Influenced factors on hanoi consumers satisfaction for safety and hygiene

VIETNAM NATIONAL UNIVERSITY, HANOISCHOOL OF BUSINESS Doan Thi Huong Giang INFLUENCED FACTORS ON HANOI CONSUMER’S SATISFACTION FOR FOOD SAFETY AND HYGIENE MASTER OF BUSINESS ADMINISTRATI

VIETNAM NATIONAL UNIVERSITY, HANOI

SCHOOL OF BUSINESS

Doan Thi Huong Giang

INFLUENCED FACTORS ON HANOI CONSUMER’S SATISFACTION

FOR FOOD SAFETY AND HYGIENE

MASTER OF BUSINESS ADMINISTRATION THESIS

Hanoi – 2010

VIETNAM NATIONAL UNIVERSITY, HANOI

SCHOOL OF BUSINESS

Doan Thi Huong Giang

INFLUENCED FACTORS ON HANOI CONSUMER’S SATISFACTION

FOR FOOD SAFETY AND HYGIENE

Major: Business Administration

Code: 60 34 05

MASTER OF BUSINESS ADMINISTRATION THESIS

Supervisors:

1 Dr Pham Quy Long

2 Dr Nguyen Thi Phi Nga

Hanoi – 2010

TABLE OF CONTENTS

ACKNOWLEDGEMENTS i

ABSTRACT ii

TÓM TẮT iv

TABLE OF CONTENTS vi

LIST OF FIGURES viii

LIST OF TABLES ix

Introduction 1

1 Necessity of the research 1

2 Research Objectives 1

3 Research questions 2

4 Scope of the research 2

5 Research methodology 3

6 Limitations 3

7 Contributions of the research 3

8 Expected results 4

9 Suggestions for future research 4

10 Research structure 4

Chapter 1: Literature Review 6

1.1 Consumer’s satisfaction definition 6

1.2 Theories of consumer’s satisfaction interpretations 9

1.2.1 Psychological interpretation 10

1.2.2 Economic interpretations 16

1.2.3 Sociological interpretation 22

1.3 Discussion of related research 25

Chapter 2: Research model and Hypothesis 30

2.1 Research model 30

2.2 Description of factors in the model 32

2.2.1 Media 32

2.2.2 Product’s quality 35

2.2.4 Product’s label 42

2.2.5 Compliance level of food safety and hygiene 44

2.3 Hypothesis of correlation among factors 45

Chapter 3: Research Methodology 48

3.1 Research purpose 48

3.2 Research approach 51

3.3 Measurement index of factors 52

3.4 Sample selection 55

3.5 Data collection 57

3.6 Data analysis 59

3.6.1 Validity 59

3.6.2 Reliability 60

Chapter 4: Data presentation and results 62

4.1 Data presentation 62

4.2 Some results 76

4.2.1 The most important factors of Hanoi consumer’s satisfaction regarding food safety and hygiene 76

4.2.2 Consumer’s satisfaction regarding food safety and hygiene by influenced factors 79 4.2.3 Hypothesis tested 81

CONCLUSION 85

REFERENCES 87

APPENDICES 101

Appendix A: Survey questionnaire for Chinsu sauce product 101

Appendix B: Survey questionnaire for Dr Thanh product 104

LIST OF FIGURES

Figure 1.1: Loyalty in different situation of satisfaction and attitude 8

Figure 1.2: Interpretations of consumer’s satisfaction/dissatisfaction 12

Figure 1.3: Consumer surplus 18

Figure 1.4: Hypothetical utility curves 21

Figure 1.5: Classification of consumer satisfaction/dissatisfaction research 26

Figure 2.1: The structural model of influenced factors on consumer’s satisfaction on food safety and hygiene 32

Figure 2.2: Pricing strategies matrix 39

Figure 4.1: Gender in Dr Thanh and Chinsu sauce survey samples 63

Figure 4.2: Frequency of using products in the recent two surveys 67

Figure 4.3: Willingness to introduce products to others 68

Figure 4.4: Satisfaction level of respondents with Chinsu sauce product 72

Figure 4.5: Satisfaction level of respondents with Dr Thanh product 76

Figure 4.6: The importance of influenced factors in Dr Thanh survey 77

Figure 4.7: The importance of influenced factors in Chinsu survey 78

Figure 4.8: Respondents' satisfaction regarding food safety and hygiene by influenced factors in Dr Thanh survey 80

Figure 4.9: Respondents' satisfaction regarding food safety and hygiene by influenced factors in Chinsu survey 81

LIST OF TABLES

Table 3.1: Assessing the importance of influenced factors of consumer’s satisfaction

53

Table 3.2: Assessing the satisfaction level of consumer’s satisfaction regarding food safety and hygiene 54

