Factors affecting the purchase decision of Vietnamese young customers to cosmetic products, 2022

MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OF

VIETNAM

BANKING UNIVERSITY OF HO CHI MINH CITY

NGUYEN NGOC THUY TIEN

FACTORS AFFECTING THE PURCHASE DECISION

OF VIETNAMESE YOUNG CUSTOMERS TO

COSMETIC PRODUCTS

GRADUATE THESIS

MAJOR: BUSINESS ADMINISTRATION

CODE: 7340101

HO CHI MINH CITY, 2022

MINISTRY OF EDUCATION AND TRAINING THE STATE BANK OF

VIETNAM

BANKING UNIVERSITY OF HO CHI MINH CITY

NGUYEN NGOC THUY TIEN

FACTORS AFFECTING THE PURCHASE DECISION

OF VIETNAMESE YOUNG CUSTOMERS TO

COSMETIC PRODUCTS

GRADUATE THESIS

MAJOR: BUSINESS ADMINISTRATION

CODE: 7340101

SUPERVISOR

DR. TRAN NGOC THIEN THY

HO CHI MINH CITY, 2022

i

ABSTRACT

This thesis aims to explore the factors influencing the purchase decision of

Vietnamese young customers. This study is based on a literature review on customer

behavior, purchase decision and previous studies. This study conducts quantitative

research methods. In the quantitative research, the author collects survey

questionnaire data from 300 Vietnamese young customers who range from 16 to 34

years old.

Based on the research results, the author shows that five factors influence

cosmetic the purchase decision of Vietnamese young customers: price, product

characteristics, brand, promotion, reference group. Meanwhile, the brand factor has

the most decisive influence on the cosmetic purchase decision, the product

characteristics factor has the weakest impact. From the study results, several

governance implications have been proposed to improve and enhance efficiently and

effectively in cosmetic sales for cosmetic companies.

Keywords: Cosmetic, influencing factors, purchase decision, young customer

ii

AUTHOR’S DECLARATION

I hereby declare that the thesis “Factors affecting the purchase decision of

Vietnamese young customers to cosmetic products” is the result of my research

conducted over 10 weeks. Except for references from previous research works as

stated in the thesis, the survey data and the results of the thesis are completely honest

and have not yet been published in any research work before.

Ho Chi Minh, May 2022

Nguyen Ngoc Thuy Tien

iii

ACKNOWLEDGEMENT

First and foremost, I would like to express my whole-hearted gratitude to my

supervisor, Dr. Tran Ngoc Thien Thy. Thanks to her teaching in transmitting a

myriad of important knowledge, and good recommendations in line with her patience

and devotion, I could able to complete a well-rounded my bachelor's thesis. During

conducting my thesis process, I received a bunch of meaningful teaching and

inspiration from my respected lecturer.

Furthermore, I am grateful to all the professors and lecturers from the Banking

University of Ho Chi Minh City who educate me with vital comprehensive

knowledge and essential skills throughout my syllabus at university.

Last but not least, I also want to thank the examiners for your pivotal time and

consideration to review my graduation thesis.

iv

TABLE OF CONTENT

ABSTRACT.............................................................................................................................i

AUTHOR’S DECLARATION..............................................................................................ii

ACKNOWLEDGEMENT................................................................................................... iii

TABLE OF CONTENT........................................................................................................iv

LIST OF ABBREVIATIONS............................................................................................ viii

TABLE LIST.........................................................................................................................ix

FIGURE LIST........................................................................................................................x

