perception and predictors of consumers purchase intentions for store brands - evidence from malaysia

8/12/2019 Perception and Predictors of Consumers Purchase Intentions for Store Brands - Evidence From Malaysia

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Asian Journal of Business and Accounting 6(2), 2013 105

Asian Journal of Business and Accounting 6(2), 2013 ISSN 19854064

Perceptions and Predictors of

Consumers Purchase Intentions forStore Brands: Evidence from Malaysia

Siohong Tih* and Kean Heng Lee

ABSTRACT

This study examines consumers perceptions of retail store brandsand identies the predictors of purchase intentions for the storebrands. To examine the proposed research model, two independentsamples are drawn. The rst sample consists of 120 responsescollected via mall intercept at a famous hypermarket retail chainstore, and the second sample consists of 120 responses also collectedusing the mall intercept method at a supermarket chain storein Klang Valley, Malaysia. Multiple regressions are used to testthe hypotheses. There are mixed results in relation to the testedrelationships. Perceived value for the money, perceived qualityvariance, perceived price and perceived risk have a signicantimpact on consumer purchase intention for the store brand in thehypermarket sample. However, analysis using the supermarketsample indicated that only perceived quality variance has asignicant impact on consumer purchase intention for the storebrand.

Keywords: Consumer Perception, Purchase Intention, Store BrandJEL Classifcation: M31

1. Introduction

In an effort to increase their competitiveness in the market, large-scaleretailers have adopted a popular strategy, namely, developing theirown store brands. The retailers create their own brand either usingtheir store name for the brand or a separate brand name. These typesof brand names are known as store brands or private label brands.

* Corresponding author. Siohong Tih is an Associate Professor at the Graduate School ofBusiness, Universiti Kebangsaan Malaysia, 43600 UKM, Bangi, Selangor, Malaysia, e-mail:[email protected].


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Siohong Tih and Kean Heng Lee

Asian Journal of Business and Accounting 6(2), 2013106

This strategy creates an opportunity for retailers to own, control, and sellproducts under their own labels. Store brands play a vital role in retail

strategy. Today, store brands are available in diverse goods and servicesranging from household items to food and accessories. Store brandedproducts can be priced high or low depending on the retail strategy(Baltas, 1997; Batra & Sinha, 2000; Dick, Jain & Richardson, 1997; Kremer& Viot, 2012; Tifferet & Herstein, 2012; Zielke & Dobbelstein, 2007).

Store brands are highly important. The development of a storebrand is essential for improving revenue. From the retailers pointof view, a strong store brand might reduce marketing expenditures,lead to cost savings and allow for exible pricing (low or high prices,

depending on the targeted customers and margin). Store brands alsoprovide an opportunity for retailers to set their own prices duringpromotion periods and thus compete with national brands. Moreover,store brands may offer an opportunity to increase store trafc and buildstore loyalty (Baltas, 1997; Baltas & Argouslidis, 2007; Dick et al., 1997;Kremer & Viot, 2012; Tifferet & Herstein, 2012; Zielke & Dobbelstein,2007). For instance, in the UK and the US, store brands are commonlyadopted by retailers (Kremer & Viot, 2012; Tifferet & Herstein, 2012).Rahman et al. (2012) also stated that many retailers potentially develop

their own store brands to create loyal customers.Demand for the store brand might encourage consumers to visit,

especially when they are familiar with the private label products,because they are associated with particular retail stores. To createand enhance customer loyalty, the brand may play an important rolein promoting products to the public, for example, communicatingthe value for the money or the quality of the products. Consumerswillingness to purchase store branded products and loyalty towards thebrands depends on the consumers perception of critical factors such

as price, risk and quality (Dick et al., 1997; Rahman et al., 2012; Zielke& Dobblestein, 2007).

The existing literature has examined the perception differencesand purchasing preferences between national and store brands (Batra& Sinha, 2000; Broyles et al., 2011; De Wulf et al., 2005; Hoch & Banerji,1993; Mieres, Martin & Gutierrez, 2006; Sethuraman & Cole, 1999).Research has also examined the factors that influence consumerdecisions regarding retail stores and brands (Grandhi, Singh & Patwa,2012; Kumar & Karande, 2000; Tifferet & Herstein, 2012; Zielke &

Dobbelstein, 2007). For example, Tifferet and Herstein (2012) examinedthe predictors of store brand decisions, and Zielke and Dobbelstein


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Perceptions and Predictors of Consumers Purchase Intentions for Store Brands: Evidencefrom Malaysia


(2007) studied customers willingness to purchase new store brands.However, little attention has been given to the factors (i.e., price and

promotional sensitivities) inuencing consumers shopping behaviourin different retail formats (Wang, Bezawada & Tsai, 2010). A closelyrelated theoretical reference would be studies on consumer behaviouracross channels or multi-channel research. It was found that consumersbehave differently across channels, such as using the Internet channelfor searching and visiting the retail outlet for actual purchasing (Piercy,2012; Verhoef, Neslin & Vroomen, 2007; Konus, Verhoef & Neslin,2008). With reference to the cross-channel literature, the key question iswhether consumer behaviour would be different across retail formats

(Wang et al., 2010). Researchers have initiated studies on consumerbehaviour across store formats. There are indications of behaviouralbuying differences across retail formats with regards to demographicsand behavioural factors (Bustos-Reyes and Gonzalez-Benito, 2008;Carpenter & Moore, 2006). Wang et al. (2010) mentioned that there arelimited studies that examine consumer purchasing behaviour acrossretail formats. Therefore, we aim to contribute towards the existingliterature by examining consumer store brand purchase intention usingtwo samples, a supermarket and a hypermarket context, to complement

the previous studies that focus on a single retail format. It is expectedthat the results will provide a useful reference for retailers in theirbranding decisions. Specically, the objective of this study is to identifythe factors that inuence store brand purchase intentions across differentretail formats. The assumptions are that particular factors would havean impact on store brand purchase intention and that by manipulatingthese factors, retailers can better manage their investment in store branddevelopment and measure their return on store brand investment.

