MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY - THIS DISSERTATION WAS ACCOMPLISHED AT THE NATIONAL ECONOMICS UNIVERSITY Supervisors: Prof Dr Luong Xuan Quy Assoc Prof Dr Luu Van Nghiem CHU TIEN DAT Critic 1: CONSUMER BEHAVIORS AND THE MARKETING MIX OF MOBILE ENTERPRISES IN VIETNAM Critic 2: Critic 3: MAJOR: BUSINESS ADMINISTRATION (MARKETING) CODE: 62.34.01.02 This dissertation shall be defended before the State-level Dissertation Assessment Council convening at the National Economics University, Hanoi, at …, on … 2014 This dissertation can be found at: The National Library The National Economics University Library SUMMARY OF DISSERTATION IN BUSINESS AND MANAGEMENT HANOI, 2014 Despite the appearance of new services such as value-added services, the ARPU has continued to decrease The present ARPU is 4.5 US dollars per subscriber This is partly due to discounts and other promotion programs CHAPTER 1: INTRODUCTION 1.1 The urgency of the dissertation 1.1.1 In theory There have been many studies on consumer behaviors in the field of mobile telecommunications throughout the world However, most of these studies have addressed only one aspect of consumer behaviors, examining the impact of the external or internal factors of the consumer’s “black box” or technology on consumer behaviors Almost none of them have provided an overall examination of external and internal factors that may have effects on behaviors consumers In Vietnam, there have not been many studies on mobile services, especially on consumer behaviors towards these services There are two reasons for this shortage On the one hand, not many enterprises have been licensed to trade in these services On the other hand, due to the recent slow-growth market, the mobile enterprises have started to develop intensively, retaining customers and paying more attention to them, instead of developing extensively with the focus on increasing subscribers 1.1.2 In practice 1.1.2.1 Mobile enterprises are recommended to start with a good understanding of customers to have appropriate strategies for a reasonable distribution of their limited resources to both marketing and technology developing activities Mobile telecommunications is a service industry that is greatly affected by technology If mobile enterprises pay too much attention to marketing and sales activities without developing technology, they will unavoidably fail On the contrary, if they only focus on developing technology without any care about customers’ needs, they are more likely to end with failures In the present-day competitive environment, enterprises should have a thorough grasp of consumers’ needs, intentions, behaviors, and attitudes in order to build appropriate strategies with limited resources 1.1.2.2 The Vietnamese mobile market has nearly reached a saturation point in terms of subscribers in the transitional period from extensive development to intensive development The slow-growth market and low ARPU, which is only one-fourth of the regional ARPU, require that the enterprises should shift the focus of competition, paying more attention to customers It is because paying attention to customers and retaining them are the best choice when it is difficult to gain new customers Paying attention to customers is also the most feasible way to increase the ARPU In general, the enterprises should have appropriate strategies to best satisfy their customers’ needs, retain their customers, and increase their ARPU 1.2 The context of the Vietnamese mobile market The market growth has gradually slowed down for the last few years There has not much change in the market share The three largest market share holders are Viettel, Vinaphone, and Mobifone As the result of slow-growth market and low ARPU, the big service providers in Vietnam have focused on safeguarding the market, furthering the intensive development via the promotion of value-added services, continuously paying attention to pre-paid customers, and focusing more on post-paid ones Enterprises with much potential are looking towards the overseas market 1.3 Research purposes and tasks 1.3.1 Research purposes On the one hand, the research investigates the consumer behavior model, and the external and internal factors of the consumer’s “black box” that have impacts on the consumer’s behavioral intentions towards mobile services On the other hand, based on the results of the investigation of the Vietnamese consumer behaviors, the research provides an analysis of the orientation of the marketing mix employed by the Vietnamese mobile enterprises over the past time and proposes a new orientation to these enterprises for the coming time 1.3.2 Research tasks To achieve the afore-mentioned purposes, the research is supposed to fulfill the following tasks: - Synthesize and systematize the concepts, contents, and theories on consumer behaviors, the marketing mix, and the role of the research on consumer behaviors in the building of the marketing mix; - Examine and assess the fundamental models of theory and the research models of the preceding studies on mobile consumer behaviors; work out a research model involving both internal and external factors affecting mobile consumers in Vietnam, based on the analysis of the preceding studies and the real situation of the Vietnamese mobile market; - Investigate, study, and analyze consumer behaviors, as well as the internal and external factors’ levels of impact on Vietnamese mobile service consumers; - Synthesize and analyze the marketing mix employed by the Vietnamese mobile enterprises in the past five years; investigate how these enterprises distribute their resources to each marketing mix tool, corresponding to the external factors in the aforementioned research model; - Propose an orientation for strategies and solutions on marketing mix to mobile enterprises, based on the results of practical analysis and those of the research on behaviors and factors affecting the Vietnamese consumer behaviors The dissertation provides an overall review of external and internal factors affecting behavioral intentions, as well as consumer behaviors in relation to the marketing mix 1.4 Subjects, objects, and scope of research 1.4.1 Subjects and objects of research The subjects of research include the behaviors of Vietnamese mobile consumers and the marketing mix of Vietnamese mobile enterprises The objects of research include mobile service consumers in Vietnam and mobile enterprises which have operated in Vietnam since 2008 (including Mobifone, Vinaphone, Viettel, EVNTelecom, Vietnammobile, Sphone, and Gmobile) Specifically, the research addresses the following issues: • The real situation of the Vietnamese mobile market; • Theoretical background on consumer behaviors, the marketing mix, and the building of the marketing mix based on the research on consumer behaviors; • The external and internal factors affecting the behaviors of Vietnamese mobile service consumers; • The real situation of the marketing mix, and the strengths and weaknesses of the marketing mix used by the Vietnamese mobile enterprises 1.4.2 Scope of research The research is restricted to: (1) mobile service customers in Vietnam and (2) mobile enterprises in Vietnam (7 enterprises) The research focuses on the following contents: (1) factors affecting the customer’s