Examining the Structural Relatiosnhips of Product Price, Product Quality and Customer Purchasing Decision
Keywords:
Price, product quality, purchasing decision.
Abstract
This research aims to test the influence of price and product quality on customers’ purchasing decision. To this, 105 respondents were used to fill up the questionnaires, Smart-PLS 3.0 was used to analyze and test the hypothesis. The results showed that product price influenced positively and significantly on customers’ purchasing decision, while product quality did not. This research enriches the empirical study on price, product quality, and the customer purchasing decision. At the practical level, the result revealed that corporates should emphasis developing and delivering products meeting the needs of customers in price sensitive market in order to stimulate customer’s purchasing decision and enhance corporate’s market share.
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References
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Beneke, J. and Zimmerman, N. (2014) ‘Beyond private label panache: The effect of store image and perceived price on brand prestige’, Journal of Consumer Marketing, 31(4), pp. 301–311.
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Djatmiko, T. and Pradana, R. (2016) ‘Brand Image and Product Price; Its Impact for Samsung Smartphone Purchasing Decision’, Procedia - Social and Behavioral Sciences, pp. 221–227.
Gök, O., Ersoy, P., & Börühan, G. (2019). The effect of user manual quality on customer satisfaction: the mediating effect of perceived product quality. Journal of Product and Brand Management.
Hair, J., Hollingsworth, C. L., Randolph, A. B., & Chong, A. Y. L. (2017). An updated and expanded assessment of PLS-SEM in information systems research. Industrial Management & Data Systems, 117(3), 442–458.
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Jung, H. S. and Yoon, H. H. (2012) ‘Why do satisfied customers switch? Focus on the restaurant patron variety-seeking orientation and purchase decision involvement’, International Journal of Hospitality Management, 31(3), pp. 875–884.
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Papafotikas, I., Chatzoudes, D. and Kamenidou, I. (2014) ‘Purchase Decisions of Greek Consumers: An Empirical Study’, Procedia Economics and Finance, 9(14), pp. 456–465.
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Saldanha, E. de S. (2019) ‘The Mediation Effects of Business Strategy on the Relations between Industrial Competition and Performance’, Timor-Leste Journal of Business and Management, 1(1), pp. 1–11.
Song, M., Lee, W. S. and Moon, J. (2019) ‘Exploring effective price presentation format to reduce decision difficulty and increase decision satisfaction’, Tourism Management Perspectives.
Veloutsou, C. (2015). Brand evaluation, satisfaction and trust as predictors of brand loyalty: the mediator-moderator effect of brand relationships. Journal of Consumer Marketing, 32(6), 405–421.
Vera, J. (2015) ‘Perceived brand quality as a way to superior customer perceived value crossing by moderating effects’, Journal of Product and Brand Management, 24(2), pp. 147–156.
Wang, Y., Lo, H. P. and Hui, Y. V. (2003) ‘The antecedents of service quality and product quality and their influences on bank reputation: Evidence from the banking industry in China’, Managing Service Quality: An International Journal, 13(1), pp. 72–83.
Weisstein, F. L. et al. (2017) ‘Examining impacts of negative reviews and purchase goals on consumer purchase decision’, Journal of Retailing and Consumer Services, 39(July), pp. 201–207.
Whang, U. (2017) ‘Comparative advantage, product quality, and the competitiveness of firms’, Journal of Korea Trade, 21(3), pp. 174–190.
Zietsman, M. L., Mostert, P. and Svensson, G. (2019) ‘Perceived price and service quality as mediators between price fairness and perceived value in business banking relationships: A micro-enterprise perspective’, International Journal of Bank Marketing, 37(1), pp. 2–19.
Asadi, A., Pool, J. K. and Jalilvand, M. R. (2014) ‘The effect of perceived price fairness through satisfaction and loyalty on international tourists’ price acceptance of Islamic-Iranian art products’, Education, Business and Society: Contemporary Middle Eastern Issues, 7(4), pp. 201–215.
Baack, D. W. and Boggs, D. J. (2008) ‘The difficulties in using a cost leadership strategy in emerging markets’, International Journal of Emerging Markets, 3(2), pp. 125–139.
