LAO CONSUMER BEHAVIOR AND KEY FACTORS THAT INFLUENCE BUYING DECISION TOWARD BEER PRODUCTS OF BEERLAO VIPAPAN MUKPROHM A THEMATIC PAPER SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF MANAGEMENT COLLEGE OF MANAGEMENT MAHIDOL UNIVERSITY 2015 COPYRIGHT OF MAHIDOL UNIVERSITY Thematic paper entitled LAO CONSUMER BEHAVIOR AND KEY FACTORS THAT INFLUENCE BUYING DECISION TOWARD BEER PRODUCTS OF BEERLAO was submitted to the College of Management, Mahidol University for the degree of Master of Management on December 13, 2015 ……………….………….…..……… Miss Vipapan Mukprohm Candidate ……………………….….…..……… ……………………….….…..……… Asst. Prof. Nareerat Taechapiroontong, Asst. Prof. Parisa Rungruang, Ph.D. Ph.D. Advisor Chairperson ……………………….….…..……… ……………………….….…..……… Assoc. Prof. Annop Tanlamai, Asst. Prof. Kannika Leelapanyalert Ph.D. Ph.D. Dean Committee member College of Management Mahidol University ii ACKNOWLEDGEMENTS I would like to thank my advisor, Asst. Prof. Nareerat Taechapiroontong, to devote her time to give me advice and suggestions for this research. She provided the valuable and helpful guidance to accomplish my research. Moreover, I am thankful to all instructors at CMMU who deepened my understanding and broadened my knowledge. I would like to express my gratitude to all Lao respondents who helped fulfill questionnaires and carried out this study. I am thankful to my friends and colleagues to help and encourage me working on this research. They all are my source of motivation. Finally, I am highly indebted to my mother for supporting me at every step in the research process. Although she does not receive a high degree and cannot help me in study, she knows how to take care of a Master degree student. Without her support, I cannot complete my study. Vipapan Mukprohm iii LAO CONSUMER BEHAVIOR AND KEY FACTORS THAT INFLUENCE BUYING DECISION TOWARD BEER PRODUCTS OF BEERLAO VIPAPAN MUKPROHM 5749054 M.M. (ENTREPRENEURSHIP MANAGEMENT) THEMATIC PAPER ADVISORY COMMITTEE: ASST. PROF. NAREERAT TAECHAPIROONTONG, Ph.D., ASST. PROF. PARISA RUNGRUANG, Ph.D., ASST. PROF. KANNIKA LEELAPANYALERT, Ph.D. ABSTRACT According to ASEAN Economic Community (AEC) and beer market growth in Laos, this study aims to understand Lao consumer behavior and buying decision toward a specific beer brand, namely Beerlao, which has gained a largest market share in Lao beer market. The research adapts the theories of demographics and marketing mix to describe Lao consumer behavior and buying decision on beer products of Beerlao. The quantitative tool is used for this study by submitting 100 questionnaires to Lao people who has lived in Vientiane. The results are the diversification of genders and income levels has different beer consumption on Beerlao. The male gender and low income consumers more frequently consume Beerlao beer than other gender and income levels. Moreover, the marketing mix factor that affects Lao consumer buying decision toward Beerlao is its brand reputation. The second and third ranks in product factor are good taste and familiarity. KEYWORDS: Beerlao/ Demographic/ Marketing Mix/ Consumer Behavior 61 pages 1 CONTENTS Page ACKNOWLEDGEMENTS ......................................................................................... ii ABSTRACT ................................................................................................................. iii CONTENTS .................................................................................................................. 1 LIST OF TABLES ........................................................................................................ 3 LIST OF FIGURES ...................................................................................................... 4 CHAPTER I INTRODUCTION ................................................................................. 5 1.1 Background ............................................................................................ 5 1.2 Statement of Problem ............................................................................ 6 1.3 Study Objectives .................................................................................... 7 1.4 Scope of Study ....................................................................................... 7 1.5 Expected Benefits .................................................................................. 8 CHAPTER II LITERATURE REVIEW ................................................................... 9 2.1 Background of Beerlao .......................................................................... 9 2.2 Definition and Model of Consumer Behavior ..................................... 10 2.2.1 External Influences ............................................................. 