INTERNATIONAL UNIVERSITY SOCIALIST REPUBLIC OF VIETNAM
SCHOOL OF BUSINESS Independence - Freedom - Happiness
ASSURANCE QUALIFIED THESIS
Students Name: Nguyen Thanh Trung Hieu Student ID: MBA05010 Title of Thesis: EXPLORING THE FACTORS AFFECTING PURCHASE INTENTION OF SMARTPHONE: A STUDY OF OFFICE WORKERS IN HOCHIMINH CITY, VIETNAM
Advisor:
I assure that the content of this thesis has been qualified all requirements for a research paper and able to participate in the final thesis defense.
Approved by
Dr. Pham Hong Hoa
EXPLORING THE FACTORS AFFECTING PURCHASE INTENTION OF SMARTPHONE: A STUDY OF OFFICE WORKERS IN HOCHIMINH CITY, VIETNAM
In Partial Fulfillment of the Requirements of the Degree of
MASTER OF BUSINESS ADMINISTRATION In International Business
By Mr. Nguyen Thanh Trung Hieu ID: MBA05010 International University - Vietnam National University HCMC September 2014
EXPLORING THE FACTORS AFFECTING PURCHASE INTENTION OF SMARTPHONE: A STUDY OF OFFICE WORKERS IN HOCHIMINH CITY, VIETNAM In Partial Fulfillment of the Requirements of the Degree of MASTER OF BUSINESS ADMINISTRATION In International Business by Mr. Nguyen Thanh Trung Hieu ID: MBA05010 International University - Vietnam National University HCMC September 2014 Under the guidance and approval of the committee, and approved by all its members, this thesis has been accepted in partial fulfillment of the requirements for the degree. Approved:
Advisor: Dr. Pham Hong Hoa ---------------------------------------------- --------------------------------------------- Committee member
Committee member
---------------------------------------------- --------------------------------------------- Committee member Committee member
Acknowledge This study would not have been completed without the kind guidance and the support of my supervisor, my family and friends. First of all, I would like to express my profound gratitude and appreciation to my supervisor Dr. Pham Hong Hoa for her valuable guidance, advices and recommendations throughout this research. Thank you for your kind support every time I am in need for consultation. I would like to express my great appreciation to all the teachers of the Masters program in the International University, who imparted their knowledge and experience to me during the past two years. I would like to give special thanks to my beloved family which has been my inspiration throughout the past time and always been the endless source of joy in my life. It is also my pleasure to have the opportunity to study with classmates from MBAIU05 who have shared with me their impressive knowledge and skills during the challenging courses of the MBA program. Finally, I would like to thank the members of the Examination Committee for taking time and giving valuable comments so that I could improve this thesis.
Plagiarism Statements I would like to declare that, apart from the acknowledged references, this thesis either does not use language, ideas, or other original material from anyone; or has not been previously submitted to any other educational and research programs or institutions. I fully understand that any writings in this thesis contradicted to the above statement will automatically lead to the rejection from the MBA program at the International University Vietnam National University Ho Chi Minh City.
Copyright Statement This copy of the thesis has been supplied on condition that anyone who consults it is understood to recognize that its copyright rests with its author and that no quotation from the thesis and no information derived from it may be published without the authors prior consent. Nguyen Thanh Trung Hieu/MBA05010/2011-2014
Table of Contents Chapter 1. Introduction ............................................................................................................... 1 1.1 Research Background....................................................................................................... 1 1.2 Research Problems .......................................................................................................... 2 1.3 Research Questions ......................................................................................................... 3 1.4 Research Objectives ......................................................................................................... 3 1.5 Research scope and limitation ......................................................................................... 3 1.6 Significant of the Research .............................................................................................. 4 1.7 Research Methodology .................................................................................................... 4 1.8 Structure of Research ...................................................................................................... 6 Chapter One: Introduction ......................................................................................... 6 1.8.1 Chapter Two: Literature review ................................................................................. 6 1.8.2 Chapter Three: Research Methodology ..................................................................... 6 1.8.3 Chapter Four: Data Analysis and Findings .................................................................. 6 1.8.4 Chapter Five: Conclusion ............................................................................................ 6 1.8.5 Chapter 2. Literature Review ....................................................................................................... 7 2.1 Dependent Variable ......................................................................................................... 7 Purchase intention ..................................................................................................... 7 2.1.1 2.2 Independent variable ....................................................................................................... 8 Price ............................................................................................................................ 8 2.2.1 Brand ........................................................................................................................ 10 2.2.2 Compatibility ............................................................................................................ 10 2.2.3 Product Feature ....................................................................................................... 11 2.2.4 Relative Advantage .................................................................................................. 12 2.2.5 Social Influences ....................................................................................................... 13 2.2.6 2.3 Review of relevant theory .............................................................................................. 13 Diffusion of innovations ........................................................................................... 13 2.3.1 Social Identity Theory ............................................................................................... 15 2.3.2 Theory of Materialism .............................................................................................. 15 2.3.3 2.4 Proposed Theoretical Framework .................................................................................. 17 2.5 Hypothesis Development ............................................................................................... 17 Chapter 3. Methodology ............................................................................................................ 19 3.1 Research design ............................................................................................................. 19 3.2 Data collection methods ................................................................................................ 19 Primary data ............................................................................................................. 19 3.2.1
Table 1 - Coded items of measurement scale ................................................................... 26 Table 2 - Rules of Thumb about Correlation Coefficient ................................................. 27 Table 3 - Demographic of Respondents ............................................................................ 30 Table 4 - Crosstab between age and average income of respondents ............................... 32 Table 5 Descriptive statistics of respondents ................................................................. 34 Table 6 - Cronbach's Alpha rule based on George and Mallery ....................................... 36 Table 7 - Reliability test for consumers purchase intention on smartphone ................... 37 Table 8 Reliability test of Brand (1 st run) ...................................................................... 38 Table 9 - Reliability test of Brand (2 nd run) ...................................................................... 38 Table 10 - Reliability test of Brand (3 rd run) .................................................................... 39 Table 11 - The final table of Cronbachs alpha reliability test ......................................... 39 Table 12 Exploratory Factor Analysis (EFA) for independent variables ...................... 41 Table 13 Group of EFA ................................................................................................. 42 Table 14 Exploratory Factor Analysis (EFA) for independent variables ...................... 42 Table 15 - Pearson Correlation Testing ............................................................................ 44 Table 16 - Multiple regression testing .............................................................................. 47 Table 17 - Reliability Test of Respondents....................................................................... 73
Figure 1 - Diffusion of innovations model. Rogers, E.M. (1995) .................................... 14 Figure 2 - Conceptual model: Factors affect purchase intention of smartphone .............. 17 Figure 3 - Sex of Respondents .......................................................................................... 30 Figure 4 - Age of Respondents ......................................................................................... 31 Figure 5 - Average income of respondents ....................................................................... 31
Abstract In a world of digital devices, people require more convenient and powerful gadgets on hand to support for their daily works as well as their need for entertainment. Smartphone is invented to fulfill those demands, furthermore, provided a most compact assistant in the pocket. While replace some simple task of work from the traditional computers, smartphone also play a vital role in peoples lifestyle. This leads to a booming in the smartphone industry while more and more people want to own one smartphone. Nevertheless, it is a fact that there are too many brand of smartphone found at the current, making the process of choosing a smartphone become more complicated. The study aim to explore the factors affecting purchase intention of smartphone among the office workers in Hochiminh City. The initial factors include: Price, Brand, Relative Advantage, Compatibility, Product Features, Social Influence and Purchase Intention. 218 respondents have provided data for the study. The process of collecting is online surveys via the Qualtrics electronic form using likert scale. The data was analyzed through SPSS 20. The results of this research were unhide base on answering the research questions.
1 CHAPTER 1. INTRODUCTION 1.1 Research Background Since the introduction of 1 st IPhone generation, the consumer has inherited a rapid innovation by smartphone manufacturers. Nowadays, smartphone is considered as a must-have stuff by most urban persons. Thanks to its fabulous features, smartphone users may experience things out of communicating: browsing webs, enjoying medias, playing games, checking emails, using as a navigator, participating in social sites and so on (Qiang Xu, 2011). In the other hands, smartphone is also named as an "indicator of status, prestige and lifestyle" (Mohd Azam Osman, 2012). That leads to a trend of switching from feature phone to smartphone. It is a normal sense to see one working at office using a smartphone checking their emails, reading feeds on their Facebook. From a C.E.O to an apprentice, they all maintain a regularly online status throughout a day with office Wifi or broadband cell signal. A recent survey conducted by Google an Ipsos Media CT in Vietnam (2013) indicated that: 70 percent of interviewees using their smartphone daily in past seven days, while 91 percent of them use their smartphone at works, meanwhile, 58 percent spent more time online with their smartphone in the last 6 months (Google Our mobile planet: Vietnam, quarter 3, 2013). Hence, smartphone is transforming the consumer behaviors. Nevertheless, a huge number of manufacturers in the smartphone industry, creates plenty of models, lead to an embarrassment of consumer while choosing a smartphone. This generates a hard task for one manufacturer to persuade their potential customers distinguishing between its products and others. Therefore, it is essential to know what factors influencing the purchase intention of smartphone.
