LAPORAN PSM BARU II COO

i

DOES COUNTRY OF ORIGIN MATTER TO PURCHASE INTENTION
OF LOCAL AND INTERNATIONAL COSMETIC AMONG WOMEN
CUSTOME

ROBITAH BINTI ABU

UNIVERSITI TEKNOLOGI MALAYSIA

ii

SESSION : SEM 1 2015/2016

No 2 Lorong Mewah 15,
Bandar Tun Razak Cheras,
50672 Kuala Lumpur
07 December 2015

07 December 2015

iii

“It is hereby I already read this study and for my opinion this study is enough
based on the scope and the quality for the purpose Degree of Bachelor of
Marketing Management”
Signature: …………………………
Supervisor: Ahmad Sharifuddin bin Shamsuddin
Date: 07 December 2015

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DOES COUNTRY OF ORIGIN MATTER TO PURCHASE INTENTION
OF LOCAL AND INTERNATIONAL COSMETIC AMONG WOMEN
CUSTOME

ROBITAH BINTI ABU
SX105392HFD04

A thesis submitted in fulfillment of the requirement for the award of the
Degree for Bachelor of Management (Marketing)

Faculty Management and Human Resource Development
Universiti Teknologi Malaysia

December 2015

v

“I declare that this entitled ‘Does country of origin matter to purchase intention
of local and international cosmetic among women customer’ is the result of my
own research except as cited in the references. The thesis has not been accepted of
any degree and it not currently submitted in candidature of any other degree “

Signature: …………………….
Name : ROBITAH BINTI ABU
Date : 19 MAY 2015

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For my lovely husband, my father and my son and of courses my family for their

support and advice throughout complete my thesis

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ACKNOWLEDGMENTS

Praise to Allah the Almighty, for his blessing and guidance for giving me the
inspiration to embark on this thesis and instilling me the strength to finish my
‘Projek sarjana Muda Akhir’ SHD3812 . I would like to express my gratitude to
who have helped me in one way or another in the planning, brainstorming, and
writing and contributed to the completion of this project.
Firstly, big thanks are addressed to my thesis advisors Encik. Ahmad Sharifuddin
for his comments, guidance and advaice in the preparation of this project. His
knowledge and help has really been useful while making this thesis such his kind
encouragements, generosity, and patience in providing valuable comments and
recommendations on every earlier draft. Without him, this research would not
have been successfully carried out.
I’m also grateful to my family and friends for their patience and cooperation
during the entire report making process. The deep appreciations are also
addressed towards all the people who had read and gave the information and

advice that have made this project possible. Finally I like to extend my
appreciation to UTM Space for providing me with the facilities vital to the
completion of this assignment.

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ABSTRACT

Kajian ke atas kosmetik telah mendapat perhatian yang lebih terbukan bukan sahaja
daripada pengguna, pengeluar dan peruncit, tetapi juga daripada pihak berkuasa yang
mengawal industri ini. Punca dan akibat daripada penggunaan produk mendapat
perhatian tetapi pemahaman perkembangannya hampir tidak diterokai. Tetapi masih, dari
tahun ke tahun, jualan kosmetik telah menunjukkan pertumbuhan yang berterusan.
Peserta industri pada masa kini telah mempelbagaikan pendekatan pemasaran mereka
bukan sahaja untuk pasaran tradisional- wanita, tetapi kini juga untuk pasaran lelaki juga.
Kajian ini menyiasat pengaruh COO dengan faktor pembolehubah mereka: imej negara,
patriotik dan pengetahuan produk kepada keputusan pembelian dikalangan kakitangan
Telekom Kakitangan Malaysia dalam penggunaan kosmetik tempatan dan antarabangsa.
Tinjauan terhadap 241 responden dengan menggunakan soal selidik secara telah
dijalankan di kalangan anggota TM di Menara TM Jalan Pantai Bahru, Kuala Lumpur,

kajian itu juga untuk mendedahkan kesan COO terhadap niat pembelian dikalangan
kakitangan TM berkenaan penggunaan kosmetik tempatan dan antarabangsa

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ABSTRACT

Studies on cosmetic have received more attention not only from users, producers,
retailers, but also from the authorities that are governing the industry. The
consequences of the product usage received considerable attention but
understanding of its development is hardly explored. But still, from year to year,
the sales of cosmetics have demonstrated the continued growth. The industry
players nowadays have diversified their marketing approaches not only to the
traditional female market, but also to male market as well. This study to investigate
the influence of the COO with their variable factor: the image of the country,
patriotic and product knowledge on the Telekom Malaysia Staff purchase decision
in local and international cosmetic adoption. A survey of 241 respondents using
personally administered questionnaires, was conducted among the TM staff at
Menara TM Jalan Pantai Bahru, Kuala Lumpur, The study further to uncovering
the COO effect on the TM staff purchase intention of local and international

cosmetic adoption

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TABLE OF CONTENTS
PAGE
Declaration of Supervisor

iii

Title of thesis

iv

Declaration of Researcher

v

Dedication

vi

Acknowledgments

vii

Abstract

viii

Table of Contents

x

List of Table

xii

List of figures

xiv

List of Syimbol

xv

1.0 INTRODUCTION

1

1.1

Background Of The Study

1.2

Statement Of The Problem

3

1.3

Purpose Of The Study

3

1.4

Objective Of The Study

4

1.5

Research Questions

4

1.6

Significance Of The Study

5

1.7

Scope Of The Study

6

2.0 LITERATURE REVIEW

7

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3.0

4.0

2.1

Overview Country Of Origin Effect

2.2

Coo Effect On Purchase Intention Of Local And International
Cosmetic Adoption
9

2.3

Country Of Origin On The Evaluation Of Products

10

2.4

The Role Of Com And Cob On Coo Effect

15

RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research Framework
3.3 Respondents Instruments
3.4 Research Respondent Of Study
3.5 Research Procedure
3.6 Data Analysis

RESULT OF THE STUDY
4.1
4.2
4.3
4.4

5.0

Introduction
Analysis Descriptive of purchase intention on local and
international cosmetic
Factor That Influence COO Effect
Frequency, Percentage, Mean and Standard Deviation
Toward Local & International Cosmetic.