Table 4.1: Age category in the two surveys 64

Table 4.2: Job positions of the samples in the two surveys 65

Table 4.3: Monthly income of the samples in the two surveys 65

Table 4.4: How long the respondents have used products in the two surveys 66

Table 4.5: Media factor in Chinsu survey 69

Table 4.6: Quality factor in Chinsu survey 70

Table 4.7: Price factor in Chinsu survey 70

Table 4.8: Label factor in Chinsu survey 71

Table 4.9: Label factor in Chinsu survey 71

Table 4.10: Media factor in Dr Thanh survey 73

Table 4.11: Quality factor in Dr Thanh survey 73

Table 4.12: Price factor in Dr Thanh survey 74

Table 4.13: Label factor in Dr Thanh survey 74

Table 4.14: Label factor in Dr Thanh survey 75

Table 4.15: Significance of influenced factors in Chinsu survey 82

Table 4.16: Significance of influenced factors in Dr Thanh survey 83

1 Necessity of the research

With annual growth rate of 1.2%, Hanoi population reaches approximately 6.7 million people in 2010, the demand for food is increasing more than ever before despite the fact that land for agriculture is getting smaller due to urbanization Therefore, food consumption situation becomes more complex and hard to control

Nowadays, many cases of un-safety and in-hygiene food have been revealed and punished by food management authorities including Ministry of Health, Ministry of Industry and Trade and Ministry of Agriculture and Rural development As the result, Hanoi consumer’s satisfaction has been affected and their confidence in food safety and hygiene has been being lost However, there are still some foods brands that take care of consumers’ health and commit to provide only safe and qualified products would beawarded consumers’ trust

In such context, I decide to choose the topic: “Influenced factors on Hanoi consumer’s satisfaction for food safety and hygiene”, to identify key factors influencing consumer’s satisfaction and to propose solutions for marketers in enhancing Hanoi consumer’s satisfaction with food industry

2 Research Objectives

 Study definition and theory of consumer’s satisfaction

 Study factors influencing consumer’s satisfaction in Hanoi regarding food safety and hygiene

 Propose some solutions for enhancing Hanoi consumer’s satisfaction regarding food safety and hygiene.

3 Research questions

In order to achieve the objectives of the thesis, the author of thesis will try to answer the following questions:

 What is definition of consumer’s satisfaction?

 What are theories of consumer’s satisfaction?

 What is research model for the thesis?

 Which influenced factors are selected for the research model?

 Which research methodology is applied for the thesis?

 Which products are selected as sample for the research?

 What are solutions for enhancing Hanoi consumer’s satisfaction regarding food safety and hygiene?

4 Scope of the research

This thesis focuses on the most influenced factors on Hanoi consumer’s satisfaction for food safety and hygiene

For food safety and hygiene issue, food is a broad term which can be classified into import foods and domestic food; fresh food and processed food; etc In scope of this thesis, the author selects two domestic products as research objects in stead of food in general They are fish sauce Chinsu and herbal tea Dr Thanh The research is conducted in Hanoi area, which targets

to those who often buy food They are officers, housewives, students, etc

Thereby, the solutions for enhancing Hanoi consumer’s satisfactionregarding food safety and hygiene will be proposed, based on the research conduction and analysis.

5 Research methodology

Thesis is used methodology of researching the secondary data, primary data; conducting qualitative (by interviewing respondents in Hanoi ) and quantitative by survey regarding their opinions about factors affecting their satisfaction for food safety and hygiene, focusing two selected products as research objects

6 Limitations

 The first limit of this thesis is the scope of work, which focuses

on only two products, not covering all kind of foods in the market

 The second one is the research methodology using quantitative

by survey, with limited observations in the sample Due to limited time and budget, the author only conduct the survey in small scale of approximately 200 observations each survey, which target to sample of officers, students, housewives, etc 189 respondents joined Dr Thanh survey and 198 respondents joined Chinsu sauce survey Therefore, the result will be relatively precisely estimated

7 Contributions of the research

This thesis presents the updated theory of consumer’s satisfaction This theory is good references for researchers, marketers, and leaders for their

On the practice side, some influencing factors on Hanoi consumer’s satisfaction their impacts to consumer’s satisfaction regarding food safety and hygiene will be discovered as a good source for marketers and leaders in order to accelerate consumer’s satisfaction regarding food safety and hygiene.

8 Expected results

The study expects to show the following findings:

 Bring systematic knowledge and theory of consumer’s satisfaction

 Provide a thorough analysis the research result through qualitative and quantitative methodology conducted for two selected products in Hanoi regarding on food safety and hygiene

 Propose the lessons for marketers in enhancing Hanoi consumer’s satisfaction regarding food safety and hygiene

9 Suggestions for future research

Further study can also be carried out to consumer’s satisfaction on food safety and hygiene in Vietnam with variety of products will be chosen for the research objects

10 Research structure

In chapter 1 the nature of consumer’s satisfaction/dissatisfaction is first explored The literature dealing with the conceptualization of consumer’s satisfaction/dissatisfaction is surveyed, followed by a discussion of research investigating factors influencing consumer’s satisfaction/dissatisfaction

Based on the survey of the literature on consumer’s satisfaction/dissatisfaction, a structural model of consumer’s satisfaction and

