The factors affect consumer purchasing behavior of vietnamese branded coffee products in hanoi city

Cohort 2016 – 2018

Master’s Thesis
BY

PHAM THU HIEN

THE FACTORS AFFECT CONSUMER
PURCHASING BEHAVIOR OF VIETNAMESE
BRANDED COFFEE PRODUCTS IN HANOI CITY

Supervisor: Prof.Dr. Pham Thi Lien

HANOI, JUNE 2018


ACKNOWLEDGMENT
First of all, I would like to send my sincere thanks to the lecturers, especially to my
supervisor Prof. Dr. Pham Thi Lien for her devoted attention, lessons and guidance, which
have equipped me with key knowledge and essential skills throughout the course. More
importantly, everything I have learned here would undoubtedly help me tremendously in
my work in the future.
I would also like to thank lecturers of International School - Vietnam National University,
Nantes University for their useful supporting during my process of studying and researching to
complete this paper. This course has equipped and improved and added a lot of knowledge about
the different areas. In addition, the course also helps me to have a relationship, have the
opportunity to share information and learn from other students in the program.
I am pleased to gratitude respondents for their enthusiastic support and creating
favorable conditions for me to have more useful information to complete thesis.

Sincere thanks.

Author
Pham Thu Hien

ii


ABSTRACT
Strongly development of the coffee industry shows vital role of this beverage in the
our daily life. Vietnam is in the top five Asian countries for coffee consumption per capita
after Japan, South Korea and Thailand. With population of over 90 million people, it has a
difference in the coffee culture that older than in other countries. This is a lucrative market
for Vietnamese coffee companies to exploit and develop their brands. But the reality shows
that this potential market is to be omitted because Vietnamese coffee enterprises focus on
exporting green coffee. In a current market economy, the fierce competition occurs among
businesses and anyone who wants their products or services to be attended and selected by
customers. In order to achieve that goal, it is not only base on factors such as good quality
products, competitive price, also on other elements that need to be resolved for instance
what customers need and want, how their demand change, buying motivation and the
personality traits of each customer group as well as the factors directly and indirectly
impact on their buying behavior, etc. For a long-term, stable development, enterprises need
to understand the psychology, age, occupation, average income, behavior of their
customers. Therefore thesis has focused on investigating customers’ awareness about
Vietnamese coffee brand, their habit and purchasing behavior of Vietnamese coffee
products, the factors impact on their buying behavior of Vietnamese coffee products. Data
collection was conducted in five districts of Hanoi city and used quantitative method with
survey questionnaire. Based on 250 valid responses from customers, the study identified
five

components

–

PRODUCT

CHARACTERISTICS,

PRICE,

PRODUCT

MOTIVATION and SOCIAL AFFECTS, PERSONALITY – which explain customer
purchasing behavior of Vietnamese coffee products in Hanoi city. The relationship
between these purchasing behavior components and affecting factors is tested by
regression analysis. As the result showed except component personality has not met
analysis condition and rejected, the rest four components have positive influence on
Hanoian customer purchasing behavior of Vietnamese coffee products in which
PRODUCT CHARACTERISTICS has the most significant impact on consumers’ buying
behavior. Base on these findings, the thesis also gives some suggestions for Vietnamese
coffee producers for further improve their quality of products and service to satisfy
customer demand and taste in Hanoi market.
Key words: Vietnamese coffee, buying behavior, affecting factors, impact
iii


TABLE OF CONTENT
ACKNOWLEDGMENT .......................................................................................................ii
ABSTRACT..........................................................................................................................iii
TABLE OF CONTENT ........................................................................................................ iv
ABBREVIATIONS .............................................................................................................. vi
LIST OF GRAPHS, FIGURES AND TABLES ..................................................................vii

INTRODUCTION ................................................................................................................. 1
CHAPTER 1. THEORETICAL FRAMEWORK AND RESEARCH MODEL ................... 5
1.1.

Concepts of consumer behavior .............................................................................. 5

1.2.

Purchase decision making process and different types of buying decision ............ 6

1.3.

Literature review on the customers’ coffee purchasing behavior ........................... 9

1.4.

Research models and the the factors affect consumers’ purchasing behavior of

Vietnamese branded coffee products ............................................................................... 11
1.4.1.

Theoretical models of consumer behavior and coffee purchase decision ..... 11

1.4.2.

The factors affect consumers’ purchasing behavior of Vietnamese branded

coffee products ............................................................................................................. 16
1.5.

Research model ..................................................................................................... 22

CHAPTER 2. RESEARCH CONTEXT AND METHODOLOGY .................................... 24
2.1. Analyzing Vietnam café industry.............................................................................. 24
2.1.1. History and development of Vietnam café industry ........................................... 24
2.1.2. Categories of planted coffee in Vietnam ............................................................ 25
2.1.3. SWOT analyzing ................................................................................................ 27
2.2. Analyzing macro environment .................................................................................. 29
2.2.1. Political - legal .................................................................................................... 29
2.2.2. Economic ............................................................................................................ 29
2.2.3. Social - culture .................................................................................................... 30
2.2.4. Technology ......................................................................................................... 30
2.3. Analysis domestic coffee market and product brand ................................................ 31
2.3.1. Distribution channel and promotion ................................................................... 32
2.3.2. Purchasing habits and coffee consumption of Vietnamese people .................... 33
2.3.3. Brand awareness ................................................................................................. 34
2.3.4. Customer satisfaction and loyalty ...................................................................... 34
2.4. Research methods...................................................................................................... 35
2.4.1. Research approach .............................................................................................. 35
iv