7

17
17
17
18
20
22
23

24

25
29
35

DISCUSSION AND CONCLUSIONS
5.1
5.2
5.3
5.5

Introduction
Study Finding
Future Research Recommendation
Conclusion

37
41
41
41

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REFERENCE

44

LIST OF TABLE
TABLE

TITLE

PAGE

Table 3.3.1

Number of Respondents Population and sample

4

Table 3.5.1

Rating scale category

4

Table 4.2.1

Frequency Distribution and Percentage of

15

Respondents on International cosmetic
Table 4.2.2

Frequency Distribution and Percentage of

15

Respondents on Local cosmetic

Table 4.2.3

Frequency Distribution and Percentage of

15

Respondents on International cosmetic adoption
if local cosmetic have same price
Table 4.2.4

Frequency Distribution and Percentage of
Respondents on International cosmetic adoption
if local cosmetic have better quality

16

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Table 4.3.1(i )

Observation of COO influenced by Country Image

Table 4.3. 1(ii)

Observation of COO influenced by product knowledge 16

Table 4.3. 1(iii)

16

Observation of COO influenced by patriotism

15

LIST OF TABLE
TABLE

Table 4.3.1 (iv)

TITLE

CHI - SQUARE TEST on factor that

PAGE

35

influencing COO effect

Table 4.3

Frequency, Percentage, Mean and Standard
Deviation Distribution of Analysis According

53
Customer Purchase Intention Towards Local &
International Cosmetic
Table 4.4.1

Frequency, Percentage, Mean and Standard Deviation
Towards the importance of COM and COB
in the selection Of cosmetics among TM staff

35

xiv

LIST OF FIGURE
FIGURE

TITLE

PAGE

Figure 2.2

Research Model

53

Figure 2:3

Trusting Beliefs and COO Effect

53

Figure 3.2

Flowchart of the Research Framework

53

Figure 3.3

likert scale

53

xv

LIST OF SYMBOL

SYIMBOL

TM

Telekom Malaysia Berhad

COO

Country Of Origin

COM

Country Of Manufacture

COB

Country Of Brand

SPSS V20

Statistical Package For Social Sciences Version 20

Sd.

Standard deviation

xvi

1

CHAPTER 1

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Refer to Erickson, G. M., Johansson, J. K., & Chao, P. (1984). Image variables
in multi attribute product evaluations; before 1914, a product's origin was not a
major issue. After losing in World War I, German exports have been obliged to
take the English word “Made in Germany”. Country-of-origin mark was imposed
as a punishment for German industry and a way to help consumers across Europe
and North America to avoid the product from the

Former enemy. According to Lee, J. K., & Lee, W. N. (2009). Country-oforigin effects on consumer product evaluation and purchase intention: “COO" is
an abbreviation for the country of origin, which refers to the country manufacture,
design or assembles a product that is associated with or closely related. People

2

usually have positive feelings towards some countries for customized products
such as shoes Italian, Japanese electronic appliances and German cars.
In these days buying trends have changed. Customers are more
sensitive to the selection of products and know what they like to buy. Therefore,
they do not buy without thinking and evaluate before making a decision. In
choosing between foreign and domestic products, a lot of aspects to be considered
before deciding to buy, there are several factors that influence consumers' buying
intentions. Although there are many parameters to consider when they want to
buy a product like brand, color and design, the consumers does not ignore
extrinsic factors such as country of origin.

Malaysian spends about U.S. $ 500 million each year on
cosmetics. This is an increasing trend and reflects the growing trend among
consumers in Malaysia for beauty products. Consumer sophistication, along with
greater awareness of international and local products combined with the demand
for higher-end customer-oriented, generating demand for specific lifestyle and
concept stores. According to MIDA the Malaysian Industrial Development
Authority, beauty and health market in Malaysia is growing rapidly. The cosmetic
industry recorded retail sales of $857 million in 2006, while sales volume is hit
$1.1 billion by 2010. Local cosmetics industry is still a relatively small industry in
Malaysia. However, in 2012 domestic players Unza shows excellent performance
by marketing a range of products under the brand Dashing, Aiken, Safi and Elite
which received good feedback from local brand loyal consumers. But
international products still have a competitive advantage over domestic products,
with strong brand reputation established internationally and locally. For example,
Procter & Gamble international company distributes a variety of personal care
products under brands such as SK- II, Gillette, Pantene, Oral-B, Olay and Rejoice.
These brands are marketed coherently in Malaysia. With population about 63.6%
aged between 15 and 64 years old, it is clear that Malaysians had no exceptions to
this issue and this is called as the country of origin has an important role to buy

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the product itself. Various elements have a relationship with the country of origin,
such as the image of the country, patriotic and product knowledge.
1.2 STATEMENT OF THE PROBLEM
According to the sources, MIDA the Malaysian Industrial Development
Authority,

Malaysian consumers prefer to use imported cosmetic products

compared to domestic brands. Thus the total sales local cosmetics are still
relatively low compared to imported cosmetic. It is believed that imported
products will remain in high demand, especially among middle-and high-income
consumers because the standard of living in Malaysia has increased. Among
issues that needed to be addressed concerned on the relationship between the
purchase intention and product evaluation of COO that effect cosmetic usage, The
whole process in cosmetic consumption also involved in knowing the degree or
level of the consumer awareness towards the effects of extrinsic factors. Another
important consideration is the role COM and COB is very much associated with
the COO.

