THE BRAND EQUITY APROACH TO MARKETING OF MALAYSIAN PALM PRODUCTS

B. Kamaleswari

Bachelor of Applied Sciences (Biotechnology) Universiti Sains Malaysia 2000

Submitted to the Faculty of Business and Accountancy, University of Malaya, in partial fulfillment of the requirement for the Degree of Master of Business Administration June 2009

“Branding adds spirit and a soul to what would otherwise be a robotic, automated, generic price –value proposition. If branding is ultimately about the creation of human meaning, it follows logically that is the humans who must ultimately provide it “– David Aaker

2

(ABSTRACT)

Commodity business needs to tap onto the benefits of using branding as a driver to differentiate its business and survive in the B2B sector, allowing firms to gain substantial competitive advantage. The palm oil industry exporters need to begin the process by identifying and managing, in a more systematic and structured way, the associations that contribute to brand equity, which are critical to enhancing brand value. This study will approach to measure brand equity, using a model to help evaluate core elements required for firms to strategize their brand management strategies.

3

1 Brand Building Model 3.1.6 Palm oil demand 2.1.2.1.3 Significance of study 1.2 Challenges in corporate branding 3.5 Oils and fats trade 2.8 Trends and issues concerning palm industry 2.1.1 Oil palm (Tenera) basic facts 2.4.3 Brand asset management 3.2.8.1.6 Organization of the study CHAPTER 2 MALAYSIAN PALM INDUSTRY 2.1 Brand equity models and its measurement 3.4 Production cost of palm oil 2.1.3 Palm oil and blood cholesterol controversy CHAPTER 3 BRAND AND BRAND EQUITY 3.3 Differences between product and Corporate branding 3.8.1 Branding by Malaysian companies 1.2 Product branding 3.2.1 History 2.TABLE OF CONTENTS PAGE CHAPTER 1 INTRODUCTION 1.3.7 Malaysian palm oil prices and sales mechanism 2.3.1.1.1 Environmental and cultural impact 2.3.2 Objective of study 1.3.2.3 Food uses of palm oil and its downstream products 2.3 CBBE model 3.1 Corporate Branding 3.2 Palm oil as bio-diesel 2.3.1 Malaysian palm oil industry and branding strategy 1.4 Product branding strategy by Malaysian palm oil 3.1.5 Limitations of study 1.4 Customer based industrial brand equity 3.2 Infrastructure of the Malaysian oil palm industry 2.8.2 Aaker‟s and Keller‟s model to brand equity 3.1.1 Antecedents of brand equity 9 10 11 12 14 15 16 18 20 24 27 29 31 35 36 39 40 41 43 46 48 49 50 51 53 55 59 62 63 4 .1.1.4 Scope of study 1.

2 Research method and design 4.1 Hypotheses and conceptual framework 4.3.4.2 Questionnaire design 4.4.3 Data gathering method 4.5.3 Descriptive analysis on brand equity attributes 5.4 Brand associations 3.1 Brand Origin 6.4.3.7 Summary CHAPTER 6 6 CONCLUSIONS.3.2 Implication of study 6.1 Summary of brand equity model for Malaysian palm oil products 65 69 71 CHAPTER 4 4 RESEARCH METHODOLOGY 4.3 Perceived quality 3.2 Brand loyalty 3.1 Brand awareness 3.4 Conclusion REFERENCES Appendix 1: Major players in the Malaysian palm oil supply chain Appendix 2: Questionnaire Appendix 3: Data Analysis 73 77 85 86 87 91 97 101 102 102 104 107 109 110 111 5 .4 Data analysis technique 4.4 Normality test of data 5.6 Hypothesis Testing 5.2.2 Product Uniqueness 6.3 Malaysian palm oil brand equity in different geography 6.2.1 Research and statistical analysis on brand equity approach 4. RECOMMENDATIONS 6.2 Profile of Malaysian palm product purchasers 5.5 Coefficient 5.5 Summary CHAPTER 5 5 RESEARCH FINDINGS 5.4 Dimensions of customer based brand equity 3.1 Demographic data of respondents 5.4.3 Recommendations for future research 6.3.5 Summary of MPOC Strategic Plan 3.1 Discussion of research results 6.

1: From Brand Assets to Brand Equity Figure 3.2: Brand asset management process Figure 3.3: Brand Equity Figure 4.1: The relationship between brand equity and overall satisfaction of Malaysian palm products 24 26 31 34 35 36 37 48 58 61 76 106 6 .1: Conceptual Framework Figure 5.1: Summary of the supply chain in exporting of Malaysian palm products Figure 2.7: Malaysia's share of the global oils and fats trade Figure 3.2 : Location and breakdown of Malaysian palm plantation Figure 2.4: World Production of oils and fats Figure 2.3: Non-food application of palm products Figure 2.5: World exports of oils and fats Figure 2.1: Palm oil & palm kernel oil processing flow chart Figure 2.List of Figures Page 16 Figure 1.6: World consumption of oils and fats Figure 2.

6: Costs of production (selected oils and fats) Table 3.5: Food uses of palm products Table 2. adapted from prior research Table 5.2: Oil palm yield compared to other major oils Table 2.1: Demographic profile of respondents Table 5.1: Basic information on oil palm Table 2.4: Summary of industry segments and companies Table 2.2: Results of factor analysis.4: Questions developed for questionnaire.2: Corporate Branding versus Product Branding Table 3.4: Descriptive analysis on brand equity attributes Table 5.3: Overall brand equity and overall satisfaction scale Table 4. loading and statements.1: Reliability comparison of two brand equity scales Table 4.5: Descriptive analysis on overall brand equity attributes and overall satisfaction Page 22 23 27 28 30 33 47 52 56 66 70 78 79 81 84 90 92 94 99 100 7 .3 : Profile of Malaysian palm product purchasers Table 5.List of Tables Table 2.5: Perception versus Reality Table 4.3: Number of palm oil mills. factors. variances.4: Summary of Brand equity dimension from Aaker and Keller models Table 3.3: The shift from traditional Brand Asset Management Table 3.1: The functions of the brand for the consumer Table 3.2: Country – Malaysian palm product purchaser by country Table 5. refineries. adapted from Atilgan (2005) Table 4. oleo-chemicals plants and kernels crushers in Malaysian (2001) Table 2.

8: Summary of correlations of variables Table 5.7: Coefficient Table 5.Table 5.9: Summary of correlation for brand equity and overall satisfaction 101 102 103 104 8 .6: Summary of analysis Table 5.

Brand managers need to understand how brands influence consumer 9 . it influences consumer behavior. their goal was to make running shoes for athletes. not create a global brand empire. On the demand side. strong brands can attract better talent. Brand management underlines the fact that brands are not born as brands. and even reduce the cost of capital.CHAPTER 1 INTRODUCTION Brand creates value by shifting both the demand and supply curves. influence terms of trade. but they are born as commodities. For example. when Bill Bowerman and Phil Knight each chipped in dollars 550 to set up Nike. In 1962. The ability to optimize brand equity also requires prioritizing those associations based on their impact on the brand and the business. increased loyalty and willingness to pay a price premium. A critical starting point towards better leveraging brand equity requires understanding what associations contribute to it and how those associations tie back to business results. On the supply side. not a global brand named Cocacola. John Pemberton set out to create a common tonic. leading to greater trial. improved frequency of use. and then managing them aggressively across all customer touchpoints. more than a century ago.

Companies that can master the science and art of branding stand in good stead to improve shareholder value. If Malaysia wishes to compete effectively in the global economy. indicates Malaysia‟s 50 largest brands and brand portfolio are worth MYR 64. Singapore‟s top 50 brands amounts to S$36. 1. since brands represent a sizeable portion of intangible assets. 10 .1 Branding by Malaysian companies Brands.4 billion).6 billion). indicating the enterprise values and trademark values.8 million (USD 19.perceptions and behavior in order to develop strategies that optimize market performance and brand value. benchmarking companies listed in the Kuala Lumpur stock exchange. In Malaysia. Findings by Brand Finance report (2008).2 (USD 25 billion) and Australia‟s Top brands accounts for A$80 billion (USD 69. Comparatively. 2008).3 billion. which is rapidly shifting towards knowledge-based activities. PETRONAS Group has the most valuable brand portfolio of all listed Bursa Malaysia companies. branding and brand management are amongst the most frequently discussed topics in the boardroom and business schools. Brand Finance report also lists 50 top brands in Malaysia. with a brand value of MYR 8. it has to step up efforts to recognize and invest in intangible assets (Brand Finance.

There were only three oil palm based companies listed on the 50 top-brands list.1 Malaysian palm oil industry and branding strategy The Malaysian palm oil industry. changes in regulations on import and export. which are Sime Darby Berhad (ranked number six). but there is evidence Malaysian palm oil companies in the agri-business sector. This report may not clearly state the case. oilseeds demand and 11 . about 30 percent has been sold and are being commercially exploited (Basiron. the Malaysian Palm oil Council (MPOC) has been instrumental in opening up new markets to export palm products. 2005). through branding or trademark activities. It is important for the palm oil players to have price stability in the market place. refiners and exporters in closely monitoring business changes. has gone through several ups and downs. Both bodies work together with plantation. and remains very resilient and will remain the darling of the plantations industry. price fluctuations is influenced by palm oil supply. facing international challenges and has emerged as the world leader in palm oil research and development. Whilst. In the case of downstream products. millers. do not have primary focus on building the intangible asset. IOI Corporation Bhd (ranked number thirteen) and Kuala Lumpur Kepong Bhd (ranked number twenty six). The Malaysian Palm oil Board (MPOB) has been in the forefront when it concerns developing new products based on palm oil. MPOB has registered more than 200 patents. 1. Malaysian palm products are competing with almost 20 types of oils and fats globally.1.

Countries like Indonesia and Thailand may have more oil palm acreage than us. helped in establishing the following objectives for this study. Combining successful R&D background. reputation as pioneer marketer in palm based products. speculative activities but also global economic outlook. 1. 2005). Earlier. adding value into downstream palm products should provide a suitable formula into creating brand equity for palm products exported out of Malaysia. In order to have sustainable pricing for products. Despite existing interests in the area of branding. Buyers view Malaysia as a reliable supplier of palm oil products. The ‟Brand Malaysia‟ concept is applicable to palm oil as it is an important export commodity and is expected that Malaysian palm oil will be differentiated into a better „brand‟ to continue attracting customers (Basiron.2 OBJECTIVES of STUDY A critical understanding for the need of branding for Malaysian palm products. 2005).supply. the industry may consider strategizing marketing activities to achieve higher brand consciousness. 2007).  To identify brand equity for Malaysian palm products 12 . Malaysian has lost market leadership with natural rubber and should not let it happen to palm oil (News Straits Times. but leadership in downstream research product innovation is far harder for the competition to emulate (News Straits Times. existing literature on brand equity relating the Malaysian palm oil industry is still sparse.

strong brand demonstrates benefits of price premiums and market share leadership that drive company bottom line. Since any differentiated product or service can be given a proper name to signal its particular characteristics. 13 .3 SIGNIFICANCE of STUDY Branding is applicable to all categories and industries. because any product or service can be differentiated. in rigorous and structured way. The challenge lies in understanding how brand strategy enhances and enables business strategy (Micheal Leiser. To analyze and identify the core brand equity element. from customer experience. branding is possible for Malaysian palm products. crucial to enhancing both the brand‟s value and its financial impact on business. this allows the organization to leverage the brand‟s most business relevant aspects better to help drive improved financial performance. A good starting point is a better understanding of brand equity and how it drives brand value. The value of treating brands as assets and managing them as such is obvious. contributing to brand equity  To search for a suitable model to measure and evaluate brand equity for Malaysian palm products  To test a suitable model to measure and evaluate brand equity for Malaysian palm products 1. even applies to commodities. In turn. 2003).

At the end of the study. as it affects 90% of Malaysia‟s palm oil business. its competitors and the category. The ability to optimize brand equity also requires prioritizing those associations based on their impact on the brand and the business. but more importantly those which are owned by the brand and critical to a customer‟s purchase decision. which is export based and mainly sold to industrial food manufacturers and distributors. This sort of intelligence paves the way for more informed business decisions involving everything from traditional marketing communications to new product development.Qualitative and quantitative research would enable palm product exporters to uncover those associations which are not only most closely aligned with the brand itself. it is hoped that the significance of brand equity will be well understood by downstream manufacturers in palm industry. Product attributes are strengthen through these promotional programs 14 . this study will justify the reason for downstream palm manufacturer to re-look at how they should create or enhance brand equity for a particular product line. to develop future strategies to marketing and branding. This study should close the gap on brand equity definition specific to Malaysian palm products and its primary antecedents. It is hoped that. MPOB and MPOC has already developed strong international promotional strategies focusing on the product attributes and benefits of Malaysian palm products. and then managing them aggressively across all customer touch-points.

These respondents are redistributing or using directly palm products as semi-finished or finished products. 1. distributors and traders of Malaysian palm products. shows the relations of the respondents. Figure 1. based on four antecedents of brand equity. The customer based equity model used will focus on industrial buyers and distributors. whom are also exporters of Malaysian palm products. located in Europe.to counter negative publicity on Malaysian palm oil. Respondents will evaluate “Malaysian Palm Products”.4 SCOPE OF STUDY This study focuses on few key players in the Malaysian oil palm industry. to assess Malaysian palm product brand equity.1. With further understanding on brand equity elements. hopefully non-governmental organizations and private organizations. will be able to develop promotional and marketing programs for Malaysian palm products to create strong international brands. The downstream players encompass manufacturers. Target respondents for this study are industrial manufacturers of food products. whom are part of this study and their role in process of exporting Malaysian palm products. The objective of these marketing program should be focused more on building brands and not just reacting or countering negative publicity to Malaysian palm products. derived from Aaker (1991) brand equity model. Central Asia and the Middle East. 15 .

1 Summary of the supply chain in exporting of Malaysian palm products. This enables both the tangible and the higher order intangible associations with the brand to be better leveraged and managed. PROCESSED. 1. this study is organized in the following manner: 16 . identifying the key dimensions of brand equity.6 ORGANIZATION OF THE STUDY To accomplish the above stated goals. The focus must shift to those that have real impact and draw correlations between strategic brand drivers and business outcomes. 1.5 LIMITATIONS OF STUDY The challenge marketers face is. But the profiling process must be moved beyond the expansive cataloging of a brand‟s associations.CRUDE MALAYSIAN PALM OIL REFINED. CENTRAL ASIA and MIDDLE EAST MANUFACTURERS OR DISTRIBUTORS Figure 1. profiling their brand against these dimensions and then modeling the core strategies brand drivers. PACKED in MALAYSIAN (downstream industry) MALAYSIAN PALM PRODUCTS (downstream products) IMPORTERS in EUROPE.

Since the industry is developing at a rapid pace. The 17 . The works of MPOB and MPOC relating to branding is also examined. formulates the problem and objectives of the study and discusses the research method adapted. in the area of conceptualization and measurement of customer based brand equity. as well as the research approach adapted in the study and the type of secondary data collected. The main focus of this chapter is to identify the brand equity model and its application for this study.Introduction to Malaysian Palm Industry In chapter two. Chapter Three – Literature Review on branding and brand equity This chapter examines the definitions relating to branding and brand equity. The focus of this chapter includes the main players in the industry and Malaysian palm product competitions. Chapter Two .Chapter One – Introduction This chapter sketches the background of the study. The relationship among the variable are tested to determine. the background of Malaysian palm industry is explained. this chapter is based on information gathered until April 2009.Research Methodology The marketing research process is discussed in this chapter. Chapter Four . key factors that build brand equity for Malaysian palm based products.

recommendations are made and areas of future research will also be discussed. which leads to the hypothesis testing. 18 . conclusions are drawn. The findings will refer to the profile of the respondents and the brand equity dimensions examined in the survey.respondents will be tested on the elements or dimensions of brand equity to understand factors that influence customer decision process. Chapter Six – Conclusion and Recommendations The findings in Chapter five are interpreted. Chapter Five – Research Findings The findings of the empirical research are presented in this chapter.

the Malaysian palm industry is the pride of the country. 19 . It has been consumed as food. as well as provide economic and technical advisory services. from as long as 5000 years ago and today is found in one out of every ten food products worldwide.CHAPTER 2 MALAYSIAN PALM INDUSTRY Palm oil is one of the 17 major oils traded in the global edible oils and fats market. As one of the worlds largest producers and exporters of palm oil and its products. The oil palm industry has been the backbone of Malaysia‟s social and economic development. contributing about RM 3. offer more products as well as increase its share of the global oils and fats market. The Malaysian palm oil industry is basically export-oriented owing to the country‟s small population base. the industry is one of the top earners for the country. Since more than 90% of its production is exported. promotions and marketing.18 billion in foreign exchange in 2006. under which two agencies are responsible for its progress and promotion – the Malaysian Palm Oil Board (MPOB) and the Malaysian Palm Oil Council (MPOC). These agencies undertake R&D. but also provided employment to more than half a million Malaysians. This industry has not only improved the living standards of farmers. This is done to ensure that the industry will continually achieve higher yields. This sector is under the Ministry of Plantations Industries and Commodities. regulatory and enforcement functions.

