An Empirical Study on Consumer Behavior towards Food and Beverage Services in Vietnam

Abstract

Vietnam is an ideal place in Southeast Asia to expand the food and beverage (F&B) business thanks to stable politics, favorable economic conditions, a young population, and an increasing middle class. Yet Vietnam still poses challenges for the F&B industry wanting to invest in the country. The study aims to identify and evaluate the factors impacting consumer behavior towards F&B services in Vietnam, particularly emerging F&B services. Based on previous studies, we proposed six factors (social influence, service, price, food, atmosphere, and location with 26 observed items) in F&B services that may have a big impact on consumer behavior. The data is collected from 300 consumers who used to use local F&B services. The findings show that socialinfluence, service, price, and food are the four most influential factors. The other two factors such as atmosphere and location have no significant impact on consumer behavior. Besides, there is no difference between consumer groups in terms of income and age. Hence, the current study offers practical insights into the factors that have a significant impact on consumer behavior in F&B services. As such, the findings of this study could assist practitioners in developing a strategic business plan for sustainable development in the F&B industry.

1. Introduction

Vietnam is one of the countries with a young population, who tend to eat out, and has become a big potential market for the food and beverage industry. This not only attracts domestic investors but also foreign giants (PwC, 2018). More importantly, the F&B sector is witnessing an increasing demand from consumers, which attracts a huge amount of investments through different channels. The F&B sector is believed to be a profitable sector for investors. However, studies have also shown that 80% of F&B services, coffee shops faced difficulties or losses during the first six-month or one year. This reflected the fact that the F&B sector seems potential, but the competition is very challenging, competitive, and harsh (PwC, 2018). The invasion of international F&B giants has become a big source of threats and competition towards the Vietnamese F&B chains, in general. During the past 8 years (2012–2020), international F&B chain has dominated the Vietnamese F&B sector for 43.7%, the dominants including McDonald’s, Baskin Robbins, Haagen- Dazs, Pizza Hut, Kentucky Fried Chicken, Burger King, Swensen’s (US’s brands), Lotteria, Caffe Bene, Tous Les Jours, BBQ Chicken (Korean brands) and so on (BBG V, 2018). Additionally, the performance of the Vietnamese F&B sector including F&B services is still facing many difficulties and challenges. The market of food and catering services has few barriers to entry but the elimination rate is very fast, so it is still a challenge for businesses that want to conquer. Vietnamese people are ready to experience new food services but they may get bored soon. To maintain their revenue, businesses must always be flexible in developing products and services. Therefore, in-depth research about consumer behavior is strongly suggested to enhance the performance of the Vietnamese F&B sector.

For these reasons, we strongly believe that this study will clarify the Vietnamese consumer behavior towards F&B service by the conceptual model. The model helps to analyze the relationship and the influencing levels of factors related to the consumer behavior towards F&B services in Vietnam. The research findings are useful for F&B business owners, F&B start-ups or enterprises, projects that are trying to attract national and international investors. Moreover, the research attempts to demonstrate an overall picture of crucial factors that impact the consumer behavior towards F&B services that may improve the management board’s view in shaping strategies, analyzing and adjusting their enterprise’s SWOT analysis to catch up with the consumers’ demands to serve them the best F&B experience.

2. Literature Review

2.1. Consumer Behavior

Consumer behavior is the study of consumers and the processes they use to choose, use (consume), and dispose of products and services, including consumers’ emotional, mental, and behavioral responses (Kotler, 2001). Consumer behavior is the series of behaviors or patterns that consumers follow before making a purchase. It starts when the consumer becomes aware of a need or desire for a product, then concludes with the purchase transaction (Howard, 1977).

Fishbein and Ajzen (1975) in Theory of Reasoned Action (TRA) argued that consumer behavior is based on the intention to perform a behavior that depends on two factors including attitudes toward behavior and social influences related to that behavior. The TRA model is very useful in predicting behaviors that are under the control of the human will. Next, The Theory of Planned Behavior (TPB) proposes additional factors to control cognitive behavior to predict consumers’ actual intentions and behaviors.

The biggest drawback of the TRA and TPB is that human behavior is assumed to be subject to the control of will and consciousness that precedes human behavior. Therefore, these theories cannot be applied to fully explain consumer behaviors in cases of consumers acting in a habit or unconscious, impulsive or coercive manner (Werner, 2004). On the other hand, a number of studies analyzed the underlying factors affecting attitudes, social influences, and control of typical cognitive behaviors (Singh, 2014; Irianto, 2015). According to these studies, consumer behavior will be implemented under cognitive behavior control and in the case of food purchase behavior, the cognitive behavior control factor becomes relevant to product prices.

