CONSUMER BEHAVIOR AND PURCHASE DECISION TOWARDS LINEMAN (AN ON DEMAND FOOD DELIVERY) IN BANGKOK BY MISS NOPPANUT TALABPETCH AN INDEPENDENT STUDY SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE PROGRAM IN MARKETING (INTERNATIONAL PROGRAM) FACULTY OF COMMERCE AND ACCOUNTANCY THAMMASAT UNIVERSITY ACADEMIC YEAR 2017 COPYRIGHT OF THAMMASAT UNIVERSITY Ref. code: 25605902040756PCR
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CONSUMER BEHAVIOR AND PURCHASE DECISION
TOWARDS LINEMAN (AN ON DEMAND FOOD
DELIVERY) IN BANGKOK
BY
MISS NOPPANUT TALABPETCH
AN INDEPENDENT STUDY SUBMITTED IN PARTIAL
FULFILLMENT OF
THE REQUIREMENTS FOR THE DEGREE OF
MASTER OF SCIENCE PROGRAM IN MARKETING
(INTERNATIONAL PROGRAM)
FACULTY OF COMMERCE AND ACCOUNTANCY
THAMMASAT UNIVERSITY
ACADEMIC YEAR 2017
COPYRIGHT OF THAMMASAT UNIVERSITY
Ref. code: 25605902040756PCR
CONSUMER BEHAVIOR AND PURCHASE DECISION
TOWARDS LINEMAN (AN ON DEMAND FOOD
DELIVERY) IN BANGKOK
BY
MISS NOPPANUT TALABPETCH
AN INDEPENDENT STUDY SUBMITTED IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE
OF MASTER OF SCIENCE PROGRAM IN MARKETING
(INTERNATIONAL PROGRAM)
FACULTY OF COMMERCE AND ACCOUNTANCY
THAMMASAT UNIVERSITY
ACADEMIC YEAR 2017
COPYRIGHT OF THAMMASAT UNIVERSITY
Ref. code: 25605902040756PCR
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Independent Study Title CONSUMER BEHAVIOR AND PURCHASE
DECISION TOWARDS LINEMAN (AN ON
DEMAND FOOD DELIVERY) IN BANGKOK
Author Miss Noppanut Talabpetch
Degree Master of Science Program in Marketing
(International Program)
Major Field/Faculty/University Faculty of Commerce and Accountancy
Thammasat University
Independent Study Advisor Associate Professor James E. Nelson, Ph.D.
Academic Year 2017
ABSTRACT
Due to the upward trend of mobile internet users and the increasing
demand in connecting an online platform to offline businesses, O2O e-commerce has
been developed and becomes the next trend that helps connect offline service
providers to customers. LINE MAN is a pioneer of O2O platform in Thailand which
provides an on-demand delivery service. Growth opportunity in Thai market is
considerably high if entrepreneurs can develop a technology to enhance their business
and have a good understanding on consumers’ behavior and purchase decision
towards online to offline platform.
This study investigated a contemporary topic in applied marketing
focusing on technology area of marketing knowledge. Objectives of this research are
to understand consumer behavior in adoption process and barrier to adoption factors
towards LINE MAN, an on-demand food delivery service, as well as identify
influencing of motivation factors on adoption of on-demand food delivery service,
and examine consumer segmentation.
Results showed the most working women in Thailand are likely to adopt
on-demand food delivery service of LINE MAN. They are trendy and trust in online
shopping environment. Their beliefs in O2O value are the pursuit of quick and easy,
high quality and inexpensive. Personal influences is the main impact to their attitude,
trial, and purchase decision. On the other hand, the main barrier to adopt this service
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is in a stage of need recognition. Most non-users did not consider or have no problem
about finding their meals. Surprisingly, technology capability is not an obstacle.
