW PRODUCT – THE CASE OF “THREAD DEFORMED BAR STEEL” OF VINA KYOEI STEEL COMPANY

The topic aims to answer the following question: “What is the market’s

opportunity for the new product (Thread Deformed Bar Steel)?”

The thesis is based on the following conceptual framework to solve the

research problem:

Figure 2: Path of Conceptual Frame Work

2 Significance of thesis

Successfully launching a new product campaign is obviously the tentative

purpose of the thesis Besides, the topic is expected to:

 Help to increase the sales for Vina Kyoei Steel Company

 Introduce the new product which is better than the existing one

Problem:

Sales face the fierce competition

How to protect and increase sales

Marketing strategy

Product Price Place Promotion

Adjust the

existing product

New market for the existing product

Introduce the new product

Success

Increase sales

Furthermore, this topic is the initially significant step for Vina Kyoei Steel

Company to marketing the new product to the Vietnam’s market and Ho Chi Minh

City’s market especially

It will help the company having the good insight of the market, customer’s

behavior, customer’s need, the properly and suitable marketing programs for the new

product

3 Scope and limitation of thesis

Ho Chi Minh City was chosen to survey because the demand for steel products

here is large and very potential And we will focus mainly on recent customers

(construction contractors) of Vina Kyoei Steel Company

The secondary data will be collected from year 2010 – 2012

The study will be conducted from June to December – year 2012

4 Objectives of thesis

To solve the research question mentioned above, the objectives of the thesis

are to:

 Review theory about customer’s demand and customer buying process

 Explore market’s opportunities for the new product “Thread Deformed Bar Steel” of Vina Kyoei Steel Company

 Suggestion and recommendation for Vina Kyoei Steel Company

5 Research methodology

This thesis was undertaken by using both qualitative and quantitative method,

collect secondary data and primary data by in-depth interview and survey making

Figure 3: Research Methodology Framework

6 Thesis structure

The structure of this thesis includes five chapters:

 Chapter 1 - Introduction: This chapter contains the general background of

Vina Kyoei Steel Company and the new product as well

 Chapter 2 - Literature review: This chapter introduces the related concepts

and theories regarding to this thesis, and examines research studies which are

made by other researchers

 Chapter 3 - Research methodology: This chapter presents an over view of

the approaches used to conduct this research

 Chapter 4 - Data analysis and Research result: This chapter focuses on

analyzing and discussing the results obtained from the collected data

Problem statement

Objectives

1 Review theories Descriptive statistic and collecting

secondary data

2 Explore market’s opportunities for

the new product

Survey on customer, Quantitative method, Using SPSS software

Result of research

Recommendation

 Chapter 5 - Conclusions and Recommendations: This chapter focuses on

discussing the final results of study and suggestions for the new product in the

future

Chapter 2 - Literature review

This chapter focuses on introducing the related concepts and theories that are

used in my thesis It means this chapter will introduce the literature review of the

market’s opportunity in order to give a clear idea about the research area and discuss

previous studies on the market’s opportunity

1 The market’s opportunity

Nothing is more important for any enterprise than to find and exploit new

market opportunities Even when business is robust, there is always the need to hunt

for new turf, to guard against the time when a strong product or service category will

become static or declining The skill in finding new market opportunities is the

lifeblood of business worldwide

According to Redfern & Snedker (2002), market opportunity means newly

identified needs, wants, and demand that a firm can exploit because it is not being

addressed by the competitors Therefore, in order to know what the market

opportunities of any company are, we have to figure out three basic things of the

market (needs, wants, and demand)

2 Need

Philip Kotler (1997) stated that the most basic concept underlying marketing is

that of human needs A human need is a state of felt deprivation Humans have many

complex needs These include basic physical needs for food, clothing, warmth and

safety; social needs for belonging and affection; and individual needs for knowledge

and self-expression These needs are not invented by marketers; they are a basic part

of the human make-up When a need is not satisfied, a person will do one of two

things:

