the customer perception and purchase intention in
TRANSCRIPT
THE CUSTOMER PERCEPTION AND PURCHASE INTENTION
IN ALTERNATE FUEL VEHICLES (LPG & CNG) CONVERSION
KIT IN THAILAND
KETTHIP KHWANWONG
A THEMATIC PAPER SUBMITTED IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR
THE DEGREE OF MASTER OF MANAGEMENT
COLLEGE OF MANAGEMENT
MAHIDOL UNIVERSITY
2014
COPYRIGHT OF MAHIDOL UNIVERSITY
Thematic paper
entitled
THE CUSTOMER PERCEPTION AND PURCHASE INTENTION
IN ALTERNATE FUEL VEHICLES (LPG & CNG) CONVERSION
KIT IN THAILAND
was submitted to the College of Management, Mahidol University
for the degree of Master of Management
on
August 24, 2014
……………………….….…..………
Dr. Detlef Reis,
Ph.D.
Advisor
……………………….….…..………
Assoc. Prof. Annop Tanlamai,
Ph.D.
Dean
College of Management
Mahidol University
……………….………….…..………
Miss Ketthip Khwanwong
Candidate
……………………….….…..………
Asst. Prof. Prattana Punnakitikashem,
Ph.D.
Chairperson
……………………….….…..………
Asst. Prof. Kannika Leelapanyalert,
Ph.D.
Committee member
ii
ACKNOWLEDGEMENTS
I would like to express my deepest appreciation to my Thematic Course
advisor, Dr. Detlef Reis for his upbeat attitude and the substance of genius. His
knowledge and experience are one of the main contribution for the complete and
success of this research paper. Without his persistent assistant and guidance this paper
would not have been possible.
In addition, I would like to thank the committee members for excellent
suggestion and approval of this paper. Otherwise, this paper may not be as complete as
it has. I would like to thank you for the valuable comments
Also, I would like to give special thanks for my family for their untiring
support in so many ways. I thank all of my interviewees for their permission, time and
cooperation in providing valuable inside information that make the thematic possible.
Ketthip Khwanwong
iii
THE CUSTOMER PERCEPTION AND PURCHASE INTENTION
IN ALTERNATE FUEL VEHICLES (LPG & CNG) CONVERSION
KIT IN THAILAND
KETTHIP KHWANWONG 5549296
M.M. (MARKETING AND MANAGEMENT)
THEMATIC PAPER ADVISOR COMMITTEE: DETLEF REIS, Ph.D., ASST. PROF. PRATTANA PUNNAKITIKASHEM, Ph.D., ASST. PROF. KANNIKA
LEELAPANYALERT, Ph.D.
ABSTRACT
A vehicle running on liquefied petroleum gas (LPG) or compressed natural
gas (CNG) is currently being discussed as a more energy efficient and climate-
friendly. This means that insights into consumer perceptions and acceptance of
Alternative fuel vehicle conversion car are still limited. This paper summarizes the
insights into consumer acceptance of LPG and CNG vehicles obtained from a
literature review. These findings are supplemented by ten in-depth interviews. The
interviews were conducted with vehicle users in Bangkok area. The studies showed
that consumer come into contact with alternative fuel vehicle conversion car in various
ways, mainly through direct experience user before deciding to switch to alternative
fuels. The interviewees reported that they had concerns regarding performance, safety
of the conversion car. These insights suggest that the experiences communicated from
direct experience users seem to be important in improving the perceived reliability and
safety for non-experience car users. This confirms strategies like field trials, the
economic advantage played a crucial role in the decision-making process; however,
environmental issue was not play important role for Thai consumer.
KEY WORDS: Alternative Fuel / Customer Perception / Conversion Car / Willing To
Change
32 pages
iv
CONTENTS
Page
ACKNOWLEDGEMENTS ii
ABSTRACT iii
LIST OF FIGURES iv
CHAPTER I INTRODUCTION 1
CHAPTER II LITERATURE REVIEW 3
2.1 Economic Advantage 3
2.2 Environment Advantage 4
2.3 Reference Group (Expertise, Friends and others) 5
2.4 Performance and Safety 5
CHAPTER III METHODOLOGY 9
3.1 Data Collection 9
3.2 Discussion and Research Questions 9
3.3 Methodology Interviews 11
CHAPTER IV FINDING AND DISCUSSION 12
4.1 Research Question 1 12
4.1 Research Question 2 12
4.1 Research Factor: Economic Advantage 13
4.2 Research Factor: Environment Advantage 14
4.3 Research Factor: Reference Group (Expertise, Friends and others) 15
4.4 Research Factor: Performance and Safety 16
4.5 Limitations 20
CHAPTER V CONCLUSION AND RECOMMENDATION 21
REFERENCES 23
BIOGRAPHY 26
v
LIST OF FIGURES
Figure Page
1.1 Propose model for factors affecting consumer’s alternative auto fuel 7
Purchasing intention
1
CHAPTER I
INTRODUCTION
With a long history of safety in using alternative fuel car worldwide and
successful publicity and public perception has been positive first developed in
European countries. Thailand has been developed to use alternative fuel vehicle since
1984 mainly for the emission reduction in Bangkok area in the early stage of bring a
developed technology into Thai Market. A good started prototype project conversion
in Thailand began in 2004 with Taxi, following the government support measure and
commitment. They converted taxi into alternative fuel and by the survey from
Thammasart University, (NGV Global Knowledgebase, 2014), interviewed taxi driver
whose taxis had been converted to use alternative fuel. The result was satisfaction
successfully.
