Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia
ISBN: 978-1-922069-76-4
Consumer Perception on Brand and Packaging Quality:
A Case Study of Kedai Rakyat 1 Malaysia
Sazrinee Zainal Abidin1, Raja Ahmad Azmeer Raja Ahmad Effendi2,
Rahinah Ibrahim3 and Muhammad Zaffwan Idris4
Integration of brand and packaging design would be the main factor to established
and maintained customer loyalty towards Kedai Rakyat 1 Malaysia (KR1M). This
study was conducted started from September 2012 till March 2015. The purpose of
this study is to gather data on consumer perceptions on quality towards KR1M as a
brand and its packaging design. This study uses the literature review/survey to
identification the key characteristics of branding towards packaging applications’ in
enhancing quality product brand of KR1M and investigate the elements that gain
customer loyalty towards a product. Finally, it uses case study and observation to
document the packaging design applications’ trend that is successful in the current
market. Results of the study would include consumer perceptions towards KR1M
brand and packaging on how it has represented quality. The results expected to
show diverse opinion ranging from states, gender, age and occupations. After the
introduction of the background problem, this study will present the literature on brand
quality; customer loyalty; designers' utilized packaging design; and KR1M; and
describe the research methodology before presenting the expected results. Results
gathered from 43 KR1M shops all over Malaysia with respondents total of 206 will
provide interesting data. This study contributes the justification on quality perception
by consumer towards KR1M products concentrating on brand and packaging quality.
The Ministry of Domestic Trade, Co-Operatives and Consumerism and KR1M
management to get insight from consumer to do improvement on the products.
Field of Research: Branding, Packaging Design and Business
Name of the Track: Business
1. Introduction
Malaysian government identified this issue in the National Key Result Areas (NKRA)
to reduce the burden experiencing by Malaysian. The Ministry of Domestic Trade,
Co-Operatives and Consumerism defined KR1M or Kedai Rakyat 1 Malaysia as an
initiative to assist consumers with subsidised and lower prices of consumer goods.
“The KR1M initiative has been expanded as a national movement in an effort to
address the impact of rising prices and cost of living of the people in tandem with the
National Key Result Areas (NKRA) under the Government Transformation
Programme (GTP)”. The government is fulfilling its promise to the people with the
________________________________
1, 2
Department of Industrial Design, Faculty of Design and Architecture, Universiti Putra Malaysia,
Malaysia
3 Department of Architecture, Faculty of Design and Architecture, Universiti Putra Malaysia, Malaysia
4 Faculty of Art, Computing and Creative Industry, Universiti Perguruan Sultan Idris, Malaysia
Mailing Address: Department of Industrial Design, Faculty of Design and Architecture, Universiti Putra
Malaysia, 43400 UPM Serdang, Selangor Darul Ehsan, Malaysia.
Email Address: rinee_eee@yahoo.com, Tel : +6016 2741656, Fax : +603 89485242
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Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia
ISBN: 978-1-922069-76-4
slogan ‘People’s First’ with several initiative to enlighten the burden felt by the
consumers. This is an effort of a gigantic CSR project initiated to reduce the burden
carried by the consumer.
In order to reach its full potential and achieve the overall goal of this development
initiative, KR1M initiative should be more focus on providing more shopping options
through increasing product flexibility. KR1M initiative also needs to emphasize the
overall quality of the product. KR1M has always been associated with quality issues
by the consumers largely. Lots of improvement have taken place to gain trust from
the consumers. The tormented images will take some times and the brand
positioning plus the packaging design will play a bigger role to achieve that goal.
Nambikei (2012) discussed in its report that “The existence of KR1M also acts as the
medium for the Government to control prices and lessens the monopolization of
products which has long been dominated by the multinational manufacturers. As
such, the multinational companies will be constrained from imposing price hikes
without due justification”.Prizes were controlled by packaged most of the items into
(Sagran,Zainol, Al-Mamun and Permarupan (2014)smaller and affordable for the
consumers. KR1M also emphasize the products manufacture by SME (Small and
Medium Entrepreneurs) to support the initiative by the government to stimulate
SME’s products manufacturing capability and marketing expansion. By using local
SME’s products, it’ll create a ripple positive effect of economy to the country where
manufacturer will have more sales and consumer will have purchasing power.
