Purchase Intention of Consumers: Instant Noodles

Chapter 1

Generalities of the study

Introduction of study

During the economic recession, consumers have to spend more economically and change their consumption behavior. Food which people around the world initially thinks of and enables people to save more is instant noodles which are very cheap and have diversified brands and flavors. Therefore, the instant noodle market can make a lot of money when compared with other consumption goods because consumers like to buy and store the instant noodles during the economic recession period.

Almost every family in Thailand always store and eats the instant noodles as a meal or emergency food. When people are hungry at night and they want to save money, the instant noodles are their first choice. The study of Nano Search Co., Ltd showed that, at present, consumers buy and eat the instant noodles with which they have been familiar or a long time. Thai people in all ages know the instant noodles in diversified brands and original and new flavors which meet consumers’ need.

Most students at Rajamangala University of Technology Thanyaburi (RMUTT) have domiciles in various provinces while some students’ houses are from the university. Therefore, they have to live in the dormitories outside and inside the university. As most students have no incomes, they have to save their expenditure on consumption. Therefore, the instant noodles are their first choice because there are several brands and original and new flavors of the instant noodles which meet consumers’ need. Therefore, the idea to learn about what events or factors affecting the consumption of instant noodles students.

Instant noodle is very famous in Thailand. It has variety of brand and target to many age ranges. Many children love to eat instant noodle especially not when they are not boiled. They eat it as snacks.

Instant noodles sold in ready-to-prepare packages area popular industrially processed food in Thailand. Six million packages are produced each day, 80% of which are made by only three companies. Most are consumed domestically, although they are also exported. In 1993instant noodle consumption in Thailand was 30 packs per capita [Anonymous. Reaching the masses. Asia Pacific Food Industry 1996;8:38-45.]. Over 90% of these instant noodles are of the deep-fried type, which are sometimes classified by academics as “junk food” due to their high salt, fat, and carbohydrate content and low-quality protein. Therefore, the label on the package suggests adding meat or egg and vegetables, which is the traditional mode of eating noodles in Thailand. However, because of inconvenience, this suggestion is seldom practiced by consumers. Both males and females aged 15 to 49 years from all socio-economic strata in Thailand consume instant noodles. The consumption of the products according to the country’s regions and zones is shown in table 1. Forty-one percent of the products are consumed in Bangkok, at the same percentages as in up-country rural areas.

TABLE 1. Regional and zonal percent distributions of instant noodles

Location

Percentage

Regions

Bangkok

41

Central

17

North

18

North-East

18

South

7

Zones

Bangkok

41

Rest of country

Urban

18

Rural

41

Source: Thai President Foods Public Company Limited, Bangkok,Thailand, 1996.

There are many brands present i.e. MAMA, WAI WAI, YUM YUM, and etc. The instant noodle war is very competitive. As the data on 21st June, 2010, the leader brand is MAMA of Thai President Food. It has market share 53 percent or around 5,000 Million Baht. Meanwhile WAI WAI- the market follower of Thai Preserved Food Factory takes only 25 percent [www.banmuang.co.th]. For MAMA cup, it has been grown by 50% when compare with the sales at the same period last year. That is the highest sales volume during last 20 years. The growth in market value leaped in significant level in last 6 years, as seen in below table.

Table 2: Market value of instant noodle

Year

Market Value (Million Baht)

Percentage

2005

9,500

2006

10,000

5.26%

2007

11,500

15.00%

2008

12,000

4.35%

2009

10,000

-16.67%

2010

10,300

3.00%

2. Statement of the research

Instant noodle is widely eaten all around Thailand. As we can see in news during recession period, we will see in the news keep telling about “Mama Index”. The index is the total consumption of instant noodle.

The report is interested in purchasing behavior of the students at Rajamangala University of Technology Thanyaburi. The research would like to study the relationship of purchasing. The research is conducted within RMUTT and data collection will be gathered from RMUTT student.

3. Research Objectives

Objective of this research are listed as below;

1. To study the reason for the purchase of instant noodles students.

2. To study the advertising is to attract the consumption of instant noodles students.

3. To study the satisfaction of the students in the appropriate price and quality.

4. To study the satisfaction and popularity of the student with flavor of instant noodles.

4. Scope of the Research

We will study about instant noodles consumption behavior of Rajamangala University of Technology Thanyaburi Students by making selected representative sample of 100 people resided in dormitories of internal and external university to take Questionnaires on various topics related to the purchase of instant noodles such as the reason for the purchase, advertising of instant noodle, appropriate price and quality and flavor of student satisfaction. We will collect data to analyze the behavior of students instant noodle consumption.

