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Do Consumer based-factors influence consumer buying behavior in

automotive industry? (Malaysia Evidence)

Conference Paper · June 2011

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 2011 International Conference on Sociality and Economics Development
IPEDR vol.10 (2011) © (2011) IACSIT Press, Singapore

Do Consumer based-factors influence consumer buying behavior in

automotive industry? (Malaysia Evidence)

Hossein Nezakati1*, Kem Oon Kok2 and Omid Asgari3

1
Department of Management and Marketing, Faculty of Economics & Management, Universiti Putra
Malaysia (UPM)
2
MBA student, Graduate school of Management (GSM), Universiti Putra Malaysia (UPM)
3
Founder & CEO, Delta Consulting Group (DCG), Tehran, Iran.

Abstract. The research would give some contribution to many parties namely academicians, practitioners
and policy makers. The academicians can use this study for their future research for better understanding the
concept of consumer purchasing behavior. The results from the previous and this study then may help to
express the factors that influence consumer attitudes towards imported car in Malaysia. Moreover, the
understanding on consumer purchasing behavior leads to better explanation of the concept to their students
accurately in this globalization era. Results of the research may give some useful information to marketing
managers. They can better understanding on consumer purchasing behavior that towards comprehensive in
concept of the attitude consumers. The results also can give companies to know well why certain countries
make use of local car producing or imported car than other countries in order to segments their market. Thus,
these can make practitioners to revise their marketing strategies in order to sustain in the globe market which
is set all the principles across all target customers. The producers’ local car such as PROTON and
PERODUA also can gain from this study. They can understand of the consumer purchasing behavior in term
of price, quality, value, risk, beliefs, and perception and so on in order to come out with more effective
marketing strategies. Malaysia National Automobile Industry and also foreign car manufacturing should be
able to reduce the cost and improve the production in order for them to enjoy the economics of scale. From
the result, it can be concluded that respondents are seemed have high level of beliefs system in the mind
towards purchase imported car. They prefer to belief what they are thinks regarding perception of the
imported car. This result was analyzed by using Multiple Regression through the responds from the
respondents.
Keywords: Consumer based-factors, Consumer buying behavior, Automotive industry, Consumer
purchasing behavior

1. Introduction
Nowadays, automobile industry in Malaysia was indicated growth year by year through joint venture
with others countries to produce better products by using technology advancement such as automobile
industry. Economic growth was increased spending by the population towards this industry to make the
economic in Malaysia encounters the growth in equity market [1]. The growth in Malaysia indicated that
economy in Malaysia was encounters the growth market through industrial production. Recently automobile
industry in Malaysia was maintained a steady growth. Malaysia was encounters the growth market in
automobile industry whereby the people was disposable income to acquiring the dreams automobile. As we
know, the growing automobile industry in Malaysia was encountering many benefits to the economy country.
Thus, consumers will enormous search information and see the financial performance before acquiring
automobile [2]. Nowadays, purchase a house is one of the heavy investments whereas followed by purchase

