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Marketing Channels for Fresh Vegetables and Fruits in Malaysia
A.D. Rozhana, Z. Mohd Hafizuddin and A.H. Noorlidawati
Economic and Technology Management Research Centre MARDI
MARDI Headquarters, Persiaran MARDI-UPM
43400 Serdang, Selangor
Malaysia
Keywords: fresh vegetables, fresh fruits, consumer preferences, consumer loyalty
Abstract
Rapid economic growth and urbanization have transformed the retail food
sector in developing countries, including Malaysia. The number of modern retail
stores is increasing with a higher growth rate. A survey involving 770 respondents
was carried out in Peninsular Malaysia to investigate consumer perceptions and
preferences towards marketing channels for fresh vegetables and fruits in Malaysia.
This study revealed that the wholesale market was the most preferred marketing
channel for fresh agriculture produce, followed by hypermarket/supermarket, the
night market and the agro-market. In general, Malaysian consumers were not loyal
to a specific outlet. The main factors that influenced the consumer to patronize a
specific outlet to buy fresh agricultural produces were “cleanliness of a store”,
“parking space” and “safety during shopping”. On the other hand, consumers were
particular with “the convenience to visit the outlet”, “store operation time” and
“good services offered by the store workers”. Consumers from rural areas were
more influenced by “distance of outlet” as compared to urban consumers who were
more indifferent. Besides store ambience, price and information of the product were
also important to consumers when deciding on patronage of an outlet.
INTRODUCTION
Rapid economic growth and urbanization have transformed the retail food sector
in developing countries, including Malaysia (PECC, 2005). The retail food sector has
moved from a conventional to a modern market that offers a more systematic, efficient
and under one roof store. Generally, the retail food sector can be divided into two
categories (Johnson et al., 2006): modern retail store or store-based, such as convenient
store, supermarket and hypermarket, and non-store-based retailer or traditional markets
that include agro-markets and night markets. Store based retailer is located in a particular
location, and the sale is performed under a specific building (Bond et al., 2009). The store
based retailer provides better environment such as family entertainment and food stall that
attracts consumers to patronize the store. Consumers visit store based retailers not only
for shopping, but also for leisure.
On the other hand, traditional markets such as agro-markets and night markets are
also increasingly popular in Malaysia. Agro-market and night market are convenient
marketplaces that normally offer cheaper products, located near to consumers’ home and
operated in certain time (Johnson et al., 2006). As direct marketing channels, agro-market
operation allows growers to sell their products directly to consumers. The absence of
middle men and cheap rental in the traditional market allows the producers and traders to
sell their products cheaper than the store based retailers. The perception that these
traditional markets offer cheaper products leads the consumers to patronize them.
The transformation of the retail sector has resulted in a fierce competition between
the store based retailers and the traditional market. The number of store based retailers is
increasing every year and start to spread from urban to semi-urban and rural areas. The
number of supermarkets and hypermarkets is expected to increase further in the near
future due to increase in population in certain vicinity. The increase of the store based
a rozhan@mardi.gov.my
Proc. 7th International Postharvest Symposium
Eds.: H. Abdullah and M.N. Latifah
Acta Hort. 1012, ISHS 2013
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retailers, especially hypermarkets and supermarkets will affect the profit margin of the
small and medium enterprises in the vicinity. On the other hand, the competition offers a
better choice for consumers when they decide to purchase agriculture produce, including
fresh vegetables and fruits.
When choosing outlet for purchasing fresh vegetables and fruits, consumers not
only look at the intrinsic factors such as store ambiance that include product
arrangements, price of products, friendly customer services, and the environment
surrounding the store (Minot and Roy, 2007). The consumers are also concerned about
the extrinsic factors such as store location, the distance from home, convenience to visit,
and the availability of public transportation. There is a connection between consumers
demand and the store’s intrinsic and extrinsic attribute that leads to consumers’ loyalty
towards a specific outlet. This study aims to identify marketing channels for fresh
vegetables and fruits in Malaysia. It also aims to investigate consumer perceptions,
preferences on store characteristics that influence them to patronize certain marketing
channels for fresh agricultural produce, especially fruits and vegetables.
MATERIALS AND METHODS
A survey of consumers was conducted from July through September 2010 in
Peninsular Malaysia. The survey aims to gather information from consumers on their
store preferences when they decide to purchase fresh vegetables and fruits. They were
also asked to identify store characteristics that influence them to patronize and be loyal to
those stores. The survey involved 770 respondents who participated voluntarily. They
were approached randomly at post offices and offered to participate in the study. Every
respondent was given a self-guided questionnaire, and they answered the questions freely.
In the case of old respondents who are not able to understand the questions, they were
assisted by an enumerator. The number of usable surveys was 769 (99.5%) because every
completed questionnaire was verified before it is collected from the respondent.