2 1.2 Research Problems Recent market research by Google has indicated that there are about 17 million Vietnamese had been using smartphone (GlobalWebIndex, 2013). The figure is counted as approximately 20% of Vietnam population. In this emerging market, there is still lot of potential for mega smartphone manufacturers as Samsung, LG, and Apple as well as Chinese or Vietnamese ones. Especially, in the group of office workers, who are in the raising of income and spend on hi-tech products frequently. According to Gartner (2013), trend of using smartphone and tablet to improve productivity as well as to provide more entertainments might be required by half of office workers in 2017. Despite the dramatic increasing of smartphone sales in Vietnam, there are not many researches on the consumer's perception of purchasing smartphone, and there are no static evidences to provide a better understanding between the enterprises and the end- users purchase intention. Thus, it is an essential for the the manufacturer/distributor/retailer to know what factors affecting to the consumer's purchase intention of smartphone, particularly, to the office workers. Since then, they might be benefited by understanding their potential perceptions. As the above reasons, I have chosen the topic: EXPLORING THE FACTORS AFFECTING PURCHASE INTENTION OF SMARTPHONE: A STUDY OF OFFICE WORKERS IN HOCHIMINH CITY, VIETNAM The study is to clarify the factors affecting the office workers purchase intention, and then choose the right strategy for the real enterprises to approach the consumer in
3 terms of boosting their sales volume. Furthermore, the hi-tech topics are also my favorite. 1.3 Research Questions Regarding to the research problems above, question has been raised for the research as below: Which factors will affect the consumer's purchase intention of smartphone? Which factor will most influence the consumers purchase intention of smartphone? 1.4 Research Objectives At first, the research is aimed to identify the factors affecting to the office worker's purchase intention of smartphone in Hochiminh City. To be more detailed, the research is to manage these tasks: To build a conceptual model for the research base on the previous researches and literatures To explore the factors affect the purchase intention of smartphone To gather information and analyze the results, as well as, to give recommendation to rate consumer's intention 1.5 Research scope and limitation This research only apply to office workers to find out their purchase intention of smartphone. Furthermore, the research only aims to ones who live in Hochiminh City, as this is one of the two biggest city in Vietnam with high rate of smartphone users. Moreover, there are plenty of enterprises operating in the city at the current.
4 However, this means that the data does not present the whole pictures of Vietnamese consumers. In the other hand, the small size of sample might not be large enough due to lack of resources. 1.6 Significant of the Research One of the most important purpose of this study is to provide a deeper insight of consumers in terms of factor affecting on purchase intention of smartphone. Since then, smartphone manufacturer as Samsung, Nokia and Sony might obtain proper information about their consumers requirement for a smartphones design, feature, price settings and so on. Taking advantages of those knowledge, firms might have better strategies planning to adjust their products in order to fulfill what an office worker might want from their smartphone. Firms also might concern on social influence on the consumers, which can be solved at the end of this research. From the results, more appropriate marketing tactics might be used as to persuade the consumers in terms of their social relations affection. Finally, results of this thesis might be a reference for further research on the same topic, especially to researchers who might want to explore those issues in a larger scope or with different samples. 1.7 Research Methodology Literature reviews are performed at first, based on these precious theories, conceptual model would be made. Quantitative research method would be applied to design questionnaire implementing in convenient sampling method. Data would be gathered and analyzed with SPSS for further static findings. Since then, conclusions and recommendations would be conducted.
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6 1.8 Structure of Research The research consist of five following chapters: Chapter One: Introduction 1.8.1 Providing the introduction of the research with background, problem statements, research questions and objectives, scope, limitation and research methodology Chapter Two: Literature review 1.8.2 By providing the concepts and theories concerning the research problem, the whole chapter concentrates in the purchase intention, perceived customer value, perceived product quality, valance of experience, customer service, trust, brand etc. Chapter Three: Research Methodology 1.8.3 The Chapter clarify the way to conduct the research and statistical method to be used in the thesis, as well as providing the research process, questionnaire designing, sampling method, survey implementation as a foundation for statistical analyzing Chapter Four: Data Analysis and Findings 1.8.4 This chapter goes on details with figures and numbers recorded by previous steps, which offers interviewees profile, analyzing the raw materials inputted throughout Statistical Package for the Social Science (SPSS), since then, further discuss of the research might be given Chapter Five: Conclusion 1.8.5 Base on the above steps, the author provide conclusion according to his personal side for the final results, furthermore, present the recommendations for future researches.
7 CHAPTER 2. LITERATURE REVIEW Critical points of current knowledge will be presented in this chapter. The purpose is to provide substantive findings as well as theoretical and methodological which to contribute to the topic research process. Meanwhile, the literature reviews are also considered as prestige secondary sources, which do not present any new research information 2.1 Dependent Variable Purchase intention 2.1.1 Defining as a plan to purchase certain good or service in the future, purchase intention does not always confirm should the plan implement as it is also affected by ability to perform (Warshaw & Davis, 1985). We could also consider the purchase intention as what the consumers think and will buy (Blackwell, Miniard, & Engel, 2001). Furthermore, purchase intention could be useful by understand the possibility of a customer on that lead to a purchasing action, which can be understand that the stronger the purchase intention is, the higher possibility to purchase particular product or service occur (Schiffman & Kanuk, 2000). Through a process of consumer behavior toward buying a product or a service, the consumers purchasing intention might formed by recognition, information seeking, alternative products evaluating, purchasing behavior and post-purchase step of mind (Schiffman & Kanuk, 2000) The purchase intention should also be considered as consumers tendency on an object, often measures the intention to buy of consumers (Kim & Kim, 2004). Final cognitive step in decision making process is also the intention to purchase towards particular products or services, according to Han (1990), Pecotich, Pressley and Roth (1996). Furthermore, it is also a favorable topic in the marketers side as its ability to
8 dig more consumers insight, since then, they can find appropriate segmentation before deciding to launch a new product into any markets (Silk & Urban, 1978). Kumar (2000) also indicated that, purchase intention can be used to predict future demand. Finally, there are evidence about an relationship between the relative advantage, price, social influence and product compatibility with purchase intention (Juha, 2008;Yue & Suart J, 2011; Ima Ilyani Ibrahim, 2013). There are also positive relations between brand name and Product Features and purchase intention (Mei Min and Chow, 2012) 2.2 Independent variable Price 2.2.1 It has been researched that price were always the most concerned issue from the consumer whenever they were to make a buying decision (Smith and Carsky, 1996). Meanwhile, Nagle and Holden (2002) indicated the role of price as a monetary value, using by the consumers in order to trade with the sellers for products or services Aaker (1991) stated that the image of a brand is mainly established by the price, in the consumers side, the behavioral intentions are affected from the price positively. In other words, a high (or low) price presents a high (or low) quality or image. Likewise, two type of products by price has been provided: high-priced brands and low-priced brands (Kunal et al., 2010). Image are indicated as the key factor of high- priced brands. Similarly, people tend to consume high-priced brand products due to their image and adapt for a premium price in order to perceive their value and status, which make the consumers price-inelastic (Bolton, 1989). Meanwhile, low-priced brands are chosen to utilize their value, often by consumers who tend to choose
9 products in terms of price par value. Thus, consumers would chose a low-priced brand product or looking for and subtitled one for the best value (Kunal et al., 2010). As a result, Rao and Monroe (1988) indicated that consumers have a tension to separate the higher price with higher quality and the lower price with inferior quality. Etgar and Malhotras (1981) found consensus to claim that high price goods and services are equals to high quality in most of consumers perception. Therefore, if the quality or features are comply to the consumers expectation, they should accept a price level at peak to fulfill their demand; the consumers might consider the price at a fair deal and willing to pay at a higher price if they could be deserved by what quality and service they expect (Monroe, 2003) More than dozen of mobile brands could be found in todays market, with plenty of series, which offer different price levels. On the website of thegioididong.com, the largest mobile phones retailer in Vietnam, consumer may find 14 various brands of smartphone, this leads to wide range of price for each segment of products. The strong brand may be an advantage to encourage the consumer choosing one product. Nowadays, people sometimes does not consider price at the most important element. There is a trend of consumers who might be willing to pay high price for their smartphone and receive a higher quality or services. There is about 38.81% Vietnamese consumers who ever own a smartphone believe that Iphone, a luxury product, is the best smartphone they ever wanted (Jana, 2014 Smartphone preference and spending). According to the research, Vietnamese consumers also acquire more on quality and higher level of services.