As no palm oil was ever produced in the country. Hazard Analysis & Critical Control Points (HACCP). plantation. the evidence implied that the oil was traded during the time of the Pharaohs. Oil palm originated from West Africa in a belt from Angola to Senegal. Labour Law. The oil palm industry is closely linked to its sister industry – the oleochemical sector – represented by the Malaysian Oleochemicals Manufacturers‟ Group (MOMG). the industry is subject to several laws and regulations. Environmental Quality (Clean Air) Regulations 1978. milling and refining.1 History Archaeological evidence on palm oil consumption was found in an Egyptian tomb in Abydos. Workers‟ Minimum Standard of Housing and Amenities Act. Protection of Wildlife Act 1972. The Refiners‟ Association of Malaysia (PORAM).The industry can be divided into three levels. Pesticides Act 1974 (Pesticides Registration) Rules 1976. To ensure that all the activities do not pose problems. making it one of the most regulated industries in the world. represented by their respective association(s) to coordinate mutual and separate interests. which is about 5000 years ago. and Occupational Safety and Health Act 1977. The Malaysian Palm Oil Association (MPOA) represents the planters or growers and the Federation of Palm oil Miller‟s Associations of Malaysia (POMA) speaks for the millers. 2. The Portuguese discovered the crop during their expeditions to West Africa in 20 . Some of the laws and regulations include the Land Acquisition Act 1960.

A principal agent of this development was the government‟s Federal Land Development Agency (Felda) which undertook forest clearance and settling of smallholders. Henri Fauconnier planted the palm for its oil at Tennamaran Estate in Batang Berjuntai. Oil palm was introduced to the peninsula of Malaysia. basic facts The oil palm first planted in Tennamaran Estate was Dura – the fruit type with a thick shell. Selangor. but it is largely female sterile and produces very few bunches. including the downstream sectors. In practise. the less would be the oil bearing mesocarp and less the oil yield. Pisifera should be planted. 21 .1 Oil palm (Tenera). In 1917.000 people. the thicker the shell. There are two other fruit types – Pisifera with no shell and Tenera with a thinner shell.15th century. Tenera is planted as a compromise. Obviously. 2. and palm oil later became a basic part of the food on board of slave ships. employs 860. as an ornamental plant by the British in the 1870s. which was used at the time to make candles and lubricants for machines. At that time. both directly and indirectly. The industrial revolution created a much larger demand for palm oil. the principal export crop at that time.1. the Malaysian oil palm industry as a whole. Currently. Malaysia. then Malaya. the genetics of shell type was not known. Ideally. Oil palm‟s economic potential was first realized in the 1960s when the Malaysian government embarked on a poverty eradication program through agricultural diversification by planting this crop and to diversify significantly away from rubber.

e Dura x Pisifera Table 2. of bunches produced per palm Average weight of bunch No. and annual rainfall of almost 2000mm that is evenly distributed. of fronds produced per year Average length of frond Leaf colour Colour of ripe fruit Nursery period 1st harvesting Harvesting cycle No. ample sunshine. palm oil from mesocarp and palm kernel oil from the kernel. The oil palm is more productive than other oil-bearing crops and Malaysian oil palm currently 22 . is ideal for the cultivation of oil palm. of fruits per bunch Shape of bunch Fruit size (1 x b) Fruit weight Kernel content Oil extraction rate Palm oil yield Planting density Economic lifespan Source: MPOC (1995) West Africa ~ 60cm/year ~ 60cm ~ 24cm 3 – 4m Green Usually yellowish red 12 – 18 months ~ 30 months after planting 2 – 3 weeks 10-15 per year 10 – 20kg 1000 . Unlike other oil-bearing crops.1: Basic information on oil palm Origin Average height increment (present palms) Trunk diameter No.but it was later discovered that Tenera is just a hybrid between Dura and Pisifera i. the oil palm is unique crop in producing two oils from its fruit.3000 Round or oval 5cm x 2cm ~ 10g 3-8 % per fruitlet 20% ~ 4 tonnes/ha/year 136 – 160 palms/ha 20 – 30 years field Malaysia‟s humid tropical climate with a temperature range of 24 to 32 deg Celsius throughout the year.

yields an average 3. An oil palm usually bear fruits from 30 months after field planting. it can be harvested round the year throughout its long productive lifespan (usually 25-30 years). which is 7 and 2. This ensures that the supply of palm oil is uninterrupted and oil palm remains the most efficient oil-bearing crop in the world.5 times more than soybean and rapeseed respectively.66t/ha of oil per year. Being a perennial crop. Table 2.2: Oil palm yield compared to other major oils 23 .

Figure 2.1: Palm oil and palm kernel oil processing flow chart Source: MPOB 24 .

RBD palm oil is obtained. However in the mid 1970s. In the 1960s and early 1970s. 2.Figure 2.1 illustrates the process of collecting fresh fruit bunches (FFB) and milling the FFB at the mills to extract crude palm oil (CPO). it encourages wider use in a range of end-products. Its fast expanding production has to find markets overseas as there was no way the domestic market could absorb the exponential growth in production. hence resulting in about 90 percent of export of Malaysian palm products. both in the food and non-food sectors. After refining of CPO. Further blending and packing of these oils produces various types of downstream products. likewise for palm kernel (the inner shell). RBD palm kernel is obtained. in line with the industrialization policy of the government. The refining process will further remove unwanted residue from CPO and result in production of Refined Bleached Deodorized Palm oil (RBD Palm Oil) which is fit for human consumption. The RBD oils are products of downstream processing. The CPO is then transported to a local refinery for refining process.2 Infrastructure of the Malaysian oil palm industry Palm oil is known to be versatile and due to its technically superior properties. Malaysia is relatively a small population and is unable to consume all the quantity processed locally.1. the country undertook a bold step towards greater value addition by making palm oil products available in various fractions and refined 25 . Malaysia has led the world in supplying crude palm oil (CPO). A refiner or manufacturer will then export these products to various users.

Figure 2. Currently. able to process 16.forms to meet the specific needs of the market.4 million tonnes of kernels.34 million tonnes of CPO and 4. the refining sector in Malaysia is well established with 47 refineries and 36 kernel crushers in operation.24billion tonnes and 11 kernel crushers (42 million tonnes capacity) are still under planning to cater for expected increase in CPO and kernel in the future. Ten other refineries with a combined capacity of 3.2: Location and breakdown of Malaysian palm plantations 26 . The export of CPO fell inversely to the rising export of processed palm oil from mid 1970s.

MPOC. whom can be classified into 7 major categories. MPOB. MOMG) vii) Customers (Consumers) (local and export-oriented customers) This study focuses on two major players in the industry. 312. whom are manufacturers and distributors. 957. 720 46 15. the primary focus is on importers of Malaysian palm based products.Table 2. Customers consist of institutional buyers. laboratory. unions. Among producers of specialized oils and fats. the downstream producers and export based customers. 479. distributors and traders) iv) Government Agencies (PORAM. Other producers 27 . oleo-chemical plants and kernel crushers in Malaysia (tabulated as at 2001) Palm kernel crushers in operation Number Capacity Number Capacity Number Capacity Number Capacity (tonnes/yr) (tonnes/yr) (tonnes/yr) (tonnes/yr) 352 67.744.3: Number of palm oil mills. refineries. 400 17 1. NGOs) vi) Industry Organizations (MPOA. 100 Mills In Operation Refineries In Operation Oleochemical Plants in operation Source: MPOB The Malaysian palm industry consist of few major players. 509 38 4. i) Upstream Producers (plantation and mills) ii) Downstream Producers (refiners and manufacturers) iii) Exporters / importers (buyers. In the context of this study. FELDA) v) Other players/ Support Industry (Certification body. IOI Corporation Berhad is set to be one of the major player following its acquisition of Loders Croklaan BV.

United Plantations Berhad.include PPB Oil Palms Berhad. a subsidiary of IOI Corporation Berhad.4: Summary of industry segments and companies in these segments PLANTATION (UPSTREAM) Felda PPB Oil Palm Bhd Sime Darby (Synergy Drive) United Plantations Berhad Kuok Oils IOI Plantations Kwantas REFINING AND PACKING (DOWNSTREAM) Lam Soon (M) Berhad Intercontinental Speciality Fats (ISF) Mewah Oleo Industries Cargill Palm Products Sdn Bhd Southern Edible Oil Industries IOI Corporation Berhad (acquired Loders Croklaan) 28 . a subsidiary of KL Kepong Berhad an Southern Acids (M) Berhad Table 2. Sime Darby Berhad. Other local major producers are Palm-Oleo Sdn Bhd. Intercontinental Specialty Fats Berhad. Southern Edible Oil Industries (M) Sdn Bhd and Cargill Speciality Oils and Fats Sdn Bhd. FPG Oleochemicals Sdn Bhd. Cognis Oleochemicals Sdn Bhd (joint venture company between Cognis Oleochemicals of Germany and Golden Hope Plantations Berhad). The largest and most intergrated producer of olechemicals in Malaysia is Palmco Holdings Berhad. Multinationals have a presence in the oleochemical sector through associate or subsidiary companies such as Akzo & Nobel Oleochemical Sdn Bhd.

shortenings.3 Food uses of palm oil and its downstream products The four main traditional uses of palm oil in food products are for cooking or frying.5 and non-food application in Figure 2. such as resistance to oxidation. Palm oil is the most versatile oil due to its various food applications without or with only minimal modification. Palm oil is ideally suited for use as an ingredient in shortenings and margarines as it has 20-22 percent solid fat content at 20° C which helps in the formulation of fat products with a variable range of consistency. super olein.2. which contributes towards a longer shelf-life of end products. as well as in non-food products such as oleochemicals. which are used in various food products. it can be fractionated to produce downstream products such as olein. and palm mid fraction. margarines and confectionary fats.1.3 29 . Being semi-solid at room temperature. soaps and biodiesel. Palm oil has many of the required characteristics suitable for food applications. stearin. It offers several technical characteristics desirable in food applications. Palm oil is popularly used in both solid fat products as well as liquid form as cooking oil sector especially for industrial frying applications. summarized in Table 2.

5: Food uses of palm products 30 .Table 2.

palm oil cost of production survey. Being the most productive oil 31 .Figure 2.4 Production cost of palm oil Malaysia (PORLA) had jointly Since 1998. but now known as the Malaysian Palm Oil Board (MPOB).3: Non-food applications of palm products 2. Palm Oil Research Institute of embarked on an annual palm oil cost of production survey aimed at estimating the national palm oil cost of production. Market forces have been and will continue to propel investments in Malaysia and Indonesia. The work has continued since then. two palm oil producing countries.1.

producing 5-10 times more oil per hectare compared to other oils and fats crops. The cost to produce a tonne of palm oil either in Malaysian or Indonesia. so oil palm has shown to have highest economic advantage. It is two times more expansive for farmers in Europe to produce rapeseed oil (USD400/tonne) and it costs USD 459. As the world economy liberalizes under the aegis of WTO. 32 . palm oil in Malaysia is expected to position itself in the next 15 years by leveraging on its inherent advantage through better planting materials and management practices. it is envisaged that the reduction and eventual dismantling of domestic farm support and other trade barriers will gradually eliminate inefficient producers.90 to produce one tonne of soybean oil in USA. is cheaper (compared to oils from the annuals in the temperate countries) because of the relatively cheaper factors of production. Indonesia for instance. Nevertheless.5 tonnes of oil per hectare.bearing crop with a world average yield of 3. managed to produce palm oil at USD 165 per tonne and Malaysia at a cost of USD 239 per tonne.

by overtaking the production of soybean oil about 0.60 227.60 228.5 Oils and Fats Trade Palm oil and palm kernel oil contributed the highest percentage (28 percent) of the total global production of oils and fats in 2006. The four–decade performance of world palm oil is commendable and it is projected. world output of palm oil is expected to set a historic milestone in 2015. the production of palm oil was only 1. 33 .1.30 2.23 million tonnes compared to 3. Four decades ago. The production share of palm oil was only 4 percent against 11 percent for soybean oil and 39 percent of animal fats back then.20 292.80 459.20 215. 2005).90 249.43 million tonnes of soybean oil and 12 million tonnes of animal oil.60 400.Table 2. With continued expansion and higher yield. this track record will continue into the future.20 239.30 400.6: Costs of production for selected oils from major producing counries Country Indonesia Malaysia Colombia PNG USA Canada EU China Argentina Brazil Source: LMC(2001) Oil Palm Palm Palm Palm Soybean Rapeseed Rapeseed Soybean Soybean Soybean USD/t 165.26 million tonnes (Basiron.

the changeover is very slow. Their production is highly elastic due to the flexibility of land usage.In the oils and fats market. Once land is locked on oil palm. it would be difficult to turn the land into other uses in the short-term. the business cycle is very pronounced due to the annual crop component of the oil-bearing crops such as soybeans. When prices are high. therefore constant supply of palm oil is available. Figure 2. sunflower seed.4: World production of oils and fats 34 . rapeseed. farmers tend to reallocate their land resource to the oil crops rather than grains. and with oil palm. peanuts and etc.

5: World exports of oils and fats 35 .2) Palm oil and palm kernel oil were the most traded oils in the global oils and fats market with a market share of 56 percent in 2006 Figure 2.

palm oil and palm kernel oil constituted the highest percentage (27 percent) of the total.6: World consumption of oils and fats 36 .26 million tonnes of oils and fats consumed in 2006. Figure 2.3) Of the total 148.

it is more likely that they will continue 37 .6 Palm oil demand Macroeconomic factors such as growth in population and disposable income will continue to affect the demand for food items including palm oil.7: Malaysian Share of Global Oils and Fats Trade 2.1.4) A comparison of annual exports of palm oil between Malaysia and other exporters from 2002 -2006 (million tonnes) Figure 2. India and Pakistan. Although. The population increases will occur in Asia in particular China. Asia is also experiencing income growth which is propelling the world economy. some major palm oil importing countries such as China and India will continue to pursue self sufficiency in edible oil supply.

to be dependent on import to meet their edible oil deficits. Palm oil has the potentials to bridge the demand deficits. Palm oil will the most preferred edible oil of the world, with expected consumption of 43.2million tonnes in 2020 compared to 41 million tonnes soybean oil (Basiron, 2005) Animals fats which used to be the main source of vegetable oil supply in the past is expected to lose a lot of its market share by 2020. Over the past 40 years, animal fats consumption has declined by 0.86 percent per annum because of consumer concerns over its health effects.

The combined use of oils and fats as bio-fuels is likely to be around 13 million tonnes next year, up from around 9.0 million tonnes in 2005, an increase of more that 40 percent. By December 2007, the total global capacity to make bio-fuels could reach around 20 million tonnes. Though this capacity may not be fully utilized immediately, the world‟s crude oil production has already peaked and demand for bio-fuels has only just begun. Global population is increasing by 74 million annually, an important factor leading to higher demand for vegetable oils to cook food. After accounting both fuel and food requirements, demand for oils and fats is expected to rise by 8.6 million tonnes in the year to September 2007, while production may gain 6.5 million tonnes.

38

2.1.7

Malaysian palm oil prices and sales mechanism

All oil buyers know that the price of oils and fats is decided by the law of supply and demand. With very few exceptions, oils and fats are interchangeable or can easily be made so. Users of oils and fats all over the world acknowledge that palm oil and its fractions, always offer the best value for money. There are two major basic factors that will determine the direction of the price movements, which are:

1) Fundamental Factor 2) Technical Factor 2.1.7.1 Fundamental Factor

This is the most important basic factor that will influence the price

of

commodities, which consist of supply and demand element. High supplies or production of a commodity will have dampening effect on the market price and vice-versa. Very good demand or off-take of a commodity will be a boost to the market price and vice–versa. The production levels of other substitute vegetable oils such as soybean oil, sunflower oil and rapeseed oil, will have influence on palm prices.

2.1.7.2 Technical Factor

Various charts are used before a marketing strategy or decisions to purchase are made. Charts will usually show price trend in the past and will indicate future trend based on various factors and formulation. Chart reading and forecasting

39

requires specialized skill and experience and do not always guarantee right pricing decision. In an effect to maximize the accuracy of price forecasting of the commodities, both the technical factor and the fundamental factor should be used to compliment each other that could give better positive results.

2.1.7.3 Palm Oil Pricing and Sales

Due to the ever changing situational factors and conditions affecting price movements, strategy made must be very flexible in an effort to maximize the returns. Basically, there are three main sales mechanism in pricing CPO:

1) Spot Sales

Most conservative and is done based on the availability of the product from the production units at each particular time. Sales are made based on the availability of current stock level of CPO.

