Consumer’s perception of low product quality of saigon special in saigon beer alcohol beverage corporation (SABECO)

UNIVERSITY OF ECONOMICS HO CHI MINH CITY INTERNATIONAL SCHOOL OF BUSINESS Consumer’s perception of low product quality of Saigon Special in Saigon Beer-Alcohol-Beverage Corporation S

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

INTERNATIONAL SCHOOL OF BUSINESS

Consumer’s perception of low product quality

of Saigon Special in Saigon Beer-Alcohol-Beverage Corporation

(SABECO) Name: Tran Thi Thanh Huyen

ID: 221500030

Ho Chi Minh City- 2017

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

INTERNATIONAL SCHOOL OF BUSINESS

Consumer’s perception of low product quality

of Saigon Special in Saigon Beer-Alcohol-Beverage Corporation

(SABECO) Name: Tran Thi Thanh Huyen

ID: 221500030

SUPERVISOR: Dr LE NHAT HANH

MASTER OF BUSSINESS ADMINISTRATION

Ho Chi Minh - 2017

Acknowledge

I would like to thank all of my family, friends and colleagues who inspired and supported me in

this thesis writing venture I am really indebted to my supervisor Dr Le Nhat Hanh whose proper

guidance and close supervision helped me to carry out this research to the right direction I

would also like to show my gratitude to all of respondents who shared their experiences with me,

thanks for all valuable time they have invested in this study that gave me precious information

for research Last but not least, I would like to express my thankfulness to my company -

Sabeco, my Boss and all colleagues who supported me a lot during the time doing this research

TABLE OF CONTENTS

EXECUTIVE SUMMARY……… ………… 1

CHAPTER 1 PROBLEM IDENTIFICATION……… ……… 2

1.1 Background of the company……….…….…….3

1.2 Background of the problem……… 7

1.3 Problem identifying …… ……….……….….…… 11

1.3.1 Problem justifying……….……… 11

1.3.2 Justify the existing of problem……….……….……… 16

1.3.3 Definition problem……….……….22

1.3.4 Justify the importance of the problem: literature regarding, consequence effect….…….23

1.4 Potential causes……….……… ………….27

1.4.1 Opinions from other people……… ……….….28

1.4.2 Situation……….……….…….29

1.4.3 Product physical properties……….…….29

1.4.4 Storage, use, and convenience of beer……….…….30

1.4.5 Cause - effect tree……….31

1.5 Causes validation ……….32

CHAPTER 2 ALTERNATIVE ANALYSIS………36

2.1 Alternative Solutions……… ……….…… 36

2.1.1 To improve warehousing can adapt to these rule in preservation ……….…… 36

2.1.2 Invest on transportation vehicle beer suitable for ensure quality product………….…… 38

2.1.3 Improving reasonable distribution network……….….39

2.2 Solution comparison……… 40

CHAPTER 3 ACTION PLAN……….43

CHAPTER 4 CONCLUSIONS AND RECOMMENDATION… ……….52

REFERENCES ……….……… 54

APPENDIX 1 ……….……….……58

APPENDIX 2 ……….………….61

APPENDIX 3 ……….………….63

LIST OF FIGURES

Figure 7: Model of determinants and consequences of perceived product quality

LIST OF TABLES

Table 1 : Company information

Table 2 : Market share of all products of Sabeco from 2013 to 2015

Table 3 : Sample details

Table 4 : Customer’s evaluation for Saigon beer report

Table 5: Technical requirement of Saigon Special beer

LIST OF ABBREVIATIONS

- SABECO: Saigon Beer-Alcohol-Beverage Joint Stock Corporation

- HABECO: Hanoi Beer and Beverage Corp

- MoIT: Ministry of Industry and Trade

- BMI: Business Monitor International

- SATRACO : Saigon Trading Corporation

- SABETRANJSC: Sabeco transportation joint stock company

- SABECUCHI: SABECO Cu Chi Factory

- QA: Quality Assurance

- VBA: Vietnam Beverage Association

EXECUTIVE SUMMARY

Beer industry has witnessed higher total volume growth despite the rise in the Special Consumption Tax from 50% to 55% since 2016 Positive economic conditions in Vietnam have boosted consumers’ incomes and forced them to shift from unbranded to branded beer, as higher quality and taste Saigon Alcohol Beer & Beverages Corp (Sabeco) saw a reduction in its market share although it maintained its lead in beer Saigon Special is a new brand of SABECO that is aiming at the target segment of people who tend to drink premium beer Although at present SABECO is the leading beer producer with the market share accounting for 39% in 2016 however the launching of its new brand Saigon Special was not

so successful because SABECO lacked of an effective distribution plan especially focusing on preservation during transportation activities for this new brand In exploring the weakness point of the product, Saigon Special, we have given some recommendations to grow market share and market size by investment into quality ptoduct to create the customer need

