BM3313 Marketing Research: Factors influencing customers intention to patronize Chatime.

Executive Summary
The objective of this research is to verify and study the factors influencing customers intention to
purchase Chatime beverages. The theoretical foundation of the research is based on attitude,
price, convenience and subjective norms. Besides that, we are applying two theories which are
Theory of Reasoned Action (TRA) and Theory of Planned Behaviour (TPB) as our research
theories. Firstly, Theory of Reasoned Action (TRA) was formulated to explain and investigate the
relationship between attitudes and behaviours that is seen within human action. Theory of
Planned Behaviour (TPB) explains that prediction of deliberate behaviour and how it is affected
by different independent variables.

Through this research, we distributed 200 questionnaires to several participants for collection of
data. In addition, we used the convenience sampling method (non-probability sampling method).
Most of the participants were from Seremban and Kajang. After that, all the data was collected
and analysed using Statistical Package for the Social Sciences (SPSS) Version 23. We used this
system to run several tests which include Reliability Test, Multiple Regression Analysis,
Independent Sample T-Test, and One-Way ANOVA Test to gather and determine the final
outcome for our research. According to the Multiple Regressions Analysis conducted in this
research paper, it clearly shows that the most significant variables which influence customers
intention to patronize Chatime are Price, Convenience and Subjective Norms. On the other hand,
it is also showed that Attitude do not play a significant role in influencing customers to patronize
Chatime.

In conclusion, some implications for managers were provided. Managers of Chatime will be able
to refer to our findings which include concrete data to improve their business and to attract more
customers in the future. Managers will understand the market better and provide better service to
their customers in order to retain them.

Keywords: Chatime, Theory of Reasoned Action,, Theory of Planned Behaviour, Intention to

purchase Chatime beverages, Price, Attitude, Subjective Norms, Convenience, Multiple
Regression Analysis, Independent Sample T-Test, One-Way Anova, R Square.

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 BM3313 Marketing Research: Factors influencing customers intention to patronize Chatime.

1.0 Introduction
1.1 Company background

Chatime, a global franchise teahouse which originated from Taiwan was founded in year
2005. Chatime has successfully expanded its business by setting up over 1000 outlets in 26
countries. A wide selection of freshly brewed tea infused with various natural flavors has helped
Chatime attract various customers globally.

1.2 Problem definition

Chatime are usually famous for their type of drink that is called bubble tea. There is a
special black pearl inside of their drinks which would usually attract a lot of customers. Chatime
is not the only store that offers bubble tea. There is a high competition in Malaysias F&B market.
In order to increase the intensity of customers to purchase Chatime beverage, marketers want to
know the issues that control a customers purchase intention to make correct decisions and to gain
more competitive advantage in the market. Thus, this project is to examine the factors that affect
customers intention to purchase Chatime beverages.

1.3 Research Question

1. What is the intention level to purchase Chatime beverages?

2. Are there significant differences in intention to purchase Chatime beverages among
working and non-working, gender, age, income and education?
3. Are there significant impacts of attitude, price, convenience and subjective norms on
intention?

1.4 Objectives of the Research

The main objective of this project is to examine the factors which affect customers intention
to purchase Chatime beverages. Besides that, there also some sub research objectives that are
mentioned below:

1. To determine the level of intention to purchase Chatime beverages.

2. To examine varying levels of intention among students and working, gender, age, income
and education.

3. To investigate the impact of attitude, price, convenience and subjective norms on

intention to purchase Chatime beverages.

1.5 Significance of the research

Marketers can understand the customers purchasing behavior and make the correct
decisions in their decision making process. By conducting this study, marketers are aware of
certain customers tastes and preferences to suit their wants and needs when consuming Chatime
beverages. Additionally, they also can identify the problem and find the most effective solution to
solve the problem.

2.0 Literature Review

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 BM3313 Marketing Research: Factors influencing customers intention to patronize Chatime.