2) Forward Sales

This is the most dynamic and aggressive sales mechanism, which requires forecasting power in order to maximize profitability in the marketing of palm products. Before a marketing or sales decision is made on the forward selling, various factors which will influence price movement have to be carefully analyzed. Major risks are minimized by doing hedging on the Kuala Lumpur Stock Exchange (via Malaysian Derivative Exchange). Hedging is a marketing

40

millers. The Malaysian Derivative Exchange (MDEX) is used as a hedging tool for pricing futures contract. millers (crushers). plantations.1. The major players whom decide the pricing structure of the CPO are the plantations. export subsidy and tariff and non-tariff measures to protect their agricultural sector.8. agriculture is very much a proceed and subsidized sector compared to other sectors.1 Globalization and Trade Liberalization Waves Undoubtedly. inventory levels (stock level). refineries and speculators.tool whereby positions are taken on the „paper‟ market in order to minimize the loss on the physical market . the concerns over inter alia. 2.1. Short term oils and fats price movements reflect factors such as weather conditions. The main users of the futures market include the refiners. food security and support for the farming community in both developed and developing countries have led to support and subsidies both in terms of production subsidy. 1991). brokers and dealers. Crude Palm Oil Futures is the most successful commodity futures contract in Malaysia. Launched in October 1980. price changes are highly correlated with those oils and fats in general because of the considerable extent to which these products are interchangeable (Fatimah Arshad.8 Trends and issues concerning palm industry 2. In the case of palm oil. exchange rates and the price of substitutes. Hence it was 41 .

and therefore its use is 42 .1. The future holds bright for palm oil as countries are unlikely to maintain high levels of support for their local agriculture industry.only in the Uruguay rounds of multilateral trade negotiations that a serious effort was made to effectively eliminate the adverse trade distorting effects of protectionism and allow comparative advantage and production efficiency to prevail under the trade rules that are fair. hence. In the context of oils and fats complex. there are several initiatives through Free Trade Areas (FTAs) to foster greater economic co-operation.1 Environmental and cultural impact Demand for palm oil is rising and is expected to climb further. 2. These concerns continue to be addressed in the new WTO rounds of negotiations. an avenue opened to address the shortcomings of the Uruguay Rounds.8. palm oil is the only oil that is produced on a competitive basis. Aside from the WTO negotiations. Bio-diesel is promoted as a form of renewable energy that greatly reduces net emissions of carbon dioxide into atmosphere. Malaysia and other palm oil producing countries will have to leverage on the multilateral trade negotiations and FTA initiative to seek greater access for palm oil. It will be taxing on their financial resources as enhanced by agricultural reform initiated by countries such as the European Union often ends up with huge agricultural subsidies. equitable and enforceable. particularly for use in bio-diesel. The world is moving into an era of globalization and trade liberalization.

we may witness the disappearance of orang utan from the wild. This is due to the higher prices of fuel and increasing demand for alternatives sources of energy in the Western world. which will start operating middle of next year and expected to produce 100. The resulting plantations are often run by agribusiness. Rainforests are being cleared to make room for the plantations.8. thus reducing the habitat for some threatened species.1. 2.2 Palm oil as bio-diesel The Malaysian government is refocusing the use of palm oil to the production of bio-diesel to cater for the huge demands from European countries and has encouraged the building of bio-diesel plants locally.being touted as a way to decrease the impact of the greenhouse effect and also the possibility of peak oil. Orang utan experts around the world have unified to recognize that continued unsustainable development of the palm oil sector is the single greatest threat to the future of orang utan in the wild. However. there is increasing concern from the environmental an other NGOs about the social and environmental impacts of the palm oil industry. The best professional estimates state that if the industry is not regulated then within 12 years. Strong 43 . These bio-diesel plants. and locals in places such as West Papua and Kalimantan are missing out on jobs to migrant workers.000 tonnes of bio-diesel annually. such as the orang utan (or Borneo and Sumatra).

Drained peat is also at very high risk of forest fire. 44 . With the growth of emphasis on bio-diesels presenting a sustainable alternative to fossil fuels its important to recognize that these benefits are partly negated when forest is cleared to make room for bio-diesel crops such as oil palm. which causes a draining of the peat and this not only unlocks the carbon in the surface covering of trees. Malaysia intends to take advantage of the rush in finding cleaner fuels.000 to 10. South Korea and Turkey is fuelling the industry‟s growth. NGOs are now alerting the international arena. India. including drafting legislation that will make the switch mandatory. as more countries sought to reduce their reliance on mineral oil. there is still substantial clearance of tropical hardwood forest for palm oil plantations. that despite millions of hectares of land standing unplanted in Indonesia. and there is a clear record of fire being used to clear vegetation for palm oil development in Indonesia. Malaysia has already begun preparations to change from diesel to bio-fuel by 2008. Being the world‟s largest producer of crude palm oil. Furthermore.demand for bio-diesel from Europe as well as Colombia. From 2007.000 years worth of carbon locked into the ground. as the remaining unprotected lowland forest dwindles. but begins an oxidation process of the carbon in the peat reserves which can be between 5. developers are looking to peat swamp for conversions. all diesel sold in Malaysia must contain 5% palm oil.

its application for manufacturing does not require much hydrogenation.2. Monosaturated fatty acids such as oleic acid is as effective in reducing serum total and low-density lipoprotein (LDL) cholesterol levels as polyunsaturated fatty acids such as alpha-linoleic acid. palm oil has been a preferred fat due to this property for those whom are concerned about TFA. peanut oils and lard showed that palm oil actually increased the levels of good cholesterol and reduced the levels of bad cholesterol in the blood. 45 . it has been established that the primary cholesterolelevating fatty acids are the saturated fatty acids with C-12 (lauric acid).1. soybean. which are harmful to health.8. the World Health Organization in its report states there is convincing evidence that palmitic oil consumption contributes to an increased risk of developing of cardiovascular diseases. During the hydrogenation process the fatty acids in these oils are transformed into the trans fatty acids (TFAs). C-14 (myristic acid) and C-16 (palmitic acid) carbon atoms with a concomitant increase in the risk of coronary heart disease. Polyunsaturated edible oils are liquid and would need to be first “hardened” by hydrogenation in order to maintain semi-solid nature for manufacturing of food products such as margarines. vegetable ghee. A study by a group of researchers in China comparing palm. since it is semi solid in ambient. In the case of palm oil. shortenings.3 Blood Cholesterol Controversy and Trans Fat Issues For many years now. are also referred to as “ trans fat”. Currently. confectionery and bakery products. Such hydrogenation fats containing TFA. compared to oils like soybean and sunflower.

symbol.Chapter 3 BRAND AND BRAND EQUITY The American Marketing Association defines.” Brands have started becoming more than mere identifiers and have gained higher focus and 46 . intended to identify the goods or services of one seller of group sellers and to differentiate them from those competitors. This distinction is very important. they wanted to buy Kit Kat or Buitoni. brand as: a name. “Companies wished to buy a producer of chocolate or pasta. after 1980.” A brand can be an asset that does not have physical existence and the value of which cannot be determined exactly unless it becomes the subject of a specific business transaction of sale and acquisition. term. Branding and brand management can no longer be considered the exclusive domain of consumer marketing.1 Brand Building Model Kapferer (1997) mentions that before the 1980s there was a different approach towards brands. sign. in the first case firms wish to buy production capacity and in the second case they want to buy a place in the mind of the consumer.2004:1). The modern concept of branding can be applied to anything “from product and services to companies and even countries (Clifton. Kotler (2000:404) regards branding as “a major issue of product strategy”. or combination of them. 3. or design.

According to Kapferer (1997). Table 3.value in companies.” The next three are for reducing the perceived risk and the final three concern the pleasure side of brand.1. positive and prominent meaning in the minds of large number of consumers. to its logo. Kapferer (1997). Satisfaction linked to the attractiveness of the brand. To be sure of finding the same quality no mater where or when you buy the product or service To be sure of buying the best product in its category. to make sense of the offer. brand serve eight functions shown in Table 3. Satisfaction brought about through familiarity and intimacy with the brand that you have been consuming for years. To allow savings of time and energy through identical repurchasing and loyalty. to quickly identify the sough-after products. Practicality Guarantee Optimization Characterization Continuity Hedonistic Ethical Source: Adapted from Kapferer (1997) 47 . the best performer for a particular purpose. add that the value of the brand comes from the ability to gain an exclusive.1: The functions of the brand for the consumer Function Identification Consumer Benefit To be clearly seen. Satisfaction linked to the responsible behaviour of the brand in its relationship towards society. “to function as a recognized symbol in order to facilitate choice and to gain time. To have confirmation of your self-image or the image that you present to others. The first two are mechanical and concern the essence of the brand. to its communication.

Four factors combine in the mind of the consumer to determine. the level of confidence. of significance. the level of perceived compared to competitors. The development of product branding over the past 30 years is characterized by 48 . show a summary of the relationship between the different concept of brand analysis. p. and the richness and attractiveness of the images conjured up by the brand.1. liking = Brand Assets Brand added value Perceived by customers .2 Product Branding The concept of the brand can be traced back to product marketing where the role of branding and brand management has been primarily to create differentiation and preference for a product or service in the mind of the customer. whereby Kapferer‟s view of brand value is monetary and includes intangible assets. branding and brand building should focus on developing brand value.Hence. Figure 3. (Kapferer.Cost of invested capital Brand financial value (BRAND EQUITY) Source: Kapferer.1: From Brand Assets to Brand Equity Brand Awareness + Image + Perceived quality + Evocations + Familiarity.Cost of branding . the perceived value of the brand. 1997. of liking. brand awareness. Figure 3. of empathy . 1997).37 3.

Organizational values.2. which differentiates a brand. 2001). but requires a holistic approach to brand management. Following the International Corporate Identity Group‟s statement on corporate identity (van Riel and Balmer. Management and organization wide support is crucial in this process (Urde. core values and added values are the foundation of a corporate brand. 3. 1997). 49 .2003). corporate identity is interpreted as an organization‟s ethos. corporate branding draws on the traditions of product branding. A product brand is also flexible.layers of added value built around the core functionality of the product or service to create and maintain distinction in a particular market (Knox. The interaction among them form the value-creating process of the corporate brand (Urde. The increase sophistication of product branding management techniques and these refinements reflect both responses to changes in the business environment and the development of deeper insights into the nature and influence of the organizations as an intangible element in the marketing mix. allowing firms to position and appeal to different segments in different markets. The linkage between core values and corporate brand is decisive for a firm‟s brand equity and competitive position. 2003).1 Corporate Branding On the contrary. 2003). in which all members of an organization behave in accordance with the desired brand identity (Harris. aims and values that create a sense of individuality.

No single internal department can claim to control or own the brand as their internal turf. implying that the brand becomes the responsibility of the whole company. Instead. 50 . This gives companies a clear sense of direction and provides the basis for competitive advantage. changing corporate branding from a marketing-communication activity into a strategic framework. cross-functional relations. Unfortunately. led by the CEO of the organization. The creation of a corporate brand entails that branding shifts from solely being considered from a marketing discipline to a more strategic perspective. organization theory. Capitalizing on corporate branding. Companies pursuing corporate brand strategies are much more dependant on their employees delivering their brand promises than companies engaged in armlength product branding strategies (Schultz. strategy and corporate communications.3. blends thinking from diverse disciplines such as marketing.2 Challenges in Corporate Branding Corporate branding has been hailed by some as a way of circumventing the problem of escalating media costs. where different departments contribute to the building of the brand.2. all departments will have to engage in company-wide. which have to be shouldered by corporations launching new brands. this has erroneously led some organizations to treat it almost like a giant-size product brand (Schultz. 2002). 2002).

2001). Integrating corporate brand strategy is not easy task and requires that companies are able to re-think their decision-processes in ways that ensure the business is driven by corporate brand. In this case. 3. including both intangible and accepted tangible product or service elements.One of the implications of corporate branding is that the relations between branding and corporate strategy becomes much more intimate. King (1991) points out that audiences for the corporate brand go beyond customers to include all stakeholders. 51 . One of the implications of this is that corporate marketing necessitates not only a planning perspective which addresses the matching of external opportunities with core competencies. and that these audiences exercise a wider range of discriminators.3 Differences between Product and Corporate Branding One of the key differences between line and corporate branding is that the latter requires greater focus within the organization. employees need to be recognized as brand‟s ambassadors. but also considers the integration of internal activities to ensure cohesion and therefore consistency in delivery (Harris.2. Employees represent a source of customer information and action needs to be taken to ensure this is compatible with the way senior management wishes the organization to be perceived (Kennedy. 1977).

2. The attitudes and behaviour of employees play a central role in brand delivery and need to be more aware of their brand‟s values. 2002) At the levels of the firm. Use vision and culture of the whole organization explicitly as part of its uniqueness. Normally controlled by marketing department At the level of product/ services. Differentiation preference strategies and Corporate Values and Images.Corporate branding acts as a mechanism to align organizational subcultures across functional and geographic boundaries. measure and strategies. More complex and demands greater attention. normally marketing Execution Measure Market share. corporate communications and corporate culture. Table 3. The overall image of the firm is to generate brand equity at product level.2: Corporate Branding versus Product Branding Subject Method and mechanism Corporate Branding Provides management with holistic framework for conceptualizing and aligning the many different activities by which companies express who they are and what they stand for (Schultz. It is a short-term strategy and has functional approach Simpler and requires focused attention of a single department. Hatch and Schults (2001). summarizes the difference between corporate and product branding. reaches customers. enabling companies to better balance issues of global recognition and local adaptation (Shultz. Need to have coherence between internal and external dimensions. Combines corporate strategy. price differentials. customer loyalty. allowing firms to position and appeal to different segments in different markets. Employees are often regarded as executors of brand communication. differentiating firm from its competitors. It is a long-term strategy and has strategic approach. execution. 2002). price differentials. Market share. 52 . Table 3. The overall image of the firm is therefore expected to generate brand equity at corporate level Product Branding Product branding is flexible. Focuses on product uniqueness. customer loyalty. listing difference from the perspective of method.

Part of the competitive strategy of palm industry should focus upon its product differentiation. supply. palm oil is the most competitive at 79. quality functionality. Companies that produce and export. palm.3. A world competitive index for 4 major vegetable oils. 2005).4 Product Branding Strategy for Malaysian Palm Products As sophistication of customers and competitors increase. The index is based on 10 attributes. image. all players in the Malaysian palm production chain must finds ways to collaborate to meet the new challenges. customer support services. Local manufacturers already have the ingredients to start creating a suitable marketing program to brand their products.2. cost of production yield. followed by canola oil (58. A step further would be for local manufacturers to also brand their products to their consumer or industrial based buyers. Collectively the industry has to take major steps to safeguard growth and sustainability for its export based products. canola and sunflower has been developed by MPOB. assurance.69 percent).74 percent) and sunflower oil (54. in the process. R&D and subsidy (Amiruddin. soy. must find ways to achieve secured market share and able to dislodge negative campaigns against palm oil.44%. soy oil (56. Most of the world vegetable oils producers are increasingly differentiating themselves and. price.14percent). MPOC is already making plenty of effort in safeguarding the Malaysian palm industry by strategizing a brand strategy. many are repositioning their marketing strategies. 53 . Based on the index.

MPOC branding exercise comes amid allegations that South Asia palm growers are increasing through deforestation.Malaysia has to continue striving to differentiate and diversify its products to take them out of the commodity trap where the emphasis is entirely on price. 2008). safe and clean (Dato Sabri. The general message that Malaysian products should convey would be that they are sustainable. The European Union plans to put in place strict regulations on using vegetable oils for making bio-fuels. MPOC proposed the concept of „Brand Malaysia‟ is needed to ensure its credibility in the global market. MPOC released press statement on plans to start branding Malaysian palm oil with an aim to boost sales and certify that virgin forests aren‟t destroyed to grow oil palm trees (Dow Jones. a status that would only be achieved with sufficient science–based proof being at hand. marketing and branding. healthy. With continued efforts to ensure customer satisfaction through the customization of products and ensuring of food safety and quality. The target would be for Malaysian palm oil to be unquestionably accepted by its global customers to be sustainable. mentioned one possible brand name “MALAYSIA PALM”. will be factors to allow the industry to pull away from the pack. it should be differentiated from its competition through value-added products. Yusof Basiron (CEO of MPOC).2005). In the case of palm products. The adoption of sustainable palm oil practices is no longer a novelty. This brand will give an assurance that palm oil produced under this program comes 54 . Only recently. but a necessity and the good progress made should be relentlessly pursued and improved upon.

communicating it internally and externally. This becomes relevant given that the top three strategic goals for brand strategy nowadays are increasing customer loyalty. brand asset value. 55 .3 Brand Asset Management Davis (2000) defines Brand Asset Management as balanced investment approach for building the meaning of the brand. are a company‟s most valuable asset.from plantations grown on legally approved agricultural land in Malaysia.3. differentiating from the competition. and brand returns over time “ (p. 3. along with people. and leveraging it to increase brand profitability. Some of the shifts from traditional brand management to this new idea are highlighted in Table 3. 2002).12). Davis (2002) also talks about new way of managing brands and argues that brands. a logo will differentiate branded palm oil from non-branded volumes. and establishing market leadership (Davis and Dunn. Possibly. This plan is part of MPOC‟s strategic plan for 2007.

involves four phases and eleven steps.2. developing the elements of brand vision.Table 3. 56 .3: The shift from traditional Brand Asset Management Traditional Brand Management Brand management Brand managers Retention One time transactions Customer satisfaction Product-driven revenues Three-month focus Market share gains Marketing manages the brand Awareness and recall metrics Brand is driven internally Source: Davis et. which consists of a single step. al (2002) Brand Asset Management → → → → → → → → → → → Brand asset management strategy Brand champions and ambassadors Deep loyalty Lifetime relationship Customer commitment Brand-driven revenues Three-year focus Stock price gains All functional areas manage the brand Sophistication brand metrics Brand is driven externally Davis (2002) has developed the Brand Asset management process. The basic objective of this step is to clearly state what the branding efforts must do to meet corporate goals. The second phase is to determine the company‟s “Brand Picture” by understanding consumer perceptions about the brand and of competitor brands. The first phase is to develop a brand vision. as shown in Figure 3.

This phase consists of five steps. positioning the brand. 57 .This phase consists of three steps. The third phase is to develop a brand asset management strategy. and establishing a brand-based culture. Finally. the fourth phase is to support a brand asset management culture. communicating the brand‟s positioning. creating the brand‟s contract and crafting a brand-based customer model. This final phase consists of two steps. in order to determine the correct strategies for achieving goals according to the brand vision. extending the brand. determining the brand‟s image. leveraging the brand and pricing the brand. which allows for understanding how consumers act and think. creating a measure of the return on brand investment.

Developing a brand vision STEP 1 Elements of a brand vision PHASE 2 – Determining Brand Picture STEP 2 Determining brand image STEP 3 Creating brand contract STEP 4 Brand-based customer model PHASE 3 – Developing a brand asset management strategy STEP 5 Positioning the brand STEP 6 Extending the brand STEP 7 Communicating brand‟s positioning Elements of a brand vision STEP 8 Leveraging the brand STEP 9 Pricing the brand PHASE 4 – Supporting a brand management culture STEP 10 Measuring return on brand investment STEP 5 Establishing a brand-based culture 58 .2: Brand asset management process PHASE 1 .Figure 3.

