1. Introduction
The current economic growth of Thailand relies on the capitalist approach. Therefore, businesses focus only on maximizing profits, taking into account their profits for the benefit of the organization and its shareholders but often neglecting social responsibility (Roth et al., 2020). Conversely, community enterprises apply the concept of local community integration: a group of people who have a common way of life in the community and are connected using local resources as inputs. They aim to enable communities to generate income and self-reliance. The knowledge of local wisdom has also been combined with international wisdom and applied to the modern times (Somerville & McElwee, 2011). The nature of the business operations of community enterprises is different from that of general businesses in several ways. First Production: Community enterprises have limited funding, which results in insufficient funds for the use of machinery and technology in production. This means most of the products are made manually (Naipinit et al., 2016). Second Capital and profit management: Community enterprises aim not only to obtain financial rewards but also to create jobs. They also aim to establish a circular economy in the community (Bailey, 2012). Third Benefit the community: Community enterprises focus on the benefits the community receives from their products, such as creating jobs, generating income, and creating a circular economy in the community (Barraket & Archer, 2010). Fourth Entrepreneurs: The entrepreneurs of community enterprises are not businessmen. Therefore, they are limited in their skills and knowledge of business operations. Different business operations affect the products of community enterprises (Somswasdi et al., 2015). Therefore, an interesting aspect of the result of this research is the community enterprises developing competitive strategies in accordance with consumer purchasing decisions. It also creates knowledge management for various sectors in the country to apply research results as guidelines for distribution supporting community enterprises in the future.
2. Objective
This study aimed to investigate the confirmatory factors of decisions to purchase community enterprise products in Nakhon Si Thammarat Province, Thailand.
3. Methodology
The researcher used mixed methods research (exploratory design), starting with interviewing consumers of community enterprise products to determine the components of their purchase decisions. Then those data were used to create a questionnaire for consumers of community enterprise products for confirmatory factor analysis, as in the process below:
Step 1. The researcher used snowball sampling to identify data providers from informants who had direct experience with purchasing the products of community enterprises.
Step 2. Data were collected during in-depth interviews. The researcher terminated the interviews when the data were saturated due to a lack of new information.
Step 3. The researcher used the content analysis method to analyze and summarize the data and distinguish the participants’ reasons for their decisions to purchase community enterprise products according to a conceptual research framework.
Step 4. The researcher used the conceptual research framework to create a Likert scale questionnaire that used five levels of criteria. The questionnaire was assessed by three experts.
Step 5. The researcher determined the sample size of community enterprise customers by separating the desired samples based on the districts in Nakhon Si Thammarat province. For the sample size to be reliable, it was based on the sufficiency rule for analyzing data with a ratio of at least 20:1 observed variable. The researcher used 1,000 questionnaires for this process.
Step 6. The researcher collected the data using a simple random sampling method with consumers who bought goods or used the services of community enterprises.
Step 7. The researcher used the data for a confirmatory factor analysis to determine the components of the purchase decisions for community enterprise products.
4. Research result
4.1. The Results of Deciding to Purchase Community Enterprise Products
To investigate the components of purchase decisions for community enterprises in Nakhon Si Thammarat Province, the researcher started with interviews to collect the reasons for the participants’ decisions to purchase community enterprise products, as shown in Table 1.
Table 1: Shows the Interview Results Regarding the Participants’ Reasons for Deciding to Purchase Community Enterprise Products.
4.2. The Results of a Second Order Confirmatory Factor Analysis of the Purchase Decisions for Community Enterprise Products
The researcher used the interview results regarding the participants’ reasons for their purchase decisions for community enterprise products to analyze the second order confirmatory component to confirm and verify the correctness of the relationship structure between the variables. The researcher also used the interview data to measure the latent variables and confirm the observed variables in each group of the two main components, which are 1. purchase decisions for community enterprise products, consisting of the 1.1 shape of products, 1.2 quality of products, 1.3 price of products, 1.4 packaging of products, 1.5) channels for selling the products, and 1.6 geographical identification of products; and 2 decision-making based on social contexts, consisting of 2.1 consumers’ perceptions of community problems, 2.2 consumers’ consciousness about helping their communities, 2.3 consumers’ experiences with community enterprise products, and 2.4 consumers’ attitudes toward community enterprise products. The details are shown in Table 2.