Customers’ perspective of quality has been proven to be the primary element contributing to the success

of the company In which, four important factors affecting customers’ perspective of quality are opinions from other people, situation, physical properties and storage, use, convenience of beer The purpose of this thesis is to identify the root cause led to the main problem after analyzing all possible causes Strongly invest for retailer in terms of point of sales material (POSM), display (for short term) and invest

on distribution system in both policy and display, especially at point of sales (for long term) Finally it implicates potential solutions that can be applied to solve this problem

CHAPTER 1: INTRODUCTION

The first chapter presents an introduction to the research, as well as introduces about company

background and discusses the purpose, objectives and research problems of this company Chapter Two will present the literature review which explains the theoretical framework and give some solutions for this research that will be used for the survey In this chapter, the two main research methods, namely quantitative and qualitative research, will be discussed The third chapter will present the empirical findings Lastly chapter fourth wills conclusion and recommendations for companies and further studies

1.1 Company background

SABECO is built in 1875 In June 1977, the factory was renamed as Saigon Brewery factory In 1993 the factory was renamed as the Saigon Beer Company and became one of the company has the most modern equipment in the beer industry in Vietnam In July 2003, Saigon Beer Company expended and became one of leading enterprises in the beer industry in Vietnam- Sabeco In early in 2008 became SAIGON BEER – ALCOHOL – BEVERAGE JOINT STOCK CORPORATION upon the government's decision For over 30 years of operation in the brewery, alcohol and beverage industry, SABECO has developed to be market leader in Vietnam’s beer business in many respects

Company name, location SAIGON BEER – ALCOHOL – BEVERAGE JOINT STOCK CORPORATION

6 Hai Bà Trưng, Bến Nghé, 1, Hồ Chí Minh

Website Website : http://sabeco.com.vn

Product Main product classes Beer (main product), soft drinks, and

low alcoholic drinks

Table 1: Company information

Achievements

SABECO recognized titles as of to date include: The brand name “Saigon Beer” has been recognized as the “trusted brand” for 22 years; The “Saigon Beer” product has been repeatedly voted as a “High – quality Vietnamese product” for 13 consecutive years from 1997 to 2012; The “333” canned beer product won the Silver Medal at the international beer content held in Australia in years 1999, 2000, 2001

SABECO business includes three main fields First, manufacture and sale kinds of beer, alcohol,

beverage, packaging, label for beer, wine, soft drinks and food; Sales materials, equipments, parts related

to the production of beer, wine, soft drinks, assorted flavors, juice for the production of beer, wine and soft drinks; food Second, import and Export all types of: beer, wine, soft drinks, materials, equipments, wine and soft drink Third, provide training services, research, technology transfer, investment

consulting, construction, installation, repair and maintenance in the Beer - Alcohol – Beverage industry and food SABECO main products include 333 Can and Bottle Beer, Saigon Lager Beer (Sai gon Xanh), Saigon Export (Sai gon Do) and Saigon Special Beer (Sai Gon Lun) Saigon Do, 333, Saigon Xanh are among 15 best – selling products of 36 cities Saigon Do takes first place in On – Premise channel while

333 Can become leader in Off – Premise Consumption SABECO Vision to 2025 is to become “national leading” Beverage Group, with high position in regional and international market” By the end of 2016, Sabeco included 23 branches and 21 co-owned joined ventures A part of them are dealing only in beer trading or indirectly connected to beer The production capacity of the 23 breweries reaches about 1800 mln liters per year In view of growing output volumes the company is investing into construction of new breweries planning to bring their net capacity to the level of 2000 mln liters by 2020

Missions

SABECO defines four Missions to follow, which are:

 to develop Vietnam Beverage Industry to the world level;

 to heighten Vietnamese culinary culture;

 to improve Vietnamese life quality through the provision of high quality, safe and nutritious beverage products;

 to bring real benefits to shareholders, customers, partners, employees and society SABECO defines his core values into: Traditional Brands, Social Responsibility, Cooperation for Mutual Benefits and Continuous Improvement