They contend that for a brand to have value it must be valued by consumers.1 Brand Equity Models and its Measurement One method of assessing the success of a brand is through brand equity. definitions approach the subject from the perspective of the customer – whether it is an individual or organization.3.3. When marketing practitioners use the term “brand equity”. The customer based brand equity. or detract from its value to the customer and to the business”. referred to as “customer brand equity” to distinguish it from the asset valuation meaning. There are two perspectives to brand equity. they tend to mean brand description or brand strength. and the perceived quality attributed to the product independent of its features. Then. brand reputation. Brand equity was defined by Farquhar (1989). 3. Aaker and Joachimsthaler (2000:17) define brand equity as “brand assets and liabilities connected to the brand that add to. the intangible value.2 Aaker’s and Keller’s Model to Brand Equity Aaker (2004) refer to the elements of brand equity as brand awareness. A customer-based definition of brand 59 . brand differentiation. which is the sum of all different values people attach to the brand. Brand equity can include the monetary value. seen. and heard about the brand as a result of their experiences over time (Keller.24). brand relevance and brand loyalty. from financial value to the firm and customer-based value which comes from marketing decision-making context. the power of a brand lies in what customers have learned.3. 2003:59). as “ the added value with which a given brand name endows a product” (p. felt.

Aaker and Joachimsthaler (2000) define brand equity as brand assets linked to a brand‟s name and symbol that add to.equity is given by Keller. Among several brand equity model. a product or service. 60 .4.‟ Customer based brand equity measurement studies are constructed mainly on conceptual constructs proposed by management gurus. The success or otherwise of this process determines brand strength or the degree of brand loyalty. as „differential effect that brand knowledge has on consumer response to the marketing of that brand. Brand description (or identity or image) is tailored to the needs and wants of a target market using the marketing mix of product. A brand value is determined by the degree of brand loyalty. the most commonly cited which is shown in Figure 3. or subtract from. price. as this implies a guarantee of future cash flows. place and promotion.

” To help answer both these questions. measured and managed 61 . Keller‟s model provides a unique point of view as to what brand equity is and how it should best be built. Hence. felt. suggesting that brand equity represents a condition in which the consumer is familiar with the brand and recalls some favourable. seen. and heard about the brand as result of their experience over time (Keller. “ What make a brand strong ?” and “How do you build s strong brand?. 2003). Keller‟s model is derived from brand awareness and brand image. Two questions often arise regarding brands. The customer based brand equity (CBBE) model is based on the premise. that the power of a brand lies in what customer have learned. strong and unique brand associations.3: Brand Equity Brand Equity Brand Awareness Perceived Quality Brand Associations Brand Loyalty Source: Aaker and Joachimsthaler (2000) Keller (1993) also takes the consumer-based brand strength approach to brand equity.Figure 3. there is differential effect of brand knowledge on consumer response to the marketing of a brand.

a brand with positive customer-based brand equity might result in consumers being more accepting of a new extension. felt. and heard about the brand as a result of their experiences over time. when the product is attributed to a fictitious name or is unnamed). Thus.g. The basic premise of the CBBE model is that the power of a brand lies in what customers have learned. beliefs.3 Customer Based Brand Equity (CBBE) Model CBBE model approaches brand equity from the perspective of the consumer – whether and individual or an organization. images. A brand is said to have positive customer-based brand equity when consumers react more favourably to a product and why it is marketed when the brand is identified than when it is not (e. seen. opinions. less sensitive to price increases and withdrawal of advertising support.3. and so on become linked to the brand. or more willing 62 . Understanding the needs and wants of consumers and devising products and programs to satisfy them are at the heart of successful marketing. perceptions. feelings. the power of a brand lies in what resides in the minds of customers. Customer based brand equity is formally defined as the differential effect that brand knowledge has on consumer response to the marketing of that brand. The challenge for marketers in building strong brand is ensuring that customers have the right type of experience with products and services and their accompanying marketing programs so that the desired thoughts.3. In other words.

based brand equity seems a good starting point to assess industrial brand equity. Added value of a brand is created in the mind of consumers.4. Antecedents of the two distinct components of industrial brand equity (product and corporate) need to be identified.1 Antecedents of Brand Equity In consumer research. as a result of perceived performance on various marketing dimensions. a brand is said to have negative customer-based brand equity if consumers are less favourably to marketing activity for the brand compared with an unnamed or fictitiously named version of the product. Therefore. In previous studies. brand equity is generally defined as the added value endowed to a product as a result of past investment in the marketing of the brand (Keller. Buyer.3. Consequently. quality 63 .3. it has been argued that industrial brand equity could be conceptualized and measured from the perspective of the industrial buyer. brand equity has been related to expenditures in the dimensions of the marketing mix. On the other hand.to seek the brand in a new distribution channel. 3. 3. a customer-based method developed in consumer research will adapted to the specific situation of the industrial buyer.4 Customer Based Industrial Brand Equity Little agreement exists as to the conceptualization of industrial brand equity in consumer marketing literature. In the present study relevance of several marketing mix dimensions for the creation of industrial brand equity will be investigated. 1998).

when the product requires substantial service or support. than end consumers. conditions are said to exist under which industrial buyers appear to make a purchase decision on the basis of the brand name instead of price. On the other hand. assessments of the product. Although procurement in industrial markets is often rational and calculative. On one hand. product quality. or other factors. In such situations. overall satisfaction with product will be the main driver of product brand equity. distribution services (ordering delivery). and any other variables involved in the purchase and use of the product. the supplier of the product. in terms of the process leading to buying decisions. Differences exist between and consumers and industrial buyers. more and more industrial products are purchased online through specifically designed website. This may occur when failure of the purchased product would have dire consequences for the buyer‟s organization. industrial buyers are thought to be more rationally concerned with determinants like product performance. or for the buyer personally. brands could play a significant role in this process under conditions of risk. Drivers identified in previous studies were: physical attributes. when the product is complex or when the buyer is under time and/or resource constraints. 64 .or more specifically performance components have been identified as the main drivers of industrial brand equity. brands could be important in establishing a consideration set of potential suppliers in the mind of the buyer. service and price. delivery. Also. That is. and support services. Because the performance and perceived quality of products are crucial in an industrial context.

product brand equity will also affect repeat purchasing intentions indirectly. This is partially driven by factors independent of specific individual products. 65 . 3. corporate governance corporate promotional efforts) and partially driven by individual product brand equity. Corporate brand equity will directly influence repeat purchase intentions as a purchasing risk reducer. a combination of the brand equity dimension was done and a model was selected to suit the purpose of this study. At the same time.Company manufacturing the product will have built a corporate reputation and associated corporate brand equity. such as stock performance. through its effect on corporate brand equity.4 Dimensions of CBBE (summary) After comparing the model presented by Aaker and Keller.

relative to alternatives.1 Brand Awareness Brand awareness is a very important element in the branding process. Aaker (1991. brand association as “anything linked in memory to a brand”. and unique brand associations in memory Perceived quality is defined as “the customer‟s perception of the overall quality or superiority of a product or service with respect to its intended purpose.2002) Brand Awareness Aaker (1991) Perceived Quality Aaker (1991) Brand Associations Keller (2003) Brand resonance Aaker (2002) Brand Reputation 3. Aaker defines brand awareness as “the ability of the potential buyer to recognize and recall that a brand is a member of a certain product category” Customer based brand equity occurs when the customer has a high level of awareness and familiarity with the brand and holds some strong.4. The demand on a certain brand increases when more awareness and acceptance of the brand are created among customers. Brand associations may be seen in all forms and reflect characteristics of the product or aspects independent of the product itself.Table 3. Aaker defines. Keller examines brand loyalty under the term “brand resonance “ which refers to the nature of customer-brand relationship and the extent to which customers feel that they are “in sync” with the brand. Tangible and intangible perception of what it is „good at‟. 66 . favourable . especially when that brand makes a change . Customers should be aware about the product.4: Summary of Brand equity dimension from Aaker and Keller models Source Aaker (1991) Dimension Brand Loyalty Definition Aaker(1991) defines brand loyalty as a situation which reflects how likely a customer will be to switch to another brand. Consumers will choose only the recognized item if there are two items to select. either in price or in product features.

Dominant brand means the customers can think of the product category. a consumer may be able to recall ten to 15 different brands while the others lack brand awareness. dominant. For examples. if asked to name car brands. Third. which are all the brand names easier to recall after you. For them. 3. First. Jell-O and Al steak sauce. top-of-mind. The third level is recalling brands. that is. namely. is “passively loyal” these consumers buy the product because of habit and not for a reason.4. Klenex. Second. These customers can change any time if there is a good reason.2 Brand Loyalty Brand loyalty of customers is classified in five categories. have mentioned the “top-of-mind” brand. Pepsi and Coca Cola. recall and recognition. the second one is “top of mind” which means the customers can think of the first brand: for examples. A brand that is merely recognized is the weakest form of awareness. These customers are interested in convenience and price. The next category is “fence sitters‟. “price switchers “ which are consumers who always buy the cheapest product. A consumer can recall all different types of laundry like Downey Surf and Cheer. they like the cheaper product but must be a 67 . which means these customers use different type of products.There are four different levels of awareness. a branded product is costly and not much different. is “noncustomers‟ also called “non users”. tend to look for the cheapest product and have a higher satisfaction.

A product has to live up to certain quality standards. One example is how consumers like to kick tires just to classify the quality of a car.4 Brand Associations Consumers have a positive level of brand equity when they are familiar with a brand and it evokes strong. which may or may not be tests of true quality.4. The particular associations we recall and their salience will depend not only on the strength of associations.4. Aaker and Jacobsen. This shows the difference from the tests of true quality. 3. but also on the retrieval cues present and the context in which we consider the 68 . Two factors that strengthen association to any piece of information are its personal relevance and the consistency with which it is presented over time.3 Perceived Quality Perceived quality is defined as the consumer‟s judgement about a product‟s overall excellence or superiority (zeitaml. unique favourable associations. The more deeply a person thinks about product information and relates it to existing brand knowledge. Finally. 3.convenient situation to purchase a product. 1994). the stronger the resulting brand associations will be. Consumers are willing to pay the price premium for the product and services but they perceive higher quality. „committed clients‟ like to buy a particular product in any place at any time. The perceived quality of products and services is central to the theory that strong brands add value to consumer‟s purchase evaluations. 1988.

” MPOC has set up the Promotions and Branding Division. Palm Oil Trade Fair and Seminars (POTS). to work on projects pertaining to Malaysian palm oil promotions. 3. it‟ not in the same category as other edible oils owing to poor brand-building. MPOC believes that poor brand building exist in the industry. Promotional activities include educational programs. to promote the market expansion of Malaysian Palm Oil (MPO) and its products by enhancing their image and creating better acceptance through awareness of various techno-economic advantages and environmental sustainability of palm oil.5 Summary of MPOC Strategic Plan (MPOC. program for the rehabilitation and improvement of Malaysian Palm Oil Exports (Prime). although palm oil enjoys a high generic awareness.brand. MPOC believes in the need to inculcate this feature in palm oil marketing and the first step is to dispel the negative image and trigger acceptability and a better perception of palm oil. in 2006 the management of MPOC embarked on its newly defined mission namely. The background to brand equity consists of consumers‟ prior experience of the brand. 69 . 2007) The challenges faced by the Malaysian palm industry have increasingly become more sophisticated and demanding. public relations initiatives. palm oil wildlife conservation fund (POWCF). In order to meet these challenges. either as a result of marketing or direct contact.

and c) To defeat and neutralize the negative perceptions of palm oil or palm products. for palm oil to sustain the existing levels of imports from Malaysia in the short term. b) To improve the perception and increase the demand in the long term. 70 . and eventually preference.5: Perception versus Reality Perception Commodities can‟t be branded Every commodity is similar Every customer is the same Lowest price is the King Source: MPOC. MPOC‟s Promotions and Branding Divisions objectives are: a) To create consumer awareness and acceptance of.Table 3. 2007 Reality Commodities can be branded Pricing differs Customers can be segmented Prices differ & can be raised MPOC‟s Promotions and Branding Division‟s goals are: a) To capitalize on the continued build-up of the health and nutritional benefits of palm oil in gaining wider acceptance of the oil with the view to widening the acceptance of palm oil as the best option b) Clear doubts about palm oil which is generally caused by misinformation and the lack of accurate information in order to correct the current perception on palm oil both on health and environment front.

Understanding of brand asset management process. easier for consumers to remember the differentiator. since it was widely accepted found suitable to measure the brand equity for Malaysian palm products and the dimensions of brand equity are summarized as follows: 71 . The MPOC strategic plans also showed that product branding was the key area of development since year 2006 and to create a brand called “Malaysia Palm” .1 Summary of Brand Equity Model For Malaysian Palm Products This chapter summarizes the definition of brand. brand building model and brand equity. 3. could be an inspired route for them. research and scientific community. makes it easier to express its values and provide sustainable advantage as it differentiates products and services that appear similar in features and attributes for various types of oil. medical health professionals. enables more efficient and effective communicator. After comparing both Aaker and Kellers models. In exploring brand building model. This allowed a deeper understanding as to why product branding was selected for this research model. adding Malaysia to generic palm oil. The reason for branding palm oil is to add credibility to claims made. policy makers. general consumers and media. MPOC believes in the need to differentiate Malaysian palm oil from its competitors and a need to establish a Malaysian palm oil brand. Aaker‟s model for brand equity was adapted.MPOC‟s target audiences are food processors and manufacturers. allows us to the develop and measure brand equity from customer perspective.5. it was critical to compare product branding and corporate branding in the literature review. Example.

 Brand awareness – the ability to recognize or recall Malaysian palm oil products by direct users or distributors  Brand associations – anything linked to the direct users or distributors memory of Malaysian Palm oil products  Perceived Quality – the buyer‟s judgment about Malaysian palm product‟s overall excellence or superiority  Brand loyalty – The tendency to be loyal to a supplier of Malaysian palm oil. as demonstrated by the intention to purchase from the Malaysian palm product supplier as a primary choice. leading to the study‟s hypotheses development. adapted for Malaysian palm products will enable the development of conceptual framework in the next chapter. 72 . The above definitions of dimension.

4. we are able to determine if Malaysian palm oil manufacturers and exporter can create a framework and strategize what elements most matter. Second. will then be explained in Chapter 5. where their weaknesses and strengths are placed in the brand equity model. How are various customer-based measures of brand equity related to each other (i. do they have convergent validity at both the individual and aggregate level)? How well do the customer-based measures of brand equity estimate choice at the individual level? What is the role of brand equity in industrial purchasing? 73 . data collection methods and details of instrumentation and scales will then be explained at the end of the chapter.1 Hypotheses and Conceptual Framework This study will identify. The research hypothesis will be tested in this study and full description on the relationship between brand equity and Malaysian palm oil products.CHAPTER 4 RESEARCH METHODOLOGY This chapter will outline the sequence of stages by which the research will be developed and will also outline the theoretical framework. if positive brand equity exist for Malaysian palm oil products.e. The research design. it will explore which dimension is the strongest in forming brand equity for Malaysian palm products. Hence.

whether an individual or organization. felt. on which brand equity is based. and the most critical parts of which involve the verification of the dimensions. preference to use palm products from Malaysian origin. creates brand equity to the exporters of downstream producers whom refine. In the case of Malaysian palm products.2005). Hence. Based on the above points and definitions of dimensions and suggested relationships in the literature. because it is the most commonly cited and has been probed for a number of empirical investigations (Washburn and Plank. pack and export finished products out of Malaysia.Atilgan.Customer based brand equity (CBBE) model approaches brand equity from the perspective of the customer. The basic premise of the CBBE model is that the power of a brand lies in what customers have learned. the customer based brand equity model by Aaker (1991) and its dimensions were chosen. A brand is said to have positive customer-based brand equity when consumers react more favorably to a product. seen and heard about the brand as a result of their experiences over time. by customers.2002. the following hypothesis is formulated: H1 – Brand awareness has positive direct effect on brand equity of Malaysian palm products H2 – Brand associations has positive direct effect on brand equity of Malaysian palm products 74 .

Every dimension is adapted from Aaker‟s (1991) model. hence this translates to brand equity for Malaysian palm producers and exporters. will need to win the preference of consumer in order to sustain business. Malaysian palm producers whom are exporting products internationally. is an asset to exporters. Figure 4. 75 .H3 – Brand loyalty has positive direct effect on brand equity of Malaysian palm products H4 – Perceived quality has positive direct effect on brand equity of Malaysian palm products H5 – Malaysian palm products have positive brand equity since customers have preference for Malaysian palm products H0 – Malaysian palm products have no brand equity A conceptual research framework is designed to test the above hypothesis relationships for Malaysian palm product marketing. Preference for Malaysian palm products. for export based market. to customer preference to purchase Malaysian palm products.1 maps the relationship between the dimensions of brand equity. compared to products from other origins. The hypothesis will be tested and results explained upon completion of survey and statistical data analysis.

1: Conceptual Framework .Brand Awareness H1 +ve Brand Associations H2 +ve Brand Loyalty H3 +ve Preference for Malaysian palm products H5+ve Brand Equity Perceived Quality Awareness H4 +ve Figure 4.

and need high level of differentiation in order to compete. no specific reference has been made to customer-based customer based brand equity and the use of a model to measure or evaluate brand equity. the measurements employed to study beverages were found suitable for adaptation for Malaysian palm products.4. Since. The availability of past data specific to brand equity study on Malaysia palm products and test method is very limited. beverages are very common retail product.2.2 Research Methods and Design The research design selected is descriptive study where detailed descriptions and analysis on the relationship between both independent and dependent variable will be analyzed since the objective is to explain the relationship between brand equity and Malaysian palm products. hence in this study. Atilgan (2005) used Aaker‟s (1991) brand equity model.1 Research and Statistical Analysis on Brand Equity Approach The definitions of dimensions. survey technique to collect primary data will be conducted. The topic of brand equity approach for Malaysian palm products is relatively new. The statistical results and methods in measuring 77 . 4. adapted for Malaysian palm products were adapted from studies done by Yoo (2000) and Atilgan (2005). Even though MPOC has drafted specific product brand strategy in year 2007.