Keywords: LINE MAN, On-demand Food Delivery Service, O2O e-commerce
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ACKNOWLEDGEMENTS
I would like to express my very great appreciation to Associate Professor
James E. Nelson, Ph.D. for his valuable, expertise and constructive suggestions during
the planning and development of this study. His willingness to give his time so
generously has been very much appreciated. My grateful thanks are also extended to
my friends and every participants who have made this study a success through their
support. Finally, I wish to thank to MIM community and Thammasart University for
such a great knowledge and experience through my study.
Miss Noppanut Talabpetch
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TABLE OF CONTENTS
Page
ABSTRACT (1)
ACKNOWLEDGEMENTS (3)
LIST OF TABLES (7)
LIST OF FIGURES (8)
LIST OF ABBREVIATIONS (9)
CHAPTER 1 INTRODUCTION 1
1.1 Statement of Problems 1
1.2 Research Objective 2
CHAPTER 2 REVIEW OF LITERATURE 3
2.1 Consumer Trend in the Mobile Internet Era in Thailand 3
2.2 Current Situation of LINE and LINE MAN in Thailand 3
2.3 Consumption Psychology and Consumption Behavior in the Mobile
. Internet Era 4
2.4 Online to Offline e-commerce (O2O) 5
2.5 Consumer Behavior towards O2O Platform 6
2.6 Consumer Adoption for New Products or Technology 7
CHAPTER 3 RESEARCH METHODOLOGY 9
3.1 Exploratory Research 9
3.1.1 Secondary Research 9
3.1.2 In-depth Interviews 9
3.2 Descriptive Research 10
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3.2.1 Questionnaire Design 10
3.3 Identification of Key Research Variables 10
3.4 Target Population 11
3.5 Data Collection Method 11
3.6 Data Analysis Method 12
CHAPTER 4 RESULTS AND DISCUSSION 14
4.1 Review of In-depth Interview 14
4.2 Characteristics of LINE MAN Users 15
4.2.1 LINE MAN Users 18
4.2.2 Non-Users Awareness 22
4.2.3 Beliefs in Online Behaviors and Lifestyles 22
4.3 Factor Analysis 24
4.4 The Impact of Factors on Implementation of On-demand Food
. Delivery Service 26
4.5 Clusters Analysis 28
4.5.1 Defining Clusters 289
4.5.2 Consumer Segmentations 30
CHAPTER 5 CONCLUSIONS AND RECOMMENDATIONS 31
5.1 Conclusion 31
5.2 Recommendation 33
5.3 Limitation of This Study and Future Research 33
REFERENCES 34
APPENDICES 37
APPENDIX A: Questionnaire Design 38
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APPENDIX B: SPSS Data Result 45
BIOGRAPHY 49
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LIST OF TABLES
Tables Page
3.1 Sampling Plan 12
4.1 Characteristic of in-depth interview’s respondents 14
4.2 Respondent’s demographic characteristics 16
4.3 Respondent’s awareness of LINE MAN 17
4.4 Familiarity with LINE MAN services 17
4.5 The classification of LINE MAN users 18
4.6 Reasons to trial LINE MAN services 18
4.7 Respondent’s degree of information searching on-demand food
delivery service 19
4.8 Respondent’s occasion of applying on-demand food delivery service 19
4.9 Respondent’s reasons of applying on-demand food delivery service 20
4.10 Purchasing factors affecting on choosing an on-demand food
delivery service 21
4.11 Barriers of using an on-demand food delivery service 22
4.12 Respondent’s beliefs toward online behavior on degree of
the pursuit on each characteristic 23
4.13 Respondent’s agreement toward lifestyle 24
4.14 The most used mobile applications (Top 3) 24
4.15 Pattern Matrix of Factor Loadings (Promax Rotation) 25
4.16 New Labels of factor analysis 25
4.17 The impact of purchasing factors and reasons to use on
implementation of on-demand food delivery service 27
4.18 The impact of extracted purchasing factors on implementation of
on-demand food delivery service 28
4.19 Final clustering and ANOVA table 29
4.20 The segmentation of consumers based on mobile applications 30
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LIST OF FIGURES
Figures Page
2.1 AIDMA and SCIAS models 5
2.2 Operation flow of O2O e-commerce 6
3.1 Independent variables and Dependent variables 11
5.1 The result of respondents towards adoption model and
decision making process 31
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LIST OF ABBREVIATIONS
Symbols/Abbreviations Terms
O2O Commerce Online to Offline Commerce
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CHAPTER 1
INTRODUCTION
1.1 Statement of Problems
With the development of smart phone and telecommunication technology,
this enables people to access the internet easily and more convenient from anywhere
and at any time they want. Along with this, the rising trend of e-commerce has seen
through various innovations. Currently, a new e-commerce model is O2O which
refers to Online to Offline. This concept was first introduced by Alex Rampell in
2010. He defined as “the business model that leverages online channels to acquire
offline services and products” (Rampell, 2017). The integration of these
advancements transform people’s daily’s live in term of consumption psychology and
consumption behavior.