 Look for an object that will satisfy it; or

 Try to reduce the need

3 Want

Kotler (1997) also defined Human wants are the form taken by human needs

as they are shaped by culture and individual personality A hungry person in Bahrain

may want a vegetable curry, mango chutney and lassi A hungry person in Eindhoven

may want a ham and cheese roll, salad and a beer A hungry person in Hong Kong

may want a bowl of noodles, char siu pork and jasmine tea Wants are described in

terms of objects that will satisfy needs As a society evolves, the wants of its members

expand As people are exposed to more objects that arouse their interest and desire,

producers try to provide more want-satisfying products and services

4 Industry

In economics, the competition is the rivalry among sellers trying to achieve

such goals as increasing profits, market share, and sales volume by varying the

elements of the marketing mix: price, product, distribution, and promotion

Merriam-Webster defined competition in business as "the effort of two or more parties acting

independently to secure the business of a third party by offering the most favorable

terms" It was described by Adam Smith in The Wealth of Nations (1776) and later

economists as allocating productive resources to their most highly-valued uses, and

encouraging efficiency Smith and other classical economists before Cournot were

referring to price and non-price rivalry among producers to sell their goods on best

terms by bidding of buyers, not necessarily to a large number of sellers nor to a

market in final equilibrium

Later microeconomic theory distinguished between perfect competition and

imperfect competition, concluding that no system of resource allocation is more

Pareto efficient than perfect competition Competition, according to the theory, causes

commercial firms to develop new products, services and technologies, which would

give consumers greater selection and better products The greater selection typically

causes lower prices for the products, compared to what the price would be if there was

no competition (monopoly) or little competition (oligopoly)

5 Ability

Consumer buying power is the behavior of a consumer in regards to how he

spends money on goods or services For example, an individual might have $1,000

per month to spend on goods after he pays taxes This sum of money is known as his

consumer buying power because it is the amount he is able to contribute to the

economy through purchases This amount is then divided among actual purchases to

find out how consumer buying power is allocated among different industries such as

entertainment, food, housing and clothing

Philip Kotler (1997) examined stages that buyers pass through to reach a

buying decision The consumer passes through five stages: need recognition,

information search, and evaluation of alternatives, purchase decision and

post-purchase behavior

6 Brand

A brand is a name, term, sign, symbol, or design which is intended to identify

the goods or services of one seller or group of sellers and to differentiate them from

those of competitors Besides, brand also is what is experienced and valued by

customers in everyday social life, the culture of the product – shared taken – for

granted brand stories; images; and associations, and the mental and emotional file we

have for a product or service or entity

Rossiter and Percy (1987) described brand awareness as being essential for the

communications process to occur as it precedes all other steps in the process Without

brand awareness occurring, no other communication effects can occur For a

consumer to buy a brand they must first be made aware of it Brand attitude cannot be

formed, and intention to buy cannot occur unless brand awareness has occurred

(Rossiter & Percy 1987; Rossiter et al 1991)

In memory theory, brand awareness is positioned as a vital first step in

building the “bundle” of associations which are attached to the brand in memory

(Stokes, 1985) The brand is conceptualized as a node in memory which allows other

information about the brand to be “anchored” to it (Aaker, 1991) The

conceptualization of a network of brand associations in memory with the brand as a

central core has been put forward by many others (eg Keller 1993; Holden 1993;

Holden & Lutz 1992)

7 Intention

An intention has been defined as a person’s commitment, plan, or decision to

carry out an action or achieve a goal (Eagly & Chaiken, 1993), and in fact has been

used synonymously at times with choice, decision, and plan All these usages more

generally fall under the label volition Psychologist Ajzen (1991, p.181) conceives of

intentions rather broadly as “indicators of how hard people are willing to try, of how

much of an effort they are planning to exert”

This definition seems too broad in that it encompasses (i) motivation, which is

better construed as an antecedent of intention and (ii) planning, which constitutes a

mental activity or process that often occurs after one form an intention to pursue a

goal or perform an action

The need for a narrower definition of intention can be seen in Lewin’s (1951,

pp.95–96) specification of the role of volition in action: “A complete intentional

action is conceived as follows: Its first phase is a motivational process, whether a brief

or a protected vigorous struggle of motives; the second phase is an mental act of

choice, decision, or intention, terminating this struggle; the third phase is the

consummatory intentional action itself” This clearly differentiates intention from

motivation and action and situates it between these concepts: motivation → intention

→ action

8 Environment

Macro environment factors are uncontrollable external forces that affect how a

business operates They are largely out of the control of the business, and often

require changes in operating, management, production, and marketing Analysts often

categorize them using the acronyms PEST or PESTEL Broken down, PEST stands

for political, economic, social, and technological concerns PESTEL also includes

environmental and legal factors

8.1 Political: Political macro environment factors include things like tax

policies, government-issued safety regulations, the availability of government

contracts, and even shifts in the controlling political party International laws, such as

trade agreements and tariffs, may affect the supply and demand chains and available

markets for many different companies as well

8.2 Economic: A market boom, recession, or growing inflation problem can

all change the way an organization plans for the future and operates in the present

