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IIMS Journal of Management Science

IndianJournals.com DOI: 10.5958/j.0976-030X.3.2.008

Vol. 3, No. 2, July-December 2012, pp- 205-215

Consumer Perceptions of Quality towards Beautification Products: A Developing Country Perspective Jashim Uddin Ahmed*, Humayun Kabir Chowdhury*

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ABSTRACT This study investigates the influence of some important extrinsic cues relevant to Bangladesh, i.e. brand image, perceived price and perceived country of origin, on consumer perceptions of quality towards beautification products. An instrument for measuring consumer perceptions of quality towards beautification products is developed. Covariance structure analysis has been performed using a total of 309 responses. Results from structure analysis reveal a broader conceptualisation of consumer-perceived quality in Bangladesh in the form of a model. This paper discusses the implications for theory, research and practice, and makes suggestions for future research. KEYWORDS: Beautification; Perceived quality; Brand; Perceived county-of-origin; Perceived price JEL CLASSIFICATION: M3; M31 BIOGRAPHICAL NOTE: Dr. Jashim Uddin Ahmed is an Associate Professor at School of Business and Director of BBA Program, North South University, Dhaka, Bangladesh. He received his Ph.D. in management sciences from University of Manchester Institute of Science and Technology (UMIST), UK. His current research interests include the areas of strategic management, change management and contemporary marketing thoughts. He can be reached at [email protected], [email protected]. Dr. Md. Humayun Kabir Chowdhury is a Professor at Department of Business Administration, East West University, Dhaka, Bangladesh. He has published more than 30 research articles in reputed journals and conference proceedings. His research focuses on consumer behaviour, contemporary issues in marketing. He can be reached at [email protected], [email protected]

INTRODUCTION Beautification products are those that clean and perfume body, change appearance, correct body odor, protect skin and keep it in good condition (Chidambaram and Devi, 2000). Especially, these products are more important to women. When we look at the rising speed of the industries of beautification products and beauty parlors and health centers, it is clear that the consciousness of beauty and the use of beautification items have been increasing. Purchasing beautification products may be a thoughtful decision because these decisions affect the overall appearance of an individual (Kim and Seock, 2009). IIMS Journal of Management Science

To identify how consumers perceive quality is, of course, a difficult task. The complex nature of perceived quality can be well-understood when a product with excellent attributes did not impress the consumer, whereas a fairly made product did impress the consumer as having excellent quality. However, most of the previous research agree on the argument that the high-quality perception often depends on certain assumptions about consumer behaviour, such as: (1) consumers hold some uniqueness beliefs in memory towards the product under evaluation; (2) consumers hold a positive impression towards the country from which the product was originated; (3) consumers 205

Consumer Perceptions of Quality towards Beautification Products: A Developing Country Perspective




possess a positive impression towards the brand name of the product; and (4) the price of the product conveys some favourable information. However, there is a growing body of evidence indicating that providing high-quality goods enhances profitability, improves productivity, increases market share and return on investment and reduces costs (Takeuchi and Quelch, 1983; Garvin, 1984; Finn and Lamb, 1991). When it comes to product quality, managers in the third world countries (Bangladesh has been considered in this study) still think that the competitive problem is much less serious than it really is. Managers in Bangladesh always claim that they cannot know how their product quality stacks up against that of their competitors. A number of studies have been published on this specific topic in a general form or has been conducted with reference to the first world, or all are based on data taken from the USA, Japan or the European countries. Thus, the main purpose of this study is to identify how people in Bangladesh define and reflect quality towards beautification products. Research has shown that quality perceptions may vary depending on the level of economic development of the country (Chowdhury and Islam, 2003). In many countries, especially those with a low per capita income, insufficient marketing systems prevail. Because of low income, individuals are more likely to patronise traditional retail outlets where credit obtainment is easier. Limited storage capacity, the desire of household members to socialise through daily shopping and limited means of transportation, all represent factors that hamper the information search process of consumers. For most products, the demand far exceeds the supply and longtime established companies tend to be the market leaders. Product information is not freely available, and the penetration of mass media and the use of advertisements to promote products are quite limited (Austin, 1990). Therefore, it is important to 206

adopt a research approach to see the mechanism of consumers’ perceived quality in the less-developed countries like Bangladesh. It is hoped that the findings of this study will provide guidance to the policy makers for developing appropriate marketing strategies.

