TRƯỜNG ĐẠI HỌC MỞ TP.HCM

UNIVERSITÉ LIBRE DE BRUXELLES

HO CHI MINH CITY OPEN UNIVERSITY

SOLVAY BRUSSELS SCHOOL

MBMM4

Le Quang Vinh

Factors Influencing Consumers’ Behavior of Wine
In Ho Chi Minh City

MASTER PROJECT
MASTER IN BUSINESS & MARKETING MANAGEMENT

Tutor’s name: Dr. Ha Nam Khanh Giao

Ho Chi Minh City
(2010)


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DECLARATION
I declare that this study does not incorporate without acknowledgment any material
previously submitted for a degree or diploma in any university; and that to the best of
knowledge it does not contain any materials previously published or written by another
person except where due reference is made in the text.

would like to thank Solvay Business School Vietnam and Ho Chi Minh City Open
University for delivering the wonderful MBMM program.
Last, but not least, I wish to thank my family members for their love, assistance,
encouragement and patience.


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TUTOR’S COMMENTS
 The study is a highly practical research. The research objectives were defined
correctly. The structure of the study is rational.
 The author used the proper research method. The findings are quite interesting with
suitable scientific approach. In the result, the author pointed out that the symbolic
benefits are the most important factor influencing the consumers’ behavior of wine
in Ho Chi Minh City. Besides, the country of origin and grape varieties, which are
being used as wine value proposition, were proved to be not significant. Based on
this finding, the author also proposed some useful suggestions for marketers of
wine in the market.
 However, the study has some limitations, such as the survey area and sampling
method; or the generalised target population …
 In summary, the quality of the study meets the requirements (both content and
presentation) of a Marketing master thesis.
I propose this study to be presented in front of the examiner board of the Solvay – OU
Master of Business and Marketing Management Program.
Ho Chi Minh City, December 14th, 2010

Dr. Ha Nam Khanh Giao


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4.5.1. Questionnaire design...................................................................................... 25
4.5.2. Sampling method ........................................................................................... 25
4.5.3. Sample size .................................................................................................... 25
4.6. Chapter Summary.................................................................................................. 26
5. DATA ANALYSIS & FINDINDS ............................................................................. 27
5.1. Chapter Overview ................................................................................................. 27
5.2. General Descriptive Information........................................................................... 27
5.2.1. Research response rate ................................................................................... 27
5.2.2. Gender, Age and Income ............................................................................... 27
5.2.3. Favorite communication channels and wine consuming place ...................... 29
5.3. Factors Influencing of Wine Consumption ........................................................... 31


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5.3.1. EFA for all the valid scales ............................................................................ 33
5.3.2. Multiple regression analysis .......................................................................... 35
5.3.3. Discriminant analysis for conceptual framework 1 and hypotheses testing .. 38
5.3.4. Discriminant analysis for conceptual framework 2 and hypotheses testing .. 41
5.3.5. Evaluation of the relationship between the factors and Average bottle
consumed per month ................................................................................................... 42
5.3.6. Evaluation of the relationship between Communication channel and
Consuming place with Average bottle consumed per month...................................... 46
5.3.7. Classification of the responses of open question ........................................... 47
5.4. Findings ................................................................................................................. 48
5.5. Chapter Summary.................................................................................................. 49
6. RESEARCH CONCLUSIONS ................................................................................... 50
6.1. Chapter Overview ................................................................................................. 50
6.2. Research Summary................................................................................................ 50
6.3. Research Limitations & Future Research Suggestions ......................................... 51

Figure 5.8: Adjusted conceptual framework 2 ..................................................................... 37
Figure 5.9: Themes from open question .............................................................................. 47


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LIST OF TABLES
Table 4.1: Concept operationalization and measurement scales ......................................... 24
Table 5.1: EFA & Cronbach's Alpha for each concept / dimension .................................... 32
Table 5.2: EFA result - Full scales ...................................................................................... 34
Table 5.3: Multiple Regression result .................................................................................. 36
Table 5.4: Discriminant analysis result - Average bottle consumed per month .................. 40
Table 5.5: Discriminant analysis result - Average price per bottle ..................................... 42
Table 5.6: ANOVA result - Symbolic benefit factor ........................................................... 44
Table 5.7: ANOVA result - Enjoyment benefit factor......................................................... 45
Table 5.8: ANOVA result - Utilitarian & Experiential benefit factor ................................. 46
Table 5.9: Chi-Square result - Communication channel & Wine consuming place ............ 47