For this research study, we will be focusing on two main theories which are Theory of
Reasoned Action (TRA) and Theory of Planned Behaviour (TPB). The TRA was formulated by
Ajzen and Fishbein in 1967. This theory was formulated to investigate the relationship between
attitudes and behaviours that is seen within human action. However, the study showed that
behaviour was not 100% voluntary and under control. This resulted in the creation of perceived
behaviourial control. In 1985, the Theory of Planned Behaviour was formulated with the addition
of behaviour taken into account. This theory predicts deliberate behaviour and is affected by
different independent variables. These independent variables may defer from attitudes, subjective
norms and perceived behaviourial control.
2.1 Purchase Intention

Purchase intention is one of the dependent variable which is to assess the customers and
their perception towards a brand. Based on Theory of Reasoned Action, purchase intention is one
of its significant dependent variable. A purchase intention is to be seen as a subjective desire or a
customer to purchase a certain product, which is a crucial point to anticipate customers purchase
behavior. This argument is supported by Morwitz & Schmittlein (1992) claims that in order to
predict customers behavior, purchase intention is the most significant factor because it helps to
measure the level of interest of the customers to purchase certain product. This argument is
strengthen by, Spears and Singh (2004), stated that purchase intention is a fundamental core value
which motivates the customers in buying an item. Hence, we can conclude that, customers who
have a good impression towards a brand or product will more likely to have stronger intention to
purchase a product.

2.2 Price Consciousness

According to Lin and Fang (2013), price can serve as a marker of value for customers
where the higher the cost of an item, the more professed risk a customer causes. Most of the
customers usually perceived that, higher the cost of a product, the higher the product value will
be compare to the products with a cheaper price (Xia & Monroe, 2010). From this statements
presented above, we can clearly see that, customers are price sensitive when they purchase a
product. These are the reasons why most of the companies use different pricing strategies to cater
their customers demand. Based on Hruschka (2002), customers may build their perception
towards a brand through the product pricing. For example, customers may perceive that,
expensive products deliver higher value whereas cheaper products provide lower value. On the
other hand, other customers may perceive that, cheaper price motivates them to purchase an item
and it worth every single penny spent (Tabassum and Rahman, 2012). In conclusion, price can be
stated as significant factor that influence customers to purchase a product and together they
perceive the value of a good brand.

2.3 Subjective Norms

According to Ajzen (1991), a subjective standard can be understood as the perceived

social power to complete a specific behavior. For instance, some people may be bound into social
pressure in terms of their choice of purchasing an item, which influence them to refer to their
family members and friends (Chaplin and John, 2010). Besides that, opinions from Specialist,
Experts and Celebrities also influence customers to purchase a product because these
personalities play an important role in the customers daily lifestyle (Kim & Chung, 2011). Based
on Thompson (1995) argument, he claims that subjective norms are the significant indicators of
behavioral intention than attitudes. This argument is also supported by Barua. P (2010), have also
stated that subjective norms plays an important role in influencing customers to purchase a
product autonomously.

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2.4 Attitude

According to Ajzen & Fishbein (1980), there is a positive relationship between attitude
and behavioral aim based on Theory of Reasoned Action. From this statement, we can conclude
that, the more positive perception customers have on an item, the more desire they have to
purchase it (Dodd and Supa, 2011). An individuals choice of action and responses to challenges,
incentives and reward will influences by attitude. This argument is supported by Suddin Lada et
al. (2009), where he claims that attitude refers to necessarily ideas, positively or negatively on
object, person or situation responds. This variable of attitude is usually used as the medium to
measure customers behaviors and aims. In addition to that, customers are usually motivated to
purchase an item based on the beneficiaries offered by the particular items (Bohner, 2002). For
example, customers feel healthy while consuming the Chatime beverages due to its low sugar
contains which promises a healthy lifestyle which other carbonated beverages could not offer.
Besides that, Chatime beverags is also suitable to all age groups. Hence, these are the evidence
which clearly explains and supports the positive relationship between attitude and customers
intention to purchase Chatime beverages.

2.5 Convenience

Convenience and product attributes are the most fundamental criterion which influences
customers intention to purchase an item. This argument is clearly supported by John D. (2015),
he claims that, customers usually search for the better alternatives which provide them
tremendous convenience and accessibility while purchasing a product due to higher buying power
and low switching cost. Products convenience seemed by customers includes accessibility, time
factors, and locations. Convenience is one of the fundamental criterions to be considered in order
to fulfill customers requirements (Ortega-Rivas, 2010). For example, most of the fast food and
beverages stores are usually set up in the town areas and easily assessable by the customers. In
conjunction, Chatime outlets are located in the shopping malls and areas which have higher
customers traffic which clearly demonstrate the convenience provided by Chatime to its valuable
customers. Besides that, the fast customer service provided by Chatime is also one of its added
advantages.