2.4.2. Designing questionnaire and pilot testing .......................................................... 36
2.4.3. Sample and data collection ................................................................................. 39
2.5. Analyzing data plan ............................................................................................... 40
2.5.1. Reliability analysis by Cronbach’s alpha ........................................................... 41
2.5.2. Exploratory factor analysis ................................................................................. 42
2.5.3. Regression analysis ............................................................................................ 43
CHAPTER III. RESEARCH RESULTS ............................................................................. 45
3.1. Descriptive statistics.................................................................................................. 45

3.1.1. Sample demographic .......................................................................................... 47
3.1.2. Customers’ brand awareness and satisfaction on Vietnamese coffee products . 48
3.1.3. Customer’s habit of Vietnamese coffee purchasing and drinking..................... 50
3.2. Reliability analysis and measurement scales ............................................................ 55
3.3. Exploratory Factor Analysis ..................................................................................... 58
3.3.1. Exploratory Factor Analysis of Affecting Factors Scale ....................................... 58
3.3.2. Exploratory Factor Analysis of Purchasing Behaviors Scale ............................. 63
3.4. Regression Analysis and hypotheses tested results................................................... 64
3.4.1. Regression analysis ............................................................................................ 64
3.4.2. Research model and hypotheses tested results ................................................... 68
CHAPTER IV. FINDINGS AND DISCUSSION ............................................................... 70
4.1. Assessing customers’ purchasing behavior and loyalty of Vietnamese coffee brand
products in Hanoi city ...................................................................................................... 70
4.2. The affecting factors on customers’ purchasing behavior of Vietnam coffee brand
products ............................................................................................................................ 71
4.3. Suggestions for Vietnamese coffee companies to attract more customers and
increase sale volume in Hanoi market ............................................................................. 72
4.3.1. Promoting customer puchase motivation. .......................................................... 72
4.3.2. Improve product characteristics ......................................................................... 72
4.3.3. Setting an appropriate price ................................................................................ 73
4.3.4. Social affects ...................................................................................................... 73
4.3.5. Personality .......................................................................................................... 74
REFERENCE....................................................................................................................... 77
APPENDIX 1. Interview Guideline..................................................................................... 81
APPENDIX 2. Questionnaires ............................................................................................. 85
APPENDIX 3. SPSS data analysis ...................................................................................... 91
v


ABBREVIATIONS

MARD

Ministry of Agriculture and Rural Development

DARDs

Department of Agriculture and Rural Development

TTP

Trans-Pacific Partnership Agreement

FDI

Foreign Direct Investment

BMI

BMI research – Fitch group company

GDP

Gross Domestic Product

RTD

Ready to drink

I.A.M

Vietnam Institute of Applied Marketing

IPSARD

Institute of Policy and Strategy for Agriculture and Rural Development

VBCSD

Vietnam Business Coucil for substainable development

VICOFA

Vietnam Coffee - Cocoa Association

vi


LIST OF GRAPHS, FIGURES AND TABLES
Figure 1. 1. Consumer behavior model.................................................................................. 5
Figure 1. 2. Stages of purchase decision making process ...................................................... 6
Figure 1. 3. Howard-Sheth Model of consumer behavior ................................................... 12
Figure 1. 4. Nicosa’s Model of purchasing behavior........................................................... 13
Figure 1.5. A structural equation model of effective variables on selecting chain stores
from the customer perspective........................................................................ 14
Figure 1. 6. Model factors affecting consumers’ buying decision in selection of a coffee brand 14
Figure 1.7. Model factors affecting consumers’ buying decision of foreign coffee in
Hochiminh city ............................................................................................... 15
Figure 1. 8. Research model ................................................................................................ 23
Table 2. 1. Estimate of Vietnam’s coffee area by province ................................................. 26

Table 2. 2. Pilot testing result .............................................................................................. 39
Table 2. 3. Encoded data ...................................................................................................... 40
Table 3. 1. Descriptive analysis ........................................................................................... 45
Table 3. 2. Gender distribution among 250 respondents ..................................................... 47
Table 3. 3. The customers’ brand awareness of Vietnamese coffee products ..................... 48
Table 3. 4. Frequency and types of consumed coffee products ........................................... 50
Table 3. 5. The influence level of factors on customer buying behavor of Vietnamese
coffee products according to average in come .................................................. 52
Table 3. 6. Test of Homogeneity of Variances .................................................................... 53
Table 3. 7. ANOVA analysis ............................................................................................... 54
Table 3. 8. Reliability of mesuament scales ........................................................................ 55
Table 3.9.1. Exploratory factor analysis of affecting factors on customer purchasing behavior
of Vietnamese coffee products in Hanoi city – KMO and Bartlett’s test ........... 59
Table 3.9.2. Exploratory factor analysis of affecting factors on customer purchasing behavior
of Vietnamese coffee products in Hanoi city – Total variance explained .......... 59
Table 3.9.3. Exploratory factor analysis of affecting factors on customer purchasing behavior
of Vietnamese coffee products in Hanoi city – Rotated Component matrixa ..... 60
Table 3.10.1. Reliability statistics and exploratory factor analysis of affectin g factors
on customer buying behavior of Vietnamese coffee products, 2nd time –
KMO and Bartlett’s test .................................................................................. 61
vii


