In recent years, the market for Fast Moving Consumer Goods has developed at

such a promising growth rate that it has become such a tough competition between many
brands. Interestingly, many brands have been trying to differentiate their product by
offering the customers with private label brands. In order to survive in this fierce
competition, the company or the brand have to understand well the customer decision
criteria. One of the most well-known brand in Vietnam market mow is Co.opmart. This
research aims to find out and analyze which factors can possibly affect the purchase
decision of Co.opmart private label brand Fast Moving Consumer Goods. Furthermore,
by conducting this research, the author hopes to shed light on the dimensions in which the
brand or the company can influence to achieve better customer’s purchase decisions.

There are four factors including in the research: PRICE CONSCIOUSNESS,

VALUE CONSCIOUSNESS, BRAND IMAGE, and QUALITY. After the study was
conducted with quantitative method, it came to the conclusion that BRAND IMAGE
appeared to be the most influencing factor to the purchase decision of Co.opmart’s
private label FMCG.

2
 Table of Contents
Abstract............................................................................................................................................3
List of Figures..................................................................................................................................6
List of tables....................................................................................................................................7
Chapter I. Introduction................................................................................................................8
1.1 Background of the study...................................................................................................8
1.2 Problem statement.............................................................................................................9
1.2.1Research objective...........................................................................................................9
1.2.2Research question..........................................................................................................10
1.3 The scope of study..........................................................................................................10
1.4 The relevance of the study..............................................................................................10
1.5 Structure of the study......................................................................................................11
Chapter II. Literature review......................................................................................................12
2.1 Basic concepts.....................................................................................................................12
2.1.1 Fast Moving Consumer Goods (FMCG)......................................................................12
2.1.2 Private label brand (PLB).............................................................................................13
2.2 Background theories............................................................................................................14
2.2.1 Consumer behavior model............................................................................................14
2.2.2 Theory of reasoned action (TRA).................................................................................16
2.2.3 Theory of planned behavior (TPB)...............................................................................17
2.3 Related studies.....................................................................................................................18
2.3.1 Review of previous studies...........................................................................................18
2.3.2 Price consciousness......................................................................................................22
2.3.3 Value consciousness.....................................................................................................23
2.3.4 Brand image..................................................................................................................24
2.3.5 Quality..........................................................................................................................25
2.3.6 Purchase decision..........................................................................................................25
2.4 Proposed research model.....................................................................................................26
Chapter III. Methodolody........................................................................................................27
3.1 Research design...................................................................................................................27
3.1.1 Quantitative research....................................................................................................27

3
 3.1.2 Research process...........................................................................................................27
3.2 Research type.......................................................................................................................28
3.3 Research data.......................................................................................................................28
3.3.1 Secondary data..............................................................................................................28
3.3.2 Primary data..................................................................................................................29
3.4 Research tool.......................................................................................................................30
3.4.1 Questionnaires..............................................................................................................30
3.4.2 Preparation of the multi-item scale...............................................................................32
3.5 Sampling..............................................................................................................................33
3.5.1 Sample population........................................................................................................33
3.5.2 Sampling frame.............................................................................................................33
3.5.3 Sampling size................................................................................................................34
3.5.3 Sampling technique......................................................................................................34
3.6 Data analysis........................................................................................................................36
References......................................................................................................................................63

List of Figures
Figure 1 Consumer behavior model..................................................................................16
Figure 2 Theory of Reasoned Action.................................................................................17
Figure 3 Theory of Planned Behavior...............................................................................18
Figure 4 The proposed research model..............................................................................26
Figure 5 The research process...........................................................................................27
Figure 6 Data analysis process..........................................................................................36
Figure 7 Descriptive analysis of age and gender...............................................................37

4
 List of tables
Table 1 Summary of previous study..................................................................................21
Table 2 Measurement scale for factors..............................................................................32
Table 3 The first run of Cronbach's alpha.........................................................................41
Table 4 The second run of Cronbach's alpha.....................................................................44
Table 5 KMO and Bartlett’s Test for independent variables.............................................44
Table 6 Total Variance Explain of independent variables.................................................45
Table 7 Rotated Component Matrix of independent variables..........................................46
Table 8 KMO and Bartlett's Test of dependent variables..................................................47
Table 9 Total variance explained of dependent variables..................................................48
Table 10 Component matrix of dependent variables.........................................................48
Table 11 Correlations........................................................................................................50
Table 12 Model Summary.................................................................................................51
Table 13 ANNOVA...........................................................................................................52
Table 14 Coefficients.........................................................................................................52
Table 15 Hypothesis Testing.............................................................................................54

5
 Chapter I. Introduction
1.1 Background of the study
Human’s life has witnessed significant changes recently due to the innovation and
ongoing growth rate of globalization. It really makes sense that human’s demand keeps
rising in parallel with the high development of the modern world. Maslow’s hierarchy of
needs has stated that human needs are never fully satisfied. As a result, the marketer’s job
is to satisfy the ever-changing customer’s needs. This creates a very promising
opportunity for those who can catch up with the latest trends and run the business.
Consequently, Fast Moving Consumer Goods emerge as a lucrative target for manifold
investors. Due to the very nature of the FMCGs (the provision of essential products at
high quality and low cost), they have the ability to constitute a large portion of
consumers’ budget in every corner all over the world. As a developing country,
Vietnam’s population bears a very high demand for daily consumption of these products.
Possessed with more than 90 million people and a gold-population structure (with 56 %
of the population under 30), Vietnam is not the exception in the expansion of FMCGs
sector (MInh, 2018). Moreover, it is predicted that the total expenditures of Vietnam
consumers will double and reach approximately $173 billion in 2020. The growth rate in
the period 2011-2010 is supposed to be the highest among ASEAN countries (8%)(Như,
2019). Many report from international market investigation bears a strong resemblance to
these figure and conclude that Vietnam (especially the very dynamic Ho Chi Minh city)
poses great opportunities for the development of FMCGs.

