i ẹAẽI HOẽC Mễ TP. HO CH MINH UNIVERSITE LIBRE DE BRUXELLES UNIVERSITE OUVERTE DE HCMV ECOLLE DE COMMERCE SOLVAY MMVCFB PROGRAMME DE MAITRIES EN MANAGEMENT - BELGIQUE PHAM BAO KHANH FARMERS BEHAVIOUR IN BUYING PESTICIDE IN MEKONG RIVER DELTA. MASTER OF MANAGEMENT THESIS Supervisor : Doctor Nguyen Van Ngai Ho Chi Minh City, Vietnam 2006 ii This is my original work. Any data, result or quote in the project is clearly indentified. Pham Bao Khanh iii ACKNOWLEDGMENT Completing this research project is never the work of a single person, and when attempting to acknowledge the contributions of others, one always runs the risk of omitting some important contributions. Nonetheless, the attempt must be made, because this project has been helped immensely by the many helpful comments I have received along the way from my advisor, farmers and interested colleagues. I would like first to express my deepest thanks to Dr. Nguyen Van Ngai for his invaluable advice and contributions in the completion of this research project. I am grateful to a number of people for their assistance in this project especiallly the technical and marketing staffs in Mekong River Delta. Many thanks are given to the Directors of Tan Thanh Company Ltd., An Nong Company Ltd., Nong Phat Company Ltd. whose helped me substantially by sharing their busy time from marketing ‘s activies to collect the data, doing the survey and arrange the group discussions for the project. Pham Bao Khanh HoChiMinh city, Vietnam December 2006 iv SUPPERVISOR’S COMMENTS Understanding the market and consumer’s behaviors of a particular product is really necessary for companies to do business and develop the market in general, the topic that the author chose for his study is suitable for the program that the author is studying and for works that he is doing. The thesis includes five chapters that is appropriate for a Master Thesis. The methodology of the study is acceptable to meet the objectives of the study. Based on a clear analytical framework with primary data surveyed by the author with a proper sample size and secondary information, the thesis provides a comprehensive analysis of the market for pesticides including demand and supply sides, discusses the behaviors of farmers in buying pesticides for their farming and then recommends solutions for companies doing business in pesticides to improve their business and improve farmers’ farming. The suggested solutions are accepted. Thus, the thesis has great contributions to parties in pesticide markets such as farmers and companies, and also to social planners and related studies. I strongly support the author to present the thesis to an academic board for evaluation of the study and complete the Master Degree. Ho Chi Minh City, 9 Feb. 2007 Supervisor Dr Nguyen Van Ngai v THE FIRST discussion vi THE SECOND discussion vii ABSTRACT In this research project, an effort has been made to build up the draft picture of Vietnam’s pesticide market and to study the farmer ‘s behaviour in buying pesticides in Mekong River Delta, the main agrochemical market in Vietnam. The three focus group’s discussions and 317 farmer’s surveys were used to collect all information for these purposes. At the same time, depth discussion with the marketers from four local companies was also conducted to understand the current marketing practice. The total value of end-user markets increased to around US$400 million (year 2006, our estimation), a increase 60% on 2000. Agrochemical sales increase heavily in all around country, due to pests conditions and planting area increase. The increase of the agrochemical market in Vietnam has also resulted in a number of local companies opened dealing in pesticides make the market become more competion as well as to explore the use of pesticide in current planting practice. The buying behaviour of farmer is complex due to many influences were made through many marketing activities conducted by almost hundred of pesticide / trading companies in Vietnam and other environmemtal factors. Farmers think efficacy is the most important factor for any pesticide and they think it’s very much related to price. According to our reasearch, the most effective channels that can influence to farmer’s buying behaviour mainly farmer meeting, retailer’s effect. viii TABLE OF CONTENTS CHAPTER 1 - INTRODUCTION 1 CHAPTER 2 : LITERATURE REVIEW & ANALYTICAL FRAMEWORK 5 2.1 CONSUMING THEORY 5 2.1.1 Consuming Products 5 2.1.2 Factors influence to consuming 6 2.2 THE CONCEPT OF CONSUMER / PURCHASING BEHAVIOR 6 2.3 CONSUMER DECISION MAKING PROCESS 9 2.4 THE QUALITATIVE - QUANTITATIVE DICHOTOMY 11 2.5 THE STUDY APPROACH 12 2.5.1 Conduction of focus groups 12 2.5.2 Sampling Plans 13 2.5.3 Characteristics of the sample and how well it works 14 CHAPTER 3 – MARKET FOR PESTICIDES IN VIETNAM 16 3.1 DEMAND 16 3.1.1 Rice production 16 3.1.2 Pesticide use on rice 19 3.1.3 Demand of pesticide 21 3.1.4 Mekong River Delta – the most important area 21 3.2 SUPPLY 23 3.2.1 Import evolution 23 3.2.2 Market share 23 CHAPTER 4 : FARMER’S BEHAVIOUR IN BUYING PESTICIDE 28 4.1 BRAND RECOGNITION 28 4.1.1 Unaided awareness 28 4.1.2 Aided awareness 29 4.2 PRODUCT FEATURES & BUYING CRITERIA 30 4.2.1 Unaided awareness 30 4.2.2 Aided awareness 31 4.3 PRODUCT FEATURES & BUYING CRITERIA DISCUSSION 32 ix 4.3.1 Cost / sprayed area 32 4.3.2 Duration of control 32 4.3.3 Farmer fellow recommendation 33 4.3.4 Retailers recommendation 34 4.3.5 Government officer recommendation 34 4.3.6 Easy to use & Spectrum of control 35 4.3.7 Advertising 35 4.4 SOURCE OF INFORMATION 36 4.4.1 Source of information for new pesticide 36 4.4.2 All sources of information 38 4.5 BRAND SWITCHING & LOYALTY 38 CHAPTER 5 - CONCLUSIONS & RECOMMENDATIONS 41 5.1 MAIN FINDINGS ON FARMERS BUYING PROCESS 41 5.2 KEY INFLUENCES MODEL 44 5.3 RECOMMENDATIONS 44 5.4 LIMITATION AND DIRECTION FOR FURTHER 45 REFERENCE 47 APPENDIX 48 TABULATION OF SURVEY 52 SURVEY QUESTIONARE 67 x LIST OF TABLE Table 3-1 Paddy rice production & export 