Beneke, J. et al. (2013) ‘The influence of perceived product quality, relative price and risk on customer value and willingness to buy: A study of private label merchandise’, Journal of Product and Brand Management, 22(3), pp. 218–228.
Beneke, J. and Zimmerman, N. (2014) ‘Beyond private label panache: The effect of store image and perceived price on brand prestige’, Journal of Consumer Marketing, 31(4), pp. 301–311.
Boniface, B., Gyau, A. and Stringer, R. (2012) ‘Linking price satisfaction and business performance in Malaysia’s dairy industry’, Asia Pacific Journal of Marketing and Logistics, 24(2), pp. 288–304.
Cai, R., Ma, W. and Su, Y. (2016) ‘Effects of member size and selective incentives of agricultural cooperatives on product quality’, British Food Journal, 118(4), pp. 858–870.
Cakici, A. C., Akgunduz, Y. and Yildirim, O. (2019) ‘The impact of perceived price justice and satisfaction on loyalty: the mediating effect of revisit intention’, Tourism Review, 74(3), pp. 443–462.
Carvalho, H. de F., Saldanha, E. de S. and Amaral, A. M. (2020) ‘The Mediation Effects of Customer Satisfaction on the Relations Between Product Price, Service Quality and Purchasing Decision’, Timor-Leste Journal of Business and Management, 2(1), pp. 14–26.
Cheung, C. M. K., Xiao, B. S. and Liu, I. L. B. (2014) ‘Do actions speak louder than voices? the signaling role of social information cues in influencing consumer purchase decisions’, Decision Support Systems, 65(C), pp. 50–58.
Conti, E. et al. (2019) ‘Design-driven innovation, quality, and customer value in manufacturing companies’, TQM Journal, 31(6), pp. 968–986.
Djatmiko, T. and Pradana, R. (2016) ‘Brand Image and Product Price; Its Impact for Samsung Smartphone Purchasing Decision’, Procedia - Social and Behavioral Sciences, pp. 221–227.
Gök, O., Ersoy, P., & Börühan, G. (2019). The effect of user manual quality on customer satisfaction: the mediating effect of perceived product quality. Journal of Product and Brand Management.
Hair, J., Hollingsworth, C. L., Randolph, A. B., & Chong, A. Y. L. (2017). An updated and expanded assessment of PLS-SEM in information systems research. Industrial Management & Data Systems, 117(3), 442–458.
Hair, Joe F., Sarstedt, M., Hopkins, L., & Kuppelwieser, V. G. (2014). Partial least squares structural equation modeling (PLS-SEM). European Business Review, 26(2), 106–121.
Hanaysha, Jalal Rajeh. 2018. “An Examination of the Factors Affecting Consumer’s Purchase Decision in the Malaysian Retail Market.” PSU Research Review 2 (1): 7–23.
von Helversen, B. et al. (2018) ‘Influence of consumer reviews on online purchasing decisions in older and younger adults’, Decision Support Systems, 113(March), pp. 1–10.
Henseler, J., Ringle, C. M. and Sarstedt, M. (2015) ‘A new criterion for assessing discriminant validity in variance-based structural equation modeling’, Journal of the Academy of Marketing Science, 43(1), pp. 115–135.
Huang, Z. and Benyoucef, M. (2017) ‘The effects of social commerce design on consumer purchase decision-making: An empirical study’, Electronic Commerce Research and Applications, 25, pp. 40–58.
Hustić, I. and Gregurec, I. (2015) ‘The influence of price on customer’s purchase decision’, Central European Conference on Information and Intelligent Systems, pp. 1–6.
Jung, H. S. and Yoon, H. H. (2012) ‘Why do satisfied customers switch? Focus on the restaurant patron variety-seeking orientation and purchase decision involvement’, International Journal of Hospitality Management, 31(3), pp. 875–884.
Karimi, S., Holland, C. P. and Papamichail, K. N. (2018) ‘The impact of consumer archetypes on online purchase decision-making processes and outcomes: A behavioural process perspective’, Journal of Business Research, 91(June), pp. 71–82.
Kaswengi, J. and Lambey-Checchin, C. (2019) ‘How logistics service quality and product quality matter in the retailer–customer relationship of food drive-throughs: The role of perceived convenience’, International Journal of Physical Distribution and Logistics Management.