Besides, there is a rising retail revolution underway, which is known as “private

label”. Instead of introducing multi-brands to adapt to the various choices of consumers,
retailers are now transforming into developing their own products. As consumers are
more cautious with their purchase decision, they are gradually forming the habits of
finding and seeking the value for their money. This generates a very high potential for the
growth of private label on the globe. It is noticeable to see that this sector now seems to

6
take the lead in Vietnam market as more and more retailers want their customer to
recognize their own products and maintain strong brand identification.

Since Vietnam is an open economy, it is no longer the game between domestic

competitors but they also have to face obstacles at international level. There is always a
rising concern whether or not Vietnamese retailers will be defeated on their own home.
Fortunately, in recent years, the government has promoted encouragements to use
Vietnamese products as a Vietnamese people. A successful business is operated by the
wise idea of recognizing the possibility of the current market situations. Vietnamese
retailers are approaching these innovations quite well provide that various retailers
mushrooms to provide FMCGs under their own brand name. Among these retailers, it is
obvious that Co.opmart seems to take the lead in the industry by incorporating the
aforementioned business ideas. What Co.opmart does is just to provide daily
consumption products under their own brand name, so what makes them distinctive from
other competitors and becomes the apple of people’s eyes? These drive my curiosity and
I keep questioning myself how? For this reason, I would like to choose the topic “Factors
affecting customer’s decision to buy Co.opmart private label brand FMCGs in Ho Chi
Minh city” to tackle my concerns. This study is made with a view to shedding light on the
contributing factors that influence customer’s decision to select FMCGs under Co.opmart
private brand.

1.2 Problem statement

1.2.1Research objective
It is of great significance to study how consumer behaviors are affected as it
strongly represents the success of the business. The behaviors of consumers change from
time to time by changing some factors affecting their selection. The preliminary purpose
of the study is the research of behavior of people in Ho Chi Minh city in the selection of
Co.opmart private label FMCGs. The study also wants to find out factors affecting
customer decisions to gain more insights into consumer behavior. In addition, the
researcher wants to determine the level impact of factors to the selections of the

7
customers (from the most important to the least important). Finally, the research aims to
identify on which dimensions can Co.opmart brand concentrate on to live up to
customer’s expectations and operate a successful business.

1.2.2Research question
The researcher will collect and analyze data and reveals the findings to answer the
below questions:

- What factors affecting customer’s decision to buy Co.opmart brand private label
FMCGs?

- What is the most crucial factor to the selection of consumers?

- What is the least crucial factor to the selection of consumers?

- The relationship of each factor to the selection of consumers? (positive or negative)

- To what extent does price factor affect customer’s decision?

- Does brand loyalty affect consumer’s decisions?

- Does reference groups have an influence on the selection of consumer?

- In which way can Co.opmart do to increase the consumer’s purchase decision?

1.3 The scope of study

The research will only focus on the factors that drive consumers’ decision to the
selection of Co.opmart private label brand FMCGs in Ho Chi Minh city. Ho Chi Minh
city is such a bustling city in Vietnam so that most of consumers have a very high
demand for FMCGs and get acquaintances to the consumption of FMCGs. The research
is accomplished through collecting information from respondents by creating online
questionnaire- one of the most common method for data collection. The research is
conducted within a month (from middle September 2019 to middle October 2019).

8
 1.4 The relevance of the study
From the economy’s perspective, this study will specify the reasons that contribute
to the selection of Co.opmart brand private label FMCGs in Ho Chi Minh city. This gives
the company a broad picture of Vietnamese retail market and helps them to highlight the
important factors that are of great consideration of consumers when making a purchase
decision. By emphasizing the role of significant factors, the company is able to
understand the market better and satisfy what consumers need. As a result, this study
assists the company in analyzing the market and implementing appropriate marketing
strategies to achieve the best consequences when running the business.

1.5 Structure of the study

The study is comprised of five chapters. Each chapter will be discussed separately
with various concepts and explanations. These chapters are:

- Chapter 1 (Introduction): It describes what drives the researcher to conduct the research
by referring the current situation of FMCGs and private brand in Vietnam market. Also,
chapter 1 gives the brief ideas of research objectives, research procedures, …

-Chapter 2 (Literature review): This part is very important to the conduct of the research
because it reveals many concepts and theories related to the study. By referring to the
results of previous study, the researcher extracts some potential factors that will be used
for the research. Also, the proposed research model will be formed and the researcher
will clearly state the relationship between each factors and the purchase decisions.

-Chapter 3 (Methodology): This chapter visualizes how the research will be conducted. It
includes determining the sample and sampling method for data collection, forming the
questionnaire.

-Chapter 4 (Results and discussions): Data analysis and its results will be shown in this
chapter. The data collected from the survey will be analyzed by using the SPSS software.

9
-Chapter 5 (Conclusions and recommendations): This chapter will summarize what the
research has achieved so far and give some recommendations for the development of the
company. What is more, some limitations of the research will be pointed out to seek for
improvements in the future research.

