Contents

DECLARATION ..................................................................................................................... 3
LIST OF TABLES ................................................................................................................... 4
LIST OF FIGURES ................................................................................................................. 5
CHAPTER 1 ............................................................................................................................ 6
RESEARCH PROJECT ........................................................................................................... 6
1.0 Introduction ........................................................................................................................ 6
1.1 Overview of SME .............................................................................................................. 7
1.2 Coverage of definition for SMEs in Malaysia ................................................................... 8
1.3 Overview of Packaging ...................................................................................................... 9
1.4 Overview of Purchase Decisions ..................................................................................... 11
1.5 Overview of price............................................................................................................. 13
1.6 Overview of Customer Loyalty........................................................................................ 14
1.7 Problem Statement ........................................................................................................... 16
1.8 Purpose of the Study ........................................................................................................ 16
1.9 Significant of the Study.................................................................................................. 17
1.10 Limitation of the Study ................................................................................................ 17
CHAPTER 2 .......................................................................................................................... 18
2.0 Introduction ...................................................................................................................... 18
2.1 Literature Review on SME............................................................................................... 19
2.2 Literature Review on Packaging ...................................................................................... 26

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2.3 Literature Review on Purchase Decisions ........................................................................ 36
2.4 Literature Review on Price............................................................................................... 44
2.5 Literature Review on Customer Loyalty .......................................................................... 50
CHAPTER 3 .......................................................................................................................... 56
3.0 Introduction ................................................................................................................... 56
3.1 Hypothesis..................................................................................................................... 57
3.2 Research Design ............................................................................................................. 57
3.3 Sampling Design ........................................................................................................... 59
3.4 Data Collection ................................................................................................................ 61
3.5 Question Design ............................................................................................................. 62
3.6 Scale Type Used............................................................................................................. 64
3.7 Pilot Test ........................................................................................................................ 67
CHAPTER 4 .......................................................................................................................... 69
4.0 Introduction ...................................................................................................................... 69
4.1 Description statistics of the data collection ...................................................................... 70
4.2 T-test of the data collection .............................................................................................. 76
4.3 Hypothesis testing ............................................................................................................ 82
4.4 Chapter Summary ............................................................................................................ 84
CHAPTER 5 .......................................................................................................................... 86
5.0 Introduction ...................................................................................................................... 86
5.1 Respondent profile ........................................................................................................... 87
5.2 Discussion of Findings ..................................................................................................... 89
5.3 Recommendations ............................................................................................................ 89
5.4 Practical Implication ........................................................................................................ 90
5.5 Limitation of Study .......................................................................................................... 91
5.6 Conclusion ....................................................................................................................... 91
References .............................................................................................................................. 93
Coursework. ......................................................................................................................... 97

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DECLARATION
I declare that this thesis entitled “The effect of Packaging to SME’S Product: Purchase
Decisions, Price and Customer Loyalty” is the result of my own research except as cited
in the refferences.The thesis has not been accepted for any degree and is not
concurrently submitted in candidature of any other degree.

Signature:

Name:

Date:

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LIST OF TABLES
Table 1.4.2 Customer involvement ........................................................................ 12
Table 3.1.1: Summary of the questionnaire ........................................................... 66
Table 4.1.1: Age of respondents ............................................................................ 70
Table 4.1.2: Gender of respondents ....................................................................... 70
Table 4.1.3: Marital status of respondents ............................................................. 71
Table 4.1.4 Race of respondents ............................................................................ 72
Table 4.1.5 Religion of respondents ...................................................................... 72
Table 4.1.6 Education level .................................................................................... 73
Table 4.1.7 Occupation .......................................................................................... 74
Table 4.1.8 Monthly income .................................................................................. 74
Table 4.1.9 Living area .......................................................................................... 75
Table 4.1.10 Do you buy the SME’S product? ...................................................... 76
Table 4.2.1 Independent samples test between gender and packaging .................. 78
Table 4.2.2 Independent samples test between gender and purchase .................... 79
Table 4.2.3 Independent samples test between gender and price .......................... 80
Table 4.2.4 Independent samples test between gender and customer loyalty ........ 81
Table 4.3.1 one way ANOVA between age, race, religion, education level, occupation
and income with packaging. ................................................................................... 84

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LIST OF FIGURES
Figures 1.4.1 Purchase Decisions .............................................................................. 11
Figures 2.1.1 Distribution of Small and Medium Enterprises in manufacturing by Sub-
Sector ......................................................................................................................... 23
Figures 2.1.2: Distribution of Small and Medium Enterprises in services by Sub-Sector
................................................................................................................................... 24
Figures 2.1.3: Distribution of Small and Medium Enterprises in agriculture by Sub-
Sector ......................................................................................................................... 25

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 CHAPTER 1

RESEARCH PROJECT

1.0 Introduction

Chapter 1 highlights on the explanation of overview of SME, Coverage of

definition for SMEs in Malaysia, Overview of Packaging, Overview of Purchase
Decisions, Overview of price, Overview of Customer Loyalty, Problem Statement,
Purpose of the Study, Significant of The Study and Limitation of the Study.

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1.1 Overview of SME

It all began on 2 May 1996, when a specialized agency was established to spur the
development of small and medium enterprises (SMEs) by providing infrastructure
facilities, financial assistance, advisory services, market access and other support
programmers. Known as the Small and Medium Industries Development Corporation
(SMIDEC), its aim was to develop capable and resilient Malaysian SMEs to be
competitive in the global market. The establishment of the National SME Development
Council (NSDC) in 2004 presented yet another chapter in SME development in Malaysia.
As the highest policy-making body, its role was to formulate strategies for SME
development across all economic sectors, coordinate the tasks of related Ministries and
Agencies, encourage partnership with the private sector, as well as ensure effective
implementation of the overall SME development programmers in this country. Initiatives
under NSDC included enhanced access to financing, financial restructuring and advisory
services, information, training and marketing coordination and a comprehensive SME
database to monitor the progress of SMEs across all economic sectors.

In 2007, the NSDC decided to appoint a single dedicated agency to formulate

overall policies and strategies for SMEs and to coordinate programmers across all related
Ministries and Agencies. SMIDEC was tasked to assume the role and the official
transformation into Small and Medium Enterprise Corporation Malaysia (SME Corp.
Malaysia) commenced on 2 October 2009. SME Corp. Malaysia is now the central point
of reference for information and advisory services for all SMEs in Malaysia.

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1.2 Coverage of definition for SMEs in Malaysia

Effective 1 January 2014, more firms will have access to SME support programmers
as the newly revised SME definition comes into effect:
Manufacturing sector, sales turnover not exceeding RM 50 million OR full-time
employees not exceeding 200 workers. Services and other sectors sales turnover not
exceeding RM 20 million OR full-time employees not exceeding 75 workers.

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1.3 Overview of Packaging

Packaging is more than just your product's pretty face. Your package design may
affect everything from breakage rates in shipment to whether stores will be willing to
stock it. For example, "display ability" is an important concern. The original slanted-roof
metal container used for Log Cabin Syrup was changed to a design that was easier to
stack after grocers became reluctant to devote the necessary amounts of shelf space to the
awkward packages.

Packaging and labeling is the technology of enclosing or protecting products for

distribution, storage, sale, and use. Packaging also refers to the process of design,
evaluation, and production of packages. Packaging can be described as a coordinated
system of preparing goods for transport, warehousing, logistics, sale, and end use.
Packaging contains, protects, preserves, transports, informs, and sells. In many countries
it is fully integrated into government, business, and institutional, industrial, and personal
use.

The purposes of packaging and package labels

Storage – Maintain the condition of the contents until ready for use or – in the event that
it’s a consumer product – until the end of the life of the product.
Transit – Provide adequate protection against all potential hazards likely to be
encountered during the journey to final destination.
Information – Provide all necessary information to those who may handle, store, use or
purchase the product.

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Advertising – Support the marketing of the product and establish, maintain or enhance
the Manufacturer’s profile in the market place.
Convenience – Provide user-friendly facilities throughout the execution of the cycle of
use.
Safety – Provide a package safe to handle.
Environment – Protect the environment from the product.
Economy – Provide the most effective cost of ownership expenditure.
Traditionally, packaging has been the responsibility of specialist designers and
suppliers. And ensuring cost effective packaging has been left to production, purchasing
and packaging engineering departments. The importance of brand values in packaging is
now recognized. With the dominance of self-service outlets the pack is the "silent
salesman." Its effective use is vital to a successful marketing strategy. Whether you are
working on an existing or new product, or venturing into new markets, packaging is a
critical consideration. It will enable you to direct the focus of packaging design to improve
design and cut costs. Guidelines are contained for you to achieve the optimum balance
between packaging costs and sales performance. You will be shown how to think through
the options prior to and during design work as well as how to maximize your own vital
contribution.

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1.4 Overview of Purchase Decisions

Figures 1.4.1 Purchase Decisions

1. Problem/Need Recognition This is often identified as the first and most important step
in the Customer’s Decision Process. A purchase cannot take place without the recognition
of the need. The need may have been triggered by internal stimuli (such as hunger or
thirst) or external stimuli (such as advertising or word of mouth).

2. Information Search having recognized a problem or need, the next step a customer may
take is the Information Search stage, in order to find out what they feel is the best solution.
This is the buyer’s effort to search internal and external business environments, in order
to identify and evaluate information sources related to the central buying decision. Your
customer may rely on print, visual, online media or word of mouth for obtaining
information.

3. Evaluation of Alternatives As you might expect, consumers will evaluate different

products or brands at this stage on the basis of alternative product attributes – those which

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have the ability to deliver the benefits the customer is seeking. A factor that heavily
influences this stage is the customer’s attitude. Involvement is another factor that
influences the evaluation process. For example, if the customer’s attitude is positive and
involvement is high, then they will evaluate a number of companies or brands; but if it is
low, only one company or brand will be evaluated.

Customer involvement High Medium Low

Characteristics High Medium Low

Number of brands
Many Several One
examined

Number of sellers
Many Several Few
considered

Number of product
Many Moderate One
attributes evaluated

Number of external
Many Few None
information sources used

Time spent searching Considerable Little Minimal

Table 1.4.2 Customer involvement

4. Purchase Decision The penultimate stage is where the purchase takes place. Philip
Kotler (2009) states that the final purchase decision may be ‘disrupted’ by two factors:
negative feedback from other customers and the level of motivation to accept the feedback.
For example, having gone through the previous three stages, a customer chooses to buy a

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new telescope. However, because his very good friend, a keen astronomer, gives him
negative feedback, he will then be bound to change his preference. Furthermore, the
decision may be disrupted due to unforeseen situations such as a sudden job loss or
relocation.

5. Post-Purchase Behavior In brief, customers will compare products with their previous
expectations and will be either satisfied or dissatisfied. Therefore, these stages are critical
in retaining customers. This can greatly affect the decision process for similar purchases
from the same company in the future, having a knock-on effect at the Information Search
stage and Evaluation of Alternatives stage. If your customer is satisfied, this will result in
brand loyalty, and the Information Search and Evaluation of Alternative stages will often
be fast-tracked or skipped altogether.

1.5 Overview of price

Price is the quantity of payment or compensation given by one party to another in return
for goods or services. The price of goods plays a crucial role in determining an efficient
distribution of resources in a market system.

