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

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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: [email protected]

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:[email protected]


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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


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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 products.

Consumers’ attitude towards private label products

Consumers’ attitude is an important factor in influencing consumers’ purchase intention

towards private label product (Chaniotakis et al. 2010). Consumers’ attitude includes ‘trust

in private label product’, ‘familiarity’ and ‘perceived economic situation’.

Chaniotakis et al. (2010) stated that ‘the way of thinking’ influence consumers’ purchase

intention as well as perceived of economic situation. A study found that, consumers would

try to save more money by purchasing private label product during economic downturn and

once the condition turn to be better; they will shift back to their familiar brands (Conroy,

2010). This is because when the product is familiar to a person; he or she will define the product in such a good way. Therefore, in order to build up trust on private label product,

retailers should let consumers feel confident with their product (Broadbridge and Morgan,

2001 as cited by Chaniotakis et al., 2010). Trust in private label product is influenced by

perceived benefit, which means that perceived price-quality affects consumers’ attitude.

Once purchasing is made, internal memory arise from purchase experiment along with external memory arise by the information received would play their role in the purchasing

process (Bettman, 1979). People with negative experience toward a product will give a

negative impact for future purchase while when the quality matched the price, a positive

impact is shown. Furthermore, such experience is easy to be shared with others and thus

influence their decision-making (Jarvala, 1998).

Extrinsic factors of the product

Extrinsic is defined as not an inherent part of the thing or not contain in something (Free

Dictionary, 2011). Research shows that extrinsic cues play an important role in influencing

consumers’ purchase intention than intrinsic cues (Richardson, 1997). Extrinsic factors of

the product include 'perceived price, packaging, store image, and advertisement.


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Previous studies stated that consumer intention is influenced by monetary cost (Grunert et

al, 2004). In addition, Munusamy and Wong (2008) proved that there is a significant

positive relationship between price and consumers’ motives towards purchase of private label product. Therefore, the majority of consumers will make their decision by referring on

low price product (Boutsouki et al., 2008). Besides, packaging is important due to it

reaches almost all consumer, therefore it is an important factor in the decision-making

process, and consumer usually examined product by looking at the information provided on

the packaging (Ampuero and Vila, 2006). Furthermore, advertisement acts as

communicator where it informs consumers about the product and service (Uusitalo, 2001). Kim and Parker (1999) suggest that it is hard to measure the successful advertisement of

private label product and a successful advertisement is often come along with a good image

(Steinberg, and Jules, 2001). This statement is in line with the previous studies conducted

by Liljander et al. (2009) who revealed that store image influence consumers’ purchase

intention on private label product.

Intrinsic factors of the product

Intrinsic is defined as being part of the natural of something (Longman Dictionary, 2004).

Intrinsic factor is related to physical product characteristics where it includes perceived

quality, risk and value.

Food safety is an important issue nowadays, where people are more concern on the safety of

the product especially those related to food product. Risk is due to a mistake or

uncertainty. Uncertainty happens due to the appearance of the product. Consumers always

think that purchasing a low price, simple packaging and even less-well known product are highly risky because the quality of those products are of lack of confidence and doubtful

(Sudhir and Talukdar, 2004). That is the reason why consumers perceived private label

product as high-risk products. Most of the consumers are not so familiar with private label

product (Cox, 1967) and they do not understand the product very well, therefore afraid of

making wrong decision (Batra and Sinha, 2000). Consumers usually maximize their utility

of the product they purchase by avoiding mistake. On that basis, manufacturer branded products which are higher in price are always perceived to be high quality product with

lower risk and hence, they will always use price and brand to determine the quality of the

product.

