Effect of consumers' awareness about country of origin on purchasing decision in Klang Valley, Malaysia

Globalization has become vital in today’s competitive market place with firms often outsourcing various parts of their production and operation to different countries in search of the lowest possible cost and expertise. The development of the concept of the country of origin (COO) of a product dates back to World War I. It stresses the point that the COO effects could be enhanced by variables like the existence of representative products, an intervening factor as consumers look for the “made in” labelling of a product. Previous researches suggested that, the COO besides brand, price and quality of the specific product may influence customer perception in the decision making process of purchasing a product. This research focused on agricultural food products specifically dairy products in Malaysia. Food consumption pattern in Malaysia appears to be evolving in similar pattern to other emerging Asian economies, most notably Thailand, China and the Republic of Korea. Per capita consumption of livestock products in Malaysia, including dairy, is substantially below that of the Organization for Economic Cooperation and Development (OECD) countries such as the United States, Australia and Japan. Yet, compared to Thailand, China and the Republic of Korea, per capita consumption of livestock products is relatively high. Thus, the aim of this research is to explore the effect of country of origin (COO) on consumers’ awareness in Malaysia, among dairy consumers. This study was conducted in Klang Valley with a total of 1108 respondents that were selected via simple random sampling method. The primary data was collected using structured questionnaire via face to face interview. The accumulated information was examined with care to double check the accuracy using SPSS. The data collected was analysed using descriptive analysis, cross-tabulation analysis, factor analysis and multiple regression analysis. Cross-tabulation technique using chi-square analysis was applied to determine the relationship between socio-demographic factors and awareness towards COO. Next, factor analysis was used to explore determinant factors influencing Malaysians’ purchasing decision toward dairy product based on COO. After the value obtained from intervening variables, the researcher shall chart the factors that has the greatest impact. Multiple regression analysis was applied to determine the relationship between socio-demographic factors, extracted factors and consumers’ awareness toward COO. The findings on cross tabulation showed that consumer’s age, religion and education have significant relationship with their awareness toward COO, while there are no significant relationship between gender, race, employment and income of respondents and awareness of consumers towards COO. The result of factor analysis identified six factors namely Halal logo, product’s label, brand, quality,price, and country image as the factors influencing consumer’s awareness towards COO. Further analysis conducted using multiple regression to determine strength of the extracted factors, sociodemographic characteristics of consumers’ and their awareness toward COO. Result of multiple regression analysis revealed that education among the socio-demographic factors has significant effect on consumers’ awareness toward COO. Besides, brand and price have negative relationship with consumers’ awareness toward COO. Meanwhile the relationship between Halal logo,product’s label, quality and country image factors and consumers’ awareness toward COO are positive. In conclusion, most important factors that shape Malaysians’ purchasing decision based on COO are Halal logo, product’s label, brand, quality, price, and country image. It was found out that Halal logo and brand are two factors that Malaysian consumers consider the most compared to the other factors. The result of this study could provide an opportunity for Malaysians’ dairy market players or related agencies to strategizing and plan of increasing self-efficiency rate. Furthermore by recognizing the factors and purchasing behaviour of Malaysian consumers toward dairy products can be useful for dairy producers in Malaysia in identifying target market.

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