The following section of the paper synthesises the literature

on retail store brands and consumer shopping behaviour. Based onthe literature, the paper develops a research framework and specichypotheses about the predictors of store brand purchase intention. Thepaper then explains the methodology of an empirical study and theresults. The paper nal section discusses the ndings of the study andits theoretical as well as managerial implications.

2. Literature Review

A brand is dened as a distinguishing name, term, sign, symbol, orany other unique combination of elements of goods or services that


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identies one rms products and sets them apart from the competition(Aaker, 1991; Kotler et al., 2009, p.260; Solomon & Stuart 2002, p. 270).

Subsequently, store brands are dened as brands that are exclusiveto a particular retail store either produced by the retailer or suppliedby own-label suppliers (Baltas, 1997; Semeijn, Van Riel & Ambrosini,2004). Store brands or private labels are owned by the retailers (Batra& Sinha, 2000; Hoch & Banerji, 1993; Jin & Suh, 2005). In this paper, weuse the term store brand, which means store brand, private brand orprivate label product. Store brands are commonly found in large-scaleretail chain stores, especially in the US and the UK (Dick et al., 1997;Semeijn et al., 2004).

2.1 Retail store brands in Malaysia

Store brand development in the European and North American marketsis far beyond that in the Asia Pacic markets. In Malaysia, for example,store brands are still in an early stage of development (Nielsen, 2008).However, there is an estimated growth rate of 30% year-on-year withregards to the store brand market in Malaysia, which was valued atRM240 million as of September 2008 (Nielsen, 2008). Worldwide, in 2012,

it was estimated that market share of store brand or private label sectorhas reached 250 billion USD (Arslan, Gecti & Zengin, 2013). The growthof store brand development and its adoption is supported by signicantincreases in commodity prices and the downturn in the global economy.For instance, grocery prices and food items have increased between 15to 20 percent year-to-date. Thus, retailers looking for more control overproducts opt to develop their own store brands (Nielsen, 2008).

Popular store branded items are products addressing consumersbasic and functional needs, such as paper, and commodity foods, suchas bottled water, sweetener and cooking oil (Nielsen, 2008; Phang, 2009).Moreover, with the uncertainty in the global economy, Malaysians arechanging their grocery shopping habits. For example, in recent studies,it was found that the majority of the respondents (eight out of tenpeople) indicated that they only purchase essential items. Shoppers alsoshowed less loyalty and were looking for promotional items (Nielsen,2009). This switching behaviour may provide an opportunity for storebrands to penetrate the local market. Today in Malaysia, store brandsare continuously growing in popularity, and the major retailers havedeveloped a range of products under their brands (Abdullah et al., 2012).

Retailers offering their private brands include Carrefour Malaysia,IKEA, Isetan, Jusco, Parkson, Tesco Hypermarket Malaysia, Giant and


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Mydin Hypermarkets (Abdullah et al., 2012). In spite of store brandstrategy and opportunity, consumers purchase intentions towards store

brands remain largely untested and lack empirical support.A review of the literature reveals that the factors inuencing

consumer purchase intentions for store brands may include price,perceived quality variance, perceived value, brand loyalty, store imageand perceived risk associated with the store brand (Abdullah et al.,2012; Baltas, 1997; Baltas & Argouslidis, 2007; Dick et al., 1997; Glynn &Chen, 2009; Grewal et al., 1998; Jin & Suh, 2005). Zeilke and Dobbelstein(2007) reported that other influential factors include the productgroup, the positioning of the store brand, and attitudes toward store

brands. In addition, the conceptualisation of the price and perceivedquality relationship and its effect on consumers perceptions of valueand willingness to buy are studied as well as the effects of risk. Manyscholars have reported that when higher perceived risk is associatedwith private brand purchase, it lowers the individuals perception ofvalue for the money (Aqueveque, 2006; Jin and Suh, 2005; Mitchelland Harris, 2005; Semeijn et al., 2004). In brief, brand awareness, price,quality, perceived risk and perceived value for the money have beenidentied as key factors that inuence consumer purchase intention of

store brands.

2.2 Predictors of store brand purchase intention

A store brand is a part of the retailers strategy. It is believed thatconsumers attitude and judgements regarding store brands arevery subjective. Hence, perception is very important in determiningpurchase intention. Price, perceived quality variation, store brandfamiliarity, perceived risk and perceived value for the money are

among the predictors of store brand purchase intentions (Jin & Suh,2005; Richardson, Jain & Dick, 1996). Price and product quality havebeen well studied and identied as key interrelated predictors of storebrand purchase intention (see Hoch & Banerji, 1993; Jin & Suh, 2005).

Quality perception is a critical element in purchase intention.Richardson, Dick and Jain (1994) found that a poor perceived quality forstore brands partially offsets the favourable reaction to prices and leadsto a decrease in purchase intention. In consumer perception studies,store brands might have different quality ratings (Beldona & Wysong,

2007; Sethuraman & Cole, 1999). Consumers might use extrinsic cuessuch as brand name, price and packaging to judge the product quality


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of a store brand (Richardson et al., 1996). This nding is supportedby Hoch and Banerji (1993) and Semeijin et al. (2004). These authors

found that store brand purchase intention was lower when the qualityvariability of the store brands was high. Furthermore, Semeijin et al.(2004) also found that none of the store image factors could relieve therisk of quality variance. The consumers who had experienced or usedstore branded products might have higher quality perception towardsthe brands (Beldona & Wysong, 2007). This nding provided the insightthat retailers could promote their store brands by giving a free sample forthe rst trial. The trial might reduce the uncertainty and risk associatedwith store brands. Doubt regarding store brands might relate to the lack

of advertising and lower prices for store branded products (Bettman,1973; Batra & Sinha, 2000; Richardson et al., 1996).

In addition, store brand awareness, perceived risk and perceivedvalue for the money are also related to store brand purchase intention.For store brand awareness or familiarity with store brands, it is foundthat consumers have more favourable views towards the store brandedproducts that they are familiar with (Richardson et al., 1996). Perceivedrisk in terms of the lower consequences of making a mistake had animpact on store brand purchase intention (Batra & Sinha, 2000).