Past experience with private label brand food products

In this study, the influence of consumers’ past experience with the private label food

products on purchase intention is not studied. The focus is to examine how consumers

differ in their perception and attitudes towards private label food products if they have or do

not have experience with those products. Consumers’ purchasing experience involves the

internal and external memory which would play an important role in the purchasing process (Bettman, 1979). Internal memory comes from the actual experience consumers

have with the goods or service while external memory is originated from information related

to the goods or service. The experience of purchasing last longer and will remain in

consumers’ mindset. Therefore, they will immediately start evaluating on the items they

purchased and the result of the purchasing experience toward the items will be kept in their mindset for a very long time (Keller, 2001). People with negative experience towards a

product will give a negative impact for future purchase while when the quality matched the

price, a positive impact is shown. Such experience especially negative ones is easy to be

share with others and thus influence their decision-making (Jarvala, 1998).

Based on the above discussion, it can be concluded that ‘perceived price’, ‘packaging’, ‘advertisement’, ‘store image’, ‘perceived quality’, ‘perceived risk’, ‘perceived value’, ‘trust on

the product’, ‘familiarity’, ‘perceived economic situation’, are related to consumers’ purchase

intention towards private label food products which lead to the formation of framework for

the present study as depicted in Figure 1.


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Figure 1: Conceptual framework adopted from Chaniotakis et al. (2010); Beneke, (2008);

Liljander et al. (2009); Chen, (2008); Munusamy and Wong, (2008)

Materials and Methods

Five largest hypermarkets which produce their own products and sell them in their own

store in a state in Malaysia were selected as the research context for this study.

Convenience sampling was used to sample subject and location, which allows a large

number of respondents to be interview in a short period of time so it is fast and easy

accessible (Hair et al, 2008). Sampling framework for this study is depicted in Figure 2.

n=100

Figure 2: Sampling framework

Participants were selected based on the inclusion criteria i.e. either men or women aged 18

years old and above as well as had consumed private label food product from the selected

hypermarkets. Self-administered survey is the data collection method applied in this study

where the respondent reads the survey questions and records his or her own response

without the presence of a trained researcher (Hair et al., 2008).

A face-to-face self-administered questionnaire was adopted from (Chen, 2008; Chan et al,

2009; Brandley, 2002) to develop the research instrument for the present study. The

questionnaire consists of five sections, using a 5-point Likert rating scale for most

questions. Questions regarding perception of extrinsic factors of food products i.e. perceived

price, advertisement, packaging, and store image are included in Section A. Section B requires respondents to rate their perception towards intrinsic factors of the food product

including perceived quality, risk and value. Section C of the questionnaire asked questions

related to consumers’ attitude (trust, familiarity to the product and perceived economic

situation). In Section D, respondents rated their purchase intention towards private label

INTRINSIC

Perceived quality Perceived risk

Perceived value

Consumers’ Purchase Intention

EXTRINSIC

Perceived price Advertisement

Packaging Store image

CONSUMERS’ ATTITUDE

Trust Familiarity

Perceived economic situation


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food products. In the final section, data regarding respondents’ age, gender, income,

education level and marital status were obtained.

All statistical procedures were conducted using Statistical Package for Social Science (SPSS)

version 16.0. Pilot test was conducted prior to main data collection. Based on the outcome

of test to examine reliability (by scrutinizing Cronbach’s alpha value) and validity of the

measurement items (by using correlation analysis) and the respondents’ feedback, some

modifications were made to the questionnaire. The data obtained from the main data

collection were subjected to normality test, descriptive statistics analysis, comparing mean analysis (i.e. independent t-test and ANOVA) and other analyses (i.e. correlation analysis

and multiple linear regressions).

Normality test is an important test before beginning an inferential test. It was conducted to

ensure the data had been correctly entered and the distribution of variables used in analysis is normal (Coakes and Ong, 2011). In this study, ‘law of large numbers’ was

applied whereby if the sampling size is sufficiently large, which means if n>100, the central

limit theorem can be applied even if the population is not normally distributed along the

variable x (Sirkin, 2006). Since this present study has n=100, it is always safe to relax the

normality assumption. Thus, data analysis for this research used parametric test.

Descriptive data is obtained in this research to describe characteristics of the observed data

and summary as statistic. Usually, data is represented as graphic form (Hair et al., 2009).