A ten-point scale is used in this study to develop the questionnaire.90 0.89 0.94 Scale by Atilgan(2005) 0. and Atilgan (2005) is using ten-point scale of agreement to disagreement.customer-based brand equity was appropriate to be adapted for this study on Malaysian palm products and support the conceptual framework of this study.87 0.91 78 . The reliability comparison of the original scale developed by Yoo (2000) and the scale used by Atilgan (2005) is depicted in Table 4.1: Reliability comparison of two brand equity scales Brand Equity Dimensions Perceived quality (QL) Brand Loyalty (LO) Brand Associations (ASSC) Brand Awareness (AW) Brand Equity Overall scale 0. Table 4. Yoo (2000) used five-point scale in the original study.93 0.1.85 0.93 Scale by Yoo (2000) 0.62 0.74 0.

739 Brand loyalty (8 per cent) 0.820 0. variances.786 0.820 0. loading and statements.756 0. Results of the survey is listed in the table.780 X is of high quality The likely quality of X is extremely high The likelihood that X is reliable is very high X must be of very good quality I am aware of X 0.2.866 I can recognize X among competing brands Some characteristics of X come to my mind quickly I know what X looks like I would not buy other brands. if X is available at the store X would be my first choice I consider myself to be loyal to X 0.2: Results of the factor analysis. 79 . Similar questions will be developed.851 0. lists the factors in the order in which it was extracted from the data .660 Brand awareness (11 percent) 0.602 I have difficulty in imagining X in my mind I can quickly recall the logo X Table 4.856 Brand associations (6 per cent) 0. derived from the survey employed by Atilgan (2005) to measure the brand equity for Product X in the beverage industry.Table 4.700 0. factors. adapted from Atilgan (2005) Factor Interpretation (% variance explained) Perceived quality (49 per cent) Loading Brand Equity attribute 0. in Turkey. replacing Product X as Malaysian palm products.874 0.

overall satisfaction is defined as an overall evaluation based on the total purchase and consumption experience with a product or service over time. It involves not only the valence (positive) and (negative) but also the intensity and it is represented by three items measured on a five-point scale (Oliver.3.Overall brand equity and overall satisfaction scale Yoo (2000) have developed the overall brand equity scale and four items from this scale were adopted to measure the consumer-based brand equity and identifying preference for Malaysian palm products. the measure is described with results adapted from Ballester (2005). 1997). The four item items measure the difference in the consumer choice between the focal branded product and an unbranded product given the same level of product features. compared to other sources of palm products. information about reliability and convergent validity of the different measures is also reported. In line with Anderson (1994). In line with this study. this definition relies on brand knowledge structures in the minds of consumers as a foundation of brand equity. Therefore. since it is designed to test the preference of Malaysian palm products. In Table 4. 80 . in this study an overall satisfaction measure was used as a summary evaluation of the entire Malaysian palm product use experience from customer perspective. The measure is done on a Likertscale.3. These questions were also found suitable. In Table 4.

88 Reliability AVEb 0. a) Very satisfied… 0.77 Source: Ballester (2005) 4.77 0.2. The rating indicates how well Malaysian palm products perform on the attributes tested.85 0.09 0.2 The Questionnaire Design A questionnaire survey.74 13. containing 13 items rates on a ten-point scale of agreement-disagreement.81 15.86 0.84 If there is another brand as good as (X). rating Malaysian palm products. it seems smarter to purchase (X) Overall Satisfaction Considering all my consumption experience with (X) I am ….85 Even if another brand has the same features as (X).66 Alpha 0.05 0. I would prefer to buy (X) 0.66 0.81 15. I prefer to buy (X) If another brand is not different from (X) in any way. The advantage of using interval scale is that it permits the researchers to use variety 81 .Table 4.88 18. even if they are the same 0.3: Overall brand equity and overall satisfaction scale Item description Standardized Loading t-value SCRª Overall Brand Equity It makes sense to buy (X) instead of any other brand.91 19.

using 13 questions on 10-point scale of disagreementagreement.of statistical techniques which can be applied to nominal and ordinal scale data in addition to the arithmetic mean. to measure brand equity dimensions. The perceived quality of products and services is central to the theory that strong brands add value to consumer‟s purchase evaluations. Consumers are willing to pay the price premium for the product and services but they perceive higher quality. Dimensions are as follows: a.1999). Overall brand equity and satisfaction scales are also used to measure customer brand knowledge and consumption preference towards Malaysian palm products. The questionnaire was developed. standard deviation. product-moment correlations. 82 . Dimension One – Perceived Quality Perceived quality is defined as the consumer‟s judgment about a product‟s overall excellence or superiority. based on four dimensions adopted from Aaker (1991). and other statistics commonly used in marketing research (Malhotra. Aaker (1991). with 13 questions were used. adapted from a prior research done by Altilgan (2005). There are 3 parts to the questionnaire: i) PART A – each variable is tested.

Consumers will choose only the recognized item if there are two items to select. The demand on a certain brand increases when more awareness and acceptance of the brand are created among customers. The more deeply a person thinks about product information and relates it to existing brand knowledge. The background to brand equity consists of consumers‟ prior experience of the brand. 83 .Brand awareness Brand awareness is a very important element in the branding process. d. either in price or product features. either as a result of marketing or direct contact. Dimension Three – Brand Loyalty Aaker (1991) defines brand loyalty as a situation which reflects howl likely a customer will be to switch to another brand. unique favorable associations. Dimension Two .Brand associations Consumers have a positive level of brand equity when they are familiar with a brand and it evokes strong.b. c. Customers should be aware about the product. especially when a brand makes a change. the stronger the resulting brand associations will be. Dimension Four . Two factors that strengthen association to any piece of information are its personal relevance and the consistency with which it is presented over time.

a) Very satisfied… Source Modification to attributes Yoo (2000) Atilgan(2005) Product x was replaced with “Malaysian palm products” Yoo (2000) Atilgan(2005) Product x was replaced with “Malaysian palm products” Yoo (2000) Atilgan(2005) Product x was replaced with “Malaysian palm products” Yoo (2000) Atilgan(2005) Product x was replaced with “Malaysian palm products” Yoo (2000) Ballester (2005) Product x was replaced with “Malaysian palm products” Ballester (2005) Product x was replaced with “Malaysian palm products” Fully adopted 84 . it seems smarter to purchase (X) Overall satisfaction 18) Considering all my consumption experience with (X) I am …. I prefer to buy (X) 17) If another brand is not different from (X) in any way. if X is available at the store 10) X would be my first choice 11) I consider myself to be loyal to X Brand associations 12) I have difficulty in imagining X in my mind 13) I can quickly recall the logo X Overall brand equity 14) It makes sense to buy (X) instead of any other brand.Table 4. I would prefer to buy (X) 16) If there is another brand as good as (X).4: Questions developed for questionnaire. even if they are the same 15) Even if another brand has the same features as (X). adapted from prior research Factor Interpretation and attributes Perceived quality 1) X is of high quality 2) The likely quality of X is extremely high 3) The likelihood that X is reliable is very high 4) X must be of very good quality 5) I am aware of X Brand awareness 6) I can recognize X among competing brands 7) Some characteristics of X come to my mind quickly 8) I know what X looks like Brand loyalty 9) I would not buy other brands.

Central Asia and the Middle East. covered a period of 4 weeks. This will include all related publications. 85 .3 Data Gathering Method A combination of both primary and secondary data collection method will be used for this study. job function and experience level in the use or purchase of Malaysian palm products.ii) PART B – The profile of respondent companies are gathered by asking questions related to. which was used in this study. Readily data from market databases will also be included in this secondary data gathering methods. 4. company size. iii) PART C – Data on respondents profile are collected. The secondary data source was also used to develop the questionnaire design. nature of business. gender. Secondary data will also be collected for this study. only those whom have knowledge purchasing/using Malaysian palm oil products. Variables measured are age. The primary data will consist of questionnaire which will then be distributed to buyers of Malaysian palm oil products based in Europe. purpose of Malaysian palm oil purchase and sources of supply. level of education. At the same time the questions are designed to select and profile. industry related publications from government and non-government bodies.

adapted from Aaker (1991). 86 .4 Data Analysis Technique The questionnaire used for data collection contains scales to measure the various constructs depicted in the conceptual framework.11 to generate various statistical analyses.4. For overall brand equity and satisfaction measure. Thus a numerical value can be calculated from all the responses. Correlation will identify positive and which dimension for Malaysian palm products are path to brand equity for dimensions that form the strongest Malaysian palm products. Respondents are asked to express agreement or disagreement of a ten-point scale for brand dimension scale. The final inputs then transferred to SPSS v. Responses will be coded based on questionnaire items. the Likerttype scale is used to measure respondents response towards Malaysian palm products.5 Summary The results obtained will reflect on the brand equity value relationship of Malaysian palm products using the customer based brand equity model. The analyses will comprise four parts: 1) Respondent demographic profile using frequencies and percentage 2) Company purchase profile using frequencies and percentage 3) Correlation between independent and dependent variable 4. which translates to brand equity for Malaysian palm product exporters. Study should reflect the preference for Malaysian palm products.

using and distributing Malaysian palm products. A total of 72 survey questionnaires were received from the respondents. Major group of respondents fall in the age group of 20-35 years old. the gender participation in the commodity and food related industry is equal.3 percent. In European country. tests on the demographic data of respondents and the profile of company purchasing . which were then analyzed with the aid of SPSS software.1. The industry is more dominated by males in regions like Middle East and Pakistan.1 percent. using correlation analysis. a statistical tool. Respondents were selected based on their experience and involvement with Malaysian palm products. The structured survey questionnaires were distributed to respondents either in person or through the internet. Findings are presented first for Section B and C.CHAPTER 5 RESEARCH FINDINGS In this chapter the results of the survey are reported and analyzed. The ratio of male respondents is 63. Section A focuses on the measurements for brand equity model. B and C.9 percent and female respondent is 36. 5. indicates the output based on 72 respondents. Balance 33. the survey form distributed has three main components.8 percent. As mentioned in Chapter 4. belong to the age group of 87 .1 Demographic Data of Respondents Table 5. representing 52. Section A. Section B and C. Section A is used for hypothesis testing.

Majority of the respondents are degree holders (68. From the reply received. 41 out of 72 respondents are working in the sales and marketing department in current organization. This shows personnel whom are involved in this industry are expected to have at least a degree as basic qualification to work or be involved in this industry. This is important to understand how much of experience and exposure respondents have in buying or using Malaysian palm products. In measuring the academic qualification required to be in this industry. Some of the respondents are second generation managing the family business. would have to cater to this group academically qualified and highly knowledgeable. This shows major group of respondents are still young and in the early stages of their career in this industry. Such experiences could have been from previous or current work 88 .6 percent). contributing to only 1.“36 to 45 years”. Respondents were selected based on their background and involvement in the supply chain of importing Malaysian Palm products. In this research. It is important to note this.1 percent) and rest have master degree (23. the level of experience in using and purchasing Malaysian palm products was also tested. as any programs developed to market Malaysian palm oil. The second highest.4 percent. the minimum entry level tested is high school. are involved in purchasing or sourcing of Malaysian palm products for their current company. 27 respondents.

The length of exposure time. but downstream products were only exported in mid 1970s. The continued promotional programs by MPOC has generated global awareness of the benefits of Malaysian palm products in various regions. especially where respondents are located. in line with industrialization policy of the Malaysian government. which was popular then. Malaysian palm products were commercially developed in Malaysian since 1960. 89 . The younger generation of respondent whom are in age group of 20-35 years are exposed to palm products and have started accepting Malaysian palm products more proactively.experience. Only 3 respondents have less than one year experience. Malaysian palm products have been in the market for the past 30 years and probably did not get immediate acceptance as a substitute for animal based fats and soy based cooking oil. 29 respondents have above 5 years of experience in handling Malaysian palm products.22 years. 40 respondents have experience of minimum 1 year to 5 years and the mean value is 4. these respondents have is a measure of how long ago Malaysian palm products were able to reach out to these group of people. The rest.

9) 49 (68.4) 5 (6.3) 72 (100) 4.2) 29 (40.5) 4 (5.3) 9 (12.9) None None 72 (100) Years of experience in use/purchase of Malaysian palm oils products 0-1 year 1-2 years 2 -3 years 3 -4 years 4 -5 years Above 5 year Total Mean value 3 (4.2) 5 (6.8) 24 (33.9) 14 (19.4) 72 (100) N (%) Highest level of education High school Diploma Degree Master degree Total 1 (1.5) 1(1.1) 72 (100) N (%) Profile Age 20 to 35 years old 36 to 45 years old 46 to 55 years old 56 years old Total 38 (52.1) 17 (23.22 90 .9) 16 (22.4) 5 (6.6) 72 (100) Current Job function Purchasing /Sourcing Research and development Sales and Marketing Production Logistics and supply chain Total 27 (37.6) 41 (56.9) 26 (36.Table 5.1: Demographic profile of respondents Profile Gender Male Female Total 46 (63.

Russia takes part is bartering machineries with crude or refined palm oil. Middle East is represented by Lebanon. Lithuania. are located in Russia. Uzbekistan. however it does not meet their population consumption requirement. UAE (Dubai) and Saudi Arabia. Heavy promotional activity by HALAL food exhibitions in Malaysia and also efforts by MPOC. Central Asia and Asia is represented by Russian. Table 5. reaching to Muslim states has resulted in high acceptance of Malaysian based products and the largest being palm oil. Vietnam.2 Profile of Malaysian Palm Product Purchasers Profile of companies using. Europe is represented by Bulgaria. Philippines and Pakistan. Ukraine and these countries are members of EU. hence palm products are imported. Middle East is represented by 18 out of 72 respondents. Romania. Second largest group. Such trades are mediated by local ministry with assistance from MPOB. trading or distributing Malaysian palm products was tested in Section B of the survey. due to its HALAL certification. This study tried to explore as many purchasers from different regions.2 lists purchasers of Malaysian palm products by country. Middle East purchasers are heavy oils user due to their food preparation style and preference to use Malaysian based products.5. This is in line with the Malaysian government trade agreement with Russia. since it a cheaper alternative versus soy bean oil. represented by 12 out of 72 respondents. 91 . except Ukraine. Major group of companies. 16 out of 72 respondents are equally located in Romania and Bulgaria. Iran. to meet its high local consumption of oils and fats. These countries have local production of corn and sunflower production.

Number of employees were used to measure the company size. purchase size and countries palm products are sourced from. used to understand the company size.9) 8 (11. this study wanted to know the purchase behavior of companies relative to the size and experience with Malaysian palm products. have more than 51 employees.2: Malaysian palm product purchasers by country Profile by Country Lebanon Bulgaria Iran Russia UAE (Dubai) Vietnam Philippines Romania Lithuania Ukraine Uzbekistan Pakistan Saudi Arabia Total N (%) 3 (4. nature of business. normally have less overhead compared to manufacturing facilities.1) 6 (8.2) 8 (11. Such organizations.8) 5 (6. experience. These companies are medium sized. and are mainly focused on trading (47 respondents) and distributing palm based products (25 respondents). It was critical to know where exactly these companies were located in the supply chain of palm product imports. 4 out of 72 respondent.1) 4 (5.2) 7 (9. primarily Malaysian 92 . Only. have 11 to 30 employees. These findings show that.6) 3 (4.7) 5 (6.7) 4 (5. Apart from testing the brand equity. Most companies represented in this study. shows the summary of company profiles.9) 72 (100) Table 5.Table 5.9) 5 (6.3.6) 2 (2.3) 12 (16.

the use of Malaysian palm products are for food and non-food application. Only 3 respondents are focused in non-food application only. The companies are critical in the supply chain of exporting Malaysian palm products. Only 38 respondents are focused in food industry and 31 respondents are focus on both. Food industry is constantly growing. Hence. companies position their focus on marketing products to food industry only or serve both food and non-food industry. Non-food industry are normally oleo-chemical based soap and cosmetic producers. especially in newly developing countries like Romania.palm products are dependant on traders and distributors to market palm products in the local market. vegetable ghee and ole0-chemicals. in the supply chain of marketing palm products. especially in importing downstream products such as cooking oil. the use or purpose of importing Malaysian palm products by the respondent companies was tested. This research survey also tested. Summarized results show. to survive. Bulgaria and Saudi Arabia. 93 . shortening.

6) 35 (48.2) 6 (8.food application Both Total 38 (52.1) 72 (100) Sources of palm products Percentage of Malaysian palm products used from total purchase/usage Indonesia Europe Egypt Germany Malaysia only Total 36 (50) 4 (5.6) 3 (4.Table 5.4) 72 (100) Food application Non.6) 4 (5.3) 7 (9.5) 32 (44.2) 31 (43.2) 5 (6.9) 27 (37.7) None None 72 (100) 1 -10 11-20 21-30 31-40 51 and above Total 5 (6.3) 11 (15.4) 4 (5.9) 72 (100) 11-20 21-30 31 -40 41 -50 51 -60 61 -70 71 -80 81-90 91-100 Total 1 (1.4) 3 (4.7) 72 (100) 94 .8) 3 ( 4.9) 23(31.7) 11 (15.3) 3 (4.3: Profile of Malaysian palm product purchasers Profile Nature of business N (%) Profile Company size (by number of employees) N (%) Trading of palm products Distribution of palm products Food manufacturing Oleo chemicals Total 47 (65.6) 12 (16.6) 72 (100) Malaysian palm Company’s years of experience in use/purchase of Malaysian palm oils products Use of products 1 -5 years 6 – 10 years 11 -15 years 21 years and above Total 22 (30.3) 25 (34.2) 5 (6.7) 1 (1.9) 25 (34.