behavioral intentions and their levels of impact, including the specific characteristics— internal factors of the consumer’s “black box” and external factors related to the marketing mix such as corporate image, perceived service quality, perceived price, perceived promotion, and perceived switching cost; (2) the marketing mix employed by the Vietnamese mobile enterprises, the real situation, and some suggestions Research schedule: The theoretical study, the analysis of statistical reports, and the investigation of reality were conducted in five years, from 2008 to 2013 Sociological survey activities were carried out within two months, starting in May 2013, to ensure the topicality of the research 1.5 Research methodology The dissertation uses a combination of different methods for analysis, comparison, synthesis, statisticalization, description, evaluation, and investigation, with the employment of different tools such as questionnaires Specifically, the dissertation uses three main methods: (1) analyzing and synthesizing secondary data, (2) interviewing specialists, and (3) conducting sociological surveys 1.6 Contributions of the dissertation 1.6.1 Theoretical contributions The dissertation investigates the switching cost’s impact on consumer behaviors The internal factors, or characteristics, of the consumer’s “black box” are used not only as independent variables to study their effects on consumer behaviors, but also as controlled variables to examine the impacts of external factors on consumer behaviors with corresponding characteristics With regard to the quality, this dissertation presents a clear delineation and separation between the basic service quality and the value-added service quality Regarding the switching cost, this dissertation draws a distinction between its two component factors: the switching cost and difficulties due to consumers’ fear of changing their mobile numbers when switching mobile service providers Results of analyzing the collected data show some new points in the Vietnamese consumer behaviors towards mobile services as follows: • In terms of internal factors or characteristics, Vietnamese consumers can be classified into four groups corresponding to four basic characteristics, including: Novelty-fashion consciousness; Quality consciousness; Use-value consciousness based on the balance between benefits and costs; Habitual shopping Among them, the characteristics 1, 3, and have direct effects on consumer behaviors • In terms of external factors, such factors as corporate image, after-sales—customer care services, basic service quality, switching cost, service price, and value-added service quality have effects on consumer behaviors 1.6.2 Practical contributions—new proposals of the dissertation The dissertation defines the customer’s future behaviors (behavioral intentions) towards mobile services, as well as external, internal and demographic factors and their levels of impact on the consumer’s behavioral intentions The dissertation suggests the Vietnamese mobile enterprises change the orientation of their marketing mix, from distributing resources according to the priority: promotion, discount, quality, corporate image, and after-sales—customer care services services, to distributing resources according to the priority: corporate image, after-sales—customer care services, basic service quality, service cost, and value-added service quality The tool of promotion should be used reasonably by enterprises It is suggested that Vietnamese mobile enterprises should segment the market according to the four internal factors (characteristics) of the consumer, each with a corresponding marketing mix in conformity with consumer behaviors The fear of changing mobile phone numbers when switching service providers has a direct impact on the consumer’s behavioral intentions To guarantee the consumer’s interests and improve the mobile enterprise’s competitive ability, it is reasonable for the State management bodies to apply the MNP policy that has been implemented in over 70 countries in the world 2.2.1 Consumer behaviors Consumer behaviors, as defined by Philip Kotler (1999), are specific behaviors that a consumer displays in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs Figure 2.3 Kotler’s model of consumer behaviors (2004) 1.7 Structure of the dissertation Apart from tables, diagrams, figures, abbreviations, references, and appendices, the main contents of the dissertation are divided into five chapters as follows: - Chapter 1: Introduction - Chapter 2: Literature review Marketing and Other Stimuli Customer’s Customer “Black Box” Responses - Chapter 4: Research results According to Kotler (2004), the stimuli, after entering the customer’s “black box,” will cause customer responses These responses include: choosing goods-services, choosing a brand, choosing an enterprise, and choosing the purchase amount - Chapter 5: Proposal of marketing strategies 2.2.2 Marketing mix - Chapter 3: Research methodology The traditional marketing mix for goods includes four so-called Ps: product, price, place and promotion According to Luu Van Nghiem (2008), the marketing mix for services, with their own characteristics, includes seven Ps Besides the four Ps of the traditional marketing mix, these seven Ps also include people, process, and provision of customer services CHAPTER 2: LITERATURE REVIEW 2.1 Overview of mobile services-networks Mobile services are two-way radio information services that allow their subscribers to use different forms of telephone and non-telephone services within the coverage of service providers According to Truong Dinh Chien (2012), in order to satisfy the customer’s needs and thereby maximize the enterprise’s profits, the enterprises should develop effective marketing mix strategies with major groups of measures including decisions on services (products), decisions on price, decisions on the provision of customer services, and decisions on marketing These four groups of decisions are called Ps for short Mobile services are always associated with mobile networks This is true to this dissertation 2.2.3 The building of the orientation of marketing mix based on the research on consumer behaviors 2.1.2 Technical characteristics of the mobile network in relation to marketing mix According to Vu Huy Thong (2010), consumer behaviors have a significant impact on marketing strategies, including the marketing mix On the one hand, on an overall scale, the knowledge of consumer behaviors is considered as the starting point for the proposal of marketing strategies and tactics, including those for marketing mix On the other hand, the knowledge of consumers helps enterprises find answers to the basic questions when forming marketing strategies for each specific market, and enables them to provide products and services to satisfy the customer’s specific needs 2.1.1 Mobile services - The element P on process does not play a big role in the provision of services because this process is standardized - The element P on people has a minor part in the provision of services since people are not directly involved in the provision of services - Regarding the element P on services, the service quality and the service quality gap between network operators are mainly reflected in their investment in the audio