FACTORS INFLUENCING THAI SMES TO ADOPT POINT-OF-SALES SYSTEM (POS) BY MR. PONGSAKORN TIKAPICHART AN INDEPENDENT STUDY SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF SCIENCE PROGRAM IN MARKETING (INTERNATIONAL PROGRAM) FACULTY OF COMMERCE AND ACCOUNTANCY THAMMASAT UNIVERSITY ACADEMIC YEAR 2018 COPYRIGHT OF THAMMASAT UNIVERSITY Ref. code: 25616002040597HIA
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FACTORS INFLUENCING THAI SMES TO ADOPT
POINT-OF-SALES SYSTEM (POS)
BY
MR. PONGSAKORN TIKAPICHART
AN INDEPENDENT STUDY SUBMITTED IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE
OF SCIENCE PROGRAM IN MARKETING
(INTERNATIONAL PROGRAM)
FACULTY OF COMMERCE AND ACCOUNTANCY
THAMMASAT UNIVERSITY
ACADEMIC YEAR 2018
COPYRIGHT OF THAMMASAT UNIVERSITY
Ref. code: 25616002040597HIA
FACTORS INFLUENCING THAI SMES TO ADOPT
POINT-OF-SALES SYSTEM (POS)
BY
MR. PONGSAKORN TIKAPICHART
AN INDEPENDENT STUDY SUBMITTED IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE
OF SCIENCE PROGRAM IN MARKETING
(INTERNATIONAL PROGRAM)
FACULTY OF COMMERCE AND ACCOUNTANCY
THAMMASAT UNIVERSITY
ACADEMIC YEAR 2018
COPYRIGHT OF THAMMASAT UNIVERSITY
Ref. code: 25616002040597HIA
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Independent Study Title FACTORS INFLUENCING THAI SMES TO
ADOPT POINT-OF-SALES SYSTEM (POS)
Author Mr. Pongsakorn Tikapichart
Degree Master of Science Program in Marketing
Major Field/Faculty/University Faculty of Commerce and Accountancy
Thammasat University
Independent Study Advisor Professor Malcolm C. Smith, Ph.D.
Academic Years 2018
ABSTRACT
Technology has changed how businesses operate in a significant way. No
matter the size of the companies, technology can help companies work more effectively
and efficiently. The Point of Sale (POS) system is one of the technologies that could be
applied to most small-to-medium enterprises (SMEs). However, some Thai SMEs still
use manual inventory management and manual accounting, which are perceived as
traditional methods.
This study was conducted to explore the factors that could influence Thai
SMEs to adopt a POS system. The research determined the level of importance of each
element as well as any negative factors that would inhibit Thai SMEs from POS
adoption. The research will further help software companies which develop POS, and
inventors who are interested in POS businesses to target the appropriate segment of
business owners and implement the right product features, marketing strategies, or
business model to convert them into POS users.
This research used both exploratory and descriptive research methods. The
exploratory research consists of secondary research and in-depth interviews.
Respondents in the interviews are Thai SMEs, who own businesses or who have shares
in a company, and included POS users, ex-POS users, and non-POS users. The personal
contacts and social relations of the researcher were the essential resources for recruiting
respondents. The participants were recruited through announcements on social
media. For the quantitative analysis, data from 287 respondents was gathered using an
online survey site, which is SurveyMonkey. The surveys were distributed by means of
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personal contacts and social relationships of the researcher on Facebook and through
the Line application. Additionally, some questionnaires were collected by the
researcher, who went to retail stores and asked business owners to complete the survey.
The research used the Statistical Package for the Social Sciences Program (SPSS) to
analyze the data.
The findings suggest that the marketers should focus on the Explorer and
Realist group by providing the right POS system with acceptable price and good
customer service, which would encourage non-POS user to adopt POS system.
Keywords: Influencing Factors, Point of Sale System, POS, Adoption, Triggers,
Barriers
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ACKNOWLEDGEMENTS
I would like to express my deepest gratitude to my advisor, Professor
Malcolm C. Smith, Ph.D. for his helpful recommendations and his valuable time in
guiding me through this project. My journey under his supervision has been amazing
experiences and this research would not have been completed without his guidance and
support.