10 2.2.2 Internal Influences .............................................................. 11 2.2.3 Marketing Strategy ............................................................. 12 2.2.4 Consumer Decision Process ............................................... 13 2.3 Related Literature ................................................................................ 14 CHAPTER III RESEARCH METHODOLOGY.................................................... 16 3.1 Model of Research Process.................................................................. 16 3.2 Research Hypothesis............................................................................ 18 3.3 Research Design .................................................................................. 19 3.4 Population and Sample Size ................................................................ 19 3.5 Data Collection Method....................................................................... 20 3.6 Questionnaire Design .......................................................................... 21 2 CONTENTS (cont.) Page 3.7 Data Analysis ....................................................................................... 22 CHAPTER IV RESEARCH FINDINGS ................................................................. 23 4.1 The result of respondents’ demographic data ...................................... 23 4.2 The result of respondents’ consuming behavior .................................. 25 4.3 The result of marketing mix factors which influence buying decision of Lao consumers ........................................................................ 32 CHAPTER V CONCLUSION AND LIMITATION............................................... 41 5.1 The analysis of consumers’ demographic data .................................... 41 5.2 The analysis of consumers’ behavior .................................................. 41 5.3 The analysis of Marketing Mix factors................................................ 42 5.4 Limitation ............................................................................................ 42 5.5 Direction for future research ................................................................ 42 5.6 Recommendation for investors ............................................................ 43 APPENDICES............................................................................................................. 44 Appendix A Questionnaire in English ....................................................... 44 Appendix B Questionnaire in Lao ............................................................. 51 REFERENCES ........................................................................................................... 58 BIOGRAPHY ............................................................................................................. 61 3 LIST OF TABLES Table Page 3.1 Conceptual framework 16 3.2 Marketing mix factors 17 3.3 Five-point Likert scales 21 3.4 The interval of means and degree of agreement 21 4.1 Frequency and percentage of Beerlao consumer’s demographic data 23 4.2 The number and percentage of respondents’ consuming behavior 26 4.3 Result of demographics and consumer behavior analyzed by Pearson Chi-Square Tests 29 4.4 Percentage of respondents’ answer both demographics and consumer behavior 31 4.5 The result of marketing mix factors analyzed by descriptive statistics 32 4.6 The Mean and Standard Deviation of agreement level on Beerlao product 32 4.7 The Mean and Standard Deviation of agreement level on Beerlao price 34 4.8 The category of Beerlao’s beer products 35 4.9 The Mean and Standard Deviation of agreement level on Beerlao place 36 4.10 The Mean and Standard Deviation of agreement level on Beerlao promotion 37 4.11 Compared table of Beerlao price in different restaurants 38 4.12 Result of demographics, consumer behavior and marketing mix factors analyzed by ordinal regression 39 4 LIST OF FIGURES Figure Page 1.1 Recorded alcohol per capita (15+) consumption, 1961 – 2010 5 2.1 Consumer decision making process 13 5 CHAPTER I INTRODUCTION 1.1 Background Beer is an alcoholic drink blended from malted cereal grains, created alcohol from yeast, and flavored by hops. Beer is alcoholic beverage which is the most widely consumed in the world (Wikipedia, Beeracademy.co.uk). Beer is normally sold in cans and bottles and consumed in many occasions such as party, social event or festival. For alcohol consumption in Lao People’s Democratic Republic (LPDR), although Laos has numerous ethnic groups which have its own culture and custom, consumption of alcohol plays a significant role through Lao society. There are many occasions for alcohol consumption in Laos such as a new born baby, new house celebration,