1.3

PURPOSE OF STUDY

The purpose of this study is to investigate the influence of the COO with their
variable factor: the image of the country, patriotic and product knowledge on the
TM Staff, at Menara TM Jalan Pantai Bahru purchase decision in local and
international cosmetic adoption. This study also to examine the buying behavior
patterns to compare the effect of COO image that influence the product evaluation
on the buying behavior between local and international cosmetic buyers. Besides,
I also wanted to know the reasons for them to adopted local and international
cosmetic product.

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1.3 OBJECTIVES OF THE STUDY
This study intends to achieve the following outcomes:

i.

To uncovering the significance of COO effect on product evaluation
for selection of cosmetics product among TM staff.

ii.

To identifying multiple variables that explain COO effect on the TM
staff purchase intention of local and international cosmetic adoption

iii.

1.5

To reveal the relationship between the COB, COM and COO.

RESEARCH QUESTION

i.

Does COO effect significance on product evaluation for selection of
cosmetics product among TM staff?

ii.

What are the variables that explain COO effect on the TM staff purchase
intention of local and international cosmetic adoption?

iii.

What are the relationship between the COB, COM and COO?

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1.6

SIGNIFICANT OF THE STUDY

According to the topic of study, we could know what are the variables that
explain the COO effect on TM staff purchase intention of local and international
cosmetic adoption. The significant here is we could know that Country of origin
is actually are the influence of customer purchase intention with various extrinsic
parameters that have an effect on this issue,

The study also identifies the COO effect on product evaluation for
selection of cosmetics among women customer. Consumer rely more on COO
information when they are less involved in product category because COO image
acts as a silent proxy to base a buying decision rather than being merely another
piece of information. Using this integrity belief they conclude that whether the
cosmetic carrying a good or bad quality of products. The relationship between the

COB, COM and COO are one of the important matter in choosing the product,
because many consumers today do not understand and totally clueless about this
issue.

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1.7

SCOPE OF STUDY

This research will be carried out upon approximately over 330 respondents in
Telekom Malaysia Berhad at Menara TM, Jalan Pantai Bahru. My investigation
focused on the population ranges from age 20 and above. Since the study is about
COO effect on the TM staff purchase intention of

local and international

cosmetic adoption., so I decided to have groups of female as my respondents to
give their opinion on local and international cosmetic product and will included
from various background for more accurate data.

The method that I will be using to conduct this research by
distribute questionnaire to the female respondents. They need to answer several
questions that related to COO effect on TM staff purchase intention of local and
international cosmetic adoption to fulfill the objectives and purposes of this study.
I have set my time frame for about a month for distributing and
collecting the questionnaire. From the gathered data, I could proceed to make the
report conclusion on the findings research.

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CHAPTER 2

LITERATURE REVIEW

2.1

OVERVIEW COUNTRY OF ORIGIN EFFECT

Each country has its own image for technological excellence, product quality, and
product design and product value for different product categories. But consumers
give the same image in the country for various product categories. This stereotype
is because of the attitude of certain countries; familiarity with the country
(Nagashima, 1970 and Wang and Lamb, 1980), Background of the consumer,
such as their demographic characteristics and the characteristics of their culture.
Mass media can also form the country's reputation as a producer.

8

The same phenomenon also occurs among cosmetic users in
Malaysia. The increasing standard of living among Malaysians women has also
increased the level demand of the consumers especially in the urban areas; today
they are demand about quality and safe cosmetic products. Malaysian consumers
prefer to use imported skincare products compare to local brands as they associate
them with higher quality than local brands. As the total volume produced by the
local industry is still relatively low, imported products will continue to remain in
high demand especially from the middle and high income earners.
A product attracts its image from a variety of sources of design,

performance, brand and country of origin. COO is importance and can be
understood when the product is introduced in a foreign country for the first time,
or as a reference or as a unique selling preposition. COO effect is caused by the
halo build, the country's image is converted to a product or because summary of
the build. Positive image of the country may vary from product image with which
the average user, and then this image may also facilitate the development of other
domestic exports (Han Min, 1989)

COO can affects the basis of making conclusions without considering the
quality of the product and other attribute information when the purchase decision
does not involve a lot of effort. COO can activate concepts and knowledge that
affect the interpretation of other available product attribute information. COO also
acts as its products and for the assessment of the product in the case of products
that require the search and higher throughput. COO effect can also be seen as a
negative when the manufacturer is trying to hide it for fear of the creation of
negative consolidation. Thus the names of countries responsible for integration
add or subtract from the perceived value of the product.
National image may influence people decisions related to
buying, investing, and changing residence and travel. For example, although

9

AVON has a global operation today, it is still seen as an American brand, by
consumers all over the world. So if country of branding can be taken as a logical
extension to country of origin then country of branding would produce the same
associations as those produced by COO. Brands incite beliefs, evoke emotions
and prompt behaviors. Brands have social and emotional value. They enhance the
perceived utility and desirability of a product.