LITERATURE REVIEW AND RELATED CONSTRUCTS OF STUDY Literature review and the related constructs of this study are as follows: perceived quality, brand image, perceived country of origin and perceived price. Perceived Quality Quality is an elusive construct like beauty. Even welldesigned, defect-free products can fail if they do not fit consumers’ perceptions of high quality (Chowdhury et al., 2007). The perceived quality construct has received considerable attention in the marketing literature (Holbrook and Corfman, 1985; Olshavsky, 1985; Jacobson and Aaker, 1987). Quality is the ability of a product to satisfy a consumer’s needs and requirements (McCarthy and William, 1991). Perceived quality can be defined as the perception of a consumer about the overall excellence and superiority of a brand, which is directly related to his/her satisfaction. Quality is the best indicator of the product’s durability, reliability, precision and other valued attributes. It provides added value and constructive perception of a brand to affect consumers’ brand evaluation. The highquality perception often depends on consumers’ distinct liking and beliefs towards the brand. Thus, a brand may contain quality attributes, but it may not satisfy consumers’ preference if it does not fit with their perceptions and beliefs of high quality. Typically, consumers recognise about quality levels of different brands through categorised information as well as experience with the brand and they form positive or negative perception about the quality of a specific brand. When consumers are convinced with quality Vol. 3, Issue 2, July-December 2012

Jashim Uddin Ahmed, Humayun Kabir Chowdhury




of a brand, they evaluate a brand positively. Consumers also feel pride for owning quality product, because they perceive better quality as an image of social status. Consumers in the developing countries prefer highquality brand not for status, but for assurance of performance and benefit within their closely perceived range of choice. Sometimes, the perception of quality is diverse among the consumers. For a brand, different consumers hold different perception vis-à-vis brand quality. A brand might be coded as “high quality” by some consumers, while “medium quality” or “low quality” by others.

Brand Image Usually, consumers buy not only a product, but also the image associated with the product. Past studies suggest that brand image can be an important information cue for consumers to evaluate a product (Hutchinson et al., 1994; Nedungadi et al., 2001). Generally, there are two possible ways for consumers to use brand image in their product evaluation. In the first, rational way, brand image is a construct that consumers use to simplify their product knowledge about a specific brand (Meenaghan, 1995). Thus, consumers will often refer to brand image prior to their product attitude formation process. In the second, emotional way, consumers are assumed to seek a match between their selfconcept and brand image (Heath and Scott, 1998). Consumers search information concerning the brand and they respond positively on that brand which are associated with their cognition and selfworth. Habitually, consumers focus on the brand’s opportunities, suitability, benefit and prestige when they evaluate brand image. When a brand can fulfill these expectations of a consumer, (s)he holds positive impression towards that brand. That is, brand image may provide consumers a symbolic motivation in their product consumption.


Perceived Country of Origin The “made in” image is the picture, the reputation and the stereotype that businessmen and consumers attach to products of a specific country (Nagashima, 1970). To examine the impact of “image” on consumer’s actual behaviour, country image is a major consideration when they have no familiarity or knowledge about a product or brand. Several studies have examined country-of-origin effect on product evaluations (Li and Wyer, 1994; Maheswaran, 1994). Recent research has focused on the antecedent of the country-of-origin effect (Hung, 1989, Roth and Romeo, 1992) and assesses the relative importance of country of origin as one of the many possible cues (Thorelli et al., 1989; Tse and Gorn, 1993). Country image plays a significant and optimistic role in consumers’ evaluation of a brand. Inherently, consumers perceive country image according to whether the product countries are diverse, industrially developed countries or less developed countries. There is a tendency that products from industrially developed countries are evaluated as being superior to those from less developed countries. Most of the consumers believe that the industrially developed countries produce superior quality products, because they are financially strong as well as their production and marketing capability are advanced. So, country of origin influences consumers’ brand evaluation if the country is familiar as a high-image country. Perceived Price Price perception is the process by which consumers translate price into meaningful cognitions, and it has interested researchers for several years (Lichtenstein et al., 1988). Consumers want to get highest utility from a brand, which they purchase by sacrificing money and benefit from other competitive brands. The classical models in economics postulate that a consumer maximises utility by allocating a limited

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budget over alternative goods and services (Lilien and Kotler, 1983). Indeed, the main effects of price appear to be more clearly associated with quality perception of a brand. Perceived price is a good proxy variable for perceived quality. Price conveys information to the consumer about product quality (Erickson and Johansson, 1985). The importance of price as a function of perceived quality has been extensively studied more than any other factors in this sphere (Swan, 1974; Wheatley and Chiu, 1977; Zeithaml, 1988; Dodds et al., 1991). High-priced brands, likewise, are perceived to be of higher quality. Thus, price information is extensively used as an extrinsic cue to evaluate a brand. Therefore, price can play both roles, i.e. as an indicator of the amount of sacrifice needed to purchase a product and as an indicator of the level of quality.

