Post on 28-Mar-2015
Business Research MethodZCZF 6033
Research Project:
“Factors influencing the purchase of Engine Lubricant by
consumer who drive within Klang Valley”
Lecturer: Prof. Dr. Zafir Mohd Makhbul
Prepared by:
V. Devakumar - ZP00363
Shelly Elena - ZP00548
Submission Date: 18-01-2011
1
Table of Contents
Abstract...................................................................................……….3
1.0 Introduction..................................................................................3
1.1 Conceptual Framework.........................................................4
2.0 The Problem Statements..............................................................4
3.0 The Research Objectives..............................................................4
4.0 Literature Review.........................................................................5
4.1 Brand Awareness.................................................................5 4.2 Price.....................................................................................5 4.3 Place of Purchase.................................................................6 4.4 Mechanics Recommendation...............................................6
5.0 The Research Methodology..........................................................8
5.1 Sample and Data Collection Procedure................................8 5.2 Questionnaire and Analysis..................................................9 5.3 Hypothesis...........................................................................9
6.0 Data Analysis.............................................................................10
6.1 Demographics of Respondent.............................................10 6.2 Influences between Age and Purchase Decision................10 6.3 Reliability Analysis.............................................................11
7.0 Results and Conclusions.............................................................14
7.1 Future Research....................................................................................................15
8.0 References.................................................................................16
Appendix 1 (Questionnaire)..............................................................17
2
ABSTRACT
The purpose of this research is to determine the contributors to the purchase decision of engine lubricant oil. The target market will be passenger car owners in Klang Valley. The research also evaluates the brand awareness as well as the purchase preferences of consumers. The consumers were asked on their awareness of lubricant brand, type of pricing, mechanic influence and the place of purchase. From the results obtained, it is hoped that the oil company can use this information in marketing and placing their products. The study was made on 37 samples of consumer who drive. The results only show samples of the full population and cannot be used to determine the preference of everyone. The study has been divided to concentrate on four components. The components are the pricing factor (promotion), brand awareness, convenience place of purchase as well as mechanics influence.
1.0 Introduction
Most engine lubricants are nearly the same. It’s the brand or friend’s
recommendation which affect the purchase decision. When a customer
compares the brands available, factors such as brand, promotion and ease of
purchase as well as mechanics recommendation affects his/her decision.
Marketing influences the decision making of the customer when purchasing
the product. We are conducting this research to find other elements that
influence the consumers buying behaviour. We need to understand and what
are the components that are most looked for by consumers when making the
purchase decision.
Motor oil is a lubricant used in internal combustion engines. These include
motor or road vehicles such as cars and motorcycles, heavier vehicles such as
buses and commercial vehicles, locomotives and aircraft, and static engines
such as electrical generators. In engines, there are parts which move against
each other causing friction which wastes otherwise useful power by converting
the energy to heat. Contact between moving surfaces also wears away those
parts, which could lead to lower efficiency and degradation of the engine. This
3
increases fuel consumption, decreases power output and can, in extreme
cases lead to engine failure. 1
Lubricating oil creates a separating film between surfaces of adjacent moving
parts to minimize direct contact between them, decreasing heat caused by
friction and reducing wear, thus protecting the engine. In use, motor oil
transfers heat through convection as it flows through the engine by means of
air flow over the surface of the oil pan, oil cooler and through the build up of
oil gases evacuated by the Positive Crankcase Ventilation (PCV) system. In
petrol (gasoline) engines, the top piston ring can expose the motor oil to
temperatures of 320 °F (160 °C). In diesel engines the top ring can expose the
oil to temperatures over 600 °F (315 °C). Motor oils with higher viscosity
indices thin less at these higher temperatures.2
1.1 Conceptual Framework
Chart 1: Conceptual Framework of Purchase Decision
2.0 The Problem Statement
1 http://en.wikipedia.org/wiki/Motor_oil 2 Klamman, Dieter, Lubricants and Related Products, Verlag Chemie, 1984
4
PURCHASE DECISION
PURCHASE DECISION
Mechanics Recommend
ation
Mechanics Recommend
ation
Brand Awareness
Brand Awareness
The problem of this study is to evaluate the key factors or components that
influence the purchase of lubricants by the consumer. The result gained can
assist company to decide on how to market and target the product. This will
also help to promote the correct product placement at the right time and at
the right place to the correct person.