section - Technology affects all the Ps of the marketing mix However, its effects are found mainly on the two Ps: services and service prices Changes in technology not only bring about further improvements in service quality and strong decreases in service prices, but also sometimes lead to basic changes in the nature of services 2.3 Overview of research on the behaviors of mobile service consumers 2.3.1 Research in Vietnam In Vietnam, there have been few intensive studies on consumer behaviors in the field of mobile services, especially those in association with marketing mix 2.2 Consumer behaviors and the building of the marketing mix based on consumer behaviors The preceding studies on marketing in the field of mobile services have mainly focused on researching an aspect of mobile services (such as telephones), or examining consumer satisfaction or loyalty to mobile services Regarding studies on consumer behaviors in other fields, many of them have clear theoretical foundations However, due to the big differences in studied services, they are used in this dissertation as references only In general, most of these studies have not shown an overall examination of internal and external factors that have effects on consumer behaviors 2.3.2 Research in the world 2.3.2.1 Theoretical model of consumer behaviors According Philip Kotler (2004), the stimuli (or affecters) affect the consumer’s “black box” and cause certain responses—consumer behaviors Marketing stimuli - Products/ services Environmental stimuli - Economic - Price - Scientifictechnical - Provision - Political/legal - Promotion - Competitive Consumer’s “black box” Customer responses Consumer’s Decisioncharacteristics making process -Selecting products/services 2.3.2.3 Research on consumer behaviors according to the Euro-American school The European-American school examines the relation between external affecters, such as perceived quality and satisfaction, on service purchase behaviors This approach has several limitations First, it has just examined the external affecters and has not studied thoroughly the internal factors of the “black box.” Second, regarding the external affecters, it has just focused on studying perceived quality and has not addressed the others such as price and corporate image Last, with regard to the switching cost, it has just examined the opponent’s attraction in terms of price 2.3.2.4 Research on consumer behaviors according to the Asian school In comparison with studies in the Euro-American school, the recent studies at some Asian markets have been conducted in the approach of adding the concept of “provider switching cost.” This concept refers to the following situation: when a customer is not satisfied with the services he is being offered and wishes to change to other services, he will have to bear many costs (including financial, psychological, and social costs) and other risks - Selecting a brand 2.3.2.5 Some other consumer behavior research models - Selecting a provider Many studies have been conducted in the direction of considering mobile services as high-tech services and investigating how consumers respond to these services These studies are based on the following theories and models: - Selecting the purchase amount - Theory of Reasoned Action (TRA): behavioral intentions are influenced by individual attitudes and subjective norms; - Selecting the time and place of purchase This overall model shows that there are two approaches to the research on consumer behaviors: research on the impacts of the internal factors of the consumer’s “black box” on consumer behaviors and research on the impacts of external marketing stimuli 2.3.2.2 Research on consumer behaviors based on the consumer’s “black box” It is very complicated and costly to study all the factors that affect the afore-mentioned “black box.” Therefore, instead of studying the internal factors of the “black box”, researchers have focused on investigating the possible output of the “black box.” The CSI was first developed by Sproles and Kendall (1986 & 1987) for this purpose, and has been applied and adjusted by many researchers Accordingly, there are seven consumer decisionmaking styles as follows: perfectionism/high quality consciousness, brand consciousness, fashion-technology consciousness, factor balance and synthesis consciousness, price consciousness, confusion by over choice, and brand loyalty This approach has been used by researchers to examine consumer behaviors in different countries For example, it was used by Durvasula (1996) and Fan and Xiao (1998 & 2001) for their research in China, Mitchell and Bates (1998) in Britain, Wang (2004) and Song (2011) in China, and Hunjra (2012) in India - Theory of Planned Behavior (TPB): originating from the limits of behaviors under little human control; - Technology Acceptance Model (TAM): featuring the causal relationship between consumer attitudes, behavioral intentions, and behaviors in reality; - Unified Theory of Acceptance and Use of Technology (UTAUT), featuring the impacts of four main factors on behavioral intentions and behaviors, namely expected efficiency, expected effort, social influence, and material conditions; - The combination of TAM and TPB 2.4 Proposed research model This dissertation aims at an overall investigation of consumer behaviors towards mobile services, as well as a comprehensive examination of the external factors of the marketing mix, the internal factors of the consumer’s “black box”, and the impacts of these factors on the consumer’s planned behaviors—behavioral intentions To reach this goal, the researcher has proposed a working research model for this dissertation This research model focuses on behavioral intentions and factors affecting behavioral intentions for the analyses of and recommendations on marketing mix to mobile enterprises According to TRA, TPB, TAM, and UTAUT, the behavioral intention is the only factor that has a direct impact on the consumer behavior in reality As a result, many studies that apply these models and theories have focused on examining behavioral intentions, instead of 10 consumer behaviors Besides, with reference to the reality of production and business, and the relationship between customer behaviors and corporate strategies, the grasp of customer intentions and needs plays a more important role than the grasp of customer behaviors in the building of appropriate corporate strategies Technically, a behavioral intention is an individual’s tendency leading to a specific practical behavior It is the major determinant of a practical behavior that is about to occur Therefore, in many cases, it is more important to investigate behavioral intentions, or possible behaviors, than behaviors (actions that have happened or are going on) This is especially true to predictive studies or studies that aim to find out solutions to a problem (according to Ajzen, 1985; Ajzen & Fishbein, 1980; Yi, Jackson, Park, & Probst, 2006, cited in Kuo, 2008) Demographic factors Perceived quality Corporate image Primary data is collected via questionnaires, which are administered to randomly selected households in five cities and provinces of Vietnam Electricity bill collectors in Hanoi, Ho Chi Minh City, Hue, Ninh Binh, and Binh Duong are involved in this research as investigators They are