Evidence showed that perceived higher value for the money had apositive impact on store brand proneness (Richardson et al., 1996). Toolarge a price gap may adversely affect the perception of value and qualityoffered by store brands. Consequently, it is expected that a reductionin the price gap between the national and store brands will inuenceperceptions of store brand quality. All of these situations suggest thatstore brands pose a purchasing risk in the eyes of the consumer. Therisk is due to uncertainty with respect to knowing the manufacturersof these store brands. This risk is amplied by the fear of the rst trial.

Furthermore, the manifestation of the perception of risk depends onthe consumers knowledge of the store brand. Store brand purchaseintention increases when the perceived risk that the consumer associateswith the store brand decreases, thus building condence in the storebrand product quality (Batra & Sinha, 2000; Dick et al., 1995).

These studies have supported a few key predictors of store brandpurchase intentions or private label proneness. There is, however, aquestion of whether these factors have a direct or an indirect impact onstore brand purchase intention in the context of developing countries

such as Malaysia because retailers in developing countries also haveinitiated their store brands. Owning store brands enable retailers to enjoy


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higher margin (Abdullah et al., 2012) and might enhance retailer brandimage (Kremer & Viot, 2012). Introducing store brands to developing

countries provide opportunity for growth (Grandhi, Singh & Patwa,2012). It is important to examine whether the similar determinant factorswould explain store brand purchase intention in developing countrycontext. Thus, this study aims to provide some useful informationfor retailers to ease their store brand management and allow themto understand the relationships between key variables such as price,quality, awareness, risk, value for the money and purchase intention. Inparticular, identifying key predictors of store brand purchase intentionwould allow the retailer to manipulate particular variables within their

strategy formulation.

2.3 Consumer Shopping Behaviour across Retail Formats

Several studies examine consumer shopping behaviour across channeland retail formats (Hsiao, Yen & Li, 2012; Konus, Verhoef & Neslin,2008; Piercy, 2012; Verhoef, Neslin & Vroomen, 2007; Wang, Bezawada& Tsai, 2010). From the multi-channel literature, consumers tend tosearch information through the Internet channel and purchase the

product at a physical retail outlet (Konus et al., 2008; Verhoef et al.,2007). Research on the retail format choice examines predictors and thedesired store attributes of different retail formats such as department,specialty and discount stores (Carpenter & Brosdahl, 2011; Finn andLouviere, 1990; Yavas, 2003). Studies across retail formats indicated thatconsumers from different demographic and behavioural backgroundsshow different shopping behaviours across retail formats (Bustos-Reyes& Gonzalez-Benito, 2008; Carpenter & Moore, 2006; Piercy, 2012; Wanget al., 2010). For example, shopper demographic characteristics such as

age, gender, occupation, education, income, family size and distanceto the retail outlet are related to retail format choice decisions (Prasad& Aryasri, 2011). Nevertheless, expert and novices shoppers wouldconsider the utilitarian value when involve in multi-channel shopping(Hsiao, Yen & Li, 2012).

Wang et al.s (2010) study compares consumer price and promotionsensitivities in brand choice behaviour between the supermarket andthe mass merchandiser retail formats by product category. In general,consumers have lower price but higher promotional sensitivity in the

mass merchandiser format. Therefore, a co-branding strategy mightbenet the merchandiser. The consumers intrinsic preference for


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national brands is obvious in the mass merchandiser outlet relative tothe supermarket for food items. Their study also indicated that higher

income consumers were less sensitive to price and promotion activities.Married households were more sensitive towards promotion, whereashouseholds with a larger family size were sensitive towards price butnot promotion.

Research on male shoppers indicated that there are distinctivepredictors among male shoppers across different retail format choicessuch as department stores, discounters, category killers, dollar storesand online retail stores (Carpenter & Brosdahl, 2011). In particular, thepredictors of departmental store patronage were brand loyalty, price

competitiveness, shopping enjoyment and recreation, knowledgeablesalespeople and well-known brands. The predictors of discount storepatronage were product selection, price competitiveness, quality ofproducts and price. Women displayed more positive cross-channelbehaviour than men (Piercy, 2012). Piercy (2012) also found that highlyeducated shoppers had less positive behaviour towards cross-channelshopping.

Although from the literature, there are indications of consumerdifferences across retail formats, there are limited studies that directly

examine the store brands introduced by these retail outlets or thatattempt to explain consumers intention to purchase these store brandedproducts. Carpenter and Brosdahls (2011) study examines predictorsof retail format choice but not store brand purchase intention. Peircy(2012) examines positive and negative cross-channel behaviour withoutconsidering brand effect.

3. Research framework and hypotheses

The proposed research model is based on the conceptualisation of thepredictors of store brand purchase intention. The proposed model ispresented in Figure 1; it consists of ve independent variables andone dependent variable. The independent variables include perceivedprice, perceived quality variance, perceived value for the money, storebrand awareness and perceived risk. These variables were included inthis study because it is suggested that they have some direct or indirectimpact on store brand purchase intention and that they are relevantto the Malaysian retail context. The dependent variable is store brand

purchase intentions. In this study, the hypothesised direct relationshipsare tested across two samples to examine the consistency of the ndings.


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Perceived Price

Perceived QualityVariance

Perceived Valuefor the Money

Store BrandAwareness

Store BrandPurchase

Intention

Perceived Risk

3.1 Perceived Price and Store Brand Purchase IntentionPrices are always the first extrinsic cue for consumers, and howconsumers evaluate the price variable might inuence their storebrand purchase intention (Abdullah et al., 2012; Baltas, 1997; Baltas &Argouslidis, 2007; Zielke & Dobbelstein, 2007). Prices are emphasisedby those who are price sensitive. As described in Nielsens (2008; 2009)study, perceived price has been identied as having the strongestrelationship with propensity towards a store brand. This nding hasalso been reported by Glynn and Chen (2009). Price is the key predictor

of store brand purchase decisions in most product categories. Thus, thefollowing hypothesis is proposed:

H1:Perceived price is related to store brand purchase intention

Store brand quality is the most debatable element. The literature showsthat the perceived quality of the store brand is subjective. In addition,quality might be part of the perceived value for the money component(see Abdullah et al., 2012; De Wulf et al., 2005; Dick et al., 1995; Jin & Suh,