Table 3.10. 2. Reliability statistics and exploratory factor analysis of affecting fa ctors
on customer buying behavior of Vietnamese coffee products, 2nd time
– Total variance explained ...................................................................... 61
Table 3.10.3. Reliability statistics and exploratory factor analysis of affecting factor s
on customer buying behavior of Vietnamese coffee products, 2nd time
–Rotated component matrix a ................................................................... 62
Table 3.11.1. Exploratory factor analysis of purchasing behavior scale – KMO and Bartlett’s test... 63

Table 3.11.2. Exploratory factor analysis of purchasing behavior scale – Total variance explained.. 63
Table 3.11.3. Exploratory factor analysis of purchasing behavior scale – Rotated component matrixa .... 64
Table 3. 12. Partial correlation of regression coefficient – 1st time .................................... 65
Table 3. 13. Partial correlation of regression coefficient – 2nd time................................... 65
Table 3. 14. Adjusted R square ............................................................................................ 66
Table 3. 15. ANOVA analyzing .......................................................................................... 67
Table 3. 16. Hypotheses tested results ................................................................................. 68
Bar chart 3. 1. Respondents’ education and occupation ...................................................... 48
Figure 3. 1. Research model result ...................................................................................... 68

viii


INTRODUCTION

1. Rationale
In a current market economy, the fierce competition occurs among businesses and
anyone who wants their products or services to be attended and selected by customers. In
order to achieve that goal, it is not only base on factors such as good quality products,
competitive price, also on other elements that need to be resolved for instance what
customers need and want, how their demand change, buying motivation and the
personality traits of each customer group as well as the factors directly and indirectly
impact on their buying behavior, etc. To sustainable developing, enterprises need to
understand the psychology, age, occupation, average income, behavior of their customers.
Researches on customer behavior focus on individual psychology, habit, core beliefs,
values, and customs that affect on of behavior and interactions among people in the buying
process. Thereby, select the appropriate market segment, support businesses to built
appropriate marketing strategies which re-impact the customer. Understanding customer
behavior also helps organizations and government agencies protect consumer rights and
adjust marketing-related policies.

Strongly development of the coffee industry shows vital role of this beverage in our
daily life. Vietnam is in the top five Asian countries for coffee consumption per capita
after Japan, South Korea and Thailand. With population of over 90 million people, it has a
difference in the coffee culture that older than in other countries. This is a lucrative market
for Vietnamese coffee companies to exploit and develop their brands. But the reality shows
that this potential market is to be omitted because Vietnamese coffee enterprises focus on
exporting green coffee. Moreover, in the context of regional and world economic
integration, the presence of many domestic and foreign brands in the Vietnamese coffee
market brings more choices to the consumers. The coffee drinking habits of Vietnamese
people are gradually changing, now they prefer go to coffee shops to enjoy coffee. They
come here to drink coffee but also to communicate, meet friends, and satisfy their social
needs. They are more concern about coffee shop space, quality of products and services,
prices, etc. To respond those demands, Vietnamese coffee businesses also need to study
the desires, perceptions, behavioral choices and purchase decisions of their target
customers thereby, develop product quality, price and services. Each brand of domestic or
1


foreign coffee businesses with its own competitive advantage has attracted a certain
number of customers. Nevertheless, they need to catch their customers’ tastes, their
competitive strengths, weaknesses as well as their competitors in order to provide
appropriate strategies to satisfy the consumer's demand and expectation.
Furthermore, they need to capture the consumption trends to attract customers, build
a strong brand and create competitive advantages. Although the penetration of foreign
coffee brands gave consumers more choices, meet their different tastes, it has created more
pressures on domestic coffee businesses. It means that they are forced to be innovated
themselves, improve their service quality to better meet local consumers’ needs. There are
not many studies in the influencing factors on consumer behavior of Vietnamese coffee
products, so to better understand purchasing behavior of Vietnamese consumers in general
and Hanoi consumers in particular for Vietnamese coffee brands I chose the research topic

"The factors affect consumers purchasing behavior of Vietnamese branded coffee
products in Hanoi city"
2. Research objectives, questions and objects
1.2.1. Research objectives
The thesis focused on the influent factors on customers’ purchasing behavior of
Vietnamese coffee products. The paper determined impact level of these factors on
purchasing behavior of Vietnamese coffee products of different customer groups. Thereby,
it proposed several suggestions for domestic coffee companies to encourage consumers
buy products and improve business efficiency.
1.2.2. Research questions
In this study, we will find out the answers to following two questions:
1. What are the main elements affects on the customers’ purchasing behavior of
Vietnamese branded coffee products?
2. Which solutions do encourage consumers to buy much more Vietnamese branded
coffee products in the current context?
3. Objects, Research scope, data collection and analysis
3.1. Objects: Based on the research objectives above, the objects of this dissertation
included consumer’s purchasing behavior of Vietnamese branded coffee products and the
factors influencing purchasing decision on Vietnamese branded coffee products of
consumers in Hanoi city.
2