Descriptive data included frequency, mean, median, mode, range and standard deviation.

Only mean score, standard deviation and frequency are reported in this paper which is

depicted in Table 2 and Table 3.

Correlation is used to look at the ‘net strength’ relationship between two continuous

variables (Sweet and Martin, 2008). In this study, correlation is used as the predicted

change in the value of the dependent variable (i.e. purchase intention) for one-unit change

in the independent variable (i.e. all extrinsic and intrinsic factors of products and

consumers’ attitude). Guilford’s (1973) rule was used to determine the correlation strength, which is depicted as in Table 1.

Table 1: Correlation strength based on Guilford’s law

Multiple linear regressions (stepwise method) is used to find the equation that best

represents the linear relationship between variables X and Y. It is used to examine how two

or more variables act together to affect the dependent variable and it is an equation that

represents the best prediction of a dependent variable from several independent variables

(Coakes and Ong, 2011). This present study explores the most significant factors, which

predict purchase intention towards private label product.

Independent t-test is used to determine whether there is a significant difference between

two sets of scores (Sweet and Martin, 2008). Significant levels should be smaller than 0.05

to indicate there significant difference between one variable to another variable. In this

study, it is use to compare perceived factors with consumers’ purchase experience toward

private label food product.

R Strength of relationship

< 0.20 Almost negligible relationship

0.20-0.40 Low correlation; definite but small relationship

0.40-0.70 Moderate correlation; substantial relationship

0.70-0.90 High correlation; marked relationship

>0.90 Very high correlation; very dependable relationship


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RESULTS AND DISCUSSIONS

Respondents

A total of 100 respondents participated in this research. Table 2 shows a summary of

demographic profiles of the respondents.

Table 2: Summary of demographic profile

Table 2 exhibits the majority of participants aged between 18-25 years old (56%). Female

respondents are accounted for 60 percent of the total number of respondents. The highest

education for the most respondents is the secondary school education (32%). The majority

of respondents earned RM 1001-2000 monthly household income (33%) while most respondents are single (60%).

Descriptive statistics of study variables

The descriptive data including, mean, and standard deviation of the study variables was

obtained and shown in Table 3.

Demographic Profile Total in %

(n=100)

Gender

Male

Female

40

60

Age

18-25 26-35

36-45

46-55

56-65

56 21

8

7

8

Educational

Background

Primary

Secondary

STPM/ Diploma

Degree Master’s

PhD

Other

10

32

31

15 4

5

3

Monthly Household

Income

< RM1000

RM1001 -

RM2000

RM2001- RM3000

RM3001-

RM4000

RM4001-

RM5000 >RM5000

30

33

22

7 2

6

Marital Status

Single

Married without

children

Married with children

60

14

26

Family Size Alone

< 5 persons

5-10 persons

> 10 persons

3

46

50

1


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Table 3: Summary of descriptive data

Measurement Items

Mean Std.

deviation

PERCEIVED PRICE

I think price is important when I buy food products 3.82 1.09

I compare prices of other brands with private label because I choose one 3.57 1.02

I think the price of private label food products is reasonable for shoppers 3.52 0.96