5. Limitations of the Research

Problem of data errors may have findings that do not match reality because the university has students many which representative samples are less than 10% of all students. Researcher still has limitations in terms of research and duration of storage could not increase the number of representative samples.

6. Significance of the Study

Significance of the study about instant noodles consumption behavior of Rajamangala University of Technology Thanyaburi Students. To know what the factors affecting consumption of students and students have any opinion about the instant noodles today. To manufacturers and distributors preliminary results of this study can be used as guidelines for improvement of instant noodles better and for this research will enable students consume Instant noodles even more desirable. Provided the problem and make suggestions, manufacturer and distributor of lead analysis and action.

7. Definition of Terms

1. Instant noodles means:

Product line which consisting of noodles or cooked and partially cooked. Garniture different flavor. Oil and seasoning in the appropriate ratio. Packed in small envelopes. Total containers and packaging in the same Cook without eating more than five minutes.

2. Economic recession means:

Lower economic growth sluggish start trading conditions. Sellers are less Operators to reduce production losses due. Consequences are the termination of employment.

3. Changing consumer behavior means:

That the expression of individuals directly related to the use of products and economic waiter. Process, including decisions affecting expression.

Chapter 2 Literature review and previous studies

2.1Definition and Features of the Independent Variables

For the literatures reviews and related studies part, there are 3 major sections as the following:

Health Awareness

Health becomes a hot issue for today’s talk. There are many reports and news that related to health care. People are concern to health more than past. As we can see from the product which has sold in the market, they are presented as organic product, non-chemical products and many things those were labeled as chemical-free. There are some supermarkets that has organic corner. Moreover a corner in the supermarket, there are supermarkets those sell only organic food- Whole Food grocery shop. Whole food has dedicate all the store are to organic because there are many customer that want to use organic product as we can see from the sales revenue. The revenue of Whole food has climbed up every year. It has increased by 70% in past 4 year (Fiscal Year 2005 – 2009, source www.wholefood.com). It means there are many people interested in health more and more. Furthermore this trend is still increasing.

Price

The study found that instant noodles are a low cost of production is sold on the cheap, but in terms of food quality noodles are semi-successful low nutritional value, if too many consumers will negatively impact the body. Student RMUTT take into account the price and quality rather than quantity of food.

Convenience

Convenience is easy to buy and easy to eat. Instant noodle has convenience as its point of sales. Convenience also means easy to buy.

Income

Income is money which is paid to the student. It means money that has paid by their parents, by employer of their part time jobs and other ways.

2.2 Theories Related to the Independent Variable(s)

2.2.1 Health awareness

Food safety is an important issue that has shown a thoughtful effect on the consumer’s behavior in the food industry. Also the growing awareness about health & wellness play an important role in influencing the consumers demand for healthy food products. People are concern to health more and more every day. Junk food is suggested not to take too much especially taking balance dietary. Also many organizations promote health awareness to the public. Regular breakfast eating, physical activity and regular sleep patterns were associated with good Quality of life among early adolescents [Chen, 2005]. Unhealthy sleep habits are increasing and related to several other behavioral and emotional problems among children [Lui et al, 2002]. In addition, although protein-energy malnutrition in Thailand has lessened in severity over the past 10 years, deficiencies of certain micronutrients, such as iodine, irons, and vitamin A, are still significant. Among the many control and prevention strategies that have been implemented, fortification of industrially processed foods is now emerging as potentially important, since a growing reliance on such foods by the Thai people has arisen due to the country’s rapidly expanding industrialized and cash-based market economy. One such food is the instant noodle, which is acceptable, available, and affordable in Thailand. Woman with high age, high education has positive effect on consumer likelihood to concern on health [Wied, 2006].