An ell price should do three things:

 Achieve the financial goals of the company (profitability)

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  Fit the realities of the marketplace (will customers buy at that price?)
 Support a product’s market positioning and be consistent with the other variables
in the marketing mix
 Price is influenced by the type of distribution channel used, the type of promotions
used, and the quality of the product
 Price will usually need to be relatively high if manufacturing is expensive,
distribution is exclusive advertising and promotional campaigns

1.6 Overview of Customer Loyalty

1. A point of differentiation
In a competitive marketplace where businesses compete for customers; customer
satisfaction is seen as a key differentiator. Businesses who succeed in these cut-throat
environments are the ones that make customer satisfaction a key element of their business
strategy.

2. Price per customer

Retaining an existing customer base is cheaper and ultimately more profitable
than targeting and acquiring new ones. Even offering an upsell or introducing a loyalty
program, such as the new printed.com rewards program, will prove to be more cost
effective than trying to engage a new market. If you work hard to build and nurture a loyal

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customer base, you will be rewarded by their frequent and increasing business – in both
amount and quantity!

3. Insulation from price competition

The internet has enabled a price competition movement that has caused businesses
to be recklessly competitive with their prices. Maintaining and nurturing an existing
customer base allows you to enjoy a certain level of security from this rat race – a
customer with a purchase history is less likely to be enticed by a few pounds.

4. Reduced marketing spend

In creating a loyal customer tradition, you will inevitably lower your marketing
spend. As the loyal customer base grows, you will be required to spend less money on
bringing in new markets. If you’re providing a great service, your customers are going to
talk about it… and, there is no greater advertising than positive word-of-mouth from
satisfied customers. If you’re keeping your customers loyal, you’re keeping them away
from the competition – strengthening your position. It’s that simple!
When the pressure is on, it’s easy to overlook the value of customer of retention.
Yet, it’s your loyal customer base who will generate the greatest portion of your
profits…so don’t forget that they’re the most significant element of your business - in
fact, they are your business!

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1.7 Problem Statement

Cost is the main problem of the SMEs. To see the effect of the packaging to the
SME products, to identify whether the customers are still loyal to the product after the re-
packaging to the product. The price of the product will increase after the new packaging
process; the research will look whether the consumers are willing to pay more for the
SME product even though the price is increases. To see the consumer behavior in buying
SME product used the new packaging.

1.8 Purpose of the Study

First, to determine the effect after SME product has a new packaging. To aim the
customer behavior on the purchasing the product. Last, seek the loyalty of the customer
after the new packaging.

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1.9 Significant of the Study

The finding of this research will contribute to SMEs on to implement strategies

that will fulfill the customers need and ultimately win their loyalty. This research also
seeks the effect of packaging with tree variables that is price, purchasing decision and
customer loyalty.

1.10 Limitation of the Study

a) Generalizability of the finding – the research focuses only at ne place or only in

one state; therefore a more extensive study along the same procedures will be
necessary if any definite conclusions ate to be made.
b) Problem with data collection – some questionnaires distributed and returned
cannot be used as they are incomplete.
c) Time constraints – the research was only be given 4 months period to finish and
submit this findings.
d) Respondent cooperative – the accuracy of the data collected was not sincerely and
accurately answered by the respondents.

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 CHAPTER 2

LITERATURE REVIEW

2.0 Introduction

This chapter mainly presents more details of all variables in this study. It is an
overview research about the packaging effect to the customer loyalty, price and also
purchase decisions. This research would be carried out in Austin. In addition, this chapter
would also be reviewed from the previous researching from other sources, reports and
data as well to enhance the accuracy of the research.

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2.1 Literature Review on SME
The inherent characteristics of small and medium enterprises (SMEs) afford these
enterprises the potential to absorb unskilled labor and to nurture and develop
entrepreneurial skills. However, in the South African economy, these benefits are not
forthcoming due to the high failure rate of SMEs. The impediments to SME success
includes numerous and varied obstacles. Studies conducted confirmed SME owner-
managers ignorant pertaining to the risks their enterprise face with risk management
techniques deployed reactively and ineffectively. By embedding a structured approach to
enterprise risk management within SMEs, potential benefits such as reducing the over-
management of risks and organizational alignment towards the SME’s vision can be
realized.

The role played by SMEs in any society is undoubtedly important, for instance,
in Portugal around 98% of the industrial fabric is composed by SMEs. Nowadays,
entrepreneurship and firm creation is mostly related to small and micro firms, which lead
us to look at them as an important development agent in any society. Most of times, firms
are seen as a black box on what concerns to development however the measures taken by
them, entrepreneurial strategies, and entrepreneurship actions, have influence in the
development theatre. At the same, not only the SMEs as a group of firms (industrial sector)
must be taken into consideration, but also many factors inside the firm, such as the quality
of management, human resources, or innovation factors. This work intends to present the
state-of-art on the subjects relating SMEs and development, trying to find out how the
SMEs are related to development, which factors are taken into consideration when the
role of these firms are analysed, for instance, innovation factors, human resources, or the
firm revenues. It is widely accepted that SMEs are an important development agent, but
sometimes they are analyzed not like an agent by themselves, but as a group of firms

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creating (the group) another agent. This group might be a cluster, an industrial district or
a failure, however it is important to look to the firm by itself. The entrepreneur might take
individual actions different from those followed by the group. So the small or micro firm
also has an important role for development, the main idea for this work is to find out some
important initial literature on SMEs and development, trying to get a perception of the
role played, not only on what concerns to enterprises creation, but also on the strategies
adopted by these type of enterprises to overcome the bottleneck of regional development.
Keywords: Development, SMEs, Entrepreneurship.

SME Solutions, LLC, provides a comprehensive array of services to various

companies utilizing underground/aboveground storage tanks. We specialize in
installation, start-up, construction, environmental testing and maintenance of service
station fueling equipment and facilities.

Our customer base includes major oil companies, independent oil marketers, local
city and county municipalities, public transportation organizations and commercial
industrial facilities. We have the ability to work with large corporations as well as
independent, single-person operations.

With a staff of 110 trained professionals, 70 service vehicles and our combined
60 years of service experience, we truly are a "one call does it all" organization.

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Products
Products are tangible and discernible items that the organization produces, including
digital file-based output. Examples of products from the Digitization Services Branch:
 Digital files sent to a network storage system (NAS/SAN)
 New prints of motion picture film elements
 Prints for exhibit purposes
 Reference copies on DVD/CDs for the Reading Rooms or other clients

Services
A service is the production of an essentially intangible benefit, either in its own
right or as a significant element of a tangible product, which through some form of
exchange, satisfies an identified need. Sometimes services are difficult to identify because
they are closely associated with a good; such as the combination of a diagnosis with the
administration of a medicine. Examples of services from the Digitization Services Branch:
 Consulting with clients on appropriate products for specific purposes
 Providing advice on risk assessment and priority setting
 Working on standards committees
 Conducting training and other educational outreach

It is reported by Malaysian Department of Statistics as at 2003, that there were

523,132 total establishments in Malaysia which SMEs accounted the most for 99.2%
(518,996). While only 0.8 percent remaining were occupied by large companies. SMEs
comprise three key economic sectors namely manufacturing, services and agriculture.

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Micro establishments constitute the largest number with more than three quarters out of
total SMEs formations. They are primarily represented in the services and agriculture
sectors with the proportions for 80.4 and 93.3 percent respectively. Small companies
make up of 18.4 percent and medium companies 2.2 per cent. The manufacturing sector
also having the same pattern nevertheless the percentage of micro firms was lower (55.3
percent), while small firms accounted 39.5 percent (Norma, 2007). According to
Khairuddin (2000), the SMEs in Malaysia may be categorized into three components; (1)
general business, (2) manufacturing and (3) agricultures. The general business sector was
includes in construction, wholesaling and retailing, transport and storage, business
services and activities, and providing services such as hotel and restaurant. Main activities
in the manufacturing sector consist of processing and production of raw materials. The
agriculture sector was involved in rubber, oil palm, paddy, coconuts, fruits, and
vegetables. From the three components; manufacturing sector has emerged as the most
important for SMEs in Malaysia. Below are descriptions of the three components in
details. (i) Manufacturing Sector In the manufacturing sector, the largest number consist
of micro-enterprises (53.4 per cent) followed by small sized category (38.1 per cent) and
lastly medium sized category (5 per cent). In terms of distribution by industry, SMEs
were mainly in the textiles and apparel and resource based industries. The detailed of
manufacturing sub sector and number of establishments indicated in Table as below.

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 Figures 2.1.1 Distribution of Small and Medium Enterprises in manufacturing
by Sub-Sector

In correspond to geographical location, Saleh and Ndubisi (2006) found that a vast
number of manufacturing companies in Malaysia located in the West Coast of Malaysia
which is industrialized location and equip with ports services. They found that Johor has
the largest concentration of manufacturing companies such as textiles and apparel and
wood based industries with 17.5 percent, followed by Selangor (16.7 percent), Perak (9.4
percent) and Pulau Pinang (8.7 percent). Johor was being the leader of the countries
because of the accessibility of cheap labour and logging activities in there. (ii) General
business in the general business or service sector, about 449,004 out of total
establishments were SMEs which constitute 99.4 percent. In the sector, 69.3 percent of
SMEs were in the distributive trade (wholesale, retail and restaurants), followed by
transport and communication (6.2 percent), financial intermediaries (4.3 percent) and

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professional services (2.5 percent). Table 3 has shown the detail of establishments by this
sub-sector.

Figures 2.1.2: Distribution of Small and Medium Enterprises in services by Sub-

Sector

Saleh and Ndubisi (2006) mentioned the list of activities for the transportation and
communication sub-sector services such as logistics and freight forwarding services,
storage and warehousing, road haulage, sea and inland transport, highway operations,
courier services, public bus transport, car parking services. Meanwhile, a professional
sub-sector service is defined under the Malaysian Standard Industrial Classification such
as (1) Non-technical related: legal, accounting, business and management consultancy,
advertising and (2) Technical related: architectural, engineering, surveying and other

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technical activities. (iii) Agriculture Sector In the agriculture sector, out of 32,397 active
companies 99.2 percent were SMEs. Based on SMEs total establishments, 65.8 percent
were in the planting, market plantation and horticulture, followed by fisheries (20.9
percent), poultry farming (6.9 percent) and agricultural and animal husbandry services
(4.8 percent). Refer Table 4 for detailed number of firms and proportions. Normah (2007)
mentions the concentration of SMEs in the states has a close relationship with the
dominant economic activity. In Kedah where agriculture is the main stay of the economy,
the number of SMEs was the largest with 8,803 (27.4 percent) followed by the east coast
states with 26.6 percent. Table:

Figures 2.1.3: Distribution of Small and Medium Enterprises in agriculture by

Sub-Sector

The Small and Medium Enterprises has special features compared with the larger
organizations. SMEs must consider the motivations, constraints and uncertainties facing

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smaller firms and recognize that these differ from those facing larger firms. According
Westhead and Storey (1996) noted the characteristics which distinguishes small
organizations form larger ones other than size itself is that of uncertainty. For the small
organization external uncertainty affected the most such as lack of power and influence
in a market place, larger customer and vulnerability. Therefore, the SMEs seem
unpredictable and ruthless market. Therefore, uncertainties become a major problem in
the small organizations. The challenges faced by SMEs Malaysia which include (1) the
exposure the internet (2) the environmental change (the competitors’ ranking in market)
(3) the managerial activities

2.2 Literature Review on Packaging

Packaging is more than just your product's pretty face. Your package design may
affect everything from breakage rates in shipment to whether stores will be willing to
stock it. For example, "display ability" is an important concern. The original slanted-roof
metal container used for Log Cabin Syrup was changed to a design that was easier to
stack after grocers became reluctant to devote the necessary amounts of shelf space to the
awkward packages. Other distribution-related packaging considerations include:

Labeling. You may be required to include certain information on the label of your
product when it is distributed in specific ways. For example, labels of food products sold
in retail outlets must contain information about their ingredients and nutritional value.