Chapter II. Literature review

2.1 Basic concepts
2.1.1 Fast Moving Consumer Goods (FMCG)
The Fast Moving Consumer Goods (FMCG) sector represents one the largest
industry in the world. It is mainly characterized by corporations with the provision of
low-cost products that are in constant high demand. To fully understand the concept of
FMCG, we need to go back to the very nature of FMCG. Years ago, the corporation’s
productive activity was the main criteria for the evaluation of competitiveness in the
market. Nowadays, the development of sales-systems in the manufacturing or distributing
of the FMCG market boosts the dynamic processes of the companies. FMCG’s are
extremely important for the market as they constitute the dominant part of the consumer’s
demand. This is due to the fact that FMCGs are always essential products for the
consumers. This is the reason one of the defining word combination is “fast moving”.
The term “fast moving” stems from the fact that FMCG products usually have a short
shelf life and are non-durable. These goods move fast throughout the market and bring
good profit margin for the FMCG corporations. Products that are categorized as FMCG
include food, beverages, personal hygiene and household cleaning utensils. From a
retailing perspective, FMCG is often cited as a low margin-high volume game. Seeing as
profit margins are usually rather slim, firms operating in the FMCG sector mostly employ
a strategy focused on driving top line sales. Within categories, FMCG products are often
near-identical, and for this reason, price competition between retailers can be intense. To
boost profitability, companies use marketing and other techniques to establish loyalty to
the product, which enables them to charge higher prices. That said, managing input costs
also remain vitally important, as small margin gains still have a significant impact on the
10
bottom line due to the large volumes. Another important characteristic of the FMCG
sector is that it generally does well in an economic downturn, with consumers rather
cutting back on luxury products.

2.1.2 Private label brand (PLB)

A private-label product is a manufactured good that a retailer purchases from a
supplier, with the intention of renaming, repackaging and selling it under the distributor’s
own brand name. Depending on the agreement between a manufacturer and a retailer, the
manufacturer sometimes handles the packaging and labeling for the retailer for an
additional charge. Otherwise, the retailer is responsible for the process of dressing up the
product as its own. Thus, it can be said that Brands owned not by a manufacturer or
producer but by a retailer or supplier who gets its goods made by a contract manufacturer
under its own label are called private label brands. Manufacturers use either their own
name, that of a middleman, or a combination of both when they are marketing their
products. Private labeling occurs when middlemen, usually large retailers or wholesalers,
develop their own brand. Building a following from scratch through private-label
products, especially in rough economic times, is challenging because smaller retailers do
not have the marketing budget compared to their larger-sized competition.(Asst &
Studies, n.d.)

The definition of private label branding has evolved significantly over time. Some
would argue the term “private label” is a misnomer of great proportions. There is no
question that the words “private label” acknowledges the birth, history and existence of
generic and store brands. Yet, the term does not adequately capture the extent to which
private label has progressed. Today's retail marketers are managing their proprietary
brands with the same combination of care and innovation as manufacturers of national
brands. In recent years, retailers have been liberating themselves from the traditional
definition of private label marketing as being the poor relative of national brand
consumer goods, and, in doing so, opening up huge opportunities for private label
branding. These opportunities require the adoption of a different set of marketing and

11
branding practices to support and propel the retailer’s business and marketing ideals for
its PLBs. The key to successful marketing management for today’s retailers is to
understand the contribution and role of their proprietary or “own” brands in the long-term
business strategy and marketing mix of the retail store and consider both the supply side
and the demand side of the equation. Strategic brand management goes hand in hand with
these endeavors to establish sustainable points of difference in each aisle and segment
within the store. It also spurs decisions about how to appropriately define the retailer’s
“own” brand portfolio in order to galvanize consumers to connect and reconnect with its
franchise in a compelling manner (Bharathi, 2017).

Since manufacturers' (producers') brands have large advertising expenditures built

into their cost, a private labeler is able to buy the same goods at a lower cost and thus sell
them at a lower price and/or at a better profit margin. In addition, private labelers have
more control over pricing and are able to advantageously display their own brands for
maximum impact. For example, a grocery store can quickly reduce the price of its own
PLB in order to meet or beat a competitor's price. Or the grocery store can create a
special point-of-purchase advertising display and/or give its brand predominant shelf
space in order to boost sales. PLBs are usually priced lower than comparable
manufacturers' brands and therefore appeal to bargain-conscious consumers. As already
mentioned, retailers like PLBs because of their potential to increase store loyalty, chain
profitability, control over shelf space, bargaining power over manufacturers, and so forth
(Dhar & Hoch, 1997)

2.2 Background theories

2.2.1 Consumer behavior model
This research focuses on the behaviour of personal or individual
consumer.Personal consumer is defined as people who purchases product and service for
his or her own use. They are referred as “end user” or “ultimate user”. Personal consumer
performs end consumption which involves individual of different age and background.
Consumer behavior is a subset of human behavior which is the way how a person interact

12
with everything around him. Human behavior is all the every thought, motive, sensation
and decision that a person experiences daily.

Walters (1974) described personal consumer behavior as: "the process whereby
individuals decide whether, what, when, where, how, and from whom to purchase goods
and services." Schiffman and Kanuk defined personal consumer behavior as the analysis
of how people makes decision spending their available resources (time, money, effort) on
consumption-related purchase. In addition, it also encompasses that consumers display in
“searching for, purchasing, using, evaluating and disposing of products and services that
they expect it will satisfy their needs” (Jisana, 2014).

There are many models about consumer behavior which can be divided into three
main categories: traditional models, cognitive models and recent humanistic models. Two
categories cognitive models and recent humanistic models are important bases for many
customer intention or customer decision researchs. Among cognitive models, the Howard
& Sheth (H&S) Model which is published in 1969 is the most empirically validated
model. Figure 2.1 describes the consumer behavirour model of H&S including inputs,
perceptual and learning constructs, outputs and exogenous (external) variables. There are
three types of input which can be described as informational source and called as
“stimuli”. Significative stimuli is the information source coming from the product and
brand information. Symbolic stimuli is the information source coming from verbal or
visual product characteristics. Impersonal stimuli is the external information source such
as family, reference group and social class. Perceptual and learning constructs are the
critical parts in this model. It indicates the information adaptation and understanding
process of customers. The outputs are the intention or actual actions which happen after
consumer’s perceptual and learning constructs (Diogo R. Seborro, 2011).

