CONSUMERS' PERCEPTIONS, ATTITUDES AND PURCHASE INTENTION TOWARDS

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Asian Journal of Business and Management Sciences Vol. 2 No. 8 [73-90]

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

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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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Asian Journal of Business and Management Sciences Vol. 2 No. 8 [73-90] INTRINSIC Perceived quality Perceived risk Perceived value

Consumers ’ Purchase Intention

EXTRINSIC Perceived price Advertisement Packaging Store image

CONSUMERS’ ATTITUDE Trust Familiarity Perceived economic situation

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


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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 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

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.


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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 Demographic Profile Gender Age

Male Female 18-25 26-35 36-45 46-55 56-65

Total in % (n=100) 40 60 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 RM2001RM3000 RM3001RM4000 RM4001RM5000 >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

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.


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Asian Journal of Business and Management Sciences Vol. 2 No. 8 [73-90] Table 3: Summary of descriptive data

Measurement Items PERCEIVED PRICE I think price is important when I buy food products I compare prices of other brands with private label because I choose one I think the price of private label food products is reasonable for shoppers The price of private label food products is lower than the average market price for similar products I can save lots of money buying private label food products I buy private label food products because they are cheaper options Overall Perceived Price PACKAGING It is important to visually display actual product contents (ingredients) on private label food products I like to buy the product that has attractive packaging I think the packaging of private label food products look similar to other products I think the private label products have equally good packaging Overall Packaging ADVERTISEMENT I think advertisement is important when I buy food products My decision to purchase is influenced by advertisement The message on advertisement attempts to persuade me to buy private label food products I trust on the message given by the advertisement Overall Advertisement STORE IMAGE I think store image is important when I buy food products Positive characteristics of private label food product come up quicker when I see the brand shown in the supermarket/ hypermarket Overall Store Image PERCEIVED QUALITY I think quality is an important criterion when I buy food products It is important for me to buy high-quality food products 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 I think private label food products seem to be good in quality I think private label food products are equally nutritious such as high in vitamin, omega3, and etc. I think private label food products taste goods I think private label food products are fresher than other brands Overall Perceived Quality 5-point Likert scale; 1 = strongly disagree, 5 = strongly agree


Mean

Std. deviation

3.82 3.57 3.52 3.41

1.09 1.02 0.96 0.94

3.38 2.97 3.45

1.06 1.04 0.68

3.88

0.97

3.49 3.25

0.95 1.02

3.18 3.45

0.99 0.56

3.66 3.31 3.18

0.84 0.96 0.85

3.06 3.30

0.96 0.67

3.80 3.33

0.84 0.87

3.57

0.65

4.17 3.94 3.36

0.91 0.84 0.83

3.30 3.26

0.93 0.97

3.12 3.11 3.47

0.89 0.88 0.50

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Asian Journal of Business and Management Sciences Vol. 2 No. 8 [73-90] Table 3 (cont): Summary of descriptive data

Measurement Items PERCEIVED RISK When I am considering a private label food product, I will choose very carefully The cheapness of private label food products suggests to me that they may have some risks, such as being less good for health I think distributing free food samples can decrease my uncertainty when choosing private brand products I am uncertain which private label food products provide real value for money in terms of product quality Overall Perceived Risk PERCEIVED VALUE When I buy the private label food products, I would ensure that I am getting my money’s worth I always check prices at the supermarket among brands to ensure I acquire the best value for money product Overall Perceived Value CONSUMERS’ ATTITUDE Trust on the product I think private label food products are worth buying I trust private label food products Overall attitude towards ‘trust on the product’ Familiarity I am not familiar with private label food products, so I prefer to buy other brands that I feel more familiar with I am familiar with private label food products Private label product as like the food I ate when I was a child Private label food product is what I usually eat Overall attitude towards ‘familiarity’ Perceived economy situation I change food products in order to save money when the economic condition is serious I buy the well-known brand product only when the economic condition is good I buy private label food product when the economic condition is serious Overall attitude towards ‘perceived economy situation’ Overall Consumers’ Attitude PURCHASE INTENTION I would buy private label food products in order to save money I will consider to purchase the private label food products I will definitely consider buying a ‘private’ label food product Overall Purchase Intention 5-point Likert scale; 1 = strongly disagree, 5 = strongly agree