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 Opening. If your product is one that will be distributed in such a way that
customers will want to--and should be able to--sample or examine it before buying, your
packaging will have to be easy to open and to reclose. If, on the other hand, your product
should not be opened by anyone other than the purchaser--an over-the-counter medication,
for instance--then the packaging will have to be designed to resist and reveal tampering.

Size. If your product must be shipped a long distance to its distribution point, then
bulky or heavy packaging may add too much to transportation costs.

Durability. Many products endure rough handling between their production point
and their ultimate consumer. If your distribution system can't be relied upon to protect
your product, your packaging will have to do the job.

1. Variables of Packaging:
Visual Elements:
Graphics and Color:
The implication of graphics is explained by the images created on the product.
Graphics designs are visual presentations which include layout, color combinations,
typography, and product photography all of which create a positive and distinctive image.
For consumers, the package is the product, and different consumers respond to different
packages in different ways depending on their involvement level (Silayoi & Speece,
2004). For low involvement products, such as FMCG, where initial impressions formed
during initial contact can have lasting impact and where evaluation of attributes is less
important in decision making, here then a highly noticeable factor such as graphics and

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colors becomes more important (Grossman and Wisenblit, 1999) (3). On the other hand,
the behavior of consumers towards high involvement products is mostly influenced by
image issues. For low involvement, there is a strong impact on consumer decision making
from the development of the market through marketing communications, including image
building (Kupiec and Revell, 2001). (4)

2. Placement of Visual Impact Elements Matters:

In packaging layouts, the placement of visual elements also plays an important role
for consumer psyche, because a psychic research of Rettie and Brewer, (2000) (5)
indicates that brain laterality results in an asymmetry in the perception of elements in
packaging designs. The recall of package elements/attributes is likely to be influenced by
their lateral pass position on the package, as well as by other usually recognized factors,
such as font color, font size and font style. Research shows that for verbal stimuli recall
is better when the copy is on the right-hand side of the package, and better for non-verbal
stimuli when it is on the left-hand side. This may imply that, in order to maximize
consumers' recall, pictorial elements, such as product photography, typography, it should
be positioned on the left-hand side of the package.

Grossman and Wisenblit (1999) (6), says in their research that consumers also
teach color associations, which lead them to prefer certain colors for certain product
categories. For a unique particular brand, using color as a clue on packaging can nurture
a potentially strong association. However people in different cultures are exposed to
different colors and according their own culture they develop different color preferences.
So as a marketer, color consideration should be the part of their marketing strategies and
by keeping in mind the color consideration according to people perception in different

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culture, colors of a particular logo, package or product design should be done after a
thorough understanding of color association according to culture.

3. Packaging Size and Shape:

Silayoi and Speece, (2004) states that in packaging, the other visual elements such
as size and shape are also important in consideration. Package size, shape and elongation
also affect consumer judgments and considerations. Consumers use these things as
simplifying visual heuristics to make volume judgments. They generally perceive more
elongated packages to be larger.

4. Packaging Functions and Elements:

Pinya Silayoi and Mark Speece (2004), defines the basic functions of packaging
logistically and marketing by their role. The logistical function of packaging is mainly to
protect the product from incidence of damage, spoilage or loss through theft or misplace
goods during movement through the distribution channel. While in the context of
marketing function, the packaging should be attractive enough and well design, so that it
conveys the message of product attributes clearly.

5. Packaging Design
Packaging is one of the most common examples of graphic design. Apart from
displaying the important information, the packaging has become an important sales tool.
With the use of illustration, color, typography and even various packaging materials, a
beautiful and attractive packaging can boost the selling and stands out from the rack of
competitors. Here we present some cool packaging designs to inspire you.

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 As packaging is the biggest medium of communication mainly because of its
extensive reach to all kind of category purchasers, secondly its presence at the crucial
moment when the purchase decision is made and finally the high involvement of level
seekers who actively scan packaging for information.

6. Packaging Features:
When respondents were asked about the importance of specific packaging features,
41.5% reported the importance of 'information on label', 24.4% the 'quality of
package/type of package', 22% the 'brand name' and 12.2% the 'visual impact'. Although
'visual impact' in the choice of a product in the same product category was of least
importance to respondents, in another question 85.4% reported that they were influenced
(36.6% 'sometimes' and 48.8% 'always ') by the 'attractiveness' of a package in the choice
of products of the same product category. These results indicate that brand names and
type of packaging act as cues when consumers try new products.

7. Packaging Material:
When respondents were asked whether they favored transparent packaging
material so that the product content could be viewed, 40.0% responded in the 'affirmative';
40.0% indicated it 'depended' on the type of product, while 20.0% answered 'no'. Plastic
was the best choice of packaging material (39%) compared with glass (19.5%), box
(12.2%), paper (4.9%) foil (2.4%) and metal/tin (2.5%). The properties of plastic that
make it ideally suited for packaging foods include low density, resistance to breaking,
sharp edge elimination, flexibility, impermeability to oxygen and water control, control
of package atmosphere, odors protection, environmental durability, light control, package

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appearance, inertness to flavor components, metal coating, receptivity, tear and puncture
resistance and low temperature.

Most respondents (92.7%) believed that the type of packaging material could
adversely affect the quality or performance of food products. In this regard, all the
respondents reported that metal/tin has the most negative impact on the quality of a food
product.

8. Food Labelling:
Labels on food products are intended for consumer information and help to
identify, promote, inform and offer advice on the use of the products concerned, and
where for instance a label is applied over a closure, providing security as a tamper evident
feature.

Food labelling might refer to naming a product or the listing of ingredients. The
key objective of a food label is to provide information for the consumer, help sell the
product and assist the consumer in making comparable food choices.

9. Nutrition Information:
Most respondents (58.5%) read the nutrition facts panel and realized the
importance thereof. Nutrition labeling provides information as mandated by the Nutrition
labeling and Education Act 1990. In a survey conducted in the United Kingdom in 1995
by the Consumer Association, most respondents were aware of nutrition labeling, with

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62% mentioning nutrients and 45% indicating only ingredients on food labels. Although
7.3% of the respondents in the present study knew what the nutrition fact panel was about,
they still did not read the information before purchasing the product. Some Respondents
(24.4%) read the information but did not understand it. According to Sloan, 'if one is to
believe the message of many consumer surveys, the majority want detailed label
information but few consumers actually read the nutrition information and even fewer
understood it'. Also, in a number of studies conducted in the United States, people are
paying less attention to labels. Consumers of food items need to be more aware of and
better educated about nutrition information on food labels, as this will enable them to
select nutritious food. Despite the fact that most respondents in this study did not use or
fully understand the nutrition information, 92.7% agreed that it was important to Show
nutrient information on all food products. Also, while consumers still do not understand
all of the information on a label, it often affects their food purchase decisions, particularly
among upscale shoppers and those on medically restricted diets.

10. New products

The 'advertisement' (39.0%) was the most important factor that influenced the
respondent's choice when purchasing a new product. This was followed by 'visual
impact/product appeal' (22.0%) and 'brand or label information' (22.0%). In a study on
the purchasing behavior of American consumers, price and brand name remain the
leading drivers, but it seems as though the less important factors such as health claims,
type of preservatives, additives and organic claims have increased in importance.

In a GMA survey, nearly half of the respondents (49.0%) indicated that a familiar
brand name was the first or second most important element when making a purchase in

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the According to the Ministry of Consumer Affairs in Trinidad and Tobago, there has
always been an increase in the number of consumer complaints of new products after the
peak season occasions such as Christmas, Easter and Carnival (E. Lara, personal
communication). In these periods, consumers are prompted to purchase new food
products as a result of the wide variety of advertisements and promotional sales.

Although the marketing division of a company has the freedom to promote the
particular benefits of a food item, the consumer has to make an informed choice based on
the comparable information. In the present study, only 7.3% of the consumers were
concerned about the fat content of a product. This follows a worldwide tendency to reject
reduced-fat products, suggesting a need to explore and innovate 'natural' fat substitutes
and to improve the sensory quality of reduced-fat products. When respondents were asked
to rate the factors that sustained their purchasing behavior, 'convenience in preparation
and use' had the lowest response (17.1%), while' performance/satisfaction' received the
highest response (39.0%). Unlike American consumers who prefer ready-to-eat and on-
the-go foods, it seems that Trinidadian respondents are not strongly influenced by
convenience foods. In this study, 85% of the respondents cited that 'poor quality and
performance' of a product may influence them never to buy a new product again.

11. Packaging Evolution:

In early times, prior to World War II, Packaging was used primarily to surround
and protect products during storage, transportation, and distribution. Some packages were
designed with aesthetic appeal and even for ease-of-use by the end consumer, but package
design was typically left to technicians. After World War II, however, companies became
more interested in marketing and promotion as a means of enticing customers to purchase

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their products. As a result, more manufacturers began to view packaging as an integral
element of overall business marketing strategies to lure buyers.

This increased attention to packaging coincided with socioeconomic changes

taking place around the world. As consumers become better educated and more flush,
their expectations of product, and their reliance on them increased as well. Consequently
consumer began to rely much more heavily on manufactured goods and processed food
items. New technologies related to production, distribution, and preservatives led to a
massive increment in the number and type of products and brands available in
industrialized nations. Thus, packaging became a vital means of differentiating items and
informing inundated consumers.

Packaging today, is regarded, as an essential part of a successful business practice.

Package design became a marketing science, and as a new corporate cost-consciousness
developed in response to increased competition, companies began to alter packaging
techniques as a way to cut production, storage, and distribution expenses. Furthermore,
marketers began to view packaging as a tool to exploit existing product lines by adding
new items and to pump new life into maturing product. (2)

12. Packaging Attributes:

Food products brands use a range of packaging attributes, which comprises of
packaging colors, packaging designs, shapes, messages, and symbols (Pinya Silayoi &
Mark Speece, Oct, 2004). These attributes attracts and sustains the attention of consumers
and help them to identify with the images presented. The importance of packaging design

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and the use of packaging as a vehicle for communication and branding are growing in
packaged food competitive markets.

Consumer's intentions to purchase packaged products depend on the degree of

extent to which consumers expect that the product will satisfy their need when they will
consume it. But there are certain situations when they haven't even heard about the
products so much while entering into the stores, (especially in the case of new products)
so the intentions to purchase that very particular product is basically determined by what
is communicated at the point of sale. So, at the time of sale when the product is not
familiar to the consumer, the only factor that attracts consumers to purchase is Packaging.
It became a critical factor when the consumer decision making process is in progress, and
how they perceive it depends upon the communication elements, which become the key
factor to success for marketing strategies.