Since 2014, LINE was introduced in Thailand as a messaging application
and became the most popular chatting platform for Thai users. Online to Offline
model is new to Thailand. LINE MAN is one of LINE’s businesses that introduced an
initial O2O platform to the market in 2016 and it was very successful. Thus, with the
explosive growth of mobile internet user in Thailand, O2O will not only create new
opportunities for all industries, but also create benefits for consumers. However,
understanding Thai consumers’ behavior and purchase decision criteria towards this
technology is a key to have successful in O2O business. Therefore, LINE MAN is a
good case study for online to offline business model and for better understanding of
consumers’ behavior towards on demand food delivery service in the mobile internet
era. Also, the findings from this research will advantage the restaurant industry to
create marketing strategy and expand distribution channels through the development
of O2O commerce.
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1.2 Research Objective
As indicated in the introduction, online to offline model of LINE MAN
creates the opportunity for the restaurant businesses who are introducing or expanding
their products or services to consumers via the world of mobile internet technology. In
the other words, this attributes to customers easier access to products and services as
well as increasing traffic and brand visibility to the businesses. Besides, this will be
beneficial for those who aim to develop their business by using online channel to
acquire offline services and products in the growing mobile commerce in Thailand. If
this model is used efficiency, it will create a huge profit for enterprise. However, to
achieve those things, business owners or marketers should understand consumer
behavior and purchase decision towards LINE MAN food delivery service. Therefore,
there are three main objectives of this research.
Objectives for the study:
1. To understand consumer behavior in adoption process and barrier to
adoption factors towards LINE MAN, an on-demand food delivery
service.
2. To identify motivation factors such as save time, save cost, and save
energy and key purchasing factors such as system quality, product and
delivery quality, trust, and price towards LINE MAN, an on-demand
food delivery service.
3. To determine characteristic consumers’ behavior of LINE MAN, an
on-demand food delivery service and identify consumer segmentation
by 1) demographics such as age, gender, income, etc. and 2)
psychographics such as activities, preferences, and interests towards
online channel.
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CHAPTER 2
REVIEW OF LITERATURE
2.1 Consumer Trend in the Mobile Internet Era in Thailand
According to a report from We Are Social, in Thailand 2017, there are 46
million people (67%) who have accessed the internet and this is a significant growth
of 21 percent which compared with the 2016 year (Kemp, 2016). National statistical
indicated most of the users are connected to the internet through their smartphones
about 90 percent in 2016. Due to the exponential mobile internet user growth and the
transformation of consumer behavior after launching 3G/4G wireless broadband
Internet in Thailand (Thongtep, 2016), m-commerce (mobile commerce) becomes a
major channel for shopping and changing consumer shopping habits (Meola, 2016).
