Factors Influencing Consumers' Purchase Decision of Private Label Brand Products
Factors Influencing Consumers' Purchase Decision of Private Label Brand Products
Factors Influencing Consumers' Purchase Decision of Private Label Brand Products
by
Azhar Ahmad, Sallehuddin Mohd Noor, Che Aniza Che Wel
Universiti Kebangsaan Malaysia (National University of Malaysia)
[email protected], [email protected], [email protected]
Abstract. Private label brand products have increasingly becoming popular since consumers’ loyalty toward store is higher
than their loyalty to brands. Consumers also perceived private label brand products as value purchase and the quality level of
these products have improved. Hence, this study investigates the factors influencing the purchase of store brand products in
Malaysia. The factors include; perceived quality, perceived price, brand image, and promotion. All four factors have shown
positive relationship with purchase decision among the respondents. Brand image is found to have the strongest correlation
while promotion depicted weakest link with purchase decision. Socio-economic variables are also included in this study. In
the findings, household income shows significant differences in the price perception towards TESCO store brand products.
In addition, level of education is significantly difference towards the perceived quality of store brand products. Several
implications could be derived from the study. TESCO should improve the quality of its store brand products and reposition
itself as a retailer that also promotes quality products. The store could improve the perceived price of its private brands by
increasing the benefits of the products to enhance consumers’ value.
Keywords: Private label brands, purchase decision, brand image, perceived quality and retailer.
JEL classification: M31
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Business Development, e-ISSN 2247–7225
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limited time and budget, non-probability primary school leavers. The marital status
sampling method was used in the respondents’ among the respondents is about equal with
selection. Sampling on personal judgment or 49.7% of them single and 49.3% of them are
convenience is chosen when any particular married. For monthly income, nearly 40% of the
member of the population is unknown respondents are earning between RM2000 to
(Zikmund and Babin, 2010). Self-administered RM4000 a month. Another 35% of them earn
and mall intercept methods were done to 300 less than RM2000 per month and only 7.3% of
respondents at the premise of Tesco Melaka. them earn more than RM5000 a month. The
The data were then coded and analysed using findings also show that majority of the
SPSS. respondents (58.7%) is not a Tesco Clubcard
The questionnaire comprises two sections. The member.
first section measures the variables of purchase
decision and the decision factors of perceived Table 1: Demographic Profiles of Respondents
(N = 300)
price, perceived quality, brand image and Items Details Frequency %
promotion. The measurement scales for these Gender Male 118 60.7
variables are adopted from Taylor and Todd Female 182 39.3
(1995) and Conner and Sparks (1996). Ethnicity Malay 126 42.0
Respondents were asked to evaluate using a 5- Chinese 143 47.7
Indian 25 8.3
point Likert scale ranging from strongly
Others 6 2.0
disagree (1) to strongly agree (5). Second Education Lower secondary 30 10
section focuses on respondents’ profiles Level Upper secondary 140 46.7
including gender, marital status, age, ethnicity, College Diploma 67 22.3
educational level and monthly income. Bachelor Degree 47 15.7
Master and above 16 5.3
Marital Single 149 49.7
4 Analysis Status Married 148 49.3
4.1 Reliability of Variables Divorce 3 1.0
Monthly RM500 – RM999 29 9.6
Reliability refers to the ability of producing the Income RM1000 – RM1999 89 29.7
RM2000 – RM2999 55 18.3
results when repeated calculation is made.
RM3000 – RM3999 63 21.0
Internal consistency via Cronbach Alpha RM4000 – RM4999 42 14.0
showed that the measurements are reliable and Above RM5000 22 7.3
acceptable. Both perceived quality (0.651) and Tesco Yes 121 40.3
brand image (0.650) scores are above 0.60 Clubcard No 176 58.7
which indicate acceptable reliability (Nunnally,
1967). While the other three variables of
4.3 Hypothesis Testing
purchase decision (0.530), perceived price
(0.559) and promotion (0.536) demonstrate
The highest mean among the factors is
minimal reliability value (Malhorta, 2006).
promotion (3.35) followed by perceived price
(3.11) and perceived quality (2.64). Brand
4.2 Demographic Profiles of Respondents image has the lowest mean of 2.50. The results
demonstrated that only promotion and perceived
Table 1 depicts the demographic profiles of the
price influenced the respondents purchase
respondents. In the survey, majority of
decision of Tesco store brand products since
respondents are females (60.7%). In terms of
both variables have mean score of above 3.0.
ethnicity, 47.7% of them are Chinese followed
Pearson Correlation Coefficient is used to
by Malay (42.0%) and Indian (8.3%).
measure the strength of linear relationship
Meanwhile, 43.3% of the respondents have
between the variables. As shown in Table 2, the
tertiary education and only 10% of them are
correlation between purchase decision and
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perceived quality (H1) is moderate since the r 2007). The research also discusses the
score is 0.452. This means perceived quality has demographic differences of customers towards
positive influence on the purchase decision of their purchase decision and their perceptions of
Tesco store brands. For H2, the correlation store brands.