The survey instrument is dived into four sections: demographic profile of the
respondent, preference towards marketing channels and its characteristics, preference
towards product’s attributes and factors that lead to consumer satisfaction. Respondents
answered the questions using five-point scales (1=never, 2=once in three months, 3=once
in a month, 4=once in two weeks and 5=at least once in a week) for questions related to
their visit to certain marketing channels. Nine marketing channels are identified:
hypermarket, supermarket, grocery store, wet market, wholesale market, agro-market,
night market, road side stalls and fruit stalls. Respondents answered questions related to
product attribute preference using five-point scales (1=not important at all, 2=not
important, 3=don’t bother, 4=important and 5=very important). Under the section of
customer satisfaction, respondents answered questions using five-point scales (1=very
dissatisfied, 2=dissatisfied, 3=neither satisfied nor dissatisfied, 4=satisfied and 5=very
satisfied). Data were analyzed using SPSS Version 15, and the analysis includes
descriptive, correlation between variables and factor analysis. Descriptive analysis aims
to produce the current situation on Malaysian consumer preference towards specific
marketing channels when they decide to purchase fresh vegetables and fruits. These
include store characteristics and environment surrounding the store that can influence the
consumers to visit the store. Specifically, factor analysis was carried out to identify
internal and external factors that influence consumers when they decide to patronize a
marketing channel.
RESULTS AND DISCUSSION
Preferred Marketing Channels
The grocery store is the most popular marketing channels for consumers when
they decide to purchase their grocery requirements, followed by the night markets, the
hypermarket/supermarkets and the agro-market. In average, consumers visit a grocery
store and night market one time in two weeks; visit hypermarket/supermarket and agro-
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market once in a month. The grocery store is their source of food products (Fig. 1).
Figure 1 shows that more than 66% of the respondents patronized grocery stores,
followed by night markets (49.8%) and supermarkets (44.4%). Generally, grocery stores
that include 24 hours convenience stores are established in all vicinity. They are located
near to consumers’ home that allows them to visit the outlet conveniently and at their
convenient time. One of the reasons for consumers to patronize a grocery store is
convenient to visit because it is located near to their home. In average, the distance of a
grocery store to a consumer’s home is around half a kilometer. Many grocery stores are
open very early in the morning and close at late night. The supermarkets, on the other
hand, are located around 2.5-4.5 km away from the consumer’s home, especially the
stores in the sub-urban and rural areas.
Preferred Store for Fresh Agriculture Produce
Generally, every consumer purchased their fresh agriculture produce at all
marketing channels. They are not loyal to a specific marketing channel. However, the
wholesale market is the most preferred outlet, followed by the agro-markets, the night
markets and the hypermarket/supermarkets (Fig. 2).
Figure 2 shows that 28% of the respondents preferred wholesale markets as their
source of agriculture produce, in which it includes chickens, meats, fish, vegetables and
fruits, followed by agro-markets (18%), night markets (16%) and hypermarkets (13%)
and supermarkets (12%). These finding shows that in general, consumers were preferred
to go to store based store as compared to the traditional one when they decided to
purchase fresh agriculture produce. This study also found that consumers purchased fresh
vegetables and fruits from all marketing channels.
Factors that Influence Customers to Patronize Marketing Channels
The transformation of retail sector has offered a lot of store choices for consumers
to purchase their fresh agriculture produce. Consumers patronize store-based retailers
such as hypermarkets and supermarkets that offer comfortable place, and other facilities
such as food stalls, car park and accessible to public transportation. On the other hand,
consumers patronize traditional markets that offer cheaper products, and near to their
home. This study examines factors that persuade consumers when they visit certain
marketing channels. These include the services offered by store workers, the cleanliness
of the store or marketplace, the operation time and convenience to visit the store or
marketplace. The other factors are the available space in the car park; the availability of
food stalls or restaurants nearby or within the premise, product arrangement and their
safety during shopping in the store or marketplace.
These factors can be divided into two categories: intrinsic and extrinsic. The
analysis revealed the important factors that influenced consumers to patronize a
marketing channel are: the cleanliness of the store, available space for parking their car,
the safety of marketplace and product arrangements. On the other hand, the external
factors are the distance of a store to consumers’ home and the availability of public
transport, especially for those from sub-urban and rural areas (Table 1).
In general, the intrinsic factors are more important than that the extrinsic. The
intrinsic factors refer to things related to a store directly, such as the cleanliness, the
product arrangement, operation times and services offered by the workers. The extrinsic
factors on the other hand, refer to things that influence a consumer to visit a store. The
factors include the distance of a store from home, the availability and frequency of public
transportation and attraction of a store such as the availability of food court, cinema and
playing ground for children. The study revealed that the hypermarkets are cleaner, offer
more parking space; the products are arranged orderly and consumers feel safe when they
are in the premise. These factors attract more consumers to visit the hypermarkets
(Table 2).
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Store Ambience and Customer’s Satisfaction
In examining consumers’ perception towards store ambience and their level of
satisfaction, this study revealed that service offered by the workers is the most important
store characteristics for a consumer to visit a store. Consumers are also particular about
the operation time of a store. A longer operation time allows the consumers to visit the
store at the time convenient to them. This study revealed that in general consumers were
satisfied with the environment and the services offered by the store. Hypermarkets offer
the best environment for the consumers to visit and revisit the store. Most of the
respondents were satisfied with the environment offered by hypermarkets, followed by
supermarkets, agro-markets and night markets (Table 2).