2.2

COO EFFECT ON PURCHASE INTENTION OF LOCAL AND
INTERNATIONAL COSMETIC ADOPTION.

Purchase Intention was analyzed using three dimensions of country perspective
toward purchasing cosmetic products. Considering conceptual definition for the
importance of intention, three components of country image, product knowledge
and patriotism were included. The factors influencing the purchase Intentions
correlation is present as below:

PURCHASE

COO

INTENTION

Independent Variable
Dependent Variable

Figure 2.2 Research Model
* Source :Javadian Dehkordi, Graduate school of Management (GSM)
Multimedia University-Malaysia

2.2.1

Purchase intention

10

Purchase intention means deciding on action or actions that show a person's
manners in terms of a specific product. Studies have shown that the purchase
intention of customers for the product is determined by the attitudes and beliefs.
Based on research done by Wang, C.L., D. Li, et al., 2012. Country image,
product image and consumer purchase intention: Evidence from an emerging
economy, purchase intent is “when we think about things and then we will buy."
It’s also defined as emotional or perceived possibility of buying products
promoted; furthermore, purchase intentions indicate the rank of loyalty to the
product.

2.2.2

Country Image

Nagashima said in his journal a comparison of Japanese and US attitudes toward
foreign products (1970) defined the country's image as the “stereotypical, image
and position the buyers have in their minds about a country that special. There are
many diverse works on this issue, which led to misinterpretations of investigators.
Additionally, many countries are concerned about their image of product
characteristics. The country's image is important as a brand image is explained as
largely descriptive data and beliefs Nagashima also described the images as
“people’s ideas about the products of a specific country". Competition has
become tighter and, for being different from other competitors, country image is
one the most significant factors which created a distinction between goods and
services.

Correlations Country Image and Purchase Intention
Marketers experts assume that the image of the country have an influence on
decision making and assessment products. They have shown effect of country of
origin can control customer judgments about the quality of manufactured goods.
In addition, scholars have represented that 'customer characteristics and product
information on the manufacturing resources has an impact on purchase intentions.

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There is a relationship between cognitive country image and purchase intention
and also assume that the image of the country has indirectly persuaded on
purchase intentions. When people are familiar with the product, they have a
tendency to use country of origin as to the date of purchase intention. In this study
we will find out there is a significant relationship between country image and
purchase intention of cosmetic products image.

2.2.3

Product Knowledge

The knowledge of products described as memories in the minds of people and
other scholars have added product knowledge related to the user's knowledge,
awareness and self-assurance. Academic expert Ozer, M., 2011. Explained
supposed that the knowledge of the client's product is one of the most outstanding
approach that has an impact on all parts of the decision-making process. The
different levels of product knowledge differ in their understanding and there is a
better product knowledge called self- perceived knowledge has a direct positive
relationship with purchase intention
Correlations Product Knowledge and Purchase Intention
Previous studies have shown that the COO is a complex issue and several
moderator variables that have an impact on product knowledge are one of the
variables that will have an important role in the extrinsic cues. When academic’s
studying the effects of the country of origin for purchasing behavior, country of
origin is defined as the halo, which is not common and people use it as an
indicator for the evaluation of the product. This shows that, when people have
little data and information about the products they use country of origin as an
indirect proof.

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Furthermore, country of origin is not a completely independent
factor for products, For instance , Thailand is a least developed country, when
people hear about a cosmetic product, unconsciously, a low quality product
comes on their minds , but the handmade crafts of Thailand is very famous for its
high quality and value . To put all things into consideration, the user's knowledge
about the country of origin of the product can have a significant influence on their
perception of the brand product ‘, which can be positive or negative. In this study
we will unravel significant relationship between product knowledge and purchase
intention of cosmetic products image

2.2.4

Patriotism

Other independent variables have to think through in perspective coo is patriotic.
Adorno, TW, E. Frenkel-Brunswik 1950 in his report 'authoritarian personality',
discusses the healthy patriotic and ethnocentric when one loves his country and
has a hunch about it, it's called ethnocentric patriotism report, but healthy people
do not have prejudices. That has improved the patriotic consists of encouraging
feelings of other people in the country identified. Patriotism is not associated with
negative feelings. It is some exhilarating sense that people have about their own
country and it is not to deny other countries. According to other researchers
homeland and it is the ability to look across the border and are concerned to
understand the benefits of a relationship with a personal reflection as well as all
the emotional feelings towards one's country.
Correlations Patriotism and Purchase Intention
In investigating the consumers' ethnocentrism and animosity is increasingly
growing in the literature of consumers' behavior, scholars believe that it hurts
economy, reduces employment and it is an unpatriotic action. Instead, customers
are not ethnocentric tend to buy foreign and imported products. There are studies
in Asian countries such as China, Indonesia and Malaysia. The study about

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Malaysia showed that married Malays women have a higher tendency to be
ethnocentric than men. The study also showed that Malaysians have a high
tendency for local food but in contrast to the domestic cosmetics, cars and
computers. Othman, MN, S. Ong, 2008. Demographic and Lifestyle Profile and
Non-ethnocentric ethnocentric Malaysia City Guide. One of the most well-known
instruments to measure consumer ethnocentrism is CETSCALE. Its has been
tested by many researchers and have confirmed the validity and reliability in
many countries such as Indonesia, Greece, Korea, Spain and Malaysia.

