THE INTERNATIONAL UNIVERSITY VNU-HCM SCHOOL OF BUSINESS BUSINESS RESEARCH METHOD GROUP REPORT Group members: Student Number Surname Given Name 1. BABAIU11097 Châu Phú Lâm 2. BABAIU11113 Nguyễn Thị Thu Hà 3. BABAIU11178 Phạm Thị Cẩm Hà 4. BABAIU11150 Nguyễn Thùy Tố Quyên Student Name Responsibility in Assignment Participation % * 1. Châu Phú Lâm Monitor group’s workload Methologogy 25% 2. Nguyễn Thị Thu Hà Background 25% 3. Phạm Thị Cẩm Hà Literature Review 25% 4. Nguyễn Thùy Tố Quyên Methodology 25% Signatures: a. ____________________________________ b. ____________________________________ c. ____________________________________ d. ____________________________________ Ho Chi Minh City, November 11 th , 2014 Table of Contents CHAPTER I 3 1.1. Background 3 1.2. Problem Statement 3 1.3. Research Objectives 4 CHAPTER II 5 2.1. Definition of Terms 5 2.1.1. Customer Perception 5 2.1.2. Point of Purchase 5 2.1.3. Packaging 6 2.1.4. Four Dimensions of Packaging 6 2.2. Previous Study 9 2.3. Research Model 11 CHAPTER III 12 3.1 Research Design 12 3.2 Research Sample 12 3.2.1. Target population 12 3.2.2. Target sample 12 3.2.3. Sampling method 12 3.3. Research Instrument 12 3.4. Data collection: 16 3.5. Data analysis: 17 REFERENCE 18 CHAPTER I INTRODUCTION 1.1. Background In the increasing competition of today’s global market, companies and organizations use various methods of promoting sales and marketing such as reasonable price, good services, etc. in order to convince consumers to buy their desired item among various brands. However, one of the methods that companies apply is stylish packaging with high- quality (Ranjbarian, 1999, 38). According to Rundh (2005) package attracts consumer’s attention to particular brand, enhances its image, and influences consumer’s perceptions about product. Also package imparts unique value to products (Underwood, Klein & Burke, 2001; Silayoi & Speece, 2004), works as a tool for differentiation such as helping consumers to choose the product from wide range of similar products, stimulating customers buying behavior (Wells, Farley & Armstrong, 2007). Thus, this makes it an extremely powerful and unique tool in the modern marketing environment. The four most important functions of packaging are to contain and protect products, promote products, and facilitate the storage, use, and convenience of products. A fourth function of packaging that is becoming increasingly important is to facilitate recycling and reduce environmental damage (Lamb et al, 2004). Relating to the development of purchasing power in consumers and market trend that people become more conscious of hygiene and beauty (Souiden & Diagne, 2009), it affects to the rapid growth in beauty care industry, especially in this decade. Nowadays, many companies pay attention to invest in this market to respond for the high demand available in market. Therefore, this research focuses on the role of packaging in consumer's perception of cosmetics product – Prôvence Vietnam on product quality at the point of purchase. 1.2. Problem Statement According to Kotler and Rath in 1984, customers tends to buy the products, which are more attractive though they are in the same price and function. So, packaging is a significant integrative aspect of any product. It also a critical factor to decide the success of failure of a product. Therefore, the major problem that the research tries to determine can be expressed in the following question: What is the role of packaging in consumer's perception of product quality at the point of purchase? Therefore this study pursues to answer the following questions: 1. Does the role of packaging in protecting the product and consumer influence the Prôvence Vietnam consumer's perception of product quality at the Point of purchase? 2. Does the role of packaging in promoting the product influence the Prôvence Vietnam consumer's perception of product quality at the Point of purchase? 3. Does the role of packaging in facilitating the storage, use, and convenience of product influence the Prôvence Vietnam consumer's perception of product quality at the Point of purchase? 4. Does the role of packaging in recycling and reducing environmental damage influence the Prôvence Vietnam consumer's perception of product quality at the Point of purchase? 1.3. Research Objectives The main purpose of this study is to evaluate the role of packaging in Prôvence consumer’s perception of product quality at the point of purchase. In order to meet gain this purpose, the following objectives needs to be considered: 1. Investigating the impact of the following factors (Protection of products and consumer, Promotion of products, Facilitation of storage, use, and convenience of products, Facilitation of recycling and reduce environmental damage) on Prôvence buyer's perception of product quality at the point of purchase. 2. To measure the relative impact of each packaging element on the consumer. 