Chinese cultural value is proposed Chapter 2 contains the main theoretical part of the work With respect to each theoretical part of the work, with respect to each theoretical dimension of Chinese cultural values, potential marketing implications are presented Each component of the model as well

as related hypotheses are presented and discussed

In chapter 3, the methods of collecting empirical data for testing the model and hypotheses are discussed in parallel with the problems related to measurements instruments Results of the pilot survey are also presented and discussed

Chapter 4 content the analysis used in testing the model and hypotheses

The concluding part serves to summarize the research, and draw conclusions based on the research result against the hypotheses and objectives of the study It also offers implications and recommendations for further research

Chapter 1: Literature Review

1.1 Consumer’s satisfaction definition

Before discussing the conceptualization of consumer’s satisfaction, it is useful to consider what “satisfaction” is and how “satisfaction” differs from

“attitude” This section first considers this issue, followed by a discussion of the terms “consumer’s satisfaction” and “consumer dissatisfaction”, and concludes with the definition that is used in this research

Consumer’s satisfaction and consumer attitude

In order to reach a satisfactory definition of consumer’s satisfaction, it

is necessary to distinguish between consumer’s satisfaction and attitude There are quite a number of definitions of the term “consumer’s satisfaction”; amongst the earliest, Howard and Sheth (1969) define consumer’s satisfaction as “the buyer’s cognitive state of being adequately or inadequately rewarded in a buying situation for the sacrifice he has undergone’ From the marketing aspect, Andreasen (1977) stated:

“Business, government, and other nonprofit organizations need measures of how well products and services (performance) are meeting client needs and wants so that they can enhance their own and/or society’s well-being The extent to which these needs and wants are met has come to be called consumer’s satisfaction/dissatisfaction…”

Though being different, these definitions implicitly contain four common elements (Day 1975):

1- The performance of the product or service as perceived by the consumer

2- The expectations of performance which the consumer has

3- The perceived costs or “sacrifices” involved in making the purchase and using the product/service

4- The time at which the satisfaction with the product/service is assessed

Triandis (1971), summarizing central ideas used by other attitude theorists, defined attitude as “an idea charged with emotion which predisposes a class of actions to a particular class of social situations” His definition suggests the three principle components of attitudes:

1- The cognitive component is the IDEA which a person, as an evaluator, perceives in a given context

2- The affective component is the EMOTION which charges the idea

so that a person has positive affects (like) or negative affect (dislike) toward an object

3- The behavior component is the PREDISPOSITION TO ACTION, such as shopping at a department store, buying a shirt or hiring a car

Pfaff (1977) suggested that consumer’s satisfaction can be denoted, in past, by all components of attitudes The cognitive component indicates the confirmation or disconfirmation of expectation and performance of the product; the affective component indicates whether the consumer is satisfied

or dissatisfied with the product; and the conative component, whether to stop

or arouse future purchases in post-purchase situations Therefore, satisfaction

is not only an attitude; it is a richer concept than attitude

Tse (1980) suggested that satisfaction adds additional dimensions to the explanation of a consumer’s information receptivity, choice behavior and brand loyalty Taking brand loyalty as an example, he presented the interaction of attitude and satisfaction in a contingency table as in Figure 1.1.

Source: Tse (1980)

Figure 1.1: Loyalty in different situation of satisfaction and attitude

Cell 1 represents the situation where the consumer likes the product or service and is satisfied with it In this situation, the consumer has stable loyalty and will continue using the product/service Cell 2 presents the situation where the consumer likes the product/service but is dissatisfied with

it This situation may be caused by a sudden decline in the performance of the product/service Lacking confidence in the product/service, the consumer has unstable loyalty and will continue purchasing the product/service only when there is a guarantee of performance or quality Cell 3 represents the situation where the consumer does not like the product, but is still satisfied with it only

because it meets certain basic demands, for example low price In this situation, the consumer has equitable loyalty, no alternative available and is receptive towards advertisements and sales promotions.

Cell 4 represents the situation where the consumer neither likes the product/service nor is satisfied with it This situation is probably caused by market imperfections such as lack of competition, and time pressure In this situation, the consumer has to continue using the product until market imperfections are relaxed Therefore, by studying attitude alone, we cannot account for more detailed differences in the consumer’s loyalty towards brands

Consumer’s satisfaction/dissatisfaction is a complex concept

Throughout this research, it is defined as: a measurable evaluative attitude

which is derived from the disconfirmation of expectations and perceived performance of the product consumed or experienced by the consumer The level of the expectations and perceived performance are determined by every aspect of the purchase-consumption process

1.2 Theories of consumer’s satisfaction interpretations

Since 1976, the term “consumer’s satisfaction/dissatisfaction” has frequently appeared in the marketing literature However, as mentioned in the last section, no consensus on a definition of it has been reached Hunt (1977) attributed this situation to one simple reason: many researchers plunged ahead with measurement problems in consumer’s satisfaction/dissatisfaction when they had not understood the basic conceptual problems These pioneering researchers, who were involved in public-policy affairs inside and outside government in the United States, could afford only minimal effort to

the measurement problems Up to now, consumer’s satisfaction/dissatisfaction has been interpreted in the following ways (see Figure 1.2).