3.0 The Research Objectives
Specifically, this study is seeking input to the following questions:
1. To choose the key components that affects the overall purchase of
passenger car motor oil from the consumer.
2. To scrutinize which are the vital components that managers should
allocate the resources for better quality services.
3. To assist the lube marketing manager on which are the four main
components that can boost the sales of the company.
This research will also help companies to evaluate the information whether
the product are meeting customer’s expectation and influence the mind of
customer in purchasing lubricant. This study would help them to develop
and enhance the services provided to the consumers.
4.0 Literature review
4.1 Brand Awareness
Brand awareness is the consumer’s ability to identify a brand under different
conditions (Keller, 2003). This is the factors which can expose or destroy the
brand. When a cue or special word is mentioned, the customer must be able to
recall the specific brand. This is known as brand recall. The minimum of brand
awareness is brand recognition and is influenced by aided recall (Holden,
1993). When a consumer making a purchase decision at the point of purchase,
brand awareness has a big influence on their decision.
On the next level, unaided recall is brand awareness where the consumer is
able to recall the brand by referring to any other cue about the brand. (Ross
5
and Harradine, 2004). Although the brand name is not provided, the fact that
they can recall the name implies that the brand has a very strong position in
their mind. This is called brand awareness. The first-named brand in an
unaided recall thus represents the highest level of brand awareness (Laurent,
1995; Mariotti, 1999). When repeated exposure to the brand is done, the
familiarity of the brand increases and brand awareness is enhanced
(Keller,2003).
As seen from this, advertising is the first platform to build brand awareness
(Gregory,1993;Hoyer and Brown,1990). Many world famous brands use the
power of television and magazines to advertise their products and expose
potential customers to them.(Waterschoot, cited in Ross and Harradine,2004).
Some functions that brands can perform for customers are such as signal of
the product characteristics; simplify decision making; serve as a guarantee by
providing trust, consistency or a set of promises and a reduction of risk ; fulfill
a personalization, social or status function; or provide pleasure.
(Lambin,2002,Varrey 2002, Picton and Broderick,2001). The small set of
brands which the consumer automatically retrieves is important since a brand
is not part of the consideration set is unlikely to be chosen (Mowen and Minor,
2001).
According to Woodside and Wilson(1885), there exists a relationship between
brand awareness and purchase decision. When the customer recalls the brand
easily in an unaided situation, the intention to purchase is higher and the
purchase is more likely. Usually brands which are at the top of the mind have
the highest possibility of purchase. The decision-making process is further
simplified by a brand’s associated with quality (Vranesevic and Stancec, 2003).
The usual consumers perception of brand is based on the belief that when the
consumer is familiar with the brand, the organization must have spent heavily
on advertising. If the organization spends a lot on advertising, it must have
good profits which mean that many consumers are satisfied with the product;
6
therefore the product must be good, especially in brand awareness familiarity
has a great impact of a brand. (Macdonald and Sharp, 2003).
4.2 Price
When consumer decides on purchase of the engine lubricant, one of the major
factors affecting the purchase is pricing. This pricing is tailored according to
the class and standards of reliability. When the price is not set to include the
marginal cost and the price does not reflect the actual cost of production, it
will not influence the customer to purchase the optimal quantity. When this
price-marginal-cost equality is violated due to inherent market conditions,
second-best solutions are often utilized (Farrell, 1958; Leinbenstein, 1966;
Lipsey and Lancaster, 1956).
The determination of optimal prices together with cost-efficient operating is
obviously is different (Boronico et al., 1995; Crew and Kleindorfer, 1993).
Colvin et al. (1992) argues that lubricants producers should reconsider their
methods of pricing because of the current market trend of growing capital
required for brand products. The reliability also affects the margins for the
product since consumers usually choose a product based on the reliability.
(Chen,1984). None of early records of oil and gas industry considers the
reliability.
4.3 Place of Purchase
Most consumers want an easy and accessible place to purchase the products.