000 Above 10.7) 11 915. it was important to know where purchaser are getting their palm products from. Malaysian downstream products. 25 respondents have indicated purchase ratio of 91 to 100 percent.1) 15 (20. These crude palm oil is refined in the these refineries and downstream products are distributed within the country or to the neighboring countries. This is consistent with the findings on the total volume of Malaysian palm products purchased.2) 4 (5. Major competition is seen from Indonesia.000 6.000 4. Other sources or origin of palm products are in direct competition with Malaysia as an exporter. 23 respondent are purchasing only Malaysian products.8) 72 (100) In this study.8) 12 (16. such as cooking oil.000 2.6) 3 (4.6) 8 (11. shortening.001-8. It was comforting to know.001-4. As more refineries are built in Europe and the Middle East. Europe. apart from Malaysia.1) None 72 (100) 1 -2.Most important factor. representing 36 respondents whom have stated preference to buy palm products from this origin.001-6.001-10.3) 11 (15. Egypt and Germany have palm refineries and purchase in bulk vessels. crude palm oil.3) 15 (20. 95 . influencing the purchase of N (%) Malaysian palm products Size of total purchase of Malaysian palm products ( in N (%) metric tones) in a year Product quality Product price Delivery Supplier reliability Supplier relationship Product brand name Total 17 (23. oleo-chemical product and vegetable ghee.6) 40 (55. will face more competition in the long term.000 8. from total palm purchase.000 Total 8 (11.

Apart from knowing where purchaser buy their products from. Collectively. it was important to know how many years of experience they have in purchasing Malaysian palm products. The second highest group (22 respondents) has been using Malaysian palm product about 1 to 5 years. supplier reliability and relationship was selected by 12 respondents. Product price was the most important factor. It was also very critical to test. The major group of companies (35 respondents) have been using Malaysian palm products. selected by 40 respondents and 17 respondents choose product quality. since Malaysian palm product were introduced to the world and only in the last 5 to 10 years. has indicated experience of above 21 years. Developing a brand strategy allows Malaysian downstream producers to focus on key areas to counter competition and secure market shares. It has been 3 decades. despite efforts by Malaysian industrialization policy and MPOB to promote Malaysian palm usage. 6 to 10 years. The results shows that most companies are relatively new to Malaysian palm products. what was the most important element when decisions were made to purchase Malaysian palm products. producers and governmental organizations have been more aggressive in marketing abroad.This is why. Only one respondent out of 72. since mid 1970s. it is critical for Malaysian downstream products to have a strong brand strategy to market its products. The findings coincide with the fact that Malaysian crude palm oil production cost is the much cheaper versus soy bean in United 96 .

extremely high level of loyalty towards Malaysian product. The higher the mean score. None of the purchasers or respondents choose product brand name as an important element.3 Descriptive Analysis on Brand Equity Attributes Table 5. The question with highest agreement mean score. All variables are measured using the 10-point scale. suggesting multiple source of palm products and preference to product price as 97 .126. the greater respondents agree to the stated attribute. The mean score ranged from the lowest 7. Overall brand equity and satisfaction scales are also used to measure customer brand knowledge and consumption experience.3 presents the summary on the descriptive statistics of the thirteen (13) brand equity attributes for Malaysian palm products.793 (the lowest) to the highest at 2. is on product quality. Questions on brand loyalty ranged between. however some importance is also given to product quality and supplier relationship. respondents perceive well the quality of Malaysian palm products. (Question 12 from the survey is a reverse questions. The standard deviation ranges from 0. Competitive production will result in cheaper downstream product to compete in regions like Europe. showing respondents do not have. This is an indication. based on survey conducted by MPOB. consistent with earlier findings in company purchase behavior.47 and 7.72. mean of 7. from Disagreement (1) to Agreement (10). Most purchaser are still driven by product price in making final purchase decision.18. to the highest 9. 5.01. and it was recorded to be analyzed together with other attributes).States and rapeseed in Europe.

Overall brand equity and satisfaction scales were also used to measure customer brand knowledge and preference to use Malaysian palm products. variables are measured using the five-point Likert type scale.key decision making factors. Brand associations attribute test on respondents ability to recall images and logo of Malaysian palm products.63 to the highest at 3. The mean scored ranged from lowest 3.934 (highest).4 presents the summary on the descriptive statistics for the overall brand equity attributes and overall satisfaction for Malaysian palm products. there is lack of loyalty for commodity type products due to little product differentiation. which shows preference to use Malaysian palm products. and highest mean score is for overall satisfaction at 3. Overall brand equity attributes summarize overall consumer experience towards Malaysian palm products. Respondents have generally encountered positive consumption experience towards Malaysian palm products. from All Strongly Disagree (1) to Strongly Agree (5). Table 5.740 (lowest) to 0. Besides that. Mean towards the value of 5 is agreement.97. This probably is an indication that Malaysian products do not carry very memorable and prominent logos on their packing or labels. The primary reason could be the fine balance of acceptable product quality and competitive pricing 98 . The mean score indicates logo recall is weak.97. The standard deviation ranged from 0.

60 7.32 7.18 8.793 8.47 1.39 7.096 Brand awareness Brand loyalty Malaysian palm products would be my first choice I consider myself to be loyal to Malaysian palm products Brand associations I have difficulty in imagining Malaysian palm products in my mind I can quickly recall the logo Malaysian palm products 8.126 99 .046 1.475 1.82 8.969 0.793 0.18 0.06 7. if Malaysian palm products is available at the store Mean (N=72) 9.Table 5.90 8.74 Standard Deviation 0.72 7.4: Descriptive analysis of brand equity attributes Dimension Statements used for Brand Equity attribute for Malaysian Palm products Malaysian palm products is of high quality The likely quality of Malaysian palm products is extremely high The likelihood that Malaysian palm products is reliable is very high Malaysian palm products must be of very good quality I am aware of Malaysian palm products I can recognize Malaysian palm products among competing brands Some characteristics of Malaysian palm products come to my mind quickly I know what Malaysian palm products look like I would not buy other brands.467 2.71 7.122 2.609 2.01 1.503 1.725 2.805 Perceived quality 9.

65 0.5: Descriptive analysis of overall brand equity attributes and overall satisfaction. I would prefer to buy Malaysian palm products If there is another brand of palm product as good as Malaysian palm products.81 0.78 0. it seems smarter to purchase Malaysian palm products Mean (N=72) Standard Deviation Overall brand equity 3.Table 5.63 0.934 100 .858 3.791 3. a) Very satisfied… 3. Dimension Statements used for overall brand equity attribute and overall satisfaction It makes sense to buy Malaysian palm products instead of any other palm products.97 0. even if they are the same Even if another brand has the same features as Malaysian palm products. I prefer to buy Malaysian palm products If another brand of palm product is not different from Malaysian palm products in any way.740 Overall satisfaction Considering all my consumption experience with Malaysian palm products I am ….816 3.

either too peaked or too flat. As for brand loyalty.559 0. Mean Deviation Perceived 8.21304 Loyalty Brand 7. Extreme values for kurtosis are within +3 to -3. For 72 respondents as we can see the Skewness is within range.283 0. a skewed variable is one whose mean is not in the middle of the distribution. Skewness should be in the range +2 to -2.6: Summary of analysis Factor Std.97 0.9167 1.778 -0.132 -1.676 -1.934 Satisfaction ** N= 72 Skewness Std.14814 Awareness Brand 7.9792 0.792 4.904 0. Skewness is a measure of how symmetrical the data are.238 0.656 -0. Kurtosis has to do with how peaked the distribution is.283 0.997 0.559 0.4 Normality Test of Data Normality tests are conducted to ensure there are no-outliers and no errors during the coding process and to ensure that the assumptions for the subsequent tests are met. So. Table 5.080 -0.06780 Associations Brand 3.446 -0.559 0.67436 Equity Overall 3.583.283 0.7153 0.559 101 .559 0. Statistics Error -0.5.65768 Quality Brand 7.8056 1.283 0.104 Std Error 0. Kurtosis range is extremely high at 4. the data are normally distributed.583 0.559 0.283 0.6343 1.283 Kurtosis Statistics 0.

326 2.385 0.182 0.209 0.5.117 0.066 0.097 0.148 1. This analysis technique shows an indication of both the positive and negative directions. Table 5.5 Cooefficient For Model one (1).132 0.243 0. (Constant) Brand Associations Perceived Quality Brand Awareness Brand Loyalty 0.043 1 Dependant Variable = Brand Equity 5.165 0. Perfect correlation is observed at + 1 or – 1 while at 0 there is no correlations.257 Standardized Coefficients Beta t Sig.1 to + 1.729 -0. which is brand equity. 102 .063 0. The beta value for perceived quality indicates. Error 0.526 -1.054 0.072 -0.189 0. The strength is indicated by the size of the value.7: Coefficients Model Unstandardized Coefficients B Std. The minus or plus sign merely shows the direction of the two variables and does not indicate the strength of the relationship. The Pearson correlation coefficient (r) ranges between .867 1.102 0.073 0.589 1.600 0.6 Hypothesis Testing Correlation analyses are conducted to show the strength and direction of the relationships between two variables. the Beta value for brand awareness is the highest among the all the independent variables. the highest effect on the dependent variable.

Hence. this supports the three hypothesis.000 -0.382 0. brand loyalty and perceived quality.207 0.203 Brand Equity 0.108 0.203 1.000 0. the strength and direction of the relationships between each of the independent variables against the dependent variable will be analyzed.138 -0.384 -0.290 0.207 Perceived Quality -0.000 0.108 Brand Loyalty 0.In this section as per the objective of our research.384 1.145 -0.027 1.000 N=72 As from the above analysis.290 -0.027 0.049 -0.8: Summary of correlations for variables Brand Awareness Brand Awareness Brand Associations Brand Loyalty Perceived Quality Brand Equity 1.049 0. there is positive relationship between the independent variable brand awareness.382 1.138 Brand Associations 0.145 -0. Table 5. which are: H1 .Brand awareness has positive direct effect on brand equity of Malaysian Palm products H3 – Brand loyalty has a positive direct effect on brand equity of Malaysian palm products H4 – Perceived quality has a positive direct effect on brand equity of Malaysian palm product 103 .000 0.

shared their knowledge and experience on Malaysian palm product.535 0. H2 – Brand associations has positive direct effect on brand equity of Malaysian palm product Table 5. there is a positive relationship between the brand equity and the dependent variable overall satisfaction. (2 tailed) N=72 As from the above analysis.The is a negative relationship between the independent variable brand association and brand equity. hence H2 is not accepted. Malaysian palm products have positive brand equity. core brand equity elements from customer experience. companies‟ purchase behavior was also 104 . In identifying these core elements of brand equity.9: Summary of correlations for Brand Equity and overall satisfaction Overall satisfaction Pearson Correlation 0.000 Brand Equity Sig. hence H5 is accepted. The null hypothesis (H0). which translates to brand equity. and leads to overall customer satisfaction. since there is positive correlation for having preference. H5 which is. which is Malaysian palm product have no brand equity is not accepted. 5. A total of 72 respondents represent in this study. since customers show preference for Malaysian palm product. This confirms the hypothesis.7 Summary This study was set out to explore and analyze.

The summary of correlation results is shown in Figure 5.analyzed. to map the relationship between the dimensions of brand equity with preference for Malaysian palm products and brand equity. In testing the brand equity model by Aaker (1991). Malaysia and Indonesia have low production cost and equally compete in exporting palm products. 3 dimensions showed positive relationship to brand equity. The strongest path is shared by brand loyalty and perceived quality. Respondents come from the functional background of purchasing and sourcing and sales and marketing. except brand associations. 29 out of 72 respondents have more than 5 years of experience in handling Malaysian palm products.4. Brand equity and overall satisfaction show positive relationship. Malaysian palm products face major competition from Indonesia for downstream products and the key decision making is based on product price during purchase. Most companies tested are small to medium sized organizations with 11 to 30 employees. which has negative relationship with brand equity. 105 . It was confirmed that. because the primary business activity is trading or distribution of palm products.

138) Brand Associations H2 +ve (0.203) Figure 5.535) Perceived Quality Awareness H4 +ve (0. with preference for Malaysian palm products and brand equity .Brand Awareness H1 +ve (0.1: The relationship between dimensions of brand equity.207) Preference for Malaysian palm products Brand Equity H5+ve (0.108) Brand Loyalty H3 +ve (0.

This will be followed by implications of this study and thereafter. However.1 Discussion of Research Results This study has taken a fresh look at a familiar phenomenon. financial. where product weakness and strengths are placed in the brand equity model. and customer implications of brand equity have resulted in the emergence of different definitions. based on customer experience. Strategic. In this study. the main focus has been to identify brand equity for Malaysian palm products. which receives continuous attention from academic researchers. 6. The first section will begin with the discussion of the research results with regards to the brand equity measurement for Malaysian palm products.CHAPTER 6 CONCLUSION AND RECOMENDATIONS This chapter primarily focuses on discussing the findings and recommendations of this research. The finding off this study will help us determine if Malaysian palm manufacturers and exporters can create a framework and strategize what elements most matter. managers and media commentators. its name and symbol that add 107 . the most comprehensive and widely accepted definition has come over from Aaker (1991) who defined it as „set of brand assets and liabilities linked to a brand. branding. analyze and identify core brand equity element. recommendations for future research in this area.

brand association formed positive relationship with brand equity. There is opportunity to explore this further in future research. but in this study negative relationship was obtained. Even though our findings do not completely support all of Aaker‟s brand equity dimensions. indicating Malaysian palm products have managed to garner equity and translate it to customer satisfaction. This study therefore aimed to test the applicability of the Aaker‟s brand equity model. it is important to remember that this study has focused specifically on product level brand equity. When taking the findings into consideration. On the contrary to prior research. as the most common conceptual framework among several.to or subtract from the value provided by a product or service to a firm and/or to that firm‟s customers”. 108 . If one assumes that it is easier to copy specific product attributes than intangible brand associations. Overall satisfaction and brand equity has positive relationship. It also set out to verify the findings of a previous study Yoo et all (2000). Atilgan (2005) and Ballester (2005). This can be due to the attributes or statements used that may not be appropriate for Malaysian palm products. but this time in a different country and industrial context. Measurement scales were adapted to search and test for a suitable model to measure and evaluate brand equity for Malaysian palm products. This will eventually form a foundation for future marketing projects. perceived quality and brand loyalty was found to have a dominant effect on brand equity for Malaysian palm products.

product attribute is believe to be of high quality at reasonable price for customer. the level of customer-based brand equity contributes to the effectiveness of the firms marketing mix. One of the implications derived is. Keller (2005) stated that while positive customer based brand equity can lead to greater revenue. it has direct implications for the firms‟ ability to command higher prices. findings shows. the effectiveness of marketing communications. which if increased. evaluating and differentiating among a plethora of comparable products that may be capable of satisfying the consumers‟ needs to greater or lesser degree. Customer based brand equity scale give Malaysian palm industry a structured approach to formulating their branding strategies. consumers face the task of searching for. marketing managers should concentrate their efforts primarily on perceived quality and brand loyalty. will contribute positively to their firm‟s brand equity. lower costs and higher profit. In the case of Malaysian palm products. Perceived quality has several important strategic benefits to the firms. such as gaining high market share and 109 . which translates to repeat purchase and product loyalty.the strength of brands grounded on product attributes will consequently be more difficult to sustain than brands based on intangible brand associations. In other words. 6.2 Implications of the Study Across product categories. customer‟s willingness to seek out new distribution channels. and the success of brand extensions and licensing opportunities.

managers should not undervalue the effects of brand awareness. Especially the relation between brand loyalty. In order to make a beneficial choice in strategy. Part of the scales used in this study depict what customer value and perceived about product quality. reducing marketing costs. brand associations and brand loyalty. Increased awareness of brands and their potential is important to meet future competition. it is suggested that on concentrating marketing strategies on perceived quality. supporting brand extensions. and strengthening brand to the competitive threats. and should continue to build on it. there is of course a continuous need for information about the marketplace and consumer perceptions. As a result. Another point that might be considered is inter-correlations between the constructs. in many companies determining their competitive strength and thereby also their prospects of survival in the long term. Competence in the area of strategic brand management should therefore be further developed to enable successful brand orientation. brand awareness. This study has used Aaker‟s model in a simplified approach without introducing other 110 . The commodity industry is partially service oriented and sales are performance based on relationships. The second implication is tangiblizing the intangible.new customers. perceived quality and brand associations. so marketing managers have to formulate strategies based on the feedback from customers. hence this will help form tactics to winning new customers and keeping the existing ones.3 Recommendations for Future Research Brand orientation is a choice of strategy. 6.

that less concern be given to the place where brands manufacture their products. They define brand origin as „the place. Thakor anf Lavack (2003) state that even more important than the brand origin itself is the perceived brand origin as a source of brand appeal. 6.possible elements that may influence brand equity for Malaysian palm products. In their study the authors show. region or country to which the brand is perceived to belong by its customers”. Further more. that country of corporate ownership is a strong determinant of brand origin perceptions. brand origin must also be considered (Thakor and Kohli. country of perceived corporate ownership may also be a stronger influence than actual country of corporate ownership. It is similarly important. product uniqueness. and therefore.1 Brand Origin In addition to traditional concepts identified as brand equity influencers. comparison of brand equity measure in geography in different destination market and compare brand equity of other sources palm products. while more explicit when the brand concept relies more on features. Issues that might interest future research are brand origin. Recommendations for future studies revolve mostly around the questions that were raised or left unanswered or in areas that has relevance to this study.3. the use of origin cues should be subtle and implicit when the brand concept relies more on symbolism. 1996). Brand origin can be more or less salient for some brands or others. 111 . and more to the place where people perceive the brand‟s country of origin to be. In a later article.