3.2. Research scope:
About coffee brands in this thesis: research on all Vietnamese coffee brands is a big
ambition, however in this study framework, we selected the following several
representatives of local coffee brands.
 Vinacafe (Bien Hoa Joint Stock Company Coffee): A coffee brand was established
in 1968 and accounted the biggest instant coffee market share in Vietnam. Its manufactory
produced 3000 tons of instant coffee per year. With its market experience and knowledge,

Vinacafe is always a heaviest competitor to domestic coffee companies.
 Nescafe (Nestle Vietnam): A leading instant coffee brand in the world with 70-year
history. It became familiar with most of Vietnamese customers and accounted for
significant market share in Vietnam. Currently, Nescafe has got an instant coffee
manufactory with capacity of 1,000 tons/year that enables company best respond
consumer’s demand [2].
 Trung Nguyen café: Established in 1996, Trung Nguyen-a young coffee brand in
Vietnam has a spectacular development to become a prestigious and the most familiar
coffee brand to domestic and oversea consumers. Trung Nguyen won the love of
consumers across the country for its exceptional coffee that had been extracted from the
finest quality coffee beans, using advanced technology and unique inimitable oriental
formulas, and blended with an intense passion for coffee.
About survey respondents: The survey respondents are coffee consumers in Hanoi city,
where the population’s average income is higher than in the other surrounding areas.
Therefore, research to find out solutions to encourage consumers in there to buy much
more Vietnamese branded coffee products as the basis for applying to other localities is
necessary. The study is conducted from March to April 2018.
3.3. Data collection and analysis
In order to answer the three main research questions, the author uses following
research methods for data collecting and analyzing
Secondary data: According to Saunders et al. (2009), secondary data is the
information which is collected from public resources such as books, journals, and the
internet and this information is collected by previous researchers in line with current
studies’ objectives. Major advantage of secondary data is less time consuming and lower
effort to collect to the researchers [41]. In this thesis, second data was collected from books
and journals which related to consumer behavior concepts as well as previous empirical
3


evidence about the impact of product quality, price, distribution channels and promotions

on consumers' purchasing decisions on Vietnamese branded coffee products. Financial
statements, annual reports of Vietnam coffee companies in research scope, data published
by VICOFA, reports by independent organizations and actual data of their coffee products
and customer care services in Hanoi.
Primary data collection and analysis: Primary data is considered as the information
that is self-collected by the researchers without reliance on public sources. According to
Saunders et al. (2009), it has the directly advantages support for the studies but the
researchers often take time to collect this information. In this study, primary data is
collected through survey questionnaires with relevant respondents. Specifically, a survey
questionnaire was designed to collect the coffee consumers’ assessment who were living
and working in Hanoi. Then it would be processed by software SPSS version 22.0 with
methods such as reliability test cronbach alpha, exploratory factor analysis, one-way
ANOVA and multiple linear regression analysis. The analysis results would be used as a
base for proposing solutions to achieve the research objectives.
4. Research’s contributions
Within the boundary of this thesis, the author aimed to explore the factors impact to the
customers’ purchasing behavior of Vietnamese branded coffee products. Base on
evaluating customers’ purchasing behavior of Vietnam branded coffee products as well as
the impact level of these factors to their purchasing decision, the author proposed some
solutions for domestic coffee companies to encourage consumers to buy much more their
products and improve business efficiency in the future. Those solutions constituted
promoting purchasing motivation, improving product characteristics and price, social
affects and personality.
5. Research’s structure
Regardless of the introduction, conclusion, reference and appendices the thesis has four
major parts as following
Chapter 1:

Theoretical framework and research model

Chapter 2:

Research context and methodology

Chapter 3:

Survey results.

Chapter 4:

Findings and Discussions

4


CHAPTER 1. THEORETICAL FRAMEWORK AND
RESEARCH MODEL
The theoretical framework for the research will be presented in this chapter. It
includes fundamental concepts on consumer behavior, process of purchase decision
making and reviewing previous studies on consumer coffee buying behavior. The main
factors impact on consumers’ purchasing behavior of Vietnamese branded coffee products
as well as research model and hypotheses were also mentioned there.
1.1.

Concepts of consumer behavior
Schiffman & Kanuk (2007) defined consumer behavior are the decision making

process and physical specific activities, which individuals engage in when evaluating,
purchasing, using or disposing of goods and services with expecting to satisfy their needs.
According to the American Marketing Association, consumer behavior creates the

interaction between environmental stimulating factors and human being perceptions and
behaviors to change their life. In other words, consumer behavior refers to thinking,
perceiving and the actions that people do in the consuming process. Elements such as
comments from other consumers, advertising, pricing, product design, etc. probably affect
their feelings, thoughts and behaviors.
It can be seen that in fact, businesses’ research purposes on consumer behavior are
not only identifying their customer needs, habits, and preferences but also planning
products differentiation strategies and designing schemes of market segmentation. In
particularly, providers need to know what their consumers want to buy, why they buy or do
not keep using that product, how they buy it and how much etc. to offer solutions that
motivate consumers to purchase their products and restrict consumers from leaving their
existing brands and transfer to other supplier’s brands. (see Figure 1.1).
Figure 1. 1. Consumer behavior model