When the service at the outlet is good, they will return to make more
purchases. As stated by Levesque and McDougall, 1996, p. 14), satisfaction is
and overall customer attitude towards a service provider. If what the customer
receives is different from what they anticipate then there will an emotional
responds to this(Zineldin, 2000). A similar response is given by Gerpott(2001)
7
who proposes that satisfaction is based on a customer’s estimated experience
of the extent to which a provider’s services fulfill his or her expectations.
When customers are satisfied, this brings many benefits. Satisfied customers
are less price sensitive, usually buy additional products, are less influenced by
competitors and stay loyal longer (Zineldin, 2000). Although customer
satisfaction is important, it is not equally important to all the customers. There
are two types of customers. The first do not fall into the service of the
company, while the second are customers who are crucial to the company’s
existence. The first type of customer can usually be ignored but the second
type must be taken care of properly to ensure that the goal of satisfying
customers is met.(Bhote, 1996). Convenient for the customer can be defined
as “a commitment to continue to purchase product on an ongoing basis”
(Zineldin, 2000, p. 28).
A more elaborated definition is to define conveniently as the customers’ liking,
commitment, trust, willingness to purchase, and repurchase products, with the
first four being emotional-cognitive convenient constructs, and the last two
being behavioral intentions (Stauss et al., 2001). This research focused of third
components that affect the purchase of lubricants at Central Region. It is
investigated that the component of convenient when purchase oil lubricants
difference in the mind of consumers that effecting of lube purchase oil among
the Malaysians.
4.4 Mechanics Recommendation
One of the important influences of purchase decisions especially for engine
lubricant are the mechanics. This is stated as “A decision making process
carried out by individuals in interaction with other people, in the context of
formal organization.”(Webster and Wind, 1972). The overall purchasing
behavior of consumers can be affected by mechanics recommendation. These
factors can be defined as variables which relate directly to the buying task,
whereas non-task variables are those that extend beyond the buying problem,
8
variables that may influence the individual decision maker(s), such as emotion,
personal goals and internal wants.
(Rui da Silva, Gary Davies, Pete Naudia, 2003). Sheth’s (1973) model states a
generic model of organizational buying, characterizing organizational buyer
behaviour as encompassing three distinct aspects: the psychological world of
the individuals involved in the buying decisions, the conditions that precipitate
joint or group decision making among the individuals involved, and the
inevitable conflict among the decision makers and how it is resolved through
resorting to a variety of tactics. According to Rui da Silva, Gary Davies, Pete
Naudia, 2003 conclude that consumer buying is influenced by experts
(Mechanics) and personal characteristics. The way they buy will be affected by
other factors such as context and organization. In our study we are particularly
interested in component of experts like mechanics that affects the purchase
lubricants.
5.0 The Research Methodology
To evaluate and categorize elements of the group factors which are significant
to the influence of purchasing the engine lubricant within Klang Valley, the
following research methodology was utilized in the study.
5.1 Sample and Data collection Procedure
This research is based on causal research. The company will make decisions
based on assumed causal relationships. This is a descriptive research design
and survey. Data was collected from a sample of consumers. Survey forms
were given to consumers who drive and they answered all the questions given.
The population for this survey is the professional workers who drive a car to
the office every day from the private and public sectors. The respondents
comprised of 37 consumers. The demographic and frequency of the
consumers are summarized in Table 1.
9
As it’s shown there about 65% of the consumers participated in the study were
male while 35% were female. Also greater percentages of consumers were
between 25 to 30 years old. All of them stay in the city of Klang Valley. About
50% of all the consumers annual income is between RM 36,001 to RM 72,000.
5.2 Questionnaire and Analysis
To determine the job satisfaction of the professional workers, a questionnaire
comprising four main factors that can influence the purchase decision in
buying engine lubricant oil and some demographic questions was constructed.
The main factors are:
(a)Part A : Brand Awareness
(b)Part B : Purchase Decision
(c) Part C : Mechanic Recommendations
(d)Part D : Purchase Location
Respondents were asked to indicate the factors influencing the purchase of
Engine Lubricant by consumer who drives within Klang Valley. Respondents
were asked to indicate the level of satisfaction or dissatisfaction which they
derived from each of the 4 aspects of their jobs. The scale ranged from 1 to 5
signifies 1 – “Strongly Disagree”, 2 – “Disagree”, 3 – “Neutral”, 4 – “Agree” and
5 – “Strongly Agree”. The elements were formulated based on the common
influences of purchase decision by consumers.
