Factors Affecting Consumer Preference of Local Brands over ...

Journal of Business, Management and Administrative Sciences (JBMAS) Vol. 1, No. 2, December 2020

79

Volume and Issues Obtainable at Institute of Business, Management and Administrative

Sciences (IBMAS), The Islamia University of Bahawalpur Pakistan

Journal of Business, Management and Administrative Sciences (JBMAS)

ISSN: 2791-0040; ISSN (E): 2791-0059

Volume 1, No.2, December 2020

Journal Homepage: https://journals.iub.edu.pk/index.php/JBMAS/index

Factors Affecting Consumer Preference of Local Brands over Global Brands

Jasim Rahi Kadim, Federal Board of Supreme Audit, Muthanna Control Directorate, Iraq

ARTICLE DETAILS ABSTRACT

History Revised Format:

November 2020

Available Online:

December 2020

Keywords Perceived price, brand loyalty, quality of product, brand loyalty, consumer preference

The purpose of the study is to examine the local brand compete with

global brand and the factors can help the local brands to compete

with global brands. The questionnaire is used to collect the data.

This is a cross sectional design. The findings of the study is

perceived price, brand loyalty and quality of product are the factors

which affect most to the consumer’s preference while they are

purchasing their needed products. Mean percentage shows 83.85%

of customers would go for the gourmet cola brands whereas 8.07 %

would still purchase the Pepsi cola products. 7.45 % people

sometimes they purchased gourmet cola as compared to Pepsi. The

second most important factor is brand loyalty which shows 73.91%

peoples consider brand loyalty while purchasing. The third and most

important factor is quality of the product which shows 71.43%

people check the quality of product before purchase local or global

brands. So by focusing the price, quality, and brand loyalty local

brands can easily compete with global brands also.

© 2020 The authors, under a Creative Commons Attribution Non-

Commercial 4.0 International License

Corresponding author’s email address: [email protected]

Introduction During the purchase of different product categories consumers and customers are able to decide

between the local and global brands because now a days market are quickly integrates across the

borders. Global brands have advantage for having large distribution and widespread recognition.

Globalization is a name to do a lot of things with customers. Customers are in Iraq now a days

are more demanding and they become more informed. The attitude of the Iraqi customers is

changing at a quick pace. Globalization means the integration of different countries with each

other, the sharing of knowledge rules and policies make a stable culture (larsson, 2011).

Competitors become aggressive at international local in the local markets (porter, 1986).

Usually global companies compete with each other (Holt et al, 2004).

https://journals.iub.edu.pk/index.php/JBMAS/index

mailto:[email protected]

Journal of Business, Management and Administrative Sciences (JBMAS) Vol. 1, No.2, December 2020

80

Some researches examine how local brands compete successfully with global brands like the

research of (Holt, 2004) which discussed the impact of global brands dimension on customer

buying manners.in this research the author conduct a survey in which he collect the data from

different peoples to select three brands from six brands and after the evaluation he found that the

local brand is on the top. According to the study of (Kapferer, 2008) domestic brands are the top

in the market in different product categories and in several local markets.

No study conduct on the evaluation of the situation of global brands like Pepsi cola in Iraq and

no researcher examines the consumer’s preference of local brands over global brands. So the

area of research for this paper is to examine the situation of Pepsi cola and gourmet cola brand in

the local market of south Iraq and to check the consumer’s preference of gourmet cola instead of

Pepsi cola. The local brand for this research is gourmet cola which having a large purchasing

intention on consumers while on the other side Pepsi cola is a global brand for the research

which also have a great impact on the buying behaviors of consumers.

This study is conduct to measure the consumer’s preference of local brand instead of global

brand. The problem statement is which factors can affect the consumer’s preference of local

brands over global brand? Thus the main research factors for this study are to analyze if local

brand compete with global brand and what factors can help the local brands to compete with

global brands. The result of this study can be useful for different local and domestic brands in

Iraq. Many organizations can use the result of this study in their decision making process and in

making different strategies for success. This result is also useful for local brands which are trying

to compete the global brands in different local markets.

