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Journal of Emerging Issues in Economics, Finance and Banking (JEIEFB)

An Online International Research Journal (ISSN: 2306-367X) 2014 Vol: 3 Issue 5

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www.globalbizresearch.com

Determinants of International Brand Recognition among

Malaysian Consumers

Khairul Anuar Mohammad Shah,

School of Management,

Universiti Sains Malaysia, Malaysia.

Email: [email protected]

Hazril Izwar bin Ibrahim,

School of Management,

Universiti Sains Malaysia, Malaysia.

Email: [email protected]

___________________________________________________________________________

Abstract

This study purposes to explain the concept of brand recognition and to shed light on what

constitutes consumer recognition of international brands among Malaysians consumers. One

of the major objectives is to determine the predictors of international brand recognition and

their relationship with the dependent variable, and measure their magnitude of influence. By

reviewing existing literatures on brand awareness and how it impacts consumer attitudes and

behaviours, the current study delve into the roles of product price, quality, design as well as

country-of-origin effects on brand awareness in which brand recognition is a subset of. Data

collected from a self-administered questionnaire indicates some form of correlation between

independent and dependent variables.

___________________________________________________________________________

Keywords: Brand Recognition, Quality, Price, Design, Country of Origin

JEL Keywords: Brand, Brand Preference

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mailto:[email protected]



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1. Introduction

The prevalence of international business in this increasingly globalised economy has

enabled consumers to benefit from the many varieties of goods from all over the world. Of

course, every product is tied to a specific brand and consumers tend to buy what they think

will fulfil their needs and wants.

The same scenario is present in the Malaysian consumer market. Table 1.1 shows that

within 10 years, Malaysia’s total trade with foreign countries nearly doubled in 2011 since

2000. With imports amounting to RM 574.23 billion compared to just RM311.46 billion in

2000, it is a sure sign of growth as well as indicator of potential growth.

Table 1: Malaysian Trade

Source: MATRADE (http://www.matrade.gov.my/en/malaysia-exporters-section/33-trade-

statistics/1765-malaysias-trade-with-the-world-2000-2010)

The following table lists out Malaysia’s top ten partners in international trade in 2010,

together with their respective values and share of total trade. Almost half of the market

(46.4%) is dominated by China, Singapore, Japan and the United States, with trade values

exceeding RM 100 billion each.




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Table 2: Malaysian Trading Partner

Source : MATRADE (http://www.matrade.gov.my/en/malaysia-exporters-section/33-trade-

statistics/1134-malaysias-top-10-trade-statistics-for-the-year-2010-country)

Linking the trends of rising trade volume, increasing import volume indices and growing

household income, with a sizeable portion of consumer expenditure in the areas of transport

and communications, residence, leisure and recreation, and food, ceteris paribus, consumers,

who now have higher purchasing power can benefit from enjoying a more extensive variety

of goods, be it local or imported. With more goods on the shelves and higher purchasing

power, the question lies in the power of a product to attract people.

Defined broadly, a brand is a set of perceptions and images that represent a company,

product or service, which promises the customer what will be delivered or experienced.

Similarly, brand recognition is the extent to which consumers associate a brand with the

product they wish to purchase. Brands whose goods are widely recognised by the public

become household names. Some examples include brands for baby diapers (Procter &

Gamble’s Pampers), instant food (Nestlé’s Maggi), and stationeries (3M’s Post-it Notes). It is

therefore evident that consumers’ ability to recognise and associate a brand with a product

(vice-versa) impacts their spending decisions and thus the market share of certain consumer

goods.

Very often we make both conscious and unconscious decisions whether or not to

purchase a product. Managing a brand focuses on capturing the consumer market by first

establishing brand recognition among potential buyers. This can only be done when the

elements of brand recognition are determined. Much can be learnt about the factors that

consumers consider especially when they decide between foreign and local goods.

With these issues in mind, one may question the methods the average consumer use that

initiate or trigger the ability to recognise an international brand. What are the aspects that

Malaysian consumers emphasise or consider that in the end enable them to recognise




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international brands? Would the factors be product-related or would they be consumer-

oriented?

