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Malaysian Consumers Attitudes and Purchases

Toward Local versus Foreign Made Products

Md Zabid Abdul Rashid

Samsinar Md Sidin
Siti Hawa Daud
Faculty of Economics & Management
Univeniti Pertanian Malaysia
43400 Serdang, Selangor, Malaysia

ABSTRACT

This paper examines the Malaysian consumers attitudes and purchases toward local versus imported made goods. More
specifically, this paper investigates the consumers preference for local and imported products, types of products
preferred, and the country-of-origin, and the factors determining the consumers preference for local and imported
products. Based on a sample of 116 respondents, the results showed that Malaysian consumers preferred local made
products to imported ones. the implications are also discussed.

INTRODUCTION

In 1985, The Malaysian Government launched the 'Buy Malaysian Goods' campaign. One of the primary reasons for
promoting 'made-in-Malaysia' goods is to encourage Malaysians to purchase locally made products as opposed to
foreign made goods. It is also meant to reduce Malaysia's import dependence on foreign goods and outflow of
Malaysian funds. In the long run, this policy purports to enhance the development of the Malaysian manufacturing
sector in the future. This is consistent with the governments' vision of making Malaysia an industrial nation by the
year 2020.

Although it bas been more than a decade since the implementation of the 'Buy Made in Malaysia' policy, the imports
for consumption goods had increased from RM 9.5 billion (US$3.8 billion) to RM 9.8 billion (US$3.92 billion) between
1992 and 1993 (January till July). More specifically, the imports of consumer durables had increased from RMl.9
billion (US$0.76 billion) to RM 2.3 billion (US$0.92 billion). This trend suggests that there is an increasing demand
for imported goods. Therefore, one key question raised is whether there is a preference by Malaysian co11sumers tow::trd
imported versus local made products. Consequently, a research study was undertaken to enlighten us on several
issues. In this paper, the key questions addressed are as follows:

(i) To what extent do consumers prefer to buy local versus imported products?

(ii) What type of imported products do they prefer, and from which country of origin?

(iii) What are the factors influencing consumers' preference for local or imported products?

This study is particularly important as it bas implications on research in this area. Nagashima (1970) found that the
U.S. consumers' and businessmen preferred 'Made in U.S.A' goods as opposed to foreign ones. The Japanese
businessmen preferred 'Made in Japan' goods. There are, however, certain products preferred by Americans or
Japanese consumers according to their country of origin. For example, U.S. businessmen rated highly on 'Made in
U.S.A' automobiles, while Japanese businessmen rated higher for 'Made in Japan' products like cameras, electronic
goods, transistors and watches. Thus, 'made in' image is affected by the familiarity and availability of the country's
product, and the stereotype of that country (Nagashima, 1970).

Gaedeke (1973) examined the consumers' attitudes toward products 'made -in' developing countries. His findings
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showed signifiqmt differences in opinions toward the quality of products from the developing countries. The findings
also indicated that the country of origin information does not significantly affect opinions about the quality of branded
product in general. However, on an individual basis, there may be variations in consumer attitudes toward well-known
branded products when the consumer is made aware of the informational input on the country of origin (Gaedeke,
1973).

Bannister and Saunders (1978) examined the U.K. consumers' attitudes toward imported goods. The five product
attributes researched were reliability, value for money, appearance, availability, and workmanship. The results

showed substantial differences in the stereotyped images of the products 'made-in' U.S.A., Germany, France, Japan,
Italy, U.K. and Russia

Brown et al. (1987) examined the consumers' attitudes towards European, Japanese and U.S. cars. '1 he overall findings
indicated that U.S. consumers bad quite favourable attitudes towards European cars. For example, in terms of safety,
and workmanship, the West German and Japanese cars were perceived as best In terms of reliability, U.S. cars were
perceived as signific::antly less reliable than Japanese cars but not significantly less reliable than West German cars.

From the above studies, it is clear that there differing views on the domestic consumers' perceptions of locally made
and foreign made products. According to Bilkey and Nes (1982), the country-of-origin does influence buyer perceptions
of the products involved. However, Johansson et al. (1985) found that country of origin effects are relatively minor.
Therefore, it is not unreasonable to evaluate the extent of such situation in Malaysia, considering the public campaign
and policy of the Malaysian government. It is hypotl1esized that country-of-origin has effects on Malaysian
consumers attitudes towards products.

This research is also important as it has implications on the Malaysian economic policies, particularly the 'Buy
Malaysian made' goods. It provides an oveJView of the effectiveness and impact of such policy to the Malaysian
business scene and product market behaviour.

METHODOLOGY

A structured questionnaire was developed and pre-tested in the Kuala Lumpur City. A total of 116 respondents agreed
to participate in the personal inteJView.

In the questionnaire, the respondents were asked to rate tl1e following products: perfume, furniture, footwear, snack
food, clothing, electrical products, home appliances, and toys. The rating was on a five point interval scale ranging
from l(vecy frequent) to 5(never). The product attributes examined are price, quality, reliability, style, design,
durability,fashionable, brand, prestige/image, and availability. These items were selected based on previous studies by
Gaedeke (1973), Bannister and Saunders (1978) and Brown et al. (1987). The respondents were asked to rate each of
the items on a six-point interval scale, ranging from 1 = most important to 6 = least important.

A reliability test was conducted, and the Cronbach Alpha value ranges from 0.79 to 0.89 for the product attributes and
type of products. This suggests a fair level of internal consistency in the response.

In the sample, 45% of the total respondents were below 25 years of age, 46% between 25 - 30 years old, and the
remaining above 30 years old. About 47% of the respondents were married. Nearly 53% of the respondents had
tertiacy education. In terms of income, 49% earned below RM 12,000 per annum, 45% earned between RM 12,000 to
RM 24,000 per annum.

RESULTS AND DISCUSSION

The results showed that 33% of the respondents were concerned about local versus imported products when making