given instructions on how to assist informants in filling the questionnaire Switching cost Consumer decision-making style Type The research process involves the following steps: (1) Study theoretical background; (2) Build the theoretical framework, research model, and hypotheses; (3) Consult specialists (intensive interview); (4) Create a pilot questionnaire and conduct a pilot investigation; (5) Develop official measurement scales and build the official questionnaire; (6) Carry out a sociological survey with the questionnaire; (7) Run Cronbach’s alpha tests and conduct exploratory factor and linear regression analyses; (8) Analyze the situation of the orientation of the marketing mix employed by the mobile service enterprises in Vietnam in the period of 2008–2013 by analyzing and synthesizing secondary data; (9) Make recommendations on the orientation of marketing mix Secondary data is collected from reports by the Vietnam Ministry of Information and Communications, reports on market analysis by foreign organizations such as BMI, reports by enterprises, and preceding studies Behavioral intention Perceived price Type 3.1 Research process 3.2 Data collection methods Perceived promotion Type CHAPTER 3: RESEARCH METHODOLOGY Type Type Type Type 3.3 Intensive interview—qualitative research 2.5 Research hypotheses H1: The external marketing mix factors have positive impacts on the behavioral intentions of mobile service consumers in Vietnam H2: The external marketing mix factors have different levels of impact on the behavioral intentions of mobile service consumers in Vietnam H3: The internal factors of the consumer’s “black box” (consumer characteristics) have impact on the behavioral intentions of mobile service consumers in Vietnam H4: The internal factors (corresponding to consumer decision-making styles or consumer characteristics) have different levels of impact on the behavioral intentions of mobile service consumers in Vietnam H5: The external factors (corresponding to each group of customers with its own decision-making style or characteristic) have different levels of impact on the behavioral intentions of mobile service consumers in Vietnam H6: The demographic factors create differences in the behavioral intentions of mobile service consumers in Vietnam 11 The intensive interview is designed to (1) test and filter the research model and the factors affecting consumer behaviors in this research model and (2) analyze the situation of the orientation of the marketing mix employed by the Vietnamese mobile service enterprises in the period of 2008–2013 The participants in this intensive interview are divided into three main groups: (1) specialists in the fields of marketing and marketing research, (2) State administrators in the field of telecommunications, and (3) mobile enterprise administrators 3.4 Quantitative research 3.4.1 Research design Stage 1: Test the research model and questionnaire with the intensive interview Stage 2: Conduct the pilot investigation Stage 3: Conduct the official investigation This dissertation uses the sociological survey and quantitative research methods with the research tool of questionnaire and the sample size of 860 participants 3.4.2 Questionnaire design 12 To investigate the Vietnamese consumer decision-making styles, this dissertation uses the shortened version of CSI with 16 five-level Likert items that are developed by researchers Sproles and Kendall (1986 & 1987) Other scales are also used for other factors They include Konuk (2012)’s scale for the behavioral intention with items; Kim, Park, and Jeong (2004)’s scale for the switching cost with items; Kim et al (2004)’s scale for the perceived service quality with items; Tung (2011)’s scale for the perceived promotion with items; Nguyen and Lebland (1998)’s scale for the corporate image with items; and Koi-Akrofi (2013)’s scale with items 3.4.3 Sampling The research subjects are customers using mobile services throughout Vietnam Regarding the sample size, according to Hoang Trong and Chu Nguyen Mong Ngoc, the number of research participants (sample size) should be at least four or five times bigger than that of research variables The questionnaire includes 50 variables, so the minimum sample size for this research according to this formula should be 250 However, the research uses stratified random sampling, so if the sample size is too small, the collected information will not be enough for analysis Moreover, the bigger the sample size is, the more reliable the research results are Therefore, the research is administered to a sample size of 860 to increase the validity and reliability of the research results 3.4.4 Sampling method CHAPTER 4: RESEARCH RESULTS A RESULTS OF THE ANALYSIS OF CONSUMER BEHAVIORS 4.1 Survey data analysis Of 860 collected responses, 711 are valid for statistical analysis 4.1.1 The sample’s demographic features and use of mobile services in reality It is shown by the results of statistical analysis that there is no noticeable difference between the sample and the general research subjects in terms of demographic features and the actual use of mobile services In terms of purposes and motives, the majority of respondents use mobile services for basic needs such as making and receiving calls and sending text messages Besides these basic services, others such as accessing the Internet and joining online communities are attracting more and more users 4.1.2 Consumer behavioral intentions towards mobile services With regard to the behavior of changing service providers, only 5.3% of respondents will probably change their main service providers (the first SIM card in case of two SIM cards in use) in the next twelve months Among this group, 0.8% will definitely make the change On the contrary, up to 78.4% of respondents will not change service providers in the same period of time About 20.3% of this group will surely make no change With regard to the behavior of recommending the services they are using to their friends and relatives, 48.3% of respondents will while only 12.7% will not The research uses convenience sampling in combination with stratified sampling, so that the selected samples are representatives of mobile service users both in urban and rural areas, big and small cities and provinces With regard to the behavior of speaking well of their service providers, 45.4% of respondents agree while only 8.5% disagree Accordingly, via the Electricity and Telecommunications Payment Solutions Joint Stock Company, the member companies and collection agencies of the Vietnam Electricity Group (EVN), and the provincial branches of the Vietnam Posts and Telecommunications Group (VNPT), the researcher contacts the collection sections of VNPT in five big cities and provinces (Hanoi, Hue, Ho Chi Minh City, Ninh Binh, and Binh Duong) and administers the investigation to 860 households in these places 4.1.3.1 Analysis of external factors affecting consumer behavioral intentions 3.4.5 Data processing method 4.1.3 Analysis of research model based on collected data After three times of analyzing factors and rejecting variables with unsuitable transmission coefficients, the researcher extracted seven significant factors from five original ones These factors are renamed herein as follows: (1) perceived switching cost, (2) perceived