10 Brand 2.2.2 In a world of massive production, brand presents as a special characteristic for a product or service. It could be considered as a valuable asset to stand for quality and suggest precise information about the brand (Srinivasan, 2002). It was also distinguished as to improve products value (Dodds, Monroe and Grewal, 1991). Brand was also stated to indicate a product by its name (Rotfled, 2009). The American Marketing Association define brand as name, term, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition. The main function of a brand name is to confirm a products quality (Rao and Ruekert, 1994). Farquhar (1989) define the value of a brand was brand equity. And it was proven that an important phase of building brand is developing brand equity (Keller, 1998). Lastly, the consumers evaluation was influenced by the products brand, which might lead to the buying decision (Khasawneh and Hasouneh, 2010) After the survey in United States, England and Australian, The Wall Street Journal announced that the smartphone owners show the power of brand loyalty. It was also found the positive influence of consumer satisfaction on building positive brand, which lead to purchase intention respectively (Zahra Seyed Ghorban, 2012). Chia and Hao (2013) found that the myth impression of the specific brand existed prior to the decision to buy the product. As a result, the amount of sales of smartphone mostly depends on the brand itself. Compatibility 2.2.3 When consumer perceives a product or service in their personal lifestyle choices, we call that the compatibility. Consumers wants, beliefs, values, consumption patterns
11 might match with a product and service, we approve that they are highly compatible (Joep W, Ruud T and Tammo H, 2011). It is believed that demand and purchase intention of consumers is significantly affected by the compatibility (Gatignon and Robertson, 1991). While product compatible is put at a high priority, consumers ideal and expectation is getting closer to a product. Since then, more profit could be generated due to a raise in demand, which has been affected by satisfying the consumers before. Product Features 2.2.4 When buying or consuming a product, the consumers may be satisfy with a products attribute, which might be a connection with their needs or demand, this attribute is called a feature (Kotler, 2007). There is no doubt that various features might offer different perception towards smartphone. Nowadays, Smartphone is considered to be stand for a sustainable connection with internet, surfing the web, useful software, ability to manage files, recording photos and videos, entertainment tools, bulky memory of storage, GPS, navigation and large screen with high density of display (Oulasvirta, 2011). Gowind (2010) also stated that operation system and camera were two of the most favorite features consumers required from a smartphone. Meanwhile, iOS, Android, Windows Phone and Blackberry OS are the most concerned operating systems. Nevertheless, it is hoped to recognize that each of them has its own characteristics and foundation (Chang and Chen, 2005). It is also stated that products are chosen by their specific benefits created from attributes, which might be usable to personal value (Wickliffe and Psyarchik, 2011). At the current, mobile applications are introduced everyday, help the consumers to maximize the usable time from smartphone. This leads to a fact that smartphone buyers put functionality over the other factors when choosing smartphone (Kantar
12 Media, 2014 - The smartphone purchase experience, p.5). On the other hand, marketers trend to use the attributes that the consumers tend to compare between brands to advertisement, this aim to influence the consumers in choosing the appropriate product by enhancing the attributes message. (Puth, 1999) Relative Advantage 2.2.5 The degree for an innovation to be perceived as a higher level than other products in the market is considered as relative advantage (Tidd, 2010). Moreover, product with innovation placed in a long distance with the behind ones might gain a higher relative advantage degree, this might be resulted in a lower price but higher eases of use, enhanced Product Features and increased the products adoption are (L.Kurtz, H.F.MacKenzie, & Snow, 2009). The relative advantages component can be reflect in economic issues including: social status, convenience, economic gains and low cost. Relative advantage from an innovation can achieve better acceptability and diffusion speed (Ho and Wu, 2011). Roach (2009) stated that relative advantage was one of the most consistent predictors of innovation adoption. It also has been considered that relative advantage was in connection with the benefits has been made by using new technology comparing to the cost. This means that the consumers will experience low economic advantage in term of choosing a very expensive product comparing to the competitors (Sypher, 1997). In the smartphone markets perspective, relative advantage might be seen as the perception of the consumers to be favor with one advertising message in comparison with the others (Roach, 2009)
13 Social Influences 2.2.6 There are researches to confirm the relationship between virtual communities, an important sources of social influences, with purchase intention (Bickart & Schindler, 2001). It is noted that persons choice, behaviors and belief may affect to others, this theory can be found in most social sciences. People try to understand, relate to others and be themselves; hence, influence motives appear with one person might change their perception of an issue, product or brand. Up to date, the most important motive has been researched is the expectation of one person to keep their value reference aligned with his or her groups, as well as to be differentiated from devalued ones (Asch, 1951) Raising in trend of using SNS (Social network sites) as Facebook, Instagram has been found in smartphone recently. GlobalWebIndex (2014) announced that up to 20 percent of Vietnamese use their social accounts on smartphone, especially, Facebook gained the largest population of 95% of smartphone users. It is a nature that smartphone users find more convenient in keeping relation with their friends, colleagues and families in social network sites. Since then, user is probably affected by their friends, colleagues and families somehow in their decision of buying a product or service. A person can be gratefully influenced by the social, particularly when they are in a community with same thought, attitude, feeling or behavior (Rashotte, 2007) 2.3 Review of relevant theory Diffusion of innovations 2.3.1 A new product might be adopted by consumer in particular culture structure, this lively illustrate the theory of diffusion of innovations. Consumer is to adopt or not
14 adopt to a new product affected by four different stages: knowledge, persuasion, decision and confirmation (Rogers E., 1995; Fliegel, Frederick, & Joseph, 1966). There are factors might affect the consumer adoption of new product in the stage of persuasion. They could be defined as perceived characteristics of innovations or product characteristics including: relative advantage, trial ability, compatibility, complexity, and so on. Communication sources also might influence them (Rogers E., 1995; Assael, 1992; Gatignon & Robertson, A propositional inventory for new diffusion research, 1985). Lastly, those factors will affect purchase intention, which is considered as the willingness to purchase one product, alongside with ability to purchase this product form a demand (Rogers E., 1995; Fliegel, Frederick, & Joseph, 1966)
Figure 1 - Diffusion of innovations model. Rogers, E.M. (1995)
15 Social Identity Theory 2.3.2 Social identity express the idea that persons from a particular social group need to match with the conditions of those group in order to avoid of discrimination. Furthermore, those persons in group self-categorize themselves in the ways conform to their group norms or do things to gain the groups favor (Tajfel and Turner, 1979). Individual think, feel and action to his personal, family and so on might be affected by different social contexts, according to the social identity theory (Turner, 1982; Jane and Peter, 2000). In the context of smartphone, if most persons in a particular group adopted the smartphone, the rest who not yet adopt might be considering of an adaptation. Those thoughts comes from an intention to be categorized into this group and being a part of them (Jane & Peter, 2008) Theory of Materialism 2.3.3 People are affected by materialism in their lives, they gain happiness in the possession of particular luxury product, and hence they trend to persuade them different ways. Materialistic persons are matched with desires and goals to achieve wealth, so that they could own certain luxury products in order to take the senses of social recognition (Tim, 2002; Yusuf & Abdullah, 2003) According to Vitzthum (1995) and Lange (1925), consumers might experience high value on luxury product, this include new technology as well as innovative product, as those products are always at a higher price, and those situations define the theory of materialism. To be detail, high price product like smartphone might influence the consumers purchase intention, however, it is a normal sense if the purchasing power in general increases, opening chances for more people to own ones, then the social
16 status of using smartphone might no longer be available (Jee Han, Joseph, & Xavier, 2010)
17 2.4 Proposed Theoretical Framework Ima Ilyani Ibrahim (2013) state on his study of purchase intention of smartphone in Malaysia once again stated that the mentioned issued significantly affected by social influence, even though the strength differ. It is also the factor hast most impact beside the others are: Relative Advantage, Price and Compatibility. In connection with the literature review above, it is proposed to the conceptual framework in which display the independent and dependent variables and connection between them as below:
(Independent variables) (Dependent variable) Figure 2 - Conceptual model: Factors affect purchase intention of smartphone 2.5 Hypothesis Development This paper studies the association between the six independent variables, such as Price, Brand, Compatibility, Product Features, Relative Advantage and Social Price Brand Compatibility Product Features Relative Advantage Social Influence Purchase intention H 1
H 2
H 3
H 4
H 5
H 6
18 Influence, and purchase intention of Smartphone among office workers in Hochiminh City. With this goal, we propose to test the following hypotheses: H 1 : There is an impact from price towards purchase intention of Smartphone among office workers in Hochiminh City H 2 : There is an impact from brand name towards purchase intention of Smartphone among office workers in Hochiminh City H 3 : There is an impact from compatibility towards purchase intention of Smartphone among office workers in Hochiminh City H 4 : There is an impact from Product Features towards purchase intention of Smartphone among office workers in Hochiminh City H 5 : There is an impact from relative advantage towards purchase intention of Smartphone among office workers in Hochiminh City H 6 : There is an impact from social influences towards purchase intention of Smartphone among office workers in Hochiminh City H 7 : At least one factor (Price, Brand, Compatibility, Product Features, Relative Advantage and Social Influence) have the most significant influence on the purchase intention of smartphone among office workers in Hochiminh City