With unexpectedly situation of rising oil prices in recent period resulted in
an upward trend of world inflation and the world economic slowdown due to rising oil
prices would be plausible and thus adjusted downward of world economic growth
forecasts in nationwide future and high oil price on output growth and inflation.
Thailand’s domestic oil prices have been raised continually which caused the fuel
price increased respectively. Uncertain situation have caused domestic fuel price
fluctuation together with political situations suit the Thailand’s oil pricing structure
become distorted. Early of last year, Thai government launched the first car buyer
program to boost up the automotive industry for the Thai economy and with this first
car buyer program had dramatically increased number of cars in Thailand significantly
and the consumers who owning cars are becoming increasingly aware and highly
concern of fuel price in the market that relatively affected to their cost of living.
From the issue stated above, a fuel price incentive made more attractive to
vehicle owner for conversions or replacement of existing vehicles with alternative fuel
vehicle. Most cars in Thailand have the electronic fuel injection type engines,
(Pattanadesh, 2009); therefore the injection type conversion seems to be a proper
2
technology for the cars because it can eliminate miss-firing problems. The gas mixer
type can be equipped with a pressure relieve device to vent back pressure caused by
backfire. This will be useful information for vehicle owners to choose conversion
technology for suitable and their ability to pay.
Although, rising fuel prices are taking a chunk out of everyone's budget
and the economic effects have pushed “Alternative Fuel Car” technology into the
mainstream. To reduce the dependence on expensive and cost of living, this new
energy technology is being explored to Nationwide and the world of alternative fuel
can often seem strange and unpredictable; because, there are much more bizarre and
lack of expertise educated people in proper way with the correct information of
alternate fuel vehicle.
The problem with alternative fuel vehicle is most people have no idea how
cars and alternate fuel vehicle system works in the first place. With lacking
knowledge, they had only one choice left is to agreed that fuel or gasoline simply need
to go with the car for the best solution even though their budget is bleeding every time
of visited gasoline station.
To fulfill the aim and purpose of this study is, to understand customer
perception of alternate fuel vehicle and selecting criteria of customer to intentionally
convert their car to alternate fuel system in Thailand.
In this study thus, we aim to answer the following research questions:
To understand the customer perception toward automotive conversion kit in
Thailand?
Identify the factors that influence the customer persuasion to converting car in
Thailand?
I have chosen to study alternative fuel vehicle and conversion kit in
Thailand mainly because, Thailand still facing the uncertainty of uncontrollable factor
price fluctuation and there are still an opportunity for market growth and potential
market in alternative fuel car and conversion kit in Thailand based on many
availability of alternative fuel station around Bangkok and upcountry to serve Thai
consumers in term of convenience and cost that customer can safe much farther than
gasoline.
3
CHAPTER II
LITERATURE REVIEW
The focus of this paper is on studies which analyze private consumer’s
opinion with regard to actual or intended usage of LPG/CNG vehicles base in Thai
customers relatively with appropriate literatures database found from many prospect
researches. The majority of paper adopts an economic approach (Flynn 2002; Frick et
al. 2007; Janssen et al. 2006) with the empirical studies analyzing the decision making
process for purchasing a LPG and CNG vehicles respectively.
2.1 Economic Advantage
Kannwischer et al, (2010) conducted focus-groups with German drivers of
LPG vehicles and discussed their motives for purchasing such a vehicle. It turned out
that economic advantage due to lower fuel costs were the main driver for nearly all the
participants using LPG as alternative fuel vehicle. Similarly, in a survey by German
energy companies among actual users of CNG, 91 % mentioned economic advantages
and 77 % environmental reasons as important motivation.
There were the respondents from Switzerland emphasized on economic
aspects due to the countries differ with regard to infrastructure and subsidies with
higher tax reduction and a higher density of filling stations in Switzerland. There is a
widespread literature on analyzed the reasons for purchasing a CNG vehicle in
Colombia in a period during which Alternative fuel vehicles were subject to high
subsidies. In their study, economic advantages were the main, almost the only driver
for purchasing such a vehicle and for those who decided against alternative fuel
vehicles, 26 % did not give reasons, 18 % were afraid of a lower vehicle performance
and 17 % had doubts about the economic potential; (Saldarriaga-Isazu and Vergara,
2009).
4
(Di Pascoli et al, 2001), systematically explored the perception of
alternative fuel vehicle (CNG, LPG and Natural Gas) in Italy; surveying a sample of
178 individuals, those surveyed knew that CNG is cheaper than petrol; however, many
of them still overestimated the price of CNG. 22 % of the survey participants indicated
their intention to buy a CNG vehicle when next purchasing a car; 6 % would choose a
LPG vehicle.