(source: Kotler, 2009)
5


Kotler (2009) postulated external stimuli affect the consumer's black-box of a mind
to cause his/her responses that might be the choice of product, brand, deliver event time,
frequency and amount of purchase. The external stimuli were divided into two main
groups namely marketing stimulus with 4P factors which laid in the business’s control and
remain groups were environmental factors outside the enterprise such as economic,
technological, political and cultural. Kotler's theory stated that the buyer’s the black box
content created the differences in their behavior. It included buyer characteristics and
decision-making. Characteristics regard to attitudes, motivation, perceptions, personality,
lifestyle and knowledge. Decision-making process includes stages of problem recognition,
information search, alternative evaluation, purchase decision and post-purchase behavior.
Customer behavior was governed by factors such as culture, society, personal style, and
psychological factors etc. The influence level of each factor on consumer behavior was

also different each other [18].
Nowadays, the strong development of coffee industry and the diversity of coffee
types and brands made the consumer choice complicated. Moreover, countless advertise,
promotional campaigns which made describing the feelings in customer minds when they
choose a product becomes more difficult. However, although the service, pricing and
promotion policies were diversified, consumers' selection of Vietnamese branded coffee
would depend on how well they evaluate those elements. Did those coffee products satisfy
their requirements of quality, economic or class value? In other words, whether coffee
producers satisfy consumers' needs when using this beverage product. Consequently, the
analyzing and forecasting of consumer behavior were not only considered as a research
variable, but it is important in relationship with influent factors on consumer behavior.
1.2.

Purchase decision making process and different types of buying decision
The buying decision making process describes as a journey the customers go through

before they buy a product. For marketers, understanding how customer makes a buying
decision will also enable them to align a sales strategy accordingly. Kotler and Keller
(2009) introduced five stages framework following remains a good way to evaluate the
customer’s buying process (see figure 1.2)
Figure 1. 2. Stages of purchase decision making process
Problem/
need
recognition

Information

Evaluation of

Purchase

Post-purchase

search

alternatives

decision

behavior

(source: Kotler,P.&Keller,K.L. 2009)

6


 Problem/need recognition
Understanding the demand for a service or product is the first and most crucial step
in the buying decision process. Because if customers do not recognize what product or
kind of product they need, they will probably ignore a product purchase. At this stage the
consumer often sees a significant difference between the current state and desired state. In
fact, their need is driven by both internal and external stimuli. An internal stimulus occurs
from basic impulses or customer’s personal perception experience such as hunger, thirst or
a change in lifestyle so on. An external stimulus originates from an outside influence, for
example a billboard or review from friends for a new coffee brand. Once a consumer
recognizes his/her need, s/he will to gather information to understand how they can fulfill
that want. Marketers can create and promote customer demand and encourage them to
choose their brand instead of others.
 Information search
Having recognized a problem or need, the next step customers may do is the

information search to find out what they feel is the best solution. In this step the buyer will
effort to collect both internal and external information in order to identify and evaluate
information sources before making their buying decision. Internal research refers to a
consumer’s memory or recollection of a product, sometimes triggered or guided by
personal experience. External research is conducted when a person has no prior knowledge
about a product, which then leads them to seek information from personal sources (e.g.
from friends and family) public sources (e.g. google, online forums, customer reviews) or
marketer dominated sources (e.g. sales persons, advertising). In some cases customer may
choose products without any related information, but other times they seek information
carefully for identifying all alternative. Therefore, when creating content, the marketer
should put himself in his customer’s position to present information that will help them
arrive at a decision faster and easier.
 Alternatives evaluation
During the third stage, all different products and brands options will be evaluated and
compared by customer to deliver the benefit that he is seeking. The alternative evaluating
will different among consumers and buying. Sometimes this activity is known as a set of
suggestion which include reviewing price, warranties, terms and condition of sale and
7


other features so on. It is clear that customer took part in extended problem solving. If the
marketer expects their brand is part of the consideration set for many potential consumers,
they need to understand what benefits consumers are seeking and specifically, which
attributes will be most influential to their decision-making process. For instance, if the
customer’s attitude is positive and involvement is high, then they will evaluate a number of
companies or brands; but if it is low, only one company or brand will be evaluated.
 Purchase decision
While customer has assessed all the alternatives and determined the values of product
or service that will bring to him, an intention to buy the most preferred brand may be
formed in his mind. However Philip Kotler et.al (2009) found two factors that may be

‘disrupted’ customer’s final buying decision namely negative feedback from other
customers and the motivation level to accept the feedback. For example, having gone
through the previous three stages, a customer chooses to buy a new television but, his
friend, a keen technician, shared him negative feedback, he will then be fluctured to
change his preference. Furthermore, the decision may be disrupted due to unforeseen
situations such as out of stock or relocation.
 Post-purchase behaviour
The final step of buying process is post-purchase behavior which refers to customer’s
satisfaction or dissatisfaction with purchasing. It will significantly influence whether he
will purchase the product again or consider other products within the brand list. Therefore,
this stage is vital in retaining customers. If customer satisfied, it will lead to brand loyalty,
and the information search and evaluation of alternative stages will often be fast-tracked or
skipped altogether. Kotler & Amstrong (2010) divided buying behavior into four types
including complex buying behavior, harmonious buying behavior, habitual buying
behavior and variety seeking behavior. Consumers have complex and harmonious buying
behaviors when they are highly involve in purchasing and aware of the big differences
between brands. This kind of purchasing behavior is common to expensive, rarely
purchased, risky, and self-concept products such as a house, a car. Consumers have little
knowledge of such products and they have to spend a lot of time searching product
information, build trust in it, then formulate an attitude, and then proceed to select the
product to buy. Harmonious buying behavior occurs when customers noticed a little
8


