CHAPTER 3: STUDY OF CONSUMER BEHAVIOUR TOWARD BIG

C SUPERMARKETS IN HANOI

I. OVERVIEW ABOUT BIG C SUPERMARKET CORPORATION

1. General information

Big C Supercenter operates business in the form of "Hypermarket" or

"Supercenter", a modern retail business which is managed under the support of

Casino group. It is one of the major retailers in the world, with over 200.000

employees working in more that 11.000 stores, in Vietnam, Thailand, Argentina,

Uruguay, Brazil, Colombia, France, Madagascar and Mauritius. Casino Group has

ran successfully its business all over the world under the name of many systems

such as Lidle (in France), Jumbo (in Brazil) and so on.

Big C Vietnam set its first step in this market 10 years ago, but it proved to

be one of the leading company in distribution sector. In 2010, Nielsen Vietnam

ranked Big C the third among Top ten Vietnam strong bands. Today, Big C has a

total of 14 stores all around Vietnam with the area reach 8000 to 10000 m2. 14

outlets of Big C are named as follow:

Big C Vinh Phuc

Big C Hanoi includes Big C Thang Long and Big C The Garden

Big C Nam Dinh

Big C Hai Phong

Big C Vinh

Big C Hue

Big C Da Nang

Big C Dong Nai

Big C Ho Chi Minh includes 6 outlets: Big C An Lac, Big C Hoang

Van Thu, Big C Go Vap, Big C Mien Dong, Big C Phu Thanh

 Big C reflects the two most important elements of its business and strategy

for success: Big refers to the large size of the stores and the wide selection of

merchandise it offers. Big C currently stocks over 40,000 items to meet every

customer need. C refers to its loyal customers, who are the key to the success of its

business. 

2. Services in Big C

With more than 5.600 staffs, Big C offers a clean, comfortable shopping

environment with a wide assortment of goods available at reasonable prices

including provide outstanding customer service in order to ensure the winning

business strategy. Additionally, Big C provides a one-stop shopping experience to

the customers with a wide range of useful services at all stores.

2.1 At all Big C stores

The majority of the space is devoted to the sale of consumer goods and

foodstuffs at low prices and of excellent quality. Products available in a Big C store

can be divided into 5 main categories, as follows:

Fresh Food: meats, seafood, fresh fruits and vegetables, delicatessen,

frozen food, dairy products, bakery.

Dry Food: seasonings and condiments, beverages, soft drinks,

liquor, snacks, personal stuffs, cleaning products, pet food and accessories.

Clothing and Accessories: men’s, women’s, children’s and infant’s

clothing as well as shoes and handbags.

Electric Appliances: a wide range of electric appliances including

fridge, washing machine, air conditioner, kitchen appliances, home entertainment

equipment, computers and IT equipment.

Home Décor and Accessories: furniture, kitchenware, plastic storage

items and utensils, decorative items, home improvement, maintenance tools and

supplies, automobile and motorcycle accessories, sporting goods and toys.

2.2 Big C Shopping mall

Big C provides rental space located both inside and outside of Big C

building to let the entrepreneurs do business within Big C. Nonetheless, goods and

services providing must be different from the goods sold in Big C. Therefore,

customers visiting Big C could find a great range of products and services available

at a single destination, enhancing the overall shopping experience. Most of the

operators that lease space at Big C Shopping mall can be divided into 4 main

categories:

Food and Beverage: restaurants, franchises food outlets, food court

Entertainment: cinemas, karaoke booths and kid’s play ground.

Specialty Stores: book shops, fashion boutiques, electronics shops,

mobile phone shops.

Services: ATM...

2.3 Other value added services

In order to promote the image of Big C, the supermarket has added various

services to please customers who shop at Big C. It gives out ethical commitments to

win the customers’ trust; which are as: do not sell expired products, customers can

exchange/return items within 48 hours, listen to customers and will give feedback

within 5 days, it also commits that customers can exchange electronic appliances

within 72 hours.

Moreover, Big C also offers other facilities to provide the best service to

customers: free bus to the outlets of Big C, free delivery of electronic device, handy

payment with variety of means of payment such as ATM, cards installment.

To win customers’ loyalty, Big C attempts to serve the best service to its

customers. The study will also conduct research on how the customers response to

services which Big C offers.

3. Business strategies

Price policy

Big C aims to be the low price leader. Under the core strategy of “Low

price for every household”, the Price policy of Big C goes for selling bulk price for

retail products and. The price ranges at the medium level, which us suitable for the

majority of customers.