2.6 Research Framework

Price Consciousness

Attitude
Intention to purchase

Convenience Chatime Beverages

Subjective Norms

Figure 2.2 Research Framework

Research framework is a crucial section in this research paper, as it clearly shows the
variables and the significant relationship between the independent variable and dependent
variable. There are four independent variables in this research paper such as, Subjective Norm,
Attitude, Convenience and Price Consciousness. Whereas, the dependent variable is the Intention
to purchase Chatime. According to Libguides (2015), research framework is the very important in

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conduction the whole research process as it helps the researcher to identify the variables and the
significant relationship between them.

2.7 Hypothesis

The research hypothesis for this research paper to analyze the Intention to Purchase Chatime is as
follows:

H1: Attitude has a positive and significant influences towards intention to purchase Chatime.

H2: Price Consciousness has a positive and significant influences towards intention to purchase
Chatime.

H3: Convenience has a positive and significant influences towards intention to purchase Chatime.

H4: Subjective Norms has a positive and significant influences towards intention to purchase
Chatime.

3.0 Methodology
3.1 Research design and theoretical foundation

Causal research design and descriptive research design has been applied in this research to
investigate the significant relationship between several independent variables and consumers
intention to purchase Chatime. Therefore, the primary problem that influences the consumers
purchase intention will be analyzed for getting more understanding about this issues. The four
independent variables such as attitude, price, convenience and subjective norms are focused in
this research.

Numerical value was acquired in quantitative analysis to gain figure according the
consumers intention to purchase Chatime. Likert scale system is designed to measure peoples
attitudes, opinions, or perceptions (Jamieson, 2016). It allows the respondents rate their choices
for the entire item in questionnaire (refer to table 1.0).

Table 1.0: Likert Scale

Strongly disagree disagree neutral agree Strongly agree

1 2 3 4 5
Once the respondents rate the items in the questionnaire, the numerical value will be used
to determine the level of the consumers purchase intention. Due to the issues of time limitation,
this research is conducted by using non-probability sampling method to collect the data. We
ensured the samples collected represent the total population of Malaysia. Location of data
collection is at Palm Mall, Negeri Sembilan, Metro Plaza, Kajang and Metro Point, Kajang. SPSS
system is used to analyze and identify the variables which are significant in influencing the
intention when numerical value inserted into the system.

3.2 Time horizon

Our group had applied the cross sectional study for this research project. So, we only
conducted this research at one particular time to investigate the intention of customers to

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purchase Chatime beverages. Due to the reason of limited time period for this course which is
only 4 months, hence cross sectional study is more suitable for this research compare to
longitudinal study which requires long periods of time.Approximately 12 weeks were used to
prepare the questionnaire, collecting data and data analysis to determine our sampling plan. There
are total 200 questionnaires which have been distributed to consumers for data collection
purpose. Therefore, we have used self-administered survey approach in data collection section.

3.3 Structured Questionnaires

In our questionnaire, covers two sections which is Section A and Section B. Section A is
regarding demographic information of the participants. In Section A, we have 5 different
questions to analyse five different groups in terms of gender, occupation, age, income level and
education level. The objective of this section is to acquire more information about different group
people and their intention to purchase Chatime. This has been explained through T-test and One-
way Anova analysis. However, Section B focuses on the independent variables to determine the
intention to purchase Chatime. The four variables being tested is attitude, price, convenience and
subjective norms. In addition, we created 5 point Likert scales for the participants to answer their
response by a tick to verify their perception towards the product. The 5 point Likert scales is
formed as below; 1: Strongly Disagree, 2: Disagree, 3: Neutral, 4: Agree, 5: Strongly Agree.

Once the data is collected, the data is then keyed into the SPSS system to verify the
relationship between the independent variables tested and the intention to purchase Chatime.
Based on the result, the marketing manager can verify the independent variables that have the
most significant impact on the consumers intention to purchase Chatime.