Tasnim, Rashid, Zain and Salleh (2013) presented a paper stated that “KR1M, albeit
initially highly criticized for its entry into the retail industry, is now slowly making way
into the peoples’ hearts. Highly praised for its humble yet sophisticated, centralized
business model, where extreme cost cutting along the value chain and operations is
the focus, the government, MYDIN, and all of its KR1M franchisees have shown that
businesses can still realistically operate with CSR values without compromising
quality and profit.” KR1M is proven a very good initiative to boost the SME’s
manufacturer morale and assist the consumers struggling with daily expenses on
groceries.
2. The Role of Brand and Packaging towards Kr1m Products
In an article, "MYDIN Boss: Why KR1M Isn’t A Get Rich Quick Scheme," dated 17
October 2012. It was stated that “when people buy a product, it is often based on the
quality, price and packaging”. Customers judge what they buy. Those with higher
disposable income pay serious attention to quality, while those with lower disposable
income are regularly concerned with the price (Zielke, 2009). Visual representation
always play a vital role in gaining consumer trust and loyalty. Brands are at war on
daily basis in attracting consumers and shifting their preferences in products and
services. When a product has a well known brand name, it can win consumers’
preferences and increase their purchase intention.
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Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia
ISBN: 978-1-922069-76-4
3. Literature Review
This research has witness the integration from multidisciplinary specialism to max
out the effect making sure statement made and result produced are credible. The
assimilation has also created new knowledge which resulted improvements and
solutions towards the problem statements. Many research were produces earlier
related to KR1M with concentration towards business and marketing. Findings by
Sagran,Zainol, Al-Mamun and Permarupan (2014) in their study noted that product
flexibility, product quality and advertising has a significant positive association with
consumer satisfaction. Relating to their study on important of customer satisfaction,
in this research will be exploring further on branding, packaging design and some
portion of marketing aspect, in order to strengthen the customer satisfaction needs in
this particular area.
4. Brand Positioning
Success of a product will also depending highly to the role impacted by brand
positioning. It is a strategic decision and plan to integrate all the elements such as
the product, design, trademark, slogan and many others in persuading nor influence
consumers to make a purchase. KR1M must take brand positioning very seriously in
order to ensure the brand is accepted and trusted by consumers.
Aaker and Keller (1990) mentioned that a brand with high awareness and good
image can promote brand loyalty to consumers, and the higher the brand awareness
is, the higher brand trust and purchase intention are to consumers. It is proven that
good brand positioning would be able to develop brand loyalty by the consumers to
register purchasing in their unconscious mind.
Brand positioning would also functions as an assistance to the consumers in making
preferences. Keller and Lehman (2004) further discussed that “For customers,
brands can simplify choice, promise a particular quality level, reduce risk, and/or
engender trust”. Consumers will always prefer simplified transaction or processes
when purchasing or deciding towards a product nor services.
What makes a product different than others? According to Keller (2008), brand will
help customers to identify a firm’s products or services and makes itself differentiate
from other competitors. To be different and distinctive than other are an advantage a
brand must be to always ensure consumers attracted to its products.
In addition, Morgan (1994) also stated that “The ultimate goal of consumer product
brands is to develop enduring relationships with consumers”. It is very important to
develop, maintain and renew relationships between a product brand and consumers.
brand positioning will need to take all these matters into consideration to be included
in its strategic planning.
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Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia
ISBN: 978-1-922069-76-4
5. Packaging Design
Packaging represented not only as a protector towards a product content, merely
vital it also a communication tools delivering and feeding important messages from
the brand owners directly to the consumers. Hess, Jeffrey S. PhD; Singh, Jay;
Metcalf, Lynn E.; and Danes, Jeffrey PhD (2014) Packaging can serve an important
role in the product consumption experience, but consumer product companies and
researchers often focus on packaging’s impact on product promotions, distribution
and a range of pre-consumption and cost-based functions.
The purpose of designing a packaging must be very strategic enough to be able to
influence consumers. Vogl, Twomey, Dang and Kelsey (2015) concluded that
“Packaging is the fastest growing segment of the printing industry. Globally,
packaging amounts to over a $400 billion industry”. It is an important industries
because of its function and much related to promotions aspects.
Ernst & Young (2012) identified that “The food packaging market has become the
largest segment of the packaging industry comprising over 51% of total package
revenues”. This shows that food packaging is the most central of product spreading
in the market. Concentration towards food product must be taken more seriously in
relation to the safety and health issues by the respective country.