19 CHAPTER 3. METHODOLOGY 3.1 Research design As a descriptive research, this thesis may present the researchers intention to use quantitative data to illustrate the characteristics of the population, as well as to study the phenomenon. Advantage of this type of research is to collect unique data from case studies. Data was collected to provide an insight from consumers in various aspects of their lives, which other methods can not apply better (Swindells, 2004). Moreover, the method could provide an ability to finalize the result and approve or disapprove hypothesises At last, questionnaire was considered as an instrumental to imply in the research. Group of categorized questions would be provided to collect primary data. It is fast, inexpensive, efficient, and effective method compared to others (Key & P., 1997). 3.2 Data collection methods In general, the two types of data could be defined as primary data and secondary data. While the primary data is usually collected throughout research and surveys to solve specific purposes, the secondary data is considered as existing information. Both of the two mentioned types are used in researches frequently to offer more reliability as well as validaty. Primary data 3.2.1 Quantitative research was applied in the research to determine the hypothesis. In particular, questionnaire was used to gather information by their wide range of questions from individuals. In the other hands, questionnaire could be used with different type of sampling techniques, which can be easily administered via email, telephone, face to face interview, internet electrical form and so on. The questionnaire was provided into different sections, which covered all the required information for
20 the hypothesis, as well as the demographics from the interviewees for further exploration. Secondary data 3.2.2 Literally, information analysis gathered from other sources (e.g., researcher and institutions) is considered as secondary data (Cnossen & Christen, 1977). Two type of secondary data could be known as electronic based sources and paper based sources. Secondary data is also known as an efficient yet economic sources. In the limitation of the research, electronic based sources are more preferable due to its ease of searching and convenience. Throughout internet, the researchers acquire more knowledge on the thesis topic, as well as understanding relevant theories, which helping in further step of researching. Sampling design 3.2.3 A process of selecting a smaller group of people with similar characteristics and preferences as the total group where it is chosen is call sampling (Wrenn, Stevens, & Loudon, 2006). To collect data effectively and efficiently, designing a sampling framework is important to any researcher. Furthermore, selecting most appropriate samples means to provide more accurate answer while collecting the questionnaire. 3.2.3.1 Sampling frame and sampling location The data was gathered by an electronic survey provided by Qualtrics, a leading quantitative research solutions has been used in the industry as well as cited in academic journals Brunson, K. W (2008) and books (Modern marketing research concepts, 2012). Qualtrics is known as other online survey tools as Google or Surveymonkey, otherwise, it provide tons of features more
21 After the questionnaire has been formed, it was sent to respondent by two ways: Emails: An email with provided link to the questionnaire was attached to invite the receiver finished answering the questions. An disadvantage of this method is the mistaken of email providers to categorize this email as junk mails sometimes, in the other hands, receivers might have negative perception on this type of email which might let them biased on the answers . However, it is the cheapest and most convenient way. In this survey, 200 email invitations have been sent to collect data Social sites seeding: Facebook was used as a gentle invitation to conduct the survey. In connection with a post of Facebook, which content is to introduce the research, it was appeared to all new feeds of the target population as a recommend topic. A reach of approximately 3,000 viewers has been taken to collect data. Sampling Technique 3.2.4 Convenience sampling was applied in the research. As a non-probability sampling technique, convenience sampling is to obtain a sample of convenient elements. Its advantage include relatively easy sample collection and data collection (Anderson, Sweeney, & Williams, 2008). In the other hands, the technique requires least expensive and time consuming. In the limitation of the research, the researcher distributed the questionnaire to ones who were working in an office in the area of Hochiminh City. 3.2.4.1 Sampling size According to Malhotra (1996) sample size refers to the number of elements to be included. A quantity of 257 questionnaires have been finished during six days from
22 August 7 th to August 14 th . However, 39 results has been rejected due to unfinished questionnaire and duplicated results (like all answers are 4 are 5 only). At last, a number of 218 samples has been used to the data analyzing. Research instrument 3.2.5 Used instrument would be explained in this part of the research. While a survey has been chosen, it would be included the distributing of questionnaire to collect primary data 3.2.5.1 Questionnaire Questionnaire is defined as a set of questioned that prepared by the researchers to collect answers from the respondents (Sekaran & Bougie, 2010). On this research, questionnaires has been used to gather the information from the respondent to discover the factors that influence the purchase intention of smartphone among the office workers in Hochiminh City. Since then, the research analyze if there are any significant relationship between the dependent and independent variables. Questionnaire has been collected in one week as 257 respondents feedback their answers. 3.2.5.2 Questionnaire design To obtain information effectively, the process of designing questionnaires play an important role. In this research, the researcher has used fixed-alternative questions, which responses are given and answers are chosen as one closet to the respondents point of view. The whole questionnaire is divided into the three section to easily categorize the data as below:
23 Section A Three questions are provided to discover the respondents demographic. These questions are designed to ask for age, income and sex typically. Section B As to learn the independent variables in the research from this section, 30 questions are made to survey the respondent. Furthermore, those questions are categorized into six different groups which are: Price, Brand, Compatibility, Product Features, Relative Advantage and Social Influence. Likert scale is used as the measurement for the answer. Five scale including strongly disagree (1), disagree (2), neutral (3), agree (4), and strongly agree (5) are inserted in each question to gather the most consistent answers. Section C The five questions of this section are provided to survey for the dependent variable: the purchase intention. Once again, likert scale questions with five scales of strongly disagree (1), disagree (2), neutral (3), agree (4), and strongly agree (5) are used. Variables Item Description References Price P1 Price is my main consideration when deciding whether to buy a smartphone. Cheong and Park (2005), Grewal, Krishanan, Baker, & Borin, (1998), Sinhaa & Batrab (1999), Steiner (2004) P2 I will only buy smartphone on price reduction or promotion. P3 I compare prices of other Smartphones brands and store brands before I choose one. P4 I buy Smartphone because they are worth to used regarding between with their price & usage
24 quality. P5 The cheapness of some Smartphones brand suggests to me that they may have some risks, such as low quality. Brand BR1 Brand name is a major factor that will influence my decision towards buying a smartphone. Rio,Vazquez and Iglesias (2001) BR2 I prefer to choose globally brand while buying smartphone. BR3 I prefer to choose a trustworthy smartphone brand. BR4 I only choose smartphone brand of my favourite BR5 I am willing to choose a less well- known brand if its products could fulfill my needs. Compatibility C1 Smarphone is compatible and fit my needs Yang (2005), Brown L., Cajee, Davies and Stroebel (2003), Monk, Hassenzahl, Blythe and Reed (2002), He, Duan, Fu and Li (2006) C2 Smartphone is compatible and fit my lifestyle and working style C3 Smartphone fit with my habits of using cell phones C4 Smartphone is a good complement to the traditional mobile phones to me C5 Smartphone can fulfill my wants and needs in current life Product Features FE1 I like the smartphone ability of taking photos and videos Mei Min, et al. (2012), Market Analysis and Consumer FE2 Smartphone provide high quality of games
25 FE3 Smartphone has lots of useful applications Research Organization (MACRO) FE4 Smartphone can connect to internet easily (with wifi, 3G) FE5 I choose smartphone due to its operating system (iOS, Android, Blackberry OS, Windows Phone) Relative Advantage
RA1 Smartphone are more convenient, reliable, and useful than normal mobile phones. (Brown I. , Cajee, Davies, & Stroebel, (2003), Holak & Lehmann (1990), Yang (2005), Mei Min, et al. (2012), Gourville (2006), Park, Y., & Chen. J. V (2007), Ji-won Moon, Young-Gul Kim (2001) RA2 Smartphone are more fashionable, stylish, and trendy. RA3 Smartphone can be synchronized with other gadgets RA4 Smartphone bigger screen and full keyboard make different functions easier to use. RA5 Smartphone sometimes help me to solve my work instantly. Social Influence SI1 Friends and family are very helpful to me in making decision of buying smartphone. Isen (2011), Denise E. (2005), Pederson, n.d, Mei Min et al. (2012) SI2 I will ask the opinions from my friends and family when buying a smartphone. SI3 Most of my friends and family members are using smartphone SI4 Friends and family members believe that smartphone are useful to them SI5 I will seek for information from
26 social network and forums before buying a smartphone Purchase intention PI1 I will continue using smartphone. Dalsang Chung, Sun Gi Chun (2011); Kiwon Lee, Euiho Suh, Jihye Park (2012), Ling (2011), Hyuk Jun & Margaret A (2008), Ching-Fu & Yu-Ying (2008) PI2 I intend to buy a smartphone. PI3 I intend to replace my smartphone with a better one. PI4 I will share about my smartphone with my friend and family member PI5 I am willing recommend my friend/family member to buy a smartphone. Table 1 - Coded items of measurement scale 3.3 Data analysis Statistical Package for Social Sciences (SPSS) 20.0 will be used to analyze collected data. The section will present an overall view of various techniques to be used in the research for data analysis Descriptive statistics 3.3.1 As a tool to describe a set of factors characteristics in a particular context, descriptive statistics might be presented as a form that provide information about the factors after a transformation process from raw data. The techniques include of the popular following information: frequencies, measures of central tendency and dispersion. Reliability test 3.3.2 Cronbachs alpha is a reliability coefficient to indicate if items are positivily correlated to one another in a set Cavana et al. (2001), while it is computed by the average of inter-correlations among the items, its value can be vary from 0 to 1. According to Nunnally (1978), Cronbachs alpha value of item at 0.6 and above is acceptable, especially for investigations.
27 Exploratory factor analysis (EFA) 3.3.3 It is necessary to examines if provided items are completed by respondent are included in particular factors or clusters, the technique of this process is called exploratory factor analysis (Cavana et al, 2001). While EFA allows us to eliminate invalid items from the scale, it also group the items into relevant group in accordance with the respondents data. Low factor loading item (< 0.5) were deleted. Pearson Correlation Coefficient Test 3.3.4 Pearson correlation coefficient is to measures the strength of the linear relationship of two variables. In the other hand, it also confirm the significant and the strength of those relationships. The strength of the relationship could be demonstrate as the table below: Coefficient Range Strength of Association 0.91 to 1.00 Very Strong 0.71 to 0.90 High 0.41 to 0.70 Moderate 0.21 to 0.40 Small but definite relationship 0.00 to 0.20 Slight, almost negligible Table 2 - Rules of Thumb about Correlation Coefficient Multiple regression analysis 3.3.5 The techniques of multiple regression is to analyse the impact of the factors that influence the purchase intention of smartphone among office workers in Hochiminh City. Multiple regression analysis also form the independent variables into equation and forecast the dependent variable. At last, multiple regression analysis will determine how the independent variables (Price, Brand, Compatibility, Product Features, Relative Advantage and Social Influence) are significant to explain the variance in confidence level.