Therefore, it is important to examine the relationships between external as well as internal factors and consumer behavioral responses to understand consumer needs and trends which create competitive advantage for businesses (White et al., 2019).

2.2. Conceptual Model and Hypotheses

To determine the relationship between the factors affecting Vietnamese consumers toward F&B services and to compare the changes in the influence of food factors based on different service contexts, based on Kotler’s research on consumer behavior theory; intended behavior model (TPB) of Ajzen (2005), and previous studies (Werner, 2004; Singh, 2014; Irianto, 2015), the authors argue the research hypothesis including food elements, atmosphere, service, location, social influences, and prices are as follows:

2.2.1. Food and Consumer Behavior

Food is always the top concern of consumers and has the strongest influence on the choice of consumers to use catering services (Medeiros & Salay, 2013). Food factors have also shown a significant impact on consumer attitudes to food service choices in many other studies such as Singh (2014), and Nguyen. et al. (2019). According to Miller and Ginter (1979), the feature that contributes the most to food elements is the flavor of food. Besides, the characteristics related to food such as diverse menus, fresh food, food hygiene and safety, beautiful food decoration are also factors that influence the food evaluation of consumers (Miller & Ginter, 1979; Hsu et al., 1997; Singh, 2014). So, hypothesis 1 (H1) is stated as follows:

H1: Food is positively related to consumer behavior in using F&B services in Vietnam.

2.2.2. Atmosphere and Consumer Behavior

Atmosphere can be understood as the decoration, interior-exterior arrangement of the F&B service, or the methods the F&B service implement to make consumers feel excited and comfortable. Lambert and Watson (1984) studied the influence of the interior design of F&B service on consumers’ perceptions and behavior by comparing consumers’ interests before and after the renovation of F&B service. After innovation, consumers tend to pay more attention to F&B services because they feel more comfortable and some consumers think that the quality of service has improved even though nothing really changed. Like decoration and lighting, music is also one of the ways to create a good mood and spirit for both consumers and staff (Hsu et al., 1997).

Besides, the atmosphere of F&B services has been proved to be one of the factors related to attitudes and behaviors of consumers’ choice of F&B services (Hsu et al., 1997; Singh, 2014; Kim et al. 2010). Hsu et al. (1997) showed that this attribute is highly appreciated by consumers in the selection of conventional F&B services. So, hypothesis 2 (H2) is stated as follows:

H2: Atmosphere is positively related to the consumer behavior in using F&B services in Vietnam.

2.2.3. Services and Consumer Behavior

Services are mentioned in many previous studies. Tran (2020) defined service quality as a customer’s comparison of service expectations as it relates to a company’s performance. Other authors cited more specific service-related factors, such as the service speed and service attitude of employees (Hsu et al., 1997). Regarding service factors, service speed is the most common attribute of researchers in the F&B service sector which shows that service speed influences consumer attitudes, intentions, and behaviors (Medeiros & Salay, 2013; Miller et al., 1979; Hsu et al., (1997). Similar findings were found in previous studies such as Hsu et al. (1997) and Kim et al. (2010). In the study of Hsu et al. (1997), the element of employees’ friend liness while serving consumers has a strong influence on consumers’ satisfaction and attitudes when using F&B services. Besides, the ability to sit back and relax after meals and secure parking areas are also relatively important attributes when choosing dining service (Hsu et al., 1997). So, hypothesis 3 (H3) is stated as follows:

H3: Services are positively related toconsumer behavior in using F&B services in Vietnam.

2.2.4. Location and Consumer Behavior

The location of the F&B service is a factor that has been mentioned in many studies and has also proven its influence on the attitude and behavior of choosing the service (Hsu et al., 1997; Singh, 2014). When the location of the F&B service is near the residence or the workplace, it seems to be an important factor in the selection of F&B services (Medeiros & Salay, 2013). So, hypothesis 4 (H4) is stated as follows:

H4: The location is positively related to consumer behavior in using F&B services in Vietnam.

2.2.5. Price and Consumer Behavior

The service pricing is closely linked to the assessment of all aspects of the price through the consumer experience. Specifically, when the price is consistent with quality, it will be relatively stable (Medeiros & Salay, 2013). Price has been proven to be a factor that influences consumers’ attitudes and choices in food service in many studies (Hsu et al., 1997; Singh, 2014; Miller et al., 1979). According to the results of a study by Hsu et al. (1997), the price-related factors mentioned are low prices and diverse prices. Meanwhile, the study of Longart (2015) stated that the evaluation of the price of products and services of an F&B service is low or high will depend on the programs, incentive policies, and promotions of the F&B service and the price strategy of F&B services. So, hypothesis 6 (H6) is stated as follows:

H5: Prices are positively correlated with consumers’ behavior in using F&B services in Vietnam.