value-added service quality, (3) perceived corporate image, (4) perceived service price, (5) perceived basic service quality, (6) perceived promotion, and (7) perceived inconvenience when changing mobile numbers These new factors also have valid Cronbach’s alpha coefficients This dissertation uses the SPSS 16.0 version for the analysis of collected data 3.5 Secondary data analyzing and synthesizing method This method is used in the stage of studying theoretical background and designing the research model via the analysis and synthesis of information collected from preceding studies More importantly, the secondary data analyzing and synthesizing method is used in combination with intensive interview to analyze the real situation of the mobile market in Vietnam 13 4.1.3.2 Analysis of internal factors (decision-making styles) affecting consumer behavioral intentions It is shown by the results of three times of analyzing internal factors affecting consumer behavioral intentions towards mobile services that only four factors are extracted after rotating the original ones These factors are renamed herein as follows: (1) fashiontechnology consciousness, (2) service quality consciousness, (3) service price consciousness, and (4) habitual shopping 14 These newly-extracted factors also have valid Cronbach’s alpha coefficients YDHV = 1.391 + 0.13*KieuF1R + 0.208*Kieu3R + 0.261*KieuF4R 4.1.3.3 Factor analysis of behavioral intentions Results of factor analysis reveal that there is no change in the measurement scale for behavioral intentions, so the only factor in the old scale can be reused 4.1.3.4 Modified research model according to actual survey The initial research model was designed to examine the effects of five external factors and seven internal factors of the consumer’s “black box” (equivalent to seven decisionmaking styles) affecting consumer behaviors After conducting factor analysis and scale testing, however, the researcher decided to increase external factors, from five to seven, and decrease internal factors, from seven to four Here is the modified research model: Demographic factors The three decision-making styles that have positive impacts on consumer behavioral intentions are listed in ascending order of impact as follows: fashion-technology consciousness (variable KieuF1R); service value consciousness based on the balance between benefits and costs (variable KieuF2R); and habitual shopping (variable KieuF4R) 4.1.6 Analysis of the effects of external marketing factors on the behavioral intentions of each consumer style In order to categorize consumers, researcher Sproles and Kendall (1986 & 1987) developed the CSI instrument with the use of 16 five-level Likert items Accordingly, for each decision-making style, if a respondent has the mean value of his/her responses at points and above then he/she will belong to that style Table 4.38: Vietnamese consumer decision-making styles Corporate image Basic service quality Behavioral intention Perceived promotion Mean value Number Density Perceived price Value-added service quality Switching barrier Order of impact Consumer decision-making style Type Quality consciousness Price-value consciousness 3.895 407 57.24% 3.745 429 60.34% Habitual shopping 3.592 333 46.84% Results of linear regression analysis show reveal that the external factors have positive effects on consumer behavioral intentions These factors are listed in descending order of impact in the following table: Switching cost Type Fashiontechnology consciousness 3.013 123 17.30% Type Type 4.1.4 Linear regression analysis of the effects of external factors on consumer behavioral intentions towards mobile services As the result of two times of multiple linear regression analysis, factors affecting behavioral intentions are presented in descending order of influence as follows: perceived corporate image, perceived switching cost, basic service quality, perceived difficulties arising due to the change of mobile numbers when switching network, perceived price, and value-added service quality YDHV = 0.362 + 0.148*CLCoBan + 0.091*CLPhu + 0.135*CPCM + 0.096*CPDoiSo + 0.113*GiaCN + 0.315*HADN 4.1.5 Linear regression analysis of internal factors of the consumer’s “black box” on consumer behavioral intentions towards mobile services Results of two times of linear regression analysis show that only three internal factors (consumer decision-making styles) have direct impacts on consumer behavioral intentions with the following regression equation: 15 Fashiontechnology consciousness Value-added service quality Promotion Quality consciousness Price-value consciousness Habitual shopping All consumers Corporate image Switching cost Corporate image Service price Corporate image Switching cost Corporate Switching cost Difficulties in changing numbers when switching providers Provider image Value-added service quality Basic service quality Basic service quality Basic service quality Service price Switching cost Value-added service quality Basic service quality Difficulties in changing numbers when switching providers Basic service quality Difficulties in changing numbers when switching providers Difficulties in changing numbers when switching providers Service price Value -added service quality 16 4.1.7 Tests of differences between demographic groups in their behavioral intentions towards mobile services The t-test is used to test the differences between the two gender groups For other factors with three sample groups and above such as age, income, and academic standard, the ANOVA (analysis of variance) test is used The test results show that there is no difference in behavioral intentions according to gender, income, and academic standard Pre-paid subscribers have more positive behavioral intentions than post-paid ones The younger the subscribers are, the more positive their behaviors towards their service providers are Subscribers in the retired/housewifely group have more negative behaviors than those in other groups No Hypothesis Result The external marketing mix factors have positive impacts on the behavioral intentions of mobile service consumers in Vietnam Accepted The external marketing mix factors have different levels of impact on the behavioral intentions of mobile service consumers in Vietnam Accepted The internal factors of the consumer’s “black box” (consumer characteristics) have impact on the behavioral intentions of mobile service consumers in Vietnam Accepted The internal factors (corresponding to consumer decision-making styles or consumer characteristics) have different levels of impact on the behavioral intentions of mobile service consumers in Vietnam Accepted The external factors (corresponding to each group of customers with its own decision-making style or characteristic) have different levels of impact on the behavioral intentions of mobile service consumers in Vietnam Accepted The demographic factors create differences in the behavioral intentions of mobile service consumers in Vietnam Accepted in the descending order of priority as follows: promotion, price, service quality, image building— communications and popularization, the building and development of sales channels, and aftersales—customer care services CHAPTER 5: PROPOSAL OF MARKETING STRATEGIES 5.1 About the orientation of marketing mix 5.1.1 