5.1 Chapter Overview

This chapter will summarize and discuss the research results generated from previous chapter and come to a conclusion. Given this is a working report, thus a recommendation will be proposed to the medicated liquor industry. In addition, this final chapter will also highlight the managerial implications and the theoretical contributions of the research. Finally, the limitation of this research will be outlined and suggestions to those who intend to conduct relevant research in this field will be proposed.

5.2 Conclusion And Discussion

The major objective of this study is to examine how country of origin effects influences Malaysian consumers on product evaluation; purchasing occasion; indicator of quality; perception of nation image and information for buying decision related to their attitude and purchasing of medicated liquor in Malaysia. Based on the analyses discussed in the previous chapter, five hypotheses have been developed and tested. The empirical results of this study found that Malaysian consumers did take country of origin into their account before making the purchasing decision of medicated liquor. Considering past researches has offered empirical results on the positive relationship between country of origin and product evaluation (e.g. Bilkey and Nes, 1982; d’Astous and Ahmed, 1999; Kaynak and Kara, 2002; Laroche et. al., 2005; Sohail, 2005; Balestrini and Gamble, 2006; Ghazali et. al., 2008), this study is also support to priors findings. However, country of origin image was considered as a general important influence on product evaluation as well as the equity of branding. The contribution of the result to country of origin effects on medicated liquor in Malaysia was concluded and discussed as follows:

This study proposed that country of origin is important when Malaysian consumers evaluate medicated liquor for own consumption and gift giving. This result is not in line with the researches done by Balestrini and Gamble (2006) and USDA (1998, 2005, 2008). This indicated that the empirical results of country of origin effects on wine may not suitable to apply on the experiment of medicated liquor. Thus, the issues of owns consumption is more important that gift giving or vies and verse is very important when consumer buying wine, however it does not mean anything to Malaysian consumers before purchase decision. The result also indicated that the brand image is the most effective for consumers rather then country of origin. Although country of origin and price are also deemed as top three important criteria for buying medicated liquor. This also can be explained as Malaysian consumers’ mind set are not very open and they stereotyping country of origin when they buy medicated liquor for own self or for other people. They are perceived that all medicated liquors from developed or developing country its benefits are differential in terms of benefits, brand and price. As Malaysian consumers believed products from developed countries it quality is better then those product made by developing countries. Moreover, this study also showed that brand awareness tied up with country image closely and this is a major factor to affect they attitude and purchase decision. As the result showed that the effects of different brand image on consumers’ quality evaluation have significant differences. The better the brand image and nation image is, the higher the quality. On the other hand, the result also indicated that Malaysian consumers evaluate the medicated liquors made in France and Japan as the most favourable country of origin and they scored highly to both produced countries just because of Benedictine D.O.M. and Yomeishu have very strong brand awareness in Malaysia. This result might be important for foreign medicated liquor manufacturers, especially those manufacturers from France and Japan and their product not yet enter Malaysia market. Aggressive attitude and effective marketing and branding strategies may help them to get a good starting point in the market. For those producers with weak brand awareness, their marketers should develop a strong marketing strategy and brand building campaigns to attract or push up consumers’ attitude towards their products.

This study also proposed that most of Malaysian consumers agreed that “country of origin” of medicated liquor is a good indicator of the quality of medicated liquor when they evaluate medicated liquors. Country of origin had been tested empirically in this study and the results shows that country of origin with significant influence on product evaluation in all 4 brand’s origin, and it had indirect influences on Malaysia consumers’ attitude on product quality. An exception here is medicated liquors produced in China (Changyu Ling Zhi Cheiw) and Great Britain (Wincarnis). In terms of perception on product quality of medicated liquor, consumers believed that China suffers from an image problem since its products image are considered to be cheap and low quality. Although food safety scandals from 2007 to 2009 have generated a negative nation image to products of China and some of the food items from China are heavily affected in international market. However, China medicated liquors are not affected as seriously as other China food products. This is because Malaysian Chinese consumers believe with the Chinese traditional medical theories as backbone, Chinese medicated liquor should be more effective then others non Chinese medicated liquor. Demographics of this study do provide a good statement for this examination. Furthermore, Great Britain (Wincarnis) is suffers from a branding and marketing problems due to its weak brand awareness, even if a few of brand building campaigns have been done by it’s official distributors. Nevertheless, if the perception of country image remains unchanged, all marketers shall specially pay attention to China and Great Britain medicated liquors. However, the situation mentioned above can be improved by developing a strong advertising to enforce consumers to get familiar or to know the products.