28
29 CHAPTER 4. DATA ANALYISIS AND FINDINGS 4.1 Sample description Sample 4.1.1 A total of 257 questionnaires has been finished from the respondents who are office workers in Hochiminh City. However, as the unexpected quality of 39 surveys has been recorded, they were dropped from the final data collection. Those surveys were found to be unfinished or rated as under expectation while supplying the same answers in all fields (like all 4 or all 5 answers in the likert scale). After excluding those results, the valid answer was 218 at a rate of 84% in total. The collected data was coded to be analysed with the SPSS for further conclusions. Demographic profile 4.1.2 Descriptive statistic was used to summary the profile of 218 surveys. Results could be found in detail as the below table and figures:
30 Demographic Characteristics Frequency (n) Percentage (%) Gender 218 100% Male 109 50% Female 109 50% Age 218 100% Under 22 20 9.2 From 22 to 29 140 64.2 From 30 to 39 49 22.5 From 40 to 49 7 3.2 50 or older 2 0.9 Income 218 100% Less than 8,000,000 Vnd 92 42.2 From 8,000,000 to Less than 12,000,000 Vnd 72 33 From 12,000,000 to Less than 18,000,000 Vnd 29 13.3 From 18,000,000 to Less than 25,000,000 Vnd 13 6 Above 25,000,000 Vnd 12 5.5 Table 3 - Demographic of Respondents
Figure 3 - Sex of Respondents The gender distribution in the research accidentally fall into an absolute balance between male and female respondent. While 109 male respondents were recorded with a percentage of 50, the same number has also been found in female respondents. This could be surprisingly consider that male and female both paid their intention to the smartphone topic. 50% 50% Male Female
31
Figure 4 - Age of Respondents In terms of age, the group of respondents capture the largest portion was found from 22 to 29 years old. This age group gain a percentage of 64%. The group from 30 to 39 showed a percentage of 23% ranked in second. Meanwhile, the group of age from 50 and above have the least percentage of 1%. It is considered that most of office workers are in range from 22 to 39 years old and they have a more high-tech consuming direction comparing to other groups.
Figure 5 - Average income of respondents 9% 64% 23% 3% 1% Under 22 From 22 to 29 From 30 to 39 From 40 to 49 50 or older 42% 33% 13% 6% 6% Less than 8,000,000 Vnd From 8,000,000 to Less than 12,000,000 Vnd From 12,000,000 to Less than 18,000,000 Vnd From 18,000,000 to Less than 25,000,000 Vnd Above 25,000,000 Vnd
32 Less than 8,000,00 0 Vnd From 8,000,00 0 to Less than 12,000,0 00 Vnd From 12,000,0 00 to Less than 18,000,0 00 Vnd From 18,000,0 00 to Less than 25,000,0 00 Vnd Above 25,000,0 00 Vnd Total Under 22 16 2 0 0 0 18 From 22 to 29 70 52 14 4 2 142 From 30 to 39 6 16 10 7 10 49 From 40 to 49 0 0 5 2 0 7 50 or older 0 2 0 0 0 2 Total 92 72 29 13 12 218 Table 4 - Crosstab between age and average income of respondents There might be a connection between the age and the average income of the respondents. Most of them fall in the average income of under 12,000,000 Vnd. While 42% of them have the income under 8,000,000 Vnd, a percentage of 33% has been recorded from the group of income from 8,000,000 Vnd to less than 12,000,000 Vnd. The rest respondents with average income from 12,000,000 and above gain a percentage of 25%, this could also be a recognizable results. At last, it has been seen that while youngster show more favor to smartphone, they are still in a lower average income in comparison with the older ones. In cross-tabulation calculation, the respondents in the age from 22 to 29 show the largest portion in average income of under 8,000,000 Vnd (32% of total respondents) and from 8,000,000 Vnd to 12,000,000 Vnd (24% of total respondents)
33 4.2 Descriptive statistics Variable Label Mean Std. Deviation Price is my main consideration when deciding whether to buy a smartphone. PR1 3.56 .736 I will only buy smartphone on price reduction or promotion. PR2 3.37 .746 I compare prices of other Smartphones brands and store brands before I choose one. PR3 3.99 .709 I buy Smartphone because they are worth to used regarding between with their price & usage quality. PR4 4.10 .664 The cheapness of some Smartphones brand suggests to me that they may have some risks, such as low quality. PR5 3.74 .859 Brand name is a major factor that will influence my decision towards buying a smartphone. BR1 3.90 .711 I prefer to choose globally brand while buying smartphone. BR2 3.92 .720 I prefer to choose a trustworthy smartphone brand. BR3 4.13 .673 I only choose smartphone brand of my favourite BR4 3.92 .767 I am willing to choose a less well-known brand if its products could fulfill my needs. BR5 3.94 .703 Smartphone is compatible and fit with my needs. CO1 4.05 .670 Smartphone is compatible and fit with my lifestyle / working style. C02 4.14 .583 Smartphone fit with my habits of using cell phones. CO3 3.94 .732 Smartphone is a good complement to the traditional mobile phones for me. CO4 4.04 .779 Smartphone can fulfill my want and needs in current life. CO5 4.02 .692 I like the smartphone ability of taking photos and videos FE1 4.04 .646 Smartphone provide high quality of games FE2 3.75 .739 Smartphone has lots of useful applications FE3 4.11 .552 Smartphone can connect to internet easily (with wifi, 3G) FE4 4.27 .639 I choose smartphone due to its operating system (iOS, Android, Blackberry OS, Windows Phone,) FE5 3.98 .750
34 Smartphone are more convenient, reliable, and useful than normal mobile phones. RA1 3.85 .803 Smartphone are more fashionable, stylish, and trendy. RA2 3.80 .929 Smartphone can be synchronized with other gadgets RA3 4.07 .699 Smartphone bigger screen and full keyboard make different functions easier to use. RA4 3.99 .859 Smartphone sometimes help me to solve my work instantly. RA5 4.04 .743 Friends and family are very helpful to me in making decision of buying smartphone. SI1 2.63 .999 I will ask the opinions from my friends and family when buying a smartphone. SI2 3.31 1.027 Most of my friends and family members are using smartphone SI3 3.69 .700 Friends and family members believe that smartphone are useful to them SI4 3.73 .722 I will seek for information from social network and forums before buying a smartphone SI5 3.81 .784 I will continue using smartphone. PI1 3.94 .818 I intend to buy a smartphone. PI2 4.29 .655 I intend to replace my smartphone with a better one. PI3 4.06 .862 I will share about my smartphone with my friend and family member PI4 3.68 .836 I am willing recommend my friend/family member to buy a smartphone. PI5 3.64 .815 Table 5 Descriptive statistics of respondents Mean value of the variables have been display in the above table. Mean of Price vary from 3.37 to 4.10, with the lowest value found in PR2 (I will only buy smartphone on price reduction or promotion) at 3.37, which mean the marketing tactics base on price may not preferred much from the office workers. In contrast, they have more consensus in PR4 (I buy Smartphone because they are worth to used regarding between with their price & usage quality) at value of 4.10. Which means that product in the balancing between price and quality would attract more attention.
35 Brands items have rather high mean value ranging from 3.90 to 4.13. In particular, the most high rated item is BR3 (I prefer to choose a trustworthy smartphone brand) with mean value of 4.13, which means that unknown brand might not easy to capture the intention of office workers. Meanwhile, BR1 (Brand name is a major factor that will influence my decision towards buying a smartphone) get the lowest rate at mean of 3.90. The mean of Compatibilitys items are extremely high in a narrow range from 3.94 to 4.14. This means that office workers have ideas in this factor consistently. The lowest value is CO3 (Smartphone fit with my habits of using cell phones), while the highest one is CO2 (Smartphone is compatible and fit with my lifestyle / working style). Highest mean value of dependent variable found in Product Features item of FE4 (Smartphone can connect to internet easily (with wifi, 3G)) at 4.27. This raise a potential of using smartphone as an ideal surfing gadget. Meanwhile, FE3 (Smartphone provide high quality of games) with mean value of 3.75 is the lowest. We can consider that office workers prefer need more connection ability than gaming. The mean value of Relative advantage factor items found from 3.80 to 4.07. The most important concern of consumers in the factor is the RA3 (Smartphone can be synchronized with other gadgets) with mean value of 4.07, which provided function to sync between users hi-tech stuffs with smartphone (E.g.: tablet of laptop). In the other hand, respondents rate Smartphone are more fashionable, stylish, and trendy (RA2) at a lower mean value of 3.80 In term of Social Influence, means of variables have high difference from 2.63 to 3.81, in which, the lowest value of dependent variables found. At the value of 2.63, SI1 (Friends and family are very helpful to me in making decision of buying smartphone.)