3.4 Fieldwork/Data Collection

In order to conduct our research, we have distributed 200 questionnaires and collected the
data within one week. The target audience for our survey are students and working people who
have better product knowledge about Chatime. The questionnaires were distributed in Negeri
Sembilan and Kajang which covers few places such as Seremban town, Desa Palma, Tesco
Hypermarket, Giant Hypermarket, Nilai University, Metro Point and Metro Plaza in order to
obtain reliable results from people at different geographic locations. Besides that, we prepared
our questionnaire in dual language which is English and Chinese.

3.5 Sampling method

Based on the sampling plan we have collected, we were able to compute the entire
population of Malaysia by applying the Confidence Interval Approach. According to Burns &
Bush in 2010, the standard sample size formula for estimating percentage show as below:

n=sample size

z=standard error associated with the chosen level of confidence

p=estimated percent in the population

q=100-p

e=acceptable sample error

n = z(pq)

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Based on the survey of food consumption pattern, it has been noted that the percentage of
population that consumes tea in Malaysia is 47% (Norimah, 2008). Therefore, q is equal to 53.
The results obtained by using the formula to estimate percentage of those samples are shown
below:

n=sample size

z=1.96

p=estimated percent in the population

q=100-p

e=10

z(pq)
n =
e

1.96(47
n = 53)
10

n = 95.69

Based on the Confidence Interval Method that has been applied, the minimum questionnaire that
needs to be distributed in order to represent the whole population in Malaysia are only 95
samples. However, we distributed 200 questionnaires which would eventually strengthen and
maximize the accuracy and reliability of this research report.

4.0 Data Analysis Approach

A Statistical Package for the Social Sciences, also known as SPSS was used to analyze
and process the quantitative data that were attained through questionnaires.

4.1 Respondents Data

Table 1: Respondents Data

DEMOGRAPHICS ELEMENTS FREQUENCY PERCENTAGE

(%)

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Gender Male 96 48.0

Female 104 53.0
Occupation Student 76 38.0
Working 124 62.0
Age Below 15 15 7.5
16 - 30 118 59.0
31 - 45 44 22.0
46 and above 23 11.5
Income Level RM 0 RM 1,000 71 35.5
RM 1,001 RM 5,000 96 48.0
RM 5,001 RM 10,000 25 12.5
RM 10,001 & above 8 4.0
Education Level PT3 23 11.5
SPM 60 30.0
Undergraduate 68 34.0
Post-graduate 28 14.0
Masters 14 7.0
PhD 7 3.5

4.2 Reliability Test

Table 2: Reliability Test

VARIABLES NO OF ITEM ITEM DELETED CRONBACH ALPHA

Attitude 6 0 0.932
Price 4 0 0.820
Convenience 5 0 0.909
Subjective Norms 5 0 0.925

Cronbach Alpha is a measurement that measures internal consistency. Cronbach Alpha

specifically measures how closely related a set of items can be as a group (Lund Research, 2013).
For example, if the items and the questions in the questionnaire are correlated to one another, this
will result in a high value of Cronbach Alpha, which will mean higher reliability (Tavakol, 2011).

In our analysis, we used five variables which are attitude, price, convenience, subjective
norms and intention to purchase Chatime beverages. According to Nunnally (1978) and DeVellis
(1991), if the value of Cronbach Alpha is higher than 0.7, it is reliable.Based on our tests, all
variables have values that are higher than 0.7 which means that all variables are very reliable.

4.3 Multiple Regression Test

Table 3: Multiple Regression Test

Variables Significance Beta Value T Value

Attitude .981 -.001 -.024
Price .016 .150* 2.426
Convenience .000 .309*** 4.460
Subjective Norms .000 .497*** 9.336

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F Value = 114.630 R Square = 0.702

Note: Dependent variable (Intention to purchase Chatime beverages)

*** P <0.001 ** P <0.01 * P <0.05

A multiple regression analysis is carried out to investigate the relationship between

variables (Statsoft, 2016). It shows which independent variables has a significant impact on the
dependent variable. The significance of an independent variable is measured by how large its
value is. For example, if the value of the independent variable is <0.05, it shows that the
independent variable has a significant value with the dependent variable. If p <0.05, it means that
there is less than 5% chance of incorrectly rejecting the null hypothesis. Referring to table 2,
price, convenience and subjective norms have a significant relationship with intention to purchase
Chatime beverages. Attitude has a value that is more than 0.05, so it does not have a significant
value in intention to purchase Chatime beverages.