3. To identify the elements which should be highlight while design the packaging. 4. To increase awareness about the important of packaging. As a way to gain consumer's notice and attention. 5. To propose useful direction for future researches. CHAPTER II LITERATURE REVIEW 2.1. Definition of Terms 2.1.1. Customer Perception Customer’s buying decisions are effected by four main psychological factors; learning, belief and attitude, motivation and perception (Kotler et al. 1999). Actually, perception not only depends on the physical stimuli, but more important, on the stimuli’s relation to the surrounding field and on individual’s conditions. Therefore, perception is defined as the process, which customer want to chooses, organizes and interprets stimuli into a reasonable portrait of the world. In other words, perception is the “task of making sense of sensation” (Zimbardo et al. 1995). In fact, each customer observes everything differently in the same situation, so each of them will react on the basic of their perceptions, not on the basic of objective in reality. In recent years, perception becomes more important because customer will evaluates the benefits perceived from the products or services and compares them with the costs of its products or services to makes buying decisions. According to Zeithaml (1988), quality was known as the power of any product or service. So, perceived quality means that consumer has the right to evaluate about the products and services based on their expected and experience. Moreover, Grunert et al. (1996) considered that expected quality is based on a number of perceived quality signals, which may be both physical features of the product and other features such as brand name, price, advertisement, labelling, packaging etc. 2.1.2. Point of Purchase Many consumers purchase are not the result of extensive pre-planning, but are instead a function of decisions made at the point of purchase. According to Quelch (2006), Point of purchase (POP) is the most suitable place and period to communicate with consumers since it is where they make their brand choice decisions and it was defines as “materials set up at a retail location to build traffic, advertise the product, and promote impulse buying. Arens et al., (2008). Morover, POP drives shoppers in-store or online and make them buy more when they are there. 2.1.3. Packaging Packaging plays an imperative role in marketing of any goods. Kotler and Keller (2012) define packaging as “…all the activities of designing and producing the container for a product”. It is considered as the buyer’s first encounter with the brand. It captures consumer’s attention and encourage their purchasing decision. The package becomes the symbol that communicate the image and quality of a product. Underwood et al. (2001) suggest that consumers are more likely to spontaneously imagine aspects of how a product looks, tastes, feels, smells, or sounds while viewing product pictures on the package. Moreover, packaging is not only acts as a means product information and specific brand awareness, but also serves for some functional purpose. First among the functions of packaging are the practicalities. Packaging must be functional, it must protect the product in storage, in shipment and often in use. Other packaging functions concentrate in convenience for the customers, both in terms of ease of access and ease of use. In addition, to offering functional information about product identity and use, packaging also plays an important role in marketing and promotion. It needs to grab and hold the consumer’s attention and involve them with the products. Finally, the environmental protection are focused due to business ethics. Thus, some packages can facilitate recycling and avoid damaging the environment. 2.1.4. Four Dimensions of Packaging Cosmetic packaging serves several important functions which including helping customers identify the specific brand through consistent shape, color, graphics, and design, across all the products within the brand. Packaging contributes to the overall feel and image of a brand; high quality packaging signals to consumers that the product inside is high quality. Moreover, the commercialization and safety of the great majority of the cosmetic products would not be possible without the optimum preservation of the product through the use of chemical preservatives and also the packaging system. As in other industries, “cosmetics companies try not only to sell a brand to consumers but also an image that is associated with certain characteristics or qualities,”(Kokoi, “Female Buying Behaviour Related to Facial Skin Products”). 2.1.4.1. Protection The basic function of packaging is to “preserve product integrity” by protecting the actual cosmetics product against potential damage from “climatic, bacteriological and transit hazards” (Stewart, 1995). The packaging becomes a necessary part for cosmetics preservation such as maintaining the quality and safety for the same or even longer shelf life. Problems associated with insufficient protection are likely to lead to customer dissatisfaction and negative word-of-mouth advertising. H1: The role of protection of product and consumer has an influence on Vietnamese consumer perception of Provence’s quality at the point of purchase. 