13
 Figure 1 Consumer behavior model
Consumer behavior is still one new research topic in economic so most of consumer
behavior models are referred on scientific disciplines, such as psychology (the study of
the individual), sociology (the study of groups), social psychology (the study of how
individuals operate in groups), anthropology (the influence of society on the individual).
Consumer behavior is very critical to marketing and operation field that it is stated by
Assael that "Consumers determine the sales and profits of a firm by their purchasing
decisions. As such, their motives and actions determine the economic viability of the
firm” (PG Mostert, 2012).

2.2.2 Theory of reasoned action (TRA)

Theory of reasoned action was developed by Ajzen and Fishbein in the late 1960s
and revised in the 1970s. It was widely recognized as a pioneering doctrine in the field of
social psychology research (Eagly & Chaiken, 1993; Olson & Zanna, 1993). Its model
shows that the elements of consumption are the best predictors of consumer behavior.
According to TRA theory, a person's behavior was influenced by both attitudes and
subjective norms. The attitude was measured by beliefs and assessments of the results
that the behavior could create. Subjective Norms were defined as the perception of
influential people who thought that the individual should perform / or not perform the
behavior.(Leone, Perugini, & Ercolani, 1999)

14
 The biggest limitation of the TRA theory is that the theory comes from the
assumption that behavior is under control of the will. This theory applies only to
conscious behaviors. Unreasonable intentions, acting on habits or any behavior that is not
consciously considered, can’t be used to explain this.

Figure 2 Theory of Reasoned Action

2.2.3 Theory of planned behavior (TPB)
In order to have a further understanding of customer behavior, many researchers
refer to the model of Icek Ajzen which is firstly introduced in 1985 called the theory of
planned behavior. This theory is used to explain many intention and action including
smoking, drinking, breastfeeding and other substances. It suggested that these actions
depened on both motivation (intention) and ability (behavioral control). It stated that
“behavior is determined by intentions, attitudes (beliefs about a behavior) and subjective
norms (beliefs about others' attitudes toward a behavior)” (Raingruber, n.d.). A model of
planned behavior based on three types of beliefs including behavioral belief, normative
belief and control belief. Normative belief is the social belief about not doing some
wrong behavior which leads to the subjective norm.Subjective norm is individual’s
perspective about specific actions influenced by the judgement of people around them.
Control belief is the determination of the presence factors that can faciliate or prevent the
performance of behavior. It leads to the perceived behavioral control which is the
estimation of the level of ease or difficulty of conducting behavior. They all together lead
to the intention of behavior which is the desire to perform action in a specific way.
However, the intention of behavior is not very useful when individual's control over the
behavior is incompleted. By adding "perceived behavioral control”, the model will be
15
able to explain the relationship of intention and actual action in the case of incompleted
control. In addition, the theory of planned behavior also increases the predictibility of
intention in various fields including healthcare, leisure, exercise, ect. Another application
of the theory is in environmental psychology. Generally, if a person behaves in a
environmental friendly and sustainable way, the action will have positive impacts and it
will be a positive normative belief. This application faciliates the explaination of the
difference between sustainable behavior and unsustainable behavior.

Figure 3 Theory of Planned Behavior

2.3 Related studies
2.3.1 Review of previous studies
According to Mark S.Glynn and Shaoshan Chen research, their study about
customer-factors moderating private label brands success has provided the foundation to
understand the purchase decision of customers in terms of private label brands. The
results indicate that quality variability, price consciousness, price ‐quality association and
brand loyalty influence consumer proneness to buy PLBs. In addition, income, education
and household size are moderators of PLB purchasing. This research confirms the
importance of price consciousness and quality variability on PLB purchasing. The
importance of these determinants depends on both the product category and the PLB

16
market share within the category. Retailers and manufacturers need to consider the effects
of PLB in relation to the product category. For retailers, the value of a PLB is less
relevant in some categories but appealing to the price conscious consumer is important.
Manufacturers should note in some categories that brand loyalty is important but not as
much as price consciousness. Customer income is still an important determinant of PLB
purchasing(Glynn & Chen, 2009).

The study made by Justin Beneke, Ryan Flynn, Tamsin Greig, Melissa
Mukaiwa xamine the influence of perceived product quality, relative price and risk,
respectively, on perceived product value and, ultimately, consumers' willingness to buy
private label household cleaning products. The results are similar to those proposed by
Sweeney, Soutar and Johnson. Strong relationships between perceived relative price and
perceived product value, as well as between perceived product value and willingness ‐to ‐
buy, were found to exist. A negative relationship was observed between perceived
product quality and perceived risk. The results indicate that establishing a value
perception is critical in the buying process. Tangible cues exhibiting high quality (e.g.
packaging, shelf space, media placement) need profound attention. Furthermore, it is
suggested that risk (which plays an important part in the consumer decision process) is
minimized through optimal retail service quality and customer reassurances (Beneke et
al., 2013).

L.E.Wells, H.Farley, G.A.Armstrong has investigated the importance of

packaging design for own-label food brands. This paper seeks to investigate the
importance of packaging design for a UK premium own‐label food brand, by developing
an understanding of how consumers evaluate own‐label packaging, providing an insight
into their shopping behavior regarding premium own‐label desserts and identifying the
factors that influence their purchase decisions. Implicit in this is a need to establish how
the packaging designs of premium own‐label products influence the purchase decisions
of consumers. As own‐label brands are exclusive to, and owned by, the retailer they have
potentially the opportunity to develop packaging designs that are even more attuned to

17
their customer base than those offered by the equivalent range of branded products
(Wells, Farley, & Armstrong, 2007).