2005; McDougall & Levesque, 2000; Mieres et al., 2006; Zeithaml, 1988).In Baltas and Argouslidiss (2007) study, educated and high-income

Figure 1 Research Model


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individuals also consume store-branded products, and they mightindirectly compare quality with price, thus considering the overall value

of the purchase. Although perceived quality might interact with othervariables, it is suggested that the perceived quality of the store brandwas the most important predictor of store brand purchase intention(Levy & Gendel-Guterman, 2012). Therefore it is proposed that:

H2: Perceived quality variance is related to store brand purchaseintention

Value refers to the perceived quality relative to the price or the total

benets relative to the total costs perceived by the customers (Jin & Suh,2005; McDougall & Levesque, 2000; Zeithaml, 1988). Thus, the perceivedvalue implies ones relative consideration of the quality versus the priceof an offering (Dick et al., 1995; Richardson et al., 1996). Store brandprone shoppers perceive store brands as offering a greater value for themoney (Dick et al., 1995). In general, consumers are prone to brandsthat offer greater value for the money. The higher the perceived valuefor the money associated with store brands, the higher the tendency topurchase store branded products (Jin & Suh, 2005; Richardson et al.,

1996; Zielke & Dobbelstein, 2007). Jin and Suh (2005) found that valueconsciousness had a direct and indirect impact on store brand purchaseintention dependent on product category. However, in this study, weexamine the direct impact of perceived value for the money on storebrand purchase intention.

In the literature, it is also illustrated that price, quality and value areabstract elements (see De Wulft et al., 2005; Dick et al., 1995; Jin & Suh,2005; McDougall & Levesque, 2000; Mieres et al., 2006; Zeithaml, 1988).For example, image transfer in terms of the store brands image and the

retailer brand image might involve price, supply and value dimensions(Kremer & Viot, 2012). There is a tendency for price and quality to beimplied in value for the money. Considering the abstract and complexrelationships between these variables, we would prefer to examine allof the potential direct relationships between price, quality and valuefor the money on purchase intention (Dick et al., 1995; Richardson etal., 1996). Taking the above-mentioned considerations into account, thefollowing hypothesis is proposed:

H3:Perceived value for the money is related to store brand purchaseintention


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3.2 Store Brand Awareness and Store Brand Purchase Intention

Store brand awareness can be dened as the likelihood that a storebrand will appear in the consumers mind and the length of time thismemory will stay, which means familiarity with the brand and strongbrand recognition (adapted from Keller, 1993; De Wulf et al., 2005; Yoo,Donthu & Lee, 2000). It was found that familiarity with store brands hasan impact on store brand proneness (Abdullah et al., 2012; Richardsonet al., 1996). Consumers tend to have a more favourable perceptiontowards the store brands that they are familiar with and to evaluatethese more highly in terms of quality and value for the money. Miereset al.s (2006) study also indicated that a greater familiarity with store

brands would have a more positive inuence on their perceived risk.As the awareness of the store brands increases, it may become one ofthe options in the consumers considerations for purchase. De Wulfet al. (2005) suggest that high store brand awareness will increase thelikelihood that a brand will be recalled when it comes to a purchaseevaluation. Consequently, higher store brand awareness may increasethe chance or possibility that consumers will decide to purchase storebranded products because they may recall store brands when it comesto brand evaluation. Hence, the following is hypothesised:

H4:Store brand awareness is related to store brand purchase intention

3.3 Perceived Risk and Store Brand Purchase Intention

In this study, perceived risk refers to nancial risk, and it relates to thecost relative to an individuals nancial resources (Mitchell & Harris,2005). Perceived risk is dependent on the amount of information availableto the consumer about store brands. A store brand purchase is more

likely when the consumer is condent that they can obtain satisfactoryperformance (Baltas, 1997). The perceived risks associated with thestore brand are an important factor evaluated by the consumer andthey inuence the purchase intention of the store brand. Furthermore,non-store brand prone shoppers were worried about nancial risk (Dicket al., 1995). If the risk associated with the store brand is low, it mayincrease the likelihood of purchasing store branded products. In otherwords, store brand purchase intention increases when perceived risk,especially nancial risk, is reduced (Batra & Sinha, 2000; Richardson et

al., 1996; Zielke & Dobbelstein, 2007). With reference to this literature,the following is hypothesised:


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H5:Perceived risk is related to store brand purchase intention

4. Methodology

The study population for this research is retail consumers of storebrands in Malaysia. There are several store brands available in theMalaysian market such as Giant, Carrefour and Tesco (Rahman et al.,2012). The non-probability sampling technique is adopted in this study.The non-probability sampling technique is used in similar studies(Mandhachitara, Shannon & Hadjicharalambous, 2007; Tifferet andHerstein, 2012) and is acceptable when the generalisation concern is

low (Churchill, 1991; Diamantopoulos and Schlegelmilch, 1997).This study employs a mall intercept survey method for data

collection. Two samples were collected to test the proposed model.The rst sample was collected at a hypermarket retail chain store,and the second sample was collected at a supermarket retail outlet.Both retail chain stores have introduced their own store brands. Theactual names of these retail chain stores are not disclosed in this paper.However, the actual names of these retail stores and its store brandswere used in the questionnaire. These retail chain stores are selected

because they have each opened more than 20 stores nationwide inMalaysia. Furthermore, the selected supermarket retail store brandwas selected as one of Malaysias 30 most valuable brands (The Edge,2009), thus indicating the appropriateness of using these store brands.These retail chain stores have been selling their store brands for someyears. Therefore, it is possible to measure the consumers perceptionsof these store brands. Customers of these two retail stores were invitedto participate in this study.

The sampling locations were the retail store at Ampang

(hypermarket) and Taman Connaught (supermarket), Malaysia. Theshoppers were intercepted during their visit to these retail stores.Convenience quota sampling was used, aiming at a sample size of 250with 125 shoppers representing each retail store. The targeted samplesize is relatively small because this is a small-scale survey focusing onexamining relationships between variables instead of the generalisationof results.

A voluntary participative approach was used. The shopperswere approached by interceptors and asked to complete a structured

questionnaire. The shoppers who indicated their willingness toparticipate were given the questionnaire; for the participating shoppers,


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an instruction emphasised that there are no correct or incorrect answers;only your personal opinions matter to minimise possible response bias.