2.1.4.2. Promotion The promotional role of a packaging should be considered. It can be used to attract customers' attention and encourage them to examine the product. According to Pilditch in 1957, packaging was defined as the “silent salesman” . Besides, it must come alive at the point of purchase, in order to represent the salesman (Vazquezet al., 2003). About 30 years later, Lewis (1991) continued to expand further on Pilditch’s views, stating that “good packaging is far more than a salesman, it is a flag of recognition and a symbol of values”. Companies are seeing packaging as a way to promote for both new and existing brands. Packages use design, colors, shapes, pictures, and materials to influence consumer's perceptions and buying behavior (Lamb et al, 2004). H2: The role of promotion of product has an influence on Vietnamese consumer perception of Provence’s quality at the point of purchase. 2.1.4.3. Facilitation of storage, use, and convenience of products A major benefit of packaging is the information are transmitted to customers, such as directions on how to use. the product and the composition of the product, which is needed to satisfy legal requirements of product disclosure. Packaging convenience is defined by how consumers use the package. For example, a package that is easy to open as well as easy to close would be considered as a packaging convenience (Hogan, 2007). Thus, the convenience of packaging includes all of the various aspects that make the use of a product easier for consumers. Nowadays, consumers are usually seeking items that are easy to handle, open, and reclose, although some consumers want packages that are tamperproof or childproof, also want reusable and disposable packages. Flexible packaging offers many advantages to consumer, product, and to companies. It can be effective in helping brand owners build a close relationship with consumers. For consumers, convenience is even more critical – serving that draws an initial sale and retains consumer brand loyalty (Hogan, 2007). H3: The role of facilitation of storage, use, and convenience product has an influence on consumer perception of Provence’s quality at the point of purchase. 2.1.4.4. Facilitation of recycling and reducing environmental damage In recent years, focus on the environment has become a huge issue for businesses. Environmentalism has played an important role for several decades and continue to produce new things. In fact, packaging can serve many purposes for organization; however, those purposes should serve not only the organization and its end users but the environment as well. It’s nearly impossible to think of packaging without thinking of its effects on the environment. Packaging is no longer considered to be an important aspect of the product. Instead, it is increasingly being perceived as an unwanted and unnecessary source of waste material (Grace and Cohen 2000), as well as contributing unnecessary volume to landfills and the resulting greenhouse gas emissions (Johnson 2001). Nearly 80 percent of consumers believe that products use too much packaging (Ottoman 1993). As consumers become more aware of the social and environmental impact of their consumption, they are demanding more ethical product alternatives (Mintel 1999, as cited in Shaw and Shiu 2000). Ebreo, Hershey and Vining (1999) suggest that environmentally conscious consumers’ behaviors and purchasing intentions can be influenced by product packaging elements such as: its ability to be recycled, whether the packaging has been previously recycled, an absence of hazardous chemicals and a minimal amount of packaging, so as to reduce wastage. The proliferation of "green products" and "green advertising" suggests that at least some firms believes that consumers are willing to pay a price premium for environmentally friendly products. Kadlecek's study (1991), indicated that 78% of consumers in the United States have showed their willingness to pay higher prices for access to environmentally-friendly goods, and stressed the importance of focusing on advertising for the promotion of these products. According to 3R’s of sustainability, packaging should be reduced prior to the manufacturing stage. This means reducing the number of layers, materials and toxins at source. Packaging should be designed to be reusable, refillable, returnable and durable to the greatest extent possible. Packaging should be designed to be recyclable and/or made with recycled content. Efficient recycling systems for packaging guarantee the reduction of used packaging sent to landfill. This is because these systems can be seen as “closed loops” in which used packaging is collected, recycled and used again for the manufacturing of new packaging. H4: The role of facilitation of recycling and reducing environmental damage has an influence on consumer perception of Provence’s quality at the point of purchase. 