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Children’s Ownership Intention towards Licensed Character Products: The Influence of Packaging, Advertising, Peers and

Pester Power

Nur Adibah Md Lazim Zuraidah Sulaiman *Thoo Ai Chin

Adaviah Mas’od Farrah Merlinda Muharam

Faculty of Management, Universiti Teknologi Malaysia, Malaysia Johor Bahru, Malaysia.

Email: adibahlazim@gmail.com, zuraidahs@utm.my acthoo@utm.my, adaviah@utm.my, merlinda@utm.my

___________________________________________________________________________ Abstract The purpose of this study is to investigate children’s ownership intention towards licensed character products. Licensed character products are products or merchandise that are associated with well-known and licensed brands such as Disney, Warner Brothers, Nickelodeon, Sesame Street and many others. In Malaysia, popular brands of licensed character products include Upin and Ipin, BoboiBoy and Puteri, among others. Two hundred and seventy-seven primary school students from year two and year three participated in this research. The collected data was analysed using Partial Least Squares (PLS-SEM) with SmartPLS version 3.2.3. The findings revealed that packaging, social influence (peers) and pester power positively influence children’s ownership intention towards licensed character products, however, media (advertising) does not have a significant influence. The final section of this paper outlines potential recommendations for business. Key words: Ownership Intention, Licensed Character Products, Packaging, Advertising, Peers and Pester Power * Corresponding author ___________________________________________________________________________ Introduction

Many companies rely on characters to create awareness, for positioning their products, to attract customers and to expand their market. A good character design can build a strong identity for a company in order to remain competitive and produce long-term revenue. There are hundreds of characters that have been created by companies for marketing purposes (Garretson and Burton, 2005). Companies choose these characters based on how often they appear in movies, television programs, commercial breaks and the common existence of items marketed to this target group. A licensed character product is different from a brand character; a licensed character can come in many different forms, such as live action (e.g. Avatar) or animated (e.g. Naruto). The idea of endowing non-human objects or animals with human characteristics is called anthropomorphism (Epley, Waytz, and Cacioppo, 2007; Mitchell, Thompson, and Miles, 1997). The researcher found that the use of licensed characters is an effective marketing strategy, where the company places a character image on their packaging, in their advertisements or even uses one as their company logo.

The objectives of this research are: 1. To identify the relationship between the independent variables (packaging, advertising,

peers and pester power) and children’s ownership intention towards licensed character products

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2. To recognise the most important factor that influences children’s ownership intention towards licensed character products

Figure1:ConceptualFramework

Literature Review Licensed Character Products

A character is defined as any symbol, figure or letter of an alphabet that is used in printing, writing, or the traits of someone’s behaviour and personality (Character, 2015). Licensing is the process of legally protecting (via trademark or copyright) that property, which can be a name, likeness, character, logo, signature, graphic, or a combination of several forms of these elements, to place on the product or another product line (White, 1990, p.5). During the past decade, character and entertainment licensing has been a huge success and has generated billions of dollars in revenue each year. Thus, this has become one of the most profitable types of licensing (Raugust, 1995, p.21). Names such as Warner Brothers, Disney, Nickelodeon and Fox are some of the major players in character and entertainment licensing. Les’ Copaque (2014) found that licensing their characters creates more brand awareness and has been successful in promoting some of Malaysia’s most popular animated series to the international stage. During 1999, when McDonald’s collaborated with Hello Kitty, reports indicated that customers were mostly interested in the Hello Kitty special edition dolls and not the McDonald’s products.

Packaging

Packaging acts as a communication tool and provides consumers with product information during the buying process. Increasing competitive advantages makes packaging one of the most important marketing tools to attract and create brand recognition for potential customers. Children respond to products sometimes not because they really need them, but because they are fun. They are easily attracted to nice-looking packaging (Geoperwic and Beharrell, 1994; Ogba and Johnson, 2010). According to Ning (2015), the children commodity packaging colour should be pure and clear. This is because, children level of knowledge is limited; it’s hard for them to understand complex information. For children, when looking at the certain thing, their first impression of human visual sense is colour which are more straight forward and most intuitive. Although children’s is active and lively character, but their attention is not easy to focus; only attractive packaging can capture their attention. At the same time, cartoon character that portray on packaging also cause the interest to children (Ning, 2015). Previous studies suggest that children are more prefer to select foods when the packages show familiar cartoon characters (Jayne, 2009; Levin and Levin, 2010; Roberto, Baik, Harris, and Brownell, 2010). Hill and Tilley (2002) claimed that children have a justifiable preference for cereal when they identified the character portrayed on the front of their favourite cereal box.