The Organizational System

SABECO has a total of 23 subsidiaries and 21 associated companies and joint ventures operating in the production chain (see Fig.1) as follows:

 Production, supply and packaging materials

 Provide input transport services, logistics, warehousing and other auxiliary activities

 Production and sales, distribution of beer, wine,

 Investment in other industries, mainly construction and supply estate services lemongrass

Figure 1: Organizational system of SABECO

Subsidiaries

SABECO

Supply team

Production- Technology team

Marketing team

Investment- Development team

Finance- Account team

SABECO NCT

SaiGon Cu Chi FActory

Material-Packing

Packing SG beer company

Glass Malaya Company

Packing Samiguel Phu Tho

Company

Packing- Warehouse BinhTay

Food’s SABECO company

ChuongDuong Beverage BinhTay Wine Company

Commerce SABECO Ltp Transportation Company

Commerce Northern SABECO Commerce North Central Coast SABECO Commerce Central SABECO

Commerce Central Highland SABECO Commerce South Cental SABECO Commerce East SABECO

Commerce East Northern SABECO Commerce Tien river SABECO Commerce HSABECO

1.2 Background problem

1.2.1 Current situation of Sabeco

Sabeco has been remained the leading position in beer industry despite the appearance of numerous beer brands in Vietnam recently According to Vietnam beer alcohol beverage association,1Sabeco has kept the highest market share until 2015, followed by Heineken and Habeco It takes about 43% of market share while Heineken has 21.5% and Habeco with 19.7% (Figure 2)

Figure 2 Market share of beer market in 2015

However, although holding the first position in Vietnamese beer industry, market share of Sabeco has been decreased continuously Figure 3 shows that Sabeco gets the market share of 51.4% in 2012 (more than 50% of total market), however it drops to 47.5% in 2013, 45.2% in 2014 and 43% in 2015 Over 3 years, its market share has been reduced up to 8.4% 2

Figure 3 Market share of Sabeco from 2012 to 2015

The decrease of market share has posed an outcome of many problems How to identify and solve these problems to gain the market share again is the main objective of this thesis

1.2.2 Current situation of Saigon Special beer

According to a research conducted by Sabeco in 2010, Saigon Special beer is a brand that belongs

to the first four brands out of list top ten most popular beers within 36 biggest cities in Vietnam Its target segment is Vietnamese people who prefer premium beer, white collar and from middle to high income It

is the first brand oriented as a premium brand of Sabeco and positioned as high-end product which targets

to young and dynamic consumers 3

Regarding the decrease of market share of Sabeco, Saigon special beer has been chosen as the main product to this research because in comparison with other products like 333, Saigon export… market share of Saigon special beer has been decreased continuously at the highest level, from 23.4% in

2013 to 19.8% in 2014 and 18.7% in 2015 4

Table 2: Market share of all products of Sabeco from 2013 to 2015

Once customers can remember about the brand at their first thinking, it means that this brand has chance

to attract the purchase.This feature is the most important one of the evaluation about brand awareness According to the research of 2015 survey by major Japanese brewer Kirin Holdings Co, Vietnam, Saigon special got 5.1% among 395 respondent for the question " What’s your most favorite brand beer” and

stood at number 5 in consumer’s top of mind

The figure 4 shows that Saigon Special did not choose much comparing to Heineken, Tiger by users

Customers can contact to customer support department for any questions or complaint’s information during using period, they completely unsatisfied with the quality of product what did not meet their desire According to Kim Long Who is a food’s engineer working at Quality Assurance said that:

“Each year he received some of consumers’ complaints about quality to product Until June, total is 6 cases

complaints from consumers Among that have five cases related to quality product and one case is mistake of packing Detail to, five cases related to quality product , the consumer complain about physical characteristics such as crusted beer, sour beer, ….He must be collect these mistake products from complainers and check again

quality product one more Although, before delivering product to customers, the technical staff checked carefully product status”

Regarding yearly report of marketing team from customer support department, the level of customer satisfaction was collected in period 2013-2016 The report showed the percentage of unsatisfactory of SABECO’s customers was low level around 11%-22% during 03 years from 2013 to 2016 Nonetheless, from year 2013 and later, it exhibited an increasing trend of unsatisfactory of clients

Level of customer’s satisfaction Saigon special beer

Unstatisfaction

The figure 5: Level of customer’s satisfaction Saigon special beer

From these tentative problems are showed The author continues make clear to find out the real problem

So, the problem here is that what determinant factors affect perception quality consumer’s Saigon Special beer in Ho Chi Minh City?