Other information in table 2 like beta value and T value is shown. The lower the
significant value of an independent variable will cause a higher beta value. The significant value
and the beta value have a positive relationship. The higher the Beta value, the better. The higher
the F value, the higher the significance. The F value for this research is 114.630. The value of the
R Square is 0.702. R Square explains how good the model fit is in the research. The R Square
value is determined from a scale of 1 1.0 (0% - 100%). The higher the R Square, the higher the
prediction of the model. An R Square of 0.702 means that about 70% of the variance in the
dependent variable can be explained by all the independent variables. The remaining 30% of the
variance can only be explained by other variables not included in the research
framework/research model.

4.4 Summary of Hypothesis Tests

We came up with 4 hypothesis as mentioned in our Literature Review. Only the first hypothesis
was not supported as the significant value was 0.981. The second, third and fourth hypothesis
were supported with values of 0.016, 0.000 and 0.000.

5.0 Discussion on Findings

5.1 Discussions on Research Findings

According to the Multiple Regressions Analysis conducted in this research paper, it clearly shows
that the most significant variables which influences the customers to patronize Chatime as Price,
Convenience and Subjective Norms. On the other hand, it is also founded that Attitude does not
play an important role in influencing customers to patronize Chatime.

The first variable to be discussed in this section is Price Consciousness, which supports the
Theory of Reasoned Action as stated in the literature review. According to the literature review by
to Lin and Fang (2013), he stated that price can serve as a marker of value for customers where
the higher the cost of an item, the more professed risk a customer causes. With the result obtained
through Multiple Regression Analysis, 0.016 which is <0.05, it can be clearly seen that Price
plays a significant role in influencing the customers intention to purchase Chatime. Thus, this
statement strongly supports the view point of Queste, that price is a significant factor, and
customers may not purchase Chatime if the price were to be increased.

The second variable Convenience supports the Theory of Reasoned Action with its results
obtained through Multiple Regression Analysis, which scored 0.000 which is <0.05. As a result,

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Convenience is a significant factor which influences customers to patronize Chatime. This

statement is supported by John. D (2015), who stated the buying power that customers have and
low switching cost, allows them to switch to other products which provides them with better
convenience. This finding is also strengthen by Ortega-Rivas (2010), who claims that
convenience is one of the factors which plays an important role in meeting customers fulfillment.
Hence it can be concluded that, Convenience plays a significant role in influencing customers to
purchase Chatime.

The next variable to be discussed is Subjective Norms, which supports the Theory of Reasoned
Action due to its result corresponding to the theory. The results obtained from Subjective Norms
are 0.000 which is < 0.05 which clearly shows its significance in influencing customers intention
to patronize Chatime. In order of strengthening this statement, Chaplin and John, (2010), claims
that customers are more likely to refer their family members and friends in terms of their choice
of purchasing an item. Adding on to this, other experts such as (Kim & Chung, 2011),
(Thompson, 1995) and (Barua. P, 2010) stated that customers are easily influenced to purchase an
item by the feedbacks provided by Diet Experts and Celebrities. They also claim that claims
that subjective norms are the significant indicators of behavioral intention than attitudes. In
conclusion, Subjective Norms plays an important role in influencing customers to patronize
Chatime.

The final variable discussed in this research paper is Attitude which do not support the Theory of
Reasoned Action. The results shown from the Multiple Regression Analysis do not support the
argument presented by Suddin Lada et al. (2009) and Bohner, (2002). The result does not shows a
significant relationship between attitude and intention to patronize Chatime as the result obtained
was 0.0981which is higher than 0.05. Customers might not likely be concern about the product
value and the beneficiaries provided by the product. For example, Chatime beverages are known
worldwide and usually published in health magazines, therefore customers would not feel fear of
purchasing Chatime beverages as they know it is healthy. As long as Chatime provides a healthier
beverages and it worth the money that they paid, customers are happy about it. Therefore, it can
be concluded that, Attitude do not play a significant role in influencing customers to purchase
Chatime.