score is 0.294. However, the influence of
perceived price in the decision making is weak. Table 3: Regression Analysis of Purchase Decision with
For H3, the influence of brand image in the Predictor Variables
Variables Purchase Decision
purchase decision of store brand products is R R Adjusted P
moderate (r = 0.455). In the final hypothesis H4, Square R Sq
the relationship between purchase decision and Brand Image 0.455 0.207 0.204 0.00
promotion is weak with r score of 0.299. Perceived Q. 0.521 0.271 0.266 0.00
(Constant) 0.69
Table 2: Correlation between Purchase Decision and
Store Brands Factors Female respondents had higher means in all the
Factors Purchase Decision variables compared to males. This means
r p
female customers have more positive
Perceived Quality 0.452 0.00
Perceived Price 0.294 0.00 perceptions of purchase decision, brand image,
Brand Image 0.455 0.00 perceived price, perceived quality and
Promotion 0.229 0.00 promotion of Tesco store brands. However,
there is no significant difference between male
and female respondents in their purchase
4.4 Patron Intention of Store Brands decision. Table 4 also shows no significant
difference between gender in relation to brand
Multiple regression analysis was conducted to image, perceived price, perceived quality and
predict the factors contributing to the purchase promotion of Tesco store brands.
decision of Tesco store brands. The factors were
analyzed simultaneously to make prediction of Table 4: T-test for Variables by Gender
the target variables on purchase decision. Only Variables Gender Composite
two factors were found to be good predictors n mean Std Dev Sig.
Purchase D Male 118 2.21 .66 0.57
such as quality perceived and brand image.
Female 182 2.31 .67
Meanwhile, perceived price and promotion had Brand Image Male 118 2.42 .72 0.12
significant values of more than 0.05. Female 182 2.56 .66
A stepwise regression was then carried out in Perceived Q Male 118 2.58 .61 0.98
order to find out the extent of each predictor on Female 182 2.68 .62
Perceived P Male 118 2.99 .59 0.20
the future intention of the respondents. In Table
Female 182 3.19 .65
3, two factors contributed significantly towards Promotion Male 118 3.14 .62 0.12
the R square value. Brand image was found to Female 182 3.49 .73
be the largest contributor followed by perceived
quality. These two predictors explained 27.1% Table 5 indicates that marital status does not
of the variation in purchase intention among the have significant influence since the results show
customers. In addition, R square value of 0.271 that purchase decision has F value of 0.36 and
indicated low purchase behavior of respondents significant value of 0.71. In addition, the
towards Tesco store brand products. significant values of all the factors are above
0.05. Thus, there is no difference between
4.5 Socio-Demographic Influences single, married and divorced respondents in
their perceptions towards Tesco store brands.
Socio-demographic also influences the
customers’ decision making towards purchasing
store brand products (Baltas and Argouslidis,
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Table 5: ANOVA between Variables and Marital Status monthly income and other variables such as
Variables Sum of Mean F Sig. purchase decision, brand image, perceived
Sq Sq
quality and promotion. Thus, customers’
Purchase Decision
- Between Groups .316 .158 .356 .701 monthly income has a big influence on
- Within Groups 131.791 .444 perceived price of Tesco store brand products.
Brand Image
- Between Groups .178 .089 .188 .829 Table 7: ANOVA between Variables and Monthly Income
- Within Groups 140.341 .473 Variables Sum of Mean F Sig.
Perceived Price Sq Sq
- Between Groups .603 .301 .745 .476 Purchase Decision
- Within Groups 120.214 .405 - Between Groups 2.274 .379 .855 .528
Perceived Quality - Within Groups 129.833 .443
- Between Groups .088 0.44 .115 .892 Brand Image
- Within Groups 113.763 0.383 - Between Groups 1.240 .207 .435 .855
Promotion - Within Groups 139.279 .475
- Between Groups .333 .166 .332 .717 Perceived Price
- Within Groups 148.597 .500 - Between Groups 6.499 1.083 2.776 .012*
- Within Groups 114.319 .390
There is also no significant difference between Perceived Quality
ethnic groups and their decision making on - Between Groups .902 .150 .390 .885
- Within Groups 112.950 .385
factors related to store brand products. In Table Promotion
6, the significant values of all the variables are - Between Groups 2.862 .477 .957 .455
above 0.05. Therefore, ethnicity of consumers - Within Groups 146.068 .499
such as Chinese, Malay and Indian does not
influence their purchase decision, brand image, The study also looked at consumers’
perceived price, perceived quality and educational level on the purchase decision of
promotion of Tesco store brand products. Tesco store brand products. Table 8 shows
significant difference between the educational
Table 6: ANOVA between Variables and Ethnicity level of respondents and their perceptions of the
Variables Sum of Mean F Sig.
Sq Sq
quality of store brands. Meanwhile, there is no
Purchase Decision significant difference between education and
- Between Groups .159 .053 .119 .949 other variables such as purchase decision, brand
- Within Groups 131.947 .446 image, perceived price and promotion.
Brand Image
- Between Groups .903 .301 .638 .591 Table 8: ANOVA between Variables and Education
- Within Groups 139.616 .472 Variables Sum of Mean F Sig.
Perceived Price Sq Sq
- Between Groups .706 .235 .580 .629 Purchase Decision
- Within Groups 120.212 .406 - Between Groups 3.070 .614 1.399 .225
Perceived Quality - Within Groups 129.037 .439
- Between Groups .885 .295 .773 .510 Brand Image
- Within Groups 112.967 .382 - Between Groups 1.961 .392 .832 .528
Promotion - Within Groups 138.558 .471
- Between Groups .883 .294 .589 .623 Perceived Price
- Within Groups 148.046 .500 - Between Groups 3.392 .678 1.699 .135
- Within Groups 117.425 .399
Information on the respondents’ monthly Perceived Quality
income was also collected and analysed. As - Between Groups 4.472 .894 2.404 .037*
shown in Table 7, there are some significant - Within Groups 109.380 .372
Promotion
differences between the monthly income groups - Between Groups 4.862 .972 1.984 .081
and perceived price of Tesco store brands. - Within Groups 144.068 .490
However, there is no difference between
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