The questionnaires were distributed in the eld and retrieved once theshoppers had completed them.

A structured questionnaire was developed to collect the desireddata in this study. The questionnaire consisted of three sections and wasdesigned to extract the shoppers responses regarding their perceptiontowards store brands and their purchase intention. Firstly, a series ofquestions to capture their perceptions of the store brands were included.Next, the respondents were asked about their future purchase intentionfor store brands. Finally, the respondents were asked to provide socio-

demographic information. A few rounds of pre-testing were held tomake sure that the items in the questionnaire were understandableand clear.

4.1 Measurement

Multi-item scales from previous research were adopted or adaptedto measure the variables included in the proposed model. A pool ofmeasurement items were examined and revised to t the Malaysian retail

store context. The brand awareness and perceived price measurementitems were adapted from Yoo et al. (2000). Perceived value for themoney was adapted from Dobbs et al.s (1991) measurement instrument.Measurement items for perceived quality variance were adapted fromprior studies (Jin & Sternquist, 2003; Mieres et al., 2006; Yoo et al., 2000).Perceived risk was measured using a scale developed by Richardson etal. (1996) and Mieres et al. (2006). The measurement items for purchaseintention were developed by the authors with reference to the previousliterature (Jin & Suh, 2005).

The full set of measurement items are presented in the Appendix. Inparticular, we measure the store brand but not the retail store. The storebrands are considered without specifying the product categories. Thisapproach is not uncommon in empirical research (Kremer & Viot, 2012).In addition, we only use the perceived measure. It was suggested thatthe perceived measure plays a signicant role in consumer psychologybecause studies have shown that consumer perceptions have an impacton consumer behaviour (Yoo et al., 2000). All of the variables weremeasured using established ve-point Likert scales with 1 meaning

Strongly Disagree and 5 meaning Strongly Agree or vice versa fornegative items (DAstous & Gargouri, 2001). In terms of the analysis, a


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preliminary statistical analysis on the scales reliability and correlationwere performed. Then, multiple regressions were used to test the

hypothesised relationships (Hair et al., 1998).

5. Empirical Results

This section presents the results of the statistical analyses and testingof the hypotheses regarding consumer perception and the purchaseintention for store brands. The SPSS software is employed for dataanalysis. Firstly, a scale reliability test and correlation were performed,followed by the testing of the hypothesised relationships.

5.1 Sample Characteristics

A total of 240 completed responses were included in the nal sample.These responses were collected at a hypermarket and a supermarketretail store. Table 1 provides a detailed description of the socioeconomiccharacteristics of the samples. For the rst sample, responses werecollected at a hypermarket; this sample was 60.0% female and 40.0%male. Approximately 50.0% of the respondents were in the age range of25-31 years. A total of 70.0% of the respondents were Chinese shoppers,22.5% were Malay, and approximately 4.2% and 3.3% were Indian andother races, respectively. Approximately half of the samples (50.0%)were from the RM2,000 to RM4,000 income group, followed by theRM1,000 to RM2,000 (23.4%) income group. The analysis indicatedthat over half of the respondents (76.7%) had four or more familymembers. The prole also indicated that 75.0% of the respondents hadobtained a diploma or a university degree and most of them (82.5%)were employed.

The second sample was collected at a supermarket chain store and

was 58.3% female and 41.7% male respondents. Most of the respondentswere 38 years old or below (85.0%). Malay and Chinese shoppers werethe dominant races in this sample, with 47.5% and 35.8%, respectively.Most of the shoppers were from the RM2,000 to 4,000 income group,with 33.3%, followed by the RM1,000 to RM2,000 (31.7%) incomegroup. In addition, most of the respondents came from a large familywith four or more family members (73.3%). Most of the respondentshad either a diploma or a university degree (61.6%). A small portionof the respondents had only attended secondary school (21.7%) or pre-

university study (15.0%). In the sample, 15.0% were students and 74.1%


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Variables First Sample(Hypermarket) Second Sample(Supermarket)Frequency Percent Frequency Percent

GenderMale 48 40.0 50 41.7Female 72 60.0 70 58.3Age18-24 years 17 14.2 33 27.525-31 years 57 47.5 46 38.332-38 years 20 16.7 23 19.239-45 years 13 10.8 9 7.546-52 years 10 8.3 8 6.7

>52 years 3 2.5 1 0.8RaceMalay 27 22.5 57 47.5Chinese 84 70.0 43 35.8Indian 5 4.2 9 7.5Others 4 3.3 11 9.2Income (Monthly) inRinggit Malaysia5000 13 10.8 7 5.8Family Size (number ofoccupants)1 2 1.7 3 2.52 13 10.8 9 7.53 13 10.8 20 16.74 33 27.5 25 20.85 30 25.0 42 35.0>5 29 24.2 21 17.5

EducationalNo schooling 2 1.7 0 0.0Primary school 1 0.8 2 1.7Secondary school 23 19.2 26 21.7Pre-university 4 3.3 18 15.0Diploma 32 26.7 37 30.8University 58 48.3 37 30.8OccupationStudent 6 5.0 18 15.0Not employed 1 0.8 2 1.7Self-employed 14 11.7 11 9.2Employed 99 82.5 89 74.1

Table 1 Prole of the respondents


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were employed adults. The number of students may be driven by thefact that there is a college near the retail store. Hence, more students

were visiting the store to purchase their necessities.Due to the non-probability sampling technique, the sample was not

fully representative. However, the characteristics of the respondents inthe study are similar to the characteristics of retail store brand shoppers.In this study, the sample consists of more females than males. Thisresult is consistent with previous research related to store brands. Forexample, in a study involving 206 shoppers at a chain store, 71% of therespondents are female (Levy & Gendel-Guterman, 2012). The majorityof the respondents are employed except in sample two; in this sample,

there are more students because the retail store is near a college. Storebrand research involving students is not uncommon. Students, based ontheir needs for cognition, interpret relevant information in a meaningfuland integrated way and also show an inclination to purchase storebrands (Tifferet & Herstein, 2012). The prole of the respondents in thisstudy also includes representatives from different age groups, and themajority of them were educated in secondary school and above (Levy& Gendel-Guterman, 2012).

