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SECTION ONE

INTRODUCTION
1.1 Background of the study
Consumer purchase decision is one of the main concepts studied in marketing literature.
Marketing managers are interested in factors that affect consumer purchase decisions in
order to forecast sales of existing and/or new products and services. Knowledge on
consumer purchase decision making process can assist managers in their marketing
decisions related to product demand (new and existing products), market segmentation
and promotional strategies. Consequently, the importance of product quality in marketing
literature cannot be over emphasized since it is a major factor that influences consumer
purchase decision. Several studies have reported a positive correlation between product
quality and purchase behaviour (Morwitz & Schmittlein, 1992; Morwitz et al., 1996).
In a practical sense, when wanting to buy a product, the criteria that consumers
commonly point out include good features, excellent function, high quality,
reasonable price, well-known brand, and user-friendliness. With global markets
growing and rapidly emerging, the existing markets increasingly develop along the
globalization processes and move towards a so-called global product quality standard.
For market efficiency and effectiveness, where maximum opportunities exist to both
sellers and buyers at minimum cost, information must be collected on the buying
behaviour of consumers as they may have different values and use diverse methods for
product quality evaluation. This issue has recently attracted the attention of many
researchers from various disciplines, and while the concept of product quality has

become a well-liked topic among researchers and business practitioners in recent years,
few researches have touched on the features of product quality that directly have an effect
on customers buying decisions (Avery & Zabel, 1997).
Prior to consumption, benefits are unclear and sometimes even unknown. For this reason,
consumers may use many features as cues in comparing the available alternatives and
rate their evaluations of the various product quality features before making the purchase
or consumption decision (Steenkamp, 1989, 1990). The current study therefore seeks to
evaluate the various product quality features that affect the purchase decisions of
consumers with a narrow focus on Ideal milk, a product of Nestle Ghana limited.

1.2 Problem statement


In the modern world of globalization, many companies offer the same products and
services. It may seem pointless to try to compete in an environment in which numerous
other companies are already offering the same products or services. Today, we could find
various milk products of various brands, ranging from high to low price flourishing in the
market. The existence of substitute milk products have made consumers more
sophisticated with a lot of choices to choose from.
As companies seek to gain and maintain competitive advantage as well as increase their
profit margins, consumers also to seek to gain value on each cedi they spend in obtaining
and using milk products. Consumers therefore desire to make one best choice out of the
alternatives which categorically falls within the consumer purchase decision process.
Thus, the understanding of product quality and its effect on consumer purchase decision
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will be very vital to the success of organizations. It is necessary for organizations to know
the importance of product quality and the extent to which it affects consumer purchase
decision and the resultant effect on the overall performance of the organization.

1.3 Objectives of the study


The main objective of this study is to examine the effect of product quality on consumer
purchase decision in the Ghanaian food industry. The specific objectives include;
To determine the importance of product quality features to consumer need
recognition and purchase decision
To determine the effect of product quality on customer loyalty

1.4 Research questions


In an attempt to determine the effects of product quality on customer purchase decision,
the following research questions are to be answered:
i.
ii.

To what extent does product quality affect consumer purchasing behaviour?


How does product quality affect customer loyalty?

1.5 Significance of the study


In the modern era of business where information (qualitative and quantitative) has
become the lifeblood of organizations, a study of this nature becomes very significant.
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The objectives set for the study makes the study worthwhile to organizations and
marketers, consumers and the general public. The findings of this study may be beneficial
to consumers, by delivering a useful and composite set of product quality features, and to
the business sector, by providing guidance on product design, and helping them
understand consumers needs, wants, and expectations on product quality.
To the organization, the study will help it to understand the need to adopt product
concept as a business strategy, to produce quality products that will set their brands
apart from that of its competitors by adding extra features, value and enhancing its
product quality features. This will help the organization to gain competitive
advantage and increase its customer base.
To consumers and the general public, this study will help them to understand why
businesses are always on the edge of meeting their needs and also help them gain
more insight on how to evaluate the benefits of a product through its quality features.

