Consumers' Perceptions, Attitudes and Purchase Intention towards

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  • www.ajbms.org Asian Journal of Business and Management Sciences

    ISSN: 2047-2528 Vol. 2 No. 8 [73-90]

    Society for Business Research Promotion | 73

    Consumers Perceptions, Attitudes and Purchase Intention towards

    Private Label Food Products in Malaysia

    Siti Nurafifah Jaafar

    Department of Food Science

    Faculty of Agrotechnology & Food Science

    University Malaysia Terengganu, 21030 Kuala Terengganu

    Terengganu Darul Iman, MALAYSIA.

    Corresponding author: afifah@umt.edu.my

    Pan Ein Lalp

    Department of Food Science

    Faculty of Agrotechnology & Food Science

    University Malaysia Terengganu, 21030 Kuala Terengganu

    Terengganu Darul Iman, MALAYSIA.

    Mohaini Mohamed@Naba

    Faculty of Hotel and Tourism Management

    UiTM Terengganu, Sura Hujung

    23000 Dungun, Terengganu Darul Iman, MALAYSIA

    ABSTRACT The onset of inflation drives the rising of living cost. The rise of private label market provides an alternative selection for consumers during purchasing. There is very limited research regarding private label food product in Malaysia. This research focused on factors that may influence consumers intention to purchase private label food product in a state in Malaysia. Factors

    examined are extrinsic factors which include perceived price, packaging, advertisement and store image; intrinsic factors (i.e. perceived quality, perceived risk and perceived value) and consumers attitudes (in terms of trust, familiarity and perceived economic situation). All responses were collected by using questionnaire through convenience sampling (n=100). Data was analyzed to obtain descriptive statistics, comparing mean analysis (i.e. independent t-test and ANOVA) and other analyses (i.e. correlation analysis and multiple linear regressions). Result shows that perceived value becomes prominent in consumers purchasing of private label brand food product, followed by other factors. Almost all independent variables are associated with purchase intention towards private label brand food products. The most significant factor that influencing consumers purchase intention towards private label food products are consumers attitude and perceived price. Consumers past purchasing experience with the private label food products may also influence their perception towards price, packaging, store image and

    trust of those products. This study adds new knowledge regarding public purchasing behavior towards private label product. Retailers are anticipated to better understand the factors influencing the purchase and re-purchase intention of private label food products which could better improve the standard of private label food products in the local market. Keywords: private label product, purchase intention, consumer attitude, own

    label brand

    mailto:afifah@umt.edu.my

  • www.ajbms.org Asian Journal of Business and Management Sciences

    ISSN: 2047-2528 Vol. 2 No. 8 [73-90]

    Society for Business Research Promotion | 74

    INTRODUCTION

    Unfavorable economic condition and the rise of living cost were the most worrying problems in Malaysia. This scenario occurs because of slow down of global economic and onset of

    inflation. Due to the economic downturn, there is an imbalance income level with the

    increasing of living cost. Therefore, most of the consumer started to change their shopping

    habits and being more sensitive to the price of the goods.

    The growth of international hypermarket retailers into Malaysian market is rising. Tesco owns a 30% market share of the Malaysian hypermarket industry by sales, followed by

    Giant (24%), Jusco (22%) and carrefour (15%) (Seelan, 2010). Global finance crisis had

    dramatically affected global economic. Inflation pressure pulls the rising of living cost in

    Malaysia. This creates an opportunity in increasing demand of private labeled product in

    Malaysia (Chen, 2009). Expansion of large retailers gives a big shock to the market of manufacturer branded product since 1970 (Strategist team, 2007). Private label products

    provide low price product but meet their basic need to drive in more consumers toward

    purchasing of their product (Nielsen, 2008). In order for them to increase margin, they

    manufactured their own product and sell them in specific chain of store. Their strategy is to

    manufacture an alternative branded product under a low price with equal quality of

    branded product. Retailer is able to provide low cost product in order to have a stand in the market.

    Traditionally, private label product is packaged in white colored packet with a black

    typeface and it is always located at the bottom of the rack (Kumar and Steenkamp, 2007a).

    Nowadays, retailers started to improve the quality and packaging of the private label product to become ideal product. Thus, allowing private label fix in an ideal marketing

    strategy and giving an option to customers on low price product (generally economical

    value), standard (price not expensive, but comparable quality product) to premium product

    (good in quality that might be equally or surpass the goods that been offer by manufacturer

    brands). Furthermore, they began to innovate on value by using source and supply chain

    efficiencies to offer lower price without compromising on quality (Kumar and Steenkamp, 2007b). Therefore, those retailers are able to attract more consumers and thus promote

    local brand goods to consumer in order to prevent for the foreign exchange flight.

    Consumer behavior studies focusing on private label brand is very limited especially in the

    Malaysian context. This study is therefore intended to close this gap in the literature, which is aimed to understand consumers purchase intention in general and to determine the

    factors influencing purchase intention of private label brand food products. Besides, this

    study is also aimed to compare the difference in consumers perception and attitudes

    towards private label food products if they have or do not have experience with those

    products. The objectives of this research are:

    To determine factors perceived to be important in the purchase of private label food products.

    To determine factors those predict purchase intention of private label food products.

    To compare perception of extrinsic factors, intrinsic factors and consumers attitudes among consumers who have and do not have past purchasing experience

    with the private label food products.

    LITERATURE REVIEW

    Introduction of private label product

    Private label product is defined as the only trademark, which can only been found on the

    packaging and sold in a specific chain of store in low price (Hoch, 1996). Retailers control

    private label product where they can decide the marketing activities such as advertising,

    packaging and wholesale price and investments of inventory (Chen, 2008).

    Private label product is usually low in price and hence become an alternative product

    choice for consumers (Walker, 2006). However, consumers who judge product by quality

  • www.ajbms.org Asian Journal of Business and Management Sciences

    ISSN: 2047-2528 Vol. 2 No. 8 [73-90]

    Society for Business Research Promotion | 75

    will be less likely to purchase private label product. They believe quality is more important

    than price (Ailawadi et al., 2001; Richardson et al., 1996a). Based on previous studies,

    consumers begin to accept the private brand and believed that private label product represent good value for price (Laaksonen and Reynolds, 1994).

    Purchase intention

    Consumers buying decision is very complex. Usually purchasing intention is related with

    consumers behavior, perception and their attitude. Purchase behavior is an important key point for consumers during considering and evaluating of certain product (Keller, 2001).

    Ghosh (1990) stated that purchase intention is an effective tool use in predicting

    purchasing process. Once the consumers decide to purchase the product in certain store,

    they will be driven by their intention. However, purchase intention might be altered by the

    influence of price, quality perception and value perception (Zeithaml, 1988) and Grewal et al (1998). In addition, consumers will be interrupted by internal impulse and external

    environment during purchasing process. Their behavior will be driven by the physiological

    motivation that stimulates their respond which bring them to the retail store to fulfill their

    need (Kim and Jin, 2001).

    Factors influencing purchase intention towards private label product

    There are numbers of study on private label product in foreign study however there is no

    specific research on purchase intention towards private label product in Malaysia. With

    respect to private label food products, several studies have been carried out in the past to

    determine the consumers motivation, perception, preference and behavior on food products (Beneke, 2008; Munusamy and Wong 2008, Boutsouki et al., 2008; Thang et al., 2009).

    There is only one study on consumers intention of buying own label premium food

    products (Chaniotakis et al., 2010), which guided the present study. Based on the study of

    Chaniotakis et al (2010), factors that influencing consumers purchase intention are

    consumers attitudes, extrinsic factors and intrinsic factors of the prod