I wish express my appreciation towards all respondents who have spent
their time taking parts in both the qualitative research and quantitative research. Also,
I would like to give my sincere appreciation to my friends for sharing and distributing
the questionnaires. This research could not have been finished without those supports.
I would like to give my profound gratitude to Ms. Panchalee
Areethamsirikul and Mr. Chien-cheng Lien, who had helped me greatly in survey-
testing, data analyzing and suggesting.
Finally, I would like to express my deep appreciation to my family members
who always gave support and encouragement throughout the entire project as well as
the two years of study in the master’s degree.
Mr. Pongsakorn Tikapichart
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TABLE OF CONTENTS Page
ABSTRACT (1)
ACKNOWLEDGEMENTS (3)
LIST OF TABLES (8)
LIST OF FIGURES (10)
LIST OF ABBREVIATIONS (11)
CHAPTER 1 INTRODUCTION 1
1.1 Statement of the Problem 2
1.2 Objective 2
CHAPTER 2 REVIEW OF LITERATURE 3
2.1 Literature Review 3
2.1.1 What is a Point of Sales System (POS) 3
2.1.2 Evolution of POS System 3
2.1.3 POS System Industry 4
2.1.4 Features of POS System in Thailand Market 5
2.1.5 Thai SMEs’ Behavior towards POS 5
2.2 Summary of Literature Review 6
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CHAPTER 3 RESEARCH METHODOLOGY 7
3.1 Exploratory Research 7
3.1.1 Secondary Research 7
3.1.2 In-depth interviews 8
3.2 Questionnaires 8
3.3 Analysis 9
CHAPTER 4 RESULTS AND DISCUSSION 10
4.1 Qualitative Analysis and Results of Exploratory Research 10
4.1.1 Results from In-depth Interviews 10
4.2 Quantitative Analysis and Results of Descriptive Research 10
4.2.1 General Profiles of Respondents 11
4.2.2 Results from Factor Analysis 14
4.2.3 Result from Cluster Analysis 14
4.3 Research Results according to Objectives 15
4.3.1 Objective 1 15
4.3.2 Objective 2 16
4.3.3 Objective 3.1 19
4.3.4 Objective 3.2 19
4.4 Relationships between Variables 21
4.4.1 Relationship between Barriers and Intention to Adopt a
POS System
21
4.4.2 Relationship between Triggers and Intention to Adopt a
POS System
24
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CHAPTER 5 CONCLUSIONS AND RECOMMENDATIONS 27
5.1 Summary of Results 27
5.2 Conclusions and Recommendations for Marketers 28
5.3 Limitations 29
5.4 Suggestion for further research 29
REFERENCES 30
APPENDICES
APPENDIX A QUESTIONS DESIGN FOR IN-DEPTH
INTERVIEW
34
APPENDIX B QUESTIONNAIRE FOR DESCRIPTIVE
RESEARCH
35
APPENDIX C OBJECTIVE MAPPING TABLE 47
APPENDIX D SOCIO-ECONOMIC STATUS (SES)
CLASSIFICATION FOR THAIS WHO LIVE IN
BANGKOK
49
APPENDIX E RESULT OF FACTOR ANALYSIS OF
QUESTIONNAIRE PARTICIPANTS’
PSYCHOGRAPHICS
50
APPENDIX F PARTICIPANTS’ PSYCHOGRAPHICS
ATTRIBUTES IN EACH FACTOR
51
APPENDIX G RESULT OF FACTOR ANALYSIS OF
BARRIER WITH PRICING FACTOR
52
APPENDIX H RESULT OF FACTOR ANALYSIS OF
BARRIER WITHOUT PRICING FACTOR
53
APPENDIX I BARRIER ATTRIBUTES IN EACH FACTOR
(WITHOUT PRICING FACTOR)
54
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APPENDIX J CLUSTER ANALYSIS BASED ON
PSYCHOGRAPHICS FACTORS
55
BIOGRAPHY 56
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LIST OF TABLES
Tables Page
4.1 Survey completion rate 11
4.2 Respondents’ profiles based on behavior 11
4.3 Respondents’ profiles based on demographics 12
4.4 Respondent profile based on business 13
4.5 Perspective of POS users toward POS system 15
4.6 Perspective of non-POS users and ex-POS users toward POS system 16
4.7 Intention to adopt a POS system between users and
non-users classified by psychographic factors. 17
4.8 T-Test result comparing intention to adopt a POS system
between users and non-users 18
4.9 ANOVA result comparing intention to adopt a POS system
by non-POS User among the psychographic group 18
4.10 Means of barriers for each segment 19
4.11 Means of triggers for each segment 20
4.12 Acceptable price for each segment 21
4.13 Regression analysis result of barriers inhibiting
the adoption of a POS system 22