difference in price and brands, they will not spend much time to survey and quickly decide
to buy. Their consideration is mainly based on which brands have cheaper prices and more
favorable buying conditions. Among types, habitual buying behavior and variety seeking
behavior are less relevant to customer’s purchase decision. This may also due to fact that
the commodity products (e.g bread, milk) does not provide much difference between
brands, customer find the products best fit for their use and keep on buying them without

looking for alternative. Hence customers buy them regularly in convenience stores and
they do not think much before buying those products. For other example, in recent years,
coffee shops have sprung up in strip malls and most of streets all over the country.
Convenience is one reason. The other reason is meet the demand. If you tired, thirsty and
you are looking for relax area, you’re probably not going to shopping around much to find
a good coffee shop. Of course, you will go to the one that’s closest to you. The same thing
may happen if you need something immediately.
1.3.

Literature review on the customers’ coffee purchasing behavior
The complexity of buying behaviors has made by consumers in the coffee market

and the affecting factors their decisions always attract researchers’ attention. In the fact
that, researches attempted to comprehensively describe a decision-making process of
consumers when buying a product. Sequentially, starting with relatively stable internal
conditions is the basis for need recognition, followed by purchase preparing and then
decides relate whether or not to make a purchase and feedback to the decision was given.
Katona's consumer behavior theory (1964) showed that despite the consumer’s conscious
choice, somewhat are still dominated by their reckless habits or impulsive behavior. He
argued that in most cases, the reason consumers restricted their buying decision-making
and maximized their satisfaction was mainly due to lack of product-related information
and insufficient capabilities deal with available data at the stage preceding purchase
decision. He found that the decision-making process of coffee consumers is influenced
primarily by economic and psychological factors. Based on the study results of 410
respondents, Maciejewski (2016) also reported a fact that only 1/3 of the respondents who
were able to buy the product made the purchase decision.
Vinasearch has conducted a survey of factors affecting the instant coffee market in
Vietnam with nearly 400 samples in Hanoi city and Hochiminh city in 2013 [52]. Its
9

purpose was to evaluate the customers’ recognition of instant coffee brands, explore their
using habit instant coffee, thereby positioning and segmenting instant coffee brands.
Factors affecting customer instant coffee choices consist of price, customer service,
distribution, advertising and product quality. The analyzing results showed that product
quality was the most influential factor in customers’ selection of instant coffee brand. The
respondent’s age was directly proportional to their interest in coffee quality. There were
statistically significant differences in factors of pricing, customer service and distribution
between Hanoi and Hochiminh respondents. An investigation was implemented by Nguyen
Quoc Viet (2016) to evaluate the factors impact consumer’s purchasing decision on Trung
Nguyen powder coffee in Hochiminh city as well as pointed out the limited aspects that
need to address in developing this product. The study used both qualitative and
quantitative methods. The results of the qualitative research have identified six factors that
affect consumers' purchasing decision on Trung Nguyen powder coffee products include
product quality, price, place, promotion, taste and culture. This finding helped coffee
production companies and researchers better understand the market and behavior of
Vietnamese coffee consumers.
Godiya Jis Jelison (2017) studied the positive influence of sensory appeal, packing
along with branding, service quality, environmental protection, perceived health concerns,
perceived hedonic value and subject norm towards consumer purchase behavior of coffee
consumers in Wattana district in Bangkok, Thailand. She collected 210 survey respondents
who were regularly consumers at coffee shops and bakery shops, convenience stores, fast
food stores and street coffee kios at Thonglor, Ekkamai and Prakhanong areas in Wattana
district. The result showed that packing along with branding and sensory appeal had
positive impact on perceived hedonic value while other factors were not found to have any
significant impact on consumer purchase behavior of coffee consumer in there. The
consumer behaviour of coffee and tea was studied by T.C.Varun et. al, (2009) in four
districts of Karnataka, India using the primary data from 240 sample households. The
results revealed that the urban households spent more money to buy coffee and tea powder
than rural ones purchased every month. The factors like family size and total family

income had a positive influence on the demand for coffee in the urban areas. In the rural
areas, family size had a positive influence on the demand for coffee, while the coffee price
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had a negative impact on the demanded coffee. In the case of tea, total family income
turned out to be highly significant in the urban areas. Sylwia M. (2016) presented a
research on consumer preferences and behaviour on the coffee market in Poland based on
the results of primary research conducted using a structured interview on a group of 800
consumers of coffee and coffee beverages. The results obtained allowed the definition of 6
segments of coffee consumers in Poland. These segments based on different age groups
and have become the basis for the developing a marketing strategy for MOKATE SA – a
leader on the coffee market in Poland in the “Cappuccino” category.
Trinh Thien Thanh Trung et. al (2012) investigated a sample of 230 respondents who
came to garden coffee shops frequently in Hochiminh city to identify the factors impact
their coffee shop selection. The study aimed to help groups or organizations who have a
plan open a garden coffee shops or owners of garden coffee shops have a better
understanding their customers. Thereby, they can build appropriate marketing strategy as
well as plans to improve, develop their garden coffee shops. Influential factors include
landscape, shop’s decorative space, music, prices, diversity menu, special bartender,
attractive presentation, service style, free wifi and parking. The results showed that the
landscape, decorative space and prices are the most influenced factors on customers’
choice of coffee shop. Most of them prefer coffee shop with classic design, garden area of
300 square up, artificial waterfall, blue music and the price from 20,000 to 45,000 VND/ a
cup of coffee.
1.4. Research models and the factors affect consumers’ purchasing behavior of
Vietnamese branded coffee products
Since early 1960s consumer behavior has became an intensive research topic among
marketing theorists. Many research models have been developed to explain the various
factors that affect consumer behavior and their decision making process.