1.3 Problem identifying

1.3.1 Problem justification

In this part, the author will justify whether the thing is the real problem at SABECO for Saigon Special product Qualitative and Quantitative approach was adopted through secondary data, survey 40 people in

Ho Chi Minh City A survey of consumer was carried out in which they were questioned about important factors which affect beer consumption, brands of beer they consume and evaluation on Saigon Special beer based on a range of factors linked to consumption It is obvious to see that, for products in Food and Beverage category, factors which determine product quality are still considered to be most important, not only for elder consumer who has several experiences but also for the youth Most previous study cannot

be summarize easily because of a lack of consistency across research findings and the different methods and research designs used to identify attributes comprising product quality 5 Normally, the importance of

a given set of attributes for a product category will be evaluated by consumers Then, they will evaluate the level to which each brand has those attributes Their estimate of quality is obtaining the d by

multiplying the attribute's importance by the rated evaluation of the attribute, and next step, adding to all

of the attributes to obtain an overall product quality status 6 Different authors have studied perceived quality and preferences about beer using different approaches According two author’s discussion about the relationship between market share and customers’ quality perceptions, market share can influence quality by creating positive network externality In other words, when a product has positive network externality, bigger market share brings higher quality perception of customer.7 According to the writer that sometimes we are affected by other opinion’s people when we decide to buy a brand, because of, more consumers buying this product which the brand is popular And most of people not want to be outdated 8 The customers are easily affect to behavior buying, from that it effect to market share in determining product quality When there is no other information, This is why market share is a

frequently used indicator for consumers to tell product quality.9 However, it is hardly reliable to judge product quality by market share solely as products are diverse It points out that product category

undoubtedly influences the impact market share has on quality perception How does the researcher know the consumers' impressions are accurate if only one measure is used? The validity of a construct is an

issue of measurement rather than definition A valid measurement tool must be selected to make

operational a comprehensive construct for the meaning of product quality.10

1.3.2 Problem existing

Saigon Special was selected as a convenient illustration of some products in SABECO of product quality

A wide selection of competitive brands is available for comparison, as well as varied intrinsic physical differences of quality A convenience sample of 40 respondents was chosen for this survey However, the results are only for illustration and are not representative of all consumers The study design and

application are described in the appendix

The customers' perceived product quality consist of both types of feature, extrinsic and intrinsic,

For that reason it was really essential to evaluate these two dimensions independently: the perceived quality regard to the brand and the perceived quality regard to the intrinsic product characteristics For these quantify, we collected the consumer survey of potential buyers and paid attention to the technical characteristics of Saigon special

In the survey which connect with the “perceived quality attributed to the brand” (PQB) variable, the writer will start doing the evaluation of the brands that consumers provided in the detail, the surveyors will give some directly question about the level of quality the consumers would ensign to each of the 8 brands in the question data, on a five-point Likert scale following already validated quality scales 11.This procedure provided us with a separate score for each of the 8 brands that were offered for sale in the study period Therefore, we obtained a new enclosed variable; the values are between one and five, which collects the average score of the perceived quality attributed to the brand, according our surveyed

consumers As we searched and asked for the brand quality assessment, all products of a particular brand have the same value for this variable

With the “perceived quality attributed to the intrinsic product characteristics” (PQIC) variable, we

combined information related to the technical attributes and subjective information from the consumer survey First, for the Saigon special product, we search for the manufacturers' estimation of the four most important intrinsic technical characteristics for paying for it (Mitra and Golder, 2006) 12 in this way, we pick up enclosed values—between one and five—which collect the quality level of each these four

technical characteristics depending on their objective features

3 Job status Under – graduated student

Having just graduated (< 6 month)

Staff

20%

12.5%

2.000.000 VND - 4.000.000 VND Over 4.000.000 VND

hanging out/relationship Consumer only spend under 1.000.000 VND account for 12.5 percent,