Now to achieve that communication goal effectively and to optimize the potential
of packaging, the marketers and the package designers must have to consider consumer
perception point, their past experiences, their needs & wants, and understand how
packaging design layouts get consumers to notice the package and notice messages on
the package and evaluate packaging design and labeling for their effectiveness in the
communication effort because it is also important to notice that not all consumers evaluate
the packaging in the same way.

The effect of packaging on resource use, energy consumption, pollution, solid waste and
litter.
 Packaging plays a crucial role and similar to the other marketing element.

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  Packaging has to include the zero defection on the damage caused by the
transportation process.
 Ways to achieve communication goals effectively by optimizing the potential of
packaging. (The understanding of the customers’ responses towards products)

2.3 Literature Review on Purchase Decisions

Consumer Behavior is the study of individuals, groups, or organizations and the

processes they use to select, secure, use, and dispose of products, services, experiences,
or ideas to satisfy needs and the impacts that these processes have on the consumer and
society.[1] It blends elements from psychology, sociology, social anthropology,
marketing and economics. It attempts to understand the decision-making processes of
buyers, both individually and in groups such as how emotions affect buying behavior. It
studies characteristics of individual consumers such as demographics and behavioral
variables in an attempt to understand people's wants. It also tries to assess influences on
the consumer from groups such as family, friends, sports, reference groups, and society
in general.

Customer behavior study is based on consumer buying behavior, with the

customer playing the three distinct roles of user, payer and buyer. Research has shown
that consumer behavior is difficult to predict, even for experts in the field. Marketing is
an influential asset for customer behavior analysis as it has a keen interest in the re-

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discovery of the true meaning of marketing through the re-affirmation of the importance
of the customer or buyer. A greater importance is also placed on consumer retention,
customer relationship management, personalization, customization and one-to-one
marketing. Social functions can be categorized into social choice and welfare functions.

Each method for vote counting is assumed as social function but if Arrow’s
possibility theorem is used for a social function, social welfare function is achieved. Some
specifications of the social functions are
decisiveness, neutrality, anonymity, monotonicity, unanimity, homogeneity and weak
and strong Pareto optimality. No social choice function meets these requirements in an
ordinal scale simultaneously. The most important characteristic of a social function is
identification of the interactive effect of alternatives and creating a logical relation with
the ranks. Marketing provides services in order to satisfy customers. With that in mind
the productive system is considered from its beginning at the production level, to the end
of the cycle, the consumer (Kioumarsi et al., 2009).

This is the fourth stage, where the purchase takes place. According to Kotler,
[4]
Keller, Koshy and Johan (2009), the final purchase decision can be disrupted by two
factors: negative feedback from other customers and the level of motivation to comply or
accept the feedback. For example, after going through the above three stages, a customer
chooses to buy a Nikon D80 DSLR camera. However, because his good friend, who is
also a photographer, gives him negative feedback, he will then be bound to change his
preference. Secondly, the decision may be disrupted due to unanticipated situations such
as a sudden job loss or the closing of a retail store.Aim to explain how people, groups and

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organization select, purchase, use and discard goods, services, ideas and experiences in
order to satisfy their needs and desires.

The customers are divided into four groups, which include the individual
customers, domestic units, government and companies and middleman. (Sheth, 1999)

How do the SMEs in Malaysia make sure that they play their roles to catch up
with the rapid paces of the customers nowadays?

Household Decision Making

For married couples, they are more cooperative in terms of making decision,
which means that they will try to make a decision by combining ideas and generate the
best solution for them thus causing no harm to their household (Jenkins, 1979). From the
studies of Carlson et al. (2009), they prove that wives are the most likely to make decision
when it has an effect for the household income, those wives are those who have a higher
education level than the husband, as well as wives with a communist party membership.

Another study also found that couples who stay together or cohabitant also have
a different approach in decision making. According to a study on cohabitation (Nock,
1995; Brown and Booth, 1996; Stack and Eshleman, 1998; Treas and Giesen, 2000),
couples who have agreed to live together tend to make a decision that causes
dissatisfaction to them compared to the married couples. In household decision making,
the use of combination strategies in making decision is more likely to be found rather

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than using just a single strategy (Spiro, 1983; Makgosa, 2007). According to Qualls (1984,
1987), Husbands and wives in making decision has no significant difference in making
decision with the modern couples who believe in making a decision based on a mutual
agreement by considering different factors that might be affected by the decision they
make.

There are three stages in household decision-making process: initiation, make

choice and final decision (Belch et al., 1985, p. 163). The final stage is the purchasing
decision process. Children of a family have been found as one of the factors to be
considered in household decision making (Belch et al., 1985). However, according to
Spiro (1983), Children do have a certain influence in making decision for particular
product categories such as breakfast cereals. However, their impact on daily decision
making is limited. In household decision making, it is important to examine the bond
between role and influence of the husband and the wife (Strodtbeck, 1951). In household
decision making, both men and women are required to do joint decision making in order
to achieve the necessary goal since the source of income from two channels.

Conflict in Decision Making

Couples often analyze the conflict using the available strategy to overcome
problems in decision making by careful thinking and searching of information (Sheth,
1974; Qualls, 1984; Corfman and Lehmann, 1987; Nelson, 1988; Divard, 1997; Makgosa,
2007). According to Sheth (1974), conflict between the family members arises from the
difference in understanding and perceptions on other alternatives which will cause a
different purchase decision.

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 According to Makgosa (2007), ethnicity is an essential element in determining
strategies. The use of strategies, either single strategy or combination of strategies, is
affected by so many variables such as gender role, income level, age, employment,
education, and position in the life cycle (Spiro 1983). According to Qualls (1984, 1987),
gender role plays an important role of purchasing a house whereas it shows the attitude
or the personality of the spouses towards the role as a husband or wife.

In solving a conflict, many have chosen to use a compromise strategy (Kozak

2010). However, the use of a particular strategy has been found to be more often than
others (Nelson, 1988; Qualls, 1988; Divard, 1992; Holdert and Antonides, 1997).
According to Sheth (1978), the most used strategy or tactic is persuasion. However,
strategies like bargaining have been mentioned by some couples. It is believed that those
behaviors might be arising from the negative implication. Belch et al. (1980) believe that
resolution of a conflict is very dependant to the matters or problem solving compared to
bargaining or persuasion. However, according to Filiatrault and Ritchie (1980), the most
used techniques or strategy is seeking for an agreement between parties in the conflict
rather than to negotiate or bargain or persuasion.

To support the previous study, Lee and Collins (2000) find out that there are so
many types of strategy that the related parties use to encounter the conflict. Bokek-Cohen
(2008) has appeal with another different resolution known as “triangulation”. From
Bokek-Cohen (2008), spouses often use this strategy where a third party, who is
recognized by the spouses, opinions or vote, will affect the final decision. This
additionalrole is commonly used to each spouse a dispensation to purchase a certain type
of product.

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Couples in Decision Making

Unmarried couples often practice a common way in making decision. Their

choices often affect not only themselves but also the surroundings (Ganzel, 1999). The
studies of Beyth-Marom et al. (1993) believes that unmarried couples always try to focus
their decisions on social reactions then only deciding whether or not to engage their
decision. According to another studies by Fischoff et al. (1999) on decision making or
reasoning skills, for unmarried couples choosing dating venue might be according to their
desire, they will do some searching to find a suitable venue for their date. For some
unmarried couples, the price of the dating venue will also be a consideration. Some
couples might as well choose their dating venue according to the day of their date.

For most of the time, the unmarried couples always choose a dating venue
according to their desire and not considering price. Unmarried couples have a tough time
to understand the information when making decision. According to Kaur and Singh
(2004), some couples tend to carry their tradition into their lifestyle and at the same time
bring that tradition into relationship thus affecting their behavior in decision making.
Traditional attitudes often acts as a standard to measure the role of male/female in making
decision thus make the decision making process less complicated (Sidin et al., 2004).
According to Qualls (1984, 1987), traditional couples have a clear definite boundaries in
making decision. However, modern couples often try to create a balance situation in
making decision or in other words making decision through discussion which will lead to
a mutual agreement.

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 It has been found that the relative roles of husband and wife in decision making
will not only vary based on the product category, but also the stage of decision making
process (Jaffe and Senft, 1966). It is very common that people around the world have the
assumption that women were to be the subordinated to men (Ortner, 1974). However, as
time goes by, recently there are so many researches that is analyzing more to the cultural
aspects of family, husband and wife, in purchase decision making. According to
McConocha et al. (1993), women made the most benefit out of the decisions they make.
According to McConocha et al. (1993), men usually made the decision that is related
close to financial. Furthermore, he also found that cohabiters are different from married
couples. They tend to keep their accounts to their own self and at the same time make any
decision with a joint decision making. It has been found that these connections made joint
decision making an important part to break the risks in managing the financial assets.

Individuals as Decision Makers

Tversky and Kahneman (1974) found that individual as decision makers will
always have a difficulty to decide in an uncertain condition and their cognitive abilities
and biases are limited into certain factors like the outcomes, options, temporary emotion.
Decision makers will as well consider their own condition, the overall context, the
behavior of peers, and expectations from them according to their role. The rational
decision maker depicted by normative decision theory was challenged by Simon (1955),
who argued that decision makers have only bounded rationality (March, 1978) and are
seeking to “satisfice”, not maximize. Behavioral decision theory researchers found that
consumers are adaptive decision makers (Payne et al., 1988, 1993) and their preferences
are highly dependent on person-, context-, and task-specific factors (Edwards, 1961;

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Tversky, 1969; Lichtenstein and Slovic, 1971; Simonson, 1989; Slovic, 1995; Luce et al.,
1997; Luce, 1998; Swait and Adamowicz, 2001). This constructive view of decision-
making differentiates between behavioral and normative decision theory (Payne et al.,
1992). In reality, not all decision makers have well-established preferences. Hence
researchers argued that consumer preference uncertainty leads to contingent use of
decision strategies (Payne, 1976, 1982; Christensen-Szalanski, 1978; Payne et al., 1995)
and contingent weighting of attribute importance (Tversky et al., 1988; Fischer et al.,
2000) by consumers. Behavioral decision research has identified many decision strategies.
“Satisficing” (Simon, 1955) is arguably the most well-known behavioral strategy. Others
include weighted adding theory, prospect theory (Hahnemann and Tversky, 1979;
Tversky and Kahneman, 1992) equal weight (Einhorn and Hogarth, 1975), majority of
confirming dimensions (Russo and Dosher, 1983), lexicographic (Tversky, 1969),
elimination by aspects (Tversky, 1972), conjunctive and disjunctive strategies (see
Abelson and Levi, 1985, for a discussion).

Decision Making Process

There are so many decisions making system that have been found and the
necessary details have also been provided (Bartsch, Yost, & Girrell, 1976; Fulcher, 1965).
There is research evidence suggesting that better use of information can improve decision
making process (Ittner and Larker, 2006; Davenport and Harris, 2007). According to
Hemmingway (2006), skills and technologies are required to enhance the function of
information in building the capabiliteis in order to improve decision making process.

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2.4 Literature Review on Price

Pricing is the process of determining what a company will receive in exchange for
its product or service. Pricing factors are manufacturing cost, market place, competition,
market condition, brand, and quality of product. Pricing is also a key variable
in microeconomic price allocation theory. Pricing is a fundamental aspect of financial
modeling and is one of the four Ps of the marketing mix. (The other three aspects are
product, promotion, and place.) Price is the only revenue generating element amongst the
four Ps, the rest being cost centers. However, the other Ps of marketing will contribute to
decreasing price elasticity and so enable price increases to drive greater revenue and
profits.