This research is a quantitative study where the researcher discovers the
different factors influencing the Engine Lubricants purchased respectively. The
quantitative study in this research is about interpreting the data in the form of
percentages. The data was analyzed using SPSS software.
5.3 Hypothesis
Based on literature review, hypotheses were developed as below:
10
H1: There will be positive relationship between Brand awareness and Purchase decision
H2: There will be positive relationship between Mechanic recommendations and Purchase decision
6.0 Data Analysis
6.1 Demographics of respondent
Table 1.0 shows the detailed analysis on the respondents’ backgrounds.
Majority of the respondents were male with 65.0%. It is noted that
respondents with annual income of 36,001 – 72,000 are the majority with
50% of total followed by respondents who have worked for estimated 2-3
years.
Table 1: Respondents’ Demographic Information
Frequency PercentGender
Male 26 65.0Female 14 35.0
Ethnic GroupMalay 21 52.5Chinese 7 17.5Indian 10 25.0
Income Level (RM)< 18,000 3 7.518,001 – 36,000 6 15.036,001 – 72,000 20 50.072,001 – 144,000 9 22.5>144,000 2 5.0
Age
18 – 25 Years Old 5 12.525 – 30 Years Old 17 42.531 – 35 Years Old 10 25.036 – 40 Years Old 3 7.541 – 45 Years Old 4 10.0
11
46 – 50 Years Old 1 2.5Length of Service
>1 year 1 2.52 to 3 Years 6 32.54 to 7 Years 4 20.08 to 10 Years 8 20.011 to 15 Years 3 25.0Total 40 100.0
6.2 Influences between Age and Purchase Decision
Chart 1: Respondents’ Age Profile
Table 1.1 indicates the respondent’s age profile. The Age 25 – 30 years has
the highest frequency while age 46 – 50 represents the lowest with only
2.5% since most of them seldom drive to work anymore. Generally, most of
them were professional workers and lots of them have their own driver
already, hence they did not drive to office.
6.3Reliability Analysis
Cronbach'
s AlphaN of
ItemsMean
Variance
SD
12
Brand Awareness0.450 6 19.275
011.230 3.3511
4Mechanic Recommendations
0.762 5 19.0500
15.536 3.94156
Purchase Decision0.682 6 18.550
011.177 3.3431
9
Place of Purchase0.687 2 11..92
506.892 0.2625
20Table 2: Reliability Analysis
Table 2 shows the result of validity and reliability analysis for
measurement scales. It was shown that only one research variables
exceeded the acceptable standard of reliability analysis, Cronbach’s
alpha of 0.70. These statistical analyses confirm that measurement
scales have not measured the same constructs and does not met the
acceptable standard of construct validity and reliability analysis.
Aa.Predictors: (Constant), Recommendation, Brand_Awareness
Model Summary
Model R
R
Square
Adjusted R
Square
Std. Error
of the
Estimate
Change Statistics
R Square
Change
F
Change df1 df2
Sig. F
Change
1 .423a .179 .134 3.66748 .179 4.024 2 37 .026
ANOVAb
13
Model
Sum of
Squares df Mean Square F Sig.
1 Regression 108.236 2 54.118 4.024 .026a
Residual 497.664 37 13.450
Total 605.900 39
a. Predictors: (Constant), Recommendation, Brand_Awareness
b. Dependent Variable: Purchase_Decision
Coefficientsa
Model
Unstandardized
Coefficients
Standardize
d
Coefficients
t Sig.
Collinearity Statistics
B Std. Error Beta Tolerance VIF
1 (Constant) 8.167 3.914 2.086 .044
Brand_Awa
reness
.237 .198 .191 1.198 .239 .877 1.140
Recommen
dation
.373 .188 .316 1.989 .054 .877 1.140
a. Dependent Variable: Purchase_Decision
Correlations between brand awareness and consumer decision to buy that brand
due to influences from brand awareness and mechanics recommendation.