5.2 Implication for Managers

There are a few implications that managers can follow to improve their business. Price
plays an important role for cutomers to purchase Chatime beverages. If managers were to
increase the price of the beverages by 30%, Chatime would most probably lose their customers.
To retain their customers, managers could have special discounts and promotions to their
customers. For example, Buy 1 drink and get the other drink for 50% off. A loyalty card can also
be suggested.

In addition, convenience is one of the factors that Chatimes customers consider about.
Chatimes managers should provide online takeaway service to purchase bubble tea to customers.
Customers will be able to purchase via online and would not need to queue up. After purchasing
the product online, customers can just print out the receipt and collect the bubble tea at any
Chatime outlets with a specialized online counter. It can save the customers time and they
would not need to wait long to make order in the shop. Besides that, Chatime managers should
provide (DIY) drinks. For example, customers can customize their own beverages according to
their liking. Customers can make their own flavors online with just click on a button on their
website.

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For subjective norms, mangers can create birthday promotions in their outlet. For
example, Get a free drink on your birthday. Buyers tend to purchase more from
recommendations from their friends and family instead of trying out new things on their own
(Purreau, 2016). This is because buyers tend to trust their friends and family more. Chatime
should have a Facebook or any social media account to promote their brand. There are so many
users who use social media. Social media has become one of the greatest marketing tool for most
companies. For example, Facebook. If they like the product, they will simply share the
experience on social media to their friends and family. When this happens, more buyers who see
their friends and family purchase from Chatime would want to purchase from Chatime too. It will
become a trend.

5.3 Implication of Theory of Reasoned Action

In order to test the four independent variables and its significance on influencing
customers to patronize Chatime, Theory of Reasoned Action is used as the base. Thorough the
Multiple Regression Analysis, it is founded that Price, Convenience, and Subjective Norms are
the most significant variables in this research. The result has also strengthened the Theory of
Reasoned Action strongly. Hence, as a result it can be concluded that Price, Convenience and
Subjective Norms are the main motivators to influence customers to purchase the items. On the
other hand, Attitude shows a negative relationship to the customers intention to patronize
Chatime as the result obtained through Multiple Regressions Analysis is higher than the given
standard, 0.05. Hence, it is proven that this variable is not significant in this research and it is
strongly contradicting with the Theory of Reasoned Action.

5.4 Limitation of the research

The first limitation of the research is the age of participants. Based on our research, some
of the participants are from 46 years old and above. Participants of ages 46 years old and above
are not so keen into purchasing bubble tea. They do not consume much bubble tea as compared to
participants who are younger. They are not interested in purchasing Chatime beverages so there
will be limited intention to purchase Chatime.

The second limitation is the sample size. A total of 200 samples were collected. Based on
these 200 questionnaires, it can be considered as inadequate information for our research.
Therefore, a bigger sample size is suggested so that we can get a wider representation of the
population in Malaysia. There were also time constraints and because of this, it was not possible
to distribute more samples.

The third limitation is lack of the response from the participants. When we distributed the
questionnaires, most people rejected us. Most people thought that we were selling products to
them so they rejected us. Most people were not willing to spend their time to fill the
questionnaires as they were either always rushing or busy.

5.5 Conclusion

In conclusion, this research is proven to be a valid and reliable research. By generating a

higher R square value (0.703), shows the ability of our research models predictive value is high.
Our research model can be called as parsimonious model because our model can be explained by
using only four independent variables (Price, Attitude, Subjective Norms and Convenience). Only
Attitude does not affect customers intention to purchase Chatime as the result obtain was 0.0981
which is higher than 0.05. This might be due to, customers behavior which is more price

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conscious rather than the product value. Our finding concurs with Lambart, (1972) from literature
review of price consciousness, that customers are price sensitive when they purchase a product.
Therefore, Chatime managers can inspire customers to have more intention to purchase the
Chatime by exploiting the different strategies towards the attitude, price, convenience and
subjective norms by providing them first class services and exciting promotions. Various
marketing cum management strategies will be developed by the managers by analyzing the data
obtained from SPSS system to boost their sales and profits. Hence, the research is justified.

(4,792 Words)

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