2. Literature Review

Rossiter and Percy (1987) stated that many have misconceptions about brand awareness

due to the fact that there are two types of brand awareness, namely brand recognition and

brand recall. They explained further that recall of the brand name is not necessary in brand

awareness because it is possible that consumers can identify a brand by its location (“the store

next to the school”) or its physical appearance (“the sauce with the square bottle”). However,

brand recall may not be required for purchase; mere recognition of a particular brand like

“Hey that’s the new barbeque sauce they call the X-Factor” may be enough to induce

purchase.

Brand recognition according to Howard and Sheth (1969) plays a crucial role in

determining consumers’ consideration set – which is a set of brands in which serious attention

is given by consumers when making a purchase. Baker et al. (1986) supported the importance

of the composition of this consideration set. A brand that possesses some level of brand

recognition will far more likely be considered, and thus chosen by consumers compared to

brands that are less recognised. Wilson (1981) confirmed the relevance of top-of-mind

awareness in a study which found that the higher the position of a brand in the consumer’s

mind measured by unaided recall, the higher the purchase intention and the higher the relative

purchase of the brand. With that position, it will be much easier for the consumers or potential

consumers to communicate about the brand to their friends and relatives. According to

Rossiter and Percy (1987), brand recognition is essential in a brand’s communication process.

For purchase to occur, consumers must first be made recognize of a brand, because brand

attitude cannot be formed, and the intention to buy cannot exist unless these activities take

place.

Price will always be an indicator for the quality perception and indirectly the recognition

towards certain brands. For example, Etgar and Malhotra (1981), examined the effect of price

on selected quality cues, such as price, on the comfort, durability, and style of running shoes.

Similarly, Lichtenstein, Bloch, and Black (1988) considered specific quality dimensions of

running shoes to examine price-quality inferences, just to name few of earlier studies that

includes price as a cue for product quality. For the definition, Maynes (1976) defined the

perfect information frontier as a set of points in price-quality space for which a given level of

quality can be purchased at the lowest possible price. Consumers who are perfectly informed

and are rational would only purchase goods which lie on the frontier, between the two

extreme price levels. Huang et al. (2002) stated that the belief in price-quality inference, that




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“high price translates to high quality” and “low price signals low quality”, is crucial

especially in pricing theory and in predicting consumer behaviour. The price expectancy

model of consumer choice states that evaluation of goods by consumers involves comparisons

of actual price with a reference price or expected price derived from product quality and

price-quality correlation (Ordonez, 1998).

Furthermore, Tellis and Gaerth (1990) examined the impact of information on consumers’

choice strategies and discovered that when there is imperfect information on product quality,

the price-quality correlation plays a significant role towards influencing consumer behaviour.

From their perspectives, when the information about such products are very limited (because

there are so many criteria to be considered while assessing the quality of a product),

consumers’ tend to look into the price of the products as an important cue of product quality.

Bearing this in mind, it is plausible to assume that consumers’ ability to recognise

international brands could also be affected because of the lack of information on the product

itself.

For the design of product, Townsend and Sood (2012) affirms the motivation of people

for choosing high design or in simpler terms products with relatively superior physical

attributes, is an effort to boost one’s sense of self. This innate drive for self-affirmation is not

just randomly directed at the more costly option or the generally higher quality option, but

very specifically at the more aesthetically pleasing one. Their results have also confirmed

people’s desire for beautiful objects as an intrinsic value, and consumers are almost always in

a state of seeking affirmation from external sources. Similarly, a study conducted by

Landwehr et al. (2012), they acknowledged the importance of aesthetics in creating and

maintaining favourable responses from consumers. These two studies shows the importance

of product design to attract the consumers and with that attraction, indirectly it will become

the recognition of consumers towards that brand as a step above the others. That is why

several brands getting more attentions from consumers compared to the others. Just simply

because of the design.