The orientation of marketing mix in relation to the Vietnamese consumer behaviors Long-term strategy for businesses: The Vietnamese mobile telecommunications businesses should focus on intensive development instead of extensive development, improving their prestige, brands, sales, and profits through the enhancement of their customers’ satisfaction and loyalty It is seen from preceding countries’ experience that, the cost for attaining a new customer is five times as much as that for retaining an old one, while revenue from the former is only one-third of that from the latter (Kim et al 2004; Kim, 2010) On the whole, there are two types of subscribers that mobile enterprises can develop: new subscribers (students) and subscribers from other mobile networks Both types have low ARPUs, and the costs for attaining them are high They are also subject to changing networks They are easily acquired, so they are easily lost Therefore, mobile enterprises should concentrate on long-term development, instead of new subscriber development It is also advisable for mobile enterprises to enhance the development of value-added services, after-sales—customer care activities, and care to loyal subscribers (especially post-paid ones) The orientation of marketing mix: Based on the reality of consumer behaviors and factors affecting consumer behaviors, it can be said that the mobile enterprises’ marketing mix for resource allocation in such a descending order of priority (from promotion to price, quality, communications and popularization, network expansion, and customer care) at the present time is inappropriate B RESULTS OF THE ANALYSIS AND SYNTHESIS OF DATA ON THE MARKETING MIX OF THE VIETNAMESE MOBILE ENTERPRISES IN THE PERIOD OF 2008–2013 4.2 Analysis of the marketing mix of the Vietnamese mobile enterprises in the period of 2008–2013 Regarding the business strategy, the Vietnamese mobile enterprises before 2012 mainly focused on widening the market and increasing subscribers and disregarded the retaining of subscribers Regarding the marketing mix strategy, the Vietnamese mobile enterprises in the same period simultaneously implemented the marketing mix tools, at appropriate points of time, to achieve their business goals in general and their marketing goals in particular Different enterprises might promote different Ps; however, on the whole, these enterprises distributed their resources to the Ps 17 To match Vietnamese consumers’ behaviors and aspirations and thereby improve their production and business efficiency, the Vietnamese mobile enterprises should allocate their resources to the marketing factors in descending order of importance and impact as follows: corporate image (including communications and popularization, distribution channels, and service quality), after-sales—customer care services, basic service quality, service price, and value-added service quality Specifically, in terms of marketing mix, the Vietnamese mobile enterprises should: - Change their focus from short-term and unsustainable development through discount and promotion to long-term and sustainable development via the building of their corporate image—a corporation or enterprise with high prestige, good brand name, high quality, professional staff, and regular presence in and contributions to the community; 18 - Continuously improve their quality in the direction of simultaneously expanding the infrastructure network in different ways and developing value-added services, as well as customer care and assistance services; - Invest more in after-sales—customer care activities This factor has presently received the least investment from mobile enterprises, though it is the third most important factor affecting consumer behaviors Retaining customers not only contributes to improving services and service quality, but also helps to reduce selling expenses and increase profits; - Limit price competition Price still has an effect on consumer behaviors, but its impact is lower than the impact of other factors In the long run, price competition reduces enterprises’ reinvestment capacity and service quality Instead of offering direct discounts, the Vietnamese mobile enterprises should build different service packages and prices for different types of customers; - Have a reasonable plan for promotion True promotion, at least for the time being, has little impact on consumer behaviors 5.1.2 Market segmentation and marketing mix for each market segment Results of survey show that the Vietnamese consumers have four main characteristics and thus can be divided into four groups as follows: Fashion-technology consciousness; Quality consciousness; Service value consciousness based on the balance between benefits and costs; Habitual shopping are affected by extrinsic marketing factors in the descending order of impact as follows: corporate image, switching cost, value-added service quality, service price, difficulties in changing mobile numbers when changing networks, and basic service quality 5.1.2.3 Marketing mix for value conscious customers based on the balance between benefits and costs Customers with high value consciousness tend to choose services with the highest use values They often select and compare options carefully to gain the best services based on two criteria: price and usefulness They select services for long-term use which suit their needs and financial capacities They are the biggest group, accounting for 60% of all mobile service consumers Demographically, they mainly fall into the group of 23–35 years old They are either selfemployed people or office workers with salaries ranging from VND 2–20 million Seen from the angle of satisfying consumer needs and in relation to consumer behaviors, the Vietnamese mobile enterprises should have an appropriate marketing mix which focuses on the factors in the descending order of priority as follows: building corporate image, working out a reasonable price policy, and promoting basic service quality and care for loyal customers This group is also affected by difficulties in changing mobile numbers when switching networks 5.1.2.4 Marketing mix for habitual shoppers 5.1.2.1 Marketing mix for fashion-technology conscious customers This group of customers has three following characteristics: (1) value brands and tend to choose expensive and famous services, (2) follow technology, and (3) like changes This group is mainly below 23 years old Most of them are students and office workers with salaries ranging from VND 2–20 million Although they account for only 17% of all mobile service consumers, they play an important role for mobile enterprises With regard to marking mix, the Vietnamese mobile enterprises should allocate their resources to the factors in the following order of priority: value-added service quality, promotion, difficulties in changing mobile numbers when changing networks, corporate image, and basic service quality 5.1.2.2 Marketing mix for perfectionist/quality conscious customers According to the theory developed by researchers Sproles and Kendall, the perfectionist/quality conscious customers tend to choose services with best quality, most features, most value-added services, and best after-sales activities These customers fall into different age groups with different occupations They are the second biggest