The price of private label food products is lower than the average market

price for similar products

3.41 0.94

I can save lots of money buying private label food products 3.38 1.06

I buy private label food products because they are cheaper options 2.97 1.04

Overall Perceived Price 3.45 0.68

PACKAGING

It is important to visually display actual product contents (ingredients) on

private label food products

3.88 0.97

I like to buy the product that has attractive packaging 3.49 0.95

I think the packaging of private label food products look similar to other

products

3.25 1.02

I think the private label products have equally good packaging 3.18 0.99

Overall Packaging 3.45 0.56

ADVERTISEMENT

I think advertisement is important when I buy food products 3.66 0.84

My decision to purchase is influenced by advertisement 3.31 0.96

The message on advertisement attempts to persuade me to buy private

label food products

3.18 0.85

I trust on the message given by the advertisement 3.06 0.96

Overall Advertisement 3.30 0.67

STORE IMAGE

I think store image is important when I buy food products 3.80 0.84

Positive characteristics of private label food product come up quicker

when I see the brand shown in the supermarket/ hypermarket

3.33 0.87

Overall Store Image 3.57 0.65

PERCEIVED QUALITY

I think quality is an important criterion when I buy food products 4.17 0.91

It is important for me to buy high-quality food products 3.94 0.84

I think private label food products have clearly stated their ingredients

such as how much the percentage of each ingredient contain in the food

product

3.36 0.83

I think private label food products seem to be good in quality 3.30 0.93

I think private label food products are equally nutritious such as high in

vitamin, omega3, and etc.

3.26 0.97

I think private label food products taste goods 3.12 0.89

I think private label food products are fresher than other brands 3.11 0.88

Overall Perceived Quality 3.47 0.50

5-point Likert scale; 1 = strongly disagree, 5 = strongly agree


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Table 3 (cont): Summary of descriptive data

Measurement Items

Mean

Std.

deviation

PERCEIVED RISK

When I am considering a private label food product, I will choose very

carefully

3.99 0.80

The cheapness of private label food products suggests to me that they

may have some risks, such as being less good for health

3.54 0.97

I think distributing free food samples can decrease my uncertainty when

choosing private brand products

3.46 1.10

I am uncertain which private label food products provide real value for

money in terms of product quality

3.14 0.99

Overall Perceived Risk 3.53 0.54

PERCEIVED VALUE

When I buy the private label food products, I would ensure that I am

getting my money’s worth

3.76 0.85

I always check prices at the supermarket among brands to ensure I

acquire the best value for money product

3.75 0.99

Overall Perceived Value 3.76 0.79

CONSUMERS’ ATTITUDE

Trust on the product

I think private label food products are worth buying 3.32 0.90

I trust private label food products 3.19 0.84

Overall attitude towards ‘trust on the product’ 3.26 0.87

Familiarity

I am not familiar with private label food products, so I prefer to buy other

brands that I feel more familiar with

3.65 0.93

I am familiar with private label food products 2.90 0.99

Private label product as like the food I ate when I was a child 2.89 1.01

Private label food product is what I usually eat 2.78 1.10

Overall attitude towards ‘familiarity’ 3.06 1.01

Perceived economy situation

I change food products in order to save money when the economic

condition is serious

3.55 0.97

I buy the well-known brand product only when the economic condition is

good

3.35 0.99

I buy private label food product when the economic condition is serious 3.32 0.86

Overall attitude towards ‘perceived economy situation’ 3.41 0.94

Overall Consumers’ Attitude 3.22 0.96

PURCHASE INTENTION

I would buy private label food products in order to save money 3.37 0.98

I will consider to purchase the private label food products 3.33 0.89

I will definitely consider buying a ‘private’ label food product 3.19 0.94

Overall Purchase Intention 3.30 0.94

5-point Likert scale; 1 = strongly disagree, 5 = strongly agree

Based on the descriptive data in Table 3, perceived value (M=3.76, S.D.=0.79) becomes the

most important criteria in consumers’ purchasing of private label brand food product,


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followed by store image (M=3.57, S.D.=0.65), perceived risk (M=3.53, S.D.=0.54), perceived

quality (M=3.47, S.D.=0.50), perceived price (M=3.45, S.D.=0.68), packaging (M=3.45,

S.D.=0.56) and advertisement (M=3.30, S.D.=0.67). Meanwhile, consumer attitude (M=3.22, S.D.=0.96) and purchase intention (M=3.30, S.D.=0.94) towards private label brand food

product is just average.