5.2 Scale Reliability

Cronbachs alpha values are used to indicate the reliability of eachvariable. Cronbachs alpha is a measure of internal consistency basedon the average inter-item correlation. The Cronbachs alpha coefcientof each variable is shown in Tables 2 and 3. The Cronbachs alphareliability for each of the six scales (brand awareness, perceived price,perceived quality variance, perceived value for the money, perceivedrisk, and purchase intention) are 0.70 or higher, thus indicating that

they are appropriate for further analysis (Yoo et al., 2000). Hence, 23items were retained: four items for store brand awareness; two itemsfor perceived price; six items for perceived quality variance; ve itemsfor perceived value for the money; three items for perceived risk; andthree items for purchase intention. The correlation results indicatedthat most of the tested variables are related with the exception of priceand purchase intention in the rst sample (hypermarket) and brandawareness and purchase intention in the second sample (supermarket).Therefore, a subsequent regression analysis was conducted to examine

the hypothesised relationships.


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No of Mean SD 1 2 3 4 5 6

Item

2 Perceived Price 33.0 .80 [.78]

6Perceived QualityVariance

2.97 .61 .28** [.80]

4 Brand Awareness 3.55 .88 .31** .46* [.85]

3 Perceived Risk 3.32 .91 .043 .29** .11 [.88]

5Perceived Valuefor the Money

3.35 .70 .47** .65** .33** .27** [.85]

3 Purchase Intention 2.72 .93 .16 .58** .30** .34** .59* [.89]

** Correlation is signicant at the 1% level (2-tailed).* Correlation is signicant at the 5% level (2-tailed).Numbers in diagonal represent Cronbachs Alpha values

No of Mean SD 1 2 3 4 5 6

Item

2 Perceived Price 3.42 .91 [.71]

6Perceived QualityVariance

3.15 .59 .34** [.76]

4 Brand Awareness 3.58 .79 .35** .44** [.78]

3 Perceived Risk 3.34 .89 .05 .31** .03 [.76]

5Perceived Valuefor the Money

3.51 .67 .59** .57** .45** .28** [.84]

3 Purchase Intention 2.94 .86 .29** .67** .30** .18 .48** [.81]

** Correlation is signicant at the 1% level (2-tailed).* Correlation is signicant at the 5% level (2-tailed).Numbers in diagonal represent Cronbachs Alpha values

5.3 Result of Perception on Store Brand

To determine store brand perception, the means and standard

deviations of the studied variables were examined. In the rst sample(hypermarket), the purchase intention for the store brand is below the

Table 2 Descriptive Statistics, Reliabilities and Correlations Hypermarket Sample

Table 3 Descriptive Statistics, Reliabilities and Correlations Supermarket Sample


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mid-point of 3 based on a 5-point rating scale (mean=2.72, SD=.93).Similarly, the mean score for perceived quality is 2.97 (SD=.61).

However, the store brand awareness is higher than the mid-point of 3,with a mean score of 3.55 (SD=.88). The perceived price, risk and valuefor the money are in the same range, which is approximately 3.30 basedon a 5-point scale (see Table 4).

With regards to the second sample (supermarket), the purchaseintention for the store brand was also slightly below the mid-point of3, with a mean score of 2.94. The mean scores for the other variableswere all above the mid-point of 3, and the mean score for store brandawareness and perceived value for the money were approximately 3.50,

followed by perceived price (mean=3.42), perceived risk (mean=3.34)and perceived quality (mean=3.15).

Table 4 Perception of store brand

First sample(Hypermarket)

Second sample(Supermarket)

Variable Mean SD Mean SD

Purchase Intention 2.7278 .93384 2.9444 .86679

Store Brand Awareness 3.5563 .88371 3.5854 .79751Perceived Price 3.3042 .80517 3.4292 .91278

Perceived Quality Variance 2.9750 .61897 3.1542 .59768

Perceived Riska 3.3250 .91920 3.3417 .89345

Perceived Value for theMoney

3.3583 .91920 3.5100 .67704

Note: Sample sizes: 120 responses collected at a hypermarket and 120 responses collectedat a supermarket.aScoring of this item is reversed so that higher scores indicate more positive responses

In both samples, the mean score was not high because none ofthe mean scores achieve 4 points on a 5-point scale. This score mightindicate that the respondents perception of those store brands wasnot very high. With reference to the results of this study, one plausibleexplanation is that the awareness of the store brand did not achieve ahigh level, not achieving a score of 4 based on a 5-point scale. A lower

level of brand awareness might be reected in other associated variablessuch as perceived price, quality and value.


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5.4 Hypotheses Testing of Relationships

This section presents the results related to the hypotheses testing. Eachof the hypotheses was examined separately. The hypotheses were testedusing a regression analysis where store brand awareness, perceivedprice, perceived quality variance, perceived risk and perceived valuefor the money were classied as the predictive variables and store brandpurchase intention as the dependent variable.

Testing of hypotheses

The result of the regression analysis is presented in Table 5. With

reference to the regression results using the rst sample (hypermarket),the adjusted R Square value shows that the model accounts for 42.6%of the variance (adjusted r2=0.426). Among the tested variables, theperceived value for the money (=0.428) and perceived quality variance(=0.263) have a statistically signicant effect on purchase intention.Thus, hypotheses H3 and H2 were supported. Moreover, hypothesesH5 and H1 that perceived risk (=0.143) and perceived price (=-0.144)have an effect on purchase intention (p


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The regression analysis using the second sample (supermarket)shows different results. The adjusted R Square value shows that themodel accounts for 44.2% of variance (adjusted r2=0.442). Among thetested variables, only perceived quality variance has a statisticallysignicant effect on purchase intention (=0.613), thus supportinghypothesis H2. Other variables such as perceived price, perceivedvalue for the money, brand awareness and perceived risk were notsignicantly related to purchase intention. Therefore, hypotheses H1,

H3, H4 and H5 were not supported based on the data of the secondsample (supermarket).

