THE INFLUENCE OF PRODUCT INVOLVEMENT AND PERCEIVED VALUE ON CUSTOMER BRAND ENGAGEMENT OF THAI AND LAO CONSUMER: A CASE OF MILK PRODUCTS

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1 THE INFLUENCE OF PRODUCT INVOLVEMENT AND PERCEIVED VALUE ON CUSTOMER BRAND ENGAGEMENT OF THAI AND LAO CONSUMER: A CASE OF MILK PRODUCTS 1 WANANYA THONGTHIP, 2 PENSI JAROENWANIT 1 Faculty of Business Administration and Accountancy, Khon Kaen University, 123 Mittraparp Road, A. Muang, Khon Kaen Thailand, 2 Faculty of Business Administration and Accountancy, Khon Kaen University, 123 Mittraparp Road, A. Muang, Khon Kaen Thailand, 1 wananya.t@hotmail.com, 2 Penjar@kku.ac.th Abstract Customer brand engagement is one of the key strategies for building good relationship between consumer and organizations because it helps maintain the existing consumer base as well as extend to new consumer. Therefore, this research aims to study the relationship and influence of product involvement and perceived value in customer brand engagement by collecting data with 400 Thai consumer and the other 400 Lao consumer and analyzing the data with Pearson Correlation and Multiple Regression. Findings reveal that product involvement in the following dimensions: interest, pleasure, sign, risk importance, and risk probability have a positive relationship with brand engagement at the context of milk products among Thai and Lao consumer. Further, perceived values in five dimensions: functional, emotional, social, epistemic, and conditional are positively associated with customer brand engagement among Thai and Lao consumer at the context of milk products. Importantly, product involvement and the overall perceived value have a positive influence on brand engagement of both Thai and Lao consumer at the context of milk products. In fact, the overall perceived value, rather than product involvement, has a more positive effect on brand engagement among Thai and Lao consumer. These results can serve as guidelines in devising marketing strategies for academics and entrepreneurs of milk industry both in Thailand and Laos through the use of product involvement and perceived value in customer brand. Key Word- Product Involvement, Perceived Value, Customer Brand Engagement, Milk Product I. INTRODUCTION Customer brand engagement is a concept, which is currently gaining a wider recognition, as it can measure consumer behavior more accurately than other factors in former research. Building consumer brand engagement is one of the key strategies for creating good relationship between consumer and organizations because it helps maintain the existing consumer base as well as expand new consumer. [1] In addition, consumer brand engagement can forge brand loyalty, reduce consumer-related problems, increase the opportunity for consistent sales, or even reduce costs in doing business. Thus, business organizations have begun paying attention to building brand engagement because it can serve as strategies for sustainable growth of both the organizations and their brands [2]-[4]. Product involvement is one of the factors building customer brand engagement because it focuses on importance, interest, need, arousal or motivation level that individuals feel toward a brand, in combination with internal factors of individuals: beliefs, self-perception, and individual values. This process will lead to intention to seek, digest, and interpret more information, resulting in consumer buying decision [5]. These processes work and make consumer engage with a brand. Moreover, when consumer decide to buy a particular brand, their decision very much depends on consumer perceived value in various dimensions: functional, social, emotional, epistemic, and conditional [6] and then their evaluation: whether these value dimensions are worth the whole cost they have to pay or not. While perceived value positively affects consumer satisfaction, a number of researchers found that it also has a positive influence on customer brand engagement e.g. Kim, Kim and Wachter and Lee, Lee and Kim [7]-[8]. As health trend is currently growing, health-related or health promotion products, namely ready-todrink milk products are booming and thus attracting more interest from consumer accordingly. Three types of milk products: pasteurized, sterilized, and UHT are available in the market these days. It is a highly competitive market in which new entrepreneurs keep joining because both the value and market potential remain high. Moreover, readyto-drink milk products have international market opportunities, especially at the opening of ASEAN Economic Community (AEC) in This is an economic integration aimed at combining all production bases and markets in ASEAN, including allowing free movement of labor, services and funds [9]. In this regard, Laos is one of the attractive countries for investment because it is relatively similar to Thailand in social and cultural structures, including consumer behaviors. For this reason, business organizations should seek new marketing strategies to meet the growing market, and stimulate consumer to repeat their purchase, or make them loyal to their brands. 11