2.3

COUNTRY OF ORIGIN ON THE EVALUATION OF PRODUCTS

Ability Belief
Benevolence Belief

Product Evaluation
COO
O
Purchase Intention

Figure 2:3 Trusting Beliefs and COO Effect
* Source: Sertan Kabadayi, Ph.D. Assistant Prof. Marketing Graduate School of Business
Administration Fordham University

2.3.1

Trusting Beliefs

14

Trust can be defined as the willingness to rely on a exchange partner in which one
has confidence, based on Moorman , Zaltman , and Deshpande , 1992 in his book
‘The perception of the reliability of the seller’. Most now agree that trust is a
multidimensional construct with two inter-related component- trusting beliefs

,

and trusting behavior -willingness (to depend) . Trusting beliefs are the trustor’s
perception that the trustee has the features that will benefit the trustor ( Mayer et
al , 1995 ; McKnight and Chervany , 2001 ) . In other words, they collectively
reflect the perception of the reliability of trust objects. Although many believe
trust has been studied in the literature, the majority can be clustered into three
trust concept: the ability, benevolence, and integrity
2.3.2

Benevolence beliefs

Refers to the confidence that the products have a positive orientation towards
customers outside the egocentric profit motive and would not consider his own
well-being and acting in their interests ( Mayer et al ., 1995). They show the
extent to which individuals believe that a company wants to do good things not
only maximize profits. A benevolent company would still not be seen acting
opportunities by taking advantage to customers ( McKnight and Chervany ,
2001). In contrast to the other two beliefs, benevolence reflects the perception of
the willingness to engage in discretionary or philanthropic commitment to the
customer.

2.3.3

Integrity beliefs

Reflects customer confidence that the products marketed adhere to moral
principles or professional standards that guide interactions with customers. They
include the expectation that the product acts as a socially accepted standards of
honesty or a set of principles that customers receive as not lying, keeping
promises, or provide valid information (Mayer et al., 1995).

15

2.3.4

Ability beliefs

Reflects consumers' confidence in the firm or product ( Mayer et al . , 1995).
They showed confidence about the firm's ability to perform the functions that
have been specified. users have the ability beliefs about the product if they believe
that product manufacturers have the skills, competencies and attributes that enable
products which have an influence on some specific domain

(Mayer et al ,

1995 ) . Therefore, trust is domain - specific capabilities that are considered as
highly competent in some area, affording that individual trust store on the tasks
associated with the area.
2.3.5

COO Effect, Product Evaluation and Trusting Beliefs

The three trusting beliefs are related, yet distinct. Each belief captures some
unique elements that can be trusted. Therefore, as a set, ability, benevolence, and
integrity appear to explain most of the trust while maintaining parsimony. Both
single - and multi- indicators - signals showed that the COO effects influence the
assessment of individual products (see reviews of Bilkey and Nes 1982; Peterson
and Jolibert 1995). However, there are differing views about how COO affects
product evaluation.
One view is that COO is an indication that consumers use to make
inferences about the product and its products, in turn, have an impact on overall
product evaluation. COO perception activate the concept of the nation and the
general quality of the products produced there , and these concepts can be positive
or negative public on the interpretation of other products that are applying
information (Hong and Wyer 1989) . Therefore, COO affects overall product
evaluation indirectly. Another view argues that the COO can act as an important
attribute that evoke prejudice or stereotypes associated with producing countries,
directly influences product evaluation. COO there by triggering a global
assessment of quality, performance and specific properties. While the majority of
studies have documented the direct relationship COO on product evaluation, for

16

the purpose of completeness we hypothesized a positive relationship between the
COO and product evaluation.

2.4

THE ROLE OF COM AND COB ON COO EFFECT

Country of manufacture (COM) and country of brand (COB) play
important role in consumer product evaluations of quality and
decision making.

But, academic and COO researchers are in

disagreement regarding the supremacy of one over other. Han
and Terpstra and Tse and Gorn, (1993) reported larger efect of
COM on product evaluations than COB. Whereas, Hui and Zhou
and Srinivasan et al. (2004) found that COB makes greater
influence on product evaluations than COM when both the
information presented simultaneously. As the importance of both
the cues is evidenced in literature, the factors influencing
importance of COB and COM image can add new insight to COO
literature.
COB and COM, as a relevant COO decomposition,
play important role in forming customer perception. The results
of two models’ testing generate signifcant implications for
international marketers. Reliability of a product is assessed
through COB not COM. In other words, higher COB image
indicate reliability to customers and higher COB image with lower
COM image not harming the reliability perception of customers
for

refrigerators.

Similarly,

COB

image

is

important

for

understanding product durability and COM image is not playing
such role as durability is not a signifcant explanatory variable in

17

COM model. That means possible durability discounting for lower
COM image is not a signifcant factor to the customers.

In technological superior, mainly manufactured goods such as
electrical and electronic products, when customers evaluate the benefits of
technology they consider COB images and not COM image. So, the combination
of high image COB and low image COM can not harm the perception of
customers about the advantages of technology. For Customers that consider to
both COB and COM image for forming up their price perception of a product as
the price level appears as a very important explanatory variable for both the
models of this study. It is important to be noted for international marketers that by
using higher COB image and lower COM image charging high prices may not be
possible. Moreover, customers may ask for COM information when knowing
about the price and then make their own evaluation regarding price acceptability.

CHAPTER 3

RESEARCH METHODOLOGY

3.1

INTRODUCTION

18

This section discusses the methodology of the research. The main purpose of the
research is to investigate did women customer consider that influence of COO
effect when purchase the cosmetic products. In previous chapters, has been
known that the location of the study area, namely Menara Telekom Malaysia
Jalan Pantai Bahru. Therefore, in order to fulfill the purpose of the study, random
sampling was chosen to carry out the questionnaire, some interview and
observation of the staff in the area. The methodology of this study is important to
ensure that this study can walk on smooth and thus able to obtain perfect results.