Table 2 shows the index value of the second order confirmatory factors of the purchase decisions for community enterprise products passed all criteria. It also shows the model is consistent with the empirical data; therefore, it is appropriate for use in confirming the composition of the purchase decisions for community enterprise products. The details are shown in Figure 1.
Table 2: Shows the Index Value of the Second Order Confirmatory Factors of Purchase Decisions for Community Enterprise Products.
Figure 1 and Table 3 show the subcomponents of the purchase decisions for community enterprise products (product decision) had factor loadings between 0.68 and 0.76 and the average variance extracted (AVE) was 0.50, which is suitable (AVE > 0.50). The composite reliability was 0.85, which is considered appropriate (CR > 0.70). The subcomponents of personal decision (personal decision) had factor loadings between 0.65 and 0.78 with an AVE equal to 0.51, which is also considered appropriate (AVE > 0.50). It had a composite reliability of 0.81, which is considered appropriate (CR > 0.70). Therefore, it can be concluded from the second order confirmatory factor analysis that all variables in the second order confirmatory factor analysis of the purchase decisions for community enterprise products have appropriate reliability.
Figure 1: Shows the Result of the Second Order Confirmatory Factor Analysis of the Purchase Decisions for Community Enterprise Products.
Table 3: Summarizes the Second Order Confirmatory Components of the Purchase Decisions for Community Enterprise Products.
5. Summary and Discussion
The second confirmatory factor analysis of purchase decision on community enterprise products consisted of two main components: purchase decisions for community enterprise products and decisions based on social context considerations. The details are as follows.
5.1. Purchase Decisions for Community Enterprise Products
1. The appearance of community enterprise products is an important element for consumers buying products. This is because current consumers consider products with modern and beautiful appearances. Shape, color, and quantity are tangible qualities customers can see and feel at a shop. Consumers consider the appearance of products in accordance with their needs, the products’ purposes, and the products’ ease of use. The shape of products also can persuade buyers. Therefore, community enterprises should pay attention to the modern appearance and design of their products and the convenience and consistency of their products in relation to consumer needs (Rodjam, 2022).
2. The quality of community enterprise products is also an important factor in purchase decisions. This is because consumers consider the quality of products for use or consumption. Consumers assess the visual quality of products before making purchase decisions and then assess it again after using or consuming the products. They also compare a product’s quality with its price. If the price of the product is high, consumers will expect the quality to be high as well. Therefore, community enterprise products are about not just producing good products but also having responsibility toward customers. Consumers want to buy good quality products that have reasonable prices and are safe to use, and they have the need to be socially responsible and not release pollution into the environment (Chantarasombat & Singkeaw, 2012).
3. The price of community enterprise products is a significant factor in consumers’ purchase decisions because they compare the quality of a product with its price. The price of the product affects the consumers’ expectations for the product and its image. Customers are willing to pay more if the product quality is good. Therefore, products should be priced according to their perceived value for consumers, consumer behavior, the level of competition in the market, and consistency with other marketing strategies. To be satisfactory to the organization, the price should match the objectives of the organization and be suitable for consumers’ purchasing power. Pricing challenges the management’s ability to determine a sales strategy or set the product’s price in the market so it is suitable for various environmental factors and follows other marketing strategies (Chummee, 2021).
4. The packaging of products is also a significant factor in purchase decisions for community enterprise products. The design and packaging are the media that make consumers visibly aware of a product. When customers are pleased with packaging, they will be motivated to buy. The packaging can motivate consumers and create purchasing needs for community enterprise products. It should use modern technology and be environmentally friendly and has to protect the product in transit from the manufacturer to the customer, all with reasonable production costs. With good packaging and transportation, damage can be minimized and these products can be sold at high prices (Chandhasa, 2017).
5. Distribution channels for community enterprise products are another important factor in purchase decisions for community enterprise products. Consumers choose to buy products that are easy to find. Therefore, it is useless for high quality products to be produced if consumers do not know where to buy them and cannot buy them when they desire. A community enterprise distribution channel can be divided into two levels: Products are placed to sell inside the community or network for consumption in daily use or family use and products are placed to sell outside the community and can be advertised through online media to allow customers to get to know the products better when they are of good quality or have specific characteristics (Chummee, 2022).