In 2017, Ebru Enginkaya has made a research to investigate into the dimensions
that are important to consumers during their purchase of private labels. The research was
conducted with variables: price consciousness, value consciousness, perceived quality,
consumer innovativeness. What the research has revealed is that price and value
consciousness are the major determinants of consumers’ purchase decision of private
labels. Price consciousness is the most important factor on the consumers’ attitude
towards private labels and purchase behavior. Consumers who are more sensitive to price
and value, prefer private label products while shopping. According to their experiences
these consumers believe that private labels are reliable and can be used instead of
expensive alternatives (Enginkaya, 2017).

The research conducted by Yongchuan Bao, Yeqing Bao, Shibing Shen in 2011
with a view to shedding light on the motivating purchase of private brands. The study
figured out that store image and product signatureness enhance quality perception and
purchase decision of private brands while quality variation reduces both outcomes (Bao,
Bao, & Sheng, 2011).

The study made by Stany Wee Lian Fong, Tan Pei Kian, and Yeo Sook Fern in
Malaysia in 2015 to find out the factors affecting the purchase decisions of private label
brands in Malyasia. The objective of the research is to examine the relationship between
brand image, perceived price and promotion to the purchase decisions of private label
brands. The research found out that monetary factors (price perceived and promotion)
were of little significance to the purchase decisions of private label brands. This study
empirically showed that brand image has full mediation effects on mediating price
perceived and promotion to purchase decision of private label products in Malaysia
(Wee, Fong, Kian, Fern, & Vincent, 2015).

18
 Aja Ebeke Egele, Prince Obinna Ikechi2, Ama Aka Udu (2017) have made the
research to figure out the Influence of Consumer Attitude on Private Label Brand
Purchase Behavior in Port Harcourt, Rivers State, Nigeria. There are three variables
researched (quality, familiarity, perceived economic situation). The findings revealed that
there is positive significant relationship between the three consumer attitude variables
and private label brand purchase behavior. The findings also validated passive learning
theory that attitude to object are likely formed after a purchase experience. Hence, the
study concludes that customer attitude to private label brand purchase behavior is formed
from the consumer's previous purchase experience with the store including the purchase
of generic brands. The implication of the findings, is that stores must ensure that their
marketing strategies achieve favorable consumer attitude to their store for the successes
of any of their private label brand or to develop and implement consumer attitude
modification strategy if they are faced with unfavorable consumer attitude (Article,
2009).
Table 1 Summary of previous study

Author Title Dependent variable Independent variable

Consumer-factors -Quality variability

Mark S.Glynn,
moderating private label -Price consciousness -
Shaoshan Chen Purchase decision
brand success: further Price‐quality association
(2009)
empirical results -Brand loyalty
The influence of
Justin Beneke,
perceived product quality,
Ryan Flynn,
relative price and risk on
Tamsin Greig,
customer value and Purchase decision
Melissa -Perceived product value
willingness to buy: a
Mukaiwa
study of private label
xamine
merchandise
L.E.Wells, The importance of Purchase decision Packaging

19
 H.Farley, packaging design for
G.A.Armstron own‐label food brands
g
-Price consciousness
The Factors Affecting The
Ebru -Value consciousness
Attitude Of Consumers' Purchase decision
Enginkaya -Consumer
Purchasing Private Labels
innovativeness
Motivating purchase of
Yongchuan
private brands: Effects of -Store image
Bao, Yeqing
store image, product Purchase decision -Product signatureness
Bao, Shibing
signatureness, and quality -Quality variation
Shen (2011)
variation
Stany Wee Monetary and Image
Lian Fong, Tan Influences on the -Brand image
Pei Kian, and Purchase Decision of Purchase decision -Perceived price
Yeo Sook Fern Private Label Products in -Promotion
(2015) Malaysia
The Influence of
Aja Ebeke
Consumer Attitude on -Quality
Egele, Prince
Private Label Brand -Familiarity
Obinna
Purchase Behavior in Port Purchase decision -Perceived economic
Ikechi2, Ama
Harcourt, Rivers State, situation
Aka Udu
Nigeria
(2017)

2.3.2 Price consciousness

Price consciousness is defined as “the degree to which the consumer focuses
exclusively on paying a low price” (Ridgway & Netemeyer, 2014). Therefore, price
conscious consumers are concerned about searching for a low price in the marketplace,

20
and they derive emotional value and entertainment from shopping for lower prices
(Alford & Biswas, 2002). It is reflected in their shopping basket, since they tend to be
store brand users (Ailawadi, K.L., Neslin, S.A. and Gedenk, n.d.). Given that price
consciousness has similarities with other consumer personal characteristics related to
price perception (e.g., value consciousness, sales proneness, coupon proneness) such as
the focus on paying lower price, these characteristics have many similar implications for
marketplace responses. However, consumers who are value conscious, sales prone or
coupon prone have different perceptions of prices.

According to the study of Mark S.Glynn, Shaoshan Chen (2009) on consumer-

factors moderating private label success, there is correlation between price consciousness
and the purchase decision of private label brand. The research found out that price
consciousness had the strongest regression coefficient of all discussed factors and in
positive direction.

The study conducted by Ebru Enginkaya has proved that price consciousness
positively affects the customer’s decision to buy.

Therefore, because of information of the studies mentioned above, the writer

decided to choose price consciousness as one of the independent variable affecting the
purchase decision of private label FMCG.