This finding indicates that most people are value sensitive that they would ensure to getting

best value for money during the purchasing process. Therefore, they might check and

compare the price before purchase. In addition, consumers are willing to pay if they perceived worth value where the product has high quality, attractive attributes and low in

price (Chen, 2008). Apart from that, consumers perceived store image is important when

buying private label food products because store image reflect the images of retailers where

it might influence the perceived quality of products they carry and the decisions of

consumers as to where to shop (Leon and Leslie, 2007). Result shows that respondents are less willing to take risk so they tend to think twice in selecting and purchasing private label

brand food products. In addition, consumers acquire more information about the product

especially when there are similar quality food goods in the market. Therefore, the more

product information, the more likely consumers are willing to purchase because it could

enhance purchase intention and reduces purchase risk (Chen, 2008). Quality also becomes

integral in the mind of consumer in the purchasing decision because they believed that high quality product give reduces purchase mistake and assures them security of the food

products consumed, thus built a trust relationship to the particular products.

Respondents were also found to be price sensitive probably due to the increasing cost of

living including fuel prices; toll and utility rates which have resulted in the reduction of

consumers’ disposable income and affected their purchasing power Munusamy and Wong (2008). A less important factor in influencing the purchasing of food products are packaging

characteristics of the food products and advertisement. These two factors became the

source of product information (Munusamy and Wong, 2008; Semeijin et al 2004). Based on

these two medium, consumers pick a product, examine it and perhaps try it (Semeijin et al,

2004) and creating favorable images and perceptions of the products Munusamy and Wong

(2008).

Table 3 also shows that among three factors representing consumer attitude, perceived

economic situation is rated highest (M=3.41, S.D.=0.94) compared to other two factors i.e.

trust on the product (M=3.26, S.D.=0.87) and familiarity (M=3.06, S.D.=1.01). ‘Perceived

economic situation’ consists of three questions related to consumers’ purchasing strategy in terms of monetary aspect when buying well-known brand and private label brand food

products. In this study, consumers’ attitude in purchasing food product tends to be

influenced by the current economic condition. They will try to save their money during the

economic downturn by choosing private label brand products over well-known brand

products. However, they will repurchase their well-known brand product once economic

condition turns better (Conroy, 2010). Hence, this make private label product becomes an alternative choice in their purchase of food products (Walker, 2006). Respondents in this

study are slightly neutral in trusting private label product. This is possibly because of the

collectivist culture of ASEAN communities whom tend to focus more on brand name,

maintaining face and group harmony by consuming more luxurious goods and prefer

known and well-accepted brands (Ahuvia and Wong, 1998; Schutte et al., 1998). In terms of familiarity aspect, respondents rated their familiarity with the private label brand food

products at average rating. This maybe because there are many types of product with

various brands available in the market which involves promotions that change very quickly.

Consumers therefore became unfamiliar with too many available choices and tend to try

new products over other products including private label brand product (Chen, 2008).

Rating for overall consumers’ purchase intention towards private label food product is just

above neutral (M=3.30, S.D.=0.94). It indicates that individual’s purchasing intention is

always determined by other factors such as consumers’ perception and their attitude

(Chaniotakis et al., 2010). Besides, it can be interrupted by internal impulse and external

environment during purchase. Another reason that justifies the average rating of purchase

intention is that the growth of grocery store that produces products with their own label is


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still at the early stage in Malaysia. Consumers are still unfamiliar and in fact some may not

realized the availability of these products on the shelves because of the preference they have

towards well-known brands that they used to.

Factors influencing consumers’ purchase intention towards private label brand food products.

In order to determine the most influencing factor predicting purchase intention towards

private label brand food products, relationship between all variables was determined

through correlation analysis before proceeding to regression analysis. Table 4 depicts the r value for the relationship between independent variables [i.e. intrinsic factor (overall,

perceived quality, perceived value and perceived risk), extrinsic factor (overall, perceived

price, advertisement, store image and packaging) and consumer attitude (overall, trust on

the product, familiarity and perceived economic situation)] and dependent variable i.e.

purchase intention towards private label brand food products.