SECTION TWO
LITERATURE REVIEW
2.1 Introduction
This chapter covers both the theoretical and empirical literature review which is relevant
to the study and the definitions of terms and constructs.
2.2 Theoretical Literature
This gives relevant theories on the subject matter product quality and consumer purchase
decision. It initially began with some theoretical definitions of a product and what
product quality is. It continued with the explanation on consumer behavior and ends with
the consumer purchase decision process.

Product
Kotler and Armstrong (2005) defined a product as anything that can be used to attract
attention, acquisition, use or consumption to satisfy a want or a need. Product is an
important element of the marketing mix and must be properly conceived and managed to
meet the needs of the consumers and achieve organizational goals. An organizations
product policy is therefore fundamental to its ultimate success. Whether measured by
total profits, return on investment, market share or any other criterion, it is largely
dependent upon its product policy. It is therefore imperative for product planners to see
products beyond their physical features, attributes or characteristics. This is because, the
tasks involve in developing and marketing a successful product cannot be accidental, but
well thought-out.

Product Quality
According to Kotler and Armstrong (2012), product quality is the characteristics of a
product that bear on its ability to satisfy stated or implied customer needs. According to
Bowo, Hoyyi and Mukid (2013), product quality is a relative measure of a good or
service that can give you an idea of how far the level of excellence of a product is able to
meet customer desires.
The quality of products is the understanding that the products offered by sellers have
more selling points that are not owned by a competitors product. Therefore, companies
must focus on the quality of the product and compare it with the products offered by
competing companies.

Consumer Behavior
The actions a person takes in purchasing and using products and services, including the
mental and social processes that precede and follow these actions. The behavioral
sciences help answer questions such as: why people choose one product or brand over
another,
how they make these choices, and how organizations use this knowledge to provide value
to consumers.

Consumer Purchase Decision


According to Peter and Olson (2004), the key process in consumers decision making is
the integration process by which knowledge is combining to evaluate two or more

alternative brands and select one. Most companies research consumer buying decision in
increasing detail to answer questions about what consumers buy, where they buy, how
and how much they buy, when they buy and why they buy (Kotler et al., 2005). There are
seven stages of the consumer buying decision process which are need recognition, search
for information, pre-purchase evaluation alternatives, purchase, consumption, postconsumption evaluation and divestment (Blackwell et al., 2006).
Purchase decision is the fourth stage in consumer buying decision process. According to
the Consumer Decision Making Process Model (Blackwell et al., 2006), a purchase or
intent to purchase is often influenced by other factors such as risk and involvement. For
this study, the researchers proposed possible product quality factors that may affect
consumers decision to purchase milk products. The factors are the quality features of
milk products

Product quality features


Product features evaluated by the consumer has been found to be affected by a number of
factors such as: situation, knowledge, motivation and involvement (Engel et al., 1993).
The amount of cognitive and behavioral effort consumers put into their problem solving
and decision making processes is highly dynamic and complex and for this reasons,
consumers need a great deal of information to form opinion and establish a set of criteria
on which to judge specific brands.
According to Aaker et al (1992) an important feature is one that offers an important
benefit towards the satisfaction of consumer needs. Aaker (1991) adds that because most
product features provide consumer benefits, there is usually a one-to-one comparison

between brands. Kotler (2002), explains that the most salient features of a product to the
consumer do not necessarily always imply that they are the most important ones. Because
of the aggressive tendency of advertising campaigns (with high repetitiveness) other
features may be more salient simply because the consumer is more familiar or can easily
remember or recognize the features mentioned in the advertisement, hence making these
features easily noticed and on top of the mind. Consumers, therefore, focus their energy
and attention on product features that are most important and relevant when deciding
which brand to purchase. This is referred to as determinant features. Some quality
features of canned milk considered by consumers include; taste, nutritional value, price,
package and shelf-life.