2 II. RELATED THEORIES AND RESEARCH A. Customer Brand Engagement Customer brand engagement refers to the level of cognitive, emotional and behavioral engagement, absorption or obsession of consumer toward a brand or business organization [2][3][10] [11] A number of researchers have proposed a range of methods to measure customer brand engagement, depending on the contexts of their studies [2][3][12][13]. Although the dimensions of measurement may be diverse, it seems that these dimensions are variations of cognitive, emotional and behavioral dimensions, which is consistent with the concepts of Brodie et al. (2011) [2]. These three dimensions are well-recognized and widely adopted, demonstrating their accuracy and reliability. For this reason, the present research has chosen this measurement. B. Product involvement Kapferer and Laurent [14] proposed a measurement for product involvement in the following five dimensions: interest, pleasure, sign, risk Importance, and risk probability. This measurement gained the reliability value over.70, showing high reliability and multi-dimension structured measurement. Cheung, Lee and Jin [15] in their study on customer brand engagement at the context of online community, advocated that involvement in onlinestructured communities had a positive effect on customer brand engagement in online communities. Brodie et al. [2] based on their study on the relationships among different factors and customer brand engagement, identified involvement, participation, and information flow as factors influencing customer brand engagement. In light of the above research, the present study has formed the below hypotheses. H1a: Interest is positively related to involvement with milk products among Thai consumer. H1b: Interest is positively related to involvement with milk products among Lao consumer. H2a: Pleasure is positively related to involvement with milk products among Thai consumer. H2b: Pleasure is positively related to involvement with milk products among Lao consumer. H3a: Sign is positively related to involvement with milk products among Thai consumer. H3b: Sign is positively related to involvement with milk products among Lao consumer. H4a: Risk importance is positively related to involvement with milk products among Thai consumer. H4b: Risk importance is positively related to involvement with milk products among Lao consumer. H5a: Risk probability is positively related to involvement with milk products among Thai consumer. H5b: Interest is positively related to involvement with milk products among Lao consumer. C. Perceived value Perceived value is the overall idea or evaluation of benefits to gain from products or brands in terms of being worth for the money [16] [17][18] Sheth et al. [6] proposed five dimensions to measure perceived value: functional, emotional, social, epistemic, and conditional. Floyd, Harrington, and Santiago [19] in their study on perceived value in academic courses and students collaboration or engagement, suggested that perceived value in academic courses greatly impacted student s cooperation or engagement. Kim et al. [7] drawing on their research about intended engagement among smart phone users, found that positive perceived value of smart phone users affected their intended engagement. Hollebeek [13] argued that the level of perceived value is a factor influencing customer brand engagement. In light of the above research, the present study has formed the below hypotheses. H6a: Functional value is positively related to brand H6b: Functional value is positively related to brand H7a: Social value is positively related to brand H7b: Social value is positively related to brand H8a: Emotional value is positively related to brand H8b: Emotional value is positively related to brand H9a: Epistemic value is positively related to brand H9b: Epistemic value is positively related to brand H10a: Conditional value is positively related to brand H10b: Conditional value is positively related to brand Drawing on the above ten hypotheses, the current research has formulated one more hypothesis in order to test the overall relationship among product involvement, perceived value, and brand engagement in milk products among consumer. H11a: Product involvement and perceived value have a positive influence on brand engagement among Thai consumer. H11b: Product involvement and perceived valued have a positive influence on brand engagement among Lao consumer. 12

3 Table 1 : Descriptive Statistics and Reliabilities Figure 1: Conceptual Framework III. RESEARCH METHOD A. Research Sample The research sample was 400 Thai consumer been drinking One Mor Milk who live in Maha Sarakham and Khon Kaen Province. Most of them were women 61.5% with the average age of 26 or more than. Occupation of employee 25.6%.They have average revenue 10,000-15,000 baht per month 41.8% with the Laos consumer been drinking One Mor Milk who live in Vientiane. Most of them were women 90.8% with the average age of 26 or more than. Occupation of merchant 28.2%. They have average revenue 10,000-15,000 baht per month 50.07% B. Measurement Tools One Mor milk brand was selected for the research case. It is a well-known milk in area where the study was conducted. Both Laos and Thailand collected data by measurement tools consisted of fore parts: Part 1 contained questions about personal data of research participants; Part 2 asked 18 questions of Product Involvement were adopted from Kapferer & Laurent [14] and Ogbeide & Bruwer [20]; Part 3 asked 25 questions of Perceived Value were adopted from Sheth, Newman & Gross [6] and Burcu & Seda [21]; Part 4 asked 22 questions of Customer Brand Engagement were adopted from Hollebeek, Glynn and Brodie [22], Malciute and Chrysochou [23] and Altschwager, Conduit, Chameeva and Goodman [24] All of part 2-4 employed 5-point Likert Scale (5 = Strongly Agree; and 1 = strongly disagree). This research using Pearson Correlation and Multiple Regression Analysis in analyzing. IV. RESULTS A. Thailand The reliability of the research tool was tested; results of which are shown in Table 1 The value of Cronbach s Alpha ranged between.77 and.93, which was over.70, suggesting that the measuring tool of this research was reliable (Nunnally, 1959). [25] * p <.05 Table 2: Correlation Result As seen in Table 2, Accept hypothesis 1a, 2a, 3a, 4a, 5a, 6a, 7a, 8a, 9a and 10a. Product Involvement in five dimensions: Interest (r=.23, p<.05), Pleasure (r=.25, p<.05), Sign (r=.47, p<.05), Risk Importance (r=.50, p<.05) and Risk probability (r=.52, p<.05) among Thai consumer. Perceived values in five dimensions: Functional Value (r=.51, p<.05), Emotional Value (r=.81, p<.05), Social Value (r=.80, p<.05), Epistemic Value (r=.36, p<.05) and Conditional Value (r=.51, p<.05) among Thai consumer. 13