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H1: There is a relationship between packaging and children’s ownership intention towards

licensed character products. Media Influence (Advertising)

Media includes a wide range of modern communication, such as video, radio, advertising, newspaper, television, cinema, music, computer games, photography and the internet. It’s often called ‘mass media’ when it reaches large audiences. Advertising is defined as paid information that contains a non-personal message and description about the product, service or ideas by an identified sponsor through various media (Datta, 2008; Kotler et al., 2010). According Boyland and Halford (2013) television is one of the first medium that offer commercial food promotion to children. The report from UK broadcast regular shows television is media device that most missed by children (Ofcom, 2014). Despite there are availability of other medium, television still the media activity children would prefer to watch with an average of 14.6 hours every week compared to any other type of media (Ofcom, 2014). Children are more easily attracted to advertisements that include child models, animals, cartoon characters and celebrities (Ross et al., 1984; Blosser and Roberts, 1985; Rolandelli, 1989; Collins, 1990; Maher et al., 2006). Several studies have found that children perceived the advertisement as positive and more trustworthy when advertiser using familiar characters (Garretson and Niedrich, 2004; Castonguay, Kunkel, Wright and Duff, 2013). They also prefer to taste food that advertise with popular characters relatively to same food advertised without characters in the promotion (Roberto, Baik, Harris and Brownell, 2010; Kotler, Schiffman and Hanson, 2012). Familiar characters tend to influence children perceptions of advertised product (Lapierre, Vaala and Linebarger, 2011).

H2: There is a relationship between media influence (advertising) and children’s ownership

intention towards licensed character products. Social Influence (Peers)

Rashotte (2011) defined social influence as a change in an individual’s mindset, feelings and attitude that arises from the interaction between one individual or group and another. Peers refer to contemporaries of a similar age and social circle – these include friends, playmates, classmates, team members and co-workers. Niu (2013) state that peers influence has found to significantly affect purchase behaviour and it continuously reinforced by individual peer group. The stronger the bond and identification with peers, the more influences on peer communication (Wang, Yu and Wei, 2012). Children want something that makes them feel special and products that they and their friends think are ‘cool’. Children possess behaviours of jealously, revenge and controversy (Camstock and Strzyzewkis, 1990; Hameed et al., 2014). They also fear of being laugh by friends if not follow current trend. Moreover, studies by Moore and Bowman (2006) found that individuals using their peers as a benchmark of success with desire to have an equal amount of material goods as their friends. Peers perform an important function in affecting children’s preferences for products, because children are more likely to want to have licensed character products if their peers own them as well (Kline, 1993; Sengheu, 2001).

H3: There is a relationship between social influence (peers) and children’s ownership intention

towards licensed character products. Pester Power

Pester power refers to the influence children have on their family’s consumption patterns (Shoham and Dalakas, 2005) or, more specifically, where children request their parents to buy certain products for them (Gunter and Furnham, 1998; Papaoikonomou, Ryan, and Ginieis, 2010). Pester power target children who unable to purchase product for themselves by using nag, pester and

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beleaguer their parents into purchasing product for them. A basic mechanism of pester power is child-driven consumption-the more frequently children ask for a product, the more likely they are to receive it. However, this can depend on the parent–child relationship (McDermott et al., 2006; Nash and Basini, 2012). Previous literature has state there are four approaches children use to pose a purchase request to their parents: reasoning strategies (value-for-money offers), informing strategies (telling or asking their parents about the products), persuasion strategies and negative strategies (pestering) (Palan, 2001;Lawlor and Prothero, 2011). The Public Health Advocacy Institute reported that the use of premiums and giveaways such as food with small toys products is a powerful marketing tactic to pestering. McDonald’s Happy Meal toys are example of a pester power premium that involve pre-existing characters from a movie theatres contemporaneously with that Happy Meal promotion (Wilking, 2011). Parents tend to buy products that are nutritious, represent good value, are healthy, promote behavioural learning, have educational benefits and are socially acceptable. They are very selective in terms of what they want their child to have. As noted by Story and French (2004), child first request started at 2 years old and 75 percent of the time this request happens in supermarket.