This study found that there is a significant relationship between nation image and brand image as Malaysian consumers perceived that the quality of medicated liquor is closely related to the state of economic development of a producer country. This result has supported Ghazali’s (2008) and Yaris (2007) finding. It is found that Malaysian consumers relate the quality of product with the economic development of the product’s country of origin. However, this result is not consistent with notion that product made in developing country will be negatively perceived by consumers (Bilkey and Nes, 1982). Nonetheless, this does not imply that the levels of the economy development level of the producer home country will be positively related to the level of the consumers’ attitude toward products. For example, although Wincarnis is a product of Great Britain, one of the developed and advance country in the world, consumers still voted highly in the range from very poor to slightly poor compare to other developed countries such as France and Japan. As a result of weak brand name, a strong country of origin image can be offset easily.

Although Malaysian consumers perceive country of origin is an important extrinsic cue for product evaluation, however they prefer to use brand rather then country of origin as first piece of information for product evaluation when deciding which medicated liquor to buy. This conclusion indicated that Malaysian consumers are not reliance on country of origin image when evaluating medicated liquor, even though he or she attaches country of origin information to the quality of the medicated liquor. For them, buying a well know brand is the best buy to minimize risk of purchase decision as a strong brand name is accepted by anyone, especially the guarantee and warranty of product quality and responsibility. This is also in line with Laroche et. al. (2005) findings as they suggested that country image and products beliefs affected product evaluations simultaneously regardless of consumers’ level of familiarity with a country’s products.

5.3 Recommendations

According to the results of this study, country of origin is an important determinant of consumers’ attitude on product evaluation. For Hai-O Group, which is one of the largest medicated liquor importers, wholesalers, distributors and retailers in Malaysia, several suggestions have been established and presented as follows in order to help them to build better business:

5.3.1 Product Category

This study suggested that Hai-O Group should consider associating with France and Japan to do Original Equipment Manufacturing (OEM) or private labeling. However they must have a very strong house brand and distribution networks. Another major concern is how to deliver a sales volume commitment.

5.3.2 Pricing

Consumers are willing to pay higher price for the product with positive country of origin image over those items with negative reputations (Drozdenko & Jensen, 2009). For medicated liquor made in China, most of the brands are using low price strategy. It can be explained as because of their low production cost and China government export tax rebate policy. Although a low price policy enable China products penetrate overseas markets easily, but in consumers’ mindset, “low price” also stand for “low quality”. Low pricing strategy may not contribute to the brand building efforts as consumers may show bias to the cheap products. Thus the study suggests that Hai-O Group should review their pricing strategy positively. They should increase the price to a reasonable level in order to get out of the “low price” and “low quality” positioning. They giving some thing rewards to consumers as premium, for example a miniature, in order to offset the negative impact of price rising. On the other hand, the premium generated from the price increment can also be used as advertising and promotion budget in order to enhance the product image.

5.3.3 Sales Promotion

For those medicated liquors suffer with weak brand awareness and negative country image, this study suggests that marketers should develop strong marketing strategies, such as increase advertising activities (Television, newspapers and magazines, radio), enhancing personal selling training, establishing word-and-mouth effects, sampling and tasting, road show and prize competition, price rebate, value gift pack, special festival promotion, health seminar, free simple medical check and etc, in order to approach consumers to get familiar or to know the products. Culture events such as Mid Autumn Festival, People Republic of China National day, Dumpling Festival, and Chinese New Year, can be utilized as “Culture Ambassadors” to promote country image, enhance the culture meaning of the products.

5.4 Managerial Implication

The growth of international trade and the transformation of globalization have drastically widened the sourcing of the product of different national origins; while consumers are in face of more and more options for products from all over the world. It is also a very important variable that influence the multinational corporation’s worldwide marketing strategy and business planning. Regards to less country of origin research on medicated liquor industry in Malaysia has been done, this research has discovered through empirical results that country of origin effects influence consumers’ evaluation of medicated liquor and consumers has not particular bias on products from different countries. Thus medicated liquor producers, no matter their products already in the market or ready to come in, could be benefited from the findings of this study as marketers can have better understanding of Malaysian consumer behaviours and enable them to generate more aggressive and effective marketing plan and branding strategies.