2.2 Current Situation of LINE and LINE MAN in Thailand
Interestingly, LINE is the most popular messaging application in Thailand
which there was around 41 million active users at the end of 2016. The benefits of
LINE have been proved by the large user bases. Thais spend one-third of the 234
minutes per day on their mobile on LINE or about 70 minutes per day on average
(The Nation, Line aims to morph into ‘mobile platform’, 2017) cited in Nielsen’s
research. To maintain LINE users and to build its own ecosystem, LINE aims to
extend their business models to deliver end-to-end services in everyday life on the
mobile platform. Apart from exchanging messages, LINE will expand its business in
four dimensions including communication, digital content, services, and commerce. It
focuses on making users’ lives easier and more convenient through its platform. For
services and commerce perspective, now it has covered e-commerce, payment
gateway, and transportation (Leesa-Nguansuk, 2017).
In 2016, LINE launched LINE MAN as Thailand’s first O2O platform, an
on-demand delivery service. It has started to offer services 24 hours daily with four
categories which are food delivery, convenience goods, messenger, and postal.
Currently, LINE MAN has 500,000 users and the number has been increased over
10% per month (Tortermvasana, 2017). With the increasing demand of O2O
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commerce, it has been promoted the growth of LINE MAN users. LINE MAN was
very successful as Thailand’s number one food delivery service in 2017 (The Nation,
Line man celebrates first anniversary, aims to be No. 1 in Thailand, 2017)
2.3 Consumption Psychology and Consumption Behavior in the Mobile Internet
Era
The development of mobile and information technology makes consumers
get information more convenient and fast. It leads to quickly transformation of
consumption psychology and behaviors. The psychological characteristic and the
activities process of the consumption in the mobile internet era base on four common
characteristics which are personality, speed, trust, and sharing. However, consumption
behavior have been changed from the classical theory of information flow in AIDMA
model (Attention-Interest-Desire-Memory-Action) to SCIAS model (Search-
Compare-Interest-Action-Show). To search is the first step when consumers want to
buy products or use services in the mobile internet era because it can be through the
search engine online quickly and easily. Consumers will receive a lot of information
and reference from other consumer evaluations. Then, they compare details with the
similar goods or services, also combine with their needs. If they are interested in a
certain selection, they make action in purchase decision. To show comes out after the
results of consumption. Importantly, SCIAS model is without the end point of
information processing. The next transaction after the completion of the first
transaction will be due to the results in show stage. In addition, it is possible to
directly contribute to other consumers’ decision making. (Cao, 2015)
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Figure 2.1: AIDMA and SCIAS models
2.4 Online to Offline e-commerce (O2O)
Recently, a new trend of e-commerce model is online to offline (O2O) or
on-demand service that attracts online consumers to experience offline services. With
the advancement of digital technology, it enables business to build multi-platform tool
for marketing and e-commerce use by using O2O model to pull the customer closer.
The objective of O2O commerce focuses on profit maximization of the consumption
value for the consumers by using online platform (Ye, 2015). On the contrary, Omni-
channel marketing is multiple channels work seamlessly together to create total
customer experience (Kotler & Keller, 2016)
The key idea of O2O model is to enhance consumer awareness on online
channels and drive consumer to visit or using offline service. Consumers can research
and request the service on the online platform, but physically experience the reserved
service occur at an offline site. The operational flow of O2O e-commerce include
three main parties which are 1) O2O platform, 2) Consumer, and 3) Offline
businesses. Among three parties, there is an exchange information throughout the
operational flow without the end point. Basically, O2O platform connects between
offline businesses and consumer via online platform. Through this platform, offline
businesses can send information and promote their products and services while
consumer can search and collect the information. Then, consumer makes decision and
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purchases through the online platform. The personal demand will be sent to the offline
businesses through this platform. Also, payment can be paid immediately. Finally,
consumers’ feedback after experiencing the service or consuming the product can be
submit and send directly to the offline businesses (Ye, 2015)
Figure 2.2: Operation flow of O2O e-commerce (Ye, 2015)
2.5 Consumer Behavior towards O2O Platform
LINE MAN is one of a brand extension strategy of LINE by using O2O
model to maintain and expand its revenue streams. Based on theory of reasoned action
(TRA) for understanding people’s adoption intention, it asserts that user’s intentions
in using the new service is influenced by positive attitudes and trust towards the
proposed brand extension. (Hwang & Kim, 2017). However, consumer buying
behavior is the outcome of the consumers that they purchase to satisfy their needs and
wants which depending on the personal factors such as age, psychology and
personality. From model of customer satisfaction, there are three main factors which
are 1) e-commerce system quality, 2) product and delivery quality, and 3) perceived
price (Lien, Chang, & Lin, 2017). For personal factors, it defines as characteristics of
O2O consumers’ behavior which are 1) the pursuit of quick and easy, 2) the pursuit of
high quality and inexpensive 3) the pursuit of personality, 4) the pursuit of
consumption experience and 5) decline in customer loyalty (Chiu & Yen, 2016).