Correlations
1 2 3
Brand_Awaren
essRecommendat
ionPurchase_Decisi
on1 Brand_Awarene
ssPearson Correlation
1 .351* .301
Sig. (2-tailed) .027 .059
N 40 40 40
2 Recommendation
Pearson Correlation
.351* 1 .383*
14
Sig. (2-tailed) .027 .015
N 40 40 40
3 Purchase_Decision
Pearson Correlation
.301 .383* 1
Sig. (2-tailed) .059 .015 N 40 40 40
* Correlation is signficant at the 0.05 level(2-tailed)
15
7.0 Results and Conclusion
The results of the study show that the only the Mechanic’s
Recommendation variable to be above 0.7. The rest are all unreliable
data since they fall below 0.7. The significant value of 0.59 shows
that brand awareness plays a big role influencing the consumer’s
decision.
On the other hand, value of 0.027 for mechanics’ recommendation
show that this does not influence the purchase decision. Purchase has
a positive correlation with lube brand, trusted mechanic and
convenience place of purchase. However it has a negative correlation
with price. This is shown in the Pearson correlation. Lube brand is
important and has the highest positive correlation with purchase from
trusted mechanics.
Price also has the highest correlation with the purchase from trusted
mechanics. Convenient place of purchase has the highest correlation
with purchase from the trusted mechanics. The one-tailed significance
displayed that there is a significant correlation between lube brand and
mechanic and price and purchase from mechanic. Based on the study,
consumers feel that the most important factor in deciding the purchase
of lubricant is the lubricant brand. Secondly, mechanic is also a major
influence and pricing. It was also shown that the convenience place of
purchase is the least factor in deciding the lubricant to be purchased.
From the study, it is recommended that the company increase their
marketing to create a better brand awareness for their brand. As such
targeted advertising and promotions is important to increase the
awareness thus increase the purchase of lubricant. Since mechanic
play an important therefore emphasis should also be given by
encouraging the mechanics to promote the brand. Perhaps incentive
should be given to mechanics to promote the brand.
16
Since convenient place of purchase is not the main factor therefore it
doesn’t affect much on purchasing. Lubricant can be sold in all outlets
and motorist does not decide the purchase merely on convenience
place of purchase. (this can be expanded further once the analysis is
completed)
7.1 Future Research
1. Introducing mediating variable such as family advice, car
manufacturer’s recommendation.
2. The scope of survey should be more concentrated on motorists
who are the actual consumers of engine lubricant oil. This will
give a better representation of the survey group and much more
accurate results.
3. The questionnaire should be more specific in terms of finalizing
the actual representative data to be more accurate and
significant for the intended objective.
17
8.0 References
Ahmad Jamal & Mark M. H. Goode, “A Study of the Impact of Self-image Congruence
on Brand Preference and Satisfaction” , Cardiff Business School
Corinne Gangloff, “Lubricant Growth Forecast”, Freedonia Group, Inc.,
Erik L Olson & Hans Mathias Thjomoe, “The Effects of Peripheral to Information on
Brand Preference”, Journal of Norwegian School of Management, Sanvika, Norway.
INTERNET, “Motor Oil”at http://en.wikipedia.org/wiki/Motor_oil, Accessed at
07012011.
Klamman, Dieter, Lubricants and Related Products, Verlag Chemie, 1984.
Macdonald, E., Sharp, B., “Management perceptions of the importance of brand
awareness as an indication of advertising effectiveness”, Marketing Buletin,
Vol.14 No.2 (2003): 1-15.
Rebekah Bennett & Sharyn Rundle-Thiele, “Customer Satisfaction Should Not be the Only Goal, University of Queensland, Brisbane, Australia.
Tony Meenaghan, “The Role of Advertising in Brand Image Development, Journal of
Product and Brand Management Vol 4 No 4 1995 pg 23-34
Zineldin M.& Jonsson P., “An examination of the main factors affecting trust/
18
commitment in supplier-dealer relationship: An empirical study of the Swedish wood industry”, The TQM Magazine, Vol.12 No.4 2000, pg 245 – 265
19