Table 4: Correlation between independent and dependent variables

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0.5

3**

0.4

9**

0.3

9**

0.6

0**

Note : ** Correlation is significant at the 0.01 level (2-tailed), *Correlation is significant

at the 0.05 level (2-tailed)

The correlation readings indicate a significant weak to moderate (r=0.23 to 0.60) correlation

between almost all independent variables and purchase intention towards private label

brand food products. Generally, it means if the consumers’ perception towards all factors

except ‘packaging’ is good then the more intention consumer has in purchasing private

label brand food products.

A further look into each factor indicates that factors influencing purchase intention of

private label brand food products can be grouped into ‘important determinant’ and ‘least

important determinant’. The important determinants are ‘consumers’ overall attitude

towards purchase intention of private label brand food products’ (r=0.60) followed by ‘trust

on the product’ (r=0.53), ‘perceived price’(r=0.60), ‘familiarity’ (r=0.49), ‘overall perception of intrinsic factor’ (r=0.47) and ‘overall perception of extrinsic factor’ (r=0.41). The least

important factors are ‘perceived economic situation’ (r=0.39), ‘advertisement’ (r=0.35),

‘perceived quality’ (r=0.33), ‘perceived value’ (r=0.32), ‘store image’ (r=0.26) and ‘perceived

risk’ (r=0.23). On the other hand, ‘packaging’ (r=0.07) seems to have no significant influence

in the purchasing of private label brand food products.

Intrinsic factor includes perceived quality, perceived risk and perceived value. In intrinsic

factor, ‘perceived quality’ and ‘perceived risk’ are the most important factors influencing

purchase intention (Hoch and Banegi, 1993; Sethuraman, 1992). ‘Perceived risk’ is

associated with ‘perceived quality’. People who are lack of confidence toward the product


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will doubt on the quality of the product (Sudhir and Talukdar, 2004). While, perceived

quality has a positive relationship with perceived value (Tellis and Gaeth, 1990) and

perceived value has a relationship with willingness to pay (Richardson et al., 1996b). Value of money and quality of the product will drive consumers towards purchasing the product

(Burton et al., 1998). High quality, low risk with greater value of the product can increase

confidence of consumers in purchasing. The higher the perceived quality of the product, the

more likely consumer has intention to purchase private label product. The higher the

perceived risk of the product, the less likely consumers purchase intention towards private

label product and the greater the perceived value on provide for private label product, the more likely the consumers purchase on private label product. Therefore, the result is

matched with pervious studied and hypothesis.

Extrinsic factor included perceived price, packaging, advertisement and store image and

those factors play a main important role in influencing consumers’ purchasing intention (Chen, 2008). Perceived price shows a positive relationship with consumers’ motives

(Munusamy and Wong, 2008) and this motive will drive their behavior together stimulate

their responses and bring them to the store (Kim and Jin, 2001). Low price products are

most attractive to consumers (Berman, 1996). This is because people are becoming more

price conscious; therefore, low price product may become their target. Advertisement also

play an important role in purchase decision process (Ampuero and Vila 2006; Grunert et al., 2006). Advertisement gives the information to consumers and thus shows the

differentiation between products (Beneke, 2008). In addition, there is a positive

relationship between store image and private label product (Morganosky, 1990). Study

found that, good store image can reduce perceived risk and thus add value to the product

on purchasing of private label product (Agarwal and Teas, 2001; Semeijin et al., 2004; Moore, 1995). This means that trustable store image will decrease doubt on product and

increase purchase intention (Semeijin et al., 2004). The lower the perceived price of the

product is, the higher the tendency of consumers’ purchase intention toward private label

product. In addition, there was a relationship between advertisements with consumers’

purchase intention. This is due to advertisement shows the information to consumers and

thus shows the differentiation between products. Furthermore, if the store image of the product is good, consumers’ purchase intention will be increase. Therefore, the result

matched with previous studies. However, packaging shows no relationship with purchase

intention, this contradicted with the research of Ampuero and Villa (2006) and Grunert el at

(2006). This maybe because of increasing homogenous products makes no difference

between every product (Uusitalo, 2001). Therefore, packaging does not influence consumers’ purchase intention.

