Thai Consumer Behaviour Toward Coffee Shops in Thailand

Introduction and Research Context

Despite having been somewhat overshadowed by the internationalised economic crisis, the process of globalisation remains highly relevant and of tremendous importance. It refers specifically to the process by which markets are liberalised and the limitations imposed by national boundaries are eliminated. Globalisation is generally associated with economics and is best understood in the context of liberalised markets and free trade. In practice, however, it extends well beyond economics and trade to include the transition of political, social, cultural, technological, and other values from one global region to another.

Social globalisation is often referred to as Americanisation — the process by which American values, the American way of life, music, language, and so on are promoted and then adopted by other countries. As an extrapolation, the process has been termed westernisation, implying the transition of Western values to the rest of the world. Despite the intense influence of particular global regions on others, the East has also influenced the world in several significant ways.

One example is the propagation of Middle Eastern carpets — especially Persian rugs — which became globally recognised and appreciated. Another example is the financial investments that oil magnates have made within Western societies. A final example is coffee, the energetic drink believed to have first been discovered in the Ethiopian highlands, though the precise timing remains unclear. From Ethiopia, the beverage spread initially throughout the Arab world and then to the European continent and eventually to the American continent (Law, 1850).

The coffee industry is a multi-billion dollar industry, with coffee exports exceeding six million tons per year. Coffee trading commenced within the Arabian Peninsula, and the popularity of the drink soon expanded throughout the rest of the world (Smith, Gupta, and Gupta, 2007). Coffee consumption gradually evolved from an old-fashioned practice of grinding coffee beans in stone recipients and drinking the beverage at home into a thoroughly modern activity. Coffee is now consumed on the streets, in restaurants, in dedicated coffee shops, and in virtually any location. It is enjoyed at all times of day, and the variety of coffee-based products is virtually endless.

Within this context of coffee's discovery and consumption evolution, it is worth noting that the East discovered and popularised the beverage, but it was the West that created its consumption culture. Starbucks is the most relevant example in this sense, as it created an entire coffee-drinking culture and has since exported that culture worldwide. Given this realisation, a question arises regarding how coffee is now viewed and consumed in the East, particularly in light of the consumption patterns established by the West.

In order to answer this question, the particular case of Thailand is assessed. The scope is to review the ways in which Thai customers respond to and engage with coffee shops. To find an answer to this question, a questionnaire was constructed, administered, and processed. The significance of the research is twofold. On the one hand, the endeavour reviews the literature and researches the market to produce specific theoretical findings. On the other hand, it constitutes a starting point for coffee shop managers who seek to better understand their customers and to improve their customer attraction and retention strategies.

In light of the situation previously described, the problem statement at the basis of this research endeavour becomes clearer. The problem statement represents the concise presentation of the research questions to be answered. It helps the researcher focus on the specific task at hand and is also useful in that it generates additional questions — alongside the broader central question — which help in finding an answer to the posed inquiry (2006).

At this stage of the research process, it is necessary to answer a series of questions:

1. What is the main topic of the research? In other words, what is the central problem in the research endeavour?
2. Who will benefit from finding an answer to the problem?
3. What form will the findings take?
4. How will the findings be retrieved?

The corresponding answers are as follows:

1. The central issue of the research is Thai consumer attitudes toward coffee shops in Thailand.
2. As mentioned throughout the introductory section, the answer to the research question will support future research endeavours and offer coffee shop owners and managers the opportunity to better know — and thereby better serve — their customers.
3. The findings will be presented in essay format as the result of both primary and secondary research.
4. The findings will be retrieved initially from the specialised literature, which represents the academic stage of the analysis. The second stage is represented by the construction, completion, and analysis of a questionnaire. The analysis of the specialised literature constitutes research from secondary sources, while the analysis of actual coffee consumers constitutes research from primary sources.

The main scope of this research endeavour is to identify the behaviour and attitudes of Thai consumers toward coffee shops in Thailand. Several aims and objectives stem from this broad scope. Research aims refer primarily to the outcomes expected to be generated through the research, whereas objectives revolve more around the means by which those aims will be accomplished (Bryman and Bell, 2007).

The research aims are as follows:

— The identification of the behaviour of Thai consumers regarding coffee shops
— The identification of the attitudes of Thai consumers regarding coffee shops
— The provision of complex and relevant answers to support future academic research
— The provision of complex and relevant answers to participants in the coffee industry and market in order to support the development of the coffee sector

The research objectives are as follows:

— The analysis of the available literature in order to develop familiarity with Thailand and the coffee industry and market
— The construction of a detailed questionnaire
— The gathering of responses to the questionnaire questions and the analysis of those answers
— The construction of relevant findings based on the questionnaire and its analysis
— The identification of the main elements that determine a particular consumer attitude or behaviour regarding coffee shops in Thailand
— Helping the general or academic reader to better understand the coffee industry in Thailand
— Helping the Thai coffee shop owner or manager to better understand the market

Consumer Behaviour Theory

The starting point of this research endeavour is that the consumption of coffee in Thailand is changing due to the forces of globalisation as well as modernisation. Both phenomena are prevalent in Thailand and are expected to manifest within the consumption of coffee as well.

The globalisation of Thailand commenced in the 13th century, when the country — a kingdom and constitutional monarchy (Central Intelligence Agency, 2010) — began trading merchandise with China. By the 18th century, Thailand had extensive trading partners including Japan, Indonesia, Spain, France, and even the United States. At that stage, the Thai population lived at bare subsistence levels, with all production surplus collected by the government.