1.2.1 Psychological interpretation

A large amount of research has been done by consumer psychologists and marketing researchers, applying a variety of psychological theories to explain product evaluation, and to assess satisfaction in the consumer decision-making context Theories which have received a considerable amount of attention in consumer’s satisfaction literature are:

Theory of cognitive dissonance Proposed by Festinger (1957), the

cognitive dissonance theory begins with a consideration of two cognitive elements If one element does not follow from the other, the two elements are said to be in dissonance If the two cognitive elements are in dissonance, psychological discomfort will motivate the person to reduce dissonance and achieve consonance in several ways:

1- By changing one of the two elements

2- By lowering the importance of the cognitive elements

3- By adding new cognitive elements which will be consonant with the element in question

4- By making relevant elements irrelevant,

The two cognitive elements may be viewed as the perceived expectation towards the product before use or consumption, and the performance of the product The disconfirmation, if it occurs, will be reduced (assimilated) by the consumer, who adjusts his perception of the product to be more consistent with his expectations

Figure 1.2: Interpretations of consumer’s satisfaction/dissatisfaction

Contrast theory The contrast theory of consumer’s satisfaction predicts

consumer reaction in just the opposite way Instead of reducing dissonance, the consumer will magnify the difference between expectation and the performance of the product/service If the product’s performance exceeds expectation, he will be highly satisfied, but if the product’s performance falls below expectation, he will be highly dissatisfied (Day 1977) This implies that the consumer is very sensitive to unmatched expectations and may react

in an exaggerated way

Assimilation-contrast theory This theory was introduced by Anderson

(1973) in the context of post-exposure product performance, based on Sherif and Hovland’s (1961) discussion of assimilation and contrast effect, in studies of communication effects on attitude change It has been used to explain consumer’s satisfaction by applying one or both of the two theories discussed above In the case of a moderate level of disconfirmation of expectation and performance, the consumer will behave according to the theory of cognitive dissonance That is, the consumer will try to reduce the discrepancy by adjusting his perception In the case of a high level of disconfirmation which is beyond some “latitude of acceptance”, the consumer will behave in accordance with the contrast theory, that is, will magnify the difference between expectation and performance of the product (Day 1975)

Adaptation-level theory Adaptation-level theory is another theory which is

consistent with expectation and disconfirmation effects on satisfaction This theory was originated by Helsen (1964) and applied to consumer’s satisfaction by Oliver (1980b, 1981) Helsen (1964) simply put his theory as follows:

It posits that one perceives stimuli only in relation to an adapted standard The stand is a function of perceptions of the stimulus itself, the context, and psychological and physiological characteristics of the organism Once created, the “adaptation level” served to sustain subsequent evaluations

in that positive and negative deviations will remain in the general vicinity of one’s original position Only large impacts on the adaptation level will change the final tone of the subject’s evaluation For example, someone who sees lots of big cars on the road every day will have a different standard for

"big car" than someone who's surrounded by small vehicles

Opponent-process theory This was originally a theory of motivation

reformulated by Solomon and Corbit (1974) which has been adapted from the basic physiological phenomena known as homeostasis (Fletcher 1942) Homeostasis assumes that many hedonic, affective or emotional states, being away from neutrality and exceeding a threshold level of hedonic feelings, are automatically opposed by central nervous system mechanisms which reduce the intensity of the feelings, both pleasant and aversive, to some constant level (Solomon and Corbit 1974)

Emotional events, such as criticisms or rewards, elicit two sets of processes Primary processes, which evoke emotions that are consistent with the affective tone of the event Threatening events, such as examinations, elicit processes that provoke anxiety Relaxing events, such as meditation, evoke processes that foster composure Opponent processes, which evoke emotions that counter these primary processes Threatening events elicit opponent processes that promote composure Relaxing events evoke opponent processes that provoke anxiety, and so forth

Several properties differentiate primary and opponent processes First, most emotional events will elicit primary processes Only the more intense events will elicit opponent processes Specifically, when the intensity or magnitude

of the primary processes exceeds some threshold, opponent processes are evoked Second, the primary process is elicited rapidly but also declines quickly The opponent process, in contrast, is evoked more slowly but also wanes gradually As a consequence, in response to aversive events, individuals often experience unpleasant emotions initially that gradually decline Indeed, at some point in the trajectory, the opponent processes often overrides the primary process, and a pleasant emotion is experienced called

an overshoot effect Positive events can elicit the converse trajectory of emotions Third, frequent exposure to a specific event, such as examinations

or meditation, does not significantly affect the magnitude or trajectory of primary processes After regular exposure to these events, however, the opponent process is evoked more rapidly and diminishes more slowly

Equity theory An early recognition of this theory first came out of research

by Stouffer and his colleagues (1949) in military administration They referred to “relative deprivation” (equity) as the reaction to an imbalance or disparity between what an individual perceives to be the actuality and what

he believes should be the case, especially where his own situation is concerned This imbalance or disparity will induce an attitude of satisfaction

or dissatisfaction in him This led to Homans’ concept of “distributive justice”, which refers to a condition where an individual’s investments are balanced by his rewards