For marketing theory, this study has highlighted the importance of country of origin effects on Malaysian consumers’ product evaluation for marketers. For those producers who are suffers for weak brand name and low country image, this study can be considered as a contingency approach to understanding a good marketing strategy such as building a good brand name for product, offer in reasonable price, and aggressive advertising plan can help to offset these negative factors. Once a positive image is established, the marketers could make use of the country of origin effects as added value for business expansion or saving market penetration cost as well as advertising and promotion expenditure on entering new market.

For academia this study will contribute to the academic corpus of knowledge as it is an important reference of the medicated liquor product and medicated liquor consumer behaviours in Malaysia and Southeast Asia. It is also significant to study the country of origin effect on medicated liquor in the context of internationalism and globalization as well as the rising medicated liquor development trend.

5.5 Limitations

This study has identified a number of limitations. Thus, the findings of this study should be interpreted with the consideration of the following limitations:

Time and resource limitations as well as shortage of manpower are a major constraint to conduct a more extensive study involving a larger sample size. Therefore the sample area only covers Klang Valley including Kuala Lumpur and Selangor. Northern area (Pulau Pinang, Ipoh, Taiping and etc.) and Southern area (Seremban, Melaka, Muar, Johor Bahru) are not included, limiting the representative of the sample.

The result from the current research may have limited external validity considering the sample composition of predominantly Chinese respondents. Indian and Malays are not selected for the survey due to religion customs and other culture factors. With all of the respondents are Chinese, the consumers behaviours of the Chinese cluster could still have different from those non Chinese sample. As a result, the study is limited to explain the characteristics of the Malaysia Consumer group and may not apply to general consumers.

Although this research is focus on Malaysia Chinese consumers. However, the result may not be able to apply to other Chinese community in other countries or areas such as Hong Kong, Singapore, Taiwan as well as other Chinese community in South East Asia, such as Thailand, Indonesia and Philippine.

The findings of the study were based on only one alcohol product category – medicated liquor product. It is possible that the country of origin cues do not have influence perceptions of quality and buying intention for other alcohol product categories, such as Liqueur, Gin, Rum, Vodka and etc.

The respondents have limited choice: only 4 brands of medicated liquors are selected for experimentation. This study do not cover other medicated liquors manufacturing countries and area such as Korea, Hong Kong, Taiwan, Vietnam, Cambodia and Thailand. Therefore the result is limited to test the effects of country of origin towards products from these countries.

The demographic characteristics may influence the exact nature of the country of origin effect as there is quite a number of the participants are homemaker / retired and their education levels mostly are primary and secondary. They may not have enough capability to understand the purpose of the survey. This misunderstands may reflected on the answer of questionnaire.

In addition, the target of this study is to examine the effects of country of origin on medicated liquor product. The result of this study may not suitable for other alcohol products in Malaysia, such as samsu, beer, wine and spirits.

5.6 Future Research

Given this study taken Malaysian Chinese citizens as the samples is limited representation of Malaysian consumers group, therefore it was suggested that future study should diversified the sample group to Indian, Thai and other ethnic groups which have habitual medicated liquor drinking culture. it could lead to more empirical test on different ethnic groups, and this could be benefit the marketers to obtain the understanding of different ethnics’ attitude towards country of origin and consuming habit for medicated liquor marketing strategy.

In addition, this study conducted an empirical test for country of origin effects on medicated liquor as a whole at a time, it has less been studied. Therefore, for further comprehensive study, it was suggested that further research should also examine more on the roles between country of origin effects and marketing mix such as branding, pricing, advertising, promotion, etc. It can increase the marketers’ understanding on market environment and marketing strategy planning.

On the other hand, it would be interesting to carry out comparative research on the Malaysian medicated liquor market with Singapore medicated liquor market as both countries have a very close relationship and similar value of demographic and evaluate criteria.

The study only applied 4 brands of medicated liquors as experimental products. This suggests that increase more brands from other countries and areas such as Korea, Hong Kong, Taiwan, Thailand, Vietnam etc, which may have significant influence on consumers’ perception for experiment.

Other issues that are suggested for analysis are to investigate into the interfere role of price discount, brand equity, word of mouth behavior on the effect of the country of origin towards consumers’ product evaluation of medicated liquor.

Future research would also suggested to spend effort in investigating more complex issues such as nation stereotyping, cultural bias and negative country image, which may have significant influence on consumers’ perception of country of origin effects on medicated liquor.