ABSTRACTThis study is conducted to investigate the relationship of factors affecting consumer buying behavior with the mediating role of country of origin. For conducting research, a sample of 250 students of IBA are studied. Three independent variables perceived quality, brand loyalty and brand awareness are used in this research to check their relationship with consumer buying behavior in the presence of country of origin as a mediating variable. Different statistical tools included one sample t-test, correlation, regression analysis and structural equation modeling are used to test the hypotheses. The statistical data analysis reveals that there exists a positive relationship between all these variables and country of origin has a mediating effect in all the independent and dependent variables. Multinational as well as local companies can use this information to focus on the priority of the customer as in this case customers are more quality conscious. Companies can enhance their brand loyalty to get more customer base. In this study country of origin is taken as a mediating variable which is never done before in Pakistan. Many other variables can impact the buying behavior like price or packaging which is not included.
INTRODUCTIONProducts with different countries of origin are seen differently. The quality of the product also plays an important role while purchasing a product. If consumers are well aware of a brand, then they will certainly try that brand. Rungtrakulchai (2018) studies investigated the impact of perceived quality on the brand equity in the context of brand associations and brand knowledge on consumer buying behavior. This study extended the prior literature on brand equity by concentrating on how a consumer perceives a brand in the category of high involvement products. The findings supported that perceived quality is an important factor which creates the brand associations that consumers make to create brand equity leading to consumer purchase intensions. Ayutthaya (2018) explains the conceptual model investigating the impact of perceived service quality on brand image and repurchase intention using regression analysis the results reveal that brand evaluation dimension provided the strongest support, whereas brand awareness, brand loyalty, and brand name were also statistically significant. Moreover, it is proved by a conceptual model that perceived service quality affects brand image and repurchase intention in Thai air passengers. Ahmed et al. (2017) assimilate three behavioral factors namely perceived value, brand trust and e-word of mouth (eWOM) as mediating factors and the Internet and smartphone as a moderating variable. The study using the SEM-based multivariate approach including exploratory factor analysis exhibited that the interactive digital media channels have a positive and direct impact on brand awareness. Results further revealed that the perceived value, brand trust, and eWOM as mediating factors and the Internet and smartphone as moderating variables have a significant and influential impact in a relationship of the brand awareness and interactive digital media tools. As per the above literature, we see that there is a rapid change in the behavior of the customer due to change in the technology in Pakistan. Now people are buying online and are well aware regarding the competing brands also available at an affordable price. This flexibility has also changed the thinking of the companies about buying behavior. The reputations of products vary from country to country; customers try to simplify their attitudes towards the products of a country (Han, 1989; Samiee, 1994). This is based on the background and the knowledge, and their own experience of that product attributes like superior technology, quality of the product, the design of product, self-esteem, status, value for money and country of origin. Consumers are taking more interest in an international product than earlier, and they have many other attributes to be recognized other than the quality of the product (Peterson & Jolibert, 1995). Now product differentiation is not an easy task, so companies need to work on enhancing their brand equity that results in providing a competitive advantage to the company and brand identity in the marketplace (Aaker, 1991). This purpose of the study focuses on the reasons behind the change in the consumer buying behavior with the mediating role of country of origin by keeping perceived quality, brand loyalty and brand awareness as a base. This research will make an important contribution to understanding what the expectations of the customers from the brands are and what makes the international brands more famous in Pakistani market. Brand awareness is another factor which is related to consumer buying behavior. Customer repeat purchases show the loyalty of the customer with that particular brand. All these factors have a big impact in developing countries. As there are a huge number of potential customers present in the developing markets, therefore, companies also focus on developing new ways to provide benefits