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Interestingly, the study of O2O platforms in China found that sales promotion is the
most important stimuli for purchase decision on O2O food delivery (Ye, 2015)
2.6 Consumer Adoption for New Products or Technology
O2O platform is new to Thai consumers. For new products or new ideas,
marketers generally target to early adopters and use the theory of innovation diffusion
and consumer adoption to identify them. According to Everett Rogers, the consumer-
adoption process is the mental steps of an individual consumer that starts from the
first hearing to final adoption. The stages of Innovation-Adoption Model consist of
awareness, interest, evaluation, trial, and adoption respectively. However, the level of
innovativeness of an individual consumer is different. Everett Rogers defines as “the
degree to which an individual is relatively earlier in adopting new ideas than the other
members of his social system. It is divided into five groups which are Innovators,
Early adopters, Early majority, Late majority, and Laggards (Kolter & Keller, 2016).
When consumers consider to purchase, the pre-purchase stage begins with personal
motivations (stimulus) which may cause from a commercial cue, a social cue, or a
physical cue. Then, it is followed by problem awareness, information search, and
evaluation of alternative (Hoffman, 2011)
Based on the previous studies, there are a few researches done to
understand adoption and barriers toward on-demand food delivery service (O2O
platform) and focusing on consumer behavior, decision making process, and
purchasing factors in the context of Thailand. As Thai characteristic and culture
values might differ from other countries, this is a gap that the author’s interest to
study about this relationship for the country by using LINE MAN as a case study.
Because of fast growing m-commerce and O2O model, adoption issues in on-demand
food delivery service have been significantly related to consumers’ behavior. It is
influenced by positive attitudes and beliefs in an online platform which are 1) the
pursuit of quick and easy, 2) the pursuit of high quality and inexpensive 3) the pursuit
of personality, 4) the pursuit of consumption experience and 5) decline in customer
loyalty. Additionally, to satisfy consumer needs and want, it depends on personal
factors (psychographic and demographics) and satisfaction or purchasing factors
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including system quality, product and delivery quality, and perceived price. These
have been the main topic done by other researches. However, there are still not many
studies being done to study on other factors or relationship that might contribute to
adoption in on-demand food delivery service. Consequenlty, this research was
adapted a few variables and model from previous studies and designed the framework
as a reference for this study to understand consumer adoption for new services or
technology in Thailand.
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CHAPTER 3
RESEARCH METHODOLOGY
The research were conducted by exploratory research and descriptive
research. The exploratory research was included secondary research and in-depth
interviews of 10 respondents which provided insights about consumer behavior and
attitude towards LINE MAN. The findings from the exploratory research were then
validated through descriptive research. The descriptive research was conducted by
online survey questionnaire with target of 200 respondents. Sampling selection was
from current target consumers who were Bangkok millennial and knew LINE MAN
application. Due to time constraint, the sampling method of this research was
convenience sampling method. After data collection completes, the data was analyzed
by using SPSS to achieve the research objectives.
