Factors Affect To Consumer Behavior Towards Ready-To-Eat Food Products

(www.c10mt.com) Unlike olden days where man used to have his food lavishly and slowly, the present trend changed the habits of foods, which are simple and easy to digest. Hence, the existence of these foods fulfilled all the needs of modern human being. Canned foods, convenience foods, fast foods, frozen foods, instant products, dried foods, preserved foods, etc. all comes under ready-to-eat foods. The food habits in Vietnam have changed due to the Western influence and the usage of these foods is also on the rise. Factors Affect To Consumer Behavior Towards Ready-To-Eat Food Products In Viet Nam.

In Vietnam, majority of food consumption is still at home. Nevertheless, out of home food consumption is increasing due to increase in urbanization, breaking up of the traditional joint family system, desire for quality, time which translates into an increased need for convenience, increasing number of working women, rise in per capita income, changing lifestyles and increasing level of affluence in the middle income group had brought about changes in food habits. Recently, the share of urban population has increased from 32.45 per cent in 2012 to 33.47 per cent in 2013. During the same period, the female work participation rate had increased from 72.4 in 2012 to 73.5 per cent in the third quarter of 2013. The per capita income increased from 1,540 USD/person/year in 2012 to 1960 USD/person/year in 2013

Generally, food is prepared depending on the habits, tastes, social status, economic factor, availability, traditions, habitats, etc., of the people of that region. The most sought after in the present age are the ready- to- eat foods. Ready-to-eat food is food offered or exposed for sale without additional cooking or preparation, which is packaged on the premises where they are being sold and are ready for consumption.

With the income level rising, demand for milk, meat, fish, fruits and vegetables is also increasing in Vietnam. With more urbanization, Vietnamese families also consume more processed foods, more ready-to-eat foods, etc. This creates a scope for the producers to come out with a long range of dishes including the usual meals. Vietnam had been at the forefront for variety of dishes both in domestic and global market. Ready-to-eat foods are very popular in the western region of the world. Even Vietnam is being influenced by these ready-to eat foods.

There are some main reasons for popularity of ready-to-eat food products, including:

- Emergence of industrial society: Development of the large cities due to increase in population, emergence of industries, evolution of various new factors, time factor, etc., created the need for ready-to-eat foods in the market.

- Reduced domestic servants: Due to industrialization, the labor category is getting attracted to it because of better emoluments and hence there is shortage of home maid- servants. Due to this, the housewives, in order to save time started using ready-to-eat foods.

- Womenfolk taking to job: As the literacy rate is increasing among the women, a large number of them in our country are taking up jobs to set up their own status in the society and to use the extra income generated. These are creating the need for ready-to-eat foods.

- Emergence of nuclear families: Earlier times, a single family consisted of many people i.e., a group of several nuclear families were living in a single place. Hence, larger quantities of the food were used to be prepared. But as these joint families started disappearing due to various reasons, each single family started using these ready-to-eat foods in order to save time and energy.

- Prices of raw materials: This forms one of the major factors for the use of ready-to-eat foods in the present world. Because the prices of some of the raw materials are continuously increasing, the purchases of these foods formed more economical.

- New products: Because there are different new products coming up in the markets daily that are very cheap and easy for using and preparing, the popularity of ready-to-eat foods is increasing.

- Drudgery of work: To award the heavy laborious works like grinding manually and other drudging works, people choose ready-to-eat foods, which are easy to prepare and eat.

- Convenience: Ready-to-eat foods are convenient to prepare and are economical. This increased its usage by the people as it saves the time, energy and money.

- Increasing income: Due to establishment of multi-national companies in Vietnam, the lady of the house also started working, because of which there is no time to prepare food at home. Hence, this created the need for using ready-to-eat foods.

- Standard of living: The standard of living is also changing due to raise in income level, influence of western countries, more global trade, traveling, etc.; hence, people are changing their taste to ready-to-eat foods more compared to the old traditionally prepared foods.

- Media: In the modern era, the media, particularly electronic and print media, are playing an important role in creating awareness of the products manufactured and released in the market.

All these factors are responsible for the popularity of ready-to-eat food products in the market. Therefore, in Vietnam, more and more international and domestic companies invest in food processing industry, especially ready-to-eat food products. The potential for investment in this sector is further accentuated by the following factors:

A huge and exponentially growing demand represented by a market of 92,477,857 people in 2013 spending on an average about 50 per cent of household expenditures on food coupled by a scenario of rapid urbanization and changing lifestyles.
A 8 million (in 2012) upper and middle class segment of the total population consume processed and packaged food with another 40 million people, projected to shift to this group by 2020. Thanks largely to rapid urbanization and changing lifestyles.
Continuously increase in per capita income from $700 in 2005 to $1749 in 2012 and consumption per capita this year is estimated at 5.8 million/year (equivalent to 316 USD/year).
The change in food habits and increase in the consumption of processed food. From now to 2016, this will increase by 5.1%/year, estimated at 29.5 billion dollars (Source: Figures from Ministry of Industry and Trade).
Well-developed infrastructure and distribution network. Large pool of scientific, technical and skilled manpower.
Introduction of series of investment friendly initiatives by the government including strengthening and augmenting of road and rail network, modernization of ports, prioritization of infrastructure for postharvest management, logistics (including cold chain), markets, retailing, food processing.
Introduction of a number of liberal policy initiatives by the government to boost food processing activities.
Many food parks approved to enable small and medium food and beverage units to set up and to use capital intensive common facilities such as cold storage, warehouse, quality control labs, effluent treatment plant, etc.

