Journal Paper Format
Total Page：16
File Type：pdf, Size：1020Kb
International Journal of Advanced Science and Technology Vol. 28, No. 8s, (2019), pp. 661-668 Assessing Future Consumer Perceived Value on Proton-Geely Products Siti Zaleha Sahak, Nur Rosyiidah Abdul Thalip, Nurul Syahirah Hairudin Arshad Ayub Graduate Business School, Universiti Teknologi MsARA, Shah Alam, Malaysia Abstract Beginning 2017, Perusahaan Otomobil Nasional Holdings Berhad (Proton Holdings Berhad), a Malaysian car producer has collaborated with Geely Zhejiang Holding, a Chinese car manufacturer. The first model of Proton-Geely product is expected to launch in Malaysia in 2018. What motivated this study was a query on how future customers will perceive Proton-Geely products and what determines its perceived value, considering prior to the partnership, most Malaysian consumers tend to have a negative perception on Proton as a brand. The literature has indicated that perceived value is significantly important in determining customer satisfaction. There were 234 respondents who participated in this study. They were postgraduate students from Malaysian universities. The questionnaire was distributed to the respondents through face to face meetings and online. The data gathered were analysed using SPSS. Overall, the findings of the descriptive analysis showed that the respondents demonstrated positive perceived value towards Proton-Geely. The results of multiple regression analysis indicated that the only significant factor that influences the respondents' perceived value towards Proton-Geely products was perceived quality. Product price and country of origin image were found to be regarded as non-significant in determining the respondents’ perceived value. The implication of the study and suggestion for future research are highlighted. Keywords: perceived value, Proton-Geely, country of origin, perceived quality, perceived price 1. Introduction Automotive is one of the key industries in Malaysia (Malaysian Automotive Association, 2018). The sector is targeted to achieve a total industry volume (TIV) of 590,000 vehicle units in 2018. The TIV for the year 2017 and 2016 was 576,635 units and 580,085 units respectively (theedgemarket.com., 2018). Malaysia has two national car brands namely Proton and Perodua. Proton was established in 1985, and Perodua was formed in 1993. As per the Malaysian Automotive Association (MAA) Report (2018), the top five car brands in the Malaysian market are Perodua, Honda, Proton, Toyota, and Nissan. Based on the total market share for passenger vehicle, it is noted that Proton (13.8%), the first Malaysian national car is behind Honda (21.3%), a Japanese brand (MAA, 2018). Although the price of the national car brands being cheaper than foreign car brands following the national tax structure on local and imported cars. As reported, Proton's poor sales is led by the negative perception of the brand among Malaysians (The Star, 2018). The findings of one of the national surveys involving Malaysian graduates, who represent one of the major target customers of the automobile sector showed that 70% of the respondents preferred imported cars over national cars. The respondents acknowledge the fact that the quality of national cars is incomparable to the imported cars. This was how the respondents perceived the value of national cars, although, the survey found that more ISSN: 2005-4238 IJAST 661 Copyright ⓒ 2019 SERSC International Journal of Advanced Science and Technology Vol. 28, No. 8s, (2019), pp. 661-668 than 90 percent of the respondents have not had the experience of driving national cars (Hmetro.com, 2017). Beginning year 2017, Zhejiang Geely Holding Group Co. Ltd (Geely), a China-based company has become a strategic foreign partner to Proton. Geely completed its acquisition of a 49.9% stake in Proton in September 2017 (The Star, 2018). This partnership shows a collaboration between two developing countries. Consumers have their own perception of China-made products. When comparisons were made between Chinese products and products originating from other countries, products made in China suffer from the perception of low quality despite being price effective (Khan & Ahmed, 2016). However, although Geely is a China-based company, its credibility as one of the global automotive companies is undeniable. Other than Volvo, Geely has acquired The London Taxi Corporation Ltd which is an automotive engineering company based in the United Kingdom (The Telegraph, 2013). Through the collaboration with Proton, Geely aims to introduce a sports utility vehicle (SUV) platform into Proton. The SUV model, known as Boyue is expected to be marketed in Malaysia in the second half of 2018 (The Star, 2017). Consumers’ low perception towards products originating from