1
* Hossein Nezakati (Ph.D.), Tell; +60173724245; fax: +60389486188
E-mail address: hossein@econ.upm.edu.my, dr.nezakai@gmail.com
17
car [2]; manufacturing must keep maintain the products and services up to standard quality in order to
satisfies the consumers need and repeat purchasing in the following years especially for the first time buyers.
Meanwhile, accommodating to the functional may require necessary requirements to develop nice design of
the imported car. In order to attract the consumer buy the imported car, manufacturing must enhance the
quality of the car at the same time design the unique physical image of the car by attraction eyes of the
potential buyer in the market. Past research evidence show that many buyers are come from attractiveness of
the origin product whereby the product can satisfies the consumers’ need and want [3].One of the attractive
cars in the automobile industry was convenience car which is called small car. This product market was
changed rapidly due to demand on the market seem economy nowadays changed rapidly. Besides, due to
technology advancement, producing this types of car was rapidly demanded and manufacturing should take
initiative to understand consumers’ preference on near future and take actions whereby overcome the market
changes situation [2]. Meanwhile, in marketing perspective where focused customer needs is based on the
how deep understanding of the consumer behavior [4]. It could be very interesting topic to know what are the
alternatives that can be master in order to know the consumer preference today and carried out what is the
step of consumer buying process for automobile market. Lastly was examining what are the critical elements
of the consumer when buying imported car. The entry foreign car manufactures into Malaysia such as
Mercedes, BMW, Toyota, Mitsubishi, and Ford and so on enable Malaysia automobile industry started
growing dramatically. In order to achieve world class automobile in the world, equity partnerships with
others automobile companies should keep maintaining in order to gain technological collaborations to
increase the quality of the car in Malaysia at the same stable the sales market in local market as well as world
market [5]. Malaysia is now taking steps in the manufacturing industry, particularly heavy commercial
vehicles in order to establishment of the Heavy Industries Corporation of Malaysia (HICOM) in year 1980.
Malaysia motor industry was been growing in recent years whereas help to growing the economy in
Malaysia at the same time increase the lifestyle of the population. In this reasons, Malaysia started heavy
invest in this industry in order to gain competitive advantages in this industry. The general objective of this
research is to identify the consumer buying behavior towards automobile industry in Malaysia. As
competition among firms around the globe increases, the marketers search for the best marketing strategies
to overcome the challenges of the marketplace. This study was determine what factors will influence the
consumer purchasing behavior towards imported car industry in Malaysia. The factors were price
consciousness, value consciousness, price – quality inference, risk averseness, beliefs, perception, attitude,
and group influence whereby these factors has positive or negative relationship with the consumer intention
purchase towards imported car. The benefits of this research is can understand the respondents respond
regarding the imported car and what are the possible treats will occur towards local car manufacturing such
as PROTON and PERODUA.

2. Materials and Methods

The purpose of this research is to identify what factors will influence consumer buying behavior towards
automobile industry in Malaysia. The framework for this study is based on the several framework as mention
above are combined together to become the new framework for this study. The several frameworks are
Huang et al. (2003), Byoungho and Yong (2005), Keegan et al. (1992), B. Lane, S. Potter (2007), Gilbert
(1991), Sheth, Newman, and Gross (1991), and F. van Rijnsoever et al. (2009) Consumer behavior is turn to
be causally determinants of consumers’ purchase behavior towards imported car in automobile industry in
Malaysia[1][6]. Figure 1 represents new framework for this study after gathering all the information and
various researchers’ framework and study. Whereas, the variables of the framework (Price consciousness,
value consciousness, price-quality inference risk averseness, beliefs, perception, attitude, and group
influences) as independent variable. Intention to purchase imported car would become as dependent variable.
The conceptual framework for this study is rendered in Figure 1.

18
 Fig. 1:
1 Conceptual Framework of
o Customer Loyalty
L
Based on o the conceeptual frameework of thiis study, thee following hypotheses
h w
were formullated for thee
relationshipps between inndependents variables and dependent variable.

2.1. Hyppothesis of the

t Study
H1: Consum
mers’ price coonsciousnesss will significcant affects consumers’
c i
intention to ppurchase imp
ported car.
H2: Consum
mers’ value consciousnesss will signifiicant affect consumers’
c inntention to ppurchase imported car.
H3: Higher of the pricee-quality infeerence by thee consumerss, the more negative
n the consumers’ intention too
purchase im
mported car.
H4: Higher risk averseeness to the consumers,, the more negative thee consumerss’ intention to purchasee
imported caar.
mers’ beliefs significant affect
H5: Consum a consum on to purchasse imported car.
mers’ intentio
H6: Consum
mers’ percepttions significcant affect coonsumers’ inttention to puurchase impoorted car.
H7: Consum
mers’ attitudee significant affects consuumers’ intenttion to purchhase importedd car.
H8: Group influences
i siggnificant affe
fect consumers’ intention to purchase imported caar.