Literature Review Customer Satisfaction Customer satisfaction is a marketing tool that evaluates how services and products given by the

company meet the customers need, want and expectation. Different studies find that high level of

customer satisfaction lead the firms to greater loyalty (Anderson and Sullivan, 1993). Customer

satisfaction is very often misunderstood and mistreated Expression. Many organizations use this

expression to say their customers are happy and satisfied with the level of service made and

purchased goods and services, but they are really never tried to measure this satisfaction (Zairi,

2000). Customer satisfaction measurement tool has become the mostly used tool to organizations

and managers (Nawaz, Zhang et al. 2019). This prescriptions center on the people that

satisfaction is an issue in the performance of market, after this satisfaction is measured and used

by the company’s management in the process of decision making (Piercy, 1996). If companies

want that their customers become satisfied then company must measure customer’s satisfaction

because you cannot manage the things that you cannot measure

Purchase intension Purchase intension is a plan of customers of buying something for the fulfilment of their needs

(www.Business dictionary.com). The information on purchase intention is widely used in

making the different strategies and programs in support of product. According to (Fishbein and

Ajzen, 1975) a customer’s behaviors and its evaluation create purchase intension, so it a main

reason conduct buyer forecast. The greater a customer have purchase intension towards a product

the greater likelihood to purchase that product (Dodds et el, 1991). Many researches and articles

claimed that the purchase intension is not an attitude but it a function associated with the


81

economic status of the customers. During the promotion of both existing and new product,

purchase intension is a factor that is used as a pretesting factor (Ehrenberg and Bird, 1966).

According to the research of Schlosser (2003), purchase intension is a widely used factor for

measuring the behaviors customers.

Country of origin Country of origin can be defined as the favorable and unfavorable effect of manufacturing

country on consumers’ purchase intension and decision making while purchasing the product

(Elliot, 1994: Cameron, 1991). Different companies have different effects on consumers buying

behaviors so that consumers considered country of origin effect while purchasing different

products of different brands. When customers are known about the country of origin before

judging a product, the COO effects the decision of customers (Hong and Wyer, 1989).

According to (Papadoupoulos and Heslop, 1993) during the formulation of marketing strategies

firms positively relate brand associations with the COO.

Quality Quality is described as the customer’s judgement about a brand’s total excellence and superiority

(Zeithaml, 1988: Rowley, 1998). A global well established brand can make a halo constructs

which can effects the quality (HAN, 1989). Quality means customer’s evaluation of a brand or a

product that covers the expectations of an individual. This type of evaluation of an individual

comes from his own experience between the products of two firms (BusinessDisctionary.com).

According to the (Chowdhury and Andaleen, 2007) Quality of the product enhances the

competitive advantage of that company. Consumer prefers the national or local brand when they

make comparison between the local or global brands just because local brand are more reputable

familiar and have good coverage on the minds of consumers and on the media (Besharat, 2010;

Chen et al., 2007). We can say that quality is an assessment of superiority and advantage of that

product (Zeithaml, 1988).

Perceived price Every consumer have a unique perceptions on pricing of different products (Ramirez, 2009:

Goldsmith, 2009). According to Veale et AL (2009), brief details and information about the cost

of the product, cost of transactions and the accessibility of that product influence the evaluation

of consumers and reactions of consumers to price through the media. Cheap prices may create a

negative mind set on the quality (Chandrashkaran, 2006: Grewal, 2006). Price is a main factor

that effect the perception of consumers. Price is a thing which is given by the consumer in place

of a specific product Evans et AL (1996). The benefits of the product should exceed the price to

buy it (Thagunna, 2013: Khanal, 2013).

Brand loyalty Among the several brands, Brand loyalty is one of the favorite brand for consumers (Pride, 2011:

Ferrell, 2011). The meaning of brand loyalty explains that the brands have permanent and loyal

customers and consumers who are not willing to switch on other brands (Aaker and Mcloughlin

2010: Pride et al., 2011). Brand loyalty make more potential to stick customers on one brand

over other brands (Hoyer, 2008: Macinnis, 2008). Customers engaging with brands and have

high brand loyalty on parent brands are more likely to create relationship with brand extension

(Choi, 2009). When loyalty is taken as profit the brand loyalty is much important consideration

for companies (Aker, 1991). When new firms enter into market then brand loyalty is an obstacle


82

for competitors (Aaker, 1996). And consumers have high brand loyalty create an obstacle for

new entrants (Keller, 1998).

