Masters of Business Administration
BP 6955 Individual Research in Management
“A study of factors influencing purchase intention of consumers toward
dried Durian in Bangkok”
AKTARUL ISLAM C
Dr. Marrisa Fernando
In partial fulfillment of the requirement for degree of
Masters of Business Administration
MBA Program | Fast Track Hua-Mak Campus| Trimester 1/2018
Generalities to the study
1.1 Introduction :
In the past few years processed fruit products have become increasingly popular and in high demand in asian markets.. It is one of the fastest growing segment in the agricultural produce sector in many countries around the world. The industry of processed fruits responded to the rising demand with creative product ideas, product development with the use of innovative technology and improved production systems to serve its customer segment.
The industry of processed fruit has been one of the prime focus of Thai government to support its export and to boost more foreign currency inflow into Thailand in order to increase its financial liquidity. Given the fact that Thailand is an agricultural nation and specializes it self in produce sector, it generates significant amount of liquidity through agricultural commodities like fresh fruits and vegetable which are used as the raw materials in producing processed fruit products – such as frozen fruits, dried fruits, preserved fruit, juice, canned fruits, and etc.
Processed fruits also plays a significant role in the consumption behavior of Thai people. A majority of Thai customers generally perceive and consume processed fruits as a snack. At present time, the level of consumption of snacks among Thai people is increasing. Based on data from Euromonitor International, in the year 2016 month of August. The market value of snack foods in Thailand was 39,587 million Baht among which Teenage population has the the highest consumption of snack foods in Thailand.
Figure 1: Trend of snack foods market value (Euromonitor International 2016,Savoury of Snack in Thailand, Retrieved July 15, 2017)
Durian is a Southeast Asian fruit which is very famous in most asian countries like Thailand, Malaysia, Indonesia, Singapore, and the Philippines. The season of Durian fruit in Thailand is from april to august. Anyhow it can be found in thailand over the year in many forms like in dried form, crispy etc . Thai people love durian and called it as “king of fruits”. Moreover, durian is known as one of the smallest fruit in the world . But in processed durin there is less smell or some times no smell. At present there is an increase of availability of durian fruit snack in many retail stores. It has expanded to the retailers like convenience stores namely 7-Eleven, Family Mart, in supermarkets like Big C, Tesco Lotus , etc. There are also a growing number of Thai local sellers which are both traditional SMEs such as OTOP product and also other big firms that use new technologies in their production process to maintain good quality control and food standards and packaging. This however will have a benefit impact to consumers who consume crispy durian fruit product since they are able to buy better product at the same or slightly higher price.
Apart from domestic market, Thailand also has exceptional sales in export of processedDurian fruit. The main trading partners consists of China, Hong Kong, USA. In recent years, the trend of export is positive with a rising value in unit sales each year (see Figure 2). We see that there is a lot of potential and opportunities in the international market for processed durian which include crispy durian.
Figure 2 : Processed Durian export in year 2012 to 2015 ( Export of processed durian, Retrieved July 15, 2017) by Office of Agricultural Economics (2016),http://www.oae.go.th.
China is one of the biggest importer of thailand fresh fruit and dried fruit and in recent year thailand exported huge amount of durian in china . In figure 3 , we can clearly see the export of fresh and dried durian was increasing during 20111 to 2016 and it also has become most influencing item exported to china from Thailand. The Increasing consumption of durian among chinese consumer may represent a prospects for trade in other types of processed durian between Thailand and China.
Figure 3 : Thailand food export to china
( Based on UNCOMTRADE data drawn via WITS) http://www.ide.go.jp/library/English/Publish/Download/Brc/pdf/21_05.pdf
1.2 Statement of problem :
Thailand is known as a major exporting country of agricultural products especially for fresh fruits. On the other hand, this strength is followed by the weakness of excess supply of fruit products within the country. Some companies came up with idea of processed dried fruits which helped generate higher revenue and at the same time reduced the wastage of excess supplied fruits and added more value. Today, more and more Thai snack companies want to adopt the process of making Thai Dried Durian snack but are concerned with the response to the product as it comes with high investment. However, dried Durian Fruit is well known among Thai customers. It will be more useful for snack companies if they are aware of the consumer attitude and purchase intention of the target market before creating their marketing plan. In other words the understanding of perception of people who buy and do not durian snack can help Thai snack companies to boost sales revenue.
How can Thai snack companies generate more sales and attract more customers to buy Durian snack ?
1.3. Research objective :
To identify the factors influencing purchase intention of thai consumers towards dried durian.
To enhance the knowledge of consumers towards the Dried Durian fruit products
To develop recommendation for producer and seller of dried durian to increase purchase intention of thai consumers.