RESEARCH QUESTIONS AND OBJECTIVES Many issues have been identified as determining factors for consumer perceptions of quality (Dodds and Monroe, 1985; Erickson and Johansson, 1985; Johansson et al., 1985; Lee, 1999). This study explored how a consumer perception of quality towards beautification products is formed. In this process, we introduce constructs relevant to Bangladeshi consumers, i.e. brand image, country of origin and price, on consumer perceptions of quality towards beautification items. Therefore, this study will find out the exact roles of these extrinsic cues on consumer perceptions of quality of beautification products. The purpose of this research was to explore how consumers perceive quality towards a beautification product in a developing country (Bangladesh). This study considers the influence of extrinsic cues, i.e. brand name, perceived price, perceived quality and perceived country-of-origin effects, on consumer evaluative judgment concerning beautification products. If each cue has positive or negative effect on the consumer’s perceptions of quality, then we must

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find out which cue(s) has/have important role(s) to influence the consumer’s perceptions of quality towards beautification products.

HYPOTHESES OF THE STUDY In order to develop the hypotheses, the underlying assumptions of the proposed research are discussed first, and then hypotheses are developed to test the effects of the variables on consumer quality perceptions. Influence of Brand Image It is assumed that when a consumer initially encounters a new product, important information about the product is often missing. In this case, consumers may form inferences about missing information by drawing a connection between available pieces of information, one of which is brand image. Upon facing a brand, consumers’ cognitive responses will center on question such as “Does the manufacturer of this brand have the necessary skills, expertise and technology to produce a quality product?” The positive responses will develop into favourable evaluations towards the brand. The opposite will be observed in case of negative response. Thus, brand image, which is relevant to the company’s ability to produce output, is one likely source for consumers’ quality perceptions. Hence, the hypothesis is: H1: Brand image of a beautification product has a direct positive effect on the evaluation of perceived quality. Influence of Perceived Country of Origin If a consumer is familiar with a product class, perhaps, (s)he will be less likely to rely on the country image as one of the extrinsic cue on what consumers usually depend. Consumers use country image in evaluating product quality because they often are unable to detect the true quality of a product before purchase. This view is analogous to the role of other extrinsic cues, such as perceived price or brand image, on consumers’

Vol. 3, Issue 2, July-December 2012





product quality evaluation. This can better be described by the categorisation theory, where it is supposed that attitude towards a stimulus is directly related to attitude associated with the activated category (Alba and Hutchinson, 1987). When consumers see a product associated with a positive country image, they will infer positive impression towards that product, even though the product does not belong to the same category that the consumers have already used (Chowdhury and Ahmed, 2009). Thus, the hypothesis is: H 2: Perceived country-of-origin image of a beautification product has a direct positive effect on consumer-perceived quality.

Influence of Perceived Price Consumers often perceive price as an extrinsic quality cue. Several studies have researched consumer perception of price as an indicator of quality, and many of these have shown price to operate in this manner (Wheatley and Chiu, 1977; Erickson and Johansson, 1985; Dodds et al., 1991). Although there are so many arguments in favour and against this rationale, in this study, the idea of positive relationship between price and perceived quality is adopted. The argument behind this assumption is that: (a) producing quality goods needs sophisticated machinery that cost more and increases price, (b) manufacturers use high-quality raw materials to produce quality products; and (c) it is unlikely that a product with low quality will be charged more in this competitive world. Therefore, the hypothesis is: H3: Perceived price of a beautification product has a direct positive effect on consumer perceptions of quality. RESEARCH METHODOLOGY Pretests Three pretests were conducted to identify necessary stimuli for this study. The first pretest was conducted for the purpose of obtaining a list of beautification IIMS Journal of Management Science

products. Some beautification products were necessary for the purpose of data collection. Subjects were a sample of 33 students from a national university in Bangladesh. The responses were obtained by asking questions to solicit free recall protocols. More specifically, the respondents were asked to give a list of products that come to their mind when they think about beautification products. Five products were selected that have been obtained based on the frequency of mentioning. The five beautification products were as follows: lipstick, talcum powder, body lotion, shampoo and fairness cream. The second pretest was conducted to obtain brand names for beautification products. A convenience sample of 40 subjects was asked and their opinions were written about “what are their most preferred brands for lipstick, talcum powder, body lotion, fairness cream and shampoo?” The selected brand names for the five beautification products were as follows: Medora for lipstick, POND’S for talcum powder and body lotion, SUNSILK for shampoo and Fair & Lovely for fairness cream. The purpose of third pretest was to obtain a list of extrinsic cues of five beautification items. 28 subjects were asked “what are the features they consider or what are the things come to their mind when they purchase a lipstick, a talcum powder, a body lotion, a shampoo and a fairness cream”. The highest scored cues selected for the five beautification products by subjects were: brand image, country of origin and price.