In the country of origin study, researchers suggested that the relevance of country-of-

origin connects to the fact that favourable perceptions of a particular country lead to

favourable consumer attitudes toward its products and brands, which in turn influence

consumers’ purchasing intentions (Martín and Cerviño, 2009). There are two main

interpretations of country-of-origin: the most common explanation for country-of-origin,

which is where a product is manufactured in, with “Made in ...” found in most product labels;

and country where the brand was originated and from where it takes its personality, regardless

of the place of manufacture or parent firm headquarters location (Martín and Cerviño, 2009).




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Country of origin effects defined as any influence that a country of manufacture,

assembly or design has on a consumer’s positive or negative perception of a product (Cateora

et al., 2010). Since a company competing in the global marketplace today manufactures

products worldwide, the place of manufacture can possibly affect product or brand image

when a customer becomes aware of the country-of-origin. The country, type of product and

the image of the company and its brands all influence whether the country-of-origin will

generate a positive or negative reaction. Even so, consumers have broad but somewhat vague

stereotypes about specific countries and specific product categories that they judge “best” i.e.

English tea, French perfume, Chinese silk, Italian leather, Japanese electronics and so on.

Kinra (2006) mentioned that consumer attitudes toward a specific brand “can be

substantially changed, either favourably or unfavourably, through the brand’s country-of-

origin image, which more or less influences the brand preference of consumers. Yassin et al.

(2007) research showed the influence of a brand’s country-of-origin image on brand equity,

either directly or indirectly, through brand distinctiveness, brand loyalty and brand awareness

or association. The study also revealed that country-of-origin image positively and

significantly impacts brand distinctiveness, since consumers develop interest and preference

for a brand on the basis of their perception of the country-of-origin and other available

information pertaining to the brand.

Figure 3: Research Framework

3. Research Methodology

The causal-explanatory purpose of this research intends to explain the relationship

between the variables. In the context of this study, researcher intends to find out whether

product attributes and/or consumer attributes influence Malaysian consumers’ recognition of

international brands. This is a cross-sectional study where research is carried out once and

represents a snapshot of one point in time. It involves observation of all of a population, or in




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this case a representative subset, at one specific point in time. Although a longitudinal study

has the advantage of tracking particular changes over time, the current research are more

concerned with constraints of budget and time. Collection of data spans a period of two to

three weeks. The topical scope of this study is a statistical one. Designed for breadth rather

than depth, it attempts to capture a population’s characteristics by making inferences from a

sample’s characteristics. With hypotheses tested quantitatively, generalisations about findings

are presented based on the representativeness of the sample and the validity of the design.

The decision to use a survey research in the present study is also because it is the most

common form of research design used in country of origin studies (e.g. Jaffe and Martinez,

1995; and Balabanis and Diamantopoulos, 2004), and other consumer behaviour studies

(Wang and Rao, 1995). Strengthening the decision to use a survey approach is that it is the

most flexible means of obtaining data from respondents as well as providing an opportunity to

examine causal relationships and performing the analyzing task of a complex and

sophisticated analysis technique (Zikmund, 2000).

This study is implemented via collection of questionnaire responses from respondents

who are Malaysians from different states in Malaysia. Despite utilising neither the field

setting nor laboratory setting, and knowing that respondents are aware that their responses

will be used in this study, there is a relatively high participant perceptual awareness where

they perceive that research is being conducted and this will have implications on the

outcomes of the research. Nevertheless, the purpose of research is to ascertain the factors

affecting Malaysian consumers’ recognition of international brands, so the best possible

means to find out is through a survey in which they indicate their preferences and have them

recorded.

The target population of this study encompasses Malaysian consumers, while the

sampling frame is Malaysian consumers aged 14 and above from different generational

cohorts, that reside in different states across Malaysia, who have varying or similar

demographical profiles i.e. employment status, level of education. With a population of 29,

628, 392 (2013, July estimate), 65.7% are between 14 and 65 years. The gender ratio for the

15-64 age group averages at 1.04 male/female. However, due to time constraints, the sample

size is set at 100 respondents from different states who will record their responses in an online

questionnaire. The simple random sampling method is used provided that respondents are

Malaysians and are aged 14 and above. According to Malhotra (2010), simple random

sampling has many desirable features such as easily to understood, sample results maybe

projected to the target population and convenience. Those are the main reason why sample

random sampling technique is applied in the current research.