36 have least rated among the office workers, this somehow proves that the consumers tend to look for other sources rather than friends or families while choosing their smartphone. In contrast, it is supposed that the office workers might find more references on social network or forums as the I will seek for information from social network and forums before buying a smartphone (SI5) item was recognized at the highest mean value of 3.81. For the independent variable, the mean of Purchasing Intention is valued from 3.64 to 4.29. While the PI5 (I am willing recommend my friend/family member to buy a smartphone) has the lowest value of 3.64, the highest mean value is recorded in PI2 (I intend to buy a smartphone) at 4.29. 4.3 Cronbachs alpha reliability test According to Geogre and Mallery (2003), a Cronbachs Alpha calculation can be categorized into various status which is shown as below table: Cronbach's alpha Internal consistency 0.9 Excellent 0.8 Good 0.7 Acceptable 0.6 Questionable 0.5 Poor < 0.5 Unacceptable Table 6 - Cronbach's Alpha rule based on George and Mallery Factor Number of Item Cronbach's Alpha Price 5 0.713 Brand 5 0.702 Compatibility 5 0.742
37 Product Features 5 0.732 Relative Advantage 5 0.745 Social Influence 5 0.741 Purchase Intention 5 0.765 Table 7 - Reliability test for consumers purchase intention on smartphone From the data analysed in the research, we can see that all the factors have the Cronbachs Alpha as range between 0.70 and 0.77, which are considered to be acceptable for the research. Or in the order words, those items were well designed and data is reliable. However, when analyzing into particular items, the researcher found that not all the value of each item in the factor Brand are valid. According to Field (2005) and Pallant (2007), values less than 0.3 indicate that the item is measuring something different from the whole scale. Meanwhile, to determine the effect of removing items from each sub-scale, Cronbachs alpha if deleted is used (Lemmens, 2010). Since then, the item whose Cronbachs alpha if item deleted is larger than the overall Cronbachs alpha and corrected item total correlation is less than 0.3 will be discarded from the variable list. From the below table of the Cronbachs alpha from the factor Brand, the item BR5 was removed at first (Corrected Item-Total Correlation of 0.286 and Cronbach's Alpha if Item Deleted of 0.720). Reliability Statistics
Cronbach's Alpha N of Items
.702 5
Item-Total Statistics
Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted BR1 15.91 4.108 .425 .666 BR2 15.89 3.588 .636 .574
38 BR3 15.68 3.839 .586 .601 BR4 15.89 4.052 .388 .684 BR5 15.87 4.494 .286 .720 Table 8 Reliability test of Brand (1 st run) After re-run the SPSS reliability test for the items BR1, BR2, BR3, BR4, we continued to remove the item of BR4 as its Corrected Item-Total Correlation is 0.297 and the Cronbach's Alpha if Item Deleted is 0.786. In the last run including of BR1, BR2 and BR3, all the value were well construct and will be used in the next step of calculating the Exploratory Factor Analysis (EFA) Reliability Statistics Cronbach's Alpha N of Items .720 4 Item-Total Statistics
Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted BR1 11.97 2.759 .520 .652 BR2 11.95 2.454 .675 .554 BR3 11.74 2.738 .584 .616 BR4 11.94 3.103 .297 .786 Table 9 - Reliability test of Brand (2 nd run)
39 Reliability Statistics Cronbach's Alpha N of Items .786 3
Item-Total Statistics
Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach's Alpha if Item Deleted BR1 8.05 1.574 .573 .765 BR2 8.03 1.419 .680 .647 BR3 7.82 1.588 .625 .710 Table 10 - Reliability test of Brand (3 rd run) To sum up, all the items of the research will have a valid reliability shown in the below table. More details of other items could be found in the Appendix. Factor Number of Item Cronbach's Alpha Price 5 0.713 Brand 5 0.786 Compatibility 5 0.742 Product Features 5 0.732 Relative Advantage 5 0.745 Social Influence 5 0.741 Purchase Intention 5 0.765 Table 11 - The final table of Cronbachs alpha reliability test 4.4 Exploratory Factor Analysis (EFA) In this section, the researcher present the results of the Exploratory factor analysis (EFA), which might explain the number of underlying factors or dimensions of each construct. By using the technique, we will drop some invalid items and group all items into relevant groups. Varimax rotation would be used to minimize the number
40 of variables that have high loading in each factor. In the EFA calculation, there are several criteria to be follow with: The KMO value must be equal or greater than 0.5 Factor maximum absolute value loading must be greater than 0.5 The difference between the maximum absolute value and minimum absolute value of loading factors must be greater than or equal to 0.3 for any item (Jabnoun and Al-Tamimi, 2003) Total variance explained must be greater than or equal to 50% The KMO test of the research found a value of 0.669, which is above of the minimum requirements. The Barletts test of schericity was recorded of 0.000, which is significant at the level of 0.01, this means that factor analysis could be used in this study and the scale is usable
KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .669 Bartlett's Test of Sphericity Approx. Chi-Square 2405.214 df 378 Sig. .000
Rotated component matrix would show the items under each factor to be grouped in relevant items. The minimal value of each item on the table should be 0.5. Regarding to the research, all items were loaded in the range of 0.557 and 0.849 under new nine dimension describe as below table:
41 Rotated Component Matrix a
Component 1 2 3 4 5 6 7 8 9 RA4 .782
RA1 .671
RA5 .642
RA2 .624
RA3 .603
FE1
.775
FE2
.695
FE5
.679
FE4
.677
PR2
.797
PR1
.731
PR5
.589
PR3
.586
BR2
.843
BR3
.833
BR1
.771
CO1
.837
CO2
.799
CO3
.732
SI1
.829
SI2
.793
SI5
.557
SI3
.849
SI4
.738
FE3
.635
PR4
.629
CO4
.760 CO5
.611 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 13 iterations. Table 12 Exploratory Factor Analysis (EFA) for independent variables The new factor after the EFA test shall be categorized with new items as below:
42 Factor Variables included Name Label Factor 1 RA1, RA2, RA3, RA4, RA5 Relative advantage RA Factor 2 FE1, FE2, FE4, FE5 Product Features FE Factor 3 PR1, PR2, PR3, PR5 Price PR Factor 4 BR1, BR2, BR3 Brand BR Factor 5 CO1, CO2, CO3 Compatibility CO Factor 6 SI1, SI2, SI5 Social influence SI Factor 7 SI3, SI4 Social interaction SIN Factor 8 FE3, PR4 Performance PE Factor 9 CO4, CO5 Preference PN Table 13 Group of EFA A similar test has been applied to the dependent variables of purchase intention in order to examine if all the items are grouped into one or not: KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .739 Bartlett's Test of Sphericity Approx. Chi-Square 297.187 df 10 Sig. .000 Component Matrix a
Component 1 PI2 .774 PI4 .731 PI1 .721 PI5 .700 PI3 .686 Extraction Method: Principal Component Analysis. a. 1 components extracted. Table 14 Exploratory Factor Analysis (EFA) for independent variables
43 As the above table, we could discover that the KMO is 0.739, meanwhile, the Bartletts test of sphericity is 0.000. The both values show that the variable PI was retained and was expectedly group into one group as proposed. 4.5 Pearson Correlation Coefficient Pearson Correlation Coefficient is to indicate the direction, strength as well as the significant of the bivariate relationships between the variables measured on interval scale (Hair et al., 2007)
44 Correlations RA FE PR BR CO SI SIN PE PN PI RA Pearson Correlation 1 .207 ** .137 * .183 ** .180 ** .007 .237 ** .111 .393 ** .459 **
Sig. (2-tailed) .000 .000 .611 .021 .000 .401 .111 .001 .000 N 218 218 218 218 218 218 218 218 218 218 PI Pearson Correlation .459 ** .447 ** .061 .170 * .205 ** .008 .179 ** .285 ** .537 ** 1 Sig. (2-tailed) .000 .000 .371 .012 .002 .911 .008 .000 .000 N 218 218 218 218 218 218 218 218 218 218 **. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed). Table 15 - Pearson Correlation Testing The above table shows the correlations between independent variables and dependent variable. There are two factors found to be insignificant with the dependent variables Purchase intention: Price (PR) and Social Influence (SI) have the P value of 0.371 and
45 0.911 which are considerably higher than 0.05. The other factors with P value under 0.05 are acceptable. The relation between Relative advantage (RA) and Purchase intention (PI) is considered at a medium rate as the correlation value is 0.459. This value fall in a range of 0.41 to 0.70, which is said to be a moderate strength. A similar relation also has been found between the Product Features (FE) and Purchase intention. While the correlation value falls between 0.41 to 0.70, at the number of 0.447. It is concluded that there is a moderate correlation between Product Features and Purchase intention. There is a relationship between Brand (BR) and Purchase intention. However, as the correlation value is just 0.170, in the range of 0.00 to 0.20, this relationship is just considered as a slightly rate. Meanwhile, there are stronger relationship between Compatibility (CO) and Purchase intention. While falling in the range of 0.21 to 0.40, the correlation value is 0.205. In conclusion, there is definite a relationship between Compatibility and Purchase intention, however, at a small strength. There is evidence to consider a relation between Preference (PN) and Purchase intention. As the correlation value is 0.537, it falls between 0.41 to 0.70. This indicates there is a moderate relationship between Preference and Purchase intention. Social interaction (SIN) and Purchase intention are at a negligible relationship. The correlation value appears to be 0.179, hence, there is just a slight relationship between the two variables
46 There is surely a relationship between Performance (PE) and Purchase intention. As the correlation value is 0.285, we can conclude that there is definite a relationship between the two variables, nevertheless, this relationship is in a small strength. 4.6 Multiple Regression Analysis Weiers (2008) stated that multiple regression analysis is an analysis with one dependent variable and two or more dependent variables participate in. In the other hand, Zikmund et al., (2010) demonstrate it to be an association in which the effects of two or more independent variables on a single, interval-scaled dependent variable which are investigated continuously. Model Summary b