to customers. This research explains the dimensions of the country of origin, brand loyalty, brand awareness and perceived quality by measuring their effects on consumer buying behavior. There is a rapid change in the behavior of the customer due to a change in the technology. Now people are buying online as well as they are well aware regarding the competing brands. Everyone is trying to get a better product at an affordable price. Starting from the clothes to ending at the shoes everything is available at the customer’s doorstep. This flexibility has also changed the thinking of the companies about buying behavior. Brand loyalty is not a thing which is created in just seconds. It is a long procedure of giving value to the customer and in return earning the loyalty of the customer. Loyal customers are the backbone of a company. They are the basic building blocks of the company reputation in the market. Customers with repeat purchase behavior build the brand loyalty. Advertising is playing a major role in building an image of the product in the minds of the customers. Customers focus on the advertising campaigns which are attractive. For any company to sell their product, marketing is the crucial work. Brand awareness encourages the consumer to buy a specific brand in the presence of other competing brands. Shelf spacing plays a vital role in this situation. If a product is placed at the front of the shelf, then it has more brand awareness. Companies always try to place their products where the customer can easily recognize the brand. There are some customers present in Pakistan who buy products which are associated with other countries. Take an example of Honda cars as it is a Japanese car that’s why people prefer to buy it because Japan is famous for its technology and safety concerns. France is famous for producing good quality perfumes. America is producing top quality cosmetics. Many goods are associated with the country in which they are produced. Country of origin is one of the major factors which are influencing the consumer behavior in Pakistan. This study focuses on the reasons behind the change in the consumer buying behavior with the mediating role of country of origin by keeping perceived quality, brand loyalty and brand awareness as a base. It is useful to understand that what are the expectations of the customers from the brands and what makes the international brands more famous in Pakistani market. The Scope of the Study Since we know that these customers are a primary source of revenue for a company. The customer base is considered as important target market segments, where customer behaviors are well understood through market research or experience. Consumer buying behavior has various dimensions i.e. price, quality, and product image, etc. Customers purchase a product after going through a long process of decision making. It is a time taking the job when the interest is high. Country of origin is a main factor in Pakistani market which creates a distinctive image in the minds of the customer regarding foreign products. This research is based on the problem that why people prefer to buy the foreign products. Perceived quality, brand loyalty, and brand awareness are considered for this study to relate it with buying behavior by the mediating role of country of origin. Research Objectives To determine whether brand awareness effects the consumer buying behavior. To determine whether perceived quality effects the consumer buying behavior. To examine whether brand loyalty effects the consumer buying behavior. To determine the country of origin impact on buying behavior.
LITERATURE REVIEWConsumer Buying Behavior Chakraborty and Bhat (2018) uses structural equations modeling (SEM) to examine the impact of customer-based brand equity (CBBE) on consumer behavior (purchase intention). The results indicated that the country of origin (source) and product quality are the most vital factors that affect consumer’s credibility on purchase intensions. A significant relationship has found between brand awareness, perceived quality, and organizational brand associations and thus leads to consumer’s purchase intention in the context of consumer electronic products. Consumer buying behavior deals with the individual decision making regarding their spending on consumable items (Schiffman & Kanuk, 2000). It is also defined as a process which involves consumers’ purchase decisions and their activity of satisfying their needs (Dinnen, 2002) Baiocchi (2010) has proposed a framework and different paradigms that made the consumer behavior study modern. Darley at al. (2010) while discussing the consumer behavior has explained the basic purpose of understanding the consumer behavior is to check the answers to the questions that why what and how people buy and consume a product or service. Moreover, they also have an opinion that consumer research is an ongoing process because it involves actions, opinions, and concepts of group and individuals (Vermeir & Verbeke, 2006). Paul and Olson (2008) have explained that it is very important to answer the