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This study utilises a questionnaire which is designed and distributed virtually to intended

respondents. It is often the lowest cost option and the least time consuming method to reach a

wider scope of participants given a limited time frame. Self-administered surveys are

perceived as more anonymous and may be a good way to minimise participant perceptual

awareness and obtain honest (and potentially extreme) responses. Data collection is done via

communication process whereby subjects are questioned and then have their responses

collected through personal or impersonal means. In this case, the collected data is a result

from self-administered instruments (structured survey composed and administered in Google

Docs) transmitted electronically (via the Internet) to Malaysians aged 14 and above who are

from different states.

4. Findings and Discussion

The target population consists of Malaysian consumers. The largest limitation during the

data collection is the time limitation. The given timeframe has resulted in a low sample size of

only 100 respondents from different states across Malaysia and have different demographic

information i.e. gender, age, occupation, level of education. All responses are recorded

virtually in a self-administered online survey form generated in Google Docs and sent via

electronic mail and its hyperlink posted public.

Of the 100 respondents who agreed to participate, 34% were male and the remaining 66%

are female. The biggest cohort has an age range of 14 to 23 years dominating 57% of the total

figure. Most of the participants in this cohort (47 of 57) are students from secondary schools,

or higher education institutions such as colleges and universities. Those aged 24 to 33 make

up the second largest group with 35 records and 26 of them (74.3%) are employed. Due to the

limitations of reaching respondents who are 34 years old and above, only eight people

responded: three in the 34 – 43 years category, two in the 44 – 53 years category, and three

aged 54 and above.

Figure 4: Demographic Profiling of Respondents




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It was noted that 66% of the respondents have or are pursuing a Bachelor’s Degree, while

15% and 10% are in the Diploma/STPM/Matriculation level and PMR/SPM level

respectively. Students comprise 48% of the respondents, while 44 are employed. Half of the

remaining eight respondents are self-employed; four are homemakers, of which, one is

pursuing post-graduate studies. From the results, the study also found that one fifth of the

respondents visit a shop (i.e. grocery store, convenience store, shopping complex) to make

purchases almost every day, while 43% does it once or twice a week. 19 of the 100 patronise

shops about twice each month, 17 once monthly, and 1 almost never does. A sizeable portion

of the participants have had experience with making purchases online, with 73 of 100

indicating “Yes”, while the remaining 27 indicated otherwise. However, only 5% of 79 (who

disclosed their frequency of shopping online) are regular e-shoppers. 36 of them spend money

online sometimes, while the remaining half (49%) does rarely. The summary of the

demographic profiles is presented in Figure 4.1.

Defined as the consistency of a measure, reliability ensures that the same results are

obtained, repeatedly. To test the reliability of the four proposed independent variables and the

dependent variable in this study as mentioned earlier, Cronbach’s Alpha coefficient

measurement is used. This analysis calculates the internal consistency of the data and shows

how well each item in a dataset is positively correlated. Results of Cronbach’s analysis of all

the variables in this research are shown in the following table (Table 4.1).

There is one exception however for “Product Price” since the alpha value obtained is a

negative one, which means that the average covariance among the items in Product Price

variable is negative. Even with one of the items removed, the highest alpha value reached is

only 0.23 which is less than half of the minimum 0.5 – not a satisfactory level to begin with.

Hence, with the reliability model assumptions violated, further analysis may be affected if

this variable is to be included in the study since it is possible that the functions of this

particular value have estimates outside theoretically possible ranges. The possible explanation

on this negative alpha is most likely with small sample sizes and small numbers of items, is

that while the true population covariances among items are positive, sampling error has

produced a negative average covariance in a given sample of cases (Nichols, 1999).

Furthermore, Nichols also explain that another possible reason may simply be the case that

the items do not truly have positive covariances, and therefore may not form a useful single

scale because they are not measuring the same thing.