Economic factors are often difficult to assess, since economic forecasts and analyses

vary widely between experts Unemployment levels, comparative foreign exchange

rates, and the state of the global economy can all help or hurt a business's ability to get

needed components and maintain a stable profit

8.3 Social: The mood and demographics of the population make up the social

area of macro environment factors For example, a society that places an emphasis on

self-guided jobs with room for creativity may cause organizations to redefine job

descriptions and adapt the model of the workplace to attract workers Social trends,

such as a preference for on-demand mobile media devices, can also influence which

products a company manufacturers and where it chooses to spend advertising dollars

8.4 Technological: Technological macro environment factors can influence

how an organization does business A new type of machinery, computer chip, or

product created through research and development can help a company stay

modernized and ahead of the market curve Owners must be able to accurately

identify which new developments will be truly useful, and which are just fads

8.5 Environmental: Environmental concerns are important to businesses

both in the short and long term In the short-term, things like natural disasters can

disrupt production and supply operations; or even destroy company assets Programs

such as environmental risk assessment can help companies prepare to handle many of

the most likely short-term crises In the long view, however, businesses may have an

interest in ensuring that their supply chains are not destroyed by unsustainable

practices

8.6 Legal: Legal factors can limit or change how a business operates For

example, they may have to hire additional supervisory staff or purchase safety

equipment after a new health and safety law is passed Child labor laws often limit the

hours a minor can work and require set break periods If an organization employs

several minors, it may have to hire additional help to cover the hours when the minors

cannot legally work Legal factors are determined by both local legislation and

regional and national laws In some cases, companies that do business internationally

are also affected by international laws

8.7 Hedging against the macro environment: Generally, businesses have

little to no control over their macro environment They can, however, prepare for the

unexpected by using a PEST or PESTEL analysis For example, if a business has a

manufacturing plant in an area prone to hurricanes, they could hedge against the

possible loss by developing an action plan to relocate employees or supplies if

threatened by a hurricane Many organizations conduct regular analyses of the macro

environment factors connected to them, and revise their strategies accordingly

9 The related research about the market’s opportunity

There are some findings of the previous study concerning with the market’s

opportunity as follow:

Table 1: The related research about the market’s opportunity

Findings

Beyond “the numbers”, feedback from various steel consumers

identified a number of specific concerns requiring attention from

steel stakeholders:

Standardization: There are efficiency gains for major construction

projects if the number of specifications can be streamlined on the

basis of industry best practices This will not only increase efficiency

in completing projects; it will also cut costs currently tied up in larger

than required inventories This is a particular issue of concern for

fabricators, but it may require more active involvement of experts in

the engineering and regulatory fields

Capacity Utilization: Governments and private industry alike in all

parts of Canada have recognized additional opportunities for other

regions of Canada to increase their participation in the western

market It is evident that there is available industrial capacity within

Canada that can play a greater role in meeting western Canadian

development requirements

Communication: A number of steel consuming industries indicated a

need and willingness for regular and more intensive dialogue with

steel market participants along the supply chain Information is a key

– whether in terms of current barriers to expansion, project

scheduling and sequencing, evolving customer requirements, and

research and development priorities This potentially impacts all parts

of the supply chain, particularly as an issue in one component can

have consequences for other participants elsewhere in the supply

chain

In addition to the private sector, governments at all levels can play a

key role in facilitating the required communication and coordination

within the private sector to respond to this challenge This is

especially true in light of the planning challenges and “peaks” in

demand sometimes associated with a significant volume of

construction projects in a short period of time

A common thread throughout this analysis is the desire to maximize

the benefits to Canada from the western expansion There is a clear

desire to see governments play a leadership role in bringing widely

distributed industrial interests together in pursuit of this common

objective

Going forward, there is clearly substantial room for additional work

in the area of steel demand for specific markets This study has

sought to provide a useful baseline of information and a starting point

for more intensive examination of these opportunities

10 Research model and hypotheses

Figure 4: The proposed research model

Adapted from conceptual model by Trieu Tien Phung (2012)

Table 2: List of Hypotheses

H 5 Brand does affect to Market’s Opportunity

H 6 Intention does affect to Market’s Opportunity

Chapter 3 - Research methodology

Based on research objectives, the scope, and research methodology concerned

in chapter one; and literature review presented in chapter two; this chapter particularly

presents the approach used to conduct the research

The qualitative method was conducted by collecting secondary data

Secondary data refers to the statistical material which is not originated by the

investigator himself but obtained from some one else's records, or when Primary data

is utilized for any other purpose at some subsequent enquiry it is termed as Secondary

data This type of data is generally taken from newspapers, magazines, bulletins,

reports, journals etc e.g if the data published by RBI on currency, National Income,

Exports or Imports, is used in some other statistical enquiry, it will be termed as