First Sample(Hypermarket) Store

Brand PurchaseIntention

Second Sample(Supermarket) Store

Brand PurchaseIntention

R 0.671 0.682

r2 0.450 0.465

Adjusted r2 0.426 0.442

Std.Error of the Estimate 0.70773 0.64749

F 18.637*** 19.851***Store Brand Awareness

Unstandardised coefcient 0.072 -0.047

Standardised coefcient 0.069 -0.043

Perceived Price

Unstandardised coefcient -0.167 0.009

Standardised coefcient -0.144 0.010

Perceived Quality Variance

Unstandardised coefcient 0.396 0.889

Standardised coefcient 0.263** 0.613***Perceived Value for Money

Unstandardised coefcient 0.569 0.204

Standardised coefcient 0.428*** 0.159

Perceived Risk

Unstandardised coefcient 0.145 -0.057

Standardised coefcient 0.143* -0.059

***, ** and * represent signicance (two-tailed) at 1%, 5%, and 10% levels respectively.

Table 5: Factors affecting purchase intention of store brand


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Previous researches across retail formats shows that consumer-behaviour varies across retail formats (Bustos-Reyes and Gonzalez-

Benito, 2008; Carpenter & Moore, 2006; Wang et al., 2010). This ndingmight explain why there are different predictors for store brand purchaseintention with regards to hypermarket and supermarket retail formats asfound in this study. Furthermore, in the literature, consumer behaviourand acceptance of a product or brand is also inuenced by brand image,self-image congruity, brand credibility and brand origin (Dolich, 1969;Li, Wang & Yang, 2011; Rahman et al., 2012). For example, a store brandwith a good image and high self-image congruity is more attractive tocustomers (Dolich, 1969; Rahman et al., 2012). Brand credibility, brand

origin and self-image congruity are also inuential factors leading toconsumer purchase intention. For example, brand credibility has astrong direct impact on the consumer purchase intention of a brand (Li,Wang & Yang, 2011). Brand preference is also inuenced by brand imagebelief as a result of brand advertisement endorsers. In particular, brandpurchase intention rather than brand attitude is signicantly affectedby brand image belief when social consumption is evoked and there isa t between brand and self-image congruity (Batra & Homer, 2004).

6. Discussion

One of the primary contributions of this research relates to the useof two different samples collected at hypermarket and supermarketretail outlets to test the hypothesised relationships. The use of differentsamples allows for cross-validation of the proposed relationships. Thus,the results provide evidence of variations across different store brandsand allows for the examination of customers perceptions and purchaseintentions with regards to different retail contexts.

With regards to our study objectives of identifying perception anddirect predictors of store brand purchase intention, ve predictors ofstore brand proneness, i.e., brand awareness, perceived price, perceivedquality variance, perceived value for the money and perceived risk, wereexamined. In the previous literature, there is some evidence that storebrand awareness or familiarity with store brands has a direct or indirectimpact on store brand proneness (Richardson et al., 1996; Mieres et al.,2006). In this study, it was found that store brand awareness did not havea direct impact on store brand purchase intention. Perhaps the indirect

relationship is prominent as suggested in literature (De Wulf et al.,2005; Mieres et al., 2006) either via perceived risk or a higher recall rate.


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Another plausible explanation is that the store brand awarenessamong these retail store brands was not very high: none of the store

brands achieved 4 points based on a 5-point rating scale. Perhaps animportant rst step is to build greater consumer awareness of storebrands by increasing familiarity with them. Familiarity with storebranded products may be increased via education, taste tests, or thedistribution of free samples whenever there is a new store brandedproduct being launched (Richardson et al., 1996).

Perceived price only exerts a small contribution to store brandpurchase intention. The relationship between perceived price andpurchase intention was only partially supported in the rst sample.

Surprisingly, perceived price was not related to purchase intentionwhen the relationship was tested in the second sample collected at asupermarket retail outlet. This non-associative relationship was alsoreported in Jin and Suhs (2005) study with regard to the home applianceproduct category. This nding is inconsistent with some earlier researchndings where price was the most important reason for store brandpurchase (Baltas, 1997; Baltas & Argouslidis, 2007; Zielke & Dobbelstein,2007). In addition, if consumers associate the store brand with a lowerprice, the likelihood of purchase was reduced. Therefore, retailers should

be careful when adopting lower price strategies. This phenomenonrequires further investigation to assist retailers in their penetrationstrategies in emerging markets such as Malaysia, Indonesia and China.

Perceived quality variance is a key predictor of store brandpurchase intention, which means that a high perception of the qualityof store brands leads to a higher tendency to purchase store brandedproducts regardless of the retail outlet. This nding is consistent withLevy and Gendel-Gutermans (2012) study. They found that perceivedquality is an important predictor of store brand purchase intention.Similarly, Jin and Suhs (2005) study indicated that the quality of thestore brand is much more important than a lower price strategy indetermining the store brands market share for home appliances. Othersupporting literature includes Batra and Sinha (2000) as well as Glynnand Chen (2009).

In this study, perceived value for the money is a significantpredictor for purchase intention when the hypothesised relationshipwas tested in the rst sample (hypermarket) but not in the secondsample (supermarket). In previous research, perceived value for money


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was found to have an effect on store brand proneness when the studycompared national or manufacturing brands with store brands (Jin

& Suh, 2005; Richardson et al., 1996). Another view is that perceivedvalue for money might have an indirect relationship with store brandproneness (Jin & Suh, 2005). Therefore, it is yet to be conrmed whetherperceived value for money has an indirect relationship with store brandpurchase intention. Based on the ndings for the direct relationshipsin this study, Malaysian consumers might purchase store brandedproducts due to their perceived higher value for the money or becauseof the perceived higher quality.

Consumers who lack experience with store branded products are

likely to view them with doubt and may consider them to be a riskychoice. This study shows that the relationship between perceived riskand purchase intention was partially supported in the rst sample(hypermarket) but not in second sample (supermarket) even thoughboth store brands mean perceived risk score was 3.3 on a 5-point scale.This result means that the respondents might consider the perceivedrisk when buying store branded products. The previous literature alsosuggests that perceived risk is one of the predictors of store brandpurchase intentions (Batra & Sinha, 2000; Richardson et al., 1996; Zielke

& Dobbelstein, 2007).