After more than 20 years of construction and renovation, the processed food industry in Vietnam has been gradually meeting many essential products to the market economy, serving domestic demand, reducing import and increasing export. Currently, the food processing industry in Vietnam reached 20% gross domestic product.

Under the perspective of profitability, according to the statistics report of Vietnam in V1000 list (1000 businesses pay the highest tax in Vietnam in 2013), food-beverages processing industry attached to top 5 and its ROE and ROA is the second highest in the industry sectors. Realizing the potential and in order to provide further boost, the government has some incentive policies for food processing companies. If they have planned to change new technology, they will be able to loan with credit priority policies and grant land priority policies to treat environment.

The processed food industry should introduce innovative new products of high quality at low cost in small package sizes in ready-to-eat format. To cash on this booming opportunity, smart players have to enter the growing market with a high potential of retail Foreign Direct.

Investment (FDI). In addition, the marketers should see to it that the ready-to-eat food is available to the consumers without any difficulty at competitive rates. The products should be provided to consumers by keeping in mind as when they want, where they want and the manner in which they want. These methods help in increasing the sales of the product with good feedback from the customers and creating niche for ready-to-eat foods in the market.

The consumers purchase a variety of goods and services to satisfy their needs and they are always influenced in their purchasing decision by many factors. Therefore, consumer buying is more complex. Consumer purchases are likely to be influenced by physiological, psychological and sociological factors. The commodities and services are brought by the consumer to satisfy his basic needs, for comfort, pleasure, recreation and happiness. Every individual has physiological need such as hunger, shelter, thirst, etc ..., which have to be satisfied for survival. The psychological factors like status prestige and social factors like friends, neighbors, job and relatives influence their purchasing activities.

Before the selection of a particular commodity, an individual requires information regarding the various sources of supply of the commodity, its brands, relative merits and demerits, uses and value of their characteristic features and services offered. The common sources through which individual gathers information are from advertising media (television, radio and newspapers), friends, retailers in the locality, displays in shops and food labels.

Like this, there are many factors which affect to consumer behavior towards ready-to-eat food products in Vietnam such as level of income, age, level of education, etc. However, one of the factors that should be considered seriously is the culture differences, especially individualism-collectivism because culture is a significant factor in influencing the consumer behavior (Subramanian and Bala, 2001).

According to Hofstede’s cultural dimensions, individualism-collectivism describes the relationship between an individual and his or her fellow individuals in society. High individualism societies allow a large degree of freedom and display loose integration. High collectivism societies (low individualism societies) show tight integration. The IDV indicator (individualism) of Vietnam is just 20, so Vietnam has collectivism society

In fact, the cultural variable is difficult to isolate and operate. Especially nowadays, with the increasingly globalized economy, and increasingly blending culture, ready-to-eat food processing companies should pay even more attention to analyzing the cultural environment, identifying the differences between values, and also establishing the strategy of branding accordingly.

Previous Studies

In recent years, some researchers have studied the subject of fast food in Vietnam. For example, with the research “Fast food and consumer behavior: a focus on Lotteria and KFC” (Tran Thi Thuy, 2010), the author presented research of how KFC, Lotteria and Jollibie carry out their strategies to attract Vietnamese consumers. Besides, she has proposed some solutions to help businesses fast-food foreign brands in Vietnam can be changed to attract more consumers in the future such as improving quality of products and services or advertising, event, sponsorship target to youth.

In the research “Influences of personality, psychology factors and marketing mix on the consumption of foreign fast-food brands in Ha Noi, Vietnam” (Nguyen Thi Thanh Huyen, 2008), the author has built up the theoretical framework of the relationship of each pair of factors influence consumers Vietnam’s decision to buy the product foreign brand fast food with 3 variables of "personal factors" 5 variables of "psychological factors" and 4 variables in the "marketing mix". This helps businesses in particular fast food business and food industry in general has a long competitive strategy long.

However, their studies just research about fast food is a part of “ready-to-eat-food” products. They did not mention cultural factors in influencing the consumer behavior. Besides, the previous studies did not really emphasize the relationship between brand awareness, brand preference and brand loyalty and their effects on consumer behavior. In the study “Factors affect to consumer behavior towards ready-to-eat food products in Vietnam”, this limitation will be fixed.

Research Problem

In the modern days, where the life is at fast pace with the time very valuable to every person, “Ready-to-Eat Foods” play an important role in everyone's day-to-day life. The term “ready-to-eat-food” means simple, fast and convenient food, which is easy and fast to prepare besides being hygienic, free from microbial contamination and also convenient to eat.

Several firms had been engaging in production and marketing of ready-to-eat food products. Hence, the consumers had a greater option to choose from. In this context, a study on consumer behavior was seemed to be important to understand the buying behavior and preferences of different consumers, especially when consumer’s taste and preference were found to change rapidly, especially in a dynamic environment. Understanding the factors which affect to consumer behavior would help the firms in formulating strategies to cater for the needs of the consumer and thereby increase their market share. Among the factors affecting to buying behavior of the individual, cultural differences are very important factors, especially individualism-collectivism aspect.

Keeping in view the importance of consumer behavior and consumption pattern, this study will focus on how the individualism-collectivism in culture dimensions and other factors affect to the consumer behavior towards ready-to-eat food products in Vietnam?

Research Objectives

The specific objectives of the study are:

1. To analyze factors, especially individualism-collectivism of culture differences, influencing the buying behavior of ready-to-eat food products.

2. To study the extent of consumer awareness towards branded ready-to-eat food products.

3. To evaluate brand preference and study the factors influencing brand preference.

4. To analyze brand loyalty of consumers for ready-to-eat food products.

5. To evaluate alternative purchase plans of the consumers.

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