Secondary data According to M.M Blair, "Secondary data are those already in

existence for some other purpose than the answering of the question in hand" In my

research, I use secondary data such as books, articles, previous studies and data from

Internet, Vina Kyoei Steel Company’s internal data, and Vietnam Steel Association’s

data I review the theory of the market’s opportunity

The quantitative method is done by surveying the questionnaires with the

sample size of 200

3 Quantitative approach

3.1 Sampling

Population sampling is the process of taking a subset of subjects that is

representative of the entire population “The sample must have sufficient size to

warrant statistical analysis” (Joan Joseph Castillo, 2009) Sampling is done usually

because it is impossible to test every single individual in the population It is also

done to save time, money and effort while conducting the research

Still, every researcher must keep in mind that the ideal scenario is to test all

the individuals to obtain reliable, valid and accurate results If testing all the

individuals is impossible, that is the only time we rely on sampling techniques

Performing population sampling must be conducted correctly since errors can lead to

inaccurate and misleading data

In this case, a sample was a good solution; sample was defined as a small

percentage of a population In this research, the population was defined that was all

customers who used to use steel products in Vietnam Sample consists of construction

contractors in Ho Chi Minh City because they have certain experiences as well as the

knowledge in this field

In order to estimate the sample size which was used in exploratory factor

analysis, Hair et al (1998) mentioned that at least 5 samples should be used to

estimate 1 item I had 18 observed variables in this thesis Therefore, the sample size

was at least 5 * 18 = 90 In order to well adapt with the sample size criteria of Hair

(1998), the sample size research targeted in this research is 200

Object Construction contractors

3.2 Interview with General Manager of Vina Kyoei Steel Company

“The interview is the primary data collection technique for gathering data in

qualitative methodology; an interview can be conducted individually or in groups”

(Cooper & Schindler, 2006) My research was conducted individually I interviewed

Mr Tran Ngoc Tuan (General Manager of Vina Kyoei Steel Company) in order to

test and get more opinions for my questionnaire adjusted

3.3 Pilot study

A pilot, or feasibility study, is a small experiment designed to test logistics and

gather information prior to a larger study, in order to improve the latter’s quality and

efficiency A pilot study can reveal deficiencies in the design of a proposed

experiment or procedure and these can then be addressed before time and resources

are expended on large scale studies Animal experiments are not usually carried out in

isolation, but are part of a program of research A good research strategy requires

careful planning and a pilot study will often be a part of this strategy

Cavana (2001) suggested that “a questionnaire should be piloted with a

reasonable sample of respondents coming from the target population Pilot testing can

help detect the weakness in questionnaire design” Therefore, it was considered that

the pilot survey would be useful in order to test the content and the meaning of words,

or if necessary modify measurement scales to be suitable with the context of Ho Chi

Minh City

In my study, the pilot survey was conducted at construction companies using

the qualitative method through questionnaire with 25 construction contractors It has

been suggested that for most questionnaires the number of respondents for a pilot

study should be at least 10 (Fink, 1995) The purpose of the pilot study is able to

check the content, meaning of words and get suggestions from the customers for

possible questionnaire revision of the instrument for validity assessment

3.4 Data collection

My research was conducted by quantitative research mainly Data for my

thesis is gathered at construction companies in Ho Chi Minh City and the participants

who are construction contractors of those companies This data is collected from

August 30 to November 5 2012 I collected 200 questionnaires “the questionnaires

will be reviewed and eliminated which are not satisfied: answers of questionnaire are

the same for all statements; the questionnaire has 10% of all statements can not be

answered (Gilbert, 2004)” I have the list of construction companies in my company,

and then I proactively contacted them and made the appointment with them to survey

They all seemed interested in this new product, so it was not difficult to do the survey

and explain for them

3.5 Data analysis

SPSS software 18 was used in this research to analyze the collected data The

analyze procedure spent through six steps: the first step is Descriptive statistics, the

second step is Reliability statistics, the third step is Exploratory factor analysis, the

fourth step is Correlation testing, the fifth step is Regression analysis, and the final

step is Crosstabs analysis

3.5.1 Descriptive statistics

"Descriptive statistics is the discipline of quantitatively describing the main

features of a collection of data (Mann, Prem S., 1995)" A set of brief descriptive

coefficients that summarizes a given data set, which can either be a representation of

the entire population or a sample The measures used to describe the data set are

measures of central tendency and measures of variability or dispersion

Measures of central tendency include the mean, median and mode, while

measures of variability include the standard deviation (or variance), the minimum and

maximum variables, kurtosis and skewness

Descriptive statistics provide a useful summary of security returns when

performing empirical and analytical analysis, as they provide a historical account of

return behavior Although past information is useful in any analysis, one should

always consider the expectations of future events

In my research, Descriptive statistics will present the minimum value,

maximum value, Std Deviation, and mean of all variables

3.5.2 Reliability statistics

“Reliability statistic indicates how well the items in a set are positively

correlated to one another” (citied Nguyen Phan To Chan, 2012)