1.4 Scope of the research :
The researcher designed both exploratory research and descriptive research for this study. For the exploratory research secondary data were obtained from published sources and journals. Descriptive research was carried out through questionnaire.Target respondents were people who love to eat dried durian in Bangkok, Thailand. The respondents (400 respondents) were specifically given a screening questionnaire, to verify the target respondents were asked whether they love durian and currently stay in bangkok.
1.5 Limitation of the study There are two limitations in this research. First of all , the researcher had a limited time frame of three months to conduct the study and to collect the significant data from the respondent . The process was time consuming which required more time in finding the right respondent based on objective of the research. Secondly, this research has limitation in finding the target respondents who can provide the accurate data.
1.6 Significant of the study
There will be some benefits from the finding of the study such as the researcher will be able to know the key factors which influence thai people to consume dried durian by the discussion of results of hypothesis. On the other hand recommendation given by the researched based on the result of the study will help the manufacturer and seller of the dried durian in an efficient way to increase the sale of dried durian and which will rise the profit margin.
1.7 Operational definition of items :
Market value : refers to most approximate price that a buyer would pay and a seller would receive for an item in an open market.
prospects for trade : The possibility or hope of future trade among people, countries or organization.
Snack : Defines as a small , tasty, quick and convenient food product which can be eat between the meals of breakfast, lunch and dinner.
Dried fruit : Is the fruit which have been dried to take out majority of its water contain through sun drying or specialized dryers.
Review of related Literature
In this part of the study, researcher provides the related literature of each variables which are applied to the conceptual framework . The literature review is the guideline of correlation among variables of the research. The chapter includes two part which are literature review of variables and the summary of related studies which have done before.
2.1 Theories related to Independent Variables :
Price :Price is define as the sum of money which consumers need to pay in exchange of service or product. Usually, higher price is charged for high quality of product. On the other hand, lower price or negotiation can be consider by lower price (Belch, 2000). Product price is set by the Manufacturer or retailer based on both production cost and marketing to get profit margin (Wells, Burnett, and Moriarty, 1998). In many cases consumer predict the quality of product according to the price. In marketing mix factors, price is the most flexible component and it is factor which generate income, but other factors generate costs (Philip Kotler, 2000). Price competitiveness is the most problematic situation for the firms and it can be change any time . To gain market share low Pricing could be viewed as penetration strategy and also demoralize competitors entry (Assael, 2002).
Product :Product can be defined as a satisfying need or want of someone which can be provide by anything (PhilipKotler, 2000). People’s needs and want can be fulfilled through product. There are several types of basic product which offering to people such as tangible and intangible products – known as commodities and services In marketing mix concept product is considered as the key element. It can also designate brand name, product features and after sales service favor (Assael, 1993). A composite of Tangible and intangible features are defined through Product. To satisfy people’s need and want it consist of wrapping, color,services etc (William Stanton, 1964). It also defines as satisfaction of people want and need that can be gained, basically through currency (Belch, 2004). .
Place :Place is defined as a method of delivering and servicing of the product to the consumer from its producers (Wells, Burnett, and Moriarty, 1998). In marketing mix theory place is mentioned as the medium through which a product can be transported to its final user from its particular manufacturer. Resellers or intermediar are the prime members of the channel who takes the responsibility of product and distribute it in the market. (Assael, 1993) stated that there are three major parts of distribution system; manufacturers, wholesalers, and retailers, their main intention is to deliver the right product to customer at the right place and at the right time.
Promotion :Promotion is defined as any initiative that a seller or organizations undertake to promote their product or service to increase in sales margin, product usage or trial (Philip Kotler, 2011). (Belch, 2004) stated, Promotion is the organization of all creative efforts that is originated from the seller to set up persuasive behaviour in order to sell goods and services or promoting an idea. There are several component of promotion like sales promotion, personal selling, advertising, public relation etc which generally can be considered as promotional mix in marketing mix factor (Assael, 1993). The mixture of techniques of sales promotion, advertising, personal selling, public relations, direct marketing, and point-of-sales or packaging is attributed to promotion or marketing communication(Wells, Burnett, and Morarty, 1998). Marketing promotion is used as credible communication method to market a product to its target segments.
Attitude : Attitude is defined as the convey of evaluating individuals psychological tendency with some degree of like and dislike (Eagly and Chaiken, 1993). (J. Huls,1999) stated attitude as a psychological and neural condition of accessibility to respond through experience. There were various discussions on relation between attitude and purchase intention in the marketing positive attitude also refer to the sensation of satisfaction of people in regard to something. . According to Theory of Reasoned Action, actual behavior is the forerunner of attitude which is positively correspondence with behavioral intention(Ajzen and Fishbein, 1980).
Demographic factors refers to a population in terms of its size, distribution, and structure of human living population that changes overtime . Demographic effects consumption patterns both directly and indirectly also by influencing others attributes of individuals, such as personal value and decision styles. Marketers regularly segments markets on basis of demographics (Hawkins, Best, Coney, 2004) Demographic factors such as gender, marital status, age, education, occupation, income, etc, are the factors influencing consumer purchase intention (Philip Kotler, 2000).