Among other psychologists (Spector 1956; Patchen 1961) who worked along similar lines, Adams (1963) was the first to adopt the term “equity” to

explain his work on the amount of effort expended by production workers

He stated that “equity exists for a person whenever his perceived job inputs and/or outcomes stand psychologically in an obverse relation to what he perceives are the inputs and/or outcomes of others’ In other words, the perceived inputs (investments or costs) to the job must be in equilibrium with the perceived benefits (rewards) or the individual will be in a state of imbalance, and will attempt to reduce the resulting tension Adams’s definition differs from his antecedents’ in stressing the concepts of costs and rewards It must be realized that another person’s perception that matters most It is the individual’s own perception of his situation which continues to have overriding significance in determining his response pattern This theory can be treated as a special case of cognitive dissonance

In explaining consumer’s satisfaction, a consumer makes his judgment

in a buying decision-making process, by weighing the costs (inputs) and benefits (outcomes) of the product selected, relative to those rejected If the outcomes of this comparison are constant, then the consumer will be satisfied Otherwise, the consumer will attempt to achieve equilibrium by adjusting the perceived costs and benefits of the product selected (Adler and Robinson 1980) Hence, the costs and benefits of the product selected can be viewed as performance, while those of the product rejected as expectation The outcome of the comparison can be treated as the confirmation or disconfirmation between expectation and performance

Huppertz (1979), studying satisfaction associated with shopping, developed different measures of the inputs and outcomes of consumer and seller from shopping events He first gave some examples of the events which measure outcomes and inputs Consumer input should be the price paid, or

the distance to the store Consumer outcome could be the time span that the product lasts, or the amount of help given by advertising The seller input could be the amount spent on advertising or the availability of sales persons

to serve the consumer; and the seller outcome could be the profit made, or the complements from shoppers These ratios were then compared to give a measure of equity or inequity which represents consumer’s satisfaction/dissatisfaction In such a way Huppertz successfully discriminated between satisfied and dissatisfied consumers He used the ratios to make the concept of equity or inequity (satisfaction or dissatisfaction) more operationalized This was indeed a contribution to the application of equity theory to both the conceptualization and the measurement of consumer’s satisfaction; however, what is needed is the development of better measures of inputs and outcomes for specific situations

1.2.2 Economic interpretations

Consumer’s satisfaction/dissatisfaction can also be conceptualized in terms of economic theory Two branches of economic theory are discussed here

Consumer surplus In economic theory, a rational consumer will

allocate his scarce resources in such a way that the ratio of marginal utilities

to the prices of the products will be equal Hence, the total utility which he derives from all products is at its maximum If there are any changes in the prices of the products, his resources have to be reallocated in order to reach a new equilibrium Furthermore, in a given market under perfect competition, the market price is determined by the interaction of consumers and firms in such a way that, when at equilibrium, the price required by the firm is exactly

the price the consumer wishes to pay for a given quantity Therefore, all consumers in a given market are assumed to be prepared to pay the same market price However, there is a gap between total utility and the total amount of money the consumer pays to obtain the products This gap is in the nature of a surplus to the consumer The reason why this consumer surplusoccurs is simply the fact that market price is determined by marginal rather than total utility Each unit of a product is bought at the same price as the last unit But according to the law of diminishing marginal utility, the earlier units are worth more to the consumer than the last Thus the consumer enjoys a surplus on each of the earlier units.

Samuelson (1980) showed how consumers reap the surplus by a diagram which is reproduced in Figure 1.3 In Figure 1.3, when consumers buy OQ1 units of a product at the price of OP1 for each, the total amount of money they pay is OQ1 times OP1, represented by the shaded area OQ1EP1 However, the total utility of OQ1 units of the product in monetary terms is the whole area under the demand curve dd bounded by both the quantity and the price axes Therefore for all those consumers who expect to pay a price at

a level higher than OP1, there exists a consumer surplus which is equal to the difference between the two areas, i.e the area of the triangle P1ER

Source: Samuelson (1980, 10 th ed P 413)

Figure 1.3: Consumer surplus

It is obvious that the larger the surplus, the more satisfied the consumers will be with the product However, there are three points worth noting First, consumers’ surplus is measured at an aggregated level rather than an individual level Since the price of the product is determined by the market and not by and individual consumer himself, the measurement of consumer surplus is difficult Second, the assumption that the market is in perfect competition is not always true Third, the satisfaction derived from consumer surplus does not represent the consumers’ total experience in purchasing/consumption of the product/service (Pfaff 1977) It is a result of a consumer’s reaction to the price and quantity of a product It ignores many aspects of the product such as quality, packaging, convenience, taste, etc Furthermore, according to the concept of consumer surplus, it seems

impossible to arrive at a definition for satisfaction as the discrepancy between the market price and the consumer’s hypothetical price Using this definition,

it would be very difficult to conclude which consumer is more satisfied with the product, when consumers have the same hypothetical price, and those who do not buy are dissatisfied with the product