2.2 Environment Advantage
Consumers today are more concerned about environmental degradation
and negative impact of their uses of product and services on environment. The reason
for this concern could be visible climatic changes, global warming and increasing air
and water pollution. Various studies support the assertion that consumers today prefer
environmentally safe products and have a positive disposition towards companies
following such practices. A strong willingness is shown by consumers to favor
environmentally conscious products and companies as per various opinion polls taken
in US and elsewhere, however action to do so in reality are debatable (Mendleson N,
Polonsky M J, 1995).
It has been always believed that the actions of individuals can be predicted
by their attitudes. Number of studies has been made towards improving the ability to
predict an individual’s actions. Davidson et al. (1985) found that the consumers’
attitude is associated with the knowledge and personal experience they possess.
However inconsistencies were found among the relationship between consumers’
attitude and their behavior when it comes to green consumerism. Mainieri et al. (1997)
found low correlation between consumers’ attitude and green behavior.
Additional, the literature review showed that paint slightly different
picture which presented by (Jonkers, 2009) from the interviewed stakeholders who
actual users of CNG vehicles in the Netherlands and Switzerland. In these both two
countries, saving the environment played a central role for adopting the technology;
following with literature of (RheinEnergie et al. 2006) found that the majority also
mentioned environmental advantages as the second most relevant motive or viewed it
as an important side-effect.
5
Antonio et al (2009) suggested that due to environmental consciousness
that has evolved over time, studies on green consumerism will be the main focus point
in future leading to identifying the consumer attitudes, behaviors and intentions.
Braimah and Tweneboah-Koduah (2011) studied Ghanaian consumers and have found
low level of awareness towards green marketing issues which affected that purchase
decision of the consumers.
2.3 Reference Group (Experts, Friends and Relatives)
Interestingly, we know from (Di Pascoli et al, 2001) that individuals who
had had direct experience of CNG vehicles were much more likely to opt for a CNG
vehicle (48 % compared to 12 % in the no experience group). Furthermore, those with
direct experience of CNG were also more likely to choose LPG (10 % compared to 5
%). Indirect experience – i.e. via friends or family – also led to a higher probability of
choosing CNG (22 %). This ties in with another result of this study: A vast majority of
respondents indicated that family and friends were their main sources of information
on these issues. However, there is a gap in the literature of (Di Pascoli et al, 2001)
found that the performance of alternative fuel vehicle was most often cited as the
reason for opting for a petrol car. Poor infrastructure was perceived as the most
important barrier and one of the factors that customer concerns which were voiced
repeatedly included doubts about the safety of CNG cars and the fear of poor
performance.
2.4 Performance and Safety
Several interviewees remembered that during the decision making process
they were afraid that it might be dangerous to use CNG/LPG and of a possible
explosion of the vehicle. And there were two of the interviewees mentioned that they
had concerns about the infrastructure.
“I heard that the infrastructure is bad. Thus, I was concerned about this.
However, then I looked for further information, where do I usually drive, where do I
6
go for holidays. (Elisabeth Dutschneider & Alexandra-Gwyn Paetz; P5, CNG
vehicle)”
Others expected problems because the technology is relatively to non-
familiar new product and, thus, maybe less reliable. They searched the internet to find
further information on this issue. Another interviewee worried whether the LPG
powertrain would negatively influence the performance of the car. Further concerns
were connected to the high pressure in the CNG tank and the process of refilling.”
I was a bit afraid about the refilling – I mean, there’s a lot to screw and to
consider, that was a bit, hmmm, well, I was a bit reluctant at the beginning. (Elisabeth
Dutschneider & Alexandra-Gwyn Paetz; P12, LPG vehicle).
It is alleged that marketing literature on consumer behavior shows an in-depth
understanding of a consumer’s attitude formation and decision-making process with
respect to new products is required.
There is a general consensus in the literature that customer perceived that
converting alternative auto fuel is not only purchasing product itself but also they are
purchasing services at the same time, (Sourabh, 2011) as well as (Smeltzer and
Ogden, 2002) conducted that purchasing services is more difficult than purchasing
goods in term of supplier, due to a variety of reasons from the view of different
subject fields. If any service is characterized by the following, then this service is
likely to be viewed as professional by consumers (Thakor and Kumar, 2000): (a
service) involves large amount of expertise; is perceived to be of critical importance;
is recommended to users by others; is difficult to evaluate the quality of the service.
Professional service providers are extremely dependent on their ability to attract,
mobilize, develop and transform the knowledge of the highly educated employees to
create value for their clients (Løwendahl et al., 2001).