As such country of origin image would have had an impact on the equity of such goods. The perceived uniqueness of product may differ based on culture and consumer demographics. Malaysian palm products are seen to have unique combination of high product quality. In this study.The image of a country that consumers perceive is one of the factors that consumers consider in making their purchase decision particularly in the purchase of consumer durables. which translates to loyalty from buyers. the conceptual framework of the present study does not take into considerations factors that moderate the influence of antecedent of brand equity on brand equity. This is could an essential contributing element to creating value to product brand and contributing to brand equity of the brand itself. It would be essentially good to investigate the relationship between country-of origin image and brand equity. The brand or its products may have a unique combination of feature and uniqueness. Palm products are highly commoditized and face stiff competition. It 112 . Exploring and understanding what makes Malaysian palm products unique and well accepted is important. to what extent the brand and its products are different from competitor in the mind of consumer. future research should expand the present model by incorporating moderating factors such as culture and consumer demographics. Thus.2 Product Uniqueness It would be essential to test. In addition. 6.3. which may have significant influence on consumers‟ perception. coupled with reasonable prices.

Malaysian palm product have gone under attack by anti palm oil campaigns. there is a likelihood that brand equity for Malaysian palm product is damaged.3 Malaysian Palm Oil Brand Equity in Different Geography In the last two decades . 6. This would assist in developing campaigns focused on creating or enhancing brand equity for Malaysian palm products.would be interesting to explore if Indonesian and European palm product share similar attributes. Indonesia has emerged as Malaysia‟s biggest competitor. Organizations like MPOB and MPOC has resources and may be keen to investigate such phenomenon.3. 6. The effect of this campaigns can be traced in different geographic regions. similar approach can be used for European producers. Likewise. In countries were the campaign have high negative impact.3. versus Brand Equity of Malaysian Palm Products This study has gathered data from respondent on other sources of palm product. Knowing and understanding our competition. What makes Indonesian palm products well accepted? What different product or features are offered by Indonesian palm producers to have such influence on buyers and user? The measured scale used in this study can be applied to Indonesian palm products. allows us a step forward in better brand orientation and management.4 Brand equity of Competing Palm Producers. 113 .

If the consumers react more positively to the elements of the marketing mix of a particular brand in comparison to the elements of the marketing mix of another brand.4 Conclusion The brand orientation represents the choice of strategy providing a company with competitive power and ensure the company‟s long-term survival. it was found that perceived quality and brand loyalty for Malaysian palm product has the strongest positive correlation in the brand equity measure. so they can be sold at a “premium”. In this research. development. thus increasing the company‟s profitability and enabling its further growth and development. i. 114 . that means that the product brand has a higher market value which represents something additional. Product brand gives products additional value. This allows a key sense of focus in brand management as an asset. allocation and use because the brand is a very valuable asset for a company.e. This can be used as focal point to synchronize activities and communication and put them in accordance with brand vision. The basis for the market brand value is the consumers‟ memory and experience. it represents a positive status in the consciousness of the consumers.6. Malaysian palm products. These results have important implications for researchers and the management of international companies exporting.

London. Global Oils and Fats Business Magazine. Journal of Product and Brand Management. “ European Journal of Marketing Vol. The Free Press. (July-Sept) Bek-Nielsen . Vol. corporate branding and corporate marketing – seeing through the fog”. David A. “Palm Oil: Winning Ways and Challenges to market Access”. ” Propelling The Malaysian Palm Oil Industry Towards Excellence” . European journal of Marketing.35 No3/4. “Corporate identity. Brand Leadership. the Need For New Approach”. Vol. “Global Oil and Fats Business : Challenge in the New Millennium”. Fatimah. pp. September 2005 Ambler . Nicholas E. Yusof (2007). “The marketing of Agricultural Primary Commodities. Johan. José Luis. pp 496-513 Bamer.M. (2005). Phillip.A (1991). June 1991. Berens. Johanssen. pp. and Styles.United Plantations Sdn. T. 10-19. Golden Hope Plantations Berhad. Marketing Intelligence and Planning. 248-291 Ballester. (2005). NY. C. Vol. Ulf and Persson. Carl (2006). 14 No. and Erich Joachimstahler (2000).Proceedings of Economics & Market Forecast Conference . “Understanding price premium for grocery products: a conceptual model of customer-based brand equity” Journal of Product & Brand Management . Operationalization and impact on the economic success of sport teams. and Sauer. D. 14/3.. No. “Customer-based brand equity in the team sport industry. (2005). Dato‟ Sabri. Melia Kuala Lumpur Bauer.J. Bhd. pg 1-9 Basiron.Oil Palm Industry Economic Journal.7. Yusof (2001).5/6. “Brand development versus new product development : towards a process model of extension decisions”. and Schmitt. pp 187196 Basiron.4 Issue 3.References Aaker. “Does brand trust matter to bran equity?”.”Corporate Branding: The development of corporate associations and their influence on stakeholder reactions” Erasmus Research Institute of Management (ERIM). New York. (1991). Elena Delgado and Muneura-Alemán. (1996). pp 401-414 Arshad.T (2001). 39. Ahmad. Vol. Anselmsson. Free Press. Guido A. Vol. John. Hans H.1. 16/6. “Managing Brand Equity”. Aaker. “ Sustainable Palm oil Production in Malaysia and The Price Outlook for 2006/2007” . Erasmus University Rotterdam 115 . Nicholas (2007).M (2004).

24 (March). Davis. Number 2. pp 168-179 Clifton. 17. K. De Chernatony.65. 343-356 Chaudhuri . “The brand dependence scale: measuring consumers‟ use of brand name to differentiate among product alternative”. “building on services‟ characteristics to develop successful service brands “ Journal of marketing management . (2002). New York Commodity Online (2008). Kuczmarski & Associates. March 2004. Chicago. 24-33 (1989).11. Vol. Bristow. Davis. “Managing Brand Equity”. S.” Qualitative Marketing Research: An International Journal. Vol. Leslie. pp. No.. Grace. Vol. David W.6.commodityonline. Schneider. Volume 5. Leslie and Susan Segal-Horn (2001). Journal of Product & Brand Management. 343-373 Gelder. “The future of brands. pp 81-93 Christodoulides. Josey Bass. pp 96-111 116 . Schuler. pp 145-161. Leingpibul. (1995) Brand Asset Management for the 21st Century. Friend of the Earth Thakor. Thaweephan. 25 Visions”. Journal of Marketing Theory and Practice. Building the Brand-Driven Business: Operationalize Your Brand to Drive Profitable Growth. 13 (3). 217-42 Farquhar. Scott M. “ Brand associations: looking through the eye of the beholder. George and de Chernatony. Volume 13. San Francisco. “Brand origin: conceptualization and review”. Dennis. No. 645-669 Fournier. (2004).com to help Malaysia sell palm oil”.M. Drue (2002). Debra and O‟Cass Aron. “Brand wagon www.2. Susan (1998).R and Maughan. Interbrand. “Dimensionalising on and offline brands‟ composite equity “. Jan Willem van. (2009). Peter H. “ Consumers and their brands developing relationship theory in consumer research”. Marketing Research. M. 1(September).Better Management Practices and Agribusiness Commodities. “Examining Brand Equity Antecedent/ Consequence relationships”. Number 3. Kenneth C. April. E. Allen. (2004). Journal of Consumer Research.S. (2000). (2001) “The chain of effects from brand trust and brand affect to brand performance: the role of brand loyalty”. Journal of product & Brand Management. Journal of Marketing. N. “Greasy Palms: Europena buyers of Indonesian palm oil”. 17. Mrugank V and Chiranjeev S Kohli (1996).. A and Holbrook. Phase Two report: Commodity Guides 2004 Boyles. Schumann.B. and Micheal Dunn (2002). Journal of Consumer Marketing.

1. Huseyin. “The six conventions of corporate branding” . Vol11 No. “Nurturing corporate images: total communication or ego trip?”. “Consumer Brand Equity in a cross-cultural Replication. George. Ruchan and Arasli.(2000) ” Marketing Management. Keller. The Millennium Edition. Jr. pp. S. and managing customer-based brand equity”. “Strategic brand value: Advancing use of brand equity to grow your brand and business” – Interactive Marketing. An evaluation of a scale” . “Brand building in the 1990s”. 350-368 Malaysian Palm Oil Council. King (1991). (2007). Abimbola. “Strategic Brand Management” London. S. Vol.P. Kayaman. (2000). pp 92-109 Keller. (2007). “Corporate Branding and corporate brand performance” – European Journal of Marketing. 7/8 . (2007). Sami (2006). Kevin. Micheal.L. vol 23. “Strategic Brand Management. Fellow Academy of Sciences Malaysia. Vol. Vol. Vol.6. Managing Service Quality. No. pp. 57. “Palm Oil Needs Price Recovery To Regain Confidence”. (2003). J-N (1997).35 No ¾. pp3-13. VOL. pp 998-1016 Kotler.441-456 @ MCB University Press Ibrahim. (2007).1. Kapferer. Fiona and de Chernatony. “Strategic Plan 2007 – 2010” Malaysian Palm Oil Council.L (2003). Singapore. Building.1.7.” Journal of Product & Brand Management. pp 157-173 Khan. JULY/SEPTEMBER 2003 Low.H. (2001). Journal of Marketing Management. K. Knox. Leslie. Ahmad (2008). measuring and Managing Brand Equity” . No.37 No. No 1-2. European Journal of Marketing.2nd edition Kennedy. Journal of Marketing Management.Rabobank International . (1977). Vol. 1-22. “ Strategic Financial Support: Spearheading Competitiveness of the Palm oil Industry “ . Kogan Page.120-64 Kocak. Alper. PP33-39. Simon and Bickerton. Charles W. measuring. pp. NO. pp. and Lamb. Temin and Ozer.Harris. Journal of Marketing. 17. Akin. 9. (1993). “The measurement and dimenionality of brand associations. “Customer based brand equity: evidence from the hotel industry”. “Conceptualizing. David (2003). Upper Saddle River. European Journal of Marketing. Prentice Hall Leiser.5. No. Dr. “Operational Plan -2007) 117 .

(2005) “An empirical investigation of the products package as an antecedent of Brand Personality “.K. Vol5. Vol. David and Bergin. (2005). Volume 13. Ray W. 1061-0421 Srivastava. Monday Ngan.” Shermann. A. “Technological Breakthroughs and Commercialization – The Way Forward”.3. (2007). MA. “The Challenges of corporate branding” Corporate Reputation Review. “Branding a commodity” – GLOBAL OILS AND FATS BUSINESS MAGAZINE. European Journal of Marketing . 5/6. 40. 2/3 .10 No..4. Stokes. Gaelle. Joel. (2001) – “A conceptual model study on brand valuation” – Journal of Product and brand management. 531-544. Total Quality Management. Innovative Marketing.D (1991). and Bao. Yeqing. p. MCB University Press. 2002. Boston. (2006). 1 Pappu. “Methodology or Methodolatry an evaluation of focus group and depth interviews. Mohd Naseer and Mohammad. Alan T. and Shocker. “Making the golden crop glitter “. Osman. ISSUE2.91-124. pp 217-227 118 . 16/1. Gunalan. International Palm Oil Congress News Straits Times (2005). Vol. Number 4. Andrew. Journal of Product and Brand Management. Richard. 38-48 MPOB. “Does image of country-of-origin matter to brand equity?”.. pp243-256. “Consumer-based brand equity and country-of-origin relationships. Leslie (2002).Ahmad (2000) “ Business Opportunity In Palm Oil Products” – Proceedings of Economist & Market Forecast Conference Pantin-Sohier.R. 25-29 September . 25-29 September Schultz.S (2006). Stephen (2004).S. No. Steven A. Nor. VOL. International palm Oil Congress. “The importance of brand equity to customer loyalty” . Zainal Azlan Bin Mohd Nazir. Ravi. Vol. Decrop. Celuch. Journal of Product and Brand Management. Nos. Cooksey. pp 105-112 Setharaman. pp.Mohd Nasir. 18. (2005) “Technological Breakthrough and Commercialization – The Way Forward”. Huber.31 Taylor. Ayat K Ab Rahman and Faizah Shariff (2005) “ Market potential and challenges for the Malaysian Palm Oil Industry in facing competition from other vegetable oils‟ Mohd Yasin. Pascale G. SYA. No. L. (2007).A. Marketing Science Institute. “Building Brand Equity via Product Quality”.5. Kevin and Goodwin. Amiruddin. “Brand equity: a perspective on its meaning and measurement”. Vol. Some empirical evidence”. (2006). pp 696-717 PIPOC. Alain and Bree. Quester. working paper. Norjaya. pp. Majken and de Chernatony. Frank and Shao. PIPOC .Ma Ah and Ibrahim. 13 June.

pp 347-364 119 . 0736-3761 Washburn.M. “Testing cross cultural invariance of the brand equity creation process” Journal of Product and Brand Management. Beioy John and Sekar. Vol. Sandra.Thomas. 46-61 Wood.Plank Richard (2002) “Measuring Brand Equity: An evaluation of a consumer-based brand equity scale” Journal of Marketing. Vol. 17. “Measurement and validity of Jennifer Aaker‟s Brand Personality Scale for Colgate Brand”. Pahud de Mortanges. Vol. pp18-32. “Co-Branding : brand equity and trial effects”.B. Vol. “Corporate identity: the concept. MCB university Press. Bonghee and Donthu. (2008).T. pp. J. “Corporate Branding versus product branding in emerging markets” . European Journal of Marketing.591-604.M. Lisa (2000).R.3 Urde. Till. van Riel.pg 662-669 Yoo. D. (1997). No. Haizhong. No. 5/6 .. Radi (2000). “Brands and brand equity: definition and management. Allard.3.7.31 No. THEORY AND PRACTICE.T. 11 No. Vol. “Antecedents of industrial brand equity: An empirical study”. C. its measurement and management”. H. “Corporate identity: the concept. pp. H. (2002).6.. Jornal of Consumer marketing . pp 305-316 Washburn. PC. E. pp 380-398 Yu. Management decision”.B. mats (1994)” Brand Orientation – A Strategy for Survival”. 17/5. Chunling (2008).24 No. pp 340-55 van Riel. and Balmer. Maastricht University C. European Journal of Marketing. Volume 33. Naveen. J. W.4. C. 5/6 .M. pp 340-55 Wang.M.Marketing Intelligence & Planning . Henry (2006). Yujie and Yu. (1997). Vol. and Balmer. its measurement and management”. (2005).Judith. Journal of Consumer Marketing. “Global brand equity model.31 No. combining customer-based with product-market outcome approach” Journal of Product & Brand Management. 1994. Charles and Strenkens. Brian and Priluck.11 No. VIKALPA.Judith. Xie.

Appendix 1 Major Players in the palm oil supply chain in Malaysia

Smallholders Govt Schemes Refiners

PK crushers Oleochem proucers Palm-based products manufacturers Speciality Fats producers

FELDA Plantation companies

Upstream Producer

Downstream Producers

Retail Institutional MPOAELD A Investors

Customers Exporters/ Importers

Major Players in the palm oil supply chain
MPOA ELDA

MPOB LDA

EMPA ELDA

ISP

Industry Organizations tion companies MOMG A MEOMA PORAM

MPOPC OAELDA

Govt. Agencies

POMA ELDA

NREB A

ECD

Other players MPOA ELDA NGOs OAELD A Unions MPOA ELDA

NASH MAPA AELDA

120

Appendix 2

Questionnaire

121

UNIVERSITY OF MALAYA
Faculty of Business and Accountancy Graduate School of Business Master of Business Administration

Survey On The Brand Equity Approach To Marketing Of Malaysian Palm oil Products

This survey is conducted as part of a research project, which shall be submitted in completion of the Master of Business Administration degree from the University of Malaya. All information will be kept confidential

Prepared by, Kamaleswari Balakrishnan CGA 030028 University of Malaya 122

The Questionnaire

SECTION A: Item I
Below are some statements about Malaysian Palm Oil products. Please circle the number that best fits your opinion. There is no right or wrong answer. 1 = Strongly Disagree and 10 = Strongly Agree.