CHAPTER 1: OVERVIEW OF THE RESEARCH...........................................................1

1.1 The necessity of the research ............................................................................1

1.2 Research objective .............................................................................................2

1.3 Research question ..............................................................................................3

1.4 Subjects of the research and scopes of study ..................................................3

1.5 Research Methodology ......................................................................................3

1.6 Research Significance........................................................................................4

1.6.1 Academic Significance..................................................................................4

1.6.2 Practical Significance ....................................................................................4

1.7 Thesis structure..................................................................................................4

SUMMARY CHAPTER 1.....................................................................................................5

CHAPTER 2: LITERATURE REVIEW.............................................................................6

2.1 The basics of concept.........................................................................................6

2.1.1 The concept of purchase decision .................................................................6

2.1.2 Overview of the cosmetic market in Vietnam...............................................6

2.1.2.1 The concept of cosmetic.............................................................................6

2.1.2.2 The cosmetic market in Vietnam ...............................................................8

v

2.2 Previous empirical studies ..............................................................................10

2.3 The evaluation of previous related studies....................................................19

2.4 The Hypothesis and conceptual model ..........................................................22

2.4.1 Hypothesis...................................................................................................22

2.4.1.1 Relationship between price and purchase decision to cosmetic products 22

2.4.1.2 Relationship between brand and purchase decision to cosmetic products

..............................................................................................................................23

2.4.1.3 Relationship between product characteristics and purchase decision to

cosmetic products.................................................................................................24

2.4.1.4 Relationship between promotion and purchase decision to cosmetic

products ................................................................................................................25

2.4.1.5 Relationship between the reference group and purchase decision to

cosmetic products.................................................................................................27

2.4.2 Conceptual model........................................................................................28

SUMMARY CHAPTER 2...................................................................................................29

CHAPTER 3: RESEARCH METHODOLOGY ..............................................................30

3.1 Process of research ..........................................................................................30

3.2 Research steps..................................................................................................30

3.3 Research Methodology ....................................................................................33

3.3.1 Methodology of theoretical research...........................................................33

3.3.2 Practical research method............................................................................33

3.4 Research design................................................................................................34

3.4.1 Sample size..................................................................................................34

3.4.2 Sampling method.........................................................................................35

3.4.3 Building the scale ........................................................................................35

3.4.4 Questionnaire design ...................................................................................37

3.4.5 Data collection.............................................................................................37

3.5 Data processing method ..................................................................................38

3.5.1 Descriptive statistic .....................................................................................38

3.5.2 Cronbach’s Alpha analyzing .......................................................................38

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3.5.3 EFA Analysing ............................................................................................39

3.5.4 Regression analysis .....................................................................................39

SUMMARY CHAPTER 3...................................................................................................40

CHAPTER 4: THE RESEARCH RESULT......................................................................41

4.1 Sample Description..........................................................................................41

4.2 Scale Reliability Testing ..................................................................................43

4.3 Exploratory Factor Analysis...........................................................................46

4.3.1 Factor analysis for the independent variable...............................................46

4.3.2 Factor analysis for the dependent variable..................................................49

4.4 Correlation Analysis........................................................................................51

4.5 Regression Analysis.........................................................................................52

4.5.1 Testing the Fit of a Regression Model ........................................................52

4.5.2 Regression analysis results..........................................................................53

4.5.3 Testing Multicollinearity.............................................................................55

4.5.4 Testing the Normality of Residuals.............................................................55

4.5.5 Testing the constant residual variance ........................................................56

4.6 Result discussion ..............................................................................................58

SUMMARY CHAPTER 4...................................................................................................60

CHAPTER 5: CONCLUSION............................................................................................62

5.1 Conclusion ........................................................................................................62

5.2 Theoretical contribution .................................................................................62

5.3 Practical implication and suggestion .............................................................63

5.3.1 Price factor ..................................................................................................64

5.3.2 Product characteristics factor ......................................................................64

5.3.3 Brand factor.................................................................................................65

5.3.4 Promotion factor..........................................................................................66

5.3.5 Reference group factor................................................................................66

5.4 Limitations and future research.....................................................................67

vii

REFERENCES.....................................................................................................................69

APPENDIX ...........................................................................................................................76

APPENDIX 1: QUESTIONAIRE DESIGN........................................................76

APPENDIX 2: DATA ANALYSIS RESULT......................................................80