2.3 Empirical Literature


Past research studies have identified several factors that affect the purchase decision of
consumers. Some of these factors include the country of origin, demographics, taste and
preference, price etc. Similarly, there are several literatures on the effects of product
quality on consumer purchase decisions that are relevant for the purpose of this study.
Richard Dean Lovell (2010) understudied product quality attributes and consumers repurchase decision on frozen ready to eat meals using consumers in selected hypermarkets
in Bangkok. He used correlation analysis to test the relationship between product
attributes (taste, price, convenience, preparation, packaging, and brand) and repurchase
decisions on frozen ready to eat meals and concluded that product attributes have a
moderate positive relationship with repurchase decision.

A study conducted by Ladipo, P. K. and Rahim, A. G. (2012) on the influence of product


quality on consumer purchase decision in the Nigerian Food and Beverages Industry
revealed that, product quality has a positive effect on consumers purchase decision.
Also, Sandrine C, (2007) conducted a research on Taste and Quality Perception of
Products. She adopted a mixed research approach using both quantitative and qualitative
research methods and a sample of 940 customers in Indonesia economy. The results of
the data analysis indicate that customers taste and quality perception on product quality
positively affects their purchase decision.
Siddharth S. S. and Sinha. D. K. (2012) conducted a research on A factor analysis on
product quality features for consumer buying behavior of male cosmetics in Pune City
The study investigates and evaluates product quality features which affects consumer
buying behavior of male cosmetics products in Pune city. The study was conducted
during January 2010 to July 2012 in Pune city. The results from their findings showed
that, there is positive relationship between product quality features and consumer
purchase decisions.
Finally, Pajaree Ackaradejruangsri conducted an extended study that was first published
at RJAPS (vol. 31, 2012) as Defining Thai Product Quality in the 21st Century; his
research follows with a detailed examination of the effects of product quality attribute
dimensions on Thai consumers buying decisions, specifically in the three product
categories of electronics/IT products, automobiles, and home appliances. Further analysis
of the responses to questionnaires distributed at the point of sale (POS) in Chonburi
Province, Thailand; shows that the seven examined attribute dimensions overall have
relatively similar weight and influence on Thai consumers buying decisions, with

reliability, function, and durability being the most influential attribute dimensions
and eco-friendliness and customer satisfaction being less influential.

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SECTION THREE
METHODOLOGY
3.1 Research Design
The research design adopted for the purpose of this study is descriptive research design.
This is because the research seeks to investigate the effect of product quality on
consumers purchase decision. The researchers employed a cross-sectional survey to
collect primary data through the use of questionnaire on a sample of 200 respondents.

3.2 Population of the study


The target population were the students of University of Professional Studies, Accra
(UPSA) and the people living around the university. The students and people living
around the university were chosen because, this target population could be easily reached.

3.3 Sampling size


In order to determine the effect of product quality on consumer purchase decision, a
sample size of two hundred (200) respondents has been chosen for the study. The
participants were selected using convenience sampling method; where the respondents
were chosen because they were readily available.

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3.4 Sources of data


Both secondary and primary data sources were used. The secondary data was collected
from already existing sources (both material and electronic) such as journals, books,
newsletters, internet and views of other authors. The primary data provided accurate
information. In the collection of the data, a structured questionnaire was used to collect
information from respondents. Primary data were gathered for a specific purpose and was
to be used to get accurate, complete and a reliable source of data.

3.5 Questionnaire Design and Administration


In this study, a self-completed questionnaire with both closed and opened ended
questions was developed. The open-ended questions were to enable the researchers
capture more relevant information as possible. The questionnaire consists of three parts.
The first part of the questionnaire covers demographic characteristics of the respondents
i.e. gender, age, etc., the second focuses on the quality features of the product and the
third part presents on post-purchase behaviors of consumers.

3.6 Data Analysis


The gatherings of completed questionnaires were used in the analysis of data and were
organized into tabular forms with percentages and charts. The data collected from the
field of research were analyzed using qualitative and quantitative analysis to bring more
pictorial analysis to the research work.

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SECTION FOUR
RESULTS AND FINDINGS
A total of 200 questionnaires were distributed, 196 were retrieved and used for data
analysis, giving response rate of 98%. As indicated above 196 respondents were sampled
from a population of students and workers from the University of Professional Studies
and citizens of Madina. A convenience sampling technique was used to select the
respondents.