Utility theory A variety of theories of utility have been developed

primarily in different disciplines, such as economics, psychology, statistics and management science Since economics is the father of utility theory (Fishburn 1968: 340), this section is deliberately placed under the umbrella of the economic theory interpretation of consumer’s satisfaction This section will only give an account of some of the basic notions in utility theory in order to explain how utility of products/services can reflect consumer’s satisfaction

On the practical level, utility theory is concerned with how the consumer chooses and makes his decision according to his preferences and judgments of value (Fishburn 1968) The basic ingredient of utility theory is

an individual’s preference//indifference relations applied to a set of alternatives under a set of internally consistent assumptions There are three fundamental assumptions of utility theory:

1 Connectivity All the alternatives in the set are connected This

implies that alternatives should be related to each other the preference/indifference relations

2 Consistency The preference relation between two alternatives

can not be reversed at some point in time This implies that if the consumer prefers A to B, he cannot prefer B to A or be indifferent

3 Transitivity If there are three alternatives, A, B and C, in the set,

and if the consumer prefers A to B and B to C, then he must prefer A to

C

With these three assumptions, it is then possible to arrange the set of alternatives in a ranking order according to the consumer’s preference This implies that if these three assumptions are held, an ordinal scale of utility can

be generated for the consumer with respect to derive ratio or interval utility scales for alternatives in the set, so as to make interpersonal comparisons possible As a result of this development, marketing researchers have been able to derive metric utility scales and to assign individuals (consumers or stimuli) as points on common metric scales or to multidimensional metric spaces

On a utility scale, a number is assigned to each of the preference objects (alternatives) so that the preference relations among the objects remain unchanged If a scale is developed for several brands of a product, the point on the scale which represents the best of all possible brands as judged

by a consumer is called the ideal point (or brand) (This ideal point might or might not be any of the brands being compared.) The concept of the ideal point provides the basis for assigning individuals as well as objects preference on a utility scale or a multidimensional space

The concept of the ideal point is very useful in interpreting consumer’s satisfaction in terms of the individual’s utility scale or space For an individual, the ideal point serves as the highest expectation of the product he has bought If he expects that performance of the product will be as good as the ideal point and after purchase/consumption perceives its performance as providing a lower level of utility than the ideal point, he will be dissatisfied

with it (see Figure 1.4) If he expects that the performance of the product will

be far lower than the ideal point and after purchase/consumption perceives its performance as providing a level of utility between that of the ideal point and that of his expectation, he will be highly satisfied with it (see Figure 1.4) Hence, distances are interpreted as reflections of satisfaction The closer the actual product is to the ideal point, the higher the satisfaction The same is true when the actual product is located in a multidimensional space

Figure 1.4: Hypothetical utility curves

In summary, it seems possible for utility theory to provide a simpler way to conceptualize satisfaction than the confirmation of expectation

approach However, from a theoretical point of view, utility theory provides a useful but highly abstract model when use is made of “utility” (or distance) and “ideal point” to reflect the level of satisfaction, and an explicit criterion such as expectation is not provided.

1.2.3 Sociological interpretation

Satisfaction/dissatisfaction is not only a term in the marketing literature; it also exists in the sociological literature under the heading of alienation and communication effect theory These two concepts have been extensively used in the marketing literature to interpret consumer’s satisfaction/dissatisfaction

Alienation The concept of alienation has a long history in sociological

literature Alienation is a psychological state of an individual (Clark 1959) There are a variety of definitions of alienation in the sociological literature (Clark 1959; Nettler 1957; Seemen 1959; Dean 1961), but the concept of alienation can be identified in four commonly accepted forms: powerlessness, meaninglessness, normlessness and isolation These four forms, as Clark (1959) argued, all pertain to a man’s feeling of lacking in means to eliminate the discrepancy between his definition of the role he is playing and the one he feels he should be playing in a specific situation

Powerlessness Seemen (1959) defined this form of alienation as “the

expectancy or probability held by the individual that his or her own behavior can not determine the occurrence of the outcomes’ From a consumer point of view, powerlessness is the feeling of not being able to influence business behavior in order to protect one’s interests as a consumer Allison (1977) gave the following examples of powerlessness: “Most companies are (not) responsive to the demands of the consumers,” and “People are unable to help

determine what products will be sold in the store,” In some cases, a consumer will feel powerless when a firm does not respond to his/her requests for corrective action due to the failure of a product/service to meet his/her reasonable expectation.

Meaninglessness Seemen (1959) defined meaninglessness as “a low

expectancy that satisfactory predictions about future outcomes of behavior can be made” From the consumer standpoint, meaninglessness occurs when

a consumer finds himself/ herself not able to make wise decisions on purchases because of lack of self-confidence, insufficient information about alternative products, or intelligence According to Lambert (1976), it is generally unintelligible product claims that contribute to meaninglessness Hence if consumers are able to consider an appropriate amount of easily understood and objective information about product characteristics, meaninglessness will be greatly reduced

Normlessness According to Dean (1961), there are two types of

normlessness: purposelessness and conflict-of-norms Purposelessness can be described as the absence of values that might give purpose or direction to life, and the loss of intrinsic and socialized values (MacIver 1950) Conflict-of-norms can be defined as the difficulties of a person who incorporates conflicting norms in his/ her personality In the consumer context, purposelessness is usually used Hence, normlessness may be described as the belief that generally businesspeople are engaged in unethical and unjust marketing practices Evidence has shown that feelings of normlessness exist among consumers Most consumers believe that they have been deceived or cheated by business people (Lambert and Kiffin 1975) The belief that manufacturers purposely produce new styles of cars to phase out the old ones

is another manifestation Normlessness will result in skepticism, distrust of businessmen, and even loss of confidence in the marketplace.