During the following two decades, however, new leaders developed and implemented a series of social, political, and trade reforms. These represented the starting point in the modernisation of Thailand. The most telling example of Thailand's desire to become globalised was its decision to send princes of the kingdom to European countries to study. Upon their return, they were charged with implementing Western views in the Southeast Asian country. The princes "were responsible for the reforms and modernisation of education, health care, military, public administration, transportation and communication, laws and justice, etc., by adoption and adaptation of the Western models and technology" (Pupphavesa, 2002). The result was a gradual transition from an enclosed subsistence economy to a commercial economy and the creation of a more developed society placing emphasis on individual wellbeing.

Ultimately, it is assumed at this stage that, just as the country is facing new challenges and influences that compel it to adapt and develop, the coffee market and industry is also confronted with the necessity to evolve and serve new needs. The role of the following sections is to assess the elements that characterise the modern-day consumption of coffee in Thailand.

The literature review is focused on providing a starting point for the analysis and understanding of the behaviour and attitudes of Thai customers regarding coffee shops. As noted previously, the literature review represents research conducted through secondary sources. The information is divided into six thematic sub-sections covering consumer behaviour, Maslow's hierarchy of needs, the product brand, elements in the coffee purchase decision, the coffee industry and market in Thailand, and the ability of advertising and marketing to stimulate coffee purchase.

Customer behaviour can be understood through two different lenses. At the first level, there is the actual reaction of customers in response to a particular product or service. At a secondary level, there is the analysis of customer behaviour in order to better understand clients. A highly comprehensive overview of customer behaviour is offered by Perner (2010), who stated that the official definition of customer behaviour refers to the "study of individuals, groups, or organisations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society" (Perner, 2010).

According to Perner (2010), there are four major applications of consumer behaviour: marketing strategy, public policy, social marketing, and consumer benefits.

Knowledge of customer behaviour allows companies to better understand the behavioural mechanisms underlying customers' decisions, which in turn enables the development of marketing strategies tailored to customer behaviour. Two examples are relevant here. The first is the realisation that people respond better to food advertisements when they are hungry; as a result, a company will air its snack product advertisements late in the afternoon. The second example involves the realisation that whenever a new product is launched onto the market, customer purchases will be delayed until clients are convinced of the product's necessity or of its quality and functionality. The company will accordingly recognise:

— The necessity to satisfy the initial customers due to their ability to influence future purchases
— The necessity to maintain additional financial reserves to fall back on until sales of the new product pick up

This application refers specifically to consumer reactions regarding a particular product or service. In a context where an item poses threats to public health, it is most likely that policies will be created to better manage the sale of that product. A relevant example is Accutane, an acne treatment with impressive results but significant side effects on fetuses. Policy was issued to ensure that product labels contained graphic representations of these side effects.

Social marketing refers primarily to passing important information to customers, rather than convincing them to purchase a specific item or to cease a specific behaviour when such approaches are not feasible. One relevant example involves illegal drug use and the entrenched practice of needle sharing, which led to the spread of illness. As Marty Fishbein, a marketing professor at the Center for Disease Control and Prevention (CDC), recognised that stopping the practice outright was impossible, he created a strong marketing campaign encouraging users of illegal drugs to clean needles in bleach before sharing them — a solution deemed more realistic.

Maslow's Hierarchy of Needs and Purchase Motivation

Finally, the ability to understand customer behaviour leads to a series of consumer benefits, such as an enhanced ability to evaluate elements of a purchase. Perner (2010) stated that:

"Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium by buying the larger quantity. In other words, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain."

A specific means of assessing customer behaviour is offered through the lens of motivation. Reputable members of the academic community argue that consumer behaviour is directly linked to motivation. Mowen and Minor (n.d.) suggested that the decision to purchase — whether studied or impulsive — is determined by the motivation of the individual to own possessions that ensure the ability to meet physical needs, to feel safe, to belong to a group, to improve self-esteem, and to support self-actualisation. In other words, each purchase decision can be linked to a specific level in Maslow's hierarchy of needs.

Motivation refers to an internal state within the individual that will convince him or her to make a purchase or not. It commences with the realisation of a need, which will eventually determine the customer's behaviour. The need can be innate or developed, but it is never fully satisfied. Additionally, the need is associated with emotions, which can be exploited by economic agents to stimulate a purchase decision (Mowen and Minor, n.d.).

MacNeill (1993) is also among the authors who support the theory of a strong link between motivation and purchase decision. She argued that Maslow's hierarchy of needs constitutes the most effective starting point in the analysis of customer behaviour. At any given time, an individual consumer can be at any of the five levels in the hierarchy, and that position can change based on economic, personal, cultural, or other forces. As a general observation, the behaviour of the individual is influenced most by the most immediate unmet need. From the standpoint of the customer, the following elements are noteworthy at each level:

At this level, the consumer is concerned about: the retail price of the product or service and its fairness; the durability of goods considered for purchase; the warranties or guarantees associated with the product; and the potential harmful effect of the product on the individual or his or her family.

At this level, the consumer is concerned about: the location of the business in a safe area; the availability of parking; the ability to access the business during conventional working hours; and the approach to be taken when the customer needs to contact a company representative outside those hours.

At this level, the consumer is concerned about: the quality of services; the politeness and friendliness of staff members; the product's impact on the customer's ability to make or retain friends; and the popularity of the product or service within the peer group.

At this level, the consumer is concerned about: the individual treatment of customers by company employees; the recognition of the purchase as an intelligent one; employee appreciation for the customer's patronage; and the status gained from the purchase of the respective item.

Finally, at the level of self-actualisation needs, customers are concerned about: the ability of the product or service to help the individual gain a better understanding of the world; and the openness and flexibility of the firm to customise the item so that it fits the specific needs of the customer (MacNeill, 1993).