H4: There is a relationship between pester power and children’s ownership intention towards

licensed character products. Ownership Intention

Ownership can be defined as exclusive control of physical or intellectual property which exists in legal rights, referred to as title (Lachapelle, 2008). Ownership is a title to a tangible object (e.g. house) or intangible object (e.g. copyright). Intention refers to the amount of attempts that someone is willing to have in order to attain a goal (Ajzen, 1996), or things that someone plans to do or accomplish. Intention is always related to the future and indicates that the individual is still not sure about the result, positive or negative. Specifically, ownership intention may be explained as the extent to which a person wishes to own a product or service. Children are interested in owning toys based on their relationship with the character. The character creates positive responses when children identify features about the character that they like; for example, girls often enjoy character role play and re-enacting scenes from the related film (Koch, 2014). They are collecting products that refer to the character, such as toys resembling the character or any product with picture of the character on it (Acuff and Reiher, 1997; Droog, Valkenburg, and Buijzen, 2010). Besides, children can develop a special relationship with these character which called as parasocial interaction; after they exposed to media, children think that the character as a close friends (Hoffner, 1996; Lemish, 2007). The more familiar a character in child world, the more influence it can have on children consumption.

Research Methodology Data Collection and Measures

The unit of analysis in this research was all year two and year three primary school students in Johor Bahru, Johor, Malaysia. The minimum sample size was a 5 to 1 ratio to the number of variables to be tested (Tabachnick and Fidell, 2007). This research used a non-probability sampling technique, which is purposive sampling that only relies on the researcher’s personal judgements. The data were obtained by questioning respondents. The survey contained approximately 23 questions and took around 20 minutes to complete. The researcher went to the respective classes that were designated by the school authorities; each class contained between 28 and 33 students. All students in the selected classes became part of the group of respondents for this research. Two hundred and seventy-seven respondents participated in this research. Each respondent was shown two types of licensed character water bottles – Ben 10 and Princess (see Figure 2). The researcher read out and went through each question in the survey to make sure the students clearly understood the questions. The process of questionnaire distribution, questioning, and collection of the questionnaires took three months to complete.

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Figure 2: Licensed Character Water Bottles

Questionnaire responses were classified using a five-point Likert scale. Respondents were asked to give their degree of agreement, which ranged from strongly disagree (1) to strongly agree (5). All questionnaires were adapted to suit the children’s language ability. The questionnaire was adapted from previous research, namely Johnson (2010), Rundh (2009), Hyatt (2005), Shukla (2010) and Baker and Churchill (1977).

Data Analysis and Findings

All the data was analysed using Partial Least Squares (PLS-SEM) with SmartPLS (v. 3.2.3) and Statistical Package for Social Sciences (SPSS) version 20.0 software. SmartPLS was used to test the relationship between the independent variables (packaging, advertising, peers and pester power) and the dependent variable (ownership intention). Respondent Background

In the group of respondents, there were slightly more females (55.6%) than males (44.4%). The majority of the respondents were likely to watch cartoons in Malay (63.9%), followed by English (23.8%) and other languages (12.3%). About 50.2% of students received less than RM 4 pocket money per day from their parents, while 49.8% received equal to or more than RM 4 per day. 65.3% of respondents were from a public school and 34.7% from a private school. Construct Validity

Construct validity is a test of how well the measure fits the theories around which the test was designed (Sekaran and Bougie, 2010). It can be assessed through convergent and discriminant validity, and the loading results demonstrate whether there are any problems with any particular items. The items with a loading greater than 0.5 are deemed as significant (Hair et al., 2010).Referring to the results in Table 1, all items were loaded highly on that construct, thus confirming construct validity of the test results.