18 Table 3-2 Rice planted area, Output and Yield per hectare by area 18 Table 3-3 Rice planted area in Mekong Delta by province - 2005 21 Table 3-4 Rice pattern schema in Mekong Delta 22 Table 4-1 First priority of buying criteria analysis 33 Table 4-2 Summary of source of information 38 Table 6-1.Frequencies statistic of planting area (Question 1a) 48 Table 6-2 Frequencies statistic of yield/hectare (Question 2b) 48 Table 6-3Frequencies statistic of percentage income from rice paddy field (Question 2) 49 Table 6-4 Frequencies statistic of brand known (Question 3a) 49 Table 6-5 Frequencies statistic of brand known at first ranking (Question 3a) 51 Table 6-6 Summary of brand recognization (Question 3b) 51 Table 6-7 Summary of important factors (Question 4) 52 Table 6-8 Criteria ranking summary (Question 5) 53 Table 6-9. Ranking brand from criteria (Question 6) 53 Table 6-10 Three main sources of information for new pesticide (question 7) 54 Table 6-11 Information sources (Question 8) 56 Table 6-12 Three main criteras to switch to other pesticide (Question 9) 58 Table 6-13 Three main critera for new new pesticide (Question 10) 59 Table 6-14 Cost imporant evaluation for pesticide (Question 11) 60 Table 6-15 Age frquencies (question 12) 60 Table 6-16 Education status (Question 13) 61 Table 6-17 Sex (Question 14) 61 [...]... model to build up the questionaire and to find out elements that influence to this buying process 16.4 The qualitative - quantitative dichotomy Once the research issues are settled, the researcher must move on to figuring out how to get the information This research design, the “how to get” part of the project, can be broadly divided into qualitative and quantitative methods of getting data and information... survey reports were recorded, in the different typical districts, in consistent with the district’s rice area density The sampling procedure must have to ensure the probability in selecting respondents to represent the users of pesticides In the same time, it is very essential to filter from the survey to get the accurate data, we have asked interviewers to select farmers that have minimum planted rice... what we do understand well, and groping toward understanding what we do not yet understand but need to know Then we must organize this information and lack of information into some clearer insight into the topic Quantitative research cannot proceed before we have this understanding The term “quantitative” itself suggests that we already understand the concepts, now we just need to put numbers to them... Qualitative and quantitative research are mutually exclusive and complementary at the same time They are mutually exclusive because they cannot be done at the same time, and they are not interchangeable But they are also complementary in that they are for accomplishing different kinds of tasks In many research projects, they have an order qualitative comes first and then quantitative Quantitative... Conduction of focus groups Even the quantitive findings have enough samples, we decide to carry out the qualitative measurement in this pesticide market study to compensate for limitations on quantitative side, especially in deriving out key attributes for the farmer behaviors We moderated three focus groups whose attendants were carefully selected among the current users of the product field Attendant... in Mekong Delta, but according to our calculation, the profit return over the cost is about 20-30% The family labor occupies mostly the cost and then fertilizer and pesticide Pest infestation is one of the greatest challenges to rice production and can affect crop output, if left unmonitored, pests can eliminate close to 90 per cent of the yield The solution for many farmers, unfortunately, were increased... (www.servenet/agriculture/fish/forestry) With a growing population, Vietnam's ability to feed its people along with production for export is a growing concern for the future sustainability of the country The pressures to explore alternate methods of pest control while continuing to increase crop yield will come to the forefront of agricultural discourse as the axis of population and food output intersect at maximum... statistics with SPSS software statistic tool to understand the important of each criteria that influences to that process 1.3.2 Data sources Data and information needed for conducting the research including primary and secondary data were basically obtained from the following main sources : Ü The descriptive data requirements were extracted from the publication of the government offices such as the Vietnam... selected in the same manner Last but not least, it is necessary to encourage farmers during the survey to supply more information that recorded to our team to build out the picture of pest 16 17.CHAPTER 3 – MARKET FOR PESTICIDES IN VIETNAM 17.1 Demand In general, market proportion of pesticide in Vietnam is about 0.5% of the international market, total sales volume is increased by about 50,000 tons... consumers make two types of purchases: trial purchases and repeat purchases Trial purchases are the exploratory phase of purchasing behavior in which consumers attempt to evaluate a product through direct use But repeat purchases are closely related to the concept of brand loyalty which most firms try to encourage because it ensure them of stability in the marketplace Classified by intentions of purchase . study are being stated below : * To analyse the demand and supply of the existing pesticide market. * To study farmer’s behaviour in buying pesticide in Mekong River Delta within purchasing decision. In this research project, an effort has been made to build up the draft picture of Vietnam’s pesticide market and to study the farmer ‘s behaviour in buying pesticides in Mekong River Delta, . planted area in Mekong Delta by province - 2005 21 Table 3-4 Rice pattern schema in Mekong Delta 22 Table 4-1 First priority of buying criteria analysis 33 Table 4-2 Summary of source of information