PROMOTION MIX: LEVEL OF AWARENESS AND PURCHASE

LIKELIHOOD

Anne Wong Ling Ling (22975)

Degree of Bachelor of

Business Administration with Honours

(Marketing)

2011

Faculty of Economics and Business

UN

IVE

RS

IT

IMALAYSIA

SA

RA

WA

K

U N I M AS

Faculty of Economics and Business

PROMOTION MIX: LEVEL OF AWARENESS AND PURCHASE

LIKELIHOOD

ANNE WONG LING LING

This project is submitted in partial fulfillment of the requirements for the

degree of Bachelor of Business Administration with Honours

(Marketing)

Faculty of Economics and Business

UNIVERSITI MALAYSIA SARAWAK

2011

Statement of Originality

The work described in this Final Year Project, entitled

“Promotion Mix: Level of Awareness and Purchase Likelihood”

is to the best of the author’s knowledge that of the author except

where due reference is made.

__________________ ___________________

(Date Submitted) (Student’ signature)

Anne Wong Ling Ling

22975

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ACKNOWLEDGEMENT

First of all, I would like to take this opportunity to express my thankful to my

supervisor, Dr. Rabaah Tudin for her guidance and direction throughout the course of

this Final Year Project. She had kindly providing me knowledge and idea from the

starting of this research until end of the research. She also gave me valuable information

and advices during the process of this research. Besides, when I was faced problems, she

was able provided detail solution to me to solve the problem.

Secondly, I would like special thanks to Associate Professor Shazali Abu Mansor (Dean

of Faculty of Economics and Business), Professor Madya Dr Ahmad Shuib (Final Year

Project coordinator of Faculty of Economics and Business), and also the staff of Faculty

Economics and Business.

Next, my thanks go to my family. I would like to thank my father, Wong Sii Kiew and

my mother, Ling Leng Hung, for their support and encouragement either in financial or

moral to me to complete this research. Furthermore, my thanks also go to my sister,

Irene Wong Hui Hui, my youngest brother, Philip Wong Ha Ing and my youngest sister,

Agnes Wong Tin Tin where suggested some idea or information to me when I am

blanked of idea.

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Lastly, thanks go to my course mates and friends who cheered up me when I am stress

and encourage me to continue finish this research. Apart from that, they were suggested

valuable ideas and explanations for me to complete the Final Year Project.

