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

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

Name : Le Duong Tin
ID : 11752317
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1 Research Background
2 Literature Reviews
3 Research Methods.
4 Concluding Remarks
 References List
 Appendix
CONTENTS
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ABSTRACT
•Knowing the role of purchase intention is undeniably
important to marketers as a determinant of success.
•In energy market, there are a lot of competitors, many of
which have advance manufacturing facilities and
technologies.
•Energy companies should not emphasize solely on
Electric water heaters’ physical appearance but on the
brand image of the manufacturer.
•Key words: Purchase intention, product quality, service
quality, price fairness, electric water heater, customer
satisfaction.
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INTRODUCTION

Research Background
•The factors that influence purchase
intention of the Ferroli electric water heater
in Central Viet Nam.
•Meeting the requirements of market
demand
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Ferroli Group Snapshot
•Ferroli Group, founded
in San Bonifacio
(Verona, Italia) 1958.
•Run by the brothers,
Dante, Leonardo, and
Luigi Ferroli.
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FERROLI INDOCHINA
FERROLI INDOCHINA
FERROLI INDOCHINA IN VIET NAMFERROLI INDOCHINA IN VIET NAM
LOCATION Thach That Industrial Zone , Quoc Oai, Ha Noi
TOTAL SURFACE 10,000 sqms
PLANT SURFACE 6,500 sqms
PRODUCTION The Electric Water Heater, Solar, Heat Pump, Boiler
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INTRODUCTION
Research Objective
•Gain knowledge about consumer’s purchase intention
toward the electric water heater product.
•Investigate the reasons that may influence intention of
buying the electric water heater products.
•Identify and determine factors that influence project’s

purchasing intention of the Ferroli Electric Water Heater
in Central, Viet Nam.
•Understand impacts of purchasing intention to Projects
in Central Viet Nam (Resort, Hotel, high class
apartment)
•Propose a model of purchase intention that leads to the
Ferroli Indochina Company’s success
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LITERATURE REVIEW (con’t)
Product Quality
• Product quality depends on the expectation of each
customer, which is unique. Quality can be defined in
broad terms as the combination of product attributes,
real or imagined, which are held to be most important
in the opinion of the customer in arriving at a
subjective assessment of a product worth (Anderson
et al., 1994).
• Product quality is a basic driver of buyer behavior
across a wide range of categories in both goods and
services markets. While the financial impact of
product quality has been thoroughly examined in
prior studies (Stewart, 2009)
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LITERATURE REVIEW (con’t)
Service quality
• Parasuraman, Zeithaml, and Berry (1985, 1988)
conceived that service quality is the difference
between customers’ expectation and their perceived
performance of a service.
• Parasuraman et al (1988) have also suggested

that service quality consists of five generic
dimensions: tangibles, reliability, responsiveness,
assurance, and empathy.
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LITERATURE REVIEW (con’t)
Price Fairness
• Price is defined as any price that a consumer uses as a
basis for comparison in judging another price
(Schiffman & Kanuk, 2000).
• Price fairness is defined as consumers’ assessments of
whether a seller’s price can be reasonably justified
(Xia et al., 2004).
• Wilson (1980) first argued that, in a market for
lemons with price-setting sellers, trade may occur at a
distribution of prices rather than at a unique price
• Price-setting sellers more informed than buyers has
been considered by Wilson (1979, 1980)
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LITERATURE REVIEW (con’t)
Customer satisfaction
• Customer satisfaction can be defined using the transaction
specific perspective or cumulative perspective. The transaction
specific perspective indicates that customer satisfaction is the
evaluation based on the recent purchase experiences (Boulding
et al., 1993).
• The customer satisfaction levels are influenced by image, trust
and the importance of a relationship with the customer
(Hasnelly, Eddy Yusu, 2012).
• Customer satisfaction has also been defined as the buyer’s
cognitive state of being adequately or inadequately rewarded

for the sacrifice he has undergone (Howard and Sheth, 1969).
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LITERATURES REVIEW
(con’
t)
Purchase intention
•Purchase intention is defined as “a person’s degree who has
formulated conscious plans to not perform or to perform
some specified future behavior” (Warshaw & Davis, 1985).
• Purchase intentions are personal action tendencies relative
to the brand. Whereas attitudes are summary evaluations,
intentions represent “the person’s motivation in the sense of
his or her conscious plan to exert effort to carry out a
behavior” (Eagly & Chaiken, 1993)
•Purchase intention is an important factor for an organization
and was used routinely to make strategic decisions
concerning both new and existing products and the marketing
program that supports them (Morwitz, Steckel & Gupta,
2006)
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LITERATURE REVIEW (con’t
)
Gaps in existing knowledge
•The lack of contextually specific intention measures
•The results may have been influenced by self-selection bias
•Some places more weight on positive aspects while some places
on negative aspects.
•The absolute predictive accuracy of purchase intention
•New product forecasting Models
The research is important