6. The geographical identification of community enterprise products is an intellectual property that is possible only when a link exists between a geographic source and a product, such as weather or raw materials that are used in the production of these local products. Products that come from such areas have special characteristics. The geographical identification of a community enterprise can provide the product with unique characteristics that make it attractive. This is an important factor in consumer purchase decisions. The benefits of geographical identification are as follows: First protecting consumers. This benefit is based on the idea that consumers should be able to consume products or services that meet the standards and safety they desire. It is unlawful to make consumers believe a product came from elsewhere because this can cause consumers not to receive the product they want. This may also affect people’s health and safety in the sense that the product may not be up to the standards it should be. Second protecting producers and preventing unfair competition. In this liberal capitalist economy, an important mission of the state is to promote fair trade competition in order for market mechanisms to operate effectively. A merchant must not be unfairly taken advantage of by other traders. This means that a business operator must not steal or fraudulently misrepresent the reputation of a trade competitor. Misrepresenting the origin of a product to exploit the reputation of other communities producing the same product would be considered an unfair act. Third increasing the value of a product for the manufacturer and as a marketing tool. One of the main objectives of geographical identification is to convey that the product is manufactured in a particular country or area. This must be done to make consumers understand the goods or products are different from the same type of goods produced by other sources. Such identification will result in the product being more expensive. Fourth maintaining standard of the product. Geographical identification is a mark of quality and product origin. When applying for protection in a geographical identification, the applicant must demonstrate the connection between the area and the goods in terms of quality, reputation, production methods, raw materials, and so on. These can affect the specific quality of the goods. A group of manufacturers therefore has to play a huge part in helping each other maintain quality or reputation; otherwise, their use of geographical identifications may be suspended. Fifth distribution of income to the community and promotion of the manufacturer. Most of the applications for geographical identifications are for agricultural products. This is because factors such as weather conditions or the condition of the area will greatly affect the quality of the product, which leads to its reputation. Therefore, the protection of geographical identifications directly stimulates the local economy by using the reputation that has been accumulated for a long time to increase the value of the product and the ability to compete both nationally and internationally. Sixth to strengthen and preserve the local community. Indirect benefits of protecting geographical identifications are creating unity among local people who must work together to improve the quality of their products, creating a sense of connection, and creating pride of place. This creates value for the locality, which can reduce the problem of rural workers migrating to cities. It can also help preserve Thai heritage, customs, and folk art (Vorapai & Ongkunaruk, 2016).
5.2. Decision-Making Based on Social Context Considerations
1. Consumers’ perceptions of community problems. The social enterprise aims to enable communities to generate income and self-reliance. If consumers are aware of community problems, it will affect their desire to make purchase decisions. This is because consumers need to participate in helping community enterprises. Consumers realize the objectives of community enterprises and consider how their profits can benefit the community. If the prices and quality of the products are equal to those of general products in the market, consumers will prefer the products from community enterprises. Many community enterprises focus on developing cost competitiveness or product differentiation. However, those community enterprises only can gain access to the market but cannot compete with other enterprises that have more capital. Therefore, the external environment is important for developing the competitiveness of community enterprises. This means developing consumers’ perceptions of the benefits society will receive from the consumption of goods and services provided by community enterprises (Jamali & Karam, 2018).
2. Consumers’ consciousness about helping their communities. Community enterprises aim to create jobs and generate income for their communities. Therefore, one component of a consumer’s purchase decision is to consider the financial journey after the purchase as part of helping the community. This is because consumers are conscious of helping their communities and would like to participate in helping and providing benefits to them (Balderjahn et al., 2013).
3. Consumers’ experiences with community enterprise products. An experience-based purchase decision component results from the experience of purchasing a community enterprise product. This experience can directly impact not only the individual but also others. Consumers make purchase decisions based on their purchasing experiences with other community enterprise products and based on the word-of-mouth about a product. Therefore, enterprises need to listen to customers’ feedback about their products and services. That feedback has to be collected through social media comments, reviews, and so on. Importantly, collecting a large amount of such feedback from customers can make it easier to understand what customers think about community enterprises(Suindramedhi, 2016).