1.4.1. Theoretical models of consumer behavior and coffee purchase decision
Howard-Sheth Model
The Howard Sheth Model is a sophisticated integration of the various social,
psychological and marketing influences on consumer choice into a coherent sequence of
information processing. It aims not only to explain consumer behavior in terms of
cognitive functioning but to provide an empirically testable depiction of such behavior and
its outcomes (Sheth, 1977).
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Figure 1. 3. Howard-Sheth Model of consumer behavior
The logic of the Howard Sheth model of consumer behavior summarizes inputs in
the form of Stimuli. There are outputs beginning with attention to a given stimulus and
ending with purchase. In between the inputs and the outputs there are variables affecting
perception and learning. These variables are termed ‘hypothetical’ since they cannot be
directly measured at the time of occurrence. Howard Sheth described buyer’s decision
making process with three situations. In a case of extensive problem solving, the consumer
does not have any basic information or knowledge about the brand and he does not have
any preferences for any product. In this situation, the consumer will seek information about
all the different brands in the market before purchasing. The situation of limited problem
solving happens when consumers have got little knowledge about the market, or partial
knowledge about what they want to purchase. In order to arrive at a brand preference some
comparative brand information is sought. The third case is a habitual response behavior
exists for the consumer knows very well about the different brands and he can differentiate
between the different characteristics of each product, and he already decides to purchase a
particular product (see figure 1.3). The weakness point of model is a absence of sharp
distinctions between external variables and other variables. Some of variables are not well
defined and are difficult to measure too. The model is quite complex and not very easy
comprehend.
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Nicosa Model
This model was developed in 1966 by Francesco M.Nicosia, an an expert in
consumer motivation and behavior. Her theory attempts to explain buying behaviour by
establishing a link between the enterprise and its potential customers.

Figure 1. 4. Nicosa’s Model of purchasing behavior
It analyses human being as a system with stimuli as the input to the system and the
human behaviour as an output of the system. The model suggests that message from the
first influences the predisposition of the consumer towards the product or services. Based
on the situation, the consumer will have a certain attitude towards the product. This may
result in a search for the product or an evaluation of the product attributes by the consumer.
If the customer satisfies with above it may result in a positive response, with a decision to
buy the product. The Nicosia Model explains in 4 basic areas: Field 1- the consumer
attribute and the firm’s attributes. The advertising message sent from the company will
reach the consumer attributes. Field 2- it is related to the search and evaluation, undertaken
by the consumer, of the advertised product and also to verify if other alternatives are
variable. Field 3 - it explains how the consumer actually buys the product. Field 4 - it is
related to the uses of the purchased items. It can also be related to an output to receive
feedback on sales results by organization (see figure 1.4). However the minus points for
this model consist of the flow is not completed and does not mention the various factors
internal to the consumer. The assumption about the consumer being involved in the
decision process with no predisposition about the various brands is restricting. Overlapping
between firm’s attributes and consumers attributes.
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Research model of Seyed Mahmoud Hosseini et. al, (2013)
Seyed Mahmoud Hosseini et. al, (2013) proposed a structural equation model of

effective variables on selecting chain stores from the customer perspective.

Image of products with brand

Facilities

Facilities Image of store

Parking
Lay out

Store selection

Quality of service and goods

Closeness to home

Facilities
Facilities
Environment

Source: Seyed Mahmoud Hosseini et. al, (2013)

Figure 1. 5. A structural equation model of effective variables on selecting chain stores
from the customer perspective
This study aimed to examine the factors influencing and affecting the behavior of store
factors on the behavior of shoppers in Iran. The authors investigated customers in different
market segments. The methods of statistical descriptive statistics were used in this study,
collected data analyzing was supported by SPSS and Lisrelt software. The study results
showed that all factors have directly and significantly impacted on the shop selection. The

level of impact factors was ranked from the most to the least respectively facilities, images
store, facilities image of store (light, music, color), the quality of the goods and services,
parking, lay out, closeness to home, price, risk.
Research model of Tanja Lautiainen (2015)
According to research model of Tanja Lautiainen (2015) buyer’s selecting a coffee
brand was influent by social, personal and psychological factors (figure 1.6).
Social factor
Personal factor

Decision selects a coffee brand

Psychological factor
Source: Tanja Lautiainen (2015)