Consumers’ attitude includes trust on the product, familiarity and perceived economic

situation. Trust on the product is influenced by perceived benefit and later on will affect

consumers’ attitude (Bettman, 1979). Consumers who trust on the product will think the

product is worth to buy and thus will recommend the product to others. Negative experience on purchasing will give a negative impact for their future purchase. In order to

prevent making mistake during purchasing, consumers will choose products which are

more familiar to them (Cox, 1967). Previous studies proved that consumers prefer to

purchase manufacturer branded products due to there are more familiar with those

products compared to private label products (Dict et al., 1995). The more familiar consumers to the private label product, the higher the tendency consumers’ purchase

intention is towards private label product. Purchase economic situation influence

consumers’ attitude which dealing with purchase decision-making (Chaniotakis et al.,

2009). Due to the economic downturn, people tend to save more money by making private

label food product as one of their selection; therefore, perceived economic situation had

influence their way in evaluating product and thus affecting their attitude.

The outcome of correlation analysis indicates that almost all factors significantly

influencing purchase intention. Further examination to determine the most significant

factor influencing purchase intention was then conducted through multiple linear

regression tests. Table 5 shows the result of multiple regressions.


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Table 5: Result of multiple regressions analysis

Variables Dependent

Purchase

Intention

Independent β t

Consumers’ Attitude .52 4.47*

Perceived price .24 2.57**

Packaging -.16 -1.79

Advertisement .08 .89

Store image .10 1.07

Perceived quality -.07 -.70

Perceived risk -.13 -1.37

Perceived value .16 1.78

P value .000

R2 .48

F Ratio 10.35

Note: * p < 0.01, ** p < 0.05

R2 statistic shows 48 percent of the total variance for the estimation of consumers’ purchase

intention towards private label food products is explained in the model. A look at the

influence of each independent variable revealed that only two independent variables

significantly predict purchase intention towards private label food products. ‘Consumer

attitude’ was the strongest predictor (β=.52, t=4.47) followed by ‘perceived price’ (β=.24,

t=2.57).

These findings indicate that the most important factor in determining consumers’ purchase

intention towards private label food products is their overall attitude towards private label food products. The more positive attitude they have towards those products, the more likely

they will buy them. In line, Chaniotakis et al (2010) proposed that consumers’ purchase

intention is influenced by consumers’ attitude especially during economic crisis. People will

try to save more money by purchasing private label product during economic downturn and

purchase again familiarity product once economic turn improves (Conroy, 2010). Therefore,

the most significant factor influencing purchase intention is due to consumers’ attitude. The result is in line with the theory of purchase intention where purchase intention usually

related with consumers’ behavior, perception and their attitude (Chaniotakis at al, 2010).

Table 5 also shows that ‘price’ is a significant predictor of how likely a consumer will

purchase private label food products. This result indicates that price is important for them and they are price sensitive. It is possibly due to increasing fuel prices; toll and utility rates

which have reduced consumers’ disposable income and affected their purchasing power

(Munusamy and Wong, 2008). Therefore, consumers switched into cost-saving mode to

stretch their household budgets (Nielsen, 2008). One alternative would be buying private

label food products which have already provided adequate value with money (Chen, 2008).

Perceptions of extrinsic and intrinsic factors and attitudes among consumers with and without

past experience with private label brand food products.

In order to compare the consumers’ responses of study factors among consumers’ with and

without past experience with private label food product, Independent T-test was conducted.

Table 6 shows the mean difference of consumers’ responses towards study variables.

Table 6: Mean difference of perceived factors among consumers with and without

experience with private label brand food products


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Factor Mean + SD

t-value Had experience No experience

Perceived price 3.55 + 0.61 3.15 + 0.79 2.67**

Packaging 3.52 + 0.55 3.26 + 0.53 2.12*

Advertisement 3.36 + 0.69 3.15 + 0.62 1.40

Store image 3.70 + 0.63 3.20 + 0.59 3.55**

Perceived quality 3.52 + 0.48 3.32 + 0.55 1.75

Perceived risk 3.53 + 0.54 3.55 + 0.59 - 0.15

Perceived value 3.82 + 0.75 3.57 + 0.89 1.40

Trust on the

product

3.36 + 0.72 2.96 + 0.78 2.41*

Familiarity 3.13 + 0.64 2.84 + 0.71 1.96

Perceived economic

condition

3.43 + 0.68 3.36 + 0.75 0.43

** Mean difference is significant at the 0.01 level, * Mean difference is significant

at the 0.05 level.