2.2. Previous Study Hari Govind & Deepak Jain (2012) ”Impact of Packaging in Consumer Decision Making Process of Namkeen Products”: stated that packaging has an important role in marketing communications, especially from the point of sales and could be treated as one of the most important factors influencing consumer’s purchase decision. The research, aims to find out the effect of packaging in buying decision for a namkeen product. And compare the packaging styles of various brands. Also the research investigate that what factors are of great importance in packaging of namkeen products. Using descriptive research and a questionnaire as a mean of data collection and the study conclude that the style of packaging do affects the sales of the namkeen and the factors taken in consideration are price, content, ingredients. Patrick& Thaddeus (2011),”The Multiple Roles of Packaging in the Entire Marketing Process Channel of Distribution and Consumer Perspective in this study aims to presents the multiple roles of packaging in the perspective of the middlemen and consumers. The results of the study are: For the middlemen, it has become an effective tool in achieving optimum use of space efficient use of shelf space in preventing inventory losses and pilferage. For the consumers, packaging has attempted to serve their informational, promotional and convenience needs. The followings are some related studies that have been found. Staniewska et al (2008), "Consumer opinions on the informational and promotional function of unit packaging of dairy products": the aim of this study is to determine the impact of packaging information and the promotional role of dairy product packaging on the consumers’ decisions to purchase dairy products. The survey was carried out in the second half of 2005 and it involved a group of 500 clients of selected retail outlets within chains of supermarkets in Olsztyn. The survey was conducted based on a direct questionnaire comprising two parts. In the first part, the respondents were asked to evaluate the impact of packaging information and the promotional role of dairy product packaging on their decisions to buy dairy products. The second part featured questions on the respondents’ sex, age, occupation, place of residence and monthly income per person in the household. The main findings of the study were: consumers focused mostly on the product’s shelf-life /minimum durability period, the producer’s trademark which is often identified with the specific brand as well as information on the product’s ingredients and nutritive value. The consumers’ propensity to make impulse purchases was confirmed by an observation that the buyers’ attention is frequently drawn to packaging design which is often identified with product quality. Pires (2008), "Consumer Behavior: Product Characteristics and Quality Perception": the aim of this study is an experiment designed to evaluate how consumers assess quality perception in terms of specific product's characteristics, namely colors and shapes in product labels. This study used data gathered from a survey given to high school students in Spain to assess semantic differentials, for examining the communication values of not only colors, but more specifically of shapes, and their interaction with colors as well. The main findings of the study: Colors and shapes combinations which are consistent are expected to enhance consumers´ product quality perception, while other combinations that are inconsistent will decrease it. Silayoi and Speece (2007), "The importance of packaging attributes: a conjoint analysis approach": the aim of this study was to investigate the role of packaging as a vehicle for consumer communication. This study was using a conjoint study among consumers for packaged food products in Thailand, which is a very competitive packaged food products market. The results showed that perceptions about packaging technology play the most important role overall in consumer likelihood to buy. Ampuero and Vila (2006), "Consumer perceptions of product packaging": This study seeks to discuss the need to understand consumer's perceptions in order to correctly design product packing and to achieve the desired position in the minds of consumers. Data collection was divided into two phases. The first, (based on designers' opinions), to determine the key graphic variables in the design of packaging. The second, (based on consumers' opinions), to associate each packaging with a positioning strategy. The results showed that the consumers have exhibited harmonious perceptions towards products-packaging strategies. Nilsson and Ostrom (2005), "Packaging as a communication vehicle": the purpose of this study is to provide a better understanding of how