Pricing is the manual or automatic process of applying prices to purchase and sales
orders, based on factors such as: a fixed amount, quantity break, promotion or sales
campaign, specific vendor quote, price prevailing on entry, shipment or invoice date,
combination of multiple orders or lines, and many others. Automated systems require
more setup and maintenance but may prevent pricing errors. The needs of the consumer
can be converted into demand only if the consumer has the willingness and capacity to
buy the product. Thus pricing is very important in marketing.

Earnings per share represent one of the most widely used indicators measuring the
performance of a company. It is calculated by dividing net income by total number of
outstanding shares. (Lawrence J. G., 2005)

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 There are researchers, suggest that the Earning per share (EPS) is part of share
price, and the increasing or decreasing of EPS will result the same situation to the share
price. (Edward A. & William B., 2006)

The rationale behind the EPS and share price are related is when an investor hold
a share, he will hold part of company’s income as well because of the ownership.
Therefore, the price of share will follow the movement of the company’s earning. (M. J.
Gordon, 1959)

However, there are some researchers back 70s, doubt the relationship of EPS and
share price, they conclude that there are other factors should be taken into account.
(Burton G. Malkiel and John G. Cragg, 1970)

Molodovsky (1995) discussed dividends as the hard core of stock value. The
importance of dividends was originally emphasized in the work of Williams (1938). The
current study will attempt to investigate identify the most influencing factors of UAE
stock markets. Some studies have concluded that company fundamentals such as earning
and valuation multiple are major factors that affect stock prices. Other indicated that
inflation, economic conditions, investor behavior, the behavior of the market and liquidity,
are the most influencing factors of stock prices. The results of this study are consistent
with most of the findings provided in the literature review and support the existence of a
long-run relationship between stock prices and both internal and external factors. The
most important influencing factor is EPS. This means that an increase in the demand for
stocks with higher earnings increases stock prices and, consequently, the trading volume.

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The findings indicate a strong positive impact of EPS on the UAE stock prices. (Al –
Tamimi, H., 2007),
According to Oscar Harkavy (1953), the two proposals have been made regarding
the retained earnings and common stock price for large, listed corporations. High
proportion of earnings retained (EPS) are associated with greater price appreciation. The
crucial factor is the profitable utilization of investors' funds. The studies of the individual
companies demonstrate that the mere fact of low dividend-payout does not guarantee
outstanding price appreciation. Increases in earning power must accompany the increases
in book value arising from undistributed profits if price appreciation is to be enjoyed.

Contras with the common findings, some researchers did found other results. In a
research, the researchers examine whether the magnitude of this relation is (positively)
correlated with the revisions in expected future earnings derived from a unilabiate time-
series model. They found that the earnings does not support the excess volatility of stock
prices found in stock market indices by some previous researchers; Leroy Porter (1981)
and Shiller (1981). In the context of their system model, which relates differenced
earnings to returns, they found no evidence that stock returns are excessively sensitive to
the earnings innovations.

Dividend is a part of net income distributed in cash to shareholders of the

company. It is the portion of corporate profits paid out to stockholders. When a
corporation earns a profit or surplus, that money can be put to two uses: it can either be
re-invested in the business, or it can be paid to the shareholders as a dividend. Many
corporations retain a portion of their earnings and pay the remainder as a dividend.
(Lawrence J. G., 2005)

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 In a study examines whether discounted cash flow models, multiplier methods,
and market-value-added approach presented in finance texts are useful tools for
predicting stock prices. Among all financial variables that were considered in this study,
dividend and highest effect predicting share values of the firm. (Reza Rahgozar, 2006)
In another study, there are researchers focus on whether the relation between stock
prices and dividends changed. Rather than focusing on a long-term historical period, they
examine the present-value model by pooling individual firms over the past 20 years and
use panel integration estimation methods to test the long-run relation between stock prices
and dividends. They also apply panel integration testing and estimation methods to
quarterly data for 84 firms over the 1979–1999 periods to determine the long-run relation
between stock prices and dividends and to test the present-value model. The results
indicate that in the period studied, there is an approximately one-for-one long-run relation
between stock prices and dividends for large established firms. Further, stock prices
explain more than one-third of dividend movements in the short-run. (Lairize N. & Jack
S. 2003)

There are results shows that variance-bound test results are consistent with the
efficient markets hypothesis when other cash distributions are included. The researchers
use the variance-bound test methodology of West (1988b) to test the hypothesis that stock
price is not too volatile. Our data are from the Toronto Stock Exchange (TSE) for the
period January 1950 to February 1991. They first analyze monthly and annual series of
ordinary cash dividends and find results comparable to those of West (1988b), i.e., stock
price appears overly volatile. The same test is then performed on broadly defined series
of monthly and annual cash flows, where the series include ordinary dividends and cash
generated by share repurchases and cash mergers and acquisitions. The results indicate
that stock price volatility is consistent with the discounted value of expected dividends

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when differencing is required to induce stationary. (Lucy F. Ackert and Brian F. Smith
1993)

Another research that testing the relationship between stock prices and dividends
by using US stock market data, and focus upon the time-series properties of aggregate
price and dividend indexes. This paper employs the cross-section ally augmented panel
unit root test introduced by Pesaran (2005). The sample for the present study comprises
104 UK non-financial companies, for which complete and continuous share price and
dividend series were available over a 34-year observation period from 1970 to 2003
(inclusive). The panel test results largely support the present value model, yielding
evidence of integration between real prices and dividends. (John G., David G. M. and
John O.S.W., 2008)

The studies about the profitability of an investment strategy that were focused on
the high dividend yield stock from British Stock Exchange in year 1994 to 2007. Their
finding had demonstrate that the portfolios composed of the best 10 highest dividend yield
stock are able to beat the market for the entire period from 1994 to 2007, but this are not
consistently. It also had present for this studies that had important for the investors
regarding to their investment horizon choice. High dividend yield portfolio had proven as
the profitable investment for the long term and these can be varying in the short term.
(Janusz B., Kathryn A. and Jerzy G., Joanna B., 2008)

The strong support had provided by the Cross-sectional weighted least squares
regression for the dividend signaling hypothesis and restricted supporting for the free cash

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flow argument in order to explain the stock price reactions to announcements of the
dividend policy changes. For the NASDAQ dividend initiations, it had shown the strong
positive relationship between stock price reactions and change in dividend yield. Change
in the dividend yield is more important for the high Q firms compared with the low Q
firms. Firms with the low dividend yield which would exclude the dividend transmit less
information, and therefore the stock price reaction become smaller. (Patricia A. Ryan,
Scott Besley and Hei W. L., 2000)

Another Authors; Chaudhary Mohammad Irfan and Dr. Mohammed Nishat (2000)
had distinguished the joint effect of the several factors such as the dividend yield, payout
ratio, size, leverage, asset growth and earnings volatility applied on share price in Karachi
Stock Exchange for the long run. But the most important factors that authors had observed
were the dividend yield, payout ratio, size and leverage. They also attempt to observe the
impact of these factors where to assess for the straighten out impact on the share price
changes. As the results they found that the dividend per share could drive the share in
terms of long run.
The decrease in the dividend yield was offset by risen growth in earning per share.
The greater grown in earning were permitted the better dividend growth and this had lead
the stock price appreciated. Dividend yield as the simply ratio between dividend and stock
price. When the dividend yield decline, the stock price had considered as overprice. All
of these had also considered as more valuable for current compare with past previously.
(John B. Carlson, 2001)

Stock is ownership in a company, with each share of stock representing a tiny

piece of ownership. (Lawrence J. G., 2005). The more shares you own, the more of the

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company you own, and the more dividends you earn when the company makes a profit.
In the financial world, ownership is called equity. Stocks are in two primary classes. The
one you choose depends on what you want from a stock. Preferred stock typically pays
regular dividends, and investors who want income foremost from their stocks favor it.
Common stock represents ownership of a company and may offer more rights and
privileges than preferred stock.
 The description of the price perception process.
 The assimilation or contrast theory among the customers. (their latitude of
acceptance in their beliefs concerning price, when a customer finds new price
information, he or she evaluates it in function of this range)
 Successful price setting.

2.5 Literature Review on Customer Loyalty

Likelihood of previous customers to continue to buy from a specific organization.

Great attention is given to marketing and customer service to retain current customers by
increasing their
customer loyalty. Organizations employ loyalty programs which reward customers
for repeat business.
Loyalty is the cause and effect of value (Reichhled, 1996). The importance of customer
loyalty is proved by this statistic: Compared to the revenue a somewhat-loyal customer
generates, a loyal customer contributes 260% the annual revenue.

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 Customer loyalty is a composite of a number of qualities. It is driven by customer
satisfaction and involves a determination by the customer to make a sustained investment.
It is reflected by a willingness to recommend the company to others and a commitment
to the company demonstrated by a resistance to switching. (Prus & Randall, 1995).

Customer satisfaction is defined as “the customer’s response to the evaluation of

the perceived discrepancy between prior expectations and the actual performance of the
product/service as perceived after its consumption”. (Che-Ha, Tse, 2007 and Tse and
Wilton, 1988, p.127)

This research project consists of five chapters which is introduction, literature

review and research methodology, results and discussion, conclusions and
recommendations.

Chapter one is introduction of the research project. It begins with the overview
and background of the topic. After that, this chapter also covers background of the
research and problem statement. After identify objective of research, research
justification will be discuss. Finally, limitation of the study and scope of the study will be
explained.

Chapter two is literature review. It presents the variables that involve in this
research. The variables include reliability, responsiveness, assurance, empathy, tangibles,
customer satisfaction, corporate image, commitment and conflict handling. First, I define

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the key terms and variables, and then followed by literature review in the context of
factors affecting customer loyalty towards bank. Finally, a small conclusion will be
discussed.

Chapter three states the research methodology. It begins with introduction and
then followed by a complete research framework to illustrate the relationship between the
dependent variable and independent variable. After that, nine hypotheses were developed
to test the correlation. Sampling procedures and sources of data will also discuss in this
chapter. Furthermore, some technique to develop questionnaire also will discuss.

Chapter four presents the results from the data analyses. The analysis examines
the results how whether the variables can influence the bank customer loyalty. The
analysis can find out there is any significant relationship between the independent
variables and dependent variable.

Chapter five states the recommendation and conclusion. It discusses the major
finding and concludes the study. It also highlights the implication of this study, limitations
and some suggestion for the future research.

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Section A
Please complete the following question by mark (/) at the box given and give
appropriate answer for the question below. This information is confidential. Individual’s
identities will not be revealed.

Age [ ] 0-18 [ ] 19-29 [ ] 30-39 [ ] 40-49 50-above

Gender [ ] male [ ] female
Marital status [ ] single [ ] married [ ] divorce [ ] other
Race [ ] Malay [ ] Chinese [ ] Indian [ ] other
Religion [ ] Muslim [ ] Buddhism [ ] Hindu [ ] other
Education level [ ] high school [ ] undergraduate degree [ ] masters
[ ] PhD or higher
Occupation [ ] student [ ] working [ ] unemployed [ ] other
Monthly income [ ] below RM 1000 [ ] RM1000-RM2999
[ ] RM3000-RM5999 [ ] Other
Living area [ ] city [ ] villages [ ] outskirt [ ] other
Do you buy the SME’S product? [ ] yes [ ] no

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 Section B

Respond to each statement by circle the extent to which you agree or disagree
with them. Use the following rating scale for your response.
1 2 3 4 5

Strongly disagree Disagree No sure agree Strongly agree

1. Packaging
a) What did you think of these packaging design?
b) What did you find important in these packaging?
c) Would you like to see any other information on label?
d) What else calls your attention?
e) Would you be willing to pay more for this product? How much more?