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1. EXECUTIVE SUMMARY
Vietnam wine market is growing fast. More and more wine producers, importers and
distributors enter the market and compete against each other to bring their products to the
consumers. Most of them focus on the product features (country of origin, grape varieties,
taste, bottle and label). This study was conducted to find out if there are other factors
affecting the consumers’ choice of wine in Ho Chi Minh City.
Firstly, a conceptual framework was built based on the Input, Process, Output consumer
behavior model, a qualitative research about perceptions of wine quality (Charters, 2003)
and Vietnamese drinking habits (Euromonitor, 2010). From the conceptual framework,

2.1. Chapter Overview
This chapter provides the project overview. It begins with the reason of this project,
followed by the general background information relating to the Vietnam wine market. The
key concepts of the research are also presented and, finally, this chapter concludes with the
outline of this study.

2.2. Rationale of the Project
Vin Attitude is a young and modern French wine producer in Côte du Rhone region,
France (www.vin-attitude.com). It represents 2,150 ha vineyard, 550 growers, more than
100,000 hl annually and a turnover exceeding 12 million €. The company is looking for a
long – term partnership who understands the local market and has a systematically
approach. Unlike other wine producers and brokers have been penetrating Vietnam market,
Vin Attitude is more willing to take risk for better controlling of marketing activities by
choosing a foreign based agent instead of an importer / distributor.
Solathien is a Vietnamese importer and distributor specialized in premium imported
Vodka. In order to exploit the existing distribution network and enrich the product
portfolio, Solathien seeks out a French wine producer who wants to enter Vietnam market.
After contacting with many companies, Solathien comes to agreement with Vin Attitude to
act as a foreign based agent in Vietnam market.
Both companies are the newcomers to a potential but also competitive market. In order to
have proper marketing strategy, the companies should have good understanding about the
consumer behavior of wine, especially in the key markets, e.g. Ho Chi Minh City and
Hanoi.
Because of the need of the companies, the project is implemented to study the consumer
selection of wine in Ho Chi Minh City. Based on the findings, recommendations will be
used form the marketing strategy of the company. The findings are also served as reference
for wine producers and importers who want to penetrate Vietnam market.

2.3. Vietnam Wine Market
In general consumption of wine in Vietnam, as well as in other Asian countries such as

protects the quality and flavor of the wine. Wine in glass bottles is sold in both on- and offtrade channels in Vietnam. Local wine can be stored in ceramic packaging, or in PET
bottles for home-made wine.
Vietnamese consumers prefer foreign wine. In the north of the country wine from Chile is
favored and is developing strongly. Wine from France has an advantage as it has been
available for a long time in Vietnam and is considered good quality. For domestic wine,
Dalat Red Wine leads, benefiting from the wide distribution. Dalat wine is different from
Hanoi wine and considered a superior offer for urban consumers. Hanoi wine and Thang
Long wine are consumed in the north. Thang Long wine accounts for around 40% of
demand in the northern region.
Regarding local products, Dalat wine is highly popular among consumers and saw a good
sales performance in 2008. Growth increases steadily and its products are present


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throughout the country and exported to Asian countries such as Japan, Korea, Malaysia
and Cambodia.
Local producers account for around 50 million liters of alcohol and sales are three times
greater than international producers’ in terms of volume. Local wine also competes
strongly with international wine thanks to its considerably lower price, as it is not subject
to import tax. However, Vietnam offers potential demand for wine, especially VIN wine,
but local VIN wine producers have to improve their product quality, service, and brand
image. In the near future local producers face tough competition with the large
international manufacturers and brands when import tax is decreased as a result of WTO
integration.
Regarding imported wine, there are hundreds of new brands launched every year in the
wine environment in Vietnam. Wine from New Zealand entered Hanoi in 2008. Wines
such as Merlot, Chardonnay, Pinot Noir and Sauvignon Blanc from New Zealand are
highly praised, and other famous varietals such as Riesling, Cabernet Sauvignon, Pinot,
Cabernet Franc, Malbec, Syrah, Chemin Blac and Gewürztraminer are also present in the