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Table 1: Loadings results for each item

Packaging Advertising Peers Pester Power Ownership Intention

A1 0.643 A2 0.881 B3 0.827 B4 0.673 C2 0.918 C4 0.483 D1 0.740 D2 0.762 E1 0.757 E3 0.688 E4 0.794

Convergent Validity

Convergent validity refers to multiple items measuring a construct actually loading on a single construct (Campbell and Fiske, 1959). Theoretically, convergent validity is created when all items measuring a construct fall into one factor and are related. According to Hair et al. (2010), factor loadings, composite reliability (CR) and average variance extracted (AVE) are the indicators used to assess convergent validity. The loadings for all items must exceed the recommended value of 0.5 (Hair et al., 2010). AVE measures the overall amount of variance captured by the indicators relative to measurement error, and it must be greater than 0.5 (Barclay et al., 1995). The AVEs range from 0.538 to 0.595, which are above the acceptable value. For composite reliability, it portrays how far the construct indicators indicate the latent. The constructs show a range between 0.70 and 0.791, which are greater than the recommend value of 0.7 (Hair et al., 2010). The results in Table 2 show that all items measuring each construct (packaging, advertising, peers and pester power) fall into their own indicated factors. This means that each variable in this research has convergent validity.

Table 2: Results of measurement model

Construct Items Loadings AVE CR

Packaging PACKAGING1 PACKAGING2

0.643 0.881 0.595 0.74

Advertising ADVERTISING3 ADVERTISING4

0.827 0.673 0.568 0.72

Peers PEERS2 PEERS4

0.918 0.500 0.538 0.70

Pester power PESTERPOWER1 PESTERPOWER2

0.740 0.762 0.564 0.72

Ownership Intention OWNERSHIP1 OWNERSHIP3 OWNERSHIP4

0.757 0.688 0.794

0.559 0.79

Discriminant Validity

Discriminant validity tests the extent to which the items or measurements are differentiated and is indicated by low correlations between the measure of interest and the measure of other constructs. In the model, items should load stronger than their own construct, and the average variance shared among each construct and its measures should be greater than the variance shared between that construct and other constructs (Compeau et al., 1999). Table 3 shows the squared

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correlation for each construct is less than the square root of the AVE by indicated measures of that construct to confirm adequate discriminant validity. In short, this result demonstrates adequate discriminant validity of the constructs.

Table 3: Discriminant validity of constructs

Constructs 1 2 3 4 5 1. Advertising 0.754 2. Ownership Intention -0.240 0.748 3. Packaging -0.129 0.264 0.771 4. Peers -0.325 0.369 0.245 0.734 5. Pester Power -0.252 0.353 0.200 0.257 0.751

*Diagonals in bold represent the average variance extracted while the other entries represent the squared correlations Reliability Analysis

In SmartPLS, reliability analysis is measured by composite validity. Table 4 shows that the value of composite reliability (CR) for all variables ranges from 0.70 to 0.79. For an internal consistency reliability, the acceptable value is 0.7 or above (Hair et al., 2010). Therefore, all variables are reliable.

Table 4: Results of reliability test

Construct Measurement item CR

Number of items

Initial Final (After

deleted)

Packaging Adopted from: Johnson (2010), Rundh (2009)

1. I like this water bottle because of its bright colour 2. I like this water bottle because of the cartoon

character on it 0.74

4 2 3. I like this water bottle because of its design (the

lid, straw, strap) 4. I like this water bottle because of its size

Advertising Adopted from: Hyatt (2005)

3. I learn a lot from watching TV 4. Everything that is on TV is true 0.72

4 2 1. I always watch TV 2. Watching TV is important to me

Peers Adopted from: Hyatt (2005)

2. I want to buy the same water bottle as my friends 4. I want to have many friends (popular) 0.70

4 2 1. It bothers me if my friends have this water bottle and I don’t have it

3. What my friends think is more important than what my parents think

Pester Power Adopted from: Hyatt (2005)

1. My parents and I agree on what I should buy 2. My parents choose things that they buy for me 0.72

4 2 3. I accept my parents’ opinion on what I buy 4. I talk to my parents about what I want to buy

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Ownership intention Adopted from: Shukla (2010), Baker and Churchill (1977)