2.2.2 Price

First, the noodles manufacturing is facing fierce competition domestically because of rapid development of alternative food. The instant noodle market is reaching maturity status, slowing growth. That is to say, operators have to develop new products to spur buying sentiment. To avoid competition, operators should build a sound brand image and reinforce marketing strategies and brands to increase sales. A large degree of overlap in noodle products should exhort firms to improve their abilities to control costs in order to ensure profits. Moreover, operators should also rely on joint purchases to deal with soaring prices of raw materials. First-tier firms may rely on parent companies’ resources, while small and medium enterprises on joint-purchases to lower costs. Next the cost of a 55-g package of instant noodles is only 3.50 to 4.00 baht (US$0.14-0.16), whereas one serving of Thai fast food costs at least 10-15 baht (US$ 0.50-0.60). This price increased in October 1996 after remaining at about 3.00 baht (US$0.12) for almost 16 years. The price was previously fixed because of high market competition. Instant noodles are a low-profit-margin product, but they can be distributed to consumers all over the country. While The attitude distribution survey found that the target customers of instant rice noodle product had attitude types mainly belongs to Reformer and Mainstreamer class. These types of attitude classes had a significant correlation to the product characteristics of sensory quality, added nutrition, convenience and price. Such information could be used for product communication. Moreover in Thailand, the cost of a 55-g package is about 5 baht, whereas one serving of Thai fast food costs at least 20 – 25 baht. Instant noodles are therefore an affordable dish for people of all socioeconomic levels. And In the United States, the cost of a volumetric feeder varies widely between US$ 5,000 and 7,000, while that of a ribbon or paddle Blender/mixer varies between US$ 9,000 and 15,000. This equipment, however, may be available locally at lower prices. Next to Instant food become more and more necessity in fast pace ages. Instant noodle and rice etc. are featured as the merits of low price and convenience but the demerits of high-calorie and nutrition shortage. In China, the major consumers of instant noodle can be divided into two categories: one is travelers and the other is single youths, such as university students and so on. In China, the price of instant noodle packed with bag is below two Yuan (0.29 USD) and the price of instant noodle packed with bowl is less than four Yuan (0.58 USD). However, the average price of a buffet is more than eight Yuan (1.14 USD) in the big cities in China. In 2008, the sales volumes of Chinese instant noodle, rice and vermicelli were over 5.5 million tons valued at least 6 billion USD, in which instant noodle accounted for about 95% market share of sales volumes and 90% market share of sales revenues. However The prices of instant noodles have scale up with the increase in the prices of basic material including the main basic material – wheat flour. Now the prices of instant noodle have risen to more than Rp 1,000 per 60-68 gram pack. As the latent demand for instant noodles in India is not actual or historic sale nor is a latent demand future sale. In fact, latent demand can be either lower or higher than actual sales if a market is inefficient (i.e., not representative of relatively competitive levels). Inefficiencies arise from a number of factors, including the lack of international openness, cultural barriers to consumption, regulations, and cartel-like behavior on the part of firms. In general, however, latent demand is typically larger than actual sales in a market. Finally, the domestic players hold the advantages of lower cost of production and distribution, competitive retail prices, local knowledge and network, but they are relatively weak in taste, variety, advertising and packaging.

2.2.3 Convenience

There are many reasons that people eating. Hungry is the basic reason but there are many others. For example want to eat, convenience, follow the colleague. However the reason for eating instant noodle may be a bit different. Nano research found that the behavior of consumers of instant noodles is “I think eating” 22.8 percent followed by “hungry” and 16.3 percent, “to save money” and 15.6 percent from the behavior of buying instant noodles with various sizes that the inquiry found. As we know that instant noodle is semi-cooked food. One of its sales points is convenience. It aims to be convenience food- ready to cook and ready to eat. Major cooking methods for instant noodle are as below.

Tear the package

Put the noodle into a bowl

Tear all ingredient which contain in the package

Pour hot water into the bowl

Close the lid

Wait for instant noodle for 3 minutes

Enjoy the instant noodle

The waiting time is 3 minutes, the waiting time is faster than cooking or buying the food. Convenience also means easy to buy. Instant noodle can be found in every grocery shop. Not only in papa-mama shop to super hyper store.

2.2.4 Income

Instant noodle in Thailand has known as low price food. It has indicated the economic in Thailand. The index is very famous. It is called “MAMA Index”. This index always converted with economy status. When the index has risen, Thai economic is nearly falling down. Low income people who have money shortage will increase buying instant noodle.

2.3 Critical Analysis/Discussion of the Theories Related to the Dependent Variables

Kent Wolfe, Marketing Analyst, the University of Georgia stated that “purchase decision” occurs when the consumer actually makes the purchase. It includes the product, method of payment, package, location of purchase and all other factors that are associated with purchasing the product.

2.4 Discussion of the Dependent Variables

This step is directly influenced by marketers. If the marketing campaign was effective, consumers purchase the product. Marketers have an impact on this portion of the process by their interaction with consumers. Advertising directly impacts the purchase decision by stimulating consumers’ awareness of a need, providing relevant product information and helping them evaluate the product and derive that this is their best purchase option.

2.5 Relationship of the independent variable to the Dependent variable.

Research indicate that consumers will step behavior of instant noodles are consumed.

When student demand to eat instant noodles

Student will demand to buy noodles semi

Finished form and the purchasing behavior

Student to compare the suitability of the price

And some student will consider the nutritional value

And these factors will result in Instant noodle consumption Behavior

of RMUTT Students

2.6 Previous Studies

Nano Search company, study about the behavior of instant noodles were consumed.