4.14 List of barrier attributes 22
4.15 Level of important of barrier factors from regression analysis
for Explorer 23
4.16 Level of important of barrier factors from regression analysis
for Realist and Delegator Groups 24
4.17 Regression analysis result of influencing factors to adopt
a POS system 25
4.18 List of trigger attributes 25
4.19 The level of important of influencing factors
from regression analysis for Explorer 26
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4.20 Level of important of influencing factors
from regression analysis for Realist and Delegator 26
5.1 List of Top 3 rating scores of barriers and triggers and list of factors
that impact the prediction of intention to adopt a POS System 28
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LIST OF A FIGURE
Figure Page
3.1 Relationship of Key Research Variables 9
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LIST OF ABBREVIATIONS
Symbols/Abbreviations Terms
POS
SMEs
CAGR
mPOS
ANOVA
VIF
IVs
DV
SPSS
ex-POS users
SES
Point of Sales
Small-to-Medium Enterprises
Compound annual growth rate
Mobile Point of Sales
Analysis of Variance
Variance Inflation Factor
Independent Variables
Dependent Variable
The Statistical Package for the Social
Sciences Program
A person who used to use POS for
his/her business
Socio-Economic Status
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CHAPTER 1
INTRODUCTION
Nowadays, technology plays an essential role in all aspects of people’s lives
such as, education, transportation, communication, and business (Hauert, 2017).
Technology helps businesspeople to operate companies more effectively and efficiently
(Gregory, 2018). Operations in business have shifted from a traditional approach
operation to being technology oriented because of the lower cost of operations.
Consequently, the SMEs which do not adapt to the change would not be competitive
and would not survive (Olenski, 2016).
A POS system is one of the technologies that could be applied to most
SMEs and increase the efficiency in their operations (Nangia, 2017). This is the reason
why a POS system is becoming a popular fixture at a check-out counter of most retail
businesses. However, some Thai SMEs still use manual inventory management and
manual accounting (Kasikornresearch, 2018). As will be seen in the literature review
below, the factors that influence the willingness of Thai SMEs to adopt a POS system
and the barriers inhibiting the adoption of a POS system have not been previously
analyzed.
Therefore, the purpose of this research, which is a contemporary topic in
applied marketing focusing on a technology issue, is to investigate the barriers
inhibiting the adoption of a POS system and the critical factors influencing consumers
that can reduce the barriers for adoption.
This report will help software companies, which develop POS systems, or
inventors, who are interested in POS businesses, to gain more insight into Thai SMEs’
perceptions towards a POS system. Therefore, concepts could be initiated to develop
better products which would be suitable for the market, as well as a marketing campaign
to encourage SMEs to adopt a POS system into their business.
1.1 Statement of The Problem
This research aims to gain insight of Thai SMEs’ perceptions towards POS
system in order to give answer to the question - “What are the factors that discourage
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Thai SMEs to using POS system and what are the factors that influence them from
adopting POS system?”
1.2 Objectives
This research has three main objectives
1. To determine Thai SMEs’ perspectives toward POS system.
1.1 Marketing Mix
1.1.1 Product
1.1.2 Price
1.2 External Factors
1.2.1 Competition and Industry Norm
1.2.2 Family and Friends Recommendation
1.2.3 Reviews
1.2.4 The stiffness of law enforcement
1.3 Internal Factors
1.3.1 Past Experiences
1.3.2 Comfortability with technology
2. To identify Thai SMEs segmentation according to their demographics,
behaviors, and psychographics.