(Cherian and Jacob (2012) found that consumers with low awareness and
still not focusing towards development of fuel-efficient vehicles products because
consumers are lack knowledge. Again, there are several issues and challenges
identified by various researchers with respect to fuel-efficient vehicles, (Welling and
Chavan, 2010) noted that practicing green marketing initially may prove to be a costly
affair as it encourages green products/services, green technology (procuring new
technology or modification of existing technology), green power/energy which
7
requires a lot of money to be spent on R&D programs. High investment is required in
marketing promotions to create awareness and their uses. It also requires the
manufactures to extensively communicate the presence and benefits of fuel-efficient
vehicles to the customers by means of various tools available for integrated marketing
communication. It could be a good way to convince the customers if they see
additional benefit (such as quality, environmentally safe product, fuel-efficient
vehicles, and non-hazardous products) attached with the product. It can help
organizations to gain a competitive advantage and a strong consumer base. (Renfro L
A, 2010).
Figure 2.1 Propose model for factors
Propose model for factors affecting consumer’s alternative auto fuel purchasing
intention. (Adapted from Mahmut & Andy (2010), Elisabeth Dutschke & Alexandra-
Gwyn Paetz (2011)
It is difficult to make direct comparisons of the studies identified because
they analyze consumer attitudes and behavior under a wide variety of conditions
which have to be taken into account. For example, the countries where user studies
were conducted differ in terms of the range of models available on the market, the
price of LPG and CNG, infrastructure and the ratio of gas-vehicles to refueling sites
offering gas, conversion costs or the additional costs for purchasing a gas-powered
8
vehicle, past experience with LPG/CNG vehicles and related technologies (e.g. natural
gas resources).
The concepts outlined in this section will be used in the remainder of this
paper in order to structure finding from the literature. Based on the above literatures
review, there are four factors have been identified representing customer purchase
intention and consumers’ attitude towards alternative auto fuel which are: Economic
Advantage, Environment Advantage, Reference (Experts, Friends, and Relatives) and
Performance and Safety. The next step is item generation to measure these dimensions
and item validation. These fours factors provided further customer’s insights of
alternative fuel vehicle which Economic and fuel price may play a role in their
assessment. Reference Group is also likely to play a role when potential users evaluate
possibility to converting their car into alternative auto fuel. Customer perception,
related especially if suitable references influence the ease of use perception. And
purchasing service is prone to impact the perceived of quality and customer service.
9
CHAPTER III
RESEARCH METHODOLOGY
3.1 Data Collection
To understand consumer purchasing behavior and influential buying
factor, author gathered primary data from semi-structured interview with standardized
level. Author discovered that interview method seems to be the effective tool for
analyzing consumer behavior. (Gothenburg, 2010) Interview helps the researcher to
investigate the understanding opinion and reaction of a respondent regarding to a
particular issue which is slightly deeper than a survey. Besides, this method can be
modified as a comprehensive way of formative assessment. Because of the flexible
process of qualitative interview, when interviewer establishes initial set of questions
base on the framework. Interviewees' answers will shape the leading and relevant
initial questions. Role of interviewer is to listen, analyze, and discuss almost
extensively. (Sociology, 2012)
By investigating the research question, conducting in-depth interview with
a group of respondents have significant advantage comparing to survey. The major
benefit of in-depth interview is providing more critical and detailed information
regarding a person’s thoughts and behaviors as well as enables to explore new issues
in depth. It becomes effective because of offering a more complete picture of what
experience and opinion towards a particular issue. (Boy et la, 2006).
3.2 Discussion and Research Questions
To sum up, several factors that are likely to play a role with regard to
choosing alternative fuels like CNG and LPG have been identified from the literature.
However, it turned out that contextual factors - which are often contingent on the
conditions within a specific country - also play an important role. Moreover, the
decision-making process has hardly been analyzed at all. In order to contribute to
10
enhancing the knowledge on this issue, we therefore conducted our own empirical
work, focusing on the questioning factors as following:
What is your opinion toward the converted alternative vehicle fuel?
How does the retail oil price increasing effect to your motive to
converting car to alternative fuel?
In your opinion, what are the different between LPG/CNG conversion
car and normal car in term of safety and performance? (Performance &
Safety, Customer perception)
What is your main concern of converting alternative vehicle fuel?
(Customer perception)
How does your relatives converted experiences effect to your
encourage to conversion fuel? (Reference Group)
How do you see alternative fuel vehicle as an eco-friendly product for
environment? (Environment Advantage)
In your opinion, what are the most important sources of information
accessed prior to the purchasing decision alternative auto conversion?
What are the relevant motives for you to purchasing a LPG/CNG
vehicle?
Open-ended questions are used because they enable respondent to think
analytically and critically. They can encourage discussion and debate from
interviewee, representing. Furthermore, they provides the opportunity for respondents
to express themselves more openly as well as encouraging respondents to provide
information including their ideas, concerns , feelings and sharing their own
experience. Besides, these questions are able to lead interviewees flow with their
thoughts and feelings. (Open research, 2008). A listed of opened- end questions is
developed not only developing creativity, self-expression, and richness of detail but
also creating two-way communication in a professional relationship from respondent
and interviewer.