Brand Equity attributes for Malaysian palm products 1 2 3 4 5 6 Malaysian palm products is of high quality The likely quality of extremely high Malaysian palm products is

Disagreement 1 1 1 1 1 1 2 2 2 2 2 2 3 3 3 3 3 3 4 4 4 4 4 4 5 5 5 5 5 5 6 6 6 6 6 6 7 7 7 7 7 7

Agreement 8 8 8 8 8 8 9 9 9 9 9 9 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0 1 0

The likelihood that Malaysian palm products is reliable is very high Malaysian palm products must be of very good quality I am aware of Malaysian palm products I can recognize Malaysian palm products among competing brands Some characteristics of Malaysian palm products come to my mind quickly I know what Malaysian palm products look like

7

1

2

3

4

5

6

7

8

9

8 9

1

2 2

3 3

4 4

5 5

6 6

7 7

8 8

9 9

I would not buy other brands, if Malaysian palm 1 products is available at the store Malaysian palm products would be my first choice I consider myself to be loyal to Malaysian palm products 1 1

10 11

2 2

3 3

4 4

5 5

6 6

7 7

8 8

9 9

12

I have difficulty in imagining Malaysian palm products in 1 my mind I can quickly recall the logo Malaysian palm products 1

2

3

4

5

6

7

8

9

13

2

3

4

5

6

7

8

9

123

it seems smarter to purchase Malaysian palm products Considering all my consumption/purchase experience with Malaysian palm products I am …. 1 2 3 4 18 Very satisfied… 1 2 3 4 SECTION B: Company Profile This section will identify background of the company you are currently attached too. Disagree Strongly Disagree 14 It makes sense to buy Malaysian palm products instead of any other palm products. I prefer to buy Malaysian palm products 1 1 2 2 3 3 4 4 15 16 1 2 3 4 17 If another brand of palm product is not different from Malaysian palm products in any way. (19) Please state the number of employees in your company Estimated number of employees: _________________ 124 Strongly Agree Neutral Agree Overall brand equity and satisfaction attribute for Malaysian palm products 5 5 5 5 5 .…. I would prefer to buy Malaysian palm products If there is another brand of palm product as good as Malaysian palm products. There is no right or wrong answer..Item II Below are some statements about Malaysian Palm Oil products. even if they are the same Even if another brand has the same features as Malaysian palm products. Please tick (X) in the appropriate box. 1 = Strongly Disagree and 5 = Strongly Agree. Please circle the number that best fits your opinion.

percentage of Malaysian palm products from total purchase of palm products Please indicate percentage: _________________ (25) Please indicate.(20) What is the nature of you company’s business Trading of palm products Distribution of palm products Food manufacturing Oleo Chemicals (21) My company buys Malaysian palm products. does your company buy palm products from? Please indicate country: _________________ (24) Please indicate. for: FOOD application NON-FOOD application BOTH (22) How long has your current company been using Malaysian palm products? Estimated number of years: _________________ (23) Please indicate which other sources. which of the following factors are most important to your company (please select one answer only) a) Product Quality b) Product Price c) Delivery d) Supplier reliability 125 . in volume (metric tones) how much of Malaysian Palm products your company purchase in a year Please indicate metric tone: _________________ (26) In selecting to purchase Malaysian palm product.

in appropriate columns. Please tick (X) in the appropriate box (27) Age 20 to 35 years old 36 to 45 years old 46 to 55 years old 56 years old and above (28) Gender Male Female (29) Highest level of education High school Diploma Degree Master Degree Doctorate (30) What is your job function. Kindly indicate your details.e) Supplier relationship f) Product Brand name SECTION C: Respondent Profile This study requires the profiling of our respondents. in your current position Purchasing/sourcing Research and development Sales and marketing Production Logistics/ supply chain (31) How long have you been involved in the use/purchase of Malaysian palm products Estimated number of years: _________________ -THE END - 126 .

126 .872 127 .258 2.502 4.588 4.046 1.626 .858 .725 2.122 2.47 8.185 2.97 Std.32 7.475 1.548 .18 8.06 7.793 1.737 .740 .629 .90 8.175 2.969 .629 2.78 3.791 .63 3.18 8.74 9.65 3. Deviation .01 3.467 2.72 7.934 Variance .82 8.939 .666 .521 .153 4.60 7.609 2.793 .096 1.816 .805 .Appendix 3 Data Analysis Demographic Data: Statistics COUNTRY N Valid Missing 72 0 Descriptive Statistics N A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 A11 A12 A13 A14 A15 A16 A17 A18 Valid N (listwise) 72 72 72 72 72 72 72 72 72 72 72 72 72 72 72 72 72 72 72 Range 3 4 3 3 7 8 9 9 8 8 9 9 8 4 3 3 3 4 Minimum 7 6 7 7 3 2 1 1 2 2 1 1 2 2 2 2 2 1 Maximum 10 10 10 10 10 10 10 10 10 10 10 10 10 6 5 5 5 5 Mean 9.648 .81 3.39 7.394 2.976 4.71 7.503 1.

4 100.0 Valid "Food application" "Non-Food application" "Both" Total 128 .0 Valid Percent 6.1 5.1 100.3 45.6 2.0 Cumulative Percent 6.1 100.9 100.9 6.2 9.9 37.6 4.6 5.6 55.8 48.9 11.6 100.6 2.8 6.3 100.7 100.3 16.6 40.0 Cumulative Percent 52.8 6.9 6.7 72.0 Valid 1-10 11-20 21-30 31-40 51 and above Total B20 Frequency 47 25 72 Percent 65.6 66.3 16.0 Valid Lebanon Bulgaria Iran Russia Dubai Vietnam Philliphines Romania Lithuania Ukraine Uzbekistan Pakistan Saudi Arabia Total B19 Frequency 5 27 32 4 4 72 Percent 6.8 56.3 34.0 Valid Percent 4.3 23.7 6.2 11.2 76.8 4.4 86.1 8.8 4.6 4.7 6.4 5.7 100.2 15.7 5.2 11.9 100.7 5.1 100.4 5.2 43.6 100.0 Cumulative Percent 4.9 11.2 43.9 100.0 Cumulative Percent 65.1 8.6 5.9 94.0 Valid Percent 65.1 93.COUNTRY Frequency 3 8 6 12 4 2 5 8 4 3 7 5 5 72 Percent 4.3 34.5 44.4 88.9 37.2 9.5 44.1 5.0 Valid Percent 52.0 Valid "Trading of palm product" 'Distribution of palm products" Total B21 Frequency 38 3 31 72 Percent 52.9 44.

7 15.6 16.0 5.0 Valid Indonesia Europe Egypt Germany Belgium Others Total B24 Frequency 1 3 6 7 11 11 3 5 25 72 Percent 1.1 100.4 100.2 6.9 79.9 1.0 Valid 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100 Total Valid Percent 1.2 95.3 15.3 15.1 20.2 100.6 48.2 58.3 15.6 4.2 6.6 63.7 2.0 5.3 9.7 100.4 4.7 100.6 59.0 Valid Percent 50.4 31.7 68.4 5.9 100.4 100.9 23.2 6.8 16.6 38.8 98.2 6.9 48.0 Cumulative Percent 50.7 15.3 4.8 1.0 Valid 1-2000mt 2001-4000mt 4001-6000mt 6001-8000mt 8001-10000mt Above 10000mt Total 129 .0 55.7 66.3 9.6 4.3 20.6 16.0 Valid 1-5 6-10 11-15 16-20 21 years above Total Percent 30.8 16.6 13.B22 Frequency 22 35 12 2 1 72 B23 Frequency 36 4 3 5 1 23 72 Percent 50.0 Valid Percent 30.9 54.9 1.0 Cumulative Percent 1.0 Cumulative Percent 11.7 15.2 8.2 8.4 4.3 20.8 100.0 B25 Frequency 8 15 12 11 11 15 72 Percent 11.9 100.3 100.8 100.6 100.4 31.6 48.1 31.9 34.7 15.3 15.6 79.1 20.8 1.0 Valid Percent 11.0 Cumulative Percent 30.9 34.3 4.7 2.3 65.

6 4.6 55.9 22.6 37.4 6.0 Valid Percent 63.6 11.6 11.4 6.8 33.6 4.4 6.0 Valid Percent 23.9 36.6 100.6 55.2 5.3 12.4 6.5 59.6 100.9 36.1 98.0 Cumulative Percent 23.0 Valid Percent 52.0 Valid Percent 4.4 100.0 Cumulative Percent 63.9 68.1 30.2 40.3 100.1 23.8 33.0 Valid Percent 1.9 100.4 100.2 83.4 8.9 100.9 22.9 19.9 19.1 100.3 12.4 100.B26 Frequency 17 40 3 4 8 72 B31 Frequency 3 5 14 5 16 29 72 Percent 4.2 40.1 100.1 100.5 1.0 Cumulative Percent 52.6 79.7 100.0 Valid "High School" "Diploma" "Degree" "Master Degree" Total 130 .8 86.0 Cumulative Percent 4.1 23.2 5.2 6.2 6.3 76.5 1.6 100.1 100.0 Valid 0-1 year 1-2 year 2-3 year 3-4 year 4-5 year Above 5 yrear Total AGE Frequency 38 24 9 1 72 GENDER Frequency 46 26 72 Percent 63.2 11.3 88.0 Valid "20 to 35 years old" "36 to 45 years old" "46 to 45 years old" "56 years old and above" Total Percent 52.0 Valid Product Quality Product Price Delivery Supplier reliability Supplier relationship Total Percent 23.0 Cumulative Percent 1.3 100.0 Valid "Male" "Female" Total EDUCATIO Frequency 1 5 49 17 72 Percent 1.9 68.

000 -.000 .9 100.138 .044 .124 .111 72 72 72 72 72 AWR .5 43.412 .027 -.58705 1.67436 .203 .007 .183 .000 .5 5.207 -.000 .027 .108 .183 72 72 72 72 72 PQLTY .000 72 72 72 72 72 LOYALTY .343 .9167 7.384 . .0 Valid Percent 37.343 .007 .POSITION Frequency 27 4 41 72 Percent 37. .9792 7.000 72 72 72 72 72 ASSC -.000 .111 .290 .14372 1.5 5.6 56.8056 Std. 72 72 72 72 72 Sig.049 -. (1-tailed) N 131 .412 . Deviation .0 Valid "Purchasing/Sourcing" "Research and development" "Sales and marketing" Total Correlation for Brand Equity (Regression) Descriptive Statistics BEQUITY PQLTY AWR LOYALTY ASSC Mean 3.044 .145 . .382 .9 100.138 -.145 .049 1.384 1.041 .61541 N 72 72 72 72 72 Correlations Pearson Correlation BEQUITY PQLTY AWR LOYALTY ASSC BEQUITY PQLTY AWR LOYALTY ASSC BEQUITY PQLTY AWR LOYALTY ASSC BEQUITY 1.207 -.290 1.6343 7.000 .17106 1.041 .382 .6 56.000 .1 100.0 Cumulative Percent 37.7153 8.108 -.124 . .203 1.

00 1.5408 2.463 -2.9490 -1. Residual Deleted Residual Stud.a Coefficients Model 1 (Constant) PQLTY AWR LOYALTY ASSC Unstandardized Coefficients B Std.257 -.076 .471 . Distance Cook's Distance Centered Leverage Value Minimum 2.148 .243 t . Error .459 .587 25.117 .165 .5 -2 0 .5 0 . 132 .7276 .000 .944 .00 N = 72.39284 4.6613 2. Deviation .0 -1 0 .0124 -.971 1.0000 .0 -2 0 .589 1.020 .16194 3.62572 .022 .066 a.885 -2.3368 2. .972 . Dev = . Dependent Variable: BEQUITY Residuals Statisticsa Predicted Value Std.102 .006 Maximum 4. 00 2.209 .760 .358 Mean 3.326 2.5868 -2. Residual Stud.484 1. 50 2.09191 2.000 .5 -1 0 .392 2.7153 .132 .9259 1. Dependent Variable: BEQUITY Charts Histogram Dependent Variable: BEQUITY 12 10 8 6 4 Frequency 2 0 Std.009 -.9680 -2.27793 .053 N 72 72 72 72 72 72 72 72 72 72 72 72 a.059 .189 .526 1.097 .000 -.056 Std.69167 1.600 .05122 . Deleted Residual Mahal.063 -1.000 .073 .97 Mean = 0.867 Sig.182 .25146 1.422 .054 Standardized Coefficients Beta .072 -.043 .043 3.009 3.1759 -3.729 1.00 Regression Standardized Residual 0 -.385 . Predicted Value Standard Error of Predicted Value Adjusted Predicted Value Residual Std. 50 1.618 .5 00 0.

00 .219 .024 . Dependent Variable: A18 133 . Error 1.00 .75 Expected Cum Prob .75 1.535 t 2.50 .741 . .308 5.25 0.Normal P-P Plot of Regression Standardized Residual Dependent Variable: BEQUITY 1.299 Sig.50 .528 .00 0.000 a.25 .140 Standardized Coefficients Beta .00 Observed Cum Prob Scatterplot Dependent Variable: BEQUITY 2 1 0 -1 -2 -3 -3 -2 -1 0 1 2 3 Regression Standardized Residual a Coefficients Model 1 (Constant) BEQUITY Unstandardized Coefficients B Std.

175 .604 .006 .341 -2.023 N 72 72 72 72 72 72 72 72 72 72 72 72 a.37 1.92 1.50 0.50 -2.008 .00 .125 3.00 -.000 .306 A18 1 a.745 1.00 Regression Standardized Residual 134 .000 .00 -2.00 .043 .813 1.00 -.015 .98 .50 1.00 1. Residual Deleted Residual Stud.000 Maximum 4.000 .63 -3.68 -3.002 .772 6.500 .45 1.306 -3.97 .500 1.003 .986 .470 . Deleted Residual Mahal.258 4.028 .a Casewise Diagnostics Case Number 3 Std.014 Std. Predicted Value Standard Error of Predicted Value Adjusted Predicted Value Residual Std.50 N = 72. Dependent Variable: A18 Charts Histogram Dependent Variable: A18 20 10 Frequency Std.00 0 -3.99 Mean = 0.00 -1.618 .50 -1.905 . Residual -3. Dev = .091 Mean 3. Residual Stud.544 .727 1.55 -2.027 1. Deviation . Dependent Variable: A18 Residuals Statisticsa Predicted Value Std.50 -3.993 1. Distance Cook's Distance Centered Leverage Value Minimum 2.094 2.99 1.789 .70 -2.000 -.

17106 1.778 .446 .792 .25 0.30810 -1.559 ASSC 72 0 1.58705 .00 Observed Cum Prob Scatterplot Dependent Variable: A18 2 1 0 -1 -2 -3 -4 -3 -2 -1 0 1 2 Regression Standardized Residual Normality test (Frequencies) Statistics N Std.283 .559 AWR 72 0 1.283 .559 LOYALTY 72 0 1.67436 .60955 -.904 .997 .559 A18 72 0 .559 135 .583 .50 .080 .50 .25 .238 .34463 -.75 Expected Cum Prob .14372 1.00 .75 1.132 .61541 2.Normal P-P Plot of Regression Standardized Residual Dependent Variable: A18 1.934 .45476 -. Error of Kurtosis Valid Missing BEQUITY 72 0 .872 -. Error of Skewness Kurtosis Std.283 4.00 0.559 PQLTY 72 0 .656 .283 .676 .743 .283 .283 .37139 -1.00 . Deviation Variance Skewness Std.

6 6.3 6.9 12.2 11.0 Cumulative Percent 5.0 Cumulative Percent 2.75 8.2 87.4 4.6 4.0 PQLTY Frequency 2 1 3 3 7 12 16 8 11 6 3 72 Percent 2.50 4.2 100.3 12.6 1.50 8.2 11.2 11.3 8.8 4.00 Total Valid Percent 5.00 3.3 13.75 3.0 83.6 15.9 22.2 100.3 95.1 15.75 4.3 8.7 63.1 72.00 2.2 8.75 9.00 Total 136 .50 3.2 38.75 5.4 5.7 22.9 22.00 4.1 8.00 8.25 8.4 5.8 41.9 5.6 1.25 4.9 75.7 22.50 9.3 4.6 15.8 1.8 100.3 90.7 16.2 9.2 9.3 6.75 10.2 11.5 95.6 4.7 16.9 5.1 15.0 Valid 2.4 4.3 4.1 8.5 22.9 61.8 100.2 4.8 1.2 100.2 100.5 27.25 7.Frequency Table – Individual Variable BEQUITY Frequency 4 1 4 11 10 16 8 6 5 4 3 72 Percent 5.3 13.2 4.0 Valid Percent 2.0 Valid 7.25 9.25 3.00 9.

25 9.7 2.8 13.4 6.5 9.8 5.9 9.8 5.8 1.4 100.75 Total LOYALTY Frequency 1 1 2 4 11 6 7 7 7 9 7 7 1 2 72 Percent 1.33 8.7 2.7 1.00 6.4 2.7 11.50 8.25 6.8 2.7 12.25 6.6 6.7 9.9 9.9 9.6 6.9 76.67 8.4 33.00 7.0 Valid Percent 1.33 7.50 6.3 50.4 54.8 100.4 2.1 20.33 10.3 8.4 2.3 9.0 Cumulative Percent 1.9 6.4 34.7 9.7 44.00 9.8 13.4 86.8 1.3 93.25 8.6 2.0 Cumulative Percent 1.8 1.7 9.50 9.0 Valid 2.7 2.8 66.5 9.67 9.9 6.4 2.67 7.0 Valid 4.3 40.33 5.6 2.9 2.4 6.1 26.9 2.4 6.00 8.4 2.75 7.6 100.50 7.7 9.8 5.1 95.4 5.2 100.4 1.00 9.8 1.6 15.7 9.9 16.2 63.3 9.4 5.00 Total 137 .7 12.67 6.8 98.00 8.1 18.7 1.00 7.7 83.9 16.1 95.7 9.7 9.4 1.4 100.8 97.7 9.6 11.8 2.75 9.6 15.0 52.8 5.75 8.7 2.AWR Frequency 1 4 2 1 5 2 4 5 5 7 2 10 12 7 2 2 1 72 Percent 1.8 26.33 6.25 7.8 100.25 5.3 8.0 Valid Percent 1.8 5.

3 13. Bartlett's Test of Sphericity Approx.9 12.0 Valid Stronly Disagree Disagree Neutral Agree Strongly Agree Total KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy.5 9.3 5.3 23.4 4.00 7.8 8.3 100.5 8.8 30.6 12.9 15.000 138 .8 2.610 650.8 8.00 5.3 100.7 13.4 100.50 8.00 8.8 33.00 9.00 5.4 2.00 4. .3 13.9 12.00 Total A18 Frequency 1 5 11 33 22 72 Percent 1.499 153 .50 9.0 Valid 3.2 6.9 15.5 8.9 8.9 8.3 5.0 Cumulative Percent 1.50 10.4 8.ASSC Frequency 1 2 2 6 4 9 7 10 6 10 9 6 72 Percent 1.4 6.9 15.6 69.6 100.8 30.50 6.1 56.0 Cumulative Percent 1.3 20.6 100. Chi-Square df Sig.50 7.4 6.0 Valid Percent 1.6 12.3 43.7 13.3 45.3 45.7 100.8 2.3 79.2 91.4 2.0 Valid Percent 1.9 65.5 9.

Sign up to vote on this title
UsefulNot useful