Result and Analysis Chapter

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Introduction

In this chapter, the quantitative data analysis was performed to address the research objectives and test the developed hypotheses. The data were analysed using frequency distribution, correlation and regression analysis. This research aimed to understand whether the influence of good service quality, loyalty, satisfaction, and social influence can positively affect Malaysian consumers’ buying intention towards premium price products. To address this aim, four objectives were developed.

The first objective was to investigate how service quality could affect the customer’s purchase behaviour of premium price products. The second objective was to investigate a loyal customer’s intention of buying premium price products. The third objective was to investigate how satisfaction could affect a customer’s purchase behaviour of premium price products. The fourth objective was to investigate how social influence could affect the customer’s purchase behaviour of premium price products. To address the aim and the four objectives listed above a quantitative data analysis was performed based on regression analysis, where hypothesis H8 was tested based on the results of the regression analysis to address the aim and the objectives. The developed eight hypotheses were tested in this study based on simple and multiple regression analysis.

Frequency Distribution Analysis

The frequency distribution analysis was conducted on the data set to identify participants’ demographic composition based on their gender and age range. The summarized results of the frequency distribution analysis are provided below in table 4.1, while the complete result outputs are given in the Appendix section.

Based on the results, it was evident that 68.2 per cent of the participants were females, while the remaining 31.8 per cent of participants were males. This indicates that the majority of the participants were females. There was more female representation in the research sample than male representation, and therefore there could be some gender biases present in the results. Moreover, based on the frequency distribution analysis of age range it was found that 92.4 per cent of the participants were between 19 – 29 years age range, while 4.9 per cent were between 30 – 39 years age range. However, 1.3 per cent were between 40 – 49 years age range, and 1.3 per cent were of over 50 years age range. Therefore it was evident that most participants were 19 to 29 years age range and were youngsters.

Reliability Analysis

Before performing any analysis on the data, the questionnaire instrument’s reliability was tested using reliability analysis in the SPSS. The reliability is a measure of internal consistency of the instrument of data collection, which means that the instrument’s results are likely to be consistent even if it is retested several times. Based on the value of Cronbach’s Alph, the reliability was measured in this study. As per literature when the value of Cronbach’s Alpha is from 0.7 to 0.8 then it is considered to have acceptable reliability, when the value of Cronbach’s Alpha is between 0.8 to 0.9 then it is considered to have good reliability when the value of Cronbach’s Alpha is above 0.,9 then it is considered to have excellent reliability (Bryman & Bell, 2011). The complete result outputs of the reliability analysis are provided in the  Appendix; however,r the summarized results are provided in table 4.1.

Model Equation 4 – Effect of Service Quality, Loyalty, Satisfaction, and Social Influence of Positive Word of Mouth Positively on Purchase Intention

Model equation 4 was tested using multiple regression analysis, and the summarised results are given in Table 4.7 below. The ANOVA of the multiple regression model indicated that model equation 4 was significantly fitted on the data set as its sig. The value was (0.000), which was less than (.050). However, the Model Summary indicated that the Adjusted R Square value of the model was (.503), which meant that around 50.3 percent variations in the dependent variable purchase intention were explained by the independent variables used in model 4. However, the remaining 49.7 percent variation in the variable purchase intention was due to other variables not included in model 4. Therefore, based on the results, model 4 was acceptable for testing H4, H5, H6, and H7.

Table 4.7 Multiple Regression Analysis – Model Equation 4

Adjusted R Square         β         Significance              Result

Model Summary (ANOVA)                   .584                                     .000

Loyalty                                                                            .624             .000                 Significant

Customer satisfaction                                                     .167             .115                Insignificant

Social influence of positive word of mouth                   .157             .045                 Significant

Service quality                                                               -.336             .000                 Significant

Based on the results, the sig. The value of the independent variable loyalty was (0.000), which was lower than (.050). This reflected that loyalty had a significant effect on purchase intention. However, the coefficient value of loyalty was .624, which indicated that it positively affected purchase intention. It means that loyalty can positively affect the purchase intention of Malaysian consumers. Therefore if loyalty is increased, then it is likely to increase the purchase intention of Malaysian consumers.