As shown in Table 6, there were significant differences on the perception of price,

packaging, store image, and trust on the product among consumers who have and do not

have past experience with private label food products. This result indicates that past experience does influence how consumer perceived private label food products. It is due to

the purchasing experience last longer and will remain in consumers’ mindset. Once

consumers purchase the product, they will evaluate the product and the result of the

purchasing experience toward the items will be kept in mind and it might influence their

future purchase decision-making (Keller, 2001).

In this study, consumer experience with the store image would play an important role in

the process of purchasing. If the consumer trusts the image of the grocery store or its

brand, he or she will buy it and use it with her friend or family (Leon and Leslie, 2007).

Therefore, he or she will think the product is worth to buy. On the other hand, bad

experience will create negative word of mouth (Solomon et al., 2007). People will spread their negative experience to others and later on will influence consumers’ attitude toward

making decision on the product.

Consumers experiencing affordable and worthy price will have positive perception towards

private label food products. Not only is that, having the price within the expected range customers willingness to pay also important (Blackwell and Blackwell, 1997). Consumers

are aware and expect that lower price is charged for store brand which in turn increase

their willingness to purchase private label products where they can save their household

budgets (Uusitalo, 2001).

In this study, the perception of private label brand packaging differs significantly among respondents with and without experience of purchasing private label brand food products.

This is possibly because users of private label brand food products have foreseen the

improvement of packaging of these products despite its lower price. The retailers of private

label brand food products realized the primary role of packaging to captivate consumers’

attention, as it informs consumers of the qualities and benefits of a product and it has a long-lasting effect in the mind of consumers (Beneke, 2008). Furthermore, they could make

more margins and launch the products quicker than it could from a branded line, because

it is in their control (Lo, 2012). On that basis, private label products have the advantage of

reaching all buyers especially those who look for the better or cheapest price, therefore

packaging becomes a communicator for price differentiation (Peter and Olson, 2008). Good

packaging can convey an upscale image, while poor packaging can detracts the products’ image.


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In conclusion, purchasing experience of private label food product is significant in

influencing consumers’ perception towards perceived price, packaging, store image and

trust on the product.

CONCLUSION

In conclusion, ‘perceived value’ becomes the most important criteria in consumers’

purchasing of private label brand food product, followed by other factors (i.e. store image,

perceived risk, perceived quality, perceived price and etc.). The result of this study also

shows the association between almost all independent variables and purchase intention

towards private label brand food products. Further examination of these associations

indicate that the most significant factor that influencing consumers’ purchase intention toward private label food products are consumers’ attitude and perceived price (extrinsic

factor). Another significant finding of this study signifies that consumers’ past purchasing

experience with the private label food products may influence their perception towards

price, packaging, store image and trust of those products.

This finding may assist retailers to better understand the factors influencing consumers’

purchase intention toward private label food product through improving the standard of

private label product and indirectly improve the private label food product in the local

market. Furthermore, it also adds new knowledge to the public on the meaning of private

label food product.

This research however has more rooms for improvement. Further research could be

conducted to a different segment of consumers or expanded to a larger sampling size or

geographical area so that the result may be reflective of the actual buying pattern of

consumers in Malaysia.

Although this study has proposed that ‘attitude’ and ‘perceived price’ (extrinsic factor) may

influence consumers’ purchase intention towards private label brand food products, other

factors are believed to be vital in better comprehend consumers buying behaviour.

Including more factors that related to consumers’ behaviour of purchasing food products to

study the real attitude and behaviour in questionnaire is encouraged.

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