Sample A student sample has been used in this study. The use of student sample is a widely discussed issue by the researchers in the consumer behaviour discipline (Beltramini, 1983; Burnett and Dunne, 1986; Badovick, 1990). Several authors have enumerated the dangers of using student samples in research (Oakes, 1972). These authors have generally cited threats to external validity as their primary concern, arguing that 209





students are atypical of the “general population”, and that any findings based on student sample may therefore not be generalisable to other populations (Cunningham et al., 1974). But the use of student sample offers the distinct advantage that it increases the homogeneity of respondents, which reduces the amount of irrelevant variation in outcome variable (Judd and Kenny, 1981). A total of 318 responses were collected from the female students of a national university in Bangladesh. The removal of outliers and records with missing values left 309 responses. Only female students were considered for the sample, because female students are the ultimate consumers and have sufficient knowledge and interest about the beautification products. In all, 88% of subjects were graduate students at the average age of 22 years.

Measurement of the Variables Multi-item measures were used to get the data on the constructs considered. Existing literature was used as the basis of the source of measures for the constructs. More specifically, perceived quality measures have been borrowed from Lee (1994), brand image from Keller and Aaker (1992), country of origin from Chowdhury (2001) and price from Bearden & Shimp (1982). Using the same scales, internal consistency by Cronbach’s coefficient alpha, nature of facets by principle component analysis and convergent validity by one-way the Anaysis of Variance (ANOVA) techniques were performed to obtain the measures appropriate for the respondents in Bangladesh. A total of 17 items were constructed for the questionnaire to measure four constructs of this study. Table 1: Summary of the reliability measurement Perceived quality

Number of items α - values 6 0.82

Brand image

4

0.91

Country of origin

3

0.83

Price

4

0.80

Dimension

Data Collection Method and Procedure Data were collected from students in the classroom with prior permission from the authority. In the surface page of the questionnaire, the purpose of this study had been provided. Some description about the country of origin of the product was provided in the second page of the questionnaire. For instance, Medora lipstick is made in France, which has a long reputation of producing cosmetics. In the same way, POND’S, Fair & Lovely and SUNSILK were also described according to their country of origin. After reading the top page of the questionnaire, the subjects were asked to turn the page and respond to all items on a number of sevenpoint Likert scales. There were five versions of the questionnaire for the four brands considered in this study. The five versions of the questionnaires were of similar length and differed by the brand name only. Most subjects spent between 7 and 10 min filling out the entire questionnaire.

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Reliability/internal consistency of the multi-item scales of each of the constructs using Cronbach’s coefficient alpha were measured. The minimally acceptable reliability for primary research should be in the range of 0.50 to 0.60 (Nunnally, 1967). For this study, coefficient alpha values were computed for each construct separately, which ranged from 0.80 to 0.91 (see Table 1).

RESULTS The independent variables follow the three hypotheses. Figure 1 shows the overall result and Table 2 shows the structural results needed for testing the hypotheses.






Table 2: Fit indices for structural model Fit indices

Recommended value

Overall structural model

χ2

N/A

220.9

df

N/A

113

χ2/dƒ

≤ 3.00

1.91

Goodness-of-fit

≥0.90

0.92

Adjusted goodness-of-fit

≥0.80

0.89

Normalised fit index

≥0.90

0.93

Comparative fit index

≥0.90

0.96

Root mean square error of approximation ≤0.08

0.06

Structural Equation Modeling In order to examine the simultaneous effect of the constructs, their relationships were estimated by structural equation modeling. The fit of the structural model was estimated by various indices (as shown in Table 2), and the results demonstrated a good fit. For models with good fit, most empirical analyses suggest that the ratio of χ2 normalised to degree of freedom (χ2/dƒ) should not exceed 3.0 (Carmines and Mclver, 1981). In addition, the obtained goodness-of-fit (GFI) measure was 0.92 and the adjusted GFI measure was 0.89, which are both higher than the suggested values. The other two indices of good fit – the normalised fit index and the comparative fit index - are recommended to exceed 0.90. The results also meet this requirement. Finally, the discrepancies between the proposed model and population covariance matrix, as measured by the root mean square error of approximation, are in line with the suggested cutoff value of 0.08 for good fit (Byrne, 1998). Tests of Hypotheses Hypothesis 1 (H 1) states that the evaluation of perceived quality will be positively affected by the perception of favourable brand image. That is, when consumers face a product associated with a perceived high brand image, their impression towards the product will be positive. However, result shows that IIMS Journal of Management Science