2.4. Aim of the Research
The Vietnamese consumers are facing many types of wine from local non-grape wine to
imported wine with very high price. These wines also vary in region of origin, packaging
and quality. Moreover, wine is quite a complicated product, and the perception of wine
quality of the consumer is much diversified.
So far the wine producers, importers and distributors don’t invest much in the marketing
and communication activities. Although wine is not banned from advertising, the
consumers rarely see the communication of wine in the TVC or press. The information
about the products is mostly presented on the website of the importers or distributors.
Though there are many wine fairs in Vietnam every year, the main target audiences of
these events are importers and distributors, not the end consumers.
So, there is neither much information nor research about how the Vietnamese consumers
select their wines. Therefore, this study will explore and evaluate a proper model for wine
consumption of Vietnamese people. Due to the limitation of time and resources, this
project will mainly focus on Ho Chi Minh City market, one of the largest markets of wine
in Vietnam. The findings drawing from this market can be applied for other regions in
South Vietnam.
There are two main objectives in this research:
 Define and measure the factors influencing the consumer behaviors of wine in Ho
Chi Minh City.
 Provide recommendations for host companies and other wine producers and
importers who want to penetrate the Vietnam market.
As per mentioned above, the research will explore and measure the factors influencing
consumer’s wine selection. There are two main stages of the research:
 Secondary research: study the consumer behavior theory and model; Vietnam
consumer demographic and lifestyles; wine marketing concepts and consuming
behavior to define the factors influencing the consumer behaviors.
 Primary research: conduct quantitative research to measure the relationship
between these factors and study the findings to infer the recommendations.
The research process can be described as following:



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2.5. Research Outline
Chapter Three of this study further lists and illustrates the previous research and literature
related to this study. Also, some relevant theories, key concepts and components of this
research and the development of the research problem will be addressed in this chapter.
After the literature review, Chapter Four will describe the research methods including the
research models, research design and research methods. Chapter Five outlines the results
and findings of this research. Finally, Chapter Six draws conclusions and summarizes the
findings of this research and provides recommendations for target audience and future
researches.


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3. LITERATURE REVIEW
3.1. Chapter Overview
The previous chapter has briefly discussed the general research background, the overview
of Vietnam wine market and the key research objectives. This chapter provides the
previous theories and research concerning the key concept. First, it begins with reviewing
different consumer behavior models and the process of consumer decision making. The
literature about wine drinking motivation is also presented. Finally, it ends with the
Vietnamese consumer lifestyle issues relating to alcoholic drinks and wines consumption.

3.2. Consumer Behavior Models
Consumer behavior includes all of the activities of buyers, ex-buyers and potential buyers
from pre-purchase deliberation to post-purchase evaluation, and from continued
consumption to discontinuance. It extends from the awareness of a want, through the


Howarth Sheth Model
Engel-Blackwell-Kollat Model
Nicosia Model

The Economic Model, Psychological Model and Sociological Model are quite simple. The
Economic Model assumes that consumers follow the principle of maximum utility based
on the law of diminishing marginal utility. The consumer wants to spend the minimum
amount for maximizing his gains.
On the other hand, The Psychological Model explains the causes which lead to purchases
and decision-making. This has been answered by A.H. Maslow in his hierarchy of needs.
The behavior of an individual at a particular time is determined by his strongest need at
that time. This also shows that needs have a priority. Firstly they satisfy the basic needs
and then go on for secondary needs.
The Sociological Model is concerned with the society. A consumer is a part of the society
and he may be a member of many groups in a society. His buying behavior is influenced
by these groups. Primary groups of family friends and close associates exert a lot of
influence on his buying.