Cronbach’s coefficient alpha values vary between 0.00 and 1.00. However, there is no

general agreement as to what constitutes good or very good levels of Cronbach’s alpha. Gabel

(1986) suggests that alpha coefficients in the high 0.80 or above should be considered good,

and Cortina (1993) suggests that alpha coefficients 0.85 or above are quite good. But, it is




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also important to know that Nunnally (1967) suggests that the alpha values that are above 0.5

can be considered as adequate.

Table 1: Cronbach's Alpha for Variables

Variables Number

of items

Number of items

Discarded Cronbach's Alpha

Product Price *3 - -0.110

Product Quality 3 - 0.594

Product Design 3 - 0.733

Country of Origin 3 - 0.500

International Brand Recognition 4 - 0.514

Alternative explanations for a low alpha value include inappropriate item coding and

weak association among items in one variable. This means that there is a low degree of

homogeneity or similarity among the items. It was therefore decided that the Product Price

variable is to be removed from this study in order not to compromise further analyses. As far

as this research is concerned, the remaining valid variables are now Product Quality, Product

Design, Country of Origin, and International Brand Recognition.

The summary of the descriptive statistics of the variables is shown below in Table 4.2.

Based on computations in SPSS, product quality recorded the highest mean of 4.2067,

followed by product design at 3.9354, country of origin with 3.9048, and international brand

recognition at 3.8119.

The standard deviations for all the variables lie between the range of 0.60 and 0.74. The

figures show how far every value in a given dataset varies from the mean.

Table 2: Descriptive Statistics

When the current study takes the observed values of X to estimate or predict

corresponding Y values, the process is called simple prediction. Multiple Xs (predictors) call

for multiple predictions – and this can be done using regression analysis. The variables were

tested significant with (p<0.01) and the F-value is 9.902. R2 is 0.248 which goes to show that

around 24.8% variations of international brand recognition can be explained by the quality,

Variables Number of items Mean Std. Deviation

Product Quality 3 4.2067 0.69110

Product Design 3 3.9354 0.73007

Country of Origin 3 3.9048 0.64926

International Brand Recognition 4 3.8119 0.60060




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design and country of origin of the product. Adjusted R2 is 0.223 while the Durbin-Watson

value is 2.079 – within the range of 1.5 – 2.5. This confirms that there is no autocorrelation of

the error terms.

Referring to Table 4.3, Product Design (denoted by DSN) is significant at 0.01 whereas

the value for the other two predictors QUA and COO are less significant with 0.125 and 0.070

respectively.

Table 3: Linear Regression Results

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) 1.526 .453 3.365 .001

QUA .127 .082 .147 1.547 .125

DSN .276 .078 .345 3.539 .001

COO .170 .093 .184 1.831 .070

a. Dependent Variable: REC

As we can see from the summary of the current study results in Table 4.4, only one

hypothesis is supported and the other two hypotheses are rejected. Surprisingly, not as

expected, product quality is not one of the important factors for the respondents to identify

and giving the recognition the global brands. Possible explanation on this insignificant result

is perhaps all peoples know that when we talk about brand recognition, it is no way that can

be separate from the existence of product quality. So it is impossible for people to recognize

certain brand without knowing the quality of such products. Hence, it is not important for

them to give the accurate answer to the question given.

Table 4: Summary of Hypothesis Testing

Hypothesis Descriptions Result

(Accept /Reject)

Beta

Value

H2 Product Quality is positively related to

International Brand Recognition Rejected 0.147

H3 Product Design is positively related to

International Brand Recognition Accepted 0.345**

H4 Product Country of Origin is positively related

to International Brand Recognition Rejected 0.184

** Significant at 0.01




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Similarly, for country of origin effects, many previous studies empirically show that it

will affect the attitudes of consumer. Contrastingly, for Malaysia consumer, at least for the

current study perspective, country of origin is not an important characteristic for the

consumers. In this case, perhaps Malaysian consumers are more liberal, i.e., they can actually

recognize any products from any country as long as its display the satisfaction level of

product quality for them. This is perhaps why country of origin is not an important indicator

of brand recognition for respondents of the current study.