Brand image According to the (Keller, 1993) brand image is the perception of consumers about brand which is

held in the mind of consumers. And According to (Hsieh, 2009: Liljander, 2009) brand image is

totally a perception of customers that how he take that brand what is his opinion and its

association with the brand. Past experience, familiarity of brand and awareness of brand can

create brand image. The country of origin and the country that produce the products of that brand

also create band image (Koubaa, 2007). Brand strategy also include task that enables the

company to produce a favorable of its brands (Martinez et al., 2008). Brand extension is one of

the strongest factor that have a great effect on brand image (Keller, 2003). While considering the

target market for product and evaluating market reaction, brand image plays a massive role

(Katsanis, 1995). Positioning of a product in market also create a positive unique and favorable

brand image (Katsanis, 1995).

Purchase intension

Quality

Perceived price

Brand loyalty

Brand image

Consumer Preferences


83

Research Methodology Bryman and Bell (2007) discuss that to conduct the research; most important factor is the

research approach which based upon the theory of research. Nature of this research is descriptive

and qualitative in nature. This study is conduct to describe the situations. This study is conduct in

order to determine why consumers prefer local brands over global brands when they are

purchasing the goods. The variables for this research is customer satisfaction, Quality, Price,

brand image, Brand loyalty and purchase intention.

This study follows a deductive approach; this study is based on theories that lead to results. In

this study, we completed the first literature related to local brands vs global brands. Then we

collected data on the basis of theory. At the end of study results are conclude based on the

analysis of literature and data. Data will be collected by using structured questionnaire. The

questions are close ended. The instrument contained total of 6 questions. The questionnaire bases

on close ended technique. The data was collected from respondents of age (18– 55) years old in

Baghdad.

The current study uses convenience sampling. Convenience sampling is no probability sampling

technique. This technique collect and sum up the relevant material from the sample or the part of

the research that are easily available for the analysis is convenience sampling (Zikmund, 1997).

Convenience sampling is a widely used technique that gathered the huge number of completed

surveys quickly (Lym et al, 2010). Due to time shortage convenience sampling is used to collect

the data for this research. Data is collected only from Baghdad.

The data for this research has been taken from 373 participants by using the educational and

psychological measurement table (Krejcie and Robert 1970). Total number of 161 questionnaires

from out of 300 were returned which were completely and correctly filled by the participants

which were acceptable for the study to carry on.

Results Variables

Customer satisfaction

Global and local brands

Purchase intention

Brand quality

Brand loyalty

Brand image

Perceived price

Profile of the consumers

Personal information and demographic information of the respondents is presented in the

following table:


84

Category Frequency Percentage

Variable

Gender Male

Female

152

8

95.0

5.0

Age 15-20

20-25

25-30

52.8

36

10.6

53.1

36.2

10.6

Education Below Metric

Intermediate

Bachelor

Master

57.1

42.2

0

0

57.5

42.5

0

0

Findings and Discussion Question 1

Overall I am satisfied with specific experience with the gourmet cola brand as compared to

Pepsi?

This question is asked to check the satisfaction level of consumers with the local brand.

According to the data collected, 61.49% of the people satisfied with specific experience with the

gourmet cola brand as compared to Pepsi. 30.43% of the people questioned claimed they are not

satisfied with specific experience with the gourmet brand as compared to Pepsi, whereas, 8.07%

of the people claimed sometimes they have good experience with gourmet cola as compared to

Pepsi.


85

Question 2:

You have a high intention to buy gourmet product as compared to Pepsi?

According to the data collected, 63.35% of the people have a high intention to buy gourmet

product as compared to Pepsi. 26.71% of the people questioned claimed they are not high

intention to buy gourmet product as compared to Pepsi, whereas, 9.94% of the people claimed

sometimes they have high intention to buy gourmet product as compared to Pepsi.