developing and less developed countries is not a new phenomenon. The literature on country of origin effect has long been established that a less preferred or negative bias towards products from developing countries is often exhibited by consumers in both developed and developing countries (Tsai, Lee & Song, 2013; Lantz & Loeb, 1996; Klein, Ettenson & Krishnan, 2006; Wang & Chen, 2004). Many consumers prefer products which originated from or were produced by an advanced economy or developed countries because the products are associated with high quality (Alshboul & Wang, 2016; Maznah, Said, Ahmad & Sarif, 2008). According to Holbrook (1994, p. 22), customer value is the fundamental basis for all marketing activities. Customer perceived value is comprised of two dimensions: perceived benefit and perceived cost. Unlike customer satisfaction, customer perceived value can take place during pre-purchase and purchasing process (Sweeney and Soutar, 2001). This study aims to determine the future consumers’ degree of perceived value towards Proton-Geely products and its significant predictors. Based on the reviewed literature, the factors investigated are perceived price, perceived quality, and country of origin image. This study does not refer to any specific model of the Proton-Geely brand, instead, it focuses on ‘Proton-Geely’ products in general. This is due to the fact that no car models from Proton-Geely are yet available in the Malaysia market, where the study was carried out. The findings of the study are expected to provide an insight into consumer perceived value of automotive brand when two companies from two developing countries namely, Malaysia and China are merged together. The results of the study are also expected to provide an input to Proton-Geely in order for them to construct a marketing plan that may mitigate the Malaysian consumers’ negative perception towards the national car brand. 2. REVIEW OF LITERATURE A. Consumer Perceived Value Consumer perceived value is commonly associated with the concept of ‘get’ and ‘give’. It consists of two dimensions known as the perceived benefit and perceived cost (Sweeney and Soutar, 2001). According to Sánchez-Fernández and Iniesta-Bonillo (2007, p. 428), one of the most commonly cited definitions of ‘value’ is supplied by Zeithaml (1988: p. 14). Zeithaml defined ‘value’ as: ‘ … the consumer’s overall assessment of the utility of a product based on perceptions of what is received and what is given’. In their ISSN: 2005-4238 IJAST 662 Copyright ⓒ 2019 SERSC International Journal of Advanced Science and Technology Vol. 28, No. 8s, (2019), pp. 661-668 systematic review of research on perceived value, Sánchez-Fernández and Iniesta-Bonillo (2007) summarized that ‘value’ is the outcome of an evaluative judgment. It implies a ‘trade-off’ between benefits (perceived benefit) and sacrifices (perceived cost). ‘Value’ also suggests an interaction between a customer and a product or service (Payne & Holt, 2001). Customer value is regarded as one of the sources of competitive advantage of a company (Wang, Lo, Chi & Yang, 2004). B. Perceived Price, Perceived Quality and Country of Origin Image Perception of consumers on certain products may be dependent on the price of a product. A survey indicated that one-third of consumers focuses on the product price rather than the perceived benefits (Inc.com, 2011). According to Alshboul and Wang (2016), a product set at the right price would stimulate the volume of sales. Thus, the company should consider setting a price based on the ability to sell a product by taking into consideration the benefits offered. A specific pricing plan should be set up by taking into account several important components such as target consumers, competitors, quality, and cost of the product (Alshboul &Wang, 2016). According to Zeithaml (1988), quality is defined as superiority or excellence while perceived quality can be defined as the products’ excellence or superiority from the buyers’ point of view. Saleem, Rahman and Umar (2015) defined perceived quality as buyers' psychological assessment on the quality of a product based on their perceptions. This definition suggests that if the perceived quality of the product is good, the tendency for the consumers to purchase a certain product exists, while a bad perceived quality of a product would prevent the consumers from purchasing the product. Perceived quality is stated as an antecedent that has a positive effect on perceived value (Cronin, Brady & Hult, 2000). In studying the American customers’ perceived value on South Korean automobiles, Alshboul and Wang (2016) found that perceived quality played a significant role in predicting the customer perceived value. Kalicharan (2014) stated that the country-of-origin has an influence only when