









































International Journal of Social and Educational Innovation (IJSEIro) 

Volume 2 / Issue 4/ 2015 

 

 

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Product and price influence on cars purchase intention in 

Malaysia 
 

 

 

Leow CheeSeng 

Dean, Graduate School, IIC University of Technology, Cambodia 

E-mail: drleowcs32@gmail.com 

 

Zahari Husin 

IIC University of Technology, Graduate School, Cambodia 

E-mail: zaharihusin@hotmail.com 

 

Received 13.07.2015; Accepted 13.09. 2015 

 

 

Abstract 

The purpose of this study is to identify the success requirements during the product introduction 

stage in relation to purchase intention amongst the automotive industry in Malaysia. The study will 

focus on the activities during the product development stage by looking at the relevant pre-

introduction variables influencing the success. The study adopted a mixed research method 

involving both the focus group interview (FGI) with non-probability samples comprises of the 

industry specialist and the quantity survey amongst 389 randomly selected samples. The statistical 

analysis on the saturated and triangulated data was also supported with content and non-verbal 

analysis to enhance the validity of the finding. Result showed that six out of seven independent 

variables were significant and influenced the purchase intention at the introduction stage of a 

product in the automotive industry in Malaysia. They were design, specifications, features, 

performance, costs of ownership and affordability. Price competitive was found not relevant. The 

finding confirmed the both product and price were two determinant variables influencing the 

success of the product introduction. 

 

Keywords: Automotive industry, product introduction, purchase intention, success factors 

 

1.Introduction 

Automotive industry has been identified as one of the growth catalyst for Malaysia’s 

industrialization program. Started with merely being an importing sector, the industry has now 

grown into developing and manufacturing local brands with the inception of two national car 

companies, namely Proton in1985 and Perodua in1993 respectively. The industry has also been 

chosen as one of the area to be liberalized under the common market of the ASEAN Free Trade 

Agreement (AFTA), scheduled to take place effective 2017. 

 

Malaysian automotive market was ASEAN third largest in-terms of annual sales in 2013 with Total 

Industry Volume (TIV) of 656,000 units, trailing behind Thailand and Indonesia with TIV of 1.3 

million and 1.2 million units respectively. 

 



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The  two national brands used to command almost a third of the Malaysian automotive market in 

the mid 90s. Proton’s share started to decline from 35.0 percentin 2004 to below 20.0 percent in 

2014. Despite Perodua share continue to remain at above 30.0 percent; this has resulted to the 

national brands control of the market to below 50.0 percent for the first time since the national car 

project started. Though not officially announced as a policy, the automotive industry in Malaysia is 

known as being protected to support the national car project. The protection will soon be relaxed 

once the market is liberalized hence the concerns on the ability of these brands to survive the 

intense competition from global brands as the market will be flooded with newer and affordable 

imported brands (Yeoh, 2010). 

 

The continuing diminishing of national brands market share raised the question of the readiness of 

Malaysian car companies in light of market liberalization and their ability to compete with other 

established global brands in the domestic market. The National Automotive Policy (NAP) 

introduced by Malaysian government in 2014 to promote the country as a regional automotive hub 

has put new pressure to Proton and Perodua due to attractive price positioning amongst the 

imported brands. The failure of Proton’s past models such as the Gen2, Waja, Savvy, Juara and few 

other recent models reflected gaps of uncertainty during the product introduction itself, failure 

during the introduction and inability to grasp changes in the market place. 

 

For the purpose of the study, purchase intention was measured on the interest to purchase the 

product at its introduction stage.Successful product introduction reflects the ability to introduce the 

right product for the right customers at the right time and right price. The scope of the study 

involved activities prior to the introduction itself, namely during the product development stage. 

Specifically, the objectives of the study were: 

1. To validate how the product itself influenced the success of the introduction. 

2. To validate how the price affected the success of the introduction. 

 

 

2. Literature review 

The level of success of any product introduction depended on the various elements, including the 

four principals of Marketing such as product, price, promotion and place. These were the four “P”s 

in marketing surrounded the customers’ decision to purchase (McCarthy& Perreault, 1984). Product 

and price were two variables critical during the development stage.  