2.2.6. Social Influence and Consumer Behavior

Social influence reflects social pressures on behavior. Social influence refers to how others feel when one performs a certain behavior. In other words, the influence of external subjective factors is more or less dependent on the relationship. As a result, the more intimate the relationship, the stronger the impact level (Fishbein & Ajzen, 1975). The degree of this social influence may vary across different cultures. According to Hofstede (2010), Vietnamese culture is considered a collective culture, which is different from the individual culture in some Western countries. Collectivist cultures emphasize the needs and goals of the group as a whole over the needs and desires of each individual. In such cultures, relationships with other members of the group and the interconnectedness between people play a central role in each person’s identity. Therefore, Vietnamese consumers are psychologically susceptible to the “herd effect”, which is caused by information that is not fully understood, so they often observe the behaviors of the people around them to find out and they will be more comfortable when the behavior has been performed before. Thus, the choice to buy or use the service is influenced by others (Hofstede, 2010). According to Ajzen (2005), social influence affects the purchasing intention and actual purchasing behaviors among consumers indirectly through attitudinal variables. However, Irianto (2015) had shown that social influence not only has an indirect effect on buying behavior through attitudes and but also directly influences the purchasing intent of people’s consumption. For that reasons, hypothesis 6 (H6) is stated as follows:

H6: Social influence is positively related to consumer behavior in using F&B services in Vietnam.

From the six hypotheses above, the research model is proposed as shown in Figure 1. The study is conducted using a quantitative research method to investigate the impact of the factors on consumer behavior in using the food service of the Vietnamese F&B service.

Figure 1: Research Model

3. Research Method

The sampling with the non-probability method was selected because of the cost and time-saving benefits. Besides, it approaches the correct target. The sample size depends on the research analysis method as the Exploratory Factor Analysis (EFA). According to Gorsuch (1988), the factor analysis requires at least 200 observations. Hair et al. (1998) suggested that the minimum sample size was 50, preferably with 100 and the observed rate of measurement variables was 5:1, the ideal rate is suggested as 10:1 and above. The formula is n = 5 × x (n is the sample size; x is the number of observed variables). Based on this argument, this research model has 26 observed variables, so n = 5 × 26 =130. However, with bigger sample size, the precision rate will be higher. The current study investigated 300 respondents who used to use and have been using Vietnamese F&B services. The survey was conducted for three months with questionnaires delivered directly to consumers. The collected data was screened to remove non-qualified responses. All collected data will be encrypted and be processed by the SPSS software. The questionnaire is qualified when all questions were fully answered and the eligibility is confirmed.

4. Results

4.1. Descriptive Statistics

Descriptive statistics show that the gender of respondents is mainly women, accounting for 66.4%, while men account for 33.6%. The age of participants mainly ranges from 22 to under 40 years old, accounting for 84%. Then, up to 73.5% of consumers are staff working in the big cities like Ho Chi Minh or Ha Noi. Therefore, the main income is about 256 to 512USD (Based on the interest rate on March 10^th, 2020). Consumers use F&B services less than 03 times per month (accounting for 80.2%) and expense about 4.2–10 USD / person (accounting for 80%). Finally, consumers use F&B services mainly for lunch, accounting for 80%. So, descriptive statistics in this section have shown a clear picture of the sample of this study.

4.2. Reliability and Validity Test

The results of reliability analysis in Table 1 show that all factors have Cronbach’s Alpha coefficients ranging from 0.70 to 0.9 which is relatively good reliability (Nunnally, 1978).

Table 1: Reliability and Validity Test

Then, the validity of factors is tested using exploratory factor analysis (EFA). Particularly, EFA is performed through the method of principal components and Varimax. In this study, the first EFA creates 26 observed variables with the Eigen value being greater than 1, then 06 factors are drawn with KMO coefficient being 0.995 (0.5 ≤ KMO ≤ 1). However, the observed variables FOO1 and FOO2 are rejected because the factor loadings are lower than 0.5.The second EFA includes 24 observed variables which are grouped into 06 factors. All observed itemsmet because the factor loading is bigger than 0.5. Thus, the study proposes the results of the second EFA for the regression analysis in the next section. The final results of EFA are shown in Table 1.

4.3.Correlation and Regression Analysis

The first step is to test the correlation between each independent variable and the dependent variable. Through the Pearson test, the results in Table 2 shows that all the proposed independent factors are strongly correlated with consumer behavior at a 1% significance level. This is a good condition for conducting the linear regression analysis.