Figure 3.1: A.H. Maslow’s hierarchy of needs
Sources: A.H. Maslow, 1970 (Motivation & Personality)
The Pavlovian Learning model, Howarth Sheth Model, Engel-Blackwell-Kollat Model,
Nicosia Model are more complicated. The Pavlovian Learning Model suggests that human
behaviors are based on some central concepts: the drives, stimuli, cues, responses and
reinforcements which determines human needs and need satisfying behavior. Individually,
a drive is a strong internal stimulus which compels action. Stimuli are inputs which are
capable of arousing drives or motives. Cues are signs or signals which act as a stimulus to
a particular drive. The way an individual reacts to the stimuli is known as his response. If
the response to a given stimulus is rewarding, it reinforces the possibility of similar
response when faced with the same stimulus or cue.

Input, Process, Output Model describes the consumer decision making process as three
distinct but interlocking stages: the input stage, the process stage and the output stage.
These stages are depicted in the simplified model of consumer behavior in Figure 8.


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Figure 3.5: Input, Process, Output Model
Source: L.G. Schiffman, L.L. Kanuk, 2004 (Consumer Behavior – Prentice Hall)


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The input stage influences the consumer’s recognition of a product need and consists of
two major sources of information: the firm’s marketing efforts (the product itself, its price,
where it is sold and its promotion) and the external socio-logical influences on the
consumer (family, friends, neighbors, other informal and noncommercial sources, social
class, and cultural and sub-cultural memberships). The cumulative impact of each firm’s
marketing efforts, the influence of family, friends, and neighbors, and society’s existing
code of behavior, are all inputs that are likely to affect what consumers purchase and how
they use what they buy.
The process stage of the model focuses on how consumers make decisions. The
psychological factors inherent in each individual (motivation, perception, learning,
personality, and attitudes) affect how the external inputs from the input stage influence the
consumer’s recognition of a need, pre-purchase search for information, and evaluation of
alternatives. The experience gained through evaluation of alternatives, in turn, affects the
consumer’s existing psychological attributes.
The output stage of the consumer decision-making model consists of two closely related
post-decision activities: purchase behavior and post-purchase evaluation. Purchase
behavior for a low-cost, nondurable product (e.g., a new shampoo) may be influenced by a

before buying the most cost-effective in the circumstances.
Two challenges to this unidimensional approach developed. The first, stemming from a
psychological perspective, came from the work of Dichter (1964), later developed by Levy
(1981; 1986) and then others. This approach focused on the symbolic meaning of
consumer goods and thus how we use products to convey messages about ourselves.
‘Symbolic consumption’ as a paradigm has produced substantial bodies of research into,
and explication of, consumption behavior. It has been suggested by Richins (1994) that the
symbolic use of consumption can be split by separating representations of interpersonal
ties (an outward directed focus) from identity and self-expression (an inner-directed focus).
In the early 1980s a second paradigm developed which contrasted utilitarian with
experiential and hedonic consumption (Hirschman & Holbrook, 1982; Holbrook &
Hirschman, 1982). This interpretation was developed in a series of research papers to show
that experiential processes (fun, amusement, sensory stimulation, excitement and
enjoyment) were closely linked to the consumer’s engagement with the product. It was also
suggested that sensory cues are likely to be non-verbal and affective rather than reducible
to words – a factor which is particularly relevant to wine consumption, where sensation
rather than language may frame the drinker’s engagement with the product (Solomon,
1990).
This triadic approach to consumption (utilitarian, symbolic and experiential) is regularly
used in consumer research at present. It has been noted that there are cultural differences in
the relative importance of the three purposes of consumption (Wong & Ahuvia, 1998), so
that, for instance, in Chinese societies the display of close family ties may be a more
important symbolic goal than in European cultures. Nevertheless, as a broad approach to
consumption it has both some validity and some acceptance, so that we can use these three
approaches – the utilitarian, symbolic and experiential – as a means of analyzing
consumption purpose. It is necessary to stress that no single act of consumption falls into
just one category, nor is a repeated act of consumption invariably given the same
motivational weighting at each repetition. Drinking a wine in solitude may focus much
more on the pure pleasure in the taste, whereas drinking in public may be primarily
concerned with conveying messages to other people (Groves et al., 2000).