3.2

Research Framework
Before start the study analysis, the research planning should be planned

and drafted to ensure the analysis process become smooth. Therefore, the research
framework has been drafted as a guideline for the data analysis and to ensure that
the researcher is able to answer the objectives and research questions for this
study

Figure 3.2: Flowchart of the Research Framework

19

3.3

RESEARCH INSTRUMENTS

This research utilized the quantitative research methodology. The
instrument used to collect the data was questionnaire, interview and observation.
A set of the questionnaire containing 14 questions divided into 3 sections A, B
and C was developed. Different types of question such as ranking, yes-no, and
scales were used in the questionnaire.

20

3.3.1 Primary Data

In the questionnaire, there are three parts that have been made. The sections are as
follows: • Part A: View on Use of local and foreign cosmetics
• Part B: View multiple variables that explain COO effect
• Part C: view of the importance of COO in the selection of cosmetics

In Part A
A view of Cosmetics: The main purpose is to examine public awareness among
staff about cosmetics. Information on the selection of cosmetics is known. In
addition, the percentage of local and international cosmetic use of the study area
is also available

In part B
Identifying multiple variables that explain COO effect on the TM staff purchase
intention of local and international cosmetic adoption. Information on public

awareness on product selection is important to ensure a successful of this study.
Staff opinion about cosmetic product evaluations also needed to be able to assess
the views of the study area for this issue.

21

In Part C
The view of the importance of COO in the selection of cosmetics: in view the
importance of COO effect in the selection of cosmetics. The main purpose is to
examine public awareness among employees about the COO, COM and COB.
Information on the selection of cosmetics does take into account the effect of
COO.

To obtain the cooperation of respondents, each part will be arranged according to
the requirements of the study. This will be facilitating the work of marking the
answers by respondent. In part B and C likert scale used in this study using the
following scheme:

1

2

3

4

5

Strongly Disagree ---------------------------------------------------------► Strongly Agree

Figure 3.3 likert scale
*Source: Norazman et al. (2006).

3.3

RESPONDENTS OF THE STUDY

22

The respondents of the study were customer from different course
of work in Telekom Malaysia Berhad at Menara TM, Jalan Pantai Baharu. Total
number of TM female staff from leasing to executive is 2414. It has been decided
to have about 70 % of the population as a respondent based on the manual
Krejcie Morgan (1970). About 241 female respondents in various level cost of life
and background at Menara TM, due to the topic research of COO effect on local
and international cosmetic product for more accurate data. Table 3.3.2 shows the
number of staff at different Level in year 2015 until 30 JUN 2015.

23

Table 3.3.1 Determining Sample Size for Research Activities-Krejcie, R.V., &
Morgan, D.W. (1970).

24

Level

Executive

Job Title

Senior Assistant Manager

Gender Population
Male
1656

Samnple

Female
1675

Assistant Manager

241(F)

Supervisor (SP)

Officer, Technical Officer

419

249

Multi Skill (MS)

Sergeant Majer
Assistant Officer, Sergeant

1261

793

360

259

41

14

52

24

3789

2414

Assistant Technical Officer
Semi Multi Skill

Senior Clerk, Senior Technician

(SMS)

Clerk, Technician, Corporal,

SK (Semi Skill)

Constable
General Assistant
(Driver ,Tea Lady, Cleaner)

Leasing
Leasing

241 (F)

Table 3.3.2 Number of Respondents Population and sample
*source: HCSSO Personnel Data Services Telekom Malaysia Berhad

3.4

RESEARCH PROCEDURE
Survey conducted in the study area, namely Menara TM Jalan

Pantai Bahru, Kuala Lumpur. Approximately 6803 employees work in Menara
Telekom TM. It is one of the largest Telekom offices in Malaysia. During the
actual study, the questionnaires distributed at various locations such as at the
office from level 10 to 14, the entrance lobby of Menara TM, cafeteria, bus stops
and also by e-mail. Survey conducted in the evenings on weekdays was selected.

25

This is because the probability staff are in the office is high. Implementation of
this survey was carried out for one month.

3.5

DATA ANALYSIS

A number of variables were taken to consideration to analyze the data. Data have
been analyzed using Microsoft Word, Microsoft excel SPSS 20. In the analysis
for this study, it involved descriptive statistics. Descriptive statistics were used to
formulate and displaying the actual information obtained from the population in
the study area. From there, a frequency analysis is carried out, where the
percentage of responses is calculated and presented in table form. Next
calculating the mean index used for comparison of data.
Assessment questionnaire is essential to assist in reviewing the
level of staff awareness of cosmetic selection due to the COO effect. From the
ratings obtained, it is used for various indexes mean for each question addressed
to the Population, Which in turn will give the rating scale category index min,
standard deviation, frequency, percentage and chi-square test.
No

Objectives

1

Uncovering the significance of COO

 Frequency

effect on

 Percentage

2

3

Analysis

product evaluation for

selection of cosmetics product
Identifying multiple variables that



explain COO effect on purchase

 standard deviation

intention of local and international

 min

cosmetic adoption

 Frequency

Revealing the relationship between

 Percentage
 standard deviation

the COB , COM and COO

 min

Chi - square test

 Frequency

26

Percentage
Table 3.5.1

Rating scale category

.