Demographic factors of consumers


Out of a total of 196 consumers sampled, 90(45.9%) were male and 106 representing
54.1% were female. Majority of the respondents were between the ages of 21 25 years;
30(15.3%) were between the ages of 16-20 years. 55(28.1%) were between the ages of
26-30 years and 33(16.8%) of them were above 31 years.
In terms of occupation, 135 respondents were students and 61(31.1%) of the consumers
were workers. This is illustrated in table 4.1 below.
Table 4.1 Demographic factors of respondents
Demographic
Variable
Frequency Percentage
Factors
Gender
Male
90
45.9%
Female
106
54.1%
Total
196
100%
Age
16 20
30
15.3%
21 25
78
39.8%
26-30
55
28.1%
31 and above
33
16.8%
Total
196
100%
Occupation
Student
135
68.9%
Worker
61
31.1%
Total
196
100%
Source: field survey
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Out of 196 respondents, 48 (24.5%) of them were daily consumers of Ideal milk, 101
consumers representing 51.5% consume Ideal milk on weekly basis and 30(15.3%)
consume Ideal milk once every month. This shows a high frequency of Ideal milk
consumption among the students and citizens of Madina. According to the respondents,
their morning begins with ideal milk when preparing breakfast. This is shown in figure
4.1 below
Figure 4.1 frequency of consumption of Ideal milk

48
30
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24.50%

51.50%
101frequency

15.30%
percentage

8.70%

Source: field survey


In order to determine the effect of product quality on consumers purchase decision, the
respondents were asked whether or not if their understanding of product quality affects
the type of milk they purchase. 78(39.8%) of the respondents strongly agreed that, their
understanding of product quality has a significant influence on their purchase decisions.
More than half of the respondents (56.1%) did agree to the fact that knowledge of product
quality helps them to make the right purchase decision. However, only 8(4.1%) of the

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consumers were not sure of how the understanding of product quality influences the type
of milk they buy. This is illustrated below.
Figure 4.2 understanding of product quality determines the type of milk consumers
buy.
110

78

8
39.80%

56.10%
frequency

4.10%
0
percentage

0.00%

0.00%

Source: filed survey


Features consumers use to evaluate the quality of Ideal milk
Research has indicated that several quality features of a product affects or influences
consumers purchase decision greatly. However, for the purpose of this research, five
features namely taste, nutritional value, package, price and shelf-life were employed. Out
of a sample of 196 respondents, 28.6% are influenced by the taste of the product (Ideal
milk), 41.9% are influenced by the nutritional value of Ideal milk as compared to other
substitutes, and 12.2% of the respondents use price to evaluate the quality of Ideal milk.
10. 2% of the respondents are influenced by the package of Ideal milk. Further interview
with this category of respondents revealed that, product packaging plays an important
role in their purchase decision since it is the only means to be informed about the product
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at the purchase point. According to the respondents, the package of Ideal milk contains
enough and useful information such as the content, ingredients, manufacture and expiry
date, etc. which makes them perceive Ideal milk to be a quality brand. However, only
5.1% of the consumers use the shelf-life of ideal milk to evaluate its quality. This can
be viewed in figure 4.3 below.
Figure 4.3 product features consumers use to evaluate the quality of Ideal milk
86

56

24

20
10

28.60%

43.90%
12.20%
frequency percentage

10.20%

5.10%

Source: field survey


Also, the researchers wanted to evaluate how consumers perceive Ideal milk in
comparison to other competing brands. 51 respondents representing 26% strongly agree
that Ideal milk is of higher nutritional value and good taste than other milk brands in the
market. 112(57.1%) of the respondents agreed. Only 13(6.6%) of the respondents
disagreed while 20(10.2%) of them were not certain.