2. Purchase decisions
a) Do you buy only branded products?
b) Which of the following, according to you help build a good brand image?
c) Do you use products because they are most available?
d) Does country of origin affect your product purchase decision?
e) Do you experiment with different brand?

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3. Price
a) Are you a price sensitive consumer?
b) The price our brand?
c) The price is low?
d) Discount or sale price?
e) Price is the ‘correct’ price?

4. Customer loyalty
a) Are you a loyal customer for the products you buy?
b) Will you stick to the same product if there is increased (and you are a loyal
customer to the product)?
c) Which of the following do you prefer?
d) Do you trust our products?
e) Do you think our products get good word of mouth publicity?

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 CHAPTER 3

RESEARCH METHODOLOGY

3.0 Introduction

This chapter is about the methodology of the research. The chapter will begin by
describing the Hypothesis, Research Design, Sampling Design, Data Collection, Question
Design, Scale Type Used and Pilot Test. In this chapter also will give explanation on how
the methods of analysis were applied to determine the reliability and validity of the
measurement instrument.

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3.1 Hypothesis

A hypothesis can be defined in empirical research, assertion made about some

property of elements being studied. Such an assumption is made early in the investigation,
guiding the investigator in searching for supporting data. The hypothesis is found to be
true or false at the conclusion of the research study, depending on whether or not the
proposed property actually characterizes the elements.
Relationship is conjectured on the basic of the network of association established
in the theoretical framework formulated for the research study.

Testing the hypothesis and confirming the conjectured relationships, it is expected

that found to correct the problem encountered.
1. The hypothesis is generated;
The first hypothesis is stated as follow:
a) There is relationship between packaging and customer purchase decision.
b) There is relationship between customer and packaging, purchase decision.
c) There is relationship between purchase decision and packaging, customer.

3.2 Research Design

The first step in deciding how you will analyze the data is to define a unit of analysis.
 Your unit of analysis is the “who” or the “what” that you are analyzing for your
study.

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  Your unit of analysis could be an individual student, a group, or even an entire
program.

The unit of analysis is the major entity that is being analyzed in a study. It is the 'what' or
'who' that is being studied. In social science research, typical units of analysis include
individuals (most common), groups, social organizations and social artifacts.
The literature of international relations provides a good example of units of analysis. In
"Man, the State and War", Kenneth N. Waltz creates a tripartite analysis with three
different units of analysis: the man (individual), the state (a group), and the international
system (the system in which groups interact).
The aim of this study was to assess the quality of coronial autopsy reports, and indirectly
the quality of autopsies, requested by coroners under the England, Wales, Northern
Ireland, Guernsey, Jersey and the Isle of Man coronial systems.

The specific objectives of the study were:

 To assess the quality of coronial autopsy reports in conjunction with the written
information relating to the death as presented to pathologists by coroners;
 To obtain a baseline overview of the standard to which coronial autopsy reports
are currently being reported, and indirectly, the standard to which they are being
perfomed;
 To assess how issues raised by a death are being addressed in the coronial autopsy;
 To highlight the variations in practices and explore reasons for these variations
(e.g.: coroners' requests and expectations; pathologists' workloads; mortuary
facilities);
 To evaluate the correctness of pathologists' Office of National Statistics (ONS)
cause of death formulations in terms of structure and content;

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  To make recommendations regarding quality of autopsy reports.

In this section, we will discuss about the sampling teaching that used in this research an
about the population of the research area.

Cross sectional survey approach will be used in gathering the data for the purpose to meet
the research objective and finally provide finding for this research.

In this research, the dependent variable is packaging while the variables are purchase
decision, price, customer loyalty.

3.3 Sampling Design

Sampling is an important thing methodology in doing the research.

The main sample design is the framework, or road map, that serves as the basis for the
selection of a survey sample and affects many other important aspects of a survey as well.
In a broad context, survey researchers are interested in obtaining some type of information
through a survey for some population, or universe, of interest.

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 Simple Random Sampling: A simple random sample (SRS) of size n is produced
by a scheme which ensures that each subgroup of the population of size n has an equal
probability of being chosen as the sample.

Stratified Random Sampling: Divide the population into "strata". There can be
any number of these. Then choose a simple random sample from each stratum. Combine
those into the overall sample. That is a stratified random sample.

Multi-Stage Sampling: Sometimes the population is too large and scattered for it
to be practical to make a list of the entire population from which to draw a SRS. For
instance, when the polling organization samples US voters, they do not do a SRS. Since
voter lists are compiled by counties, they might first do a sample of the counties and then
sample within the selected counties. This illustrates two stages. In some instances, they
might use even more stages. At each stage, they might do a stratified random sample on
sex, race, income level, or any other useful variable on which they could get information
before sampling.

For this research, consumer all around Austin was selected as the respondent of
this research.

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3.4 Data Collection

For his study, although there were many possible way to communicate with
respondent, such as callback, using internal communication, and anymore. We can self-
administrate questionnaire.

Considered to be the most popular method used given the time and also constrain
in budget to finish the project.

Since the questionnaire was highly structured and relatively straightforward,

respondent will be able to complete the survey on their own without help from the
researcher.

Large amounts of information can be collected from a large number of people in

a short period of time and in a relatively cost effective way

Can be carried out by the researcher or by any number of people with limited
affect to its validity and reliability
The results of the questionnaires can usually be quickly and easily quantified by
either a researcher or through the use of a software package

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 Can be analyzed more 'scientifically' and objectively than other forms of research

When data has been quantified, it can be used to compare and contrast other
research and may be used to measure change
Positivists believe that quantitative data can be used to create new theories and /
or test existing hypotheses

3.5 Question Design

Questionnaires are very cost effective when compared to face-to-face interviews.

This is especially true for studies involving large sample sizes and large geographic areas.
Written questionnaires become even more cost effective as the number of research
questions increases.

Questionnaires are easy to analyze. Data entry and tabulation for nearly all surveys
can be easily done with many computer software packages.

Questionnaires are familiar to most people. Nearly everyone has had some
experience completing questionnaires and they generally do not make people
apprehensive.

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 Questionnaires reduce bias. There is uniform question presentation and no
middle-man bias. The researcher's own opinions will not influence the respondent to
answer questions in a certain manner. There are no verbal or visual clues to influence the
respondent.

Questionnaires are less intrusive than telephone or face-to-face surveys. When a

respondent receives a questionnaire in the mail, he is free to complete the questionnaire
on his own time-table. Unlike other research methods, the respondent is not interrupted
by the research instrument.
Divide the Questionnaires into two major types.

Open-ended question

Open format questions or open-ended questions give your audience an

opportunity to express their opinions in a free-flowing manner. These questions don't
have predetermined set of responses and the respondent is free to answer whatever he/she
feels right. By including open format questions in your questionnaire, you can get true,
insightful and even unexpected suggestions. Qualitative questions fall under this category.

An ideal questionnaire would include an open-ended question at the end of the

questionnaire that seeks feedback and/or suggestions for improvements from respondents.

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Closed question

Multiple choice questions, where respondents are restricted to choose among any
of the given multiple choice answers are known as closed format or closed-ended
questions. There is no fixed limit as to how many multiple choices should be given; the
number can be even or odd.

One of the main advantages of including closed format questions in your

questionnaire design is the ease at performing preliminary analysis. These questions are
ideal for calculating statistical data and percentages, as the answers set is known. Closed
ended questions can also be asked to different groups at different intervals to efficiently
track their opinion about a product/service/company over time. Closed-ended questions
can be further classified into 7 types.
Part one is related to the demographic measurement.
Part two asked a question related to the packaging, purchase decision, price, and customer
loyalty.

3.6 Scale Type Used

A psychometric response scale primarily used in questionnaires to obtain

participant’s preferences or degree of agreement with a statement or set of statements.

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Liker scales are a non‐comparative scaling technique and are one-dimensional (only
measure a single trait) in nature. Respondents are asked to indicate their level of
agreement with a given statement by way of an ordinal scale. A method of
ascribing quantitative value to qualitative data, to make it amenable to statistical analysis.
A numerical value is assigned to each potential choice and a mean figure for all
the responses is computed at the end of the evaluation or survey.

Used mainly in training course evaluations and market surveys, Likert scales
usually have five potential choices (strongly agree, agree, neutral, disagree, strongly
disagree) but sometimes go up to ten or more. The final average score represents overall
level of accomplishment or attitude toward the subject matter.

It is the most widely used approach to scaling responses in survey research, such
that the term is often used interchangeably with rating scale, or more accurately
the Likert-type scale, even though the two are not synonymous. The scale is named after
its inventor, psychologist Rensis Likert. Likert distinguished between a scale proper,
which emerges from collective responses to a set of items (usually eight or more), and the
format in which responses are scored along a range. Technically speaking, a Likert scale
refers only to the former. The difference between these two concepts has to do with the
distinction Likert made between the underlying phenomenon being investigated and the
means of capturing variation those points to the underlying phenomenon.

Likert Scale Strengths:

• Simple to construct

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• Likely to produce a highly reliable scale
• Easy to read and complete for participants

Each item in part two used a five point Likert scale that anchors from one (strongly
disagree, disagree, neutral, agree, and strongly agree)

Table 3.1.1: Summary of the questionnaire

Variables No. of item Items
Section A :Demographic 1
Age 1 Section A, Item 1
Gender 1 Section A, Item 2
Marital status 1 Section A, Item 3
Race 1 Section A, Item 4
Religion 1 Section A, Item 5
Education level 1 Section A, Item 6
Occupation 1 Section A, Item 7
Monthly income 1 Section A, Item 8
Living area 1 Section A, Item 9
Do you buy SME product 1 Section A, Item 10
Section B
Packaging 5 Section B, Item 1-5
Purchase decision 5 Section B, Item 6-10
Price 5 Section B, Item 11-15
Customer loyalty 5 Section B, Item 16-20

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3.7 Pilot Test

A questionnaire should be pilot with a reasonable sample of respondents who

represents the target population or who closely resemble the target population.

A pilot study, or piloting, is defined as “The checking of the procedures to be used

in a study to see that there are no problems. “It is important in psychology as it allows the
researcher to see if there are any flaws in the experiment plans. However, is it more
advantageous to use a pilot study or is it just a waste of time and energy?

Sometimes participants that will not be part of the actual experiment are used in
order to minimize order effects. The absence of order effects in the participants of the
actual study will help to increase the reliability and validity of the results. If the same
participants are used then this could decrease the reliability and validity, unless the
experimenter has changed the layout of the study in response to the pilot study.

Participants can give feedback about the experiment and raise issues about
confusion or uncertainty or just ask questions about the study. With this feedback the
researcher can assess their experiment and make the necessary changes.

To detect weakness in design and instrumentation. To provide proxy data for

selection of profitability sample.