Kotler, P. and Amstrong, G. (2012) Principles of Marketing. 14th edn. New Jersey: Prentice Hall.
Kukar-Kinney, M., Ridgway, N. M. and Monroe, K. B. (2012) ‘The Role of Price in the Behavior and Purchase Decisions of Compulsive Buyers’, Journal of Retailing, pp. 63–71.
Maslowska, E., Malthouse, E. C. and Viswanathan, V. (2017) ‘Do customer reviews drive purchase decisions? The moderating roles of review exposure and price’, Decision Support Systems, pp. 1–9.
Nguyen, A. and Meng, J. G. (2016) ‘How source of funds affects buyer’s judgments of price fairness and subsequent response’, Journal of Product and Brand Management, 25(7), pp. 710–720.
Papafotikas, I., Chatzoudes, D. and Kamenidou, I. (2014) ‘Purchase Decisions of Greek Consumers: An Empirical Study’, Procedia Economics and Finance, 9(14), pp. 456–465.
Philip, K. and Keller, K. L. (2016) Marketing Management. 15th Editi. Boston: Pearson.
Razak, I., Nirwanto, N. and Triatmanto, B. (2017) ‘The Impact of Product Quality and Price on Customer Satisfaction with the Mediator of Customer Value Ismail’, Journal of Marketing and Consumer Research, 3(11), pp. 1240–1248.
Rua, S., Saldanha, E. de S. and Amaral, A. M. (2020) ‘Examining the Relationships among Product Quality, Customer Satisfaction and Loyalty in the Bamboo Institute, Dili, Timor-Leste.pdf’, Timor-Leste Journal of Business and Management, 2(1), pp. 33–44.
Saldanha, E. de S., Rahyuda, I. K., Yasa, N. N. K., & Sukaatmadja, I. P. G. (2018). The Role of Business Strategy in Mediating the Relationship Between Industrial Competition and Performances : A Study in the Higher Education Industry in Timor-Leste. European Jorunal of Business and Management, 10(8), 152–172.
Saldanha, E. de S. (2019) ‘The Mediation Effects of Business Strategy on the Relations between Industrial Competition and Performance’, Timor-Leste Journal of Business and Management, 1(1), pp. 1–11.
Song, M., Lee, W. S. and Moon, J. (2019) ‘Exploring effective price presentation format to reduce decision difficulty and increase decision satisfaction’, Tourism Management Perspectives.
Veloutsou, C. (2015). Brand evaluation, satisfaction and trust as predictors of brand loyalty: the mediator-moderator effect of brand relationships. Journal of Consumer Marketing, 32(6), 405–421.
Vera, J. (2015) ‘Perceived brand quality as a way to superior customer perceived value crossing by moderating effects’, Journal of Product and Brand Management, 24(2), pp. 147–156.
Wang, Y., Lo, H. P. and Hui, Y. V. (2003) ‘The antecedents of service quality and product quality and their influences on bank reputation: Evidence from the banking industry in China’, Managing Service Quality: An International Journal, 13(1), pp. 72–83.
Weisstein, F. L. et al. (2017) ‘Examining impacts of negative reviews and purchase goals on consumer purchase decision’, Journal of Retailing and Consumer Services, 39(July), pp. 201–207.
Whang, U. (2017) ‘Comparative advantage, product quality, and the competitiveness of firms’, Journal of Korea Trade, 21(3), pp. 174–190.
Zietsman, M. L., Mostert, P. and Svensson, G. (2019) ‘Perceived price and service quality as mediators between price fairness and perceived value in business banking relationships: A micro-enterprise perspective’, International Journal of Bank Marketing, 37(1), pp. 2–19.
Published
2020-12-22
How to Cite
Marcal, A., Saldanha, E. and Amaral, A. (2020) “Examining the Structural Relatiosnhips of Product Price, Product Quality and Customer Purchasing Decision”, Timor Leste Journal of Business and Management, 2, pp. 1-9. doi: 10.51703/bm.v2i0.29.
Section
Articles
Copyright (c) 2020 Timor Leste Journal of Business and Management
This work is licensed under a Creative Commons Attribution 4.0 International License.