Hypothesis 1: There is a positive relationship between price consciousness (PC) and

the purchase decision of Co.opmart private label brand FMCG

2.3.3 Value consciousness

Perceived value has been defined as "the consumer's overall assessment of the
utility of a product based on what is received and what is given" (Zeithaml, 2012). On the
assumption that for most people price and quality are the most salient "give and get"
components, we define value consciousness as a concern for paying low prices, subject to
some quality constraint. This definition is consistent with the definition of Monroe and
Petroshius (1981; i.e., the ratio of quality to price), the findings of Zeithaml (1988) on the

21
meaning of value used by many consumers (i.e., "the quality I get for the price I pay"),
and several other definitions of value that appear in the literature (Zeithaml, 2012).

According to the study of Ebru Enginkaya (2017), the results of the correlation
analysis indicate that there is positive relationship between the purchase decision of
private label brands and value consciousness. The analysis revealed that the factor is
related to private label purchase decision significantly (p=0,000<0,05)

The study conducted by Justin Beneke, Ryan Flynn, Tamsin Greig, Melissa
Mukaiwa xamine proved that there exists a strong positive relationship between value
consciousness and the purchase decision of private label brands.

Therefore, based on those studies, researcher decided to choose value

consciousness is the factor that affects to the purchase decision

Hypothesis 2: There is a positive relationship between value consciousness (VC) and

the purchase decision of Co.opmart private label brand FMCG

2.3.4 Brand image

Brand image is the overall impression in consumers’ mind that is formed from all
sources. Consumers develop various associations with the brand. Based on these
associations, they form brand image. An image is formed about the brand on the basis of
subjective perceptions of associations bundle that the consumers have about the brand.
Brand image has not to be created, but is automatically formed. The brand image includes
products' appeal, ease of use, functionality, fame, and overall value. Brand image is
actually brand content. When the consumers purchase the product, they are also
purchasing its image. Brand image is the objective and mental feedback of the consumers
when they purchase a product. Positive brand image is exceeding the customers’
expectations. Positive brand image enhances the goodwill and brand value of an
organization (Nadu, 2016).

The research made by Yongchuan Bao, Yeqing Bao, Shibing Shen (2011) has
stated that brand name positively affects the purchase decision of private labels (β=.36,
22
p<.001). Thus, investments in this direction would be worthwhile to the extent that a
better image can help both a retailer brand and its brand extension create a higher
differentiation in the competitive retailing market. Therefore, the effect of brand name on
the buying decision is significant when it comes to terms of private label brands.

Hypothesis 3: There is positive relationship between brand image (BI) and the
purchase decision of Co.opmart private label brand FMCG

2.3.5 Quality
In business, the quality is defined as “the totality of features and characteristics of
a product or service that bears its ability to satisfy stated or implied needs” (OECD,
2016). Quality is made from any conditional, perceptual attributes and can be understood
differently by different people. Each product and service owns different quality standard
which includes criteria required in production (Jayakrishnan, n.d.).

The research on the effect of consumer attitude to the buying decision of private
label brands (Aja Ebeke Egele, Prince Obinna Ikechi, Ama Aka Udu) has come up
with a conclusion that there exists a positive relationship between quality and the
purchase decision of private label brands.

Hypothesis 4: There is a positive relationship between Quality (QL) and the purchase
decision of Co.opmart private label brand FMCG

2.3.6 Purchase decision

Purchase decision is the thought process that leads a consumer from identifying a
need, generating options, and choosing a specific product and brand. Some purchase
decisions are minor, like buying toothpaste, while other purchases are major, like buying
a house. The more major the purchase decision, the more effort is typically put into the
process (Pennsylvania, n.d.).

After the consumer has evaluated all the options and would be having the intention
to buy any product, there could be now only two things which might just change the

23
decision of the consumer of buying the product that is what the other peers of the
consumer think of the product and any unforeseen circumstances. Unforeseen
circumstances for example in this case would be financial losses which led to not buying
of the product.

According to Kotler, Keller, Koshy and Jha (2009) the final purchase decision can
be disrupted by two factors: negative feedback from other customers and the level of
motivation to comply or to accept the feedback. For example, after going through the
above three stages, a customer chooses to buy a Nikon D80 DSLR Camera. However,
because his good friend, who is also a photographer, gives him negative feedbacks, he
will then be bound to change his preference. Secondly, the decision may be disrupted due
to unanticipated situations such as a sudden job loss or the closing of a retail store.

2.4 Proposed research model

With the combination of all four (4) factors in terms of literature review, the
proposed research model is described as:

Price consciousness

Value consciousness

Purchase decision
Brand image

Quality

Figure 4 The proposed research model

24
 Chapter III. Methodolody
3.1 Research design
The research used quantitative approach to obtain the data through direct and
indirect survey. The research’s questionnaires were either printed or sent via social
network platforms to access the scale and test the theoretical model of the topic.

3.1.1 Quantitative research

The quantitative approach of this research is conducted by a survey of people
either working or living in Ho Chi Minh city. Quantitative research deals with number,
logic and objective stance.

The purpose of quantitative research is to confirm the factors relevant through:

measurement scales, test the theoretical model of the groups of factors.

3.1.2 Research process

Research Theories and

objectives related studies Research model

Cronbach’s Quantitative
Factors Analysis Alpha Testing research

Pearson
Regression Conclusion and
Correlation
Analysis recommendation
Analysis

Figure 5 The research process

25
 3.2 Research type
The study is an exploratory study which is conducted by using the specific sample
size and utilizing the analysis withdrawn from the research’s results to answer the
research’s questions. However, since some theories and previous studies from other
researchers are also included in the research to have the basic knowledge of the problem,
the research can also call itself a descriptive study. Therefore, the scope of this study is
the mix of exploratory and descriptive study.