Mean

Std. deviation

3.99

0.80

3.54

0.97

3.46

1.10

3.14

0.99

3.53

0.54

3.76

0.85

3.75

0.99

3.76

0.79

3.32 3.19 3.26

0.90 0.84 0.87

3.65

0.93

2.90 2.89 2.78 3.06

0.99 1.01 1.10 1.01

3.55

0.97

3.35

0.99

3.32 3.41 3.22

0.86 0.94 0.96

3.37 3.33 3.19 3.30

0.98 0.89 0.94 0.94

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.

Perceived economic situation

Consumers’ overall attitude

0.0 7

Familiarity

0.2 6**

Trust on the product

0.3 5**

Packaging

0.5 2**

Overall perception of extrinsic factor

0.4 7 **

Store image

0.2 3*

Advertisement

0.3 2**

Perceived price

Perceived risk

0.3 3**

Overall perception of intrinsic factor

Perceived value

Consumers’ overall purchase intention

Perceived quality

Table 4: Correlation between independent and dependent variables

0.4 1**

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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Asian Journal of Business and Management Sciences Vol. 2 No. 8 [73-90] 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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www.ajbms.org ISSN: 2047-2528 Factor

Asian Journal of Business and Management Sciences Vol. 2 No. 8 [73-90] Mean + SD Had experience

Perceived price Packaging Advertisement Store image

3.55 3.52 3.36 3.70

Perceived quality Perceived risk Perceived value Trust on the product Familiarity Perceived economic condition

+ + + +

0.61 0.55 0.69 0.63

No experience 3.15 3.26 3.15 3.20

+ + + +

t-value

0.79 0.53 0.62 0.59

2.67** 2.12* 1.40 3.55**

3.52 + 0.48 3.53 + 0.54 3.82 + 0.75

3.32 + 0.55 3.55 + 0.59 3.57 + 0.89

1.75 - 0.15 1.40

3.36 + 0.72

2.96 + 0.78

2.41*

3.13 + 0.64 3.43 + 0.68

2.84 + 0.71 3.36 + 0.75

1.96 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. REFERENCES 2006. Longman dictionary of contemporary English. 6th ed. 2011. Free Dictionary. [online]. Available from: http://www.thefreedictionary.com/extrinsic. [Accessed 7th March 2011]. Agarwal, S. and Teas, R.K. (2001). Perceived value: Mediating role of perceived risk. Journal of Marketing theory and Practice. Vol. 9(4). pp.1-14. Ahuvia, A and Wong, N. (1998).The effect of cultural orientation in luxury consumption. In eric J. Arnould and Linda, M Scott (Editors), Advances in Consumer Research. Vol. 25. Association for consumer research, Ann. Arbor. MI. pp. 29-32 Ailawadi, K.L., Neslin, S.A., Gedenk, K. (2001). Pursuing the value-conscious consumer: Store Brand versus National Brand Promotions. Journal of marketing. Vol. 65(1). pp.71-89. Ampuero, O., and Vila, N. (2006). Consumer perceptions of product packaging. Journal of Consumer Marketing. Vol. 23(2). pp. 100-112. Batra, R. and Sinha, I. (2000). Consumer-level factors moderating the success of private label brands. Journal of Retailing. Vol. 76(2). pp.175-191. Beneke. J. (2008). Consumer perceptions of private label brands within the retail grocery sector of South Africa. Journal of Business Management. Vol. 4(2). pp. 203-220. Berman, B. (1996). Marketing Channels. United Status: John Wiley and Sons. Bettman, J.R. (1979). An information processing theory of consumer choice. Reading, MA. Addison-Wesley. p.402 Blackwell, R. and Blackwell, K. (1997). Changing Consumption Trends, International Mass Retail Association.


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CONSUMERS' PERCEPTIONS, ATTITUDES AND PURCHASE INTENTION TOWARDS

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