The sample is 48.0 percent male and 52.0 percent female, age range can be classified into 3 age range is 18-25 years old accounted for 63.0 percent age 26-35 years accounted for 34.5 percent and over 35. in percentage 2.5 respectively of the sample income not exceeding 10,000 baht per cent 36.0 Income 10,001 – 15,000 baht per cent 28.5 and more than 15,000 percent 35.5 for education degree Most degree 93.0 percent respectively, followed. Education Secondary School. / Secondary and Vocational / associate professionals, respectively, private companies and 64.0 per cent to group students accounted for 17.5 percent. The study of the behavior of consumers of instant noodles that In the reasons for eating instant noodles found a reason to eat it. “I think eating” 22.8 percent respectively, followed by “hungry” and 16.3 percent, to save money “and 15.6 percent from the behavior of buying instant noodles with various size that the inquiry found. Consumers have to buy popular instant noodle. Pack a small 46.0 percent and buy a big bag. 24.0 percent and buy a pack (envelope) of 24.0 per cent share at the same place to buy instant noodles at a regular place to buy it. Revealed that location was purchased by the majority is convenience store, such as 7-11 as 54.0 percent respectively, followed. Department store retail / wholesale (District Council’s Department Store) as Lotus, Big C, , etc. representing 14.5 percent of the retail and online stores. Percentage 13.5, respectively, for the cost of buying instant noodles per month, it was found that the cost to purchase per month, approximately up to 50 per month, per cent 46.0 and more than 100 Baht percent per month. And from 31.0 to inquire about purchasing behavior of consumers of instant noodles that With the behavior. “Buy the original brand new taste, but” each time a purchase. Percent. 53.0 respectively, followed. The behavior of purchasing brand new But taste is taste the same. Percent. 20.0 and for the need to have instant noodles at home always on them. Consumers see that Necessary to have instant noodles on the house always 68.0 percent and 32.0 percent, only to see that not only have to have instant noodles in the house on the important factors in decisions to buy instant noodles, it was found that the main factor. “The good taste / smell / taste 24.9 percent respectively, followed. The advertising media. 10.3 per cent and can be purchased easily Available online.6.9 percent and the appropriate subject of inquiry in terms of quality and price to buy instant noodle. Found that most consumers agree on the appropriate price and quality of the noodle-half years at Sam Century Direct sales in general and the reason for that. “Affordable quality” that consumers “price was good / not expensive” and 58.1 percent “full power good” 12.9 percent.

3.2 Conceptual Framework

Gender

Health Awareness

Intent to purchase instant noodle of RMUTT

student

Price

Convenience

Income of the student

3.3 Research Hypothesis

Ho1- There is no relationship between intentions to purchase instant noodle of RMUTT Students toward gender.

Ha1- There is relationship between intentions to purchase instant noodle of RMUTT Students toward gender.

Ho2- There is no relationship between intentions to purchase instant noodle of RMUTT Students toward price.

Ha2- There is relationship between intentions to purchase instant noodle of RMUTT Students toward price.

Ho3- There is no relationship between intentions to purchase instant noodle of RMUTT Students toward convenience.

Ha3- There is relationship between intentions to purchase instant noodle of RMUTT Students toward convenience.

Ho4- There is no relationship between intentions to purchase instant noodle of RMUTT Students toward income.

Ha4- There is relationship between intentions to purchase instant noodle of RMUTT Students toward income.

Ho5- There is no relationship between intentions to purchase instant noodle of RMUTT Students toward health awareness.

Ha5- There is relationship between intentions to purchase instant noodle of RMUTT Students toward health awareness.

3.4 Operationalization of the Independent and Dependent Variables

Dependent variable

Nominal Definition

Operational Definition

Level of Measurement

Purchasing Decision

Action occurred when the consumer actually makes the purchase.

Consumers decide to buy CP ready meal product.

Interval Scale

Dimensions (X)

(Conceptual Definition)

(Operation Definition)

Level of Measurement

Health Awareness

Being aware of how your body looks and feels and what is normal for you and to notice any changes.

Scoring on consumers health awareness by using questionnaire to be evaluated by Likert Scale

Interval Scale

Price

Price of instant food

Price is low

Ordinal Scale

Convenience

Easy to buy and easy eat

Product can be found easily

Interval Scale

Product can be eaten easily

Interval Scale

Income

Money received, especially on a regular basis, for work or through investments

Divide into two group

1) Less than 6,000

2) More than 6,000

Ordinal Scale