By interviewing method, Mr. Le Si Hien – Director of Big C Nam Dinh

provide with some of pricing policy of Big C so far. Big C sets out the red circle,

which include 800 ranges of products with the competitive price compared to

market price. Green circle comprises of products which are not allowed to be 5%

higher than market price.

Product strategy

Big C focuses on selling merchandise product with good quality. It attempts

to set its own price policy with low gross margin, focuses on certain products and

initiate discount program for each product lines and products item. Promotion

programs are public massively on media and newsletters of the company. Every

week, Big C proceeds to discount 400 different products to rotate the circle of

inventory and attract more customers.

Customer strategy

Targeted customers of Big C range from low to middle class. This is a quite

large segmentation and easy to proceed consumer behavior influencing campaigns

because they have good awareness and easy-going behaviors and high demand of

consumption.

Expansion

A core element of Big C’s success is its increasing ability to be close to its

customers throughout the country. As a result of the Company’s on-going

nationwide expansion plan, Big C currently has 14 locations around Vietnam.

4. Big C business performance

4.1 Big C business environment

Sociology environment

Supermarket business depends relatively on the characteristics of socio

environment. The typical culture of Hanoi is citizen culture, open, friendly and has

a high demand on the diversity of ranges and quality of products. Vietnam has a

“young” population which means an increase in purchasing power1.

Economic environment

To the experiences from many countries in the world, the average income is one

the crucial factors to the success of the development of supermarkets. The

current average income in Vietnam is about 600-700 USD, and in big cities like

Hanoi is about 1.900USD2 in 2010. This number has been the advantage for

supermarket to grow in such areas.

The high speed of urbanization and industrial habits are getting more and more

popular. Supermarkets, hypermarkets and other modern trade outlets is the

result of those tendencies. Vietnam is the potential market with great consuming

power; it also developing new urban areas to meet the fast pace of the

development. It is said that Vietnamese consumers are responding positively

with supermarkets activities.

The shift of purchasing habits also proves to be positively influential. People

have less time for household work, higher standard of living and income, which

will lead to the need of buying in bulk and preserving food for long usage.

1 Nielsen Vietnam, August 2010, Vietnam Grocery Report – Annual Update2 http://vnexpress.net/gl/xa-hoi/2010/11/3ba23631/

These change of mind have a great impact on the development of supermarkets

in Vietnam

Supermarkets own the competitive advantage toward traditional trade in terms

of civilized self service, quality guarantee, and hygiene guarantee.

WTO opened the gate for foreign players to get foot in this potential market. Up

to now, foreign firms are allowed to set up a 100% foreign capital company in

Vietnam, this regulation paves a good way for them to run business in Vietnam

and also challenges domestic enterprises. The competition is getting more and

more intense and requires serious consideration and effective strategies from

both side of the battle.

4.2 Big C’s main competitors

To the evaluation of Mr. Le Si Hien, there are two types of competitors of

Big C, indirect rivals are traditional markets and direct ones are other supermarkets

in Hanoi.

Traditional market

Figure. SWOT analysis between Big C supermarket and traditional markets

Big C Supermarket Traditional markets

Strength

- Organized, clean and

comfortable location

- Clearly fixed and listed price

- Quality guarantee

- Wide ranges of product

- Habitual shopping destination

- Spread in every corner of the

residential quarter

- Bargaining price

Weakness

- Lack of experience

- Lack of market share

- Lack of hygiene guarantee

- Lack of professional trading

method

- Time consuming because of

bargaining

Opportunity

- High growth rate of

economy

- High average income rate

- Trend of urbanization

- Change in consumer

behavior

- Very ubiquitous in suburban

areas

- Upgrade to specialized

business

Threat

- The market share of

traditional markets is far

more than supermarkets

- Uncompleted legal barrier

- Change of consumer

behaviour

- Fast urbanization progress

and the appearance of

supermarkets

METRO Cash & Carry supermarket

METRO Cash & Carry was the first company introduced the cash & carry

wholesale model in Vietnam. Together with its business development, METRO

Cash & Carry has made big transformation in the country’s production and

distribution building up modern trade infrastructures in Vietnam. On

28.03.2002, METRO Cash & Carry opened its first self-service wholesale center

in Ho Chi Minh City, the business metropolis of Vietnam. On 5.12.2002, also in

Ho Chi Minh City, the second cash & carry wholesale center of Vietnam started

its operations.

In 2003, the first METRO Cash & Carry wholesale center for Hanoi Capital was

opened on 31.7.2003. This was also the first self-service wholesale center for

the Vietnam’s North Region1.