•The contribution of the research is to understand the factors that
affect customer thus increase customers’ purchase intentions of
electric water heater.
•The objective is to gain a thorough understanding on customers’
purchase intention in the energy industry.
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LITERATURE REVIEW (con’t)
Contribution
•Increase sales volume, market share, image of the
Ferroli
•Create future reference for the Ferroli Indochina
Company’s current problems
•Gain a thorough understanding on customers’ purchase
intention in the energy industry.
•Findings are significant for academic and research
purposes.
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Original Model
A Theoretical Framework an Integrated Model for the Effects of Product Quality,
Service Quality, and Price Fairness on Consumer Satisfaction and Consumer Loyalty
Product quality
Service quality
Price Fairness
Customer
satisfaction
Customer
Loyalty
Adopted from: Bei and Chiao (2001)
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Model

Model
An integrated Model for the effects of Product Quality,
Service Quality, Price Fairness on Customer Satisfaction
and Purchase Intention
Product
Quality
Service
Quality
Price
Fairness
Customer
Satisfacti
on
Purchase
Intention
Customer
Satisfaction
H1
H2
H3
H4
Adopted from developed for the research
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Research Method
Research Hypothesis
• H1: There is significant relationship between product
quality and customer satisfaction.
• H2: There is significant relationship between service
quality and customer satisfaction.
• H3: There is significant relationship between price

fairness and customer satisfaction.
• H4: There is significant relationship between
customer satisfaction and purchase intention
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Research Method (Con’t)
Research Question
oDoes Product quality relate to customer satisfaction?
oDoes Product service relate to customer satisfaction?
oDoes Price fairness relate to customer satisfaction?
oDoes Customer satisfaction relation to purchase
intention?
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Research Method (Contᾼd)
•Level of Research is theory testing (description &
explanation).
•The research described in this study adopts
quantitative method.
•Measurement of variable, independent variable
and dependent variable
•Measurement scale: five – point likert scale
•I select sample and use SPSS software to analysis.
•Sample size : 125 persons
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Research Method (Con’t )
• Checking the Reliability of each factor by using
Cronbach’s Alpha
o The reliability test under scale measurement plays
an important role in determining the validity and
reliability of the survey forms.
o The various constructs were tested for validity using

principal component analysis with varimax rotation
o Coefficient Alpha or Cronbach’s Alpha were used
to measure the concept of consistency reliability.
(Chin Yuk Hoong, Khoo Kim Jing, Liew Zhao Yao,
Shim Che We, 2011)
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Research Method (Con’t )
• I will use instruments :
 In library of Shute University
 In website, historical data, and annual report of
Ferroli Co.,
 On the internet
 Books, magazines of business management
 Questionnaire.
• Survey by using questionnaire
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Research Method (Con’t )
• To collect this data
 Primary data were collected through questionnaire
designed referring
 Secondary data were collected data from articles in
websites, documents on the historical data and annual
reports that provided by Ferroli Indochina Company
• Method of data analysis :
 Descriptive Analysis
 Correlation Analysis
 Reliability Analysis
 Scale Measurement
 Chi Square
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Research Method (Con’t )
Significance of the research
• The research is expected to contribute to the marketing
management.
• The findings of Product quality, Service quality, Price Fairness
will provide the customer satisfaction with vital information .
• It will make a significant contribution to the purchase intention
literature by proposing a framework to understand project’s
purchase intention via antecedents of purchase intention
• This study provides a framework on the determinants of
purchase intention in Viet Nam energy industry for policy
makers.
• Act as references for future studies
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Concluding Remarks
There are four consumption factors that might influence
consumers’ purchase intentions of Ferroli Indochina
electric water heater
• Independent variable which is Service quality, product
quality, price fairness, customer satisfaction
• The dependent variable is purchase intention
• Parasuraman et al. (1985, 1988) state that the higher the
service quality, the higher the customer satisfaction.
• Teas (1993) also states that perceived service quality is the
augmentation of the customer satisfaction.
• Parasuraman et al. (1994), product quality is equally
importance in affecting consumer satisfaction as service
quality
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Concluding Remarks

• Price has found to be related to perceived product
quality and consumer’s product evaluations (Rao &
Monroe 1989; Dodds, Monroe & Grewal 1991)
• Price fairness significantly affect customer
satisfaction .
• Herrmann et al. (2007), it was concluded that
customer satisfaction indirectly influenced by the
perceived price fairness
• Price fairness is positively correlated to customer
satisfaction. (Bei & Chiao, 2001; Parasuraman et al.,
1994; Hanif, Hafeez & Riaz, 2010; Herrmann et al.,
2007; Huffman et al., 2001; Yieh et al., 2007).