1. I would have this water bottle rather than any other water bottle available

3. I intend to own this water bottle in the future 4. I would have this water bottle if I happened to see it in

store

0.79 4 3

2. I will recommend others to own this water bottle *Items in bold were deleted in final measures

Hypotheses Testing

Path analysis was used to test the four hypotheses generated earlier. Based on Figure 3 and Table 5, the R2 value was 0.233, suggesting that 23.3% of the variance in the extent of ownership intention can be explained by packaging, media influence (advertising), social influence (peers) and pester power. Packaging was positively related (β = 0.145, p< 0.05) to extent of ownership intention, as was social influence (peers) (β = 0.246, p< 0.05) and pester power (β = 0.241, p< 0.05); whereas media influence (advertising) was not a significant predictor of extent of ownership intention. Thus, H1, H2 and H3 of this research are supported but H4 is not. In this research it was found that social influence (peers) is the most significant predictor that influences ownership intention towards licensed character products, which is 0.246, followed by pester power at 0.241 and packaging at 0.145.

Figure 3: Structural Framework

Table 5: Path coefficients and hypotheses testing

Hypotheses Relationship Std. Beta Std. Error T Value P Value Decision R2

H1 Packaging -> Ownership 0.145 0.065 2.222 0.027 Supported

0.233 H2 Advertising -> Ownership -0.081 0.060 1.347 0.179 Not supported H3 Peers -> Ownership 0.246 0.060 4.085 0.000 Supported

H4 Pester Power -> Ownership

0.241 0.062 3.905 0.000 Supported

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Hypotheses Discussion H1- There is a relationship between packaging and children’s ownership intention

towards licensed character products. The results show that H1 is accepted, which means there is a relationship between packaging and ownership intention. This suggests that packaging definitely influences children’s product preferences. Due to children lower abilities to process information, they are likely to assess products by packaging visually (Ogba and Johnson, 2010). According to Ning (2015) children’s visual memory is very developed, and attractive colours are better perceived and are seen as more effective compared to black and white. Children are drawn to products with attractive packaging. Especially if companies place the image of popular movie or character on product packaging to promote product to children (Ellison and Adamy, 2005; Roberto, Baik, Harris, and Brownell, 2010). License character are effective in capturing children attention (Ogle, Graham, Lucas-Thompson, & Roberto, 2016). They are more likely to have product with characters displayed on the packaging and this preferences will persist even if the character were incongruent (McGale, Halford, Harrold, and Boyland, 2016). It can be concluded that using visual elements such as colour, attractive images, and cartoon characters is favoured by children and helps to establish a better connection between the product and children’s ownership intention.

H2 - There is a relationship between media influence (advertising) and children’s ownership intention towards licensed character products.

Test results do not support H2, which means there is no relationship between media influence (advertising) and ownership intention. This is primarily because children have low cognitive development and they fail to distinguish between animated and real-life characters. Therefore, the use of characters in advertising may confuse children about the distinction between advertising and TV program content (Brand, 2007). They also may not understand the link between advertising and commercial profit (Oates, Blades,and Gunter, 2002). However, children today have plenty of option for digital entertainment. They are more exposed to gadget and tablet and less watching television according to Common Sense Media Research study in 2011, about 40 percent of children year two until four possess smartphone, iPods, iPads or similar device. Dredge (2015) also have reported that YouTube has emerged as an alternative to traditional children’s Television. Children are spend more time watching cartoon on YouTube, since many popular children’s Television shows are now on YouTube. Thus, watch online cartoon has less advertisement on children product. That is why advertising does not work in persuading children to own licensed character products. H3 - There is a relationship between social influence (peers) and children’s ownership

intention towards licensed character products.

The analysis showed that H3 is accepted, as social influence (peers) scores the highest beta value; which means that peers have the most significant influence on the dependent variable, ownership intention. This study have found similar result with previous studies Wang et al., (2012) that peers communication influence purchase intention. To children, peers are important because they are the ones who inform and make individuals aware about certain brands and mainly on products characteristic (Johnson, 2015). They also allow individuals to compare their own things with the attitudes and behaviours of the group and influence other individuals to adopt the attitudes and behaviours that are in line with the norms of the group (Mohube, 2007). The more frequently children interact with their peers about consumption matters, the greater the possibility of them taking peer preferences into account in evaluating products. Dittmar (2011) indicate that due to the socialization with peers, children feels by having cool and appropriate things that they believe will make them

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socially acceptable with their peers. Overall, peer influence plays an important role in children’s ownership intention towards licensed character products.