To assess the reliability and validity of measurement scales, Cronbach’s Alpha

was used in this research Cronbach’s Alpha was used to eliminate garbage items with

low item – total correlations (< 3) The measure would be chosen if Cronbach’s

Alpha was from 6 (Tho et al., 2009)

3.5.3 Exploratory factor analysis

Exploratory factor analysis (EFA) is a statistical method used to uncover the

underlying structure of a relatively large set of variables EFA is a technique within

factor analysis whose overarching goal is to identify the underlying relationships

between measured variables (Norris, Megan, Lecavalier, & Luc, 2009)

In my research, EFA was applied to the data of the main survey in order to

conduct a primary test of the validity and reliability of the instrument The purpose of

this test is to assess the scales used to measure the constructs, i.e to refine the

measures; the refinement is based on reliability and dimensionality

“Consider the accordance of EFA: KMO coefficient (Kaiser-Meyer-Olkin) is a

criterion for evaluating the accordance of the data for EFA The EFA is appropriate

when 0.5≤KMO≤1” (Hoang Trong & ctg, 2005) “A value of 0 indicates that the sum

of partial of correlations is large relative to the sum of correlations, indicating

diffusion in the pattern of correlations (hence, factor analysis is likely to be

inappropriate) A value close to 1 indicates that patterns of correlations are relatively

compact and so factor analysis should yield distinct and reliable factors” (Andy Field,

2009)

The criteria to determine the number of factors are extracted: all extraction

factors must have Eigen value > 1 This standard is widely accepted as the basic for

adding or removing any factor (Kaiser, 1960; Rummell, 1970 – extract from Hoang

Trong & ctg, 2008)

We consider the hypothesis of Bartlett’s test of sphericity (H0) is variables that

do not have correlation with overall (overall matrix is homogeneous) When sig ≤

0.05, the hypothesis of correlation between observed variables is zero in overall

(Hoang Trong & ctg, 2008) This data is appropriate when the hypothesis H0 is rejected

The cumulative coefficient of variance explained criteria ≥ 0.5 After EFA,

some factors and variables are unvalued will be rejected or combine with other factors

to establish a new factor

3.5.4 Correlation testing

According to Hoang Trong & ctg (2008), “the correlation coefficient Pearson

is used to measure the degree of close relationship between two or more variables”

“If any variables have correlation below 3 then consider excluding them from

factor analysis” (Andy Field, 2009)

3.5.5 Regression analysis

In statistics, regression analysis is a statistical technique for estimating the

relationships among variables It includes many techniques for modeling and

analyzing several variables, when the focus is on the relationship between a

dependent variable and one or more independent variables More specifically,

regression analysis helps one understand how the typical value of the dependent

variable changes when any one of the independent variables is varied, while the other

independent variables are held fixed

For testing the relationship between the independent variables and the

dependent variable, Multiple Linear Regression was used in my research

Regression model (Sig < 0.05)

Cross tabulation (or Crosstabs for short) is a statistical process that

summarizes categorical data to create a contingency table (Create Survey, 2012)

They are heavily used in survey research, business intelligence, engineering and

scientific research They provide a basic picture of the interrelation between two

variables and can help find interactions between them

3.6 The measurement scale

The literature review presented in chapter two is a theoretical guide for my

study to develop the measurement statement, and the measurement scales of my thesis

were measured basing on the Likert 5 point, with 1: Totally disagree; 2: Disagree; 3:

Normal; 4: Agree; 5: Totally agree, as follow:

Table 3: The measurement scale

Need

1 Our company's current difficulties are to use a lot of manpower and

wasting material in connecting steel during the construction operations

5 point Likert scale

2 Our company takes a lot of time in processing steel (threading the tops of

bar steel, etc.) prior to connecting steel

5 point Likert scale

3

Our company is looking for a new product to help the steel connections

become easier

5 point Likert scale

4

Now, our company is collecting information on the market for steel

products have the ability to connect by a mechanical coupling device

(coupler), and the steel connecting accessories

5 point Likert scale

5 Our company can not import the steel coupling device (coupler) from

abroad because of high costs and inefficient due to buying small quantities

5 point Likert scale

Want

6 We want this new steel product must meet the criteria specified in the

construction law of Vietnam

5 point Likert scale

7 We want the new product to minimize construction time and labor 5 point