3.3 Research data

After the questionnaire is developed, preliminary survey will be conducted . On
the one hand, it helps to ensure the well-understanding of the respondents and collect the
preliminary data to test the reliability of the questions. On the other hand, it is a useful
approach to increase the validity and reliability of the questionnaire as well as the final
data analysis. During that process, if there is any questions that confuse the respondents,
some changes have to be carried out to revise and adjust the questions logically. After
getting the final questionnaire, the researchers begin to collect data by implementing non-
probability method. The researcher mainly gather information through online survey
rather than offline survey. Eventhough offline survey can give researcher a better
understanding and recognize any possible problem in the process, the research is
conducted by online survey due to the pressure of time and time-consuming concerns.

As for the online data collection, the researcher begins to create an online
questionnaire by Google Docs. The researcher firstly sends the questionnaire to friends
and tells them to forward the questionnaire to some qualified friends or relatives. By
doing so, the researcher can ensure the quality of responses of them and their relatives
and friends

3.3.1 Secondary data

The secondary data was initially used in my research because of its importance to
obtain the very basic knowledge in the researching field. Secondary data is defined as the

26
original data collected for other purposed and used again for other research questions.
The advantage of using secondary is easily accessible, time-saving and inexpensive. The
secondary data enabled researchers to access a huge amount of previously conducted
researches. By referring to these research, the researchers can have some basic
understanding of the field that is being conducted. The only problem is that researcher
have to filter out the most significant or relevant factors to make the stable literature
review of the research. Such a huge amount of research is definitely a challenge. The
main source of my secondary data was from various researchers, but these researchers
bear high level of reliability.

3.3.2 Primary data

Unlike the secondary data, primary data is the original data collected and
unavailable elsewhere rather than the researchers have to collect on their own. Primary
data in this study was collected directly and indirectly from those who have been working
and living in Ho Chi Minh City provided that they have experienced buying Co.opmart’s
private label FMCG. The accuracy and validity of the primary collected have the high
degree of guarantee since the researchers made all the way to manage by themselves.
However, it is time-consuming and costly.

In my research, primary data was collected through survey research. The survey
method is the technique of gathering data by asking questions to individual who are
thought to have desired information. Researchers selected this research method because it
is the easiest way to collect necessary data and allow researchers to gather a large
quantity of data relatively quickly. In addition, it is convenient for respondents whereas
they do not need to go to a specific location. With the support of technology, especially
smartphones, respondents can answer the questionnaire anywhere such as school or at
their home. Moreover, doing a survey can help researchers save time and money. Survey
allow researchers to collect large amounts of data in a short period of time and also less
expensive than others data collection techniques. Thus, collecting data through survey is

27
by far the most appropriate and effective approach. However, if the survey questions are
ambiguous or misinterpreted, the collected data will no longer be validated.

3.4 Research tool

To determine the decision to buy Co.opmart’s private label brands FMCG, the
survey method is carried out by questionnaires.

3.4.1 Questionnaires
The questionnaire was formed and adjusted by referring to the previous researches
relating to the field of private label brands and fast moving consumer goods to obtain the
appropriate results. The questionnaire is comprised of two parts. The first part is to gather
some basic personal information used for descriptive analysis. The second part is
concentrated on the four independent variable and the dependent variable as mentioned
above in the proposed research model. Details of questionnaire can be found in
APPENDIX

The measurement scale is described as follows:

Variables Code Observation Source

I took reference for pricing before

PC1
making the purchase decision
I often choose the products at the lowest
Price PC2
price (Aja Ebeke Egele,
Consciousnes
Pricing is the most important element Prince Obinna Ikechi,
s PC3
when I make a purchase decision Ama Aka Udu)
(PC)
I claim that Co.opmart’s private labels
PC4 FMCG is the cheapest among other
brands

Value VC1
I am fully satisfied with the value of Justin Beneke, Ryan

28
 Co.opmart’s private label brands FMCG
VC2 I claim that the value of the products is
Consciousnes fully guaranteed within the usage Flynn, Tamsin Greig,
s process Melissa Mukaiwa
(VC) VC3 I always check the validity of the xamine
products to ensure that I receive the best
value

BR1 Co.opmart always came first in my

mind whenever I want to buy FMCG
BR2 Co.opmart is the my most favorable
Brand brand in Vietnam market. Yongchuan Bao,
Image BR3 It gives me a feeling of secure when Yeqing Bao, Shibing
(BR) using Co.opmart’s private labels FMCG Shen
BR4 I decided to buy Co.opmart’s private
labels FMCG cause I’ve already known
the brand

QL1 Co.opmart’s private labels brand

provides better products than other
brands
(Aja Ebeke Egele,
Quality QL2 Co.opmart’s private label brands FMCG
Prince Obinna Ikechi,
(QL) is trustworthy
Ama Aka Udu)
QL3 My purchase decision depends on the
quality of Co.opmart’s private label
brands FMCG

29
 DM1 My purchase decision is totally right

Purchase DM2 I will repeat purchasing Co.opmart’s (Aja Ebeke Egele,

Decision private labels brand FMCG Prince Obinna Ikechi,
(DM) DM3 My purchase decision is due to the Ama Aka Udu)
superior attributes of Co.opmart’s
private label brand.
Table 2 Measurement scale for factors
3.4.2 Preparation of the multi-item scale
In the questionnaire, the first part contained variables about each respondent’s
personal information. The nominal scale was used in this part of the questionnaire with
non-numerical variables and no relative ordering of categories for respondents to choose.