2.2. Reseearch methhod

A reseaarch design isi a master plan
p specifying the methods and proccedures for ccollecting an nd analyzingg
the needed informationn. It is a fram mework or blueprint
b thaat plans the action for thhe research project. Thee
objectives ofo the studyy are to dettermine the research wh hich includeed in the deesign to ensure that thee
informationn collected is appropriate for solving the
t problem [7]. The reseearch design also involvees specifyingg
source of thhe informatioon, research method
m or teechnique andd the samplinng methodoloogy. Research h design cann
be classified as exploraatory, descripptive, and exxperimental.. The choicees among theese research designs aree
subjective in nature andd very much depending on o the researcch objective,, nature of thhe problem related
r to thee
research annd the percepption of the researcher on the study y. The sourcce of this sttudy was gaathered from m
primary andd secondary data. At the beginning sttage, secondaary data werre collected, as it is impo ortant to givee
some insighhts of the acttual researchh problem beefore it was supported
s byy primary datta. The targeet populationn
of this studdy consists of consumerss from regionn of Klang Valley.
V As wew know Klaang Valley is the capitall
city to Malaaysia countryy. Thus, the area has the largest propportion population in the country. In this study, a
probability sampling tecchnique was selected. It is i because evvery numberr of the popullation has a known,
k non--
zero probabbility of a seelection. In other wordss, in this stuudy, a simplee random saample that iss a group off

19
Malaysian consumers is the best-known probability sample, in which each member of the population has an
equal probability of being selected. Moreover, the study is conducted to investigate consumer purchasing
behavior towards imported car in Malaysia. For this research, statistical techniques were used to analyze the
data and achieved the research objectives as presented earlier chapter. The data should be managed and
analyzed in order to proceed to the next step. The data should be processing first such as editing, coding and
keying respondents’ answers into computer in order to analyze. The data collected from respondents should
convert into usable information so that easy to manipulate. Purpose for this step is to ensure the respondents
must have correctly answered the questions in the questionnaires. All the data and information was process
through Statistical Package for Social Science (SPSS). Descriptive analysis and inferential analysis were
used in this research. Descriptive analysis is to capture the data in general and the inferential analysis were
analyzed the variables of the research links with individual perspective. Descriptive analysis is the
transformation information raw data into form which can easy to understand and read. The raw data into
form are easy to rearranging, manipulating, and ordering into descriptive form. First form of analysis usually
is describing responses and observations. In order to summarizing the data, calculating averages, frequency
distribution, and percentage distributions is the common way to do and this is needed so. The reasons why
the frequency analysis is important in this study in order to evaluate the consumer purchasing behavior
towards imported car in Malaysia and finally summarizing the data into useful information and easy to
understand. Reliability test was required in this study in order to check the Cronbach Alpha would show and
required acceptable alpha range more than 0.70 to be acceptable. In order to identify the relationships
between variables, researchers generally will use some tools of inferential analysis to check whether
variables between dependent variable and independents variables in this research have relationship or not.
Normally statistically procedures were use is Multiple Regression analysis, Correlation analysis and so on.
Multiple Regression analysis was the main tools to use in this study in order to determine the most influence
factors to the consumer intention purchasing towards imported car. Finally, the hypotheses developed by this
study were test and identify which hypotheses will accept and which will reject. In this study, Multiple
Regression was used to investigate of the effect of two or more variables on a single interval scaled
dependent variable. The independent variables are consumer intention purchase imported car. All data
collected from respondents will edit first which is through coding and transfer to data storage. The reasons
editing is to ensure the completeness, consistency, and reliability of the data. Second step is coding which
process of identifying and classifying each answer with a numerical score or using others character symbol.
Using the symbol is enabling researcher responses to be grouped into a limited number of categories in order
to easy interpretation. This step will simplify the analysis process. Finally, keying data to computer is last
step which is easy to analyze the data. Data collected from respondents should convert into useable
information to ensure that the respondents have correctly entered their answer in the questionnaire. All the
data will processes by using SPSS.