Store Location
This study shows that given the price of fresh fruit and vegetable is constant,
distance is not an issue for a consumer to visit a specific store of his interest. The
relationship showed that an additional 5 km from home will only reduce around one time
of their visit to a certain marketplace. In other words, the distance of a market place from
home is not important to Malaysian consumers when they decide to purchase fresh
agriculture produce, including vegetables and fruits. This is because the majority of
Malaysian consumers has their own transport or the public service transportation is
considered very efficient (Table 3).
Product Attributes
Besides store ambience, consumers also look at other elements when deciding to
purchase vegetables and fruits. This study found that product information and product
label are very important to consumers and this will help them to make a decision in
selecting the preferred vegetables and fruits, followed by price and brand. These product
attributes are especially important for consumers from medium income groups and who
purchased the products at store-based. This study also shows that product quality and
freshness are less important to consumers (Table 4).
CONCLUSIONS
Economic development and urbanization have transformed retail sectors in
Malaysia. This situation, however, offers a lot of choice for the consumers when they
decide to purchase agriculture produce. Consumers in general preferred to go to store-
based retailers such as hypermarkets and supermarkets to purchase vegetables and fruits.
Nevertheless, traditional markets such as agro market and night market are still important
marketing channels for consumers when they decide to purchase fresh fruits and
vegetables.
Cleanliness of an outlet, parking space and safety during shopping were influential
factors for consumers to patronize a market place. However, consumers perceived that
these factors are still lacking in many of the marketing channels. The marketers should
address these issues as the satisfied consumers will return and become loyal to the
marketing channel.
ACKNOWLEDGEMENT
The authors thank the Director of the Economic and Technology Management
Research Centre, MARDI for his guidance and support.
Literature Cited
Bond, J.K., Thilmony, D. and Bond, C. 2009. What influences consumers choice of fresh
produce purchase location? Journal of Agricultural and Applied Economics 41:61-74.
Johnson, K.K.P., Yoo, J., Rhee, J., Lennon, S. and Damhorst, M.L. 2006. Multi-channel
shopping: channel use among rural consumers. International Journal of Retail &
Distribution Management 34:453-406.
Minot, N. and Roy, D. 2007. Impact of high-value agriculture and modern marketing
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channels on poverty: an analytical framework. Report for International Food and
Policy Research Institute.
PECC (Pacific Economic Corporation Council). 2005. Pacific food system outlook 2005-
2006: a revolution in food retailing.
Tables
Table 1. Factors that influence consumers to patronize a marketing channel.
Factors Internal factors External factors
Cleanliness 0.795
Parking space 0.764
Security 0.740
Product arrangements 0.735
Operation time 0.684
Convenient to visit 0.664
Service 0.662
Distance from home 0.778
Public transport 0.778
People attraction 0.697
Eigen value 4.258 1.612
% of variance 38.709 14.657
% of cumulative variance 38.709 53.366
KMO=0.906
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Table 2. The consumers’ satisfaction level at different marketing channels.
Services Clean Operation time Convenient to visit Parking Food stall Product arrangement Safety Average
Hypermarket 3.95 4.07 4.12 4.18 4.10 3.87 4.12 4.12 4.07
Supermarket 3.75 3.88 4.01 4.09 3.94 3.62 4.08 3.85 3.90
Agro-market 3.97 3.73 3.89 4.07 3.73 3.49 3.91 3.73 3.82
Night market 3.80 3.62 3.84 4.04 3.70 3.60 3.71 3.46 3.72
Grocery store 4.18 3.86 3.76 4.12 3.32 3.27 3.91 3.91 3.79
Whole sale market 4.18 3.47 3.97 4.00 3.70 3.44 3.77 3.59 3.77
Road side stall 3.85 3.80 3.80 4.00 3.60 2.80 3.60 3.80 3.66
Average 3.8 3.71 3.8 4.0 3.6 3.32 3.76 3.65
Table 3. Relationship between distance and willingness to visit a marketplace.
Unstandardized coefficients Sig. T-test
Hypermarket -0.010 0.000 -2.523
Supermarket -0.007 0.000 -1.760
Agro market -0.007 0.000 -1.738
Night market -0.014 0.000 -0.071
Grocery store -0.102 0.000 -1.129
Whole sale market -0.006 0.000 -1.969
Road side stall -0.004 0.000 -0.593
Table 4. Product attributes.
Product attributes preferred N Mean SD
Label and product information 769 4.5 0.69
Price 762 4.1 0.78
Branding 769 3.9 0.92
Packaging 769 3.9 0.93
Quality 762 3.1 0.67
Freshness 765 2.5 0.73
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Figures
Fig. 1. Most popular marketing channels.
Fig. 2. Most preferred store for fresh agriculture produce.
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