Moreover based on the results of the sig. The value of the independent variable customer satisfaction was (0.115), which was greater than (.050). This reflected that customer satisfaction had an insignificant effect on purchase intention. However, the coefficient value of customer satisfaction was found to be (.167), which indicated that it had a weak but positive effect on purchase intention. It means that customer satisfaction can positively but insignificantly affect the purchase intention of Malaysian consumers. Therefore if customer satisfaction increases then the purchase intention is likely to increase but insignificantly.

Furthermore, the results were evident in the sig. The value of the independent variable social influence of positive word of mouth was (0.045), which was less than (.050). This indicated that the social influence of positive word of mouth had a significant effect on purchase intention. However, the coefficient value of positive word of mouth’s social influence was (.157), indicating that it had a weak but positive effect on purchase intention. It means that positive word of mouth at the social influence of mouth can positively affect Malaysian consumers’ purchase intention. Therefore if the social influence of positive word of mouth increases, then the purchase intention is likely to increase significantly.

The results have also shown that sig. The independent variable service quality value was (0.000), which was less than (.050). This reflected that service quality had a significant effect on purchase intention. However, the coefficient value of service quality was found to be (-.336), which indicated that it had a weak but negative effect on purchase intention. It means that service quality negatively affects the customer purchase intention in Malaysia. Therefore if service quality increases then the purchase intention is likely to decrease.

Model Equation 5 – Effect of Service Quality, Loyalty, Satisfaction, and Social Influence of Positive Word of Mouth Positively on Purchase of Premium Price Products

Model equation 5 was tested using multiple regression analysis, and the summarized results are given in Table 4.8 below. The ANOVA of the multiple regression model indicated that model equation 5 was significantly fitted on the data set as its sig. The value was (0.000), which was less than (.050). However,r the Model Summary indicated that the Adjusted R Square value of the model was (.280), which meant that 28per cent variations in the dependent variable purchase of premium price products were explained by the independent variables used in model 5. However,r the remaining 72per cent variation in the variable purchase of premium price product was due to other variables not included in model 5. Therefore based on the results, model 5 was acceptable to use for testing hypotheses H8.

Table 4.8 Multiple Regression Analysis – Model Equation 5

Adjusted R Square         β         Significance              Result

Model Summary (ANOVA)                   .280                                     .000

Loyalty                                                                            .449             .000                 Significant

Customer satisfaction                                                    -.237             .040                 Significant

Social influence of positive word of mouth                   .374             .000                 Significant

Service quality                                                               -.138             .131               Insignificant

Based on the results, the sig. The value of the independent variable loyalty was (0.000), which was lower than (.050). This reflected that loyalty ha ad significant effect the on purchase of premium price product. However, the coefficient value of loyalty was (.449), which indicated that it positively affected the purchase of a premium-priced product. It means that loyalty can positively affect the purchase of a premium-priced product in Malaysia. Therefore if loyalty is an increase,d then it is likely to result in the increased purchase of premium price product by Malaysian consumers.

Moreover based on the results of the sig. The independent variable customer satisfaction value was (0.0,40), which was greater than (.050). This reflected that customer satisfaction had a significant effect on purchase intention. However, the coefficient value of customer satisfaction was found to be (-.237), which indicated that it had a negative effect on the purchase of a premium-priced product. It means that customer satisfaction can negatively and significantly affect the purchase of a premium-priced product in Malaysia. Therefore if customer satisfaction increases then the purchase of a premium-priced product is likely to decrease significantly.