group, accounting for 57% of all mobile service consumers Their behaviors 19 According to Sproles and Kendall (1986), the habitual shoppers often repeatedly purchase products and services from their favorite brands or simply from the brands they are using In the selection phase, they often learn about and compare different services and service providers carefully Once they have made their choices, they will maintain the purchase of services from their chosen providers without changes Habitual shoppers make up 48% of all mobile services consumers They fall equally into different age groups, occupations, and levels of income Viewed from the angle of meeting consumer needs and in relation to consumer behaviors, the Vietnamese mobile enterprises should work out a sound marketing mix, giving priority to the factors in the following descending order: building corporate image and brand, enhancing care to loyal customers and after-sales activities, improving basic service quality, and raising the quantity and quality of value-added services 5.2 Some solutions for perfecting the marketing mix for the Vietnamese mobile enterprises 5.2.1 Diversifying and improving service quality First of all, the Vietnamese mobile businesses should enhance the coverage area extension Based on the developed countries’ experience, they can consider the following measures: (1) Promote the socialization of investment; (2) Encourage their customers to take part in investment; (3) Share the infrastructure 20 Besides, these enterprises should diversify high-quality value-added services and encourage the participation of content service providers 5.2.6 Building reasonable human resource policies and popularizing the mobile enterprise culture 5.2.2 Applying a flexible price policy The Vietnamese mobile enterprises are recommended to promote the mobile enterprise culture which is customer-oriented, satisfies the customer’s needs, and is suitable with customer behaviors First of all, to improve the customer’s perception of price, the Vietnamese mobile enterprises should not focus on discount programs Instead, they should offer different packages so that customers can choose those suitable with their needs and financial capacities Second, the enterprises should offer discount programs to customers who purchase and use great quantities of services, and care about business-to-business (B2B) transactions Third, the enterprises should pay more attention to post-paid customers 5.2.7 Building infrastructure and material and technical facilities It is necessary for each Vietnamese mobile enterprise to build a modern, youthful, and stable corporate image in the eyes of customers Corporate image and its appearance frequency have a big impact on customers 5.2.8 Ceaselessly attending to loyal customers Besides, the enterprises should apply a service price policy in association with products/services (mobile phones accompanied by mobile services), and offer special packages to support new services, especially M2M (machine-to-machine) services 5.2.3 Extending service provision networks and improving their quality First of all, the Vietnamese mobile enterprises should extend their service provision networks Second, they should improve the quality of their service provision networks through enhancing the quality of their service distribution networks and building policies to support their agencies in the implementation of customer care services Last, they should open more and more agencies (or shops) which provide customers both mobile phones and services These mobile enterprises have an advantage that their brands have been known to many customers The customers will find it more convenient to be able buy mobile phones and services at the same place 5.2.4 Exploiting promotion at the right time On the one hand, the Vietnamese mobile enterprises should renovate forms of promotion via: (1) holding special promotion and sponsored programs with free trials offered to members of technological forums, (2) organizing contests to learn about new products and services with prizes for winners, and (3) diversifying forms of promotions, such as cash gifts, minute gifts, value-added service gifts, and bonus points On the other hand, businesses should enhance the effect of promotion with the following recommendations to be borne in mind: A discount is reasonable if it makes up about 20– 40% of the normal selling price; Small but frequent discounts are more effective and impressive to customers than big but infrequent ones; Reasons for promotions should be stated clearly 5.2.5 Boosting public relations It is advisable for the Vietnamese mobile enterprises to proactively communicate with their customers via messages and emails, and establish relations with mass media 21 It is advisable for the Vietnamese mobile enterprises to ceaselessly improve their customers’ loyalty since it means to raise switching barriers Customer care, for each marker segment, is not only important to habitual shoppers, but it is also vital to fashiontechnology conscious customers Keeping customers being well-informed of new services and invited to free trials of these services also works for the latter group of customers 5.3 Limitations of the research and directions for further research 5.3.1 Some limitations of the research First of all, due to the excessive quantity of items included in the questionnaire, the research used the shortened version of Sproles and Kendall (1978)’s CSI with 16 five-level Likert items, instead of the full one with 50 items, for the survey of customer decisionmaking styles Second, the research has not approached the subjects who have not ever used mobile services and are learning about them for the first-time purchase and use Third, the research employed multivariate regression for data analysis to define the relationship between independent variables and dependent ones However, this analysis technique does not show the relationship between independent variables Last, despite the use of convenience sampling in combination with stratified random sampling, the results of this research are hardly as valid as those gained via the use of pure random sampling 5.3.2 Directions for further research Firstly, it is recommended that further studies should extend research factors More specific and specialized examinations should be conducted on the factors of distribution, and communications and advertising Secondly, it is advisable for further studies to consider the use of the full CSI version with 50 items developed by Sproles and Kendall (1986) so as to identify more exactly the external factors of the consumer’s “black box.” 22 Lastly, further research should be extended beyond the five cities and provinces chosen in this study Simultaneously, the random sampling process and procedures, as well as the questionnaire-based interviews, should be controlled more strictly for better results CONCLUSION Mobile services are services with high technological contents, but they are becoming more and more popular in daily life Consumer behaviors towards mobile services have attracted not only researchers but also service providers and State management bodies However, theoretically, few studies in the same field have provided an overall examination of internal and external factors affecting consumer