Question 3: Are you a loyal customer for the gourmet product you buy as compared to Pepsi?


86

According to the data collected, 73.91% of the people are high loyal customer for the gourmet

product as compared to Pepsi 16.77% of the people questioned claimed if better option available

in the market they are switch from gourmet cola to this particular brand, whereas, 9.32% of the

people claimed sometimes they have purchased gourmet product as compared to Pepsi.

Question 4: Do you use gourmet products of because the brands have good image in market?


87

This question was asked to discover how much important brand image for customer when

making a purchase decision. According to the data collected, 54.04% of the people think that

brand image is so much important for purchasing gourmet cola as compared to Pepsi, 27.33% of

the people questioned claimed they are not concerned with brand image when they making

purchasing decision, whereas, 18.63% of the people claimed sometimes they have concerned

with brand image when they purchased gourmet product as compared to Pepsi.

Question 5: Do you compare the Quality of Gourmet cola and Pepsi cola when you purchasing the products

of that brands?


88

This question was asked to discover how much brand quality is important for customer when

making a purchase decision. According to the data collected, 71.43% of the people think that

brand quality is so much important for purchasing gourmet cola as compared to Pepsi, 21.12% of

the people questioned claimed they are not concerned with brand quality when they making

purchasing decision, whereas, 7.45% of the people claimed sometimes they have concerned with

brand quality when they purchased gourmet product as compared to Pepsi.

Question 6: If a gourmet brand and a Pepsi brand are priced same, would you prefer the gourmet brand?


89

The reason of asking this question is to judge and discover the importance of price factor when

both of the products of local brand and global brand have same price then what consumer do,

weather they go for global brand or stick on the local brand. The results show that 83.85% of the

consumers would go for the gourmet brands whereas 8.07 % would still buy the Pepsi cola. 7.45

% people sometimes they purchased gourmet cola as compared to Pepsi.

Conclusion Mean number of respondents in percentage

Yes Sometimes No

Customer satisfaction 61.49% 8.07% 30.43%

Purchase intention 63.35% 9.94% 26.71%

Quality of product 71.43% 7.45% 21.12%

Perceived price 83.85% 7.46% 8.07%

Brand loyalty 73.91% 9.32% 16.77%

Brand image 54.04% 18.63% 27.33%


90

The table mentioned above discussed and compared the mean of different factors that affect the

consumer’s preference of local brands over global brands. The mean of the factors expressed in

the form of percentage. Perceived price, brand loyalty and quality of product are the factors

which affect most to the consumer’s preference while they are purchasing their needed products.

Mean percentage shows 83.85% of customers would go for the gourmet cola brands whereas

8.07 % would still purchase the Pepsi cola products. 7.45 % people sometimes they purchased

gourmet cola as compared to Pepsi. The second most important factor is brand loyalty which

shows 73.91% peoples consider brand loyalty while purchasing. The third and most important

factor is quality of the product which shows 71.43% people check the quality of product before

purchase local or global brands. So by focusing the price, quality, and brand loyalty local brands

can easily compete with global brands also.

Limitations The sample size of this paper is very small, so for more accuracy and broad results future

researcher can increase the sample as well as population. Due to the time shortage convenience

sampling technique is used so this is also a limitation. Future researchers can use different type

of sampling techniques for the data collection. Future researchers can also change the dimension

of the model used in this paper and add new variables for more results. The another limitation of

this paper is this study conduct only on the basis of one local brand gourmet cola , the future

researchers can collect data of many different local brands for analysis.

References Ali, M. E. R. Ç. (2015). Using technology in the classroom: A study with Turkish pre-service

EFL teachers. TOJET: The Turkish Online Journal of Educational Technology, 14(2).

Almenara, J.C. (2004). Teacher training in ICT. The great workhorse. Communication and

Education: New technologies and teaching resources, 27-31.

Aristovnik, A. (2012). The impact of ICT on educational performance and its efficiency in

selected EU and OECD countries: A non-parametric analysis. TOJET: The Turkish Online

Journal of Educational Technology 11(3), 144–152.