The overall design of a packaging is a statement by the brand to advise and
convince consumers in making judgement during acquiring. Singh S P, Singh J,
Grewal G, Chonhenchob V. (2012) Product communication informs consumers
about package contents and facilitates the “first moment of truth” or product
selection. In a split second, that significant choices will determined expenditure by
the consumers on which products. Vogl, Twomey, Dang and Kelsey (2015) also
supported that the packaging design is a communication tool “With 73% of purchase
decisions made at the time of sale, package design has become a crucial marketing
tool”. Beside protecting the content and assisting during transportation of the
products, the advertising and promotion should take full advantages of the design
with the purpose to campaign it to the consumers during display.
6. Consumer Satisfaction and Perceived Quality
Why good branding and packaging design is vital to ensure success of a products?
Respectable branding and worthy packaging design will lead to a positive perceived
quality. Perceived quality can help consumers to have a subjective judgment on
overall product quality that make a product hold a salient differentiation and become
a selective brand in consumers’ minds (Aaker, 1991). A great perceived quality will
lasted for a very long time in a consumer awareness and may also create a ripple
effect in influencing others in purchasing a similar range of products.
Sagran, Zainol, Al-Mamun and Permarupan (2014) mention in their journal that
“Customer satisfaction plays a critical role in customers ‘retention towards the
product. Consumer satisfaction is crucial for this establishment, not only for KR1M’s
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Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia
ISBN: 978-1-922069-76-4
sustainability, but also to achieve the Governments objective to provide a wellbalanced, economical living condition in both the urban and rural areas”. Cheap
products could be good, however consumers nowadays demanding reliable and
presentable products. Consumers would like to be associated with a firm brand
because it also reflected their personality.
A brand of a product must be able to guarantee perceive quality when experiencing
it. This was define by Aaker (1996) also considered perceived quality as a necessary
measure to achieve good brand equity. Garretson and Clow (1999) added that
perceived quality will influence consumer purchase intention. Judith and Richard
(2002) further indicate that perceived quality and brand loyalty have a highly
connection, they will positively influence purchase intention. Purchasing decision will
always be the main element to be highly encourage by perceive quality. Consumers
expectation may be varied on the product actual quality and perceive quality.
Manufacturer could balance these matters by providing comprehensive packaging
design and brand positioning. Several scholars such as Aaker, Garretson, Clow,
Judith and Richard firmly quoted the importance of perceive quality in influencing
product purchase choices.
Sales of a product is an ally of a brand association that could increase if the perceive
quality is strategized. According to R. Priyadharsini & K. Shyamasundar (2013)
“Perceived quality is a brand association that is elevated to the status of a brand
asset. Among all brand associations, only perceived quality has shown to drive
financial performance. It’s a major strategic thrust of a business”. An institution must
include perceive quality as main agenda of company mission. This will open up huge
opportunity to established strong bond between consumers and brand. As a loyalist,
consumers will be contributing towards the product sales and maintaining the
credibility of the brand itself.
7. Research Methodology
This research was designed to investigate consumer’s perception towards Kedai
Rakyat 1 Malaysia on brand and packaging based on demographics of Malaysian
such as; age range, education, occupation and etc. Researcher has conducted this
survey using an instrument created that compromised question which were divided
for easy to organise later on. Researcher has successfully conducted this survey in
all 14 states in Malaysia that included 43 KR1M stores and 206 respondents.
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Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia
ISBN: 978-1-922069-76-4
List of State, Store Locations and Respondents
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
State
Perlis
Kedah
Perak
Penang
Selangor
Kuala
Lumpur
Negeri
Sembilan
Melaka
Johor
Pahang
Terengganu
Kelantan
Sabah
Sarawak
Store Location
Arau
Kangar
Kodiang
Alor Setar
Gurun
Sungai Petani
Ipoh
Bidor
Kuala Kangsar
Seberang Perai Utara
Butterworth
Bukit Mertajam
Petaling Jaya
Kelana Jaya
Rawang
Klang
Jalan Raja Laut
Batu Caves
Bandar Tun Razak
Senawang
Rantau
Ayer Keroh
Melaka Tengah
Tengkera
Ayer Hitam
Simpang Renggam
Skudai
Bentong
Mentakab
Kuantan
Kemaman
Dungun
Kuala Terengganu
Pasir Puteh
Kota Bahru
Tanah Merah
Kota Kinabalu
Inanam
Tuaran
Kuching
Kuching
Kota Samarahan
Kuching
Numbers of Respondents
13
9
12
15
20
16+10 (Putrajaya)
16
13
15
13
14
17
9+ 5 (Labuan)
9
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Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia
ISBN: 978-1-922069-76-4
Sample of KR1M Packaging and Label on Bakery Products and Ice Creams
A set of questionnaires were designed using Likert scale survey using
smiley to sad icons to allowed respondents to indicate their level opinion
whether to agree or disagree with a statement made by the researcher.