the influence of brand image on perceived quality is negative (γ = -0.08, P = 0.17). Hypothesis 2 (H2) predicted that the evaluation of perceived quality would be positively affected by the perception of country image. Specifically, when consumers face a product associated with a positive country image, they would infer positive impression towards that product. The direct effect of perceived country of origin on perceived quality is positive and significant (γ = 0.14, P = 0.05). In hypothesis 3 (H3) it has been predicted that perception of price would be positively associated with consumer perception of product quality. The results support this hypothesis, as the path between perceived price (PP) and perceived quality (PQ) is significant (γ = 0.28, P = 0.001).

CONCLUSIONS This study was conducted to examine the effects of some important extrinsic cues on how individuals subjectively evaluate the quality of a brand. In general, this study allowed analysis of direct influence of extrinsic cues on perceptions of quality. Therefore, the direct effects of the extrinsic cues, i.e. brand image, perceived country of origin and perceived price on perceptions of quality, were tested. The results proposed a model where two extrinsic cues (price and country of origin) have shown direct positive and 211





significant influence on consumer-perceived quality. Only brand image has shown no significant influence on consumer-perceived quality. In this study, it was hypothesised that brand image has positive influence on perceived quality. However, the result has shown that brand image has negative influence if not significant. The reason might be that: (a) brand image may not be an important cue on consumer perceptions of quality in case of beautification items in the developing countries. It is perhaps because consumers give more importance on price and country image to evaluate a beautification product; (b) it might be that the brand image–perceived quality relation is product specific. In the extant literature, there is also an indication that the magnitude of country-of-origin effect and price are related to the product type. Specifically, the effect of technically complex products, fashion-oriented products, cosmetic products and expensive products appears to be larger than of products low in technical complexity or inexpensive. For complex and infrequently purchased items, the country of origin appears to have a significant impact on perceived quality in a multi-cue context (Han and Terpstra, 1987). Therefore, it might be concluded that the influence of brand image, in presence of country of origin and price information, is not very important to the consumers in evaluating the perceived quality of beautification products. Results of this study substantially contribute to the theoretical and managerial understanding of the process of formation of consumer quality perception in a third world country towards beautification products. At the theory level, this study has produced greater understanding of the variables that appear to be most responsible in structuring the consumer perceptions of quality with regard to beautification products in Bangladesh. In other words, the model as a whole means that when a consumer evaluates the quality of a product, (s)he may retrieve the constructs

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directly related to quality. From a practical standpoint, results of this study should provide managers with greater insight concerning the potential benefits (and limitations) associated with using perceived quality strategies. This research clarifies the sometimes confusing roles of brand image. The multi-cue studies have manipulated other cues in addition to brand image. This research supports the multi-cue designs of consumer-perceived quality. When all the important cues to quality are readily accessible, the consumer may prefer to use those cues instead of brand image. In this study, it was assumed that in perceived high brand image condition, the consumer’s memory rehearsal about the brand would centre on pleasant thoughts in relation to his/her expectation that the product could be used without any unpleasant consequences. However, the opposite result suggests that marketers should emphasise on country of origin and price, instead of brand image, for the consumers in the developing countries.

LIMITATION AND FUTURE RESEARCH There are some limitations in this study, and thus future research should continue to test and to refine relationships investigated in the present study and variables that moderate them. More specifically, this study suggests two fertile directions for future research. First, it is clear that future research is required to yield a more complete understanding of the phenomena surrounding perceived quality for the purpose of generalisability in the South Asian countries. This study has attempted to outline major variables that logically and theoretically impact the linkages in perceived quality scenarios in Bangladesh. However, data should be collected from other third world countries to see whether the same result of the perceived quality model could be observed. Second, the three cues studied herein (i.e., brand image, country of origin and price) are themselves a simplified abstraction. Other potentially important Vol. 3, Issue 2, July-December 2012


cues were excluded from the present study. Notable amongst these is product attribute, which could be expected to play a very important role in forming

consumer perceptions of quality for beautification products. This can only be answered empirically in future research.

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