4. Customers’ attitudes toward community enterprise products. A person’s concept of community enterprise products is an important factor in their willingness to consume these products. The attitude is different for each person and is related to the individual’s life, which then is expressed in the form of various consumption behaviors. Many factors can affect attitudes, including motivation, personality, values, learning, family, society, culture, religion, and education (Kleinhans, 2017).
5.3. Recommended Guidelines for the Development of Marketing Strategies of Community Enterprises
The results of this study on the confirmatory components of purchase decisions for community enterprise products can be summarized as follows.
1. Developing the value of supporting the community. The representation of profit sharing to help solve community problems distinguishes community enterprises from general enterprises. It is the value of working for a community that shares the same beliefs and values. The sacrifice of working for the community can result in work efficiency, and loyalty in the organization can create a competitive advantage.
2. Developing creativity and innovation from folk wisdom, creativity and innovation. One important task is for an organization to demonstrate the ability to create something new or make it different from others by using change to create an opportunity. Innovation will drive longterm product growth and create future competitiveness. The factors that cause creativity and innovation are the focus on responding to customer needs by thinking of new processes or products to replace old ones and meet the needs of customers, the learning ability of the organization reflected in the learning culture of the people in the organization in creating new things, and being open to new ideas, which causes entrepreneurs to see the importance of supporting and promoting innovation in the organization. Creativity and innovation increase competitiveness. Innovation is an organizational tool for gaining competitive advantage due to rapidly changing consumer demands. Therefore, an organization needs to be innovative or creative to meet customer needs. Innovation in business creates competition. Innovation can be considered a strength and an opportunity for business organizations to create advantages when compared to competitors in the same industry or business group.
3. Developing the image of community enterprises. Importantly, image is the totality of thoughts, impressions, and beliefs a person has about something, and their attitudes and actions are highly intertwined with this image. Brand image is a personal idea based on perceptual ability. It is an ability derived from a person’s perception of a product or brand. This is a result of familiarity with a brand and the ability to see the difference between the competitors. The perception of value can indicate the value of utility. Corporate image affects consumer decision-making and builds the competitiveness of community enterprises. Therefore, the image of a product should reflect its quality and the benefits the community receives from the organization at the same time.
4. Developing business competitiveness of community enterprises. Competition can arise with the support of the government and is divided into two approaches: reducing the burden of expenses by developing tax benefits, which is important for community enterprises because governmental community enterprise tax breaks help lower operating costs and increase profits; and developing operational potential by providing low-interest funding sources for community enterprises to invest in to enhance their operational capacity, such as investments in technology to solve problems of production delays and decreased quality standards. Therefore, the governmental funding source’s lending criteria should be established in accordance with the nature and context of the community enterprise, such as easing the ratio of the collateral value to the loan balance, to reduce the constraints on the operation of community enterprises.
6. Conclusion
From the study of factors confirming the purchase decision of community enterprise products, such information is an important issue for community enterprise entrepreneurs to develop a distribution through the purchasing decision of community enterprise products by First develop an image to make a difference between community enterprise entrepreneurs and general entrepreneurs, the image of community enterprise entrepreneurs affects consumer decision-making. Therefore, there should be an image of product quality together with the benefits that the community receives. Second the local wisdom, it is a local intellectual resource. It should be used in adjusting or blending old knowledge with new knowledge together appropriately. Third creating community participation, love, unity, marketing strategy and the sympathy of the people in the community can help in participation in the operation of community enterprises in the form of volunteers and donations to replace funds.
7. Acknowledgments
This paper and the research behind it would not have been possible without the exceptional support of community enterprise entrepreneurs and the research data providers who provide the data on The Factors of Product Purchase Decisions of Community Enterprises in Nakhon Si Thammarat, Thailand, Contract No. 006/2563. I would also like to show our gratitude to the Research and Development Institute of Nakhon Si Thammarat Rajabhat University for their comments on an earlier version of the manuscript. I would like to express my very great appreciation to Nakhon Si Thammarat Rajabhat University for granting this research fund. I would like to extent thanks to all the research team members. unnamed sponsors who have trained and educated me in academic knowledge, as well as thanks to all my friends who have helped and inspired me all the time.
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