Furthermore, the results were evident in the sig. The value of the independent variable social influence of positive word of mouth was (0.000), which was less than (.050). This indicated that positive word of mouth’s social influence had a significant effect on purchasing a premium-priced product. However, the coefficient value of positive word of mouth’s social influence was (.374), indicating that it had a  weak but positive effect on the purchase of premium price product. It means that positive word of mouth can positively affect the purchase of a premium-priced product in Malaysia. Therefore, if the social influence of positive word of mouth increa,ses then the purchase of a premium price product is likely to increase significantly.

The results have also shown that sig. The independent variable service quality value was (0.131), which was greater than (.050). This reflected that service quality had an insignificant effect on the purchase of a premium-priced product. However, the coefficient value of service quality was found to be (-.138), which indicated that it had a  negative effect on the purchase of a premium-priced product. It means that service quality negatively and insignificantly affects the purchase of premium price product in Malaysia. Therefore if service quality increases, then the purchase of a premium-priced product is likely to decrease.

Based on the regression model 5, only two of the four variables were found to have a statistically significant effect on the purchase of premium price prod. However, one of the four variables was found to haan ve insignificant effect on the purchase of premium price product. In contrast, the other variable had a negative effect on the purchase of a premium-priced product. The two variables; loyalty and social influence of positive word of mouth can positively affect the purchase of premium price product.

Hypotheses Assessment Summary

H1: Service quality can positively affect satisfaction as the variable service quality of hypothesis H1 was found to have a significant and positive effect on customer satisfaction. Therefore,e hypothesis H1 was accepted.

H2: Satisfaction can positively affect loyalty behaviour as the variable customer satisfaction of hypothesis H2 was found to have a significant and positive effect on the customer’s loyalty. Therefore, hypothesis H2 was accepted.

H3: Satisfaction can positively affect positive word of mouth as the variable customer satisfaction of hypothesis H3 was found to have a significant and positive effect on positive word of mouth. Therefore, hypothesis H3 was also accepted.

H4: Loyalty can positively affect purchase intention as the variable loyalty of hypothesis H4 was found to have a significant and positive effect on purchase intention, and therefore hypothesis H4 was also accepted.

H5: Satisfaction cannot positively affect purchase intention as the variable customer satisfaction of hypothesis H5 was found to have an insignificant effect on purchase intention, and therefore hypothesis H5 was rejected.

H6: Social influence of positive word of mouth can positively affect purchase intention as the variable social influence of positive word of mouth of hypothesis H6 was found to have a significant and positive effect on purchase intent. Therefore, ore hypothesis H6 was accepted.

H7: Service quality can positively affect customer’s purchase intention as the variable service quality of hypothesis H7 was found to have a significant but negative effect on purchase intention. Therefore, hypothesis H7 was also rejected.

H8: Loyalty and social influence of positive word of mouth can positively affect the purchase of premium price product, while customer satisfaction can negatively affect the purchase of premium price product, however service quality cannot significantly affect the purchase of premium price product. As all the variables of hypothesis H8 did not positively affect the purchase of premium price product; therefore, hypothesis H8 was rejected.

Table 4.9 Hypotheses Assessment Summary

Discussion Chapter

Introduction

In this chapter, the result findings from the statistical analysis are discussed compared to the reviewed literature to identify if the finding of this present study corresponds or contradicts the past literature. The result findings based on the regression analysis and hypotheses assessment are discussed about the past empirical literature.

Good Service Quality Positively Affects Satisfaction

From the result findings of the primary data analysis based on regression analysis, it was found that good service quality can positively affect customer satisfaction. Therefore, it was inferred that if service quality increases, it is likely to increase Malaysian consumers’ customer satisfaction. Similar findings were found in the past literature related to the effect of service quality on satisfaction. From the reviewed literature it was found that as per Adams et al. (2011), Degirmenci et al. (2012), and Climis (2016) customers evaluate a product based on the quality of service they receive. So higher quality services lead to customer satisfaction. Berry, Seiders, and Grewal (2002) stated that if the service quality is not up to their expectation, then the customers tend to consider such products as substandard and overpriced. Similarly, it was suggested by Yu (2007), and Yang and Chao (2017) that service quality affect customer satisfaction and intention to purchase or repurchase the product. This highlights that this finding of this present research corresponds with the past literature.