question of what is the response of the customers regarding the marketing strategies of the company. Mishra (2007) has found a drastic change in buying behavior of the customer regarding a particular product by the concept of organized retailing. His focus is on the changes in the shopping styles of customers, their consumption patterns and the factors that bring a customer into the shop. There are three main elements of consumer behavior: effect and recognition (the ability to recognize a product), behavior (the way a customer behave to the product while purchasing) and the environment (point of purchase). These dimensions play an important role in making marketing strategies. (Pino, Peluso, & Guido, 2012) Dimensions of Consumer Buying Behavior Income Effect There is extensive research done on income as a variable that has increased the use of e-commerce websites for purchasing goods. Many studies take it as a descriptive variable while learning shopping behavior. People with higher income take the internet as a friendly and time-saving medium of purchase and that in return increase the demand for the products. Low-income people are not in favor of purchasing goods online, easy access and availability of the product at door step are demands of the high-income group. This is because of the availability of large capital present by which they can deal with possible losses. Generally, we can see the income level of a person by his professional status and the social class. Word of Mouth Word of mouth plays an important role in deciding by sharing experiences with other people since the human societies are made. The old ways of WOM are applicable to certain limitations, and their importance is diminishing day by day. Now information is transfer by using different IT-based programs and social media networks other than traditional WOM activities (Laroche, Papadopoulos, Heslop, & Mourali, 2005). Word of mouth in previous literature has provided information to a small number of people, but now by using social media, we can share information with a large number of audience. Thus online WOM has become signification in buying behavior decisions (Park & Kim, 2009). Need of Customer Needs of the customers are very important, and many researchers have emphasized them. Shahin (2007) said that customers give us a clue that what to produce and that’s why are much dependent on them. The customer should not be treated as a problem because the company’s future relies on customer and we cannot put the company in danger. That is why companies now days are working on building customer loyalty and satisfaction. Price Impact Lockshin (2005) says that while checking the purchase intentions of wine, the pricing factor has much importance. Price is always an exceptional sign of quality concerning other cues. It is used in two conditions, when product evaluation is not easy before purchase and when a high risk is associated with taking the wrong decision. Price plays a primary role in checking utilization of wine quality. Price is also a dimension and is used to diminish the perceived risk. This has been shown by experiments and observation that wine prices are dependent on the quality and reputation of the customer (Lockshin et al., 2006). Perceived Quality Sierra et al. (2017) proposed that customer perceived quality had a positive and indirect impact on brand equity, with the perceived quality as a mediator. Moreover, there was no empirical evidence found for a direct effect of customer perceived quality on brand equity. It is the consumer perception regarding standards of products while making a purchase decision (Aaker, 1991). Zeithaml (2010) has defined the term perceived quality as “the consumer’s judgment about the superiority or excellence of a product.” Lee et al. (2008) argued that the specific association with a brand deals with its perceived quality because it helps in making the perception regarding the product. While comparing with other brands, consumers know the specialty of their brand that is perceived as high quality. The credibility of the brand makes the consumers easier to search a brand and to reduce the perceived risk (Small, Melewar, Hamzaoui Essoussi, & Merunka, 2007). It is very important to provide customer value at a nominal price. In this approach, customers are provided with a group of attributes that are made up of quality levels which ultimately benefit the customer. Keeping in view the customer requirements, the perception of quality level and a group of attributes are considered. Many authors started work on finding the difference between perceived value and perceived quality, but they did not get a solid background for the difference between them and at the end they started to use them interchangeably (Cretu & Brodie, 2007). Dimensions of Perceived Quality Foreign Brands Competition has enabled the international companies to reduce their cost of at a lower cost, and this also has in enlarged their procurement model. Country of origin has become an important consideration in buying decisions mostly related to food sectors where many crises