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 Total of 100 respondents were used for the pilot test.
Questionnaire was distributed among the consumers around Taman Mount Austin
in order to determine the reliability of the instrument that used to measure the variable of
this research before performing data collection to achieve the objective for this research.

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 CHAPTER 4

DATA ANALYSES

4.0 Introduction

The result of the data analysis. Analysis of data is a process of inspecting, cleaning,
transforming, and modeling data with the goal of discovering useful information,
suggesting conclusions, and supporting decision-making. Data analysis has multiple
facets and approaches, encompassing diverse techniques under a variety of names, in
different business, science, and social science domains. Aim is report the finding that we
get from the data analysis. In the research, data were analyzed using several methods such
as description statistics of the data collection, T-test of the data collection, Hypothesis
testing and chapter summary.

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4.1 Description statistics of the data collection

Table 4.1.1: Age of respondents

Age Frequency Percent

below 18 5 5
19-29 15 15
30-49 30 30
50 and above 20 20
Total 100 100

The result of respondent’s age is shown in table 4.1.1. The table’s shows that 5%
of the respondent (5 respondents) is at the age below 18 years old, followed 15% (15
respondents) of the respondent are in 19-29 years old. For 30-49 years, there are 30% (30
respondent). Lastly, for 50 and above there are 20 %(20 of respondent).According to his
table the highest respondent are age between 30-49 years old and the lowest are age
between below 18.There are only 5 respondents.

4.1.2: Gender of respondents

Gender Frequency Percent
Male 50 50
Female 50 50
Total 100 100

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Table 4.1.2 is the result for the gender of the respondents. The finding shows that the
same respondent male and female. There are 50 respondent of male (50% of respondent)
and 50 female respondents consist of 50% of respondent.

4.1.3: Marital status of respondents

Marital status Frequency Percent
single 16 16
married 75 75
divorce 5 0
other 0 0
Total 100 100

Table 4.1.3 is the result for the marital status of the respondents. The finding shows that
the single, married, divorce and other respondent. There are 20 respondent of single (20%
of respondent), 75 married of respondents consist of 75% of respondent, 5 divorce
respondents consist of 5% of respondent and no other respondent.

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 4.1.4 Race of respondents
Race Frequency Percent
Malay 20 20
Chinese 75 75
Indian 5 5
Other 0 0
Total 100 100

Table 4.1.4 is the result for the race of the respondents. The finding shows that the Malay,
Chinese, Indian and other respondent. There are 20 respondent of Malay (20% of
respondent), 75 Chinese of respondents consist of 75% of respondent, 5 Indian
respondents consist of 5% of respondent and no other respondent.

4.1.5 Religion of respondents

Religion Frequency Percent
Muslim 18 18
Buddhism 50 50
Hindu 3 3
Other 29 29
Total 100 100

Table 4.1.5 is the result for the religion of the respondents. The finding shows that the
Muslim, Buddhism, Hindu and other respondent. There are 18 respondent of Muslim (18%

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of respondent), 50 Buddhism of respondents consist of 50% of respondents, 3 Hindu
respondents consist of 3% of respondent and 29 other of respondents consist of 29%.

4.1.6 Education level

Education Level Frequency Percent
High school 49 49
Undergraduate degree 35 35
Masters 5 5
PhD or higher 1 1
Total 100 100

Table 4.1.6 is the result for the education level of the respondents. The finding shows that
the high school, undergraduate degree, masters and PhD or higher respondent. There are
49 respondent of high school (49% of respondent), 35 undergraduate degree of
respondents consist of 35% of respondent, 5 masters respondents consist of 5% of
respondent and 1 PhD or higher respondent consist of 1% of respondent.

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 4.1.7 Occupation
Occupation Frequency Percent
student 13 13
working 47 47
unemployed 40 40
other 0 0
Total 100 100

Table 4.1.7 is the result for the occupation of the respondents. The finding shows that the
student, working, unemployed and other respondent. There are 13 respondent of student
(13% of respondent), 47 working of respondents consist of 47% of respondent, 40
unemployed respondents consist of 40% of respondent and no other respondent.

4.1.8 Monthly income

Monthly Income Frequency Percent
below RM1000 20 20
RM1000-RM2999 40 40
RM3000-RM5999 25 25
Other 15 15
Total 100 100

Table 4.1.8 is the result for the monthly income of the respondents. The finding shows
that the below RM1000, RM1000-RM2999, RM3000-RM5999 and other respondent.

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There are 20 respondent of below RM1000 (20% of respondent), 40 RM1000-RM2999
of respondents consist of 40% of respondent, 25 RM3000-RM5999 respondents consist
of 25% of respondent and 15 other respondent consist of 15% of respondent.

4.1.9 Living area

Living Area Frequency Percent
City 83 83
Villages 10 10
Outskirt 5 5
Other 2 2
Total 100 100

Table 4.1.9 is the result for the living area of the respondents. The finding shows that the
city, villages, outskirt and other respondent. There are 83 respondent of city (83% of
respondent), 10 villages of respondents consist of 10% of respondent, 5 outskirt
respondents consist of 5% of respondent and 2 other respondent consist of 2% of
respondent.

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 4.1.10 Do you buy the SME’S product?
SME'S Product Frequency Percent
yes 100 100
no 0 0
Total 100 100

Table 4.1.10 is the result for the buy the SME’S product of the respondents. The finding
shows that all the respondent have use the SME’S product.

4.2 T-test of the data collection

1. Definition of the t-test is a statistical test that is used to determine if there is a significant
difference between the mean or average scores of two groups.

2. Three types of T-test may be use:

a) One sample
The one-sample t-test is used to determine whether a sample comes from a
population with a specific mean. This population mean is not always known, but is
sometimes hypothesized.
b) Independent groups

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 A t-test helps you compare whether two groups have different average values (for
example, whether men and women have different average heights).
c) Repeated measures
Used to assess changes over time in an outcome measured serially or to test for
differences in 1 or more treatments based on repeated assessments in the same subjects.

2. In this research, independent samples test will be used to test whether gender is
significant towards packaging.

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 t-Test: Two-Sample Assuming Unequal Variances

Variable Variable
1 2
Mean 16.9 17.7
Variance 5.193878 7.030612
Observations 50 50
Hypothesized
Mean Difference 0
df 96
t Stat -1.61793
P(T<=t) one-tail 0.054479
t Critical one-tail 1.660881
P(T<=t) two-tail 0.108959
t Critical two-tail 1.984984
Table 4.2.1 Independent samples test between gender and packaging

The result of t-test is shown in table 4.2.1 above. As shown, the difference in the
mean of 16.9 and 17.7 with standard deviation of 2.279 and 2.65153 for male and female
on the packaging were insignificant. The t value is 0.108959. Because of that we can
concluded that there is no significant different of packaging between male and female
respondents.

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 t-Test: Two-Sample Assuming Unequal Variances

Variable Variable
1 2
Mean 16.9 17.64
Variance 8.663265 9.214694
Observations 50 50
Hypothesized
Mean Difference 0
df 98
t Stat -1.23754
P(T<=t) one-tail 0.109423
t Critical one-tail 1.660551
P(T<=t) two-tail 0.218845
t Critical two-tail 1.984467
Table 4.2.2 Independent samples test between gender and purchase

The result of t-test is shown in table 4.2.2 above. As shown, the difference in the
mean of 16.9 and 17.64 with standard deviation of 2.94334 and 3.03557 for male and
female on the packaging were insignificant. The t value is 0.218845. Because of that we
can concluded that there is no significant different of packaging between male and female
respondents.

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 t-Test: Two-Sample Assuming Unequal Variances

Variable Variable
1 2
Mean 16.04 18.12
Variance 10.93714 8.964898
Observations 50 50
Hypothesized
Mean Difference 0
df 97
t Stat -3.29685
P(T<=t) one-tail 0.000684
t Critical one-tail 1.660715
P(T<=t) two-tail 0.001367
t Critical two-tail 1.984723
Table 4.2.3 Independent samples test between gender and price

The result of t-test is shown in table 4.2.3 above. As shown, the difference in the
mean of 16.04 and 18.12 with standard deviation of 3.30713 and 2.994144 for male and
female on the packaging were insignificant. The t value is 0.001367. Because of that we
can concluded that there is no significant different of packaging between male and female
respondents.

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 t-Test: Two-Sample Assuming Unequal Variances

Variable Variable
1 2
Mean 16.56 17.22
Variance 8.945306 8.42
Observations 50 50
Hypothesized
Mean Difference 0
df 98
t Stat -1.11992
P(T<=t) one-tail 0.132742
t Critical one-tail 1.660551
P(T<=t) two-tail 0.265484
t Critical two-tail 1.984467
Table 4.2.4 Independent samples test between gender and customer loyalty

The result of t-test is shown in table 4.11 above. As shown, the difference in the
mean of 16.56 and 17.22 with standard deviation of 2.88882 and 2.9017 for male and
female on the packaging were insignificant. The t value is 0.265484 and. Because of that
we can concluded that there is no significant different of packaging between male and
female respondents.

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4.3 Hypothesis testing

Analysis of variance (ANOVA) is used to compare the difference between more

than two means at a same time. Before conducting ANOVA, the necessary assumption
must be met. The assumptions for ANOVA are the same as those t-test. The two
assumption of concern are:
A) Population normality-population from which the samples have been drawn should be
normal. Check this for each group using normality statistics such as skewers and Shapiro-
Wilk
B) Homogeneity of variance- the scores in each group should have homogeneous
variances.

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Anova: Single Factor

SUMMARY

Groups Count Sum Average Variance

Column 1 7 125 17.85714 231.8095

Column 2 7 264 37.71429 571.9048

Column 3 7 111 15.85714 238.8095

Column 4 7 75 10.71429 151.2381

Column 5 2 25 12.5 112.5

ANOVA

Source of

Variation SS df MS F P-value F crit

Between

Groups 3064.929 4 766.2321 2.633074 0.058081 2.75871

Within Groups 7275.071 25 291.0029

Total 10340 29

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 Table 4.3.1 one way ANOVA between age, race, religion, education level,
occupation and income with packaging.

The result of ANOVA is shown in Table 4.3.1. The F value is 2.633074. This F
value is not significant at the level 0.058081. This means that there is no significant
different between packaging

In this one Way ANOVA testing we can concluded that there is no significant
relationship between age, race, religion, occupation, income and also living area. This is
because all the significant value is more than 0.05.

4.4 Chapter Summary

The three hypotheses proposed earlier already tested in this chapter. Using a
sample of 100 respondent, data was obtained from customer in area Austin. The
questionnaire was distributed randomly .The primary objective was to determine the
effect of new packaging toward customer loyalty, price and customer purchase decisions.
Two level of statistical analysis were conducted in two different steps. The first level
involved the use of the demographic data. This level of analysis was not intended for
hypothesis testing, but rather to enable us to obtain a glance of the basic characteristics
of the data. Test level two involved two main statistical analysis; analysis of different (t-
test and one way ANOVA) and analysis of relationship and influence (Correlation).

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 We can conclude that, based on the test conducting, there are 2 hypotheses were
rejected and 1 hypotheses were acceptable. There are relationship between purchase
decisions and customer loyalty with packaging. But for price there are no relationship.
From this research shows that only purchase decisions and customer loyalty will affected
if there are a new packaging to the SME’s product.