1.000.000 VND - 2.000.000 VND account for 35 percent, 2.000.000 VND - 4.000.000 VND account for 47.5 percent , the remaining are willing to spend over 4.000.000 VND for the same purpose

There is 70% of customer drink beer every week, 2.5% of them only drink after more one month (2-3 months), 7.5% respondents drink in a month and 20% remaining drink every day, especial that there no respondent is never drink beer

For the consumers, product physical properties - functional factors that determine the quality of the product, are the most important factors leading to the choice of products In which has average score of

"5" is very high Also for the consumer, two factors from Saigon special beer that satisfied them most are

“price” (mean point 4) and “brand name” (mean point 4) Other factors influence the selection of beer

products are "brand" (mean point 3), "other opinions" (mean point 3) Despite of not taking the highest score, those emotional factors still significantly impact the choice of consumer products and should be study carefully by marketer

The impact of brand name also play important role in their consuming decision with mean point (4) This

is the reason why the percentage “High” and “very high” of Heineken and Tiger in consumer drinking list is highest one (95%) Besides, the percentage “High” and “very high” of Saigon special beer just list

is (30%) although approach the same premium segment Therefore, continue improving factors which are considered to be Saigon special beer’s strength on satisfying this market, Saigon special beer need focus

on building up the dynamic, modern image to be friendlier to consumers The consumer estimate brands mainly selected are in table 3 : Assess the quality of these brands according your opinion

From that 70% respondents assess the quality of Saigon Special is low and regular I suggest that they should examine which factors affect perceived quality of their products by surveying the consumer’s opinions, or using the qualitative research methods, such as interviews These approaches will make them

Brand Very low Low Regular High Very high

understand customers more deeply The determinants of perceived product quality can be divided into two types One is intrinsic cues that are physical characteristics of the product itself including size, color, flavor, appearance, or aroma Second are the extrinsic cues which are external to the product itself, such

as price, brand image, manufacturer’s image, retail store image, or even the country of origin Almost of consumers can use these physical characteristics to judge product quality in the interview (see appendix 2) Following the result of interview, customer has more power of understanding about the product which has right characteristics, quality of Saigon Special beer Focusing on quality can help a business maintain

a satisfied customer base Among 24 answers of 24 respondents who assesses the quality of Saigon Special is not good, they feel the flavor, aroma, taste, smell, and color of this product is not stability And these quality is not response the expectations of consumers

1.3.2 Problem definition

There are various academics defining the concept of perceived quality According to the researcher said

that “the concept of perceived product quality is defined to include the consumer's response to the entire evoked set of judgments about quality comparisons among competitive brands”. 13 This definition has a some different compare with the current practice of conception product quality on the basis of a

multidimensional list of product attributes to make the construct operational Normally, the importance of

a given set of attributes for a product category is asked to evaluate by consumers Then, they evaluated the level to which each brand has those attributes Their estimate of quality is obtained by multiplying the attribute's importance by the rated evaluation of the attribute, then summing across all of the attributes to obtain an overall product quality score

The customer’s perception created by the companies through the advertising publicities, and other social media intend to purchase the product In the main, the feeling of customer about product quality and its

characteristics provided to them such a performance and reliable of the product The evidence of quality product is made by the brand product to meet the strong belief of the customers 14

In point of fact, actual or objective quality is different from the perceived quality, product-based quality, and manufacturing quality 15 It can be viewed as the difference between overall quality and undetected quality In addition, perceived quality may lead to consumer satisfaction, which is determined by

perceived performance and expectation 16 In spite of the fact that there has more concepts from many authors, each of the definition has the same meaning; that is, perceived product quality is the consumer’s perception quality of overall components of product both tangible and intangible characteristics It may also include performance, features, reliability, conformity, durability, serviceability, and aesthetics etc Above all, it is different from the actual quality of products

1.3.3 Justify the importance of the problem: literature regarding, consequence effect

The perceived product quality has a powerful effect on various variables about business’ performances which can be described as follows:

Profit margins

The pronouncement is from research of the Profit Impact of Market Strategy (PIMS) database developed

at the Marketing Science Institute and the Strategic Planning Institute in Cambridge widely identify as the only complete database in the world of strategic information on many different industries Studies on the PIMS database dramatically determine that market-perceived quality has the relationship with return

on sales positively.17

Brand Power and Market Share

Stobart 17 said that brand power and dominant market share is result of good perceived product quality How the entrepreneurs and managers can make popular brands They must start with a clear understand

of needs and demand of a well-defined group of customers They manufacture products and supply the related services that meet those needs exceptionally well Effective ‘quality control’ measures ensure they do things right the first time in delivering those products and services Therefore, they reach to higher quality in areas that matter to the customer together with a cost structure no higher than that of lower-quality competitors Then, they notify to share with their products’ advantages The customer perceives the quality and the exceptional value are suggested