The survey has cover several aspect as below:
No.
1.
Types
Demography
2.
Customer Loyalty
3.
Product Integrity
4.
Design and Branding
Rationale
Basic information such as age, gender, education
level, occupation and state.
6 statement were provided to investigate the level of
consumer trustworthiness and confidence towards
KR1M brand and products.
2 statement were stated to explore the packaging of
KR1M reliability in term of information on the
packaging which related closely to safety and health.
5 statement were specified associated to design and
branding to scrutinise on perceive quality that KR1M
products have on consumer.
During survey being conducted male was the dominant consumer consisted of 59.2
% compare female which is 40.8 %. Total respondents for this survey 206.
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Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia
ISBN: 978-1-922069-76-4
This Malaysian government initiative has provided platform for the lower and middle
income citizen. Total of 113 respondents were at SPM level which is equivalent to ‘O’
Level with 54.9%. The diploma contributed to 18.9 % and degree 16.5 %
represented the middle income people.
This data also indicated that KR1M is acceptable by all sorts of people working on
different occupations. Non-executive benefit mostly from KR1M with 44.2 % and
followed by the executive with 32.0%. The house wife is within the nnot working
category with 16 %. These indicated that KR1M is much desirable by consumers.
A packaging must be able to function as a medium to communicate to the consumer
and marketing tools to attract consumer to make purchasing decision in the brand
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Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia
ISBN: 978-1-922069-76-4
benefit. KR1M brand and packaging establishment is not heading the right direction
when consumer indicated in this survey that 30.1 % not accepting the current
branding and packaging design. 19.4% also supported the statement by signifying
not satisfied. Only 12.1% express highly satisfaction with the current branding and
packaging design.
The data above shows the level of confidence for KR1M consumers to recommend
or suggested the products to their relatives and friends. It is a mixed percentages
among the consumers. 28.6 % specify that they will not recommend KR1M for others
to use. Meanwhile 26.7% also indicated that they will suggested KR1M to others.
Another 16.5% are strong supporter of the brand and willing to put in good words.
The data above are endorsement from the consumers that they are proud of KR1M
because it is origin. 55.8 % express that they are very proud of the brand and 18%
supported the statement. Only small number of consumers not proud of the brand
which carries 1.9%. Malaysian is very nationalist when it comes to choose a brand.
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Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia
ISBN: 978-1-922069-76-4
Majority of 55.3% stated that it is imperative for KR1M packaging design must be
eye-catching and appealing as a brand. 24.8% strongly backing the declaration
showing that KR1M product should be improve in term of brand positioning and new
look of the packaging design.
8. Conclusion
A strategic branding position and appealing packaging design will contribute hugely
on the purchasing decision and quality perceive by consumer. KR1M have good
products in term of quality. The brand positioning and packaging design should be
revisited and enhancement is essential. Respondents are proud of KR1M as a brand
and stated the products must have more attraction. Studies noted that the quality
and satisfaction concepts were linked to customer behavioural intentions like
purchase and loyalty intention, willingness to spread positive word of mouth, referral,
and complaint intention by many researchers (Olsen, 2002). By providing consumers
with great user experience, it has proven that consumers will act as a mini
ambassador towards a brand.
In order to reach its full potential and achieve the overall goal of this development
initiative, KR1M initiative should be more focus on providing more shopping options
through increasing product flexibility. KR1M initiative also needs to emphasize the
overall quality of the product(Sagran, Zainol, Al-Mamun and Permarupan, 2014)
Consumers demanding cheap products and at the same time quality is also
important. KR1M has potential to be the leading brand in Malaysia for groceries
market. The advantages of KR1M products compare to other competitor is it absorb
GST. The direction of the Malaysian government initiative could be more highly
impact towards customer satisfaction to accommodate the living standard of the
lower and middle income people.
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Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia
ISBN: 978-1-922069-76-4
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