CHAPTER 4

RESULT OF THE STUDY

4.1 Introduction

Section 4 of this chapter presented the results and analysis of the study
based on 206 criteria out of 241 survey form. There are 24non-refundable forms
and the balance of 11 survey forms can not be evaluated because it does not meet
the criteria and will cause an error to the report.

27

Analyzing data and presenting the results of the study are based as
in Chapter 1, where the objectives of the study must be achieved. The objective of
the study was to uncovering the significance of COO effect on product evaluation
for selection of cosmetics product among TM staff.

4.2 Analysis Descriptive of purchase intention on local and international
cosmetic
Table 4.2.1 Frequency Distribution and Percentage of Respondents on
International cosmetic
USING
INTERNATIONAL
BRAND

Frequency

Percent (%)

Yes

87

42.2

No

86

41.7

Natural

33

16

Total

206

100

Table 4.2.1 above showed the frequency distribution and percentage of
respondents on international cosmetic product adoption among TM staff. Based
on the table, they are 206 sample was collected. From this sample, there are 87
respondents using the international cosmetic (42.2%), while 86 respondent gave
the answer ‘no’ to the international cosmetic (41.7%). Only 33 respondents had
natural answer (16%). Roughly percentage between respondent that prefer
international brand and those who not is almost the same.

28

4.2.2 Local cosmetic
Table 4.2.2 Frequency Distribution and Percentage of Respondents on Local
cosmetic
USING LOCAL
BRAND

Frequency

Percent(%)

Yes

72

35.0

No

64

31.1

Natural

70

34

Total

206

100

Table 4.2.2 above showed the frequency distribution and percentage of
respondents on local cosmetic product adoption among TM staff. Based on the
table, they are 206 sample was collected. From this sample, there are 72
respondents using the local cosmetic (35.0%), while 64 respondents gave the
answer ‘no’ to the local cosmetic (31.1%). There are 70 respondent had ‘natural’
answer (34%). From the Table 4.2.1 and Table 4.2.2, we can see that more
respondent prefer international brand (87 respondents) rather than local brand (72
respondents). It showed that nowadays the acceptance of international brand
widely used by women.

29

4.2.3 If Local cosmetic and International cosmetic have same price
Table 4.2.3 Frequency Distribution and Percentage of Respondents on
International cosmetic
IF PRICE SAME
STILL PREFER
INTERNATIONAL

Frequency

Percent (%)

Yes

88

42.7

No

54

26.2

Natural

64

31.1

Total

206

100

Table 4.2.3 above showed the frequency distribution and percentage of
respondents that still prefer international cosmetic if the price similar to local
product. Based on the table, they are 206 sample was collected. From this sample,
there are 88 respondent agreed using the international cosmetic (42.7%). It has
highest majority of respondent. For a meanwhile 64 respondents will use both
products if they have same price (31.1%). In general we can assume that this 54
respondent prefer using local brand if the price is similar (26.2%)

30

4.2.4 If quality product better still coo matters
Table 4.2.4 Frequency Distribution and Percentage of Respondents on
International cosmetic adoption if local cosmetic have better quality
IF QUALITY
PRODUCT BETTER
STILL COO
MATTERS

Frequency

Percent (%)

Yes

100

48.5

No

42

20.4

Natural

64

31.1

Total

206

100

Table 4.2.4 above showed the frequency distribution and percentage of
respondents that still prefer international product if the local product have a better
quality. Based on the table, they are 206 sample was collected. From this sample,
there are 100 respondent still prefer using the international cosmetic (48.5%). For
a meanwhile 42 respondent rather choose to use local product if they have better
quality (20.4%). 64 respondent will consider both option either international or
local brand (31.1%).

31

4.3 Factor That Influence COO Effect
4.3.1(i ) Table Observation of COO influenced by Country Image
Does COO influenced by Country Image
Observed N

Expected N

no at all important

13

41.2

less important

18

41.2

important

65

41.2

very important

75

41.2

extremely important

35

41.2

Total

206

4.3. 1(ii) Table Observation of COO influenced by product knowledge
Does COO influenced by product knowledge
Observed N

Expected N

no at all important

5

41.2

less important

17

41.2

important

58

41.2

very important

89

41.2

32

extremely important

37

Total

206

41.2

4.3. 1(iii) Table Observation of COO influenced by patriotism
Does COO influenced by Patriotism
Observed N

Expected N

no at all important

16

41.2

less important

34

41.2

important

76

41.2

very important

46

41.2

extremely important

34

41.2

Total

206

4.3.1 (iv) Table CHI - SQUARE TEST on factor that influencing COO effect

Test Statistics
Does COO
Does COO influenced Does COO
influenced by by Product
influenced by
Country image Knowledge
Patriotism
Chi-Square
df
Asymp.
Sig.

74.777a

108.757a

47.883a

4

4

4

.000

.000

.000

33

a. 0 cells (0.0%) have expected frequencies less than 5. The minimum
expected cell frequency is 41.2.
n= 206

From the observation table 4.3.1(i)(ii)(iii) we can see the factor that influencing
COO effect are country image, product knowledge and patriotism. From this three
factors we can see that product knowledge is a factor most favored by respondent
with total score of extremely important, very important and important are 184
compare to country image and patriotism each get score 175 and 156.
H0 : country image, product knowledge and patriotism are independent
(no association)
H1 : country image, product knowledge and patriotism are dependent
In communication, it is convention that if this sig.value is less than .05,
then the statistic is considered to be significant in communication; it is convention
that if this value is less than .05, then the statistic is considered to be significant.
From table 4.3.1 (iv) Table Chi-square country image had score 74.7, product
knowledge 108.7 and patriotism 47.88, Refer to the table significant value is 0.00
more than 0.05. So accept H0 there is not a significant relationship between
country image, product knowledge and patriotism. This three factor are
independent to COO.