5. Discussions and Conclusions

The hypothesis stating that product quality is positively related to international brand

recognition is rejected due to its significance value of 0.125 and a standardised beta value of

0.147. Monroe (1979) concept of a best purchase decision proposed a measure of objective

value in the ratio: Value = Quality/Price. Since quality is part of the function, an increase in

quality would also increase value, provided that price remains the same or decreases.

Consumers base their purchase decisions on their willingness to pay for a certain value of a

product, and if the price-quality inference holds true, consumers would have a positive

attitude towards products with relatively higher quality. Being not significant at 0.01, this

study suggests that product quality is insufficient to exert considerable influence on

international brand recognition by consumers.

Similarly for brand country-of-origin, the hypothesis testing also does not accept that the

country-of-origin for a brand has a significant positive effect on international brand

recognition – with a standardised beta value of 0.184 and its significance at 0.07. Although

Yassin et al. (2007) research showed that a brand’s country-of-origin image influences brand

equity through brand distinctiveness, brand loyalty and brand awareness or association, and

having found that the country-or-origin image positively impacts brand distinctiveness (which

could facilitate brand recognition, Samiee et al. (2005) study of brand country-of-origin

recognition accuracy proved that consumers’ knowledge of brand origin is limited. Therefore,

it could be the reason why this hypothesis testing was less significant, given that consumers’

failure of associating brands with their country-of-origin weakens the influence of country

image on their attitudes and purchase behaviour. Hence, brand recognition would be more

difficult in this situation. Furthermore, Paswan and Sharma (2004) proposed that a

consumer’s perceived country-of-origin is likely to influence the perceptions of a brand from

that country, only if the consumer is aware of the brand’s country-of-origin.

However, the design of a product was the only independent variable found to be

significant in positively influencing international brand recognition in this study – based on

the hypothesis that product design is positively related to international brand recognition. Its




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standardised beta value is 0.345 – highest of the three, and the variable is significant at the

0.01 level. This validates Schoormans and Robben (1997) statement that deviations in well-

known stimuli attract attention, and Landwehr et al. (2012) acknowledgement of the

importance of aesthetics in creating and maintaining favourable responses from consumers.

Attractive, appealing designs tend to be more persuasive and have powerful influence on

consumers’ decision processes, and that includes their recognition of the product brand, too.

Wang (2012) empirical results indicated that attitudes towards visual packaging directly

influence consumer-perceived quality and brand preference in his study on food products. If

people have a desire for beautiful (as well as eye-catching) objects and wish to acquire them,

adding that they are continuously seeking for self-affirmation, the effect of product design on

international brand recognition is definitely a substantial one in terms of the magnitude of

impact.

The current study comes out with several implications. First, product attributes can be

said as one of the main pull factors that lead to consumers deciding to buy a certain product –

by first paying attention to that particular brand or product. Price-quality inferences and

product design can be strategically modified in the short term to strengthen and enhance the

recognition of the brand a certain product carries, since brand image which is partly

influenced by consumers’ perceptions of the brand’s country-of-origin, takes a longer time to

build and is more static compared to the two former elements.

Furthermore, it is certain that the global market for consumer products has become very

complex and undoubtedly is continuously evolving just as these words are being typed out.

Product characteristics however are not the only factors that shape international brand

recognition. In fact, the personal profile and background also immensely affect their

perspective and later on their attitudes toward purchase. Hence, international marketers ought

to be equipped with the psychology of consumer behaviour as well as the production and

research and development departments do, in terms of ensuring product quality and

appealing, functional design. This can be done via extensive product and market research of

target markets. Because ultimately, the success of a brand and retailer – local or international,

is determined by how closely the product measure up to the image of the selling organisation

and in the end meets the different expectations of transnational consumers.

As a conclusion from the subject matter introduction, to reviews of published works by

scholars, the presentation and analyses of data, one thing is certain, that consumer recognition

is a fundamental element required for brands to establish themselves and make themselves

known through strategic brand management so that enhanced brand image and equity will

lead to improved consumer perception and attitudes towards the product, which ultimately

encourages purchase.




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