3. Result and Discussion

The summary result from the Multiple Regression show that Hypotheses 1 was rejected since the
significant level of the variable (Price Consciousness) was more than (P > 0.05) level which is 0.641. Thus,
Hypotheses 1 is rejected. The summary result from the Multiple Regression show that Hypotheses 2 was
supported since the significant level of the variable (Value Consciousness) was less than (P < 0.05) level
which is 0.022. Thus, Hypotheses 2 is supported by 95% probability. The summary result from the Multiple
Regression show that Hypotheses 3 was supported since the significant level of the variable (Price-Quality
Inference) was less than (P < 0.05) which is significant level at 0.000. Thus, Hypotheses 3 is supported by 95%
probability. The summary result from the Multiple Regression show that Hypotheses 4 was supported since
the significant level of the variable (Risk Averseness) was less than (P < 0.05) level which is 0.001.Thus,
Hypotheses 4 is supported by 95% probability. The summary result from the Multiple Regression show that
Hypotheses 5 was supported since the significant level of the variable (Beliefs) was less than (P < 0.05)
which is significant level at 0.000. Thus, Hypotheses 5 is supported by 95% probability. The summary result
from the Multiple Regression show that Hypotheses 6 was rejected since the significant level of the variable
(Perceptions) was more than (P > 0.05) level which is 0.546.Thus, Hypotheses 6 is rejected. The summary