The METRO Cash & Carry product range and services – from delivery to

ready-made business solutions – is outstanding in its diversity, quality and

excellent price-benefit ratio. It provides fresh food products and offer “one-

stop shopping” for each market it enters. Each assortment is tailored to the

local requirements of professional customers.

1 http://www.metro.com.vn/servlet/PB/menu/1108560_l2/index.html

Under the form of business to business distributor, METRO Cash & Carry

still carries out its retailing business through making Permanent Customer

Card via companies that customer are employed or self-employed. This method

may help METRO to classify and segment its targeted customers within wide

range of people in the area.

FIVIMART supermarket system

Fivimart is rated as one of the most famous brand during 2006 – 2009,

hold by VCCI and Nielsen Vietnam. This supermarket system belongs to Nhat

Nam JSC, a Vietnamese brand in supermarket market. Founded in 1997,

Fivimart was equipped with modern systems of billing machine, camera

system, air conditioners, and refrigerators and so other on. Up to now, Fivimart

has 14 outlets all over Vietnam with 11 in Hanoi, 20.000 kinds of product with

30% of imported products.

Fivimart also carries out periodically promotion programs to attract

more customers and dedicate to its loyal customers such as Lucky draw for

billing more than 50.000, free gifts, lucky bill…Especially, golden customer is

one of the favourable program which Fivimart offers to its loyal customers.

With the accumulated points from purchasing bill, customers have chance to

have Membership Card, which can help to discount 3% of each time payment.

Moreover, Fivimart recently offers selling online service, which allows

customers a convenient and high-tech method of buying.

4.3 Big C’s business performance

II. FINDINGS OF CONSUMER BEHAVIOR TOWARD BIG C

SUPERMARKETS

1. Research methodology

Saunders. et al. (2003) stated that research methodology is an

approach that is adopted for research and it is based on research philosophy and the

nature of the subject under investigation. Therefore, choosing an appropriate

research method plays a significant role in the reliability and practicability of the

study. Two paradigms often mentioned in the literature are qualitative and

quantitative. Creswell (1994) defines qualitative research as an inquiry process of

understanding a social or human problem conducted in a natural setting. It involves

building a complex and holistic picture with detailed views of informants.

Qualitative research can be collected in number of form, such as interview and

focus group. However, this paradigm has some weaknesses such as time

consuming, ethical dilemmas, role conflict for researcher, difficulty in the access to

organisation. Meanwhile, the quantitative paradigm is defined as “entailing the

collection of numerical data and as exhibiting a view of the relationship between

theory and research as deductive (and of positivism in particular), and as having an

objectivist conception of social reality”, Bryman and Bell (2003). In the recent

years, quantitative research has been used more frequently because of its

convenience.

This study itself requires a wide range of information and numerous

responses are critical. Thus, quantitative approach is a suitable choice. However,

qualitative data is also important in the research which studies about consumer

behaviour. As a result, a mixed approach will be applied to this study, which means

qualitative approach will be used to complement the statistical analysis.

2. Data Approach

2.1. Secondary Data

Secondary data are existing information that has been gathered before by

someone other than the user. Strauss & et al. (2006) thought that in comparison with

primary data, secondary data can be collected more easily, quickly and therefore it

is less expensive than primary data, especially when the data are collected from

Internet. This study collected some secondary data from the past study of some

thesis and dissertations, papers, books and some authentic websites which will be

cited on footnote areas after each citation.

2.2. Primary Data

Primary data are information gathered for the first time to solve a particular

problem (Strauss et al, 2006). It is argued that even primary data require more time

and are more expensive but they can meets researcher’s need and are up-to-date.

Moreover, for a study whose target is to investigate consumer behaviour about

shopping behaviour at a particular company, primary data must be taken. According

to Kotler (2000), there are five ways to collect primary data: Observation, Survey,

Experiments, Focus group and Behaviour data. This study uses Survey to meet the

objectives of the research.

2.3 Population and Sample Size

The population covers the consumers who satisfy the following conditions:

Age ranges from 18 to over 35

Currently living in Hanoi

Shop at Big C supermarket at least once

Berenson et al. (2006) stated that “Sampling is the portion of the population

that has been selected for analysis”. Instead of taking complete census of the whole

population, the researcher focuses on collecting a small representative group of the

large population. Due to the limitation of the time and cost, 72 shoppers who satisfy

the conditions above were selected as sample.