Brand Equity

Aaker 15 stated that perceived product quality is one of the factors important of brand equity Perceived quality will directly affect purchase decisions and brand loyalty Specially, when a customer is not motivated or able to conduct a detailed analysis It can also support a premium price which,

successively, can make a gross margin that can be reinvested in brand equity

Perceived value

In addition, perceived product quality affects perceived value because it gives value in some ways Firstly, in many conditions, perceived quality of a brand provides a critical reason-to-buy, influencing which brands are included and excluded from consideration, and the brand that is to be selected A customer often will lack the motivation to obtain the information that might lead to an objective

determination of quality in given application Occasionally, the information may simply be unavailable

or the customer may not have the ability or resources to obtain In many cases, perceived quality

becomes important in the customers’ decisions

Returns on investment (ROI) and profitability

According to Jacobson et al 18 show a detailed research of the relationship between of perceived quality and other key strategic variables in addition to ROI, by way to create the view clearly how perceived

quality does gets profitability:

a Market share is affected by perceived product quality In fact, all products have best quality which of certainly are favored and will get a higher share of the market after controlling for other factors

b Perceived product quality affects price Business will allow charge a higher price with higher

perceived product quality Improving profitability or allowing the business to improve quality then the higher price can directly improve and moreover to decrease competitive barriers Addition to, a higher price tends to increase perceived quality by acting as quality cue

C perceived product quality has a direct impact on profitability in addition to its effect on the market share and price Improved perceived quality will increase profitability even when the price and market share are not affected Perhaps the cost of retaining existing customers declines less with higher quality,

or competitive pressures are reduced when quality is improved In any case, there is a direct link between quality and ROI

D perceived product quality does not affect cost negatively In fact, it doesn’t affect costs at all

Willingness to buy

Figure 7: Model of determinants and consequences of perceived product quality

Moreover, the figure shows the consequences of perceived product quality in business Not only affects profit margins but also affects brand power and market share, brand equity, perceived value, returns on investment (ROI) and profitability, and consumers’ willingness to buy with perceived product quality as focused before Besides, some of different study also had given that the consequences of perceived product quality on these variables in summarize, the more consumers perceive product quality the more businesses gets more benefits

Table 4: Customer’s evaluation for Saigon beer report

External factors

Competitors (promotions, new products…) 12% 14.2% 15% 15.5%

Other opinions (friends, family, relatives…) 36% 38.8% 37% 36%

Brand (brand name, country of origin…) 18.3% 17.9% 18.7% 19.3%

Product physical properties (color, taste…) 37.5% 36.7% 36.4% 35.4%

Storage, use, and convenience of beer 14.5% 16.7% 18.2% 19.3%

In this thesis, we focus on factors having high influence on customer’s evaluation on beer product, which are competitors, other opinions; brand, customer personality, situation, price, product physical properties and storage, use, convenience of beers After that, we take a short interview for a group of 10 consumers

We ask them to order these causes from highest to lowest, which affects them mostly in choosing beer Then we exclude 4 factors which have least effect on customers: competitors, brand, customer

personality and price So that we have four factors affecting customer’s evaluation on beer quality: Other opinions, situation, product physical properties and storage, use, convenience of beers

1.4.1 Opinions from other people

Word of mouth (WOM) effects have been demonstrated at various stages of consumer decision-making:

at the early stage, information search,19 during trial or sampling of products,20 and then later as an

outcome of product consumption, 21 and as an alternative to complaining when dissatisfied 22

Opinions from family (parents, sisters, brothers…) have a significant effect on evaluation of customers 23

Mr Duc Anh said that drinking behavior of his family in weekend, holidays leads him to drink beer frequently and evaluation of his father or brother can make him feel better or worse feeling toward a kind

of beer Mr Hoang toldthat when he purchases beer, he has to ask opinions from other members of his family