Satisfaction Positively Affects Loyalty Behaviour

It was found from the result findings of the regression analysis that customer satisfaction can positively affect loyalty behaviour. Therefore, based on this research, it was suggested that if customer satisfaction increases, it is likely to increase Malaysian consumers’ loyalty.

This finding also supports the findings of past reviewed literature. As per Anderson et al. (2004), customer satisfaction is one of the key aspects that eventually lead to customer loyalty. It was found by Aksoy (2013) that marketing managers generally used satisfaction and behavioural intentions metrics to measure customer loyalty.

Baker-Prewitt (2014) suggested that very high satisfaction ratings will eventually lead to customer loyalty. As per Climis (2016) when customers are satisfied with the company, they are likely to remain loyal. It was found by Morgan and Rego (2016) that customer satisfaction is an indicator of customer loyalty. Other researchers like Bansal et al. (2004) and Deng et al. (2010) suggested that satisfaction positively impacts customer loyalty. Old literature by Oliver (1999), cited by many researchers, also suggested that loyalty is the effect of customer satisfaction.

Satisfaction Positively Affects Positive Word of Mouth

Based on the data analysis and the result findings of this study, it was evident that customer satisfaction can positively affect the social influence of positive word of mouth. Therefore based on this research, it was suggested that if customer satisfaction increases, then Malaysian customers are likely to spread positive word of mouth about the product. A similar finding was suggested by Jasmine and Ramayah (2011) regarding the Malaysian consumers. Their research customer satisfaction regarding the service quality could induce customers to spread positive word of mouth about the product.

Loyalty Positively Affects Purchase Intention

Based on the regression analysis result, it was identified that loyalty could positively affect purchase intention. It meant that if Malaysian customers have loyalty towards a brand, they are likely to intend to purchase that product. This finding was also in line with the past literature. It was suggested by Abdul (2016) that customer loyalty triggers the customer’s purchase intention. Moreover, it was suggested by Beh, Yin and Faziharudean (2010) that loyalty has a mediating effect on the purchase intention of customers. If customers are loyal, then they will re-purchase the product even though any rewards are given or not given to them. This actually happens when customers have strong loyalty and association with the brand. Then they are motivated to buy the same product repeatedly.

Satisfaction Insignificantly Affects Purchase Intention

Based on the regression analysis results related to hypothesis H5, it was found that satisfaction can positively affect purchase intention, but the effect is insignificant. If the customers in Malaysia are satisfied with the product, then it does not necessarily mean that they will definitely have the purchase intention to buy that product. This could be due to various reasons; for instance, Malaysian customers are price sensitive and are likely to purchase a similar, less costly product even when they are satisfied with the product’s quality. This finding contradicts the past literature by Jasmine and Ramayah (2011) who suggested that if Malaysian consumers are satisfied with the quality of a product, then they are likely to have the intention to purchase the product. Moreover, it was suggested by Yu (2007) that satisfaction leads to a positive purchase behaviour of customers.

Social Influence of Positive Word of Mouth Positively Affects Purchase Intention

The result findings based on regression analysis related to hypothesis H6 suggested that positive word of mouth’s social influence can positively affect purchase intention. Therefore it was inferred that when the positive word of mouth socially influences the Malaysian consumers, then they are likely to have the intention to purchase that product. Similar findings were found in the past literature related to the effect of the social influence of positive word of mouth on purchase intention. In the past literature, a number of researchers such as Iyengar et al. (2011), Katona et al. (2011), and Aral and Walker (2012) highlighted that the social interactions have a positive effect on consumers’ repeat buying behaviour.