2.2 Theories related to Dependent variables :
Purchase intention :
Purchase intention refers to consumers willingness or probability of purchasing a product or service (Dodds, Monroe, and Grewal 1991). The possibility or intention of buying a product by a consumer is also defined as purchase intention (Grewal, Monroe, and Krishnan 1998). Marketers use marketing mix factors to catalyze the dedication inside a consumer mind to make purchase intention. Motivation on a customer to buy can be expressed by consumers purchase intention. However, purchase process of consumers are also determined by various other factors including cultural factors, social factors,psychological factors etc (Pen Ma Si Suwan, 2010)..Generally the product must be available so that purchase behaviour can be execute. Chang (1998) states that it would be complex to accomplish a purchase without such situation, regardless of how appropriate those intentions may be. However the consideration of product can be achieved by purchasing of product, along with purchase intention of next purchase. Hence the seller can forecast the purchase intention of existing customers.
2.3 Summary of related studies
Name of the author Research Title Finding of the research Independent
Variables Dependent Variables
Sara Sabbe, Wim Verbeke, Patrick Van DammeFamiliarity and purchasing intention of Belgian consumers for fresh and processed tropical fruit products Familiarity and purchase intention of fresh and dried tropical fruits depends on consumers’ product experiences. The purchase intention of Belgian people can link with all the variable in the study.
product familiarity, general attitude, beliefs
Demographic Purchase intention
KriengkraiSangathamMarketing mix factors related to purchase decision for cone icecreamPurchase decision of cone icecream has a positive relationship between marketing mix factors, which comprise of all factor of marketing mix elements Marketing mix : product, price, place, promotion Purchase Decision
John A. Bower, Jessica Ferguson Children’s perception of freshfruit and fruit snacks Fresh fruit perceived as likeable, healthy, convenient, low cost and available among the children’s.on the other hand Dried fruits were perceived as low quality but new snacks were likeable and convenient, but observed as expensive and unhealthy Convenience Cost Fulfilling Healthiness Availability Perception
Sasiwemon Sukhabot and Mahamat Abdourra mane An International Consumer’s Perception and Attitude towards the Purchase Intentions of OTOP Snack Food Products Consumers perception and attitude had positive significant influence on purchase intention of OTOP snacks. Product trust and product attribute are the two factors of attitude which significantly influenced purchase intention. Subjective Norms, Behavioral Control, Attitudes Purchase intention
HoJung Choo, Jae-Eun Chung, and Dawn Thorndike Pysarchik Antecedents to new food product purchasing behavior among innovator groups in India Product familiarity, Attitudes, subjective norms, Intention to buy Purchase behavior
Montira, NuttawatThai consumer’s attitude toward vacuum fried crispy fruits Marketing mix,
Motivation, segmentation (Demographic) Attitude to the vacuum fried crispy
Klairung ChookruvongA study of student’s purchase decision towards KitKat chocolate: A case study of Assumption university Marketing mix factors,
Demographic characteristics, Reference group Purchase decision
Minluckana NawathanasontFactors influencing decision of consumers in bangkok in buying “Tao-Kae-Noi” seaweed product Marketing mix, demographic characteristics, consumption behavior, Purchase decision
Ahmad Nabeel Siddiquei, Zeeshan Haider and
Hayat M. Awan Factors affecting Halal purchase intention – evidence from Pakistan’s Halal food sector Halal marketing, Halal awareness, Religious belief, Personal societalperception, Halal certification Purchase intention
Emily C. Crofton, Anne Markey, Amalia G.M. ScannellConsumers’ expectations andneeds towards healthy cerealbased snacks Risk of weight gain, diabetes, heartburn,
perceived taste, portion size, the lack of available convenient nutritional snacks, Consumer expectation on healthy snacks
3.1 Theoretical Framework :
Theoretical framework is the fundamental background which provide logical explanation of conceptual framework of this study among dependent and independent variables. The researcher selected 3 framework to study consumers purchase intention from past research by different researcher which will support.
The topics are as follows :
Students Purchase decision toward kitkat chocolate in Thailand (Klairung Chookruvong, 2006), case study of Assumption University.
An international Consumer’s perception and attitude towards the purchase intention of OTOP snake food product (Sasiwemon Sukhabot and Mahamat Abdourra mane,2014)
3.1.1 First theoretical framework
In below (figure 3.1) the researcher aimed to study on factors influencing students purchase decision toward kitkat chocolate by testing factors of marketing mix, reference and demographic behavior. The results showed that there are positive significant relationship among the variables.
Marketing mix factors.
Student’s purchase decision of kitkat
Source : Students Purchase decision toward kitkat chocolate in Thailand (Klairung Chookruvong, 2006), case study of Assumption University. (framework modified by researcher)
3.1.2. Second Theoretical framework