In addition, non-comparative scaling technique also used to conduct the research

was the Likert scale, which belongs to a set of rating scale divided into groups. In my
Likert scale, respondents answering the questionnaire are required to specify their (1)
Totally disagree, (2) Disagree, (3) Neutral, (4) Agree, (5) Totally agree with different
statements based on the number assigned to each different category totally disagree to
totally agree. The second part of the questionnaire measured factors affecting the decision
to buy Co.opmart’s private label brands FMCG, containing Price Consciousness, Value
Consciousness, Brand Image, and Quality. This section provided results in understanding
the purchase decision. Before distributing the respondents to the survey, grammar was
checked to ensure the accuracy of the scale. Reliability was verified when Cronbach Last
Alpha was more than or equal to 0.6. Next, analyzing the factors by using the EFA test.
In this section, variables with small load factors will be excluded and at the same time
check for variable deviations of the variables. Finally, conducting regression analysis to
check the relevance of the research model.

30
 3.5 Sampling
To conduct a study, researchers have to work with the people in population.
However, to survey the whole population is out of the question. Therefore, a sample -
data collected from a part of representative of the population is better to do the research
because they will bear a strong resemblance to the attributes of the population. Choosing
a sample is essential as it will the basis for the whole research.

3.5.1 Sample population

Population is a total possible respondent that can be participate in the research
within the given area of the case study. The overall population of this research is all
people living and working in Ho Chi Minh City and the sample is retrieved on the
population. Sample is a specific quantity of respondents decided by the researcher that
will be asked for the data. MacCallum said that “the sample size should be evaluated
roughly by the following levels: 50 is very poor, 100 is poor, 200 fair, 300 is good”
(MacCallum, 1999). Sample size depends largely on the population size, the level of
common characteristic between sample and population. The sample of this research is
formed demographically with gender age, income range. The age of respondents must be
over 15 year olds which is grown-up enough to understand and answer the survey
properly.

3.5.2 Sampling frame

In statistics, the sampling frame is the material or source device from which the
sample is drawn. This is a list of all people in the population that can be sampled such as
individuals, households or organizations. Different from the population, the sampling
frame is more specific, and that is also an important factor in this category.

This study was made to study the purchase decision of those people who have
already used the Co.opmart’s private label FMCG. Therefore, the responses answered by
non-users will be eliminated from the research. By that way, the research can bear the
high level of credibility.

31
 3.5.3 Sampling size
According to Hair and ctg (2006), a sample should be preferably at least 100 to
proceed Exploratory Factor Analysis. Furthermore, the measurement ratio has to be 5:1.
That means the measurement variables must be at least 5 observations.

According to Tabachnick & Fidell (2007), the minimum sample size for
multivariate regression model is calculated by the formula: N = 8*var + 50 (N is the
sample size; var is the independent variable in the model. In the study this regression
model has 4 independent variables, so the minimum sample size will be 8 * 4 + 50 = 82

Both EFA and Multivariable regression model is used in this research. In order to
achieve the two results, I decided to select the sample size of 110.

3.5.3 Sampling technique

Choosing appropriate sampling technique is very critical to the success of the
study. Sampling technique is the way how to select respondent for the sample from the
population. There are two types of sampling including probability sampling and non-
probability sampling. The basic difference between these two is the exist of
randomization which occurs when every respondent has an equally distributed
opportunity to be selected from the population (Personal & Archive, 2016). In this
research, non-probability sampling is used since it is not possible to provide equal chance
of selection for all respondents of the population. Among non-probability sampling
techniques, convenience or accidental sampling and snowball sampling are used to select
respondents for the research. Convenience or accidental sampling selects respondents
anywhere they are available. On the other hand, snowball sampling collects data from
available respondents and then asks them to help identify other members to sample and
this process continues until enough samples are collected.

In this research, convenient sampling was selected. There are many reasons why
this method is applied in various researches, not to mention this research alone. This
common type of non-probability sampling can offer much respondents with high speed,

32
cost-effectiveness and availability. Researchers can easily get access to a large number of
respondents. This is a very good point of the convenient sampling. However, it would be
a mistake if the other sides are not mentioned. That being said, the possibility of
encountering errors when using convenient sampling is extremely high because the
approach to which the sample is selected is not tightened, so the results might be
disappointing and confusing since everything cannot be ensured with high level of
accuracy. From my perspective, the advantages of this technique seem to outweigh the
disadvantages. Moreover, it is more appropriate to my context as a student, so this
technique is by far the most suitable method for me to use in this research.

33
 3.6 Data analysis
After getting the collected data, the researcher begins to analyze it. After testing
and extracting valid responses, the researcher exports the data into an excel file to analyze
it by SPSS. SPSS stands for statistical package for the social sciences which is a very
popular application assisting people in quantitative data analysis (Art Corvelay,2018). It
is easy to use and generates the results automatically. In this research, the general
demographic responses are firstly counted and listed to have an overall observe about the
data. After that, the descriptive analysis, reliability analysis, exploratory factor analysis,
correlation analysis and linear regression analysis are all conducted to further investigate
the data. For each analysis, different standards are applied for researcher to compare and
know when to accept or reject the variable. The order of analysis is logical when SPSS
firstly tests the positive or negative relationship between selected factor. Next, SPSS
determines the impact level of positive factors on the dependent factor which is the
purchase decision of Co.opmart’s private label brand FMCG. The process of data
analysis includes 7 steps:
Statistics: Conduct
Data preparation
statistics describing data

Analyze the EFA Reliability Analysis

Discovery Factor

Pearson Correlation Multiple Regression Model Test and

Analysis Analysis Hypothesis Testing

Figure 6 Data analysis process

34
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