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Figure 4.4 Ideal milk is of high nutritional value and good taste compared to its
substitutes.
112

51

20
13
0.00%
26.00%

57.10%
10.20%
frequency percentage

6.60%

Source: field survey


One vital question respondents paid attention to was the price of Ideal milk as compared
to its substitutes. 158(80.6%) of the respondents believe that Ideal milk is expensive
while the remaining 38(19.4%) of them are of the view that Ideal milk is not expensive as
compared to its substitutes. However, 31% of those who believed it was expensive
attribute its great taste as a factor they cannot substitute for price, 56% also gave the
nutritional value of ideal milk as a factor for continual usage and the packaging as a
reason indicated a 13%.
In terms of post-purchase evaluation, 7 respondents representing 4% were not satisfied
with Ideal milk after its usage whiles 75 respondents representing 38% of the entire
sample of 196 respondents are highly satisfied with Ideal milk after its usage. However,
50% of the respondents were averagely satisfied with the product after its consumption

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and 8% could not verify Ideal milk as satisfactory or not hence rated the product as
neutral in terms of the satisfaction derived from it. This is illustrated in Figure 4.4 below.
Figure 4.5 Evaluation of Ideal milk after usage

neutral ; 15; 8%
not satisfied; 7; 4%

highly satisfied; 75; 38%

satisfied; 99; 51%

Source: field survey


To test the loyalty of consumers towards Ideal milk, respondents were asked whether they
had thought of switching from Ideal milk to other substitutes, 70(36%) agreed to have
thought of switching to other substitutes whiles 126(64%) of the respondent still remain
adamant to switching to other substitutes. This is illustrated in Appendix 2.0
Another dimension of customer loyalty is recommendation and client referrals. A loyal
customer will always recommend the product to others. In order to ascertain this fact,
respondents were asked whether they would recommend Ideal milk to other people or
not. Out of 196 respondents, 159(81%) said they will recommend Ideal milk to other
people while 37(19%) were not willing to recommend Ideal milk to others.

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SECTION FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Introduction
This chapter draws conclusions from the findings of the data analysis and makes
recommendation to authorities.

5.2 Summary and conclusions


Our morning starts with breakfast, which involves using milk (carnation milk, ideal milk,
Nunu milk etc.) in preparing breakfast meals. But how often do we think of what at all a
company does to put a positive imprint in the mind of the customer and what influences a
customer to purchase a particular brand of milk.
The results of the study indicated a high frequency of Ideal milk consumption among the
respondents as a result of its usage in preparing a variety of breakfast menus. The results
of the findings also indicated that the understanding of product quality determines the
type of milk consumers buy. Out of 196 respondents, 188(96%) of them agreed to the fact
that, an understanding of product quality influences their purchase decision as to the type
of milk they purchase.
Product quality features play a vital role in the consumer decision-making process since
consumers use these features to evaluate the quality of the product and compare
competing brands. The results of the study indicated that the five features of Ideal milk
namely; nutritional value, taste, price, package and shelf-life assist consumers to evaluate
the quality of the product. Among the five features, the nutritional value of Ideal milk
stood out as the most important feature that determines its quality as indicated by
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86(43.9%) of the respondents. 56(28.6%) of the respondents indicated that the good taste
of Ideal milk sets it apart from competing brands. 12.2% respondents prioritized the price
of Ideal milk, 10.2% of them use the package while only 5.1% respondents use the shelflife of ideal milk as a determinant of its quality.
The findings of the study also show that product quality will result in repeat purchases
and hence customer loyalty. Out of 196 respondents, 126(64%) of them still remain
adamant to switching to other substitutes even though the price of ideal milk is expensive
and 159(81%) of the respondents said they will recommend Ideal milk to other people.

5. 3 Recommendations
The results of this study set out to provide evidence that product quality has the potential
to impact and influence the purchase decision of consumers. The results indicated that,
taste, price, packaging, nutritional value and shelf-life were obvious product features that
were proved to have an effect on consumers purchase decision. Therefore, these product
features should be taken into consideration when developing consumables for the
Ghanaian market.
Nestle Ghana Limited should continue to maintain the unique product features of Ideal
milk as majority of their customers perceive Ideal milk as a product of high quality in
terms of taste and nutritional value in order to increase their customer base in the
Ghanaian market.
Moreover, companies should be cautious of the uniqueness of their products to gain
competitive advantage over their competitors. Much attention should be paid to the taste,
packaging, convenience, price and other features relevant to make a product distinct from

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its substitutes. Organizations must use product quality features to differentiate between
their product and that of the competitors and also develop a positioning strategy based on
unique and relevant product features.
An advertising strategy can also be drafted based on product quality features where the
marketer can either promote one feature, two or even three product features to further
differentiate his product from other competing products.