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TABLE OF CONTENTS

LIST OF TABLES xiii

LIST OF FIGURES xvi

LIST OF CHART xvii

CHAPTER ONE: INTRODUCTION

1.1 Introduction 1

1.2 Theory 5

1.3 Problem Statement 6

1.4 Research Objectives 8

1.5 Rationale of the Study 8

1.7 Scope of the Research 10

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction 11

2.2 Marketing 11

2.3 Marketing mix 12

2.4 Promotion in Marketing mix 13

2.4.1 Advertising 14

2.4.2 Personal Selling 15

2.4.3 Sales Promotion 16

2.4.4 Public Relations 17

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2.4.5 Direct Marketing 18

2.5 Attitude 19

2.6 Theory of Attitude 20

2.6.2 Tri-component Model 21

2.6.2 Theory-of-Reasoned Action Model 23

2.6.3 AIDA Model 25

2.6.4 Hierarchy of Effect 25

2.7 Related Studies of Consumer Attitude toward Promotional Mix Elements 26

2.7.1 Consumer Attitude on Advertising 26

2.7.2 Consumer Attitude on Personal Selling 27

2.7.3 Consumer Attitude on Sales Promotion 29

2.7.4 Consumer Attitude on Publicity/Public Relations 31

2.7.5 Consumer Attitude on Direct Marketing 32

2.8 Consumers’ Level of Awareness on Promotional Mix Elements 33

2.9 Consumers’ Purchase Likelihood on Promotional Mix Elements 34

2.10 Conclusion 36

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Introduction 37

3.2 Conceptual Framework 38

3.3 Research Design 39

3.3.1 Primary Data 39

3.3.2 Secondary Data 40

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3.4 Population 40

3.5 Sample 41

3.5.1 Sample Method 42

3.5.2 Sample Size 42

3.5.3 Data Collection 43

3.5.4 Instrument Development 43

3.5.5 Data Collection Procedure 45

3.6 Pilot Test 47

3.7 Data Analysis 48

3.7.1 Descriptive Statistics 48

3.7.2 Factor Analysis 49

3.7.3 Reliability Analysis 49

3.7.4 Factor Independence Analysis 50

3.7.4.1 Q-Q plot 50

3.7.4.2 Pearson’s Correlations Analysis 50

3.7.4.3 Linear Regression Analysis 51

3.8 Hypothesis 52

3.10 Summary 52

CHAPTER FOUR: RESEARCH FINDINGS

4.1 Introduction 54

4.2 Respondents’ Profile Analysis 54

4.3 Reliability of the Survey Instrument 57

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4.4 Factor Analysis 57

4.5 Frequency 63

4.5.1 Level of Awareness of Consumer on Promotional Mix Elements 66

4.5.2 Recall of Consumer on Promotional Mix Elements 68

4.5.3 Attitude on Promotional Mix Elements 70

4.5.4 Purchase Likelihood of Consumers on Promotional Mix Elements 75

4.6 Mean and Standard Deviation 80

4.6.1 Level of Awareness of Consumer on Promotional Mix Element 80

4.6.2 Recall of Consumer on Promotional Mix Elements 83

4.6.3 Attitude on Promotional Mix Elements 84

4.6.4 Purchase Likelihood of Consumers on Promotional Mix Elements 88

4.7 Pearson Correlation Analysis 90

4.8 Linear Regression Analysis 94

4.9 Conclusion 96

CHAPTER FIVE: DISCUSSIONS OF FINDINGS

5.1 Introduction 99

5.2 Respondents’ Demographic Profile 99

5.3 Hypothesis Testing 100

5.3.1 Hypothesis 1 100

5.3.2 Hypothesis 2 103

5.3.3 Hypothesis 3 107

5.4 Conclusion 108

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CHAPTER SIX: CONCLUSIONS, LIMITATION AND FUTURE RESEARCH

6.1 Introduction 109

6.2 Conclusion 109

6.3 Managerial Implication 111

6.4 Recommendation for Future Research 113

6.5 Limitation 115

REFERENCES 117

APPENDIX A: Questionnaire

xiii

LIST OF TABLES

Table 4.1: Respondent’s Characteristics 56

Table 4.2: Reliability Analysis Results for the 30 Statements 57

Table 4.3: Appropriateness of Factor Analysis 58

Table 4.4: Rotated Component Matrixa of Consumers’ Level of Awareness on

Promotional Mix Elements 59

Table 4.5: Rotated Component Matrixa of Consumers’ Recall on Promotional Mix

Elements 60

Table 4.6: Rotated Component Matrixa of Consumers’ Attitude on Promotional Mix

Elements 61

Table 4.7: Rotated Component Matrixa of Consumers’ Purchase Likelihood on

Promotional Mix Elements 62

Table 4.8: Level of awareness of Consumers on Promotional Mix Element

64

Table 4.9: Frequency of Level of Awareness on Promotional Mix Elements 66

Table 4.10: Frequency of Recall of Consumer on Promotional Mix Elements 68

Table 4.11: Frequency of Attitude of Consumers on Advertising 70

Table 4.12: Frequency of Attitude of Consumers on Personal Selling 71

Table 4.13: Frequency of Attitude of Consumers on Sales Promotion 72

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Table 4.14: Frequency of Attitude of Consumers on Publicity 73

Table 4.15: Frequency of Attitude of Consumers on Direct Marketing 74

Table 4.16: Purchase Likelihood of Consumers on Promotional Mix Elements

76

Table 4.17: Frequency Purchase Likelihood of Consumers on Promotional Mix

Elements 78

Table 4.18: Promotional Mix Elements Rank based on the Level of Awareness of

Consumer 80

Table 4.19: Level of Awareness of Consumer on Promotional Mix Elements 82

Table 4.20: Recall of Consumer on Promotional Mix Elements 83

Table 4.21: Mean and Standard Deviation of Attitude of Consumer on Advertising

84

Table 4.22: Mean and Standard Deviation of Attitude of Consumer on Personal

Selling 85

Table 4.23: Mean and Standard Deviation of Attitude of Consumer on Sales

Promotion 85

Table 4.24: Mean and Standard Deviation of Consumers’ Attitude on

Publicity/Public Relations 86

Table 4.25: Mean and Standard Deviation of Consumers’ Attitude on Direct

Marketing 87

Table 4.26: Promotional Mix Elements Rank based on the Purchase Likelihood of

Consumer 88

Table 4.27: Purchase Likelihood of Consumer on Promotional Mix Elements 89

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Table 4.28: Q-Q Plot 90

Table 4.29: Pearson Correlation 92

Table 4.30: Regression of the Impact of Consumers’ Attitude toward Promotional

Mix Elements on Purchase Likelihood 94

Table 5.1: Reliability, Factor Analysis, Mean and Standard Deviation 101

Table 5.2: Correlation between Level of Awareness and Promotional Mix Elements

102

Table 5.3: Reliability, Factor Analysis, Mean and Standard Deviation 104

Table 5.4: Standard Regression between Consumers’ Attitude on Promotional Mix

Elements with Purchase Likelihood 104

Table 5.5: Standard Regression between Consumers’ Attitude on Promotional Mix

Elements toward Purchase Likelihood 107

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LIST OF FIGURES

Figure 1: Tri-component Model 23

Figure 2: Model of Consumer’s Attitude toward Promotional Mix Elements and

The Impact of the Attitude to The Purchase Likelihood and Level of

Awareness 38

xvii

LIST OF CHART

Chart 1: Share of Advertising Expenditure of Malaysia (2010) 4

ABSTRACT

PROMOTION MIX: LEVEL OF AWARENESS AND PURCHASE

LIKELIHOOD

By

Anne Wong Ling Ling

Promotion strategies were used by many companies to promote their products to the