Figure 1. 6. Model factors affecting consumers’ buying decision in selection of a coffee brand
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Research’s findings indicated a relationship existed between social, personal and
psychological factors and the decision-making process in coffee brand selection, but it was
not credible. It can be said that these factors have effect when consumers used different
steps in their making decisions concerning coffee purchasing. The result showed that
family, friends and neighbors are the most important factors that affect on decision making
when selecting coffee brand.
Research model of Tran Thi Truc Linh (2016)
The research model with seven factors was developed by Tran Thi Truc Linh (2016)
to definite their affecting consumer choice of foreign coffee in HCM city. The influence
elements comprise the attitude toward foreign coffee choice, subjective norm, perceived
financial control, perceived quality, perceived price, distribution network and promotion.
Attitude

Subjective norm
Decision
buying
foreign
coffee

Perceived financial control

Perceived quality
Perceived price
Distribution network
Perceived promotion

Source: Tran Thi Truc Linh (2016)
Figure 1. 7. Model factors affecting consumers’ buying decision of foreign coffee in Hochiminh city

The survey was conducted with 210 samples based on the young people at HCM city
via the five scale questionnaire. The study results determined distribution network and
perceived price were the most influence factors on consumers’ buying decision of foreign
coffee in Hochiminh city.

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1.4.2. The factors affect consumers’ purchasing behavior of Vietnamese branded
coffee products
Base on previous studies on the elements impact on consumers’ buying behaviors
and features of coffee consumption behavior which presented in theory section 1.2 and
literature review section 1.3. We summarized five factor groups affect purchasing
Vietnamese branded coffee products of consumers in Hanoi city included purchase

motivation, characteristics of coffee product, price, social affect, and personality that
would be mentioned in the parts below.
1.4.2.1.

Purchase motivation

Purchase motivation is an psychological state that drives customer to identify and
buy products or services that fulfill conscious and unconscious needs or desires. The
fulfillment of those needs can then motivate them to make a repeat purchase or to find
different goods and services to better fulfill those needs. Buying motivation can also
determine the ability of making consumer's purchase decision by the intensity of the
buying motivation. It is clear that customers’ ability to buy a product will be higher when
having a strong purchasing decision. A highly valued brand leads to higher purchasing
decisions (Dodds et al., 1991, Schiffman and Kanuk, 2000). For example, for the fashion
clothing products, branding is a crucial factor because its impact on consumer’s
preferences and buying decisions as well as willingness to pay high prices and introduce
that brand to other consumers. Biagia D. D. et. al, (2008) found that product prices and
characteristics are the major factors influencing consumers' product judgment and their
purchasing decisions. Each product has its own price threshold, if the real price exceeds
the acceptable price, the consumer's buying decision tends to decrease. Zeitham et al.
(1996) proposed that, buying behavior is a highly accurate indicator of prospecting
business performance. Some previous studies have demonstrated that there is a positive
relationship between factors of purchase motivation, price, product characteristics, and
social affect, personality that influence purchasing decisions. So we proposed the first
research hypothesis about the factors affect customer’s purchasing behavior of Vietnamese
branded coffee products in Hanoi city can be formulated as follows:
H1: The purchase motivation has positively impact on customer’s buying behavior.
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1.4.2.2.

Characteristics of coffee product

According to coffee experts who are also known as Cuppers, there are four popular
criteria to assess the overall quality of coffee product consist of aroma, acidity, body and
sweetness. It is undeniable that coffee’s attractiveness is derived from its specific aroma
that is described as bouquets and reveals the freshness of the coffee. It can either be
smelled through your nose and mouthfeel. When you drink and swallow coffee, your
retronasal will feel aromatic volatile compounds drift upward into the nasal passage. The
coffee aroma can be fruity, nutty, smoky, complex or floral, sometime many flavors come
into play together and directly affect the coffee taste. Actually, coffee beans with natural
aroma is always preferred than coffee bean with artificial fragrance by consumers. Acidity
is the second term often used to evaluate a coffee’s final taste such as the sharpness, sour,
bitter or pleasing brightness in coffee. It is similar to organic acids of fruity, berries and
flora flavors, so the acidity of this beverage can be intense, mild or even smooth. The term
body can be defined as the tactical feeling of coffee on the tongue. It describes the physical
sense of weight or heaviness that coffee brings when it settles and covers on tongue. It is
distinguished by the viscosity or thickness of the coffee and the consistency that it leaves
in the mouth. Some common texture description of coffee’s body often related to thin,
grainy, syrupy, buttery or oily. Hence this characteristic is also utilized to identify coffee’s
origin and explain for several kinds of coffee bean have got a heavier body than others.
Sweetness is one of the most desired characteristics of coffee product which is not sugar
added to beverage but highlighting the natural sweetness of the coffee achieved by creating
the perfect balance of organic acids. Coffee beans’s sweetness is compared with sweetness
of cherry fruits. During roasting these sugars have been changed and helped offset the
bitterness with sweetness.
1.4.2.2.1. Packaging design, size and shape of products
Silayoi & Speece (2004) defined that packaging is an integral part of any product and
the brand. With the main tasks of protecting product and attracting customers’ attention,

package can communicate company’s name and image, differentiate the brand from
competitors, and enhance the product’s functionality. In other words, it provides
information related to the product’s characteristics and transmits manufacturer’s message
to their consumers. During the purchasing decision, those information brought to
customers an overall product perception which assisted them in evaluating and making of
the right choice. Furthermore, the package is considered as a product that might be
recycled after the main product is consumed.
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