Berkowitz, Kerin&Rudelius (1986) defined product as a bundle of satisfactions both tangible and 

intangible that a customers receives in an exchange for money or other considerations. The product 

should be designed according to the trend, not only validated during the development stage but 

more importantly at launch time and years after (Ljungberg&Edwards, 2003). The right product 

intended for specific target customers should meet the requirements sought by the same target group 

(Kuei, Madu& Lin, 2001). Amongst others, product includes elements such as design, 

specifications, performance and features. 

Depending on the target group, the design of any product needed to reflect the taste of the buyers 

(Khalid &Helander, 2004). This includes appearance, trend, esthetic and image of the product. The 

market would normally opt for current trend or something futuristic (Wheeler, 2003). Nonetheless, 

some would still prefer retro or evergreen. Esthetic was how customers look at the product, either it 



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was beautiful, ugly or simply nothing extraordinary (Ulrich, 1995). Esthetic differs according to 

culture, life style, age, income level as well as gender (Person, Schoormans, Snelders&karjalainen, 

2008). The image includes either expensive or cheap looks, feminism or manly looks, sportiness 

and various other subjective perceptions. The success of the product depended on the ability of the 

designer to balance between the extremism and minimalism in the design concept (Clark, 1991). 

 

Specifications included the dimensions, size, standard components and other technical elements of 

the product. It reflects the built up or contents of the product (Day, 1994). The demand pattern for 

specifications shifted regularly due to changes in technology, economic, infrastructure and living 

conditions (Berry, Levinsohn&Pakes, 1998). Performance, on the other hand refers to standard 

deliverable expected of the product manifested in its product promises. It varies depending on the 

specifications built in the product itself (Crow, 1994). Depending on the target group on the target 

group, the performance sought by customers varied based on their own needs (Lincke, Richter & 

Schmidt, 1973). 

 

Features were the augmented parts of the product. They were the unique accessories and functions 

that made the product attractive to the users (Luchs, Brower &Chitturi, 2012). Features were 

something valuable and served some purpose to the user and not purely “added” just for the sake of 

adding (Nowlis& Simonson, 1996). With the advancing technology, there were many gadgets, 

accessories and systems available for the choice of customers (Johnson &Kirchain, 2011). 

Customers would want the best combination of features but would only be willing to pay for what 

necessary and useful for them (Simorson, Carmon &O’curry, 1994). 

 

Berkowitz, Kerin&Rudelius (1986) defined price as the money or other consideration exchanged 

for the purchase of the product. Elements of price included competitive, costs of ownership and 

affordability.  

 

The selling price of any product should be competitive to ensure acceptance, either by reflecting the 

perceived value of the product or at par price with the competitors’ offering the similar product 

(Fujimoto & Sheriff, 1989). Customers would look at the product itself, the brand and the re-sale 

value before committing the purchase (Turnbull, Oliver & Wilkinson, 1992). 

 

Equally important in determining the success of any product is its costs of ownership (Ellram, 

1995). It is more of a long-term in nature compared to the selling price, thus customers would be 

more careful in deciding the purchase if the product being considered rather costly to be maintained 

or kept (Dickerman& Harrison, 2010).  

 

Essentially, customers would sum up the purchase decision accordance to their ability to purchase 

the product (Abeles, 2004). This ability constitutes the affordability of the customer relative to price 

as well as costs of ownership (Ray & Ray, 2011). The right price concept was not so much on the 

manufacturer side but reflecting the acceptance to pay by customers (Johnson, Christensen 

&Kagermann, 2008). Hence, the interest on the product would be wasted assuming price set well 

outside of the affordability boundary of the interested buyers (Omar, 1997). 

 



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In line with the objectives of the study, the following hypothesis were developed in parallel with the 

research questions: 

 

Table 1: List of Research Questions and Hypothesis  

Research Questions Hypothesis 

Null Alternative 

 

RQ1 

Is the design important for survival 

of product during its introduction? 

 

 

RQ2 

Is the specification important for 

survival of product during its 

introduction? 

 

RQ3 

Is the feature important for survival 

of product during its introduction? 

 

 

RQ4 

Is the performance important for 

survival of product during its 

introduction? 

 

RQ5 

Is the price competitive important 

for survival of product during its 

introduction? 

 

 

RQ6 

Is the cost of ownership important 

for survival of product during its 

introduction? 

 

 

RQ7 

Is the affordability important for 

survival of product during its 

introduction? 