11
3.3 Methodology Interviews
Semi-structured interviews were conducted. The main advantage of this
approach is that the interview resembles a normal conversation; however, a guideline
structures the conversation ensuring that all topics of interest are covered. This format
was chosen to allow a certain degree of comparability between the individual
interviews and to be able to explore new aspects that interviewees might raise due to
the openness of the conversation. An interview guideline was prepared covering the
topics mentioned in the research questions as well as background questions (e.g.
demographics, data on the LPG/CNG vehicle).
Various ways were used to recruit interviewees in order to obtain a
heterogeneous sample. Individuals were conducted with the sample questions to
investigate the interviewee with a clear understanding opinion and reaction of a
respondent regarding to particular factors of consumer intention purchase on the
alternative fuel vehicle. Additionally – and mainly to recruit the personal car owner
interviewee who are underrepresented in the sample – personal contacts were used as
well. 10 individuals aged between 25 and 40 from various professional finally took
part. All of the interviewee never had had experience with vehicle converted to LPG,
or had purchased a CNG vehicle before.
The interviews were conducted by phone, recorded and later transcribed.
The average duration was 30 to 40 minutes. The transcripts were then coded; the
topics from the interview guideline were used to produce a preliminary list of codes,
which was extended if necessary.
The study focused on a limited geographical area has limited
generalizability but provides good insights regarding behavior of consumers towards
alternative fuel vehicle product. Future research could focus on psychographic
segmentation of consumers in terms of assessing their alternative fuel values and
preferences. The study can be replicated at a larger scale to get more insights into the
behavior of consumers and understand more about alternative fuel vehicle and
LPG/CNG auto conversion car.
12
CHAPTER IV
FINDINGS AND DISCUSSION
It was the aim of the empirical studies to complement the findings from
the literature and to fulfill the answer of understands consumer perception of
alternative fuel vehicle and selecting criteria of prospect customer to intentionally
convert into alternative fuel LPG/CNG with regard to four factors on framework.
Question #1: To understand the customer perception toward automotive
conversion kit in Thailand
Thai customer perception toward automotive in majority still not yet
accept as the alternative option of petrol. However, there were few interviews that
interesting and would convert their own car from filling petrol to alternative fuel like
LPG and CNG. However, the perception of Thai customers from our interviewees,
they are not familiar with the new technology of using alternative fuel vehicle
conversion kit car and main reason because they lack of knowledge and information
about alternative fuel correctly which created a bias factor in customer perception.
Therefore, the majority of the interviewees still not yet accept and curious about
alternative fuel LPG and CNG system in term of safety and car performance. In
contrast, the few interviewees were accepted to use alternative fuel which these
interviewees were have more understandable of alternative fuel LPG and CNG
information.
Question #2: Identify the factors that influence the customer persuasion to
converting car in Thailand
From the discussion with interviewees, owe can identify that there are
three important factors that could possibly encourage the non-user alternative fuel
LPG and CNG to convert their car in Thai market which are: economic advantage due
to the petrol seem to rising in daily. Reference group also play important role of
13
trustiness and confident in term of performance and safety which is one of three factor
that play role for those prospect customers who willing to convert their car into
alternative fuel LPG and CNG in Thailand market in the future.
And the interviews revealed that those questioned had learned about the
possibility of using LPG or CNG as an alternative fuel for their cars on various
occasions and from diverse sources as per follow.
4.1 Economic Advantage
Economic advantage was mentioned most often as a motive and this was
also the most important motive for majorit interviewees. The reason that economic
advantage were expected because the interviewees have relatively long commuting
distance to their workplace especially during the rush hours with the jam of traffic.
Every 20 cent of increasing of retail oil price in weekly or monthly caused the
interviewees suffering of their cost of living a lot. When their salary is fixed month by
month but the liquid fuel still fluctuated.
Gas filling station itself became a moment of stressful for several of the
interviewee as one of the interviewee mentions that:
“I feel depress every time my tank went down and the rate of retail oil
price per liter in daily that I have to fill up my tank.”
The interviewees mention that there are so many time that they design to
stay home rather than hangout outside; just only to safe their liquid fuel in the tank.
The conversion is a more sensible decision for people who drive lots of
miles than occasional drivers who only use the car once a week to go shopping and
alternate fuel vehicle conversion kit has increased the acceptance levels of alternate
fuel vehicles among end users in Thailand; with petrol prices continuing to increase, a
few interviewees whom owners of existing petrol vehicles are looking at converting
their vehicles to run on alternate fuels. These results from most of interviewees can
ensure that increase of petrol price plays an important factor supporting with the
literature on economic advantage which could possibly encourage the consumer to
switch from using petrol to alternative fuel vehicle; LPG/CNG in the future coming
because increasing the petrol price has been affect their cost of living.
14
In contrast, there were few interviewees’ mention that increasing the price
of petrol does not play role on their decision to convert their car into alternative fuel
vehicle and these interviewees willing to pay for petrol in any price because, they
believe that converting a car will lower the car performance and will caused future
problem of car maintenance. However, the results of discussion from the majoring of
interviewees have confirmed and support the literature from (Kannwischer et al, 2010)
that had conducted focus-groups from drivers of LPG vehicles and discussed their
motives for purchasing such a vehicle which turned out that economic advantage were
the main driver using LPG as alternative fuel vehicle.