took place, reimbursed by regulation of Geographical Indication and TRIPS (Small et al., 2007). An interesting phenomenon is that there is a perceived commonality between product origin and the branded product. This commonality has a positive effect on the buying decision, while this effect may be larger than the brand or COO. Here we can also say that the specific product made by a country may have a greater impact than COO. For example, raclette cheese is the product of Switzerland, and there is a perceived congruity between the Swiss raclette and the country itself because Swiss is the origin of this dish (Shirin & Kambiz, 2011). Product Appearance Product design, outlook and product image create the subjective quality of the product into the minds of the customer. These subjective components of quality effect positively on new product performance. Many researchers explain that product design increases the customer satisfaction and also the image of the product by giving a positive effect in attaining bigger market share. Design of the product creates the distinguished image of the product in the market. This is used as a competitive tool to gain market share. Many studies have shown the importance of product design to attract buyers. Even if we talk about industrial products, they do have the value of their design attractiveness (Creusen & Schoormans, 2005). Quality Role The new era of global competition changes the old concepts of producing goods without considering quality. Now the main focus of the companies is on total quality management TQM, as this is a major part of creating a competitive edge in the market. This concept is given by Japan and has shown remarkable success in quality assurance related matters. TQM got attention from many researchers due to its outcomes, and they have found many vital components of TQM. The main focus of these studies is to describe the different factors of TQM like leadership, quality management, and relationship with employees, training, quality information utility and process management (Molina-Castillo & Munuera-Aleman, 2009). Brand Awareness Russell-Bennett (2007) has found that Brand awareness includes the consumers’ ability to recall the brand at different occasions and the chances of the brand to recognize easily by the consumer. Brand awareness relates to the basic part of brand knowledge that involves the identification of the brand name. Brand awareness involves the lowest part of the brand knowledge that leads to the identification of the brand name and ranges towards the highly developed thinking structure of extensive information. Here the meaning of recognition is to remind the brand. Therefore, the difference between recognition and awareness is very low; the latter explains a type of knowledge known by the consumer and former explains a thinking process results from awareness (Huang & Sarigöllü, 2012). Advertising is very important for creating brand awareness and it in return makes the brand equity. Many customers buy the product by focusing on the way of delivering a product by a company, packaging style of the product is also a main dimension and the price of the product by comparing it with the perceived quality (Shaharudin, Mansor, & Elias, 2011). Brand selection is a very hectic work, and it takes much time as it involves decision making and there are many functional risks involved in it. Many risk adherence strategies are used in this context by the customer, i.e. gathering information from relatives, family members, salesperson, established brands, free sampling, price comparison of product and image of the brand (Lam & Hsu, 2006). Brand Recognition Enneking (2007) study on beer drinkers suggests in which drinkers are provided with different brands and did a blind taste test. The beer drinkers are unable to identify their preferred brand and rate that brand slightly lower, and when they identify their favorite brand after test completion then again they choose their favorite brand and give it a high rating. Beer drinkers are unable to distinguish between their favorite and other brands during the blind taste test. Though, this experiment did not find out the choices and brand sampling issues. Brand Recall Brand awareness basically deals with the customer ability to recall a brand at a certain time, to recognize that brand, or whether the customer knows that brand or not (Keller, Apéria, & Georgson, 2008). Brand awareness leads to brand equity. Brand gets a learning benefit from the brand name (Keller et al., 2008). Brand awareness enhances the performance in the market. Brand awareness research is limited. Only the lab experiments are done to find out the brand awareness effect on consumer buying behavior on the individual level customer (Macdonald & Sharp, 2000). Modern Product When a consumer is well aware of different brands which are according to his needs, then he/she will give less time on getting information regarding the unfamiliar brands. The chances of a sale of a brand which has well brand awareness are more while purchasing the goods than the unfamiliar brands. Even