H4 - There is a relationship between pester power and children’s ownership intention towards licensed character products.

Based on the analysis of results, H4 is accepted, meaning there is a positive relationship

between pester power and children’s ownership intention. The results proved that children can influence the purchasing decisions of their parents through their pester power. Federal Trade Commission indicate that animated character whether third party licensed character or character created by company for a brand is important factor in driving children to ask their parents to buy Wilking (2011). It was estimated that 34% of sales of food products are made as a result of nagging on the part of children (Morales, 2000; Huang, 2016). Children use different strategies for pestering – such as requesting, negotiation, bargaining, crying and threatening – to achieve what they want (Bhattacharyya and Kohli, 2007). Marketers found that it is easier to influence children to ask for a product rather than directly persuade the parents to buy it (Soni, 2007). Several studies also identified that there are three product categories that children would try to influence through pestering, namely food, toys and clothing (Nichollas and Cullen, 2004; Ogba and Johnson, 2010). This is how children can transform their desire into a purchase. In brief, pester power is a very important tool and plays a considerable role in children’s ownership intention. Recommendations for Business

In this section, the researcher provides recommendations for future business and marketers for targeting children. The results obtained from this study demonstrate that children’s preferences are affected by packaging, social influence (peers) and pester power. These findings emphasize the importance of visual elements in packaging as a marketing tool and imply that packaging elements such as colour, image, cartoon characters and font, should be taken into account by product designers, manufacturers and marketing agents as a way to improve sales. Children, especially those of generation Z, are more exposed to gadgets such as smart phones and tablets. As a result, they tend to watch cartoons on YouTube instead of watching them on television. That is why these children may not really understand the message from the advertisements on television. Thus, marketers can use buzz marketing by creating advertisements on YouTube. In 2008, before Twitter became part of mainstream social media, the top 10 viral marketing campaigns relied heavily on Facebook, YouTube and Hotmail to reach hundreds of millions of viewers. In addition, companies can also develop new applications to sell their products to children.

Furthermore, the results from this research support the hypothesis regarding the effects of social influence (peers) on children’s ownership intention. During weekdays, most students’ time is spent with their friends at school; therefore, marketers can commercialize their products in education through means such as sponsored educational materials, contests and incentive programs that students can participate in, and exclusive deals with soft drink companies such as Milo Nestlé to offer their products in schools. By implementing this technique, it would increase word of mouth among students, especially among their peers. The marketers can rely on children to pester their parents to buy the product, rather than targeting the parents directly. This shows that today’s children have more autonomy and decision-making power within the family than previous generations.

Limitations and Directions for Future Research

There are several limitations that the researcher faced throughout the process of this research, resulting in several recommendations for improvements in future research. First, there is the need to increase the number of respondents and broaden the number of schools used in the study to ensure a better representation of the population. Thus, if the researcher has more time and resources, it is recommended to expand the number of respondents in the study. Future researchers can broaden the

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range of schools participating in the study to include another district. This would improve data accuracy and results.

In terms of survey administration, it would be more effective for the questionnaire to be distributed in special rooms such as a computer lab or hall, similar to examination circumstances. This is because sitting next to their friends can cause children to imitate someone else’s answer. This suggestion would also reduce the noise level in the classroom. Next, diversifying the examples of water bottles brought to school and used in the study would be beneficial. Instead of using water bottles representing foreign characters, it is recommended that the researcher show other water bottles with local characters such as Upin Ipin, BoboiBoy or Puteri. Children’s preferences and knowledge about certain characters differ. Moreover, future researchers need to do specific pre-testing of the questionnaire instruments to ensure that the respondents clearly understand each item in the questionnaire

This research only covers the variables of packaging, advertising, peers and pesters power and their influence on ownership intention. Future research could use other variables such as brand character, store design, music and many others that could affect ownership intention of children towards licensed character products.

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