4.2 Environment Advantage
The environment advantage does not play the important role of consumer
purchasing alternative fuel vehicle which is contrast from the literature stated
environmental friendly was the important reasons to convince the consumer to convert
from petrol to alternative fuel vehicle LPG/CNG. Most of interviewees perceived that
there is no effect and different between using petrol and alternative fuel vehicles.
Therefore, literature of (RheinEnergie et al. 2006) cannot comply with Thai consumer.
To confirm this contrast of literature, one of interviewee mentions that:
“Using petrol or alternative fuel vehicle is both creating air pollution to the
environment anyway, so why bother”
It found that the majority of Thai interviewees do not concern of
environment friendly and saving the environment does not played any important role.
From the discussion with majority interviewees, they provided more insights into the
matter of understanding the overall attitude of the Thai consumers towards alternative
fuel vehicle conversion kit. The majority of interviewees’ shows that the Thai
consumers are indecisive or confused whether alternative fuel vehicle are an
environment friendly product; however, Thai consumers tend the quality of alternative
fuel vehicle conversion kit because, majority of interviewees are not very sure about
the quality of convert alternative fuel vehicle.
It obvious result shows that the Thai consumers are highly suspicious
about environment friendly with alternative fuel LPG/CNG. Therefore, an
15
environment advantage does not play an important factor for Thai consumers enough
to influence them before converting their car. It also reinforces the finding that the
Thai consumers are highly suspicious about the greenness and alternative fuel vehicle
conversion kit.
One interviewee expressing his idea of conventional marketing that:
“Thai consumers paid little attention to the pollution caused to the
environment from their actual usage of any products because they are concentrated on
profit taking for their own to get the most value for the money paid by them”
From the researchers and literature conducted mainly in the developed
countries, it is observed that there are various factors which have considerable
influence on consumers’ perception and attitude towards alternative fuel vehicle
conversion kit. In Thailand, the concept of environment friendly is relatively new and
the consumer buying behavior is also different from that of the developed nations.
Many cultures and traditions are prevalent in Thailand.
4.3 Reference Group (Expertise, Friends and Others)
Some of interviewees those who interest in technology knowledge of gas
vehicles both direct and indirect experiences were interested and will reacted in a
positive way of converting alternative vehicle fuel their friends’ experiences or their
relatives’ direct experience of using a converted alternative fuel car. However, some
of interviewees who do not intention to use alternative LPG/CNG car, they were not
interested at all. The interviewee also stated that direct experiences from their
colleagues, family members or friends can be able to persuade them with expressing
strong positive point into alternative fuel vehicle can gain their intention to converting
their car.
The relevant with the literature from reference group stated above that a
vast majority of respondents indicated that family and friends were their main sources
of information on these issues; our analyses found that experience as communicate by
other uses seem to be one of the most important factors to boost the perceived
reliability and safety of a technology, enhancing its perceived usefulness and ease of
use.
16
An interesting statement found from one interviewee mention that the
internet is also an important source of information, especially social online networks
like specialized platforms. Although the interviewees regard some of the information
provided there as being biased, it is still seen as a valid data source during the
decision-making process. Talking directly to other users was also regarded as helpful;
however, not everybody had this opportunity which is relevant to the literature
generally found in reference group. Furthermore, the interview results confirm the
assumption that knowing other users’ supports the decision in favor of an LPG/CNG
vehicle and that these contacts are also actively sought out by those who are already
interested in the technology. Anyhow, other sources of information, e.g. car dealers,
were seen as less helpful for forming an opinion.
In these discussion, it seem to indicate that the information provided by
persons who are trusted and regarded as reliable contributes to increasing the
perceived ease of use as well as the usefulness (e.g. in realizing economic advantages),
as well as supporting the statement from the reference group literature.
4.4 Performance and Safety
The interviewees stated the reason of not converting their car because they
were afraid that it might be dangerous to use LPG or CNG and of a possible explosion
of the vehicles as their perceived from the newspaper from time to time. One of the
interviewee mentioned that they had much concerns about the explosion.
“I have seen the newspaper reported about converted alternative vehicle
car and it had blowup. Car got burn down with the dead body inside.”
Another interviewee mention that due to the dangers involved with gas, it
is obvious that conversions should only be carried out by authorized serious garages as
well as the conversion must be recorded in the vehicle's documents and results in
temporary tax relief.
The several interviewees recounted had various concerns about safety,
reliability, availability of filling stations, performance losses, and the process of
refilling, all of which affect the usefulness and the ease of use of LPG/CNG vehicles.