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 CHAPTER 5

RECOMMENDATION AND CONCLUSION

5.0 Introduction

Processes (such as cleaning, drying, and preserving) and materials (such as glass,
metal, paper or paperboard, plastic) employed to contain, handle, protect, and/or transport
an article.

Whether you’re getting ready to create packaging for a product you’re selling or
you’re considering changing the packaging of an existing product, you may be wondering
if the appearance of a product’s package is important. Many product providers may think
that the product and its performance is more important than what the packaging looks like,

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but the product packaging can play a role in the success or failure of the sales of the
product.

This study explores the effect of the new packaging for the SMEs product. This
research looks the effect in term of customer purchase decision, price and consumer
loyalty. This study was held at area Austin, Johor. A survey of the consumer around
Austin was conducted to determine the significant and the effect of the packaging to the
consumer purchase decision, consumer loyalty and also price. A total 100 questionnaire
were distributed at Austin area. The finding shows that purchase decisions and customer
loyalty are affected by the new packaging. Customer will react on these two variables if
SME's products have a new packaging. But the others variables namely price, is not
affected. Customer is willing to pay more even the prices increases after the new
packaging. Since the result shows that consumer loyalty and purchase decision will
affected after a new packaging, SME's manufacturers must alert about it.

5.1 Respondent profile

This chapter will discuss about the result of the finding in the research. To make
it easy to understand about this discussion, this chapter will be divided into three parts
namely, introduction, recommendations and conclusion.

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 The main objective of this study is to look the effect of Packaging to SME’s
Product. In order to achieve this objective, three specific objections on this study have
been formulated as follows:

(i) To determine whether the new packaging of the SME will affect the consumer
loyalty on that product.
(ii) To examine whether consumer are willing to pay more the SME product after a
new packaging
(iii) To test purchase decisions when the SME product have a new packaging.

5.1.1
In every research, respondent are very important to make sure that the researcher
can get the data from them to completing their research and also to their objectives. In
this research the main objective is to examine the effect of Packaging to SME’s Product.
Respondents of this study consist of 100 respondents from Austin.
Who are the respondents? Researchers are categorized the demographic data
according to the respondents are divided into two. The male consists of 50 people. The
female consists of 50 people. In the research, 5% of the 100 respondent which is 5 people
are from the age of below 18 year old. Because in group is formed by student, so that no
ability to buy.

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5.2 Discussion of Findings

In this research, the figure of the analysis regarding to people from age below 18
years old shows 5% weak purchase ability. The analysis regarding to people from race in
Austin area is more Chinese respondents. The analysis regarding to people from monthly
income range in RM1000-RM2999 is more respondent. The analysis regarding to people
from religion in Austin area is more Chinese respondents, so the Buddhism is more. The
analysis regarding to people from education level is high around here have more school.

5.3 Recommendations

There are several recommendations from this study. The first goes to the
packaging itself. The innovation infrastructure is essential above all for SMEs which, as
they do not possess the necessary resources for development, need different age, race,
religion, education level, occupation and income and other services to support their
operations. In this regard, as shown by the experience of developed countries, the more
developed an infrastructure is, the greater the possibilities created for innovation
development of SMEs.

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 An infrastructure appropriate to specific conditions of economic development
becomes, in the opinion of specialists, the catalyst for the long-term generation of the
innovation growth of SMEs.

5.4 Practical Implication

Overall, from the results of the study the researchers can identify a number of
methods to improve the marketing of SME products in the study area, which is selling at
wholesale to retailers so that the cost of warehousing, transportation and packaging can
be saved by the SME operators. Packaging is the art and technology of enclosing or
protecting products for distribution, storage, and sale. Packaging design is a creative
communication with the form, structure, materials, color, typography and image. The aim
of this research is to research on the issue that relates to the SME product packing. If we
see from the newspapers and websites, many have expressed that one of the main
problems SME products are facing is their packaging and its promotions. This problem
exists due to the lack in knowledge and low capital among SME entrepreneurs.
Unattractive packaging limits the progressing of SME products. This research is to help
SME entrepreneurs in learning more about the factors that drives the promotion of a
packaging and give them a guideline that relates to the product packaging based on
customer’s demands. Besides that, this research helps in identifying factors of effective
layout packaging design in order to increase better market penetration worldwide. In
addition, the aim also to propose better packaging layout design for the SME product so
to meet the local market requirements, and widen product exposure throughout the world.

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5.5 Limitation of Study

Only specify on one area. Receive this project limited time only 4 month to
research. In the event process have some respondent in cooperation.

5.6 Conclusion

Processes (such as cleaning, drying, and preserving) and materials (such as glass,
metal, paper or paperboard, plastic) employed to contain, handle, protect, and/or transport
an article.

Whether you’re getting ready to create packaging for a product you’re selling or
you’re considering changing the packaging of an existing product, you may be wondering
if the appearance of a product’s package is important. Many product providers may think
that the product and its performance is more important than what the packaging looks like,
but the product packaging can play a role in the success or failure of the sales of the
product.

This study explores the effect of the new packaging for the SMEs product. This
research looks the effect in term of customer purchase decision, price and consumer

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loyalty. This study was held at area Austin, Johor. A survey of the consumer around
Austin was conducted to determine the significant and the effect of the packaging to the
consumer purchase decision, consumer loyalty and also price. A total 100 questionnaire
were distributed at Austin area. The finding shows that purchase decisions and customer
loyalty are affected by the new packaging. Customer will react on these two variables if
SME's products have a new packaging. But the others variables namely price, is not
affected. Customer is willing to pay more even the prices increases after the new
packaging. Since the result shows that consumer loyalty and purchase decision will
affected after a new packaging, SME's manufacturers must alert about it.

It is hoped that this study will act as a guide to such studies to be conducted by
other researchers. Other aspects such as marketing methods in different locations or study
the factors that influence the problems faced in the area can be done to increase the
collection and complement the research on this topic.

Packaging is very important element in marketing mix. The objectives and goals
of packaging are many. Mostly good packaging enhance product sale. But if packaging
is not done with planning or care then it can sabotage all the effort. Because mostly
packaging is done for the safety of the product and its transportation purposes. Suppose
if the box or carton in which a perishable product is enclosed it leaks then what will be
the impression of that product on customers. It will defame the product and company or
brand.

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References
1. (Lawson R and Wall S, 1993) (For reference only)
2. http://www.smecorp.gov.my/vn2/node/40

3. http://en.wikipedia.org/wiki/Packaging_and_labeling#The_purposes_of_packagi

ng_and_package_labels

4. http://www.crcpress.com/product/isbn/9781858020990

5. http://www.b2bmarketing.net/blog/posts/2013/06/24/5-steps-understanding-

your-customer%E2%80%99s-buying-process

6. http://sociology.about.com/od/Research/a/Units-Of-Analysis.htm

7. http://poincare.matf.bg.ac.rs/~kristina/topic-dane-likert.pdf

8. Likert, R. (1932). A Technique for the Measurement of Attitudes. Archives of

Psychology, 140, 1–55

9. http://www.smecorp.gov.my/vn2/node/40

10. http://en.wikipedia.org/wiki/Packaging_and_labeling#The_purposes_of_packagi

ng_and_package_labels

11. http://www.crcpress.com/product/isbn/9781858020990

12. http://www.b2bmarketing.net/blog/posts/2013/06/24/5-steps-understanding-

your-customer%E2%80%99s-buying-process

13. http://sociology.about.com/od/Research/a/Units-Of-Analysis.htm

14. http://poincare.matf.bg.ac.rs/~kristina/topic-dane-likert.pdf

15. http://www.alleydog.com/glossary/definition.php?term=T-Test

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16. https://statistics.laerd.com/spss-tutorials/one-sample-t-test-using-spss-

statistics.php

17. http://circ.ahajournals.org/content/117/9/1238.full

18. http://www.businessdictionary.com/definition

19. http://ir.unikl.edu

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COURSEWORK

Knowing successful entrepreneurs at work or in your personal life makes becoming one

yourself seem much more achievable. Indeed, if a close relative is an entrepreneur, you

aremore likely to want to become an entrepreneur yourself, especially if that relative is

your mother or father. At Babson College, more than half of the undergraduates

studying entrepreneurship come from families that own businesses, and half of the Inc.

500 entrepreneurs in 2005 had a parent who was an entrepreneur. But you don’t have to

be from a business-owning family to become an entrepreneur. Bill Gates, for example,

was following the family tradition of becoming a lawyer when he dropped out of

Harvard and founded Microsoft. He was in the fledgling microcomputer industry, which

was being built by entrepreneurs, so he had plenty of role models among his friends and

acquaintances. The United States has an abundance of high-tech entrepreneurs who are

household names. One of them, Ross Perot, is so well known that he was the

presidential candidate preferred by one in five American voters in 1992. Some

universities are hotbeds of entrepreneurship. For example, Massachusetts Institute of

Technology (MIT) has produced numerous entrepreneurs among its faculty and alums.

Companies with an MIT connection transformed the Massachusetts economy from one

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based on decaying shoe and textile industries into one based on high technology. It is

not only in high tech that we see role models. Consider these examples: • It has been

estimated that half of all the convenience stores in New York City are owned by

Koreans. • It was the visibility of successful role models that spread catfish farming in

the Mississippi Delta as a more profitable alternative to cotton. • The Pacific Northwest

has more microbreweries than any other region of the United States. • Hay-on-Wye—a

tiny town in Wales with 1,500 inhabitants—has 39 secondhand bookstores. It claims to

be the ‘‘largest used and antiquarian bookshop in the world.’’ It all began in 1961 when

Richard Booth, an Oxford graduate, opened his first bookstore. African Americans

make up 12% of the U.S. population but owned only 4% of the nation’s businesses in

1997. One of the major reasons for that low number is the lack of entrepreneurial role

models. A similar problem exists among Native Americans. Fortunately, this situation is

rapidly improving. Between the 1992 and 1997 censuses, the number of minority-

owned businesses grew more than four times as fast as U.S. firms overall, increasing

from 2.1million to about 2.8 million firms. According to the 2002 census,

Hispanics/Latinos owned 6.9% of the nation’s businesses, African Americans owned

5.2%, Asian Americans owned 4.8%, and American Indians and Alaskan Natives

owned 0.9%.

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 2. Marketing Is Critical for Entrepreneurs
Marketing is a vital process for entrepreneurs because no venture can become
established and grow without a customer market. The process of acquiring and retaining
customers is at the core of marketing. Entrepreneurs must create the offer (design the
product and set the price), take the offer to the market (through distribution), and, at the
same time, tell the market about the offer (communications). These activities define the
famous Four Ps of marketing: product, price, place (distribution), and promotion
(communication). Entrepreneurs often are faced with designing the entire ‘‘marketing
system’’—from product and price to distribution and communication. Because it is
difficult and expensive to bring new products and services to market—especially
difficult for new companies—they need to be more resourceful in their marketing.
Many entrepreneurs rely on creativity rather than cash to achieve a compelling image in
a noisy marketplace. An important part of gaining the market’s acceptance is building
brand awareness, which, depending on the stage of the venture, may be weak or even
nonexistent. Entrepreneurs must differentiate their company’s product or service so its
distinctiveness and value are clear to the customer. This is the job of marketing.
Marketing also plays a central role in a venture’s early growth stages when changes to
the original business model may be necessary. Companies focused on growth must be
able to switch marketing gears quickly and attract new and different customer segments.

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