4 *P<.05 Table 3: Multiple Regression Results As seen in Table 3, Accept hypothesis 11a. They are Perceived Value (β =.83, t=20.98, P<.05) and Product Involvement (β =.32, t=7.49, P<.05) positively influence brand engagement with milk products among Thai consumer. B. Lao Table 4: Descriptive Statistics and Reliabilities As seen in Table 5, Accept hypothesis 1b, 2b, 3b, 4b, 5b, 6b, 7b, 8b, 9b and 10b. Product Involvement in five dimensions: Interest (r=.51, p<.05), Pleasure (r=.32, p<.05), Sign (r=.47, p<.05), Risk Importance (r=.40, p<.05) and Risk probability (r=.50, p<.05) among Laos consumer. Perceived values in five dimensions: Functional Value (r=.50, p<.05), Emotional Value (r=.84, p<.05), Social Value (r=.98, p<.05), Epistemic Value (r=.51, p<.05) and Conditional Value (r=.76, p<.05) among Laos consumer. Table 6: Multiple Regression Results *P<.05 As seen in Table 6, Accept hypothesis 11b. They are Perceived Value (β =.1.76, t=44.54, P<.05) and Product Involvement (β =.83, t=22.21, P<.05) positively influence brand engagement with milk products among Laos consumer. V. SUMMARY, DISCUSSION, RESEARCH APPLICATIONS, LIMITATIONS AND RECOMMENDATIONS The reliability of the research tool was tested; results of which are shown in Table 4 The value of Cronbach s Alpha ranged between.81 and.99, which was over.70, suggesting that the measuring tool of this research was reliable (Nunnally, 1959). [25] *p <.05 Table 5: Correlation Result A. Summary Results reveal that product involvement in terms of interest, pleasure, sign, risk importance, and risk probability are positively related to engagement with milk products among Thai and Lao consumer. Perception of value in functional, emotional, social, epistemic, and conditional dimensions are positively associated with brand engagement of Thai and Lao consumer at the context of milk products. Product involvement and perceived value positively influence brand engagement with milk products among Thai and Lao consumer. In fact, perceived value, rather than product involvement, is more positively influential for brand engagement among Thai and Lao consumer. B. Discussion and Research Implications These research results reveal that product involvement, and perceived value have a positive influence on customer brand engagement among Thai and Lao people; thereby providing useful information in devising marketing strategies for milk products by creating more feelings of involvement and perceived value among target consumer. Having considered 14

5 consumer in Thailand and Lao, this research suggests as follows: In Thailand, if marketers want to make consumer more engage with brand of milk products. Both product involvement and perceived value should be drawn on, but the emphasis should be on perceived value over product involvement. This is because perceived value had the value of β =.83, higher than that of product involvement (β =.32). For perceived value, it is better to focus on emotional (r=.81), and social (r=.80), respectively as both dimensions were of high correlation, which means high connection toward the same direction. The more consumer perceived value in these two dimensions, the deeper engagement they have with the product brand. While the other three dimensions: functional (r=.51), conditional (r=.51), and epistemic (r=.36), were not highly correlated, they were positively related toward the same direction as that of brand engagement among Thai consumer of milk products. So these three dimensions are still worth considering for marketing strategies as well. In Lao People s Democratic Republic, in order to create brand engagement among consumer of milk products, marketers should pay more attention to both product involvement and perceived value, but the priority should be perceived value over product involvement. As demonstrated by the present results, perceived value had β =1.17 value, higher than that of product involvement (β =.83). For perceived value, marketers should emphasize on three dimensions: social (r=.98), emotional (r=.84), and conditional (r=.76), respectively. These dimensions were of high correlation, meaning high connection toward the same direction. The more consumer perceive values in these three dimensions, the deeper engagement they have with the product brand. Although the other two dimensions: functional (r=.50), and epistemic (r=.51) had moderate correlation each, they were positively associated toward the same direction as engagement with the brand of milk products. So these dimensions cannot be disregarded. Marketing strategies can be devised to make consumer involve with products and perceive values as follows: Brand engagement can be built by the use of different types of media such as radio, television, and printed matter in order to attract consumer interest in milk products. This can bring about a certain extent of product involvement. Another method is to create a buying occasion e.g. gift baskets containing milk products for special occasions will build product involvement, as opposed to buying them as regular products. [5] Perceived value may be made by offering potential benefits for consumer and providing convenience to purchase milk products. This will make consumer feel that buying these products are risk- or worryfree in terms of price, and treating customers as someone important. [26] C. Limitations and Recommendations As the present study has focused on milk products of One Mor brand, which produces pasteurized milk solely and thus is known in the research area only and not so well-recognized nationwide. This made it difficult for the researchers in collecting data because we had to ask the respondents each time if they know this brand before conducting the questionnaire. D. Recommendations for future research Future research may examine other milk brands wellknown nationwide or other types of milk products such as UHT, sterilized, or fresh milk to see how similar or different their results are as compared to those of the current research. 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