Table 2: The Results of Correlation Analysis

The linear regression analysis is performed with 06 independent variables (including SOI, SER, LOC, ATM, PRI, FOO) and 01 dependent variable (COB). The results in Table 3 show that the given regression model is relatively consistent with the 1% significance level. The adjusted R² coefficient = 64%, which means that the model can explain 63.9% of the overall relationship between factors affecting consumer behavior toward F&B services in Vietnam. The test of Durbin-Watson indicates that a value of 1, 898 proves no correlation of the first order chain in the model. The F test used in the ANOVA is a hypothesis test of the suitability of the overall linear regression model. The results show that the value of significance level is very low (sig = 0.000) compared to the model. This means the data set is suitable for conducting the hypothesis testing section.

Table 3: Result of Regression Model Analysis

4.4. Hypotheses Testing

The findings in Table 3 show that Hypothesis 1 is supported with Beta = 0.13 at the significance level of 1%. That means that with more appreciated food-related factors, the consumers will be more positive towards the use of F&B services in Vietnam. Similarly, hypothesis 3 is supported with Beta = 0.22 at the significance level of 1%. That is, consumers will be willing touse services if better services are offered. In other words, service has always been an important factor, which has been demonstrated in the study of Medeiros and Salay (2013). Therefore, F&B services need to be paid more attention to improve service quality and produce positive effects on consumer behaviors. In line with the H1 and H3, the hypothesis 5 and 6 are supported with Beta = 0.16 and 0.53, respectively at 1% significance level. These results indicate that with a more suitable price, consumers will be more positive. Besides, with positive social influence, consumers will be more positive. Hypotheses 2 & 4 are not supported because of the 5% significance level. In other words, the atmosphere and location-related factors have no impact on consumers.

5. Discussion and Conclusion

The results show that the Vietnamese consumer behavior towards F&B services was influenced by four main factors including social influence, service, price, and food. Particularly, social influence is an external factor with regard to evaluations and judgment of society. This factor is critical, but hard to control and manage since it comes from outside. Meanwhile, internal factors including service, price, andfood are actively controlled by F&B enterprises to satisfy consumers. These findings are consistent with the studies of Baek et al. (2006) and Kim et al. (2010). Besides, the two factors proposed in H2 and H4 including atmosphere and location of the F&B services show no significant effects on consumer behavior. Therefore, F&B businesses in Vietnam should focus on aspects other than atmosphere and location.

Based on the findings, to positively boost consumer behavior towards F&B services, the authors strongly suggest focusing on the a fore mentioned critical factors which greatly influence consumer behavior.

First, the social influence factor hasa strong impact on consumer behavior which means that Vietnamese consumers can be easily convinced by the effects of word-of-mouth. Moreover, Vietnamese consumers are greatly affected by feedback, reviews, or KOLs from social media like Facebook, YouTube, or Zalo, which are a recent powerful trend in Marketing. These have been proven by many successful cases in Vietnam including Uber, Grab, Spicy Noodles, and the Flying Noodles trend. However, to influence good consumer behavior, besides social media, other factors such as prestige and service quality should be ensured. Fake advertisement, as well as other marketing activities that fool consumers, should be greatly avoided.

Second, service is the second important factor. There are several factors within the service element including customer services, service quality, service speed, staff skills, and attitude. Among those, the attitude and consulting skills are evaluated well by the respondents. The findings reveal that consumers are more demanding on service quality. For that reason, managers of F&B services should concentrate on improving service quality to satisfy consumers and gain more influence on the market.

Third, price is also an important factor that impacts consumer behavior. However, in this research, the impact is not much. The reason is that consumers of F&B services in Vietnam do not perceive much value from the prices of those F&B services that they have. Thus, F&B service managers should focus on pricing strategies to attract consumers.

Finally, food is commonly the first and fore most factor that directs consumer behavior in choosing services, but this study shows that food is the least important factor in comparison with social influence, service, and price. This finding points out that consumers use F&B services in Vietnam for other reasons instead of enjoying food only. In other words, the food itself is not enough to become the main factor to attract consumers. Therefore, businesses need to combine all mentioned elements to drive good consumer behavior towards their F&B services.

Future research should expand the sample sizeand investigate various groups of respondents such as occupation, age, income. Moreover, it is recommended that more factors that have impacts on consumer behavior towards using F&B services should be included in the research model. Moreover, some specific F&B services should be included in the research model to examine their impacts. Last but not least, Structural Equation Modeling (SEM) can be utilized to examine the overall model.