3.1 Exploratory Research
3.1.1 Secondary Research
The purpose of secondary research is to understand mobile internet users’
overview in Thailand, LINE and LINE MAN current situation in Thailand, online to
offline commerce overview, overall consumer behavior towards online to offline
approach (Objective 1) , and primary consumer purchasing factors of O2O commerce
(Objective 2). The secondary data was obtained from many credible sources including
websites, market research publication, academic journals, and books.
3.1.2 In-depth Interviews
In-depth interviews were conducted to explore consumer insights in terms
of adoption process and consumer behavior towards on-demand food delivery service
of LINE MAN comparing to their original buying behavior ( Objective 1) .
Interviewees were asked to list their motivation and purchasing factors for using on-
demand food delivery service of LINE MAN (Objective 2) . Consumers’ profile and
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their lifestyle was also collected ( Objective 3) . The in-depth interview was piloted
with four respondents, and followed by six respondents. The participants were
included non-users who knew LINE MAN but never use and all LINE MAN users
regardless of their frequency in using the service.
3.2 Descriptive Research
The descriptive research was conducted by online survey questionnaire.
The questionnaire was designed based upon the information from exploratory
research, aimed for 200 respondents. The questionnaire took approximately 10 - 15
minutes. The responses were interpreted and analyzed to achieve all the research
objectives (Objective 1, 2, 3).
3.2.1 Questionnaire Design
The some part of questions survey was a guideline from the result of in-
depth interview which was designed to achieve research objective. In addition, the
questionnaire consists of five parts; (See the appendix A)
Section 1: Screening Question for selecting only target population.
Section 2: Adoption behaviors and process towards on-demand food
delivery service.
Section 3: Purchasing factors towards on-demand food delivery service
Section 4: Characteristics of consumer behavior and motivation factors
towards on demand food delivery service.
Section 5: Consumer’s demographics and psychographics.
3.3 Identification of Key Research Variables
Key variables of this research were 1) Consumer demographics 2)
Consumer psychographics such as activities, preferences, and interests towards online
platforms 3) Consumer behaviors such as a usage rate of mobile applications and
online food delivery 4) Purchasing decision such as motivation factors (save time,
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more convenience and less stress) and barriers to adoption for a new product
(awareness, interest, trial, and adoption). The independent variables and dependent
variables of this study were described in Figure 3.1
Figure 3.1: Independent variables and Dependent variables
3.4 Target Population
For both in-depth interview and questionnaire survey the target
respondents were qualified as follow: were Bangkok millennial, age 20 - 36 years old,
male and female, who knew LINE MAN application whether they used to try the
service or not.
3.5 Data Collection Method
The non-probability (convenience) samples were used for both in-depth
interview and survey questionnaire. The data collection process were conducted in
Bangkok, approximately three weeks during 28 November - 21 December 2017 for
in-depth interviews and three weeks during 14 - 31 January 2018 for survey
questionnaire. Research methodologies and the sample size for each method was
illustrated in
Table 3.1: Sampling Plan
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Table .
At first, the pilot test were conducted for all research methodologies
including 4 respondents of in-depth interview, and 5 respondents of online survey
questionnaire. All of respondents were qualified, as indicated in the content 3.4)
Target Population, through the screening questions.
For in-depth interview, personal contact were used as a method to recruit
qualified respondents from various consumer’ s profile. In-depth interviews were
conducted with 6 respondents by face-to-face interview or telephone interview
depends on respondents’ preference.
For survey questionnaire, the online questionnaires were distributed
through e-mail, online food review community, and social network platform such as
Facebook and Line. Responses from online surveys were transmitted to the researcher
immediately via the online system.
Table 3.1: Sampling Plan
Type of research Methodology Pre-test pilot Sample size