Overall, these concerns resemble those found in the literature. However, the lack of
17
infrastructure; also mentioned by these non-users interviewees in surveys – and seem
to play another important role of consumer concern of converting alternative fuel
vehicle. To support the statement from literature, the safeties continue to be one of the
top considerations for consumers. Even though the alternate fuel vehicle conversion
kit in Thailand have been making improvement to vehicle structure and safety systems
over time, but there is no guarantees that all converted car provide comparable
protection in term of gas leaking and bursting. It is important for consumers to look
beyond a list of features to see how their cars perform along with the safety after
converted to alternative fuel vehicle to use LPG/CNG instead of use petrol – one of
interviewee express their concern.
However, one of interviewee stated if the consumer perceived the benefit
of using alternative fuel vehicle; for example, low price of LPG/CNG, good after
sale/conversion service as well as sufficient infrastructure and must have to be
guaranteed. These will encourage consumer to interesting on using alternative fuel
vehicle which is relevant with the literature; (Elisabeth Dutschneider & Alexandra-
Gwyn Paetz; P5, CNG vehicle) stated that consumer had concerns about the
infrastructure and expected problem with non-familiar new technology product like
alternative fuel vehicle conversion kits because, they perceived it may less reliable.
One of the interviewee also mention that garage play the role of trust of safety and
worrying of car performance and safety could become a minor issue to be concern of;
as his mention that:
“In order to avoid any possible engine damages, the garage should be
consulted to determine whether your vehicle can tolerate gasohol or biodiesel fuel”
Before the transferability of the results of this paper to alternative fuel
vehicle conversion kit in Thailand can be discussed, it is necessary to point out the
limitations of our empirical data. The generalizability is limited due to the fact that
both the qualitative study have relatively small sample sizes and are neither
representative for the Thai population in general, nor Thai car-users in general (e.g.
men being strongly overrepresented in the sample).
Precise from finding and discussion could not be found on the population
of Thai CNG /LPG users or users of alternative fuels, so it is not possible to assess the
extent to which our sample is representative for this population.
18
Since the reference group and gas price increase in Thailand play a crucial
role in consumer perception of alternative fuel vehicle conversion to LPG and CNG,
the results of this study cannot be applied to other countries. Further limitations result
from the fact that the interview was conducted after the decision making process and
the interviewees personal perceptions might affect the results.
The number of studies researching these issues on a detailed level is very
low and as we asked non-users of LPG/CNG vehicles on their perception without their
direct experiences and are thus building on reports of real practices and behaviors, we
assume some validity for our results. This is underlined by the finding that the overall
results are congruent with the findings from the literature; however, they also add
further details to several of these findings.
With regard to future research, further analyses of information search
strategies may be important in order to inform industry about effective strategies for
supporting the market entrance of new technologies. Additionally, in this context, it
might be useful to survey individuals who started to gather information about
LPG/CNG vehicles and then decided to purchase and convert their own car. This
would also contribute to overcoming the possible self-selection effects of our study.
In the case of alternative fuel vehicles conversion has provided various
interesting findings that can potentially contribute to the future study on the alternative
fuel in the alternative fuel vehicle conversion kit industry in Thailand. Nevertheless,
the alternative fuel vehicles case study demonstrated limitation for valid example of
making decision criteria to alternative fuel conversion kit due to non- experiences user
consumer. Therefore, the recommendation in this chapter is strictly for vehicle
manufacturers in this particular business of the alternative fuel vehicle conversion kit
in Thailand market.
This chapter will provide potential recommendations from the findings in
which alternative fuel vehicle conversion kit vehicle manufacturers can apply to its
future marketing to implementation plan to help its alternative fuel vehicle conversion
business in better providing the alternative fuel conversion business more promise to
the non-experience users’ car driver. Since the market for alternate fuel vehicles in
Thailand is expected to grow at a significantly every year. There is increasing
19
availability of compressed natural gas (CNG) and liquid petroleum gas (LPG)
installation garage will also drive this alternative fuel market silently.
Most key vehicle manufacturers are looking at launching alternate fuel
vehicles in Thailand over the next two to three years, and this has increased the
acceptance levels of alternate fuel vehicles among end users. Furthermore, with petrol
prices continuing to increase, many owners of existing petrol vehicles are also looking
at converting their vehicles to run on alternate fuels.
However, the lack of widespread availability and knowledgeable of
alternate fuels in Thailand is a barrier to the growth of alternate fuel vehicles. While
the availability of CNG is currently limited to select centers in the west and north, the
penetration of LPG dispensing stations has been concentrated on specific cities, with
their network on highways remaining almost negligible.
In order to increase the market presence, alternate fuel vehicle conversion
kit manufacturers will need to focus on existing centers, where CNG and LPG are
available. They will further need to aggressively market alternative fuel vehicle
conversion kit products and also tie-up with vehicle manufacturers at the original
equipment (OE) level and vehicle dealership levels.
Marketers should come up with new way of communicating the benefits to
the consumers of converting alternative fuel car in term of alternative fuel safety
performance and safe environment friendly. Due to increased awareness and concern
consumer may prefer converting a car to use alternative fuel LPG and CNG over
conventional alternative gas to protect the environment with confident of safety
feeling. The vehicle manufacturers and vehicle dealership in Thailand should carry out
heavy campaigns to encourage consumers the benefit of using alternative fuel with
understanding of alternative fuel vehicle conversion knowledgeable, because a
majority of the Thailand consumers are not sure about the performance and safety of
the alternative fuel vehicle conversion kit. Because, consumer are still indecisive
whether they convert their car to use alternative fuel LPG & CNG. They are highly
suspicious regarding the real greenness of the eco-friendly products and tend to search
for more information before buying. All these will have a negative impact on the
success of alternative fuel vehicle conversion kit in Thailand.