Along with family influence, friends or peers influence also plays an important role in individual‘s

evaluation of beer Peers’ opinion, peers’ pressure, peers’ usage has been found to have impact on

consumer drinking behavior.24 Mr Liem said that when his friend has negative feeling on taste and color

of one brand of beer, he also does not want to purchase this beer Additionally, Mr Duc Anh told that because of business job, he had to drink so much and opinion from his boss sometime changes his mind when evaluating a kind of beer

1.4.2 Situation

The study of Hajema 25 shows that individuals can engage in different alcohol consumption behaviors in different situation Alcohol consumption levels can vary when individuals play different social roles, in different moods and different venues The drinking occasion also affects to individual’s drinking,

especially in parties or when drinking games are played As interview, Mr Liem said that he has negative feeling when drinking in upset moment and positive evaluation when he felt happy toward one kind of beer

1.4.3 Product physical properties

There are four main elements affecting to beer characteristics are appearance, aroma, flavor and alcohol content.26 Appearance is measured by five key points: glassware used, head retention, lacing, color and clarity Aroma affects importantly and firstly when consumers start drinking Aroma will change with time and temperature so that smelling will help consumers evaluating the quality of beer In one survey, author shows that beer aroma involves in 40% of a beer’s total score 27 Flavor or taste is also an

important part in evaluating beer It takes about 40% of the beer’s score 28 Flavor helps consumer

determine which beers are nutritious and which are poisonous Six flavors are usually included in beers: sweet, sour, salty, bitter, umami, and fatty Alcohol content has impact on health concern in consumer’s perception Alcohol content is various according to different brands but it is usually from 3% to 10% In our study, all customers who are interviewed said that physical properties of beer affect their evaluation

on beer

1.4.4 Storage, use, and convenience of beer

Packaging can affect a beer’s exposure to light and oxygen, two big enemies of beer 29 Ultraviolet light can cause beer to become “lightstruck,” a term often and wrongly used for all sorts of off flavors

Without getting technical, UV light reacts with alpha acids in hops causing them to breakup and recombine with sulfur components creating 3-methyl-2-butene-1-thiol, which in a basic sense is very like skunk spray So, light is bad It stands to reason that beer be packaged in such a way as to minimize light exposure and the ability of this photochemical reaction to occur Oxygen causes beer to oxidize which affecting flavor and aroma of beer Additionally, beer should be storage in cool and dark place from 45 to

600C Wrong storage procedure can reduce shelf life of beer Sabeco has numerous wholesalers and retailers who prefer packages that are easy to ship, store and extend the product’s shelf life About consumers, they are constantly seeking items that are easy to handle, open and reclose They make beer more convenient to customers Beers usually are packaged in different sizes and types to increase its utility.30

Peers (friends) Parents

Aroma

Appearance

Alcohol content Flavor

STORAGE, USE AND CONVENIENCE

Storage

Package

Market share decrease

Customer’s satisfaction decrease

1.5 Cause validation

From the secondary data of Customer Service Department and literature review, we have summarized all possible causes leading to low customer’s perspective of quality After that, we conducted in-depth interview with 6 respondents from 3 groups: customer, employee and agency

to find the main cause of this problem

Regarding to the reason that customers evaluate beer with low quality because of opinions from other people, from the data of Customer Service Department, this cause takes 37%

in 2015 and reduces to 36% in 2016 It means that this reason is not the main cause Customers may be affected by other people however it does not the main reason making them feel badly about this product The company has run many programs to increase positive evaluation among customers, such as: advertisement with percentage of advertisement per revenue up to 4.68% 31 sponsor for many activities relating to community responsibility (in 2016 Sabeco sponsored about 30 billion for charity funds and other community activities) All of them help customers improve positive perspective toward the company

Moving to the second reason that causes customers feel badly about quality of beer: situation, we can see that data also reduces from 10% in 2015 to 9.8% in 2016 It means that situation is not the main reason leading to low customers’ perspective of quality Customers may feel that quality of beer is not good based on specific situation however it does not affect mostly

on their overall evaluation The company also tried to improve drinking situation of customers

by running many programs such as games, beautiful waitress… in restaurants, bars

Physical property of product is the third reason has to be mentioned with the same trend occurs with reduction from 36.4% to 35.4% (2015-2016) It shows that evaluation of customers depends on physical property of beer but it is not the main reason causing low overall perspective of them Currently, Sabeco has invested so much on production from raw materials,