20
result from the Multiple Regression show that Hypotheses 7 was rejected since the significant level of the
variable (Attitude) was more than (P > 0.05) level which is 0.098.Thus, Hypotheses 7 is rejected. The
summary result from the Multiple Regression show that Hypotheses 8 was rejected since the significant level
of the variable (Group influences) was more than (P > 0.05) level which is 0.147. Thus, Hypotheses 8 is
rejected. A sample of 210 respondents was research whereby the 119 respondents were males and 91 were
females. Most of the respondents were Malay where contributing 98 respondents, followed by Chinese were
56 respondents, Indian were 35 respondents and others races were 21 respondents. Majority of the
respondents were aged 18 to 28 years old and most of them in the highest education level were bachelor
degree. Some of the respondents were still student where they are attending class as part-time students.
Lastly, for the income level, some of the respondents were below RM1800 but most of the respondents were
average monthly income were RM1800 to RM3000. From the reliability results, it was found that majority
respondents was beliefs them self about the quality of the car before they made decision to purchase.
Consumers seems to be equivalently beliefs them self regarding perceptive of the import car, meaning that
they purchase car based on the experience from the past where they belief which car will suitable for them.
They also act like a consumer seeker whereby they will keep forward looking for the new design of the
imported car. Some of the consumer beliefs which car they are prefer to drive and which car they are not
prefer or dislike. Some of the respondents believe the imported car was appealing luxuries and suit for them
such as BMW Mercedes Benz, Toyota, Honda, and so on. In this study, we also found that most of the
respondent beliefs that imported car were more safety to drive due to test safety before launching new model.
Other than that, they also believe imported car were made by high quality material in term of interior design,
more quality in term of engine performance and also more towards science and technology. The result of
this study can be summarized as; the regression coefficient for price quality inference and risk averseness
was negative relationship between price quality inference/risk averseness and intention purchase import car
(dependent variable). However, the regression coefficients for Value Consciousness and Beliefs were
positive relationship between Value Consciousness/Belief and Intention purchase import car (dependent
variable). As the result, if positive relationship, the higher level of independent variable, and more they were
intention to purchase. At the same time, if the negative relationship, the higher level of independent variable,
more less they will intention to purchase. The most influencing to the consumer intention to purchase
imported car was belong to Beliefs (independent variable) which is the highest beta for the coefficient
regression. Below table was indicated the result testing of the hypotheses in this study. Four of the
Hypotheses were supported in this research whereby the hypotheses were H2, H3, H4, and H5. In this results
show that Malaysia consumers are concern on the value that they receive when they purchase imported car.
To be intention to purchase imported car, they will consider how far the price and quality they concern. What
are the risks they will examine when purchase imported car, and lastly beliefs system in the consumers mind
is the major factors that will affect them to purchase imported car. Malaysia consumers seemed to have
strong beliefs system towards imported car as they like or dislike to purchase. This is because they have past
experience toward the car they brought and drives. They also prefer to the imported car after they do some
judgment and comparison of the quality, design, and performance with others car like local car
manufacturing such like PROTON and PERODUA. They gladly to pay more for imported car as what they
are get the quality from the imported car. Many of the research were done in a different country with
different culture and behavior. This study was contributing many respondents in Malaysia in order to
examine the consumer purchasing behavior. The results of the study can be used as statistically analysis for
government sector, educational sector, institution and so on. Meanwhile, the findings also benefits to the car
manufacturing companies in order to understand what the effects of consumer purchase behavior towards
automobile. For the managerial implication perceptive, in this study found that four variables have
significant relationship with intention purchase towards automobile industries especially for imported car.
The variables were Value Consciousness, Price Quality inference, Risk Averseness, and Belief.
Manufacturing and marketers should play attention on what the major factors that will influence the
consumer purchase behavior in order to sustain competitive in the market. Therefore, to successfully
complete in the Malaysia market, marketers or manufacturing must emphasize the quality of the products in
order to gain competitive advantages in the market especially local car manufacturing companies such as
PROTON and PERODUA. Marketers and Manufacturing companies must remember quality is the factors
21
 that will influences consumer’s beliefs and also will influence the intention to purchase. Marketers also
should increase the product quality in order to increase the consumer’s beliefs about the products by
maintaining the quality to gain competitive advantage. The recommendations for foreign car manufacturing
are must maintain the quality of the car in order to gain competitive advantages in market. If the foreign
manufacturing fails to do so, imported car owners will less loyal and feel the car is not satisfaction to them
then this will affect the car owner will switch to local car such as PROTON or PERODUA. Finally future
researchers should test the study by using sample from others area except Klang Vellay such as rural area.
Besides, researchers should identify others variables to investigate the relationships with consumer intention
purchase imported car such as gender, age, race, monthly income, and so on in order to get more information
regarding imported car perspective.

4. References
[1] Huang J.H., Lee B.C.Y., and Ho S.H. (2004), Consumer Attitude toward Gray Market Goods, International
Marketing Review, Vol. 21, Pp. 550-630.
[2] Bilkey, Warren, and J. Eric Nes (1982), Country of Origin Effects on Product Evaluations, Journal of
International Business Studies, Pp. 89-99.
[3] Berger I.E., Ratchford B.T., and Haines G.H. (1994), Subjective Product Knowledge as a Moderator of the
Relationship between Attitudes and Purchase Intentions for a Derable Product, Journal of Economic Psychology,
Vol. 15, Pp. 301-315.
[4] Berkman, Harold W., Lindquist, Jay D., Sirgy, and M. Joseph (1997), Consumer Behavior, Lincolnwood: NTC
Business Book.
[5] Bannister, J.P. and J.A. Saunders (1978), UK Consumer’s Attitudes towards Imports: The Measurement of
National Stereotype Image, European Journal of Marketing, Vol. 12, Pp. 562-570.
[6] Byoungho Jin and Yong Gu Suh (2005), Integrating effect of Consumer Perception Factors, Journal of Consumer
Marketing, Vol. 22, Pp.60-70.
[7] Chang, and Wildt A.R. (1994), Price, Product Information, and Purchase Intention: An Empirical Study,Journal
of the Academy of Marketing Science, Vol. 22, Pp. 13-26.

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