Model R R Square Adjusted R Square Std. Error of the Estimate 1 .677 a .458 .440 .43019 a. Predictors: (Constant), PN, SIN, BR, PE, FE, RA, CO b. Dependent Variable: PI
According to the Model Summary table, the R Square value, which is determined for the explained variation (variance) in Purchase intention from the seven factors including Relative advantage, Product Features, Brand, Compatibility, Social interaction, Performance and Preference is approximately 45.8%. This means that there is also 55.2% unexplained still left in the study. Meanwhile, the multiple correlation coefficient (R) provides the strength of the relationship between the dependent variable and independent variables is 0.677
47 ANOVA a
Model Sum of Squares df Mean Square F Sig. 1 Regression 32.883 7 4.698 25.384 .000 b
Residual 38.863 210 .185 Total 71.745 217 a. Dependent Variable: PI b. Predictors: (Constant), PN, SIN, BR, PE, FE, RA, CO
The p-value (Significant of 0.000) in the ANOVA table is less than 0.05. Its means that the alternative hypothesis as the independent variables are significantly explains the variance in consumers' level is supported by the data and will be accepted. Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) .094 .369 .254 .800 RA .254 .058 .252 4.411 .000 FE .329 .065 .291 5.070 .000 BR .020 .052 .021 .387 .699 CO -.123 .061 -.119 -2.033 .043 SIN .017 .047 .019 .355 .723 PE .100 .064 .086 1.553 .122 PN .360 .057 .382 6.315 .000 Table 16 - Multiple regression testing At last, the Coefficients table provides that the following independent variables are not significant to predict the dependent variable including: Brand (p-value of 0.699), Social interaction (p-value of 0.723) and Performance (p-value of 0.122). Those values are excluded while they are higher than the alpha level of 0.05. In contrast, Relative advantage (RA), Product Features (FE), Compatibility (CO) and Preference
48 (PN) are significant to predict the Purchase intention. Those independent variables have p-value less than alpha of 0.05. Hence, the relationship between these variables can be formed by the following equation, which is supported by the above table: Purchase intention = 0.094 + 0.254(Relative Advantage) + 0.329(Product Features) - 0.123(Compatibility) + 0.360(Preference) 4.7 Test of Hypothesis After several stages of testing, the initial hypothesis has been seen to change as the dependent variables transformed into various groups. The test of hypothesis would be modified to match with the data collected and previous analyzing. In particular, they were examined as follow: Hypothesis 1 H 0 : There is no impact from compatibility towards purchase intention of Smartphone among office workers in Hochiminh City H 1 : There is an impact from compatibility towards purchase intention of Smartphone among office workers in Hochiminh City Reject H 0 , if p<0.05 As the multiple regression table shows that the p-value of compatibility is 0.043, which is less than the significant level of 0.05. Hence, H 0 was rejected, it means that compatibility has an impact towards purchase intention. Hypothesis 2 H 0 : There is no impact from Product Features towards purchase intention of Smartphone among office workers in Hochiminh City
49 H 1 : There is an impact from Product Features towards purchase intention of Smartphone among office workers in Hochiminh City Reject H 0 , if p<0.05 As the multiple regression table shows that the p-value of Product Features is 0.000, which is less than the significant level of 0.05. Hence, H 0 was rejected, it means that Product Features has an impact towards purchase intention. Hypothesis 3 H 0 : There is no impact from brand towards purchase intention of Smartphone among office workers in Hochiminh City H 1 : There is an impact from brand towards purchase intention of Smartphone among office workers in Hochiminh City Reject H 0 , if p<0.05 As the multiple regression table shows that the p-value of brand is 0.699, which is higher than the significant level of 0.05. Hence, H 0 was accepted, it means that brand has no impact towards purchase intention. Hypothesis 4 H 0 : There is an impact from social interaction towards purchase intention of Smartphone among office workers in Hochiminh City H 1 : There is an impact from social interaction towards purchase intention of Smartphone among office workers in Hochiminh City Reject H 0 , if p<0.05
50 As the multiple regression table shows that the p-value of social interaction is 0.723, which is higher than the significant level of 0.05. Hence, H 0 was accepted, it means that social interaction has no impact towards purchase intention. Hypothesis 5 H 0 : There is an impact from performance towards purchase intention of Smartphone among office workers in Hochiminh City H 1 : There is an impact from performance towards purchase intention of Smartphone among office workers in Hochiminh City Reject H 0 , if p<0.05 As the multiple regression table shows that the p-value of performance is 0.723, which is higher than the significant level of 0.05. Hence, H 0 was accepted, it means that performance has no impact towards purchase intention. Hypothesis 6 H 0 : There is an impact from preference towards purchase intention of Smartphone among office workers in Hochiminh City H 1 : There is an impact from preference towards purchase intention of Smartphone among office workers in Hochiminh City Reject H 0 , if p<0.05 As the multiple regression table shows that the p-value of preference is 0.000, which is less than the significant level of 0.05. Hence, H 0 was rejected, it means that preference has an impact towards purchase intention.
51 Hypothesis 7 H 0 : There is an impact from relative advantage towards purchase intention of Smartphone among office workers in Hochiminh City H 1 : There is an impact from relative advantage towards purchase intention of Smartphone among office workers in Hochiminh City Reject H 0 , if p<0.05 As the multiple regression table shows that the p-value of relative advantage is 0.000, which is less than the significant level of 0.05. Hence, H 0 was rejected, it means that relative advantage has an impact towards purchase intention. Hypothesis 8 H 0 : No factors (Brand, Relative Advantage, Compatibility, Performance, Preference, Social Interaction and Product Features) have the most significant influence on the purchase intention of smartphone among office workers in Hochiminh City H 1 : At least one factor (Brand, Relative Advantage, Compatibility, Performance, Preference, Social Interaction and Product Features) has the most significant influence on the purchase intention of smartphone among office workers in Hochiminh City Reject H0, if p < 0.05 There are four factors influence on the purchase intention of smartphone among the office workers in Hochiminh City: Relative advantage, Product Features, Compatibility and Preference. Those three factors have p-value of under the significant level of 0.05. Step back to the table of Regression above, preference will
52 be the factor most significant influence on purchase intention of smartphone among office workers in Hochiminh City as its highest Beta value of 0.382
53 CHAPTER 5. CONCLUSION 5.1 Conclusion This study explores the factors influence on the purchase intention of smartphone. 218 respondents have been selected to measure the purchase intention of smartphone. Questionnaires were provided, which will collect data into 5 groups of independent variables. The respondents of this study including of 50% males and 50% females unintentionally. Meanwhile, most of respondents are at the age of 22 to 29 with 64%. Most of them have an average income less than 8,000,000 VND (32% in detail). The Product Features of connect to internet was founded to be an important items as its mean of 4.29. In contrast, the least mean of item value was 2.63 of Friends and family are very helpful to me in making decision of buying smartphone in Social influence. The data analyze also presented some irrelevant points in the study. Two items were excluded from the factor Brand after three times of Cronbachs alpha test. This stage has also demonstrated that all factors had the reliability value in range of 0.7 to 0.8, which is considered as a good rate. Several factors have been examined if they have impact on the purchasing intention of smartphone in this study. From the very beginning, the researchers spend efforts analyzing this relationship between the dependent variables and the independent variables including: Price, Brand, Compatibility, Relative Advantage, Product Features and Social Influence. Nevertheless, collected data present that office workers in Hochiminh City has been affected by Relative Advantage, Product Features, Compatibility and Preference. While the first three variables as listed are proposed at
54 first, the last variables was surprisingly discovered after the validity test. The variable was a part of the previous items found in Product Features and Price. Furthermore, Preference is also known as the variable which most influence the purchase intention with the highest Beta in Multiple Regression Calculation. However, Compatibility was also found to have negative relationship with purchase intention. Meanwhile, the rest three factors were known to play a vital role in affecting the dependent variable. Since then, adjustments of those three factors will lead to changes of purchasing intention in reality. Evidences from the study demonstrated that, smartphone firms might be inherited from the buying decision if they could enhance the effect of Relative Advantage, Product Features, Compatibility and Preference into real product, as well as into their marketing strategy. 5.2 Practical implication From the academic findings, practical implication is also recommended, which might support the managerial decisions of smartphone manufacturers in term of product development, marketing and communication. While Relative Advantage has been proven to have impact on purchase intention, it is suggested to enhance the advantages of smartphone towards the old feature phones. Instead of perceiving a just-enough-to-use phone, consumers nowadays require more hi-tech complements, more fashion and style and higher integration. Invest on product development with leading value continuously might raise an advantage for smartphone, especially, in the segment of office workers, who are at intensive use of smartphone.