Bhattacharya, I., & Sharma, K. (2007). India in the knowledge economy – an electronic

paradigm, International Journal of Educational Management,21(6), 543 – 568

Cholin, V. S (2005). Study of the application of information technology for effective access to

resources in Indian university libraries, The International Information &Library Review,37(3),

189-197.

Chong, D. H. (2001). The practical considerations of the Internet in the EFL classroom. The

Journal of Multimedia-Assisted Language Learning, 3(2), 9-35.

Gold, S. C. (2014), E-learning: The next wave of experiential learning. Developments in

Business Simulation and Experiential Learning, 28.

Higgins, S., Xiao, Z., &Katsipataki, M. (2012). The Impact of Digital Technology on Learning:

A Summary for the Education Endowment Foundation London: EEF. Available at:

http://educationendowmentfoundation.org.uk/uploads/pdf/The_Impact_of_Digital_Technology_

on_ Learning_-_Executive_Summary_(2012).pdf.


91

Horton, William K. (2001), Evaluating e-learning. American Society for Training and

Development.

Littlejohn, A., Falconer, I., &Mcgill, L. (2008). Characterising effective eLearning resources.

Computers & Education, 50(3), 757-771.

Ionescu, A. (2012). New e-learning method using databases. Database Systems Journal, 3(3), 35-

46.

Lou, Y., Abrami, P. C., &d’Apollonia, S. (2001). Small group and individual learning with

technology: A meta-analysis. Review of educational research, 71(3), 449-521.

Marc, Rosenberg J. (2001). E-learning: Strategies for delivering knowledge in the digital age.

Taiwan: McGraw-Hill Int, Enterprises Inc.

McGorry, S. Y. (2002), "Online, but on target? Internet-based MBA courses: A case study." The

Internet and Higher Education 5 (2) 167-175.

Nathan, S. K., &Rajamanoharane, S. (2016). Enhancement of skills through e-learning: prospects

and problems. The Online Journal of Distance Education and e‐Learning, 4(3), 24.

Nawaz, Z., Zhang, J., Mansoor, R., Ahmad, A., & Bangash, I. A. (2019). DECISION MAKING

STYLES OF YOUNG PAKISTANI CONSUMERS: A STUDY OF CONSUMER STYLE

INVENTORY (CSI). International Journal of Information, Business and Management, 11(4), 50-

60.

Petko, D. (2012). Teachers’ pedagogical beliefs and their use of digital media in classrooms:

Sharpening the focus of the ‘will, skill, tool’ model and integrating teachers’ constructivist

orientations. Computers & Education, 58 (4), 1351-1359.

Plomp, T., Pelgrum, W. J., & Law, N. (2007). SITES 2006–International comparative survey of

pedagogical practices and ICT in education. Education and Information Technologies, 12(2), 83-

92.

Raboca, H. M., &Carbunarean, F. (2014). ICT In Education - Exploratory Analysis of

Students'Perceptions regarding ICT Impact in The Educational Process. Managerial Challenges

of the Contemporary Society, 7(2), 59.

Sanyal, B. C. (2001). 'New functions of higher education and ICT to achieve education for all',

Paper prepared for the Expert Roundtable on University and Technology-for- Literacy and

Education Partnership in Developing Countries, International Institute for Educational Planning,

UNESCO, September 10 to 12, Paris.

Saunders, V., & Zuzel, K, (2010). Evaluating employability skills: Employer and student

perceptions’, Bioscience education, 15(1), 1-15. UGC, http://cec.nic.in/Pages/About-CEC.aspx

Wentworth, D. K., & Middleton, J. H. (2014). Technology use and academic performance.

Computers & Education, 78, 306-311.

Youssef, A. B., &Dahmani, M. (2008). The impact of ICT on student performance in higher

education: Direct effects, indirect effects and organisational change. RUSC. Universities and

Knowledge Society Journal, 5(1).


92

Zhao, Y., &Cziko, G. A. (2001). Teacher adoption of technology: A perceptual control theory

perspective. Journal of technology and teacher education, 9(1), 5-30

Factors Affecting Consumer Preference of Local Brands over ...

Documents

Transcript of Factors Affecting Consumer Preference of Local Brands over ...