As per Nitzan and Libai (2011), consumers are highly affected by other consumers’ views, which goes along with consumer purchase behaviour. It was found by Toker-Yildiz et al. (2017) that social interaction has positively affected consumers’ repeat purchase behaviour. Some researchers like Schmitt et al. (2011) and Schlereth et al. (2014) suggested that monetary incentives also influenced consumers to repeat usage. However, it was proven by Toker-Yildiz et al., (2017) that social interaction weighs other aspects, especially monetary incentives, in customer repeat purchase behaviour. As per Rauyruen and Miller (2007) and Godes and Mayzlin (2009) a satisfied customer has a high possibility to spread the positivity about the firm or products when could then lead towards attracting other customers to purchase the product.

Service Quality Negatively Affects Purchase Intention

The regression analysis results related to hypothesis H7 suggested that service quality can negatively affect a customer’s purchase intention. It meant that if the service quality increases, then it is likely that the purchase intention of customers in Malaysia will decrease. This finding contradicts the findings of Degirmenci et al. (2012) as they suggested that customers are willing to pay a high price as long as they are guaranteed higher service quality. Therefore this finding that service quality negatively affects customers’ purchase intention is not in line with the literature. Moreover, logically, it seems incorrect that an increase in service quality would lead to a decrease in customers’ purchase intention, so this finding needs to be validated in future research.

Loyalty Positively Affects Purchase of Premium Price Product

Based on the result findings, it was identified that loyalty could positively affect a premium-priced product. It meant that if customers in Malaysia are loyal to a product, they are likely to purchase the product even at a premium price. This finding corresponds with Yi and La (2004) ‘s findings, who suggested that the firms can increase the price of their products by adopting a premium pricing strategy if they have loyal customers. It is because loyal customers are willing to buy the product even if the sellers charge premium prices. As per Beh et al. (2010), loyal customers will continue to re-buy the product from the same brand regardless of any special treatment or rewards are given to them. Therefore this finding of this study validates the existing literature.

Customer Satisfaction Negatively Affects Purchase of Premium Price Product

The result findings also suggested that customer satisfaction can negatively affect the purchase of a premium-priced product. It meant that if customers are satisfied, they are not likely to purchase a premium-priced product. This finding contradicts the past literature. As per Christian et al. (2012) the high satisfaction they are likely to purchase. However, there could be other factors that prevent the satisfied customer from purchasing the premium price product. Moreover, it is possible that the satisfied customer is price sensitive and is no longer willing to buy a product when premium prices are charged. Therefore in future research, it is suggested to identify the factors which can prevent the satisfied customer from purchasing the premium price product.

Social Influence of Positive Word of Mouth Positively Affects Purchase of Premium Price Product

It was also found from the result findings that the social influence of positive word of mouth can positively affect the purchase of premium price products. It meant that when customers in Malaysia are socially influenced and receive positive word of mouth regarding a product, they are likely to purchase the product even at a premium price. For instance, a recommendation or positive feedback from a friend can influence customers in Malaysia to purchase a premium-priced product. Similar findings were found in past literature. As per Bapna and Umyarov (2015), the adoption likelihood of a product increases when their peers socially influence them. Besides, it was suggested by Jasmine and Ramayah (2011) that customers tend to spread positive word of mouth about a product when they are satisfied with the service quality of a product. This highlights that other factors can affect the social influence of positive word of mouth and explain the mediating effect of the social influence of positive word of mouth on the purchase of premium price products.

Service Quality Insignificantly Affects Purchase of Premium Price Product

Based on the result findings, it was identified that service quality negatively, but insignificantly affects the purchase of premium price products. It meant that if a product’s service quality increases, it is not likely to increase the purchase of premium price products. This contradicts the past literature because as per Adams et al. (2011) as long as the customers are sure that they will receive higher service quality they are likely to purchase premium price products by paying a high price. It was found by Christian et al. (2012) that in terms of premium pricing, the customers are willing to pay high prices for the product with high service quality. High service quality leads to positive purchase intention. As per Degirmenci et al. (2012), there are certain customers’ expectations, and if the product meets their expectations, they get satisfied and purchase premium price products.