2.4 Questionnaire design

A crucial part of a good research design concerns making sure that the

questionnaire design addresses the needs of the research and will collect the precise

data that is required to answer the research questions and achieve the research

objectives (Burgess, 2001; Saunders et al.,2003). The questions in the questionnaire

are produced based on the literature review mentioned in the last chapter.

The questionnaire consists of two parts. The first part is to let the

respondents provide some general information includes their socio-demographic

profile (e.g. age, gender, occupation, living area and average income). The second

part has 11 questions which mostly are multiple choice questions and scale

questions. These questions were designed based on the purchasing decision process,

which has been presented and analyzed in Chapter 2.

The first two questions (question 1 and 2) are to raise up the need

recognition of the respondents. The questions ask whether the respondents go to

supermarket or not if they are in need of shopping and how often they go there. The

question require respondents to rate 5 kinds of product (which are most popularly

available in supermarket: fresh food (meat, vegetable, fish, fruits…); dry food

(beverages, soft drinks, snack, seasonings, canned products…); chemical products

(washing powder, liquid…); clothes, cosmetic, interior accessory/ decoration

(furniture, plastic stuff, toys..); household electrical device (kitchen device,

entertainment, computer equipments…)) in terms of level of frequency (always,

usually and never). Question 2 is a multiple choice question which is to find the

level of frequency in terms of shopping at supermarket, which includes Everyday,

2-3 times per week, Once per week, 1-2 times per month and 1-2 times per year.

Next, question 3 is to let consumer provide the level of agreement with

some reasons for going to supermarket. Those proposed reasons are: Buying

planned necessary stuff, Window shopping and shopping about products, Looking

for product discount, Relaxing. This question is also to investigate the need

recognition of consumers.

From question 4, the questionnaire focuses directly to ask customers about

Big C supermarket. Question 4 and 5 will help researcher to figure out about the

Information search about Big C, will they choose Big C as the destination or not

and how they get the information of/about Big C. Next, the respondents are required

to show the level of agreement with some particular reasons to choose Big C as

their final decision to shop at. These reasons, which are based on the Consumer

store’s choice which has been mentioned in Chapter 2, are listed as:

Products are diversified Staff are warm-hearted and

enthusiastic

Quality of products are good Good supporting facilities

(parking, billing…)

Price is reasonable Convenient location

Product arrangement is

convenient and easy to find

Other facilities (Children play-

land, food court…)

A lot of promotion programs

Question 7 asks about the level of satisfaction of respondents when shopping at Big

C in terms of Product ranges, Quality of Product, Price, Product arrangement,

Promotion activities, Staff, Supporting activities, Location, and Other facilities.

This question is to know the Purchase decision of consumers and how they evaluate

the choice they made. Question 9 mentions the Post purchase behaviour of the

respondents by asking the evaluation of consumers via some post purchase services

such as Transportation (bus service, parking service), Payment, Delivery, Changing

defect products, Claim and Complaint. The remaining questions are to support and

direct the respondents to answer the major questions.

For the scale question type (question 1, 3, 5, 6, 7, 9), researcher offered

respondents to select one of three levels (frequency: always, usually and never; or

level of agreement: agree, neutral, disagree) with each statement in one question.

The questionnaire is only ranged within two A4 size sheet. The questions and

statement are clear and easy for respondents to understand in Vietnamese.

Moreover, the key words of the questions are capped and bold for the respondents’

convenience in catching the main ideas of the questions.

2.5 Data collection approach

Consumers who are living in Hanoi and go shopping at Big C supermarket at

least once within 6 months so far is the target population of this research. The direct

approach to those consumers is the main method to collect data. As this research

studies about consumer behaviour toward supermarket, Big C in particular, the

target should be consumers who have just shopped at Big C supermarket or the ones

who have been there lately. As the result, the data would be more valid and reliable.

Big C Thang Long and Big C The Garden are two places the researcher

chose to collect data. Moreover, officers and staff of some office are also the target

of the study. To make it easier, the researcher also made online survey to collect

data from friends, relatives and people within the network. However, it was quite

difficult for collecting survey in Big C since shoppers do not have time or were not

willing to stop by and finish the survey. Hence, the main source of the survey is

from the network of the researcher.

3. Result of the survey

There are 90 surveys which were spread and 88 responses were collected. Since the

number of sample is not large, it will be easier for researcher to deal with the data

by Excel. Moreover, the data collected online will be included with the summary of

the survey conducted by esurveypro.com.

3.1 Data description

The demographic characteristics of occupation status, age, living area,

income rate are included in this discussion to provide a descriptive profile of the

survey respondents. The summary of findings about demographic characteristics is

obtained by running frequencies on the survey data in excel document.

Age -