behaviors Practically, it is essential for mobile enterprises to have a thorough understanding of consumer behaviors since it will help them work out good plans for reasonable resource allocation and increase their ARPUs, especially in the present difficult economic and market context in Vietnam This dissertation has provided an overall examination and analysis of theoretical and practical issues and methods for researching consumer behaviors This laid the foundations for the building of a model for researching the behaviors of mobile service consumers in Vietnam, as well as the basis for the analysis and proposal of an appropriate marketing mix for Vietnamese mobile enterprises AUTHOR’S PUBLISHED STUDIES RELATED TO THE DISSERTATION Chu Tien Dat (2006), “Promotion and Its Effects”, Journal of Post, Telecommunications and Information Technology, issue 277, April 2006 Chu Tien Dat (2013), “Opportunity for Overseas Vietnamese-language Pay TV Services”, Journal of Economics and Forecasting, issue 548, June 2013 (ISSN 08667120) Chu Tien Dat (2013), “Hanoian Consumer Behaviors towards Mobile Services”, Journal of Economics and Development, special issue, August 2013 (ISSN 1859-0012) Chu Tien Dat & Tran Khanh Hung (2013), “Northern European Countries’ Welfare State Model: Lessons of Experience”, Workshop on the Basic Theoretical Issues on Modern Industrial Countries and Socialist-oriented Modern Industrial Countries, and International Experience on the Development of Modern Industrial Countries, October 2013 (KX code: 04.07/11-15) Chu Tien Dat (2013), “Theory on Consumer Behaviors and the Application of the Consumer Behavior Theory in Mobile Services in Vietnam”, Workshop on Economic Theories and Their Application Potential in Vietnam, 2013 This research has achieved its general and specific goals set in the beginning All hypotheses have been tested Results of quantitative research have shown that the behaviors of mobile service consumers are affected by six external factors listed in the descending order of impact as follows: corporate image, switching cost, basic service quality, difficulties in changing mobile numbers when changing networks, service price, and valueadded service quality Regarding internal factors, the Vietnamese consumers have four main characteristics equivalent to four decision-making styles as follows: (1) fashiontechnology consciousness, (2) quality consciousness, (3) value consciousness, and (4) habitual shopping Among them, the characteristics 1, 3, and have direct impacts on consumer behaviors The research has also proved that consumers with different characteristics are influenced differently by external factors Based on the results of quantitative research on consumer behaviors towards mobile services, the research has compared the marketing mixes of the Vietnamese mobile enterprises over the past time and then proposed the marketing mix for the whole market Accordingly, the Vietnamese mobile enterprises should further develop value-added services and after-sales—customer care activities, build corporate image, and prevent themselves from abusing promotion The dissertation has also suggested the marketing mix for each market segment according to consumer characteristics 23 24 [...]... understanding of consumer behaviors since it will help them work out good plans for reasonable resource allocation and increase their ARPUs, especially in the present difficult economic and market context in Vietnam This dissertation has provided an overall examination and analysis of theoretical and practical issues and methods for researching consumer behaviors This laid the foundations for the building... Basic Theoretical Issues on Modern Industrial Countries and Socialist-oriented Modern Industrial Countries, and International Experience on the Development of Modern Industrial Countries, October 2013 (KX code: 04.07/11-15) 5 Chu Tien Dat (2013), “Theory on Consumer Behaviors and the Application of the Consumer Behavior Theory in Mobile Services in Vietnam , Workshop on Economic Theories and Their... that consumers with different characteristics are influenced differently by external factors Based on the results of quantitative research on consumer behaviors towards mobile services, the research has compared the marketing mixes of the Vietnamese mobile enterprises over the past time and then proposed the marketing mix for the whole market Accordingly, the Vietnamese mobile enterprises should further... foundations for the building of a model for researching the behaviors of mobile service consumers in Vietnam, as well as the basis for the analysis and proposal of an appropriate marketing mix for Vietnamese mobile enterprises AUTHOR’S PUBLISHED STUDIES RELATED TO THE DISSERTATION 1 Chu Tien Dat (2006), “Promotion and Its Effects”, Journal of Post, Telecommunications and Information Technology, issue... limitations of the research First of all, due to the excessive quantity of items included in the questionnaire, the research used the shortened version of Sproles and Kendall (1978)’s CSI with 16 five-level Likert items, instead of the full one with 50 items, for the survey of customer decisionmaking styles Second, the research has not approached the subjects who have not ever used mobile services and are... Potential in Vietnam, 2013 This research has achieved its general and specific goals set in the beginning All hypotheses have been tested Results of quantitative research have shown that the behaviors of mobile service consumers are affected by six external factors listed in the descending order of impact as follows: corporate image, switching cost, basic service quality, difficulties in changing mobile. .. organizing contests to learn about new products and services with prizes for winners, and (3) diversifying forms of promotions, such as cash gifts, minute gifts, value-added service gifts, and bonus points On the other hand, businesses should enhance the effect of promotion with the following recommendations to be borne in mind: 1 A discount is reasonable if it makes up about 20– 40% of the normal selling... Second, they should improve the quality of their service provision networks through enhancing the quality of their service distribution networks and building policies to support their agencies in the implementation of customer care services Last, they should open more and more agencies (or shops) which provide customers both mobile phones and services These mobile enterprises have an advantage that their... learning about them for the first-time purchase and use Third, the research employed multivariate regression for data analysis to define the relationship between independent variables and dependent ones However, this analysis technique does not show the relationship between independent variables Last, despite the use of convenience sampling in combination with stratified random sampling, the results of. .. contents, but they are becoming more and more popular in daily life Consumer behaviors towards mobile services have attracted not only researchers but also service providers and State management bodies However, theoretically, few studies in the same field have provided an overall examination of internal and external factors affecting consumer behaviors Practically, it is essential for mobile enterprises