consumers. This paper examines the consumer’ attitude on promotional mix elements

which are advertising, personal selling, sales promotion, publicity/public relation and

direct marketing and the impact of these attitude toward consumers’ level of awareness

and purchase likelihood, without focusing on any specific products in Kuala Lumpur,

Malaysia. The theoretical frameworks used in this research were Marketing Theory and

Theory of Reasoned Action (TRA). Primary data were collected by using questionnaire.

400 questionnaires were collected and analyzed using Correlation and Regression.

Hypothesis 1 stated that there is a significant positive relationship between consumers’

attitude on sales promotion and publicity and level of awareness and this hypothesis was

accepted. Hypothesis 2 stated that consumers’ attitude on advertising, personal selling,

sales promotion and publicity/public relations will influence their purchase likelihood of

products and it also was accepted. Hypothesis 3 stated that consumers’ attitude on direct

marketing influences the purchase likelihood of products and it was rejected. One of the

reasons was consumer less intention to purchase the products after go through the direct

marketing (Alnawas, 2010).

ABSTRAK

ELEMEN PROMOSI: TAHAP KESEDARAN DAN KEBARANGKALIAN

PEMBELIAN

Oleh

Anne Wong Ling Ling

Penyelidikan ini menyelidik sikap pelanggan terhadap elemen promosi seperti

pengiklan, jualan peribadi, promosi jualan, publisiti dan pemasaran langsung. Selain itu,

tahap kesedaran dan kebarangkalian pembelian juga dikaji dalam penyelidikan ini.

Penyelidikan ini tidak menumpukan pada produk yang khusus di Kuala Lumpur,

Malaysia. Teori yang digunakan dalam penyelikan ini adalah Teori Aksi Beralasan di

mana digunakan untuk mengukur sikap pelanggan terhadap elemen promosi dan

kesannya terhadap tahap kesedaran dan kebarangkalian pembelian sesuatu produk. Data

dikumpulkan menggunakan soal selidik melaui tinjauan. Data yang dikumpul dianalisis

menggunakan “Correlation” dan “Regression” analisis. Penemuan menunjukkan bahawa

sikap pelanggan terhadap promosi jualan dan publisiti mempunyai perkaitan yang positif

dengan tahap kesedaran pelanggan. Selain itu, penemuan juga menunjukkan sikap

pelanggan terhadap pengiklanan, jualan peribadi, promosi jualan dan publisiti

menpunyai kesan pada kebarangkalian pembelian sesuatu produk. Perbincangan

implikasi dan keterbatasan disediakan dalam tesis ini.

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CHAPTER 1

INTRODUCTION

1.1 Introduction

The evolution of technologies changes every day and bring a lot of new and advance

thing for the people. Thus, technologies advancement encourages people to improve

themselves in this field. Beside, technologies advancement also creates a new flow of

evolution in the marketing field. For example, there have many new advance things

appear because of the changes of the technologies such as online buying, online

advertising, E-magazine, mobile advertising and so forth.

Technology is one of the external environments which will influence marketing

activities of a company. Hence, companies should be alert to the changes in the external

environment so they can always improve themselves and compete with the competitors.

One of the marketing activities that might be influenced by the changes of technology is

promotional tools. Traditionally, marketers used more promotional media such as

newspaper, magazines, brochures and so on to promote products or services. Due to the

changing of technology, marketers now prefer using internet to promote products and

services. The reasons is internet is easy and widely to spread news to everyone. Hence,

consumer’s daily activities also change because of the technology. According to the

latest Nielsen Advertising Information Services report, Malaysia advertising market

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rebounded from a decline in the first half of last year to record a total spending of

RM3.5 billion in the first half of 2010. The highest growth was driven by internet which

increase 55% compare with the Quarter 1, 2009 (Yun, 2010). It seems that marketers

acknowledge consumers trend using internet as their prefereable media to apply these

changes in their promotional mix elements. Now, marketers used more internet to

promote products and services. Hence, it might a new and additional promotional tool to

marketers for create awareness and influence consumer to purchase the products and

services.

Spending more in advertising also can increase the economy of Malaysia. According to

Nielsen Advertising Information Services (Anonymous, 2010), the result shows that

newspaper is the highest expenses of advertising which is 52.9%, followed by television

(35.7%) and Radio (5.6%) as shown in Chart 1. The marketer still frequently used the

traditional media to promote products and services to create awareness and persuade

consumer to purchase.