20
Therefore, to providing the knowledge to gain confident to consumer in
order to convert their car to use alternative fuel LPG and CNG, and this is very
important as the Thai consumers are in general concern of uncertain of economic and
petrol price increasing which is costlier to their cost of living. If they are not
convinced with the quality of the alternative fuel vehicle, they remain suspicious and
will not converting their car and using alternative fuel LPG and CNG.
4.5 Limitations
Although the research has reached its aims, there were some unavoidable
limitations. Frist, because of the time limit, this research was conducted only on a
small size of population who were filling on petrol for their car. Therefore, to
generalize the result for larger group, the study should have involved more participants
at different lifestyle and wide range of ages. Second, this research were conducted the
information by using qualitative strategy in order to collect the in-depth understanding
of customer perception and possibly to convert their car to use alternative fuel LPG
and CNG. With regard to future research, further analyses of information search
strategy should use quantitative method to gain more validity result with efficiency
finding data to supporting the factors for non-users of LPG and CNG vehicles for
overall results in order to contribute to overcoming the possible of alternative fuel
market in Thailand.
21
CHAPTER V
CONCLUSTION AND RECOMMENDATIONS
This study was motivated by the intention to acquire knowledge that could
be useful for assessing the potential of alternative fuel vehicle LPG/CNG from a
consumer’s point of view and to develop recommendations on how to support the
market penetration of alternative fuel vehicle conversion kit in Thailand. LPG and
CNG vehicles were identified as a valuable analogy as they have been available on the
market for some time and have attracted a relevant number of users.
Our analyses indicate that economic, reference group, and performance
and safety motives are the central ones for those willing to convert in to alternative
technology. In Thailand, (potential) users of LPG/ CNG vehicles can estimate on a
relatively clear basis whether they are likely to realize economic benefits as their
saving cost from petrol price and if the user has basic knowledge of their typical
yearly mileage, he/she can make a fairly reliable estimation. This underlines the fact
that it will probably be very important to offer additional financial incentives for
converting an alternative fuel. However, if economic advantages cannot be realized by
non-users, measures will have to be taken to direct the public’s attention to other
motives.
Environmental concerns from the point of view of the interviewees, this
does not appear to be a very promising option, which analyses from the interviewees
with non-users experiences of the use of LPG/CNG under less favorable
environmental conditions. Even though using alternative fuel vehicle LPG and CNG
indicated that reinforcing environmental motives may be worthwhile – but the
potential market share to be gained from building solely on environmental efforts is
probably quite small.
Enthusiasm for technological and safety progress was one of a very
dominant motive in our study; it could, however, have supporting factor, especially,
important when transferring our results to converting alternative fuel LPG/CNG
22
vehicles. Moreover, our analyses indicate that infrastructural concerns are lower
among those willing to use an LPG/CNG vehicle with majority of interviewees not
interested in the technology. On the other hand, this insight seems banal as users who
are seriously afraid of not being able to get fuel will certainly not acquire the
respective.
Reference Group had some relevance in our studies and literature; it
usually ranked second behind economic motives. This indicates that there may be
some potential to motivate people to convert their car into alternative. Thus, it is likely
that reference group have a greater potential for fulfilling motive like showing
personal willing to influence prospect consumer to convert the vehicle into alternative
fuel LPG and CNG.
Furthermore, our analyses suggest that experience as communicated by
other users seems to be one of the most important factors to boost the perceived
reliability and safety of a technology, enhancing its perceived usefulness and ease of
use as per mention above on our finding and discussion result. On this basis, we
recommend creating possibilities for informal social interaction around alternative fuel
vehicle conversion kit as an important element for successful marketing. Users with
direct experience seem to place strong trust in first-hand information from other users
– in this respect, projects like the field trials which are a popular instrument at the
moment seem to be very promising.
Additionally, setting up and promoting internet forums on alternative fuel
vehicle is another way to induce contacts between users and potential users.
23
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26
BIOGRAPHY
NAME Miss Ketthip Khwanwong
DATE OF BIRTH 14 April 1988
PLACE OF BIRTH Bangkok, Thailand
INSTITUTUINS ATTENDED Bachelor of Business and
Administration
Assumption University, 2008
Master of Management
Mahidol University, 2014
RESEARCH GRANTS -
HOME ADDRESS 163/80 At City Condominium
Sukhumvit 101/1, Bangkok
10260 Thailand
EMPLOYMENT ADDRESS Unit1705 Sathorn Square Office Tower
98 North Sathron, Silom, Bangrak,
Bangkok, 10500 Thailand
PUBLICATION / PRESENTATION -