2.1 To determine the SMEs’ owner profiles according to
segmentation.
3. To determine the critical factors that influence Thai SMEs to adopt POS
system.
3.1 To determine the barriers inhibiting the adoption of POS
system.
3.2 To identify influencing factors that can reduce the
barriers for POS system adoption.
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CHAPTER 2
REVIEW OF LITERATURE
2.1 Literature Review
2.1.1 What is Point of Sale System
Point of Sales (POS) is ‘the place at which a retail transaction is
carried out’ (Oxford Dictionary). When mentioning POS, it usually involves a ‘Point
of Sales System,’ which concerns a system that allows the recording of transactions
between sellers and customers at the time when such goods and services are purchased
(Investopediastaff, 2018). To better enhance customers’ experiences at checkout
counters, a POS system may use additional devices such as scanners, cash drawers,
receipt printers, touchscreen, among others.
Some POS system vendors call their system a ‘Retail Management
System’ (Kaesehagen, 2016), which may be a more appropriate term because the
system features not only sales recording, but also has more capabilities such as
inventory management, stock transfer, alerts for low quantities of stock, suppliers, the
issuance of quotations, sale reporting, e-commerce, customers recording, as well as a
customer relationship system. Nevertheless, the term ‘usually tends to create confusion
among POS system providers and retailers (Wikipedia contributors, 2019), which is
why ‘POS’ is the more commonly used term.
2.1.2 Evolution of POS System
In 1879, the cash register prototype was invented by James Ritty, who
owned several saloons. He created the cash register to use in his saloon business. In
1883, Ritty and John Birch received a patent for creating the cash register and opened
a company called National Manufacturing Company to produce cash registers. They
later sold both the company and license to John H. Patterson, who renamed the
company ‘National Cash Register (NCR)’ in 1884 (Bellis, 2018).
In 1906, the first cash register powered by an electric motor was
invented by Charles F. Kettering, who worked for NCR. The machine made it faster
and more comfortable for cashiers to sale and tab on transactions (Bellis, 2018).
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By the time the 80s and 90s came around, cash registers had evolved
into the POS system. The electronic register, PC-based POS, touch-screen and barcode
scanners eventually saw widespread use by most retailers throughout the USA at that
time.
Due to the breakthrough of cloud computing in the 2000s, POS
systems were deployed for software services which could be accessed from the internet.
Cloud POS has enabled more possibility for POS and made it compatible with a wide
range of POS hardware, including tablets and smartphones (The History of Point of
Sale (POS), n.d.). According to Statista (Statista, n.d.), mobile POS (mPOS) is the most
valuable technology for retail stores. mPOS is the trend of POS in the future.
2.1.3 POS System Industry
The global POS system market size is expected to be worth $116
billion by 2025, CAGR 9.9%. Fixed POS accounts for the most significant product
segment, whereas mPOS has grown by a high rate (CAGR: 16%) during forecast
periods (Grandviewresearch, 2018).
Due to wireless technologies and mobile POS, an increasing demand
for mPOS is predicted to drive the overall market for the POS system over the forecast
period.
A Personal Identification Number (PIN) and chip-embedded
payment cards have decreased security concerns relating to cybersecurity and identity
theft, which is anticipated to drive the POS industry. In addition to the reduction of the
cybersecurity issue, wireless connectivity, including Bluetooth combined with external
devices such as card readers, barcode and QR code scanners, and mobile printers, is
projected to drive the surge in the POS demand.
Likewise, cloud computing as well as lower cost and portability of
mPOS, which will decrease retailers' operational costs and provide better reliability,
will drive a significant increase in demand for the POS system. Moreover, rapidly
gaining popularity among end users is another critical factor that will drive demand
over the predicted period. The software, which typically serves as a subscription model,
will help to reduce the operational costs of business owners by eliminating the
requirement of installing a hardware system (Mobile Point-Of-Sale devices to account
for almost 1 In 4 POS transactions by 2023, 2018).
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2.1.4 Features of POS System in Thailand Market
The features of POS which can be found in current technologies in
Thailand include Menu management, Table management, Order management,