7. Conclusion

This study provides useful information to enhance the understandingof the key predictors of store brand purchase intentions. First, the studyidenties the perception of store brands in terms of the perceived price,quality, value for money, brand awareness and perceived risk as wellas store brand purchase intention.

Second, perceived value for money and perceived quality varianceare important factors for attracting consumers towards store brandedproducts. Perceived price and perceived risk management also increasethe consumers likelihood of purchasing store branded products andshould not be ignored. It is important to note that the prominentpredictor is perceived quality variance, which means that a high qualityimage should be created to attract the consumption of store brandedproducts. It is suggested that store brand owners might need to exploreother indirect or mediating factors because the direct relationships are

not consistent across samples.


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7.1 Theoretical Implications

The theoretical implication of this study is that it extends the currentexplanation of consumer behaviour across retail formats (Carpenterand Brosdahl, 2011). This study indicates that consumers behavedifferently towards different store brands (i.e., store brands introducedby a hypermarket and a supermarket). The results of this study indicatethat some variables such as price, value, brand awareness and perceivedrisk were not strong direct predictors of store brand consumption whenthe store brand is introduced by a supermarket, although the previousliterature has demonstrated that these variables have some impact onstore brand purchase intention (Baltas, 1997; Baltas & Argouslidis, 2007;Batra & Sinha, 2000; Jin & Suh, 2005; Richardson et al., 1996; Zielke &Dobbelstein, 2007).

Our empirical study based on two independent samples as wellas the previous literature (Levy & Gendel-Guterman, 2012) supportperceived quality as a strong direct predictor of store brand purchaseintention regardless of the brand sponsor (i.e., store brands introducedby a hypermarket or a supermarket). For this aspect, we also found thatthe perceived quality of the store brand was recorded at 2.97 to 3.15 based

on a 5-point rating scale, thus explaining the low intention to purchasestore brands (score of 2.72 to 2.94). It is also found that perceived qualityis associated with perceived price, a relative comparison betweenstore brand and manufacturer brand, functionality and the perceivedreliability of the store branded products.

7.2 Managerial Implications

In terms of store brand management, retail managers have to put inmore effort to create store brand awareness and a high quality image.This study indicated that store brand awareness was not very high andthat enhancing perceived quality would increase store brand purchaseintention. Store brand awareness is critical for providing options forconsumers consideration at the preliminary stage of informationsearching. This nding provides some feedback for the marketersregarding the effectiveness of brand promotion. Retailers must payattention to other cues of product quality associated with store brands,such as packaging and brand image, as well as to the store image,

which may inuence the perception regarding the store brand quality.Brand awareness is essentially the impression that people have of a


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companys brand. For example, retailers should also focus on storebrand communication to reect high quality.

Even though the results show that perceived price was not a keypredictor of consumers purchase intention for store brands, it shouldnot be ignored. The perceived price depends on the pricing strategy ofthe particular retailer. Consumers who purchase store brands mightor might not pay specic attention towards the price factor unless theretailers specically highlight the price factor. Instead, the retailersmight manipulate other factors such as perceived quality and perceivedrisk. With the assumption that retailers aim to keep the price a constantfactor, retailers should improve and emphasise other factors to meet

consumers expectations. However, price might not be considered tobe an independent factor; price could be integrated with other benetsto form the perceived value and perceived quality, which would thenhave an impact on purchase intention.

For retailers to reduce perceived risk, they may consider givinga longer period of warranty and offering money-back guarantees andfree testing of the store branded products. This strategy may reduceconsumers perception of the nancial and functional risks. Educatingthe consumers and frequently exposing them to the store brands would

further reduce the perceived risks.

7.3 Limitations and Future Research

This study provides some interesting insights on consumer perceptionsof store brands; however, it is restricted to small samples. Future researchshould incorporate more store brands to provide cross-validation andallow generalisation of the results. Cross-validation will also enable theconrmation of the research ndings obtained in this study, especially

the relationships between the tested variables, thus providing a morein-depth explanation of store brand perception and purchase intentions.Another limitation is that the proposed model only includes a

few potential predictors of store brand purchase intention. It wouldbe interesting to incorporate other related variables into the model toprovide a more comprehensive framework to understand the factors thatinuence customers perception and purchase intention towards storebrands. The variables may include characteristics of the product group,the positioning of the store brand, attitudes regarding store brands in

general and different aspects of purchasing behaviours as suggested inZielke and Dobbelsteins (2007) study. Finally, the sample size in this


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study is relatively small, and it limits the meaningful analysis of theinuence of some key demographic variables on store brand purchase

intention. Future research might want to incorporate a larger samplesize that adopts quota sampling with reference to ethnic groups, incomeand education level. This step would allow for a cross-group analysisbased on demographic characteristics in predicting shopper behaviour.


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Appendix: Measurement items

Variables Items

BrandAwareness

I know what the X store brand products look like.I can recognise X store brand from among the othercompeting brands.I am aware of X store brand products.I can quickly recall the X store brand.

Perceived Price The price of the X store brand product is low.The price of the X store brand product is below themarket average.

PerceivedQualityVariance

The price of the X store brand product is a goodindicator of its quality.The higher the price is for the X store brand, the higherthe quality.There is not much difference in terms of quality betweena manufacturers brand and the X store brand.The X store brand is of high quality.The likelihood that X store brand will be functional isvery high.The likelihood that X store brand is reliable is very high.

Perceived Valuefor the Money

The X store brand is worth the money it costs.The X store brand provides very good value for themoney.At the price shown, the X store brand is veryeconomical.The price shown for the X store brand is very acceptable.The X store brand is considered to be a good buy.

Perceived Risk The purchase of the X store brand is risky because thequality of X brand store is low-grade.

Because the X store brand is of poor quality, buyingthem is a waste of money.I am worried that the X store brand is not worth themoney spent.

PurchaseIntention

I consider the X store brand to be my rst choice when Iwant to purchase products that have X store brand.If I want to buy products in the future, given the choice,I probably will buy X store brand products.In approximately 6 months, I expect that I will stillconsider X store brand to be my most frequentlypurchased brand.

perception and predictors of consumers purchase intentions for store brands - evidence from malaysia

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