Isolation According to Clark (1959), isolation is a feeling of

separation from the group or from group standards It has been shown that isolation can result in many behaviors such as low social participation, spatial mobility, lower percentage of voting, greater unemployment, and a higher rate of job turnover (Jaco 1954) In the consumer context, the feeling of isolation occurs when consumers are not able to understand the real meaning

of advertisements, to identify with business practices or to experience pleasant shopping conditions Reich (1970) attributed the cause of this feeling

to the grossly commercial nature of American culture Consumers have repudiated society’s primary values and beliefs, and the marketplace is in fact one of the outlets for venting the consumers’ resentment and frustration Hence, Lambert (1976) concluded that isolation is probably the most difficult form of alienation for business people to cope with

In the marketing literature, the concept of alienation has served to explain consumer dissatisfaction from the macro aspect It shows why the ineffectiveness of the marketplace has brought about consumer discontent (dissatisfaction) (Allison 1977; Lambert 1976) Lundstrom (1974) and Lundstrom and Lamont (1976) conducted a comprehensive study to develop

a scale to measure consumer discontent In a more recent study, they also found that consumer discontent is positively correlated with different forms

of alienation (Lundstrom and Kerin 1976)

Recent work has reported that consumer alienation fails to discriminate

between complainers and non-complainers (Clabaugh 1978; Clabaugh et al

1979) This implies that consumer alienation, though being able to explain

consumer discontent, is ineffective as a indicator of complaint behavior This might be due to the fact that it has acted as a more remote and indirect variable than consumer discontent

Communication effect theory This theory is completely different

from the theories mentioned above, in that it does not emphasize disconfirmation of expectation and performance of a product/service It states that consumer’s satisfaction/dissatisfaction is a result of the consumer’s responses to changes in communication but not his cognitive or affective evaluation of a product/service (Pfaff 1977) Communications are only received in interpersonal, intergroup, or mass-communication situations

Communication affect theory makes no attempt to explain how satisfaction would be changed by the effect of interactions and communications within which the consumer is placed This is because the effects of a message are always entangled with the predisposition of the consumer towards the product/service, which makes it difficult to explain why consumer’s satisfaction/dissatisfaction changes (Pfaff 1977)

1.3 Discussion of related research

Research investigating factors influencing consumer’s satisfaction/dissatisfaction can be classified into three groups (see Figure 1.5):

1- Product-specific factors

2- Consumer-specific factors

3- Situation-specific factors

Figure 1.5: Classification of consumer satisfaction/dissatisfaction research

Research into product-specific factors is a study of how products and their attributes affect consumer’s satisfaction/dissatisfaction The product factors are typically the consumer’s satisfaction/dissatisfaction with different kinds of products such as durable and non-durable products and services The attribute factors are the specific attributes which affect consumer’s satisfaction, such as functional and aesthetic attributes, and post-sales service Functional attributes are all attributes which affect the fitness of the product/service to the task and for the consumer, for example, price and quality Aesthetic attributes are often included with functional attributes, but they belong to a different motivational set, and therefore should be treated separately These attributes are usually associated with product categories such as furniture, clothing and artwork (Levy and Czepiel 1974; Czepiel and Rosenberg 1977a) Post-sales services are usually important, and may often account for a great part of satisfaction/dissatisfaction, especially with durable products such as electrical and electronic appliances and automobiles These three kinds of attributes are most commonly studies and are apparently mandatory in any study concerned with consumer’s satisfaction/dissatisfaction.

Consumer-specific factors are the personal characteristics of the consumer which affect satisfaction These characteristics may contribute to explain why, and not how, satisfaction or dissatisfaction is derived Very often when functional attributes fail to show any relationship with satisfaction,

these characteristics come into effect (Baumgarten et al 1972) This research

involves five kinds of variables They are socio-economic variables, graphical variables, personality traits, personal values and cultural values

psycho-Situation-specific factors are the ways in which purchase, consumption, communication and response situation affect satisfaction This kind of research is growing in importance in the consumer’s satisfactionliterature.

