Bangkok's RTE Meal Preferences at 7-Eleven
Bangkok's RTE Meal Preferences at 7-Eleven
Into r
i2
By
Narisa Chalermwisatpol
5704641017
May, 2018
Semester 2/2017
Faculty of Economics, Thammasat University
Abstract
along with the hecticcity lifestyle are giving readytoeat food industries a new horizon.
During past decades, Thai people eating habits have been changed dramatically as a
readytoeat food1 (hereafter RTE) is introduced to the world. RTE food is becoming more
popular among teenagers, and young professionals, especially in urban areas. Marketing
strategies are heavily used to attract new customers. Base on data reported by the
as convenience stores fast food dominated other fast food categories in 2016 with 11%
current value growth. Regarding the key success, 7Eleven, the sole market leader in
convenience stores in Thailand holds 42% share of value sales3 in RTE category and
continues to lead both outlets and sales expansion by keeping on introducing new innovative
menus and special promotional campaigns throughout the year. Further, 7Eleven continually
grasps customers' changing needs which are then reflected in the diversified assortment of
products offered in its stores. With the proliferation of RTE food industry, understanding the
factors affecting consumer intention to purchase has become an important issue for both
meals. Of interest is the set of factors involved in the selection of RTE meals that considered
important by customers which are extrinsic factors, intrinsic factors, lifestyle factors, and
demographic factors. In the context of this study, purchase intention is defined as a measure
1
RTE food, by definition, means a food that is in edible form and does not require additional
preparation (Collinsdictionary.com, 2018)
2
https://www.portal.euromonitor.com/portal/analysis/tab
3
http://www.euromonitor.com/readymealsinthailand/report
of one's intention to perform a specific behavior or make the decision to buy a product, in this
Many researchers suggested that price is the main factor influencing purchase
intention of RTE meals, few studies have explored what really drives purchase intention
besides this monetary factor. Meanwhile, according to Lee and Lou (1996), it is generally
known that when it comes to the purchase of any goods or services, both intrinsic and
extrinsic factors are taken into account in building up expectation and opinions before
consumers experience the real product. However, most of the studies on purchase intention
toward the RTE food are focus only on some of those factors and never have been profoundly
Bangkokian and expected to shed new insights into consumer research, especially in the RTE
food settings by exhibiting the relationship between each factor. Therefore, the objective of
this research is to study this subject with two hypotheses in mind. First is all sets of factors
are significant and have the positive effect toward the purchase intention. Second is external
factors and consumers’ lifestyle are the most powerful driver of consumers’ purchase
intention. Eventually, in section 2, this article will propose a supporting literature that links
extrinsic factors, intrinsic factors, demographic factors and purchase intention. In section 3,
some theoretical frameworks are specified to support this research study. In section 4, the
method of collecting data and the statistical tools are elaborated. In section 5, the results are
discussed and some final conclusions are drawn towards the end of section 6. Eventually,
By definition, demographics factors are what make individuals different from one
another by categorizing them based on their characteristics, for example, age, gender, income,
education, and career. In general, when it comes to buying goods or services, demographic
factors are inevitably taken into account of one that affects the purchase intention to the great
extent (Kotler and Keller, 2006). For example, ‘income’ may affect willingness to pay of
consumers on what they can afford and attitude toward money that divides people into social
classes (Schiffman, and Kanuk, 2000). For ‘age’, it reflects life stages of the individual which
tend to have different preferences and needs at different stages of life. For instance, adults are
purchase intention of one in buying goods or services. In this study, the 4P’s Marketing Mix
2.2.1 Product
As stated in Dogra and Ghuman (2010), product defined as either physical products or
any kind of services that respond to consumer needs and wants. Product characteristics such
as product features, product assortment, branding and packaging also shape company's
reputation as well as its positioning, at the same time, influence consumer buying decision at
stores (Pan & Zinkhan, 2006). Further, Chaudhuri and Ligas (2009) study on product value
revealed that there is positively correlation between purchase behavior and product
characteristics. For example, RTE food consumers may concern about the functional value of
the RTE food such as packaging more than its nutrition facts.
2.2.2 Place
When it comes to convenience store, location is heart of this retail format success as it
considered to be sustainable competitive advantage that firms use to shape their offering to fit
in with consumers' busy, multiplatform lives. To the extent of this study, place refers to the set
of action toward the distribution strategy done by the company. For example, location and
Perceived price is the price which customers are willing to pay for goods and services
based on their perceptions of benefits and costs such as time and effort in acquiring goods or
services which tend to vary significantly across individual. The study on customers' purchase
there is a significant and positive relationship between purchase intention and price
perception of consumers. He also stated further that the formation of price perception is
generated based on the value that the product offers and should be defined through the "eyes"
2.2.4 Promotions
The term ‘promotion’ means the marketing message that typically consists of
advertising, publicity, sales promotions, and personal selling. Generally, the main purpose of
promotional activities is to raise product awareness in the consumers mind. For example,
firms may create an emotional link between brand and customers through advertising. When
the customer pays attention to advertising, they inevitably develop desired attitude toward the
activities purely for the sake of personal interest, here, refers to perceived quality and product
awareness.