55 Product Features is yet another field to consider in product development. For office workers, who are examined to prefer function of gaming, taking photos and connecting to internet, those phone with ready feature to fulfill their requirements might take a easily step to approach those group of consumers. As well as focus on these features for firms marcom campaign. Especially, when the manufacturer has their ability on offering high-quality of those features, take them as their unique selling points to promote as a key road to conquer the consumers. Last but not least, Preference has been analyzed to be the most significant impact on the purchase intention, which means their items regarding the use of applications and price per quality would be considered as most important things to smartphone producers. It is essential to understand that office workers, who tend to have higher education comparing to other group of society, may spend time and efforts in searching information and review for a smartphone. Since then, those people logically require a competitive price in connection with the quality they will perceive. Furthermore, as employees work in environment of computing machines, applications with productivity would be an useful tool into their smartphone. Firms might pay attention to provide such appropriate price with meaningful software to satisfy their consumers. In addition to the above implications, it is necessary for firm to collaborate with their consumers. Review and feedback from consumers for a smartphone function, design, price and build quality is required to build a strong relation between manufacturer and consumers, as well as to deeply understand the consumers continuously.
56 5.3 Limitation and further recommendation The data analyze has concerned about the precision of factors and items included. There are items and factors removed from the initial proposal, which have let to changes of analyzing factors and items. However, as the purpose to understand the relationship between factors influencing the purchase intention of smartphone, later analyze has significant discover to unhide the researchers questions. Alongside the usefulness findings, this research has several limitation to be discussed. Firstly, with a narrow scope of office workers in Hochiminh City with small samples, this research does not have ability to generalize the results in term of the whole country. It is recommended to have further studies in different cities and province with larger samples. Since then, more accurate insights of smartphone consumers would be draw out to represent for the Vietnamese smartphone market. Secondly, the study sample has not include the other groups as teenager or students, who are very fond of smartphone and have highly intention to use smartphone. Further explanation for more segment insight should give a wider picture for firms to consider while planning to launch new products. Thirdly, various stages of the consumers buying decision have not included in this research. Those stages also have important impact on the purchase intention of consumers, it is suggested that researchers should also consider and fulfill other determinants.
57
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67 Appendix BNG KHO ST NHNG YU T TC NG N NH MUA IN THOI THNG MINH (SMARTPHONE) Xin cho cc Anh/Ch, Hin ti, ti ang thc hin lun vn cao hc ti trng i hc Quc t - i hc Quc gia thnh ph H Ch Minh vi ti "Nghin cu cc yu t tc ng n nh mua in thoi thng minh (Smartphone) ca Nhn vin vn phng ti khu vc Tp.HCM". Knh mong cc anh/ch dnh cht thi gian tr li gip ti mt s cu hi sau y. Thng tin c nhn Vui lng nh du khoanh trn s anh/ch la chn. Cc thng tin bn di c s dng cho mc ch thng k v m bo tnh an ton thng tin cho anh/ch Vui lng cho bit gii tnh ca anh (ch)? 1. Nam 2. N Vui lng cho bit thu nhp hng thng ca anh (ch)? 1. Di 8,000,000 ng 2. T 8,000,000 ng n t hn 12,000,000 ng 3. T 12,000,000 ng n t hn 18,000,000 ng 4. T 18,000,000 ng n t hn 25,000,000 ng 5. Nhiu hn 25,000,000 ng
68
69 Vui lng cho bit tui ca anh (ch)? 1. Di 22 tui 2. T 22 n 29 tui 3. T 30 n 39 tui 4. T 40 n 49 tui 5. Hn 50 tui Cc yu t nh hng n quyt nh la chn mua smartphone Cc cu hi ca phn ny cp n cc yu t gy nh hng n quyt nh chn mua smartphone ca anh/ch. Xin anh ch vui lng cho bit kin ca mnh da trn nh gi theo thang im t 1 n 5 m chng ti a ra di y [(1) = Hon ton phn i, (2) = Phn i, (3) = Trung lp (Khng c kin), (4) = ng , (5) = Hon ton ng ]. Vui lng ch khoanh trn mt s la chn ng nht theo kin ca anh/ch. M GI C Hon ton phn i Phn i Trung lp ng
Hon ton ng PR1 Gi c l yu t quan trng nht khi chn mua smartphone 1 2 3 4 5 PR2 Ti ch mua smartphone trong cc chng trnh gim gi 1 2 3 4 5 PR3 Ti s so snh gi c gia cc nhn hiu v gia cc ca hng trc khi mua 1 2 3 4 5 PR4 Ti mua smartphone v n thc s ng gi da trn gi thnh v cht lng n mang li 1 2 3 4 5 PR5 Cc smartphone gi r to cho ti cm gic khng an ton v cht lng thp 1 2 3 4 5
70 M THNG HIU Hon ton phn i Phn i Trung lp ng
Hon ton ng BR1 Thng hiu l yu t quan trng nht khi chn mua smartphone 1 2 3 4 5 BR2 Ti thch chn thng hiu smartphone c bit n ton cu 1 2 3 4 5 BR3 Ti thch chn mt thng hiu smartphone c tin cy 1 2 3 4 5 BR4 Ti ch thch chn thng hiu smartphone theo s thch ca mnh 1 2 3 4 5 BR5 Ti sn sng chn mt thng hiu smartphone mi nu n p ng c cc tiu ch ca ti 1 2 3 4 5
M S PH HP Hon ton phn i Phn i Trung lp ng
Hon ton ng CM1 Smartphone ph hp cho mi nhu cu ti cn v mt chic in thoi 1 2 3 4 5 CM2 Smartphone ph hp vi cuc sng hng ngy v cng vic ca ti 1 2 3 4 5 CM3 Smartphone ph hp vi thi quen s dng in thoi ca ti 1 2 3 4 5 CM4 Smartphone l mt s thay i xng ng cho in thoi truyn thng 1 2 3 4 5 CM5 Smartphone m bo cho cc nhu cu cn s dng ca ti hin ti 1 2 3 4 5
M TNH NNG Hon ton phn i Phn i Trung lp ng
Hon ton ng PF1 Ti thch kh nng chp nh/quay phim ca smartphone 1 2 3 4 5 PF2 Smartphone c nhiu games cht lng cao 1 2 3 4 5 PF3 Smartphone c nhiu ng dng hu ch 1 2 3 4 5 PF4 Smartphone d dng kt ni internet (wifi, 3G) 1 2 3 4 5 PF5 Ti dng smartphone bi ti thch h iu hnh ca n (iOS, Blackberry OS, Android, Windows Phone, ) 1 2 3 4 5
M LI TH SO SNH Hon ton Phn i Trung lp ng
Hon ton
71 phn i ng RA1 Smartphone tin li, ng tin cy v hu ch hn in thoi thng thng 1 2 3 4 5 RA2 Smartphone thi trang, phong cch v thi thng hn 1 2 3 4 5 RA3 Smartphone c th tng thch vi nhiu thit b k thut s khc 1 2 3 4 5 RA4 Mn hnh v bn phm ln hn ca smartphone gip cho vic s dng cc tnh nng ca n d dng hn 1 2 3 4 5 RA5 Smartphone c th gip ti gii quyt cng vic trong nhiu tnh hung 1 2 3 4 5
M TC NG X HI Hon ton phn i Phn i Trung lp ng
Hon ton ng SI1 Gia nh v bn b chn mua smartphone gip ti 1 2 3 4 5 SI2 Ti hi kin bn b v ngi thn khi mua smartphone 1 2 3 4 5 SI3 Bn b, ngi thn ti phn ln s dng smartphone 1 2 3 4 5 SI4 Bn b, ngi thn ti tin rng smartphone rt hu ch cho h 1 2 3 4 5 SI5 Ti tham kho thng tin trn cc din n v mng x hi m ti tham gia khi mua smartphone 1 2 3 4 5
72 D nh mua smartphone Cc cu hi ca phn ny cp n nh mua smartphone ca anh/ch. Xin anh ch vui lng cho bit kin ca mnh da trn nh gi theo thang im t 1 n 5 m chng ti a ra di y [(1) = Hon ton phn i, (2) = Phn i, (3) = Trung lp (Khng c kin), (4) = ng , (5) = Hon ton ng ]. Vui lng ch khoanh trn mt s la chn ng nht theo kin ca anh/ch M cu hi NH MUA Hon ton phn i Phn i Trung lp ng
Hon ton ng PI1 Ti s tip tc s dng smartphone 1 2 3 4 5 PI2 Ti c nh s mua smartphone 1 2 3 4 5 PI3 Ti c nh s mua smartphone tt hn chic ang s dng 1 2 3 4 5 PI4 Ti s k vi bn b, ngi thn v chic smartphone ti ang s dng 1 2 3 4 5 PI5 Ti s khuyn bn b v ng nghip mua smartphone 1 2 3 4 5
XIN CHN THNH CM N S H TR CA QU ANH/CH
73 Table 17 - Reliability Test of Respondents Reliability Statistics
Cronbach's Alpha N of Items
.713 5
Item-Total Statistics
Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted PR1 15.20 4.583 .429 .682 PR2 15.39 4.202 .561 .628 PR3 14.78 4.470 .502 .654 PR4 14.66 4.714 .458 .672 PR5 15.02 4.244 .423 .692
Reliability Statistics
Cronbach's Alpha N of Items
.702 5
Item-Total Statistics
Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted BR1 15.91 4.108 .425 .666 BR2 15.89 3.588 .636 .574 BR3 15.68 3.839 .586 .601 BR4 15.89 4.052 .388 .684 BR5 15.87 4.494 .286 .720
Reliability Statistics
Cronbach's Alpha N of Items
.742 5
Item-Total Statistics
Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item- Total Correlation Cronbach's Alpha if Item Deleted