Summary

It was revealed that consumer’s satisfaction varied across product categories On the one hand, consumers of cars and car repairs have been found to be the most dissatisfied category Price paid failed to turn up as an important predictor of satisfaction Furthermore, warranty service also appeared to be a serious source of dissatisfaction in the post-services category On the other hand, taste and freshness in the food category, and service calls after purchase, were regarded as the most important attributes influencing satisfaction

Literature about the characteristics of satisfied and dissatisfied consumers is limited Most works have focused on socio-economic characteristics However, there has been a considerable divergence of findings with respect to these characteristics The only consistent relationship

to emerge is the effects of age on satisfaction with products Relationships of varying strength and direction have been reported with respect to education, income, gender, social class, etc

Work on personality traits of satisfied and dissatisfied consumers was very fragmented, with different results Personal values were also found to be

an important factor influencing consumer’s satisfaction, according to the work of Vinson and his colleagues who pioneered the examination of the relationship of personal values and satisfaction

With regard to contribute to consumer’s satisfaction and dissatisfactionarea, researchers have conceptually felt the importance of some influenced factors on food safety and hygiene in influencing behavior Several conceptual models have been developed but no empirical work has been reported to date.

Chapter 2: Research model and Hypothesis

2.1 Research model

A review of the literature pertaining to consumer’s satisfaction/dissatisfaction was presented in the last section There are probably many factors which may influence consumer’s satisfaction regarding food safety and hygiene such as culture, geography, living standards, education, income, etc…However, in the scope of the thesis, the author decide to select following five factors:

 Media

 Product’s quality

 Product’s price

 Product’s label

 Compliance level of food safety and hygiene

Why are these factors selected for the research?

Firstly, it was concluded that no study had investigated the full set of public media, product’s quality, product’s price, product’s label, compliance level of food safety and hygiene This thesis is therefore an attempt to fill this gap in the literature

Secondly, regarding food safety and hygiene issue, product’s quality, product’s price, product’s label are fundamental factors when assessing a food product Compliance level of food safety and hygiene mentions how consumers believe in manufactures’ compliance level regarding regulations

of food safety and hygiene

Thirdly, media factor is quite a new factor which has not yet been studied much so-far That would be a good chance to see if media factor has any influence on consumer’s satisfaction regarding food safety and hygiene

The model is presented in this chapter and its paradigm is presented in Figure 2-1 This section describes in detail each component or variable in the model The operation of the components will be discussed in next chapter The model encompasses the following components:

1 Media

2 Product’s quality

3 Product’s price

4 Product’s label

5 Compliance level of food safety and hygiene

6 Consumer’s satisfaction on food safety and hygiene

The first five components are independent variables of the model while the last component is dependent variable Causality between components in the model is indicated by arrows which show the direction of postulated influence The model assumes that there is a one-way flow of causation The solid together with the arrows show hierarchically how determinants cause or influence other determinants

Figure 2.1: The structural model of influenced factors on consumer’s

satisfaction on food safety and hygiene

2.2 Description of factors in the model

2.2.1 Media

According to Wikipedia, In communication, media (singular medium) are the storage and transmission channels or tools used to store and deliver information or data It is often referred to as synonymous with mass media or news media, but may refer to a single medium used to communicate any data for any purpose

In the scope of the research, we focus on the effect of mass media on consumer’s satisfaction regarding food safety and hygiene in particular According to Answers.com, the definition of mass media is a means of public communication reaching a large audience In modern science terms, mass

media is defined as “Twentieth century newspapers, motion pictures, radio, television, and magazines, all of which have the technical capacity to deliver information to millions of people.”

In Marketing dictionary, mass media is Broad spectrum of radio and television broadcast stations and networks, newspapers, magazines, and outdoor displays designed to appeal to the general public

Different Types of Mass Media 1

Mass media are media, which can be used to communicate and interact with a large number of audiences Be it the pictorial messages of the early ages, or the high-technology media that are available today, one thing that we all agree upon, is that mass media are an inseparable part of our lives Entertainment and media always go hand in hand, but in addition to the entertainment, mass media also remain to be an effective medium for communication, dissemination of information, advertising, marketing and in general, for expressing and sharing views, opinions and ideas Mass media is

a double-edged sword which means that there are positive effects of media as well as negative influences of media Here are some of the different types of mass media:

Print Media

The print media includes newspapers, magazines, brochures, newsletters, books and even leaflets and pamphlets Visual media like photography can also be mentioned under this sub-head, since photography is an important mass media, which communicates via visual representations Although, it is said that the electronic or new media have

replaced the print media, there exists a majority of audiences who prefer the print media for various communication purposes Public speaking and event organizing can also be considered as a form of mass media.

Electronic Media

For many people, it is impossible to imagine a life without their television sets, be it the daily news dose or even the soap operas This mass media includes television and radio This category also includes electronic media like movies, CDs and DVDs as well as the new hottest electronic gadgets

New-age Media

With the advent of new technologies like Internet, we are now enjoying the benefits of high technology mass media, which is not only faster than the old-school mass media, but also has a widespread range Mobile phones, computers and Internet are often referred to as the new-age media Internet has opened up several new opportunities for mass communication which include email, websites, blogging, Internet television and many other mass media which are booming today

Concerning media factor, two sub-factors are taken into account are: (a) Media coverage is wide-spread on a variety of channels; and (b) Communication messages are clear and relevant Supposedly these two sub-factors are equally important to constitute the media factor The sub-factor (a) mentions the media coverage level of the product while the sub-factor (b) pays attention to the clarity and relevance of communication messages

Later in the research the author will analyze the correlation between media effects and consumer’s satisfaction for two selected products