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REFERENCES
Aaker, D. A., (1991). Managing Brand Equity: Capitalizing on Value of a Brand Name.
The Free Press, New York.
Avery, C. & Zabel, D. (1997). The Quality Management Sourcebook: An International
Guide to Materials and Resources. New York: Routledge.
Blackwell, R. D., Miniard P. W. & Engel, J. F. (2001). Consumer behavior, Ohio: SouthWestern. The Dryden Press.
Forney, J. C., Pelton, W., Caton, S. T. & Rabolt, N. J. (1999). Country of origin and
evaluative criteria: Influences on women's apparel purchase decisions. Journal of Family
and Consumer Sciences, 91(4), 57-62.
Hawkins, B., & Coney, K. A. (1992). Consumer behaviour. Implications for marketing
strategy. (5th Ed.) Boston: Irwin.
Kotler, P. (1991). Marketing decision making. Harper and Row Publishers
Morwitz, V.G. & Schmittlein, D. (1992) Using segmentation to improve sales forecasts
based on purchase intent: which intenders actually buy? Journal of Marketing Research,
29, 391405.
Nowlis, S. M. & Simonson, I. (1996).The Effect of New Product Features on Brand
Choice. Journal of Marketing Research. 33, 36-46.
Peter, J. P., & Olsen, J. C. (1994). Understanding consumer Behavior. (3rd Ed.) Boston:
Irwin.
Steenkamp, J. B. E. M. (1990). Conceptual Model of the Quality Perception Process.
Journal of Business Research. 21: 309-333.

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APPENDICES
Appendix 1.0
UNIVERSITY OF PROFESSIONAL STUDIES, ACCRA.
A questionnaire administered to determine the effects of product quality on consumer
purchase decision using ideal milk, a product of nestle Ghana limited.
This questionnaire is confidential to the respondents chosen for this research. Please fill
with all sincerity. Thanks.
1.
2.
3.
4.
5.

Gender
A. Male
b. female
Age of respondent
a. 16-20 b. 21 -25 c. 26-30 d. 31 and above.
Occupation of respondent
a. Student
b. Worker
Do you purchase ideal milk? a. yes
b. no
How often do you consume ideal milk?
a. Daily b. Weekly
c. Monthly d. other (specify)
6. My understanding of product quality influences the type of milk I buy.
a. Strongly agree b. agree c. uncertain d. disagree
e. strongly disagree
7. What features do you use to evaluate the quality of ideal milk?
a. Nutritional value b. Taste
c. Price
d. Package
e. Shelf life
8. Ideal milk is known for higher nutritional value and good taste than its substitutes
(Carnation milk, Nunu milk, Pomo milk and others)
a. Strongly agree b. agree
c. neutral
d. disagree
e. strongly disagree
9. The price of Ideal milk is quiet expensive as compared to its substitutes in Ghana. Do you
agree?
a. Yes b. no
10. If yes, why do you still prefer Ideal milk to its substitutes since they all serve the same
purpose?

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11. How satisfied are you with ideal milk after usage?
a. Highly satisfied b. satisfied
c. neutral
d. not satisfied
12. Have you ever thought of switching from Ideal milk to other substitutes (Carnation milk,
Pomo milk, Nunu milk and others)?
13. Why?

A. Yes

b. No

14. Will you recommend Ideal milk to anyone? A. Yes


b. No
15. Any recommendations on Ideal milk, a product of Nestle Ghana Limited?

Appendix 2. 0
switching from Ideal milk to other substitutes

yes; 70; 36%

no; 126; 64%

yes

no

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Source: field survey

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