The Global Consumer Confidence, Concerns and Spending Survey (Quarter 1, 2010) by

Nielsen Company developed consumers’ confidence in the job market, status of their

personal finances and readiness to spend throughout Asia Pacific, Europe, Latin

America, the Middle East and North. The result states that Asian consumer ready to

spend. Asian consumer plans to spend more in out-of-home entertainment, new

technology, holidays and new clothes if compared with six months ago. It shows that

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power of spending of Asian consumer start to grow. Based on the Global Consumer

Confidence & Spending Survey (Quarter 2, 2010) by Nielsen Company, forty-seven

percent of 27,000 respondents, Vietnam (Asia) would spend excess cash on new

technology products which is the higher percentage in Asia. From the result, it shows

that new technology products are the highest segment for Asian consumer to spend. It

means Asian consumer influence by the trend of the society in their lifestyle. Asian

consumer spends more money in the new technology products because of the changing

of external environment and directly influence consumer attitude. Consumers feel that

latest technology products important to them. Thus, they have the desire to try the latest

technology products although sometimes the new technology products not necessary

important to them. Besides that, it also causes the changing of the consumer behaviors

from high-involvement to low-involvement of the expensive product. It is because

usually high technology products are quite expensive so that the consumer needs to

know the detail of product before they buy the product. Technology advancement

influence consumers to buy the new technology products in a short time without

searching for much information.

4

Chart 1: Share of Advertising Expenditure of Malaysia (2010)

Source: Nielsen Advertising Information Services (AIS)

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1.2 Theory

Theories applied to this project are marketing theory and Theory of Reasoned Action.

According to the Armstrong and Kolter (2009), “marketing is the activity, set of

institutions, and processes for creating, communicating, delivering, and exchanging

offerings that have value for customers, clients, partners and society at large.” It means

that the activities usually perform by marketing department of the company is creating,

sending, communicating and exchanging the value of the products to the consumers.

One of the major concepts of marketing is marketing mix. Marketing mix is a

combination of tactical marketing tools which are controllable by the firm and to

produce the wants in the target market (Armstrong & Kolter, 2009). The tactical

marketing tools consist of product, price, promotion and place which known as the “four

Ps” (Armstrong & Kolter, 2009).

This research, it focuses on the promotion element. Promotion defines as “activities that

communicate the merits of the products and persuade target customers to buy it”

(Armstrong & Kolter, 2009). The purpose of promotion is to ensure consumers are

aware of the products (Rowley, 1998). There is one concept of promotion which is

promotion mix or marketing communications mix. The definition of promotion mix or

marketing communications mix is specific blend of advertising, public relations,

personal selling, sales promotion, and direct marketing tools that the company uses to

persuasively communicate customer values and build customer relationships (Armstrong

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& Kolter, 2009). Hence, promotion element is one of the important marketing mixes in

company to bring profit to the company. Without promotion element, the products of the

company will not know by public no matter how good of the company’s products and

directly did not bring profit to the company.

This paper examines the consumer’ attitude on promotional mix elements which are

advertising, personal selling, sales promotion, publicity/public relation and direct

marketing and the impact of these attitude toward consumers’ level of awareness and

purchase likelihood, without focusing on any specific products in Kuala Lumpur,

Malaysia. Theory used to measure the attitude of consumer is Theory of Reasoned

Action as proposed by Azjen and Fishbein (1980). The theory represents a

comprehensive integration of attitude lead to intention and behavior. Theory of

Reasoned Action similar with the tri-component attitude model which incorporate

cognitive, affective and conative component. The model suggests that the best predictor

of behavior in the intention to act and attitude is the factors led to intention and behavior.

1.3 Problem Statement

In Malaysia, there still not much research done about the awareness, attitude and

purchase likelihood of consumer through promotional mix elements. In Malaysia, there

are a lot of marketing activities through promotional mix elements, used by companies

to communicate with consumers such as advertising, personal selling, sales promotion,

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publicity/public relations and direct marketing. According to Fill (1999), each

promotion mix elements has different capacities to communicate and to achieve

objectives of companies. But, companies did not recognize which type of promotional

mix elements will create awareness of consumer, form the consumer attitude and

influence purchase likelihood of consumer toward their company’s products. Hence, the

companies invest a lot of money in promotional mix elements to promote their product

although the promotional mix elements are not very effective to consumer or not

suitable for their products. The effectiveness of each tool can be measure by the

purchase decision whether to buy products or not at the end. Promotional mix elements

influence from unawareness of consumer to attitude and link to consumers’ purchase

likelihood.

Through identify the promotional mix elements which create awareness, form

consumer’s attitude and influence consumers’ purchase likelihood for their products,

company can gain profit and lower the waste of investment.