When it comes to perceived quality, it is not characteristic of food but rather linked
with the concept of acceptability of consumer who ultimately defines the degree of safeness
of the food. Thus, for this paper, consumer awareness on food standard and hygiene are
considered to be the key characteristics used to evaluate the quality of readytoeat meals. Chi
et al. (2008) concluded that the higher awareness on quality of food, customer will be more
inclined to purchase it. Also, his study emphasized that perceived product quality has a
set which explains specific aspects of the consumer's purchase decision or the degree of
familiarity of consumers toward the product. To this extent, product awareness is directly
linked with purchase intention as purchasing process cannot happen unless a consumer is first
2.4. Lifestyle
During this digital age, Bangkok lives have changed rapidly as disposable income
increases with less leisure time. People face the timepressured situation and busy lifestyle.
Such that they are often associated with consumption related behaviors in which they are
experiencing. This has motivated many retail stores to introduce a variety of RTE items into
the markets to respond to those unmet demands. Supported by the study of Bhaskaran and
Hardley (2002), they suggested that present consumer lifestyle helps to increase the
consumption of functional foods as well as the fastpaced of work and social schedules are
leading ever more shortcuts in cooking and food consumption. Thus readytoeat food has
become the most popular type of the foodrelated lifestyle that answers consumer’s unmet
needs.
3. Theoretical framework
Most of the time 4Ps Marketing Mix shown in Figure 1 is used as a strategy for
marketing decisionmaking which comprised of Product, Price, Place, Promotion. These are
the marketing tools that use to answers consumers’ purchase intention toward a product.
Figure 1
3.2 Income elasticity of demand
In this study of purchase intention toward the RTE foods, I assumed that, in economic
terms, RTE food is considered to be fastfood inferior good4 that has a negative income
elasticity of demand. In other words, Figure 2 shows that when income increases, the demand
Figure 2
4. Methodology
In this section, explanations of the methods and models used in this analysis will be
provided. In the process of collecting data, primary data was collected through structured
questionnaires from 252 respondents which 42.5% was from male and 57.5% was from the
female. For secondary data, I collected from publication manuals, academic journals, books
and online sources. Regarding the methods of spreading the questionnaires, I decided to use
both online survey and paperbased survey on the purpose of getting diverse population. For
instance, nontech savvy respondents may found that the online surveys are too complicated
4
http://livingeconomics.org/article.asp?docId=119
and hard to access. The target respondents are those who never purchased the RTE meals
from anywhere, and those who generally purchased RTE meals. The period of collecting
characteristics of the consumers, extrinsic factors, intrinsic factors and foodrelated lifestyle
include age, income, education levels, occupations and number of meals consumed. Extrinsic
factors include the 4P’s marketing mix (product, price, place, promotion). For intrinsic
factors, product awareness and perceived quality are taken into consideration. The last section
is about foodrelated lifestyles of consumers which are separated into three types;
Regarding the types of question, multiple choice checkboxes were used in the first
section while five rating Likerttype scales ranging from strongly disagree (1) to strongly
agree (5) were applied for the rest of the sections. To study the purchase intention of
consumers towards RTE meals, initially, cluster sampling was adopted as the method of
collecting data. In figure 3, Bangkok city was selected to be the survey area and was divided
into 6 separate subareas according to the geographic boundaries; Central Bangkok, South
Bangkok, North Bangkok, East Bangkok, North Krung Thon, and South Krung Thon. In the
second stage, the survey was distributed to the target population in those six subareas to get
diversify income ranges; highincome, middleincome, and lowincome. Lastly, the collected
primary data was applied and analyzed using the StataMP software.
Figure 3
regressors X’s are both qualitative and quantitative. In regards to this study, I choose to
estimate the result using both ordered probit model and probit model such that they allow us
to examine the probability of each factor attributed by the consumers as a function of the
purchase intention toward RTE meals. Thus, to analyze the two hypotheses mentioned above,
For Specification 1, I used Ordered Probit Regression since the categories for the
dependent variable, here is the number of RTE meals purchased in a day by individuals, is
ranking. In other words, when it is coded as 0, 1, 2, and 3 the difference between the first and
second outcome is not the same as between the second and third.