34

4.3.2 Frequency, Percentage, Mean and Standard Deviation Towards Local &
International Cosmetic.
Table 4.3.2 Frequency, Percentage, Mean and Standard Deviation Distribution of
Analysis According To Customer Purchase Intention Towards Local & International
Cosmetic.
Analysis
According To
Customer
Purchase
Intention
Towards
Local &
International
Cosmetic

Strongly
Disagree

Less
Disagree

Agree

Very
Agree

Strongly
Agree

Mean

Standard
Deviatio
n

Prefer
international
brands due to
COO

18

66

76

32

14

2.80

1.030

8.7%

32.0%

36.9%

15.5%

6.8%

Prefer
international
brands due to
customer
preference

8

37

51

78

32

3.43

1.074

3.9%

18.0%

24.8%

37.9%

15.5%

Prefer
international
brands due to
price

18

54

66

27

41

3.09

1.240

8.7%

26.2%

32.0%

13.1%

19.9%

Prefer

5

24

38

62

77

3.88

1.111

35

international
brands due to
quality
product
Prefer
international
brands due to
social status

2.4%

11.7%

18.4%

30.1%

37.4%

31

62

75

26

12

15.0%

30.1%

36.4%

12.6%

5.8%

2.64

1.067

n=206

Table 4.3.2 shows the frequency, percentage, mean and standard deviation
distribution of analysis in description to Customer Purchase Intention Towards
Local & International Cosmetic among TM staff. This table is to analyzing the
factors that are often taken into account by the user when selecting cosmetics
product.
For the highest average statement is statement in question Q11, ‘Prefer
international brands due to quality product ' with an average mean of 3.88 with a
standard deviation of 1.111 From 206 respondents, out of 38 respondents (18.4%)
of them choose neutral, 62 respondents (31.1%) agreed and another 77
respondents (37.4%) are strongly agree.
For the lowest mean average statement is at statement question Q12,
which is about ‘Prefer international brands due to social status ', reached the mean
average of only 2.64 with a standard deviation 1.067. From 206 respondents,
5.8% of the 12 respondents strongly agreed, 26 respondents (12.6%) agreed, 75
respondents (36.4%) neutral, 62 respondents (30.1%) disagrees and 31
respondents (15%) strongly disagree.
For statement Number Q8, which is a statement about ' Prefer
international brands due to COO was second lowest average mean with score of
2.80 with a standard deviation of 1.030, where is 14 respondents (6.8%) choose
strongly agreed, 33 respondents (15.5% ) selected agreed, 76 respondents (36.9%)
chose neutral and 66 respondents (32%) chose disagree.

36

For statement Number Q9, that the statement about ' Prefer international
brands due to customer preference ', roughly scored 3.43 of mean average with
standard deviation of 1.074 Out of 32 respondents (15.5%) voted strongly agreed,
78 respondents (37.9 %) selected agreed, 51 respondents (24.8%) choose neutral,
37 respondents (18%) choose disagree.

For statement Number Q10, which statement ‘Prefer international brands
due to price’, scored mean average of 3.09 with an average standard deviation
1.240, where 41 respondents (14.9%) have chosen strongly agreed, 27
respondents (13.1 %) picked agreed, 66 respondents (32%) chose neutral and 54
respondents (26.2%) chose the disagree.
This is an interval scale data. For the highest average

Q11, ‘Prefer

international brands due to quality product ' had an average mean of 3.88 with a
standard deviation of 1.111. This means that the response for the item distributed
around the mean in the range of 1.111, which means that data is distributed
among scores of 2.77 to 4.99 (‘3=natural ‘ to ‘5= strongly agreed’). For Q8, this is
a statement about ‘Prefer international brands due to COO average mean with
score of 2.80 with a standard deviation of 1.030 .Data is distributed among scores
of 1.77 to 3.83(‘2=disagreed ‘ to ‘4= agreed’)

37

4.4 Frequency, Percentage, Mean and Standard Deviation Towards the

importance of COM and COB
4.4.1 Table Frequency, Percentage, Mean and Standard Deviation towards the
importance of COM and COB in the selection of cosmetics among TM staff.

COUNTRY OF
MANUFACTU
RE
IMPORTANT
THAN COB
COUNTRY OF
BRAND
IMPORTANT
THAN COM

Strongly
Disagree

Disagree

Agree

Agree

Strongly
Agree

4

16

81

66

39

1.9%

7.8%

39.3%

32%

18.9%

14

23

90

52

17

11.7%

11.2%

43.7%

25.2%

8.3%

Mean

Std.
Deviation

3.58

0.948

3.07

1.077

Table 4.4 shows the frequency, percentage, mean and standard deviation
distribution of analysis in description to view of the importance of COM and
COB in the selection of cosmetics among TM staff.

38

For the average statement is ‘country of manufacture important than
COB’ with an average mean of 3.58 with a standard deviation of 0.948 From 206
respondents, out of 81 respondents (39.3%) of them choose neutral, 66
respondents (32%) agreed and another 39 respondents (18.9%) are strongly agree.
For the statement ‘country of brand important than COM’ reached the
mean average of only 3.07 with a standard deviation 1.077. From 206
respondents, 8