in the consideration set of the brands, if a brand has more awareness into minds of the customer, then it would be a positive point for that brand and the chances to purchase that brand are more. Brand Loyalty According to Thammawimutti et al. (2018), the researchers use four elements of brand equity (perceived quality, brand loyalty, brand awareness and brand association) to study the relationship toward purchase intention which leads to consumer buying behavior for a particular product/service. A recent study conducted in Bangkok has also proved that through the Spearman’s Rho correlation coefficient analysis, that there exists a strong relationship between brand equity (brand awareness, brand association, perceived quality, brand loyalty) and purchase intention (consumer buying behavior) Brand loyalty is categorized as a component of behavior which relates with COO and perceived quality (Lee et al., 2008; Malai & Speece, 2005). Mohd. (2007) Have found the relationship between brand loyalty with the country image. The presence of attitudinal components in the brand loyalty is not enough. There is a need to involve more attitude dimensions into the definition of brand loyalty to make it more influential. Dimensions of Brand Loyalty Brand Recognition Brand recognition and identification play an important role in creating brand loyalty by focusing on consumer buying behavior. Mostly brand identification and brand recognition research have been done on manufacturing brands, but few studies have also worked on store brands (Marin, Ruiz, & Rubio, 2009). Brand Repurchase The brand repurchase is the dimension of loyalty as it gives a clear, distinctive image of the brand in the minds of the customer. There is a strong believe that when a customer sees a little difference among the products, then they start comparing prices of the brands that increases the competition. By putting high value in the product and making positive attitude can lead to resistance to switching to another brand thus making the brand more competitive (Aydin, Özer, & Arasil, 2005). Country of Origin Country of origin may relate a product with validity, status and exoticness (Steenkamp, Batra, & Alden, 2003). Moreover, it links a product to rich product-country imagery, with sensory, affective and ritual connotations (Vrontis, Thrassou, & Melanthiou, 2007). Country of origin shows a product concerning the national identity, which creates a strong relationship to a particular brand and its products. She gave the example of an Italian-American woman which is highly attached to the Italian products, specifically the food items. She is emotionally attached to Italy, and that’s why she loves to purchase their items. People not only relate COO with quality but also the memories and the feelings of national pride (Phau, Chao, Michaelis, et al., 2008). Chattalas (2008) have done broad meta-analyses of the literature on COO effects. In this study, they learned different effects of COO on consumer decision making like attitude, perception and behavioral intentions. They have also examined the moderating effect of many study characteristics. This study gave information regarding the impact of coo in the real market. Dimensions of Country of Origin Checking the country of origin Customer evaluates the product by his purchase intention and benefits attached to it. This concept is used many times in country of origin related matters (Chandon, Morwitz, & Reinartz, 2005). McCutcheon (2009) studied that Australian customer focuses on the origin of the wine before purchasing it. Europeans also give importance to country origin while deciding to purchase wine. Some authors studied that origin is taken as related to the quality of the wine, and that is why customer pay a high price for it. (María Angulo, María Gil, Gracia, & Sánchez, 2000). Trustful Country Country of origin other than the sign of quality also focuses on the pride, identity, memories, and emotions. These type of signs and emotional attachments make the COO as expressive and image attribute. These attribute acts as important components of consumer preferences and creates the brand equity in the long run. Made in Label Now many international studies are focusing on checking the variables which effect the evaluation of foreign and domestic products by the customers (Jha & Hassan, 2003). Two more dimensions country of assembly and country of design related to COO are in consideration which effects the customer evaluations regarding the manufacturing of products (Insch & McBride, 2004) product quality is also a dimension in this regard (Ahmad et al., 2002). Country Image Some authors have attempted to describe the background and moderators of the country of origin image (Balabanis & Diamantopoulos, 2004; Kucukemiroglu, Kara, & Harcar, 2005). Country of origin is also defined as the perception of consumers regarding a product made by a specific country which is based on the country’s production capacities and their abilities to market the product. Country of origin generally affects the consumer’s evaluation of a product (Loureiro & Umberger, 2007). Theoretical Framework Country of origin is one of the main external factors, so consumer perception mostly depends on it considering the quality of the product as well as the nature of the people of that country (Iyer & Kalita, 1997). It is also found that if consumers are more aware of the COO, then that effects not only the general products but also the specific brands (Bilkey & Nes, 1982; Johansson & Nebenzahl, 1986). Consumers’ process of decision making has a direct relation with brand awareness as it plays a major role in it (Dillon, Madden, Kirmani, & Mukherjee, 2001; Hoyer & Brown, 1990). Higher the level of brand awareness has the higher chances to be purchased and noticed by the customer. This has been shown that consumers have more awareness of foreign brands than the domestic brands (Bhardwaj, Kumar, & Kim, 2010; Lee, Knight, & Kim, 2008). Research shows that country image of a brand directly or indirectly effects the brand equity by many factors like brand differentiation, brand association, and brand loyalty. Bhardwaj et al. (2010) also experienced that global brands have more loyal customers than domestic brands. List of Hypotheses Hypothesis 1: Perceived quality has a positive relationship with consumer buying behavior. Hypothesis 2: Brand loyalty has a positive relationship with consumer buying behavior. Hypothesis 3: Brand awareness has a positive relationship with consumer buying behavior. Hypothesis 4: Perceived quality has a positive relationship with the country of origin. Hypothesis 5: Brand loyalty has a positive relationship with the country of origin. Hypothesis 6: Brand awareness has a positive relationship with the country of origin. Hypothesis 7: Country of origin has a positive relationship with consumer buying behavior. Hypothesis 8: Country of origin plays a mediating role between consumer buying behavior and perceived quality. Hypothesis 9: Country of origin plays a mediating role between consumer buying behavior and brand loyalty. Hypothesis 10: Country of origin plays a mediating role between consumer buying behavior and brand awareness.
RESEARCH METHODOLOGYIn this cross-section study, applied and descriptive research approach has been adopted. Quantitative techniques such as T-test, T-test statistics, correlation, regression analysis is and SEM model is used to quantify the data. The sampling process applied to collect data is through a closed-ended survey questionnaire. Items measured the different variables using the Likert scale as desired by the measurement involved and keeping in mind the time and limited resources available to carry out the research. The sampling frame consists of different study groups like Bachelors, Masters, MPhil, and Ph.D. There are five variables in this research as independent variables i.e. perceived quality, brand loyalty, brand awareness, country of origin and consumer buying behavior, Country of origin as mediating variable and consumer buying behavior as the dependent variable. Data is collected through purposive sampling technique from the students of IBA, University of the Punjab, Lahore. The main goal of purposive sampling is to focus on particular characteristics of a population (students) that are of interest, which will best enable you to answer your research questions. The reason for using purposive sampling is to focus on particular characteristics of a population of the students of the PU are of interest, which enables the researcher to answer targeted research questions. Operationalization of Variables There are many studies which reveal that country of origin works as an external factor that might effect the consumer intention to purchase. Aaker (1991) and Keller (1993) proposed the key dimensions of brand equity like brand awareness, brand loyalty, perceived quality and brand association. A total 27 questions are asked by the researcher including eight questions for perceived quality, six questions for brand loyalty, three questions for brand awareness, five questions for the country of origin and five questions for consumer buying behavior. The constructs are taken from the studies conducted by (Han, 1989; Samiee, 1994).
RESULTSTable 2 is showing values of Cronbach’s alpha after factor reduction. Perceived quality and brand loyalty have Cronbach’s alpha values 0.84 and .829 which are higher than 0.70. Both values are closer to one, and that’s why they show high internal consistency. Brand awareness value for Cronbach’s alpha is 0.68 which is slightly lower than the acceptable value, but it can be used for further research. Country of origin and consumer buying behavior have Cronbach’s Alpha values greater than 0.70. Table 2: Reliability
|Country of origin||0.73||5|
|Consumer Buying Behavior||0.76||5|
|Country Of Origin||3.39||0.77||1||5|
|Consumer Buying Behavior||4.02||0.61||2||5|
|n = 250|
|Country of origin||7.99||0.00||0.29||0.49|
|Consumer buying behavior||26.85||0.00||0.94||1.10|
|4.||Country of origin||0.29**||0.30**||0.29**||1|
|5.||Consumer Buying Behavior||0.61**||0.13*||0.29**||0.24**||1|
|Country of Origin||0.30||0.07||3.94||***|