P r( Y = j ) = X ji β j + I ji δ j + E ji γ j + L ji η j + ε i i = 1,...,252 , j = 1,...,4
Where:
Pr (Y=j) is the probability of consumer purchasing RTE meals, where j = 0 when individuals
never buy RTE food, j = 1 when individuals buy only one meal, j = 2 when individuals buy
two meals, j = 3 when individuals buy three meals. X ji is the vector of demographic
variables including age, income, gender, careers, and years of education. Depending on the
structure of the data, some components of the demographic variables can be captured by
office worker, public worker, student, and freelance. For gender variable, female respondent
perceived quality and product awareness. E ji is the vector of extrinsic variables including
product, price, place, and promotion. L ji is the vector of lifestyle variables including
As extrinsic factors, intrinsic factors and lifestyle factors are considered to be ordinal
variables rating by five Likerttype scales, thus for the simplicity, I categorize the answers
into five levels: 1 = strongly disagree, 2 = disagree, 3 = neutral, 4 = agree, and 5 = strongly
agree.
purchase intention. To be more explicit, if the coefficient estimate is positive, this implies that
demographic factors have the higher probability of affecting the purchase intention of
purchase intention. If the coefficient estimate is positive, this implies that personal enjoyment
and one’s perception toward RTE meals have the high probability of influencing purchase
purchase intention. If the coefficient estimate is positive, this implies that external factors
purchase intention. If the coefficient estimate is positive, this implies that lifestyle of the
individual has the high probability of influencing purchase intention, vice versa. Within the
For specification 2, I aim to further explore only the extrinsic variables and lifestyle
factors whether their effects are more powerful than all variables combined. In addition, the
dependent variable also changed to be ‘Eat_RTE’. Hence, for this specification, it would be
more suitable to use the probit model as the dependent variable would give binary outcomes
Specification 2:
Where:
Let Y k be Eat_RTE; whether individuals have eaten RTE meals or not. Pr is the probability
that Y k = 1, if the individual has eaten RTE meals and 0 if does not, and taking respondent
For both specifications, I compute the marginal effects to explain how each unit
purchasing RTE meals. By having introduced data source, data description, methodology, the
Table 2 shows descriptive statistics of 252 observations, which are the mean value of
each independent variable. The result from the survey indicated that majority of the
respondent are later adolescence5. Furthermore, 145 observations are from female
respondents while 107 observations are from male respondents. And, 131 out 252
respondents has income range below 15,000 baht. Moreover, 177 out 252 respondents earn an
academic bachelor's degree. Corresponding to this, 154 out of 252 respondents are the student
(see Appendix B for more demographic survey result). However, for dependent variables, it
5
Later Adolescence is between the ages of 19 to 24 years ("Preferred Terms for Life Stages/Age
Groups", n.d.).
would be more appropriate to summarize them in term of the percent frequency showing in
Table 3.
effects (standard deviation in the parentheses) of the ordered probit estimation for the sets of
independent variables regarding the number of meals purchased in each day by individuals.
Firstly, the marginal effect of income variable indicates that if income increases by one baht,
individuals have about 0.0115% and 0.0274% more likely to be in the categories of ‘never eat
the RTE meals’ and ‘eat only one meal per day’, respectively, and about 0.0165% and
0.0225% less likely to be in the group of individuals who buy ‘two meals per day’ and ‘three
For the marginal effect of businessman variable, this variable affects purchase
intention of RTE meals significantly that a change in the value of businessman variable from
zero to one positively changes the probability of purchase intention of one in buying RTE
meals by 43 percentage points with statistically significant at 5 percent significance level. At
the same time, businessman also has the negative lower probability of buying ‘two meals per
day’, and ‘three meals per day’ for 27 percentage points, and 21 percentage points,
negative significant for ‘buying RTE meals’ more than ‘not buying RTE meals’. For the
extrinsic set of variables6, regarding the marginal effect of product variable, when concerning
the product characteristics of RTE meals, individual who buys one meal of RTE foods per
day is 2 percentage points less likely to purchase the RTE meals. In contrast to those who
purchase two and three meals per day, they are 1 percentage points and 2 percentage points
more likely to purchase the RTE foods when product characteristic increases by 1 unit at 10
percent significance level. For the marginal effect of place, it has a negative significant
relationship by 1% and 3% less likely to be in the group of people who never buy RTE meals
and only buy one meal per day at 10 percent significance level. However, the result refers that
place variable also has a positive significant relationship toward individuals who purchase
RTE meals two and three meals per day by 1.9% and 2.6%, respectively. This means that the
higher degree of the accessibility such as location and open hour of the store positively
affected the purchase intentions of those who frequently purchase the RTE meals.
For price variable, when the price increases by 1 baht, individuals will be more likely
to purchase RTE meals by about 1% for those who ‘never purchase RTE meals’ and 2% for
those ‘who purchase only one meal per day’. In contrast for those who frequently buy RTE
meals, they will be less like to purchase RTE meals when income increases. However, it is
not statistically significant, as well as the promotion variable does. For the marginal effect of
6
For the extrinsic variables excluding price, Stata ‘pca’ command was used to estimate principal
components of the model
sets of intrinsic variables and lifestyle variables, they insignificantly affect the probability of
having RTE meals and not having any RTE meals such that the values are closing to 0.
the marginal effects (standard errors within parentheses), for the place variable marginal
effect, rise in the degree of accessibility of the store and the open hour increase the
further that location strategy, as well as quick services and long open hours, are essential to
convenience stores competitive strategy. In contrast, for the price, product and promotion
variables, the increase in one unit of such variables decreases the chance that Y k = 1 for 1.8
percentage points, 1.3 percentage points, and 0.9 percentage points, respectively. However,
healthoriented consumers insignificantly affect to the probability of ‘having RTE meals’ and
‘not having any RTE meals’ such that the values are closing to 0. Contrary to the convenience
consumers additively increases the probability of purchase intention toward the RTE meals
by 1.9 percentage points at 1 percent significance level and 2.7 percentage points at 5 percent
The main contribution of this research is to shade the new insights into consumer
research, especially in RTE food setting by investigating the sets of factors affecting on the
purchase intention of individuals; demographic factors, extrinsic factors, intrinsic factors, and
lifestyle factors.
Recall the first hypothesis of the study, the result contradicts the first hypothesis in
the way that not all variables are significant and positively affect the purchase intentions. For
example, regarding the income factor, the result is in line with the theoretical framework that
as RTE meal is considered to be inferior good when income increases up to a point, people
tend to buy less of the RTE meals. Also, it corresponds to the result that businessman is less
likely to purchase the RTE meals as this group of people is considered to be middle to a
highincome group. This shows that RTE meals are associated with low to the middle level of
On the other hand, for extrinsic factors, ‘place’ shows positive significant effect
toward the consumers’ purchase intentions as well as the product characteristics. One of the
possible reasons is that ‘product’ and ‘place’ are components that satisfy the consumer's
needs for convenience and speed. For example, RTE meals may design its packaging and
product to ease the behavior of people with the hectic lifestyle. For the price of RTE meals, it
does not appear to be a factor that drives purchase intention. This may due to the objective of
buying RTE meals is to buy its functional value such as usage benefit.
However, the result supports the second hypothesis that extrinsic factors and lifestyle
factors are the main drivers of consumers’ purchase intention. The result suggests that
location is the factor which is of utmost importance and plays a crucial role in consumer
foodshopping choice. Hence, these further underline that location decision and distribution
strategies are key successes of convenience stores. Apart from that, the result reveals that the
tasteoriented consumers.
In conclusion, by knowing the insights from the result, it implies that manufacturers
should concentrate their competitive strategies on selecting prime spots that suit to
the prime location must be the location that consumer perceives is reasonable and convenient
for buying. In addition, long open hour, and variety choice of foods seems essential as well.
7. Limitations
On the process of the study, some limitations are found as follow. Firstly, some of the
respondents may not be able to evaluate intrinsic cues based on specific knowledge such as
awareness on food standard and hygiene and therefore must resort to extrinsic cues and
lifestyle factors as well as demographic factors that requiring less specific knowledge.
Moreover, I also faced time constraint in collecting the sample size which led to the small
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Appendix
Appendix A: Questionnaire
แบบสอบถามเ อการ ย
วน 1
จ ยเฉพาะ คคล :: Sociodemographic factors
2. อา (Age)
5. อา พ (Occupation)
a. กเ ยน/ ก กษา (Student)
b. าขาย/ ร จ วน ว (Businessman)
c. พ กงานบ ทเอกชน (Office worker)
d. าราชการและพ กงาน ฐ สาห จ (Public worker)
e. ฟ แลน (Freelance)
f. นๆ
Scale Meaning
1 อย ด (Strongly disagree)
2 อย (Disagree)
3 ปานกลาง (Neuttal)
4 มาก (Agree)
จ ยภายนอก :: านผ ต ณ
จ ยภายนอก :: านราคา
จ ยภายนอก :: านการ ด ห าย
3. าน ออาหารพ อม บประทานเสมอ
4. าน ต เ ง บ
Appendix B: Demographic result from the survey
Gender
Age
Occupation
Education