 

 

NH1 

There is no relationship between 

design and product survival in-

terms of intention to purchase 

 

NH2 

There is no relationship between 

specification and product survival 

in-terms of intention to purchase 

 

NH3 

There is no relationship between 

feature and product survival in-

terms of intention to purchase 

 

NH4 

There is no relationship between 

performance and product survival 

in-terms of intention to purchase 

 

NH5 

There is no relationship between 

price competitive and product 

survival in-terms of intention to 

purchase 

 

NH6 

There is no relationship between 

cost of ownership and product 

survival in-terms of intention to 

purchase 

 

NH7 

There is no relationship between 

affordability and product survival 

in-terms of intention to purchase 

 

 

 

AH1 

There is relationship between 

design ad product survival in-terms 

of intention to purchase 

 

AH2 

There is relationship between 

specification and product survival 

in-terms of intention to purchase 

 

AH3 

There is relationship between 

feature and product survival in-

terms of intention to purchase 

 

AH4 

There is relationship between 

performance and product survival 

in-terms of intention to purchase 

 

AH5 

There is relationship between price 

competitive and product survival in-

terms of intention to purchase 

 

 

AH6 

There is relationship between cost 

of ownership and product survival 

in-terms of intention to purchase 

 

 

AH7 

There is relationship between 

affordability and product survival 

in-terms of intention to purchase 

 

 

 

 

3. Methodology 

The study was done using a cross-sectional research design involving both the qualitative research 

and quantitative research. During qualitative research, Focus Group Interview (FGI) was conducted 

using the purposive samples comprised of industry players relevant to product marketing, research 

and development, sales and marketing. Data was saturated and triangulated after 35 samples broken 

in 5 FGI sessions. During the FGI, non-verbal actions by the respondents were evaluated together 

with the content analysis to enhance the reliability of the response. 

 

 



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Using only the saturated and triangulated data, the quantitative pilot test was conducted to filter and 

validate the questionnaire for quantitative survey. The pilot test was done using 30 random samples. 

During the quantitative survey, 400 samples were randomly selected with actual 389 samples or 

97.2 percent completed. The probability sampling of current car owners, non-car owners and 

potential car buyers was done in addition to the pre-set criteria such as the sample must earned a 

minimum combined income of RM3,000 a month, age group within 20 to 50 years old and should 

be the decision maker to the purchase. The samples were selected from three main cities in 

Peninsular Malaysia, namely Klang Valley, Johor Baru and Penang. 

 

 

The questionnaire was divided in 2 parts, which the first part was on the sample’s demographic 

such as gender, age group, household size, household monthly income and car per household. The 

second part of the survey contained 8 main sections related to the two independent variables, 

namely the product and price. 42 questions filtered from the pilot test were asked in relation to 

design, specifications, features, performance, price competitive, costs of ownership and 

affordability. In addition, questions on the survival were also included.Likert scale of 1 being totally 

disagreed to 5 being totally agreed was used. 

  

 

4. Analysis and results 

The descriptive analysis of the quantitative survey indicated that out of 389 samples interviewed, 

65.0 percent or 253 samples were males. Total of 45.0 percent or 175 samples were in the age 

bracket of 20 to 30 years old and 39 samples or 10.0 percent were above 50 years old. 128 samples 

or 32.9 percent were either single or living alone, 150 samples or 38.6 percent were married but 

without children and 111 samples or 28.5 percent were with 3 or more in the household. 165 

samples or 42.4 percent earned a combined monthly income between RM3,000 to RM5,000. 147 

samples or 37.8 percent did not owned any car, whilst 110 samples or 28.3 percent already owned 2 

or more cars in their household. 

 

 

The Exploratory Data Analysis (EDA) done using SPSS Version 22 revealed that the data was well 

distributed. During the pilot test, the data with reliability above 0.7 and the alpha’s Crobach validity 

greater than .6 were eliminated. 18 questions from the original 60 tested were dropped. During the 

Multiple Regression Analysis (MRA), 1 out of 8 variables, which was the price competitive was 

found not significant when p > .05 and the alternative hypothesis was rejected.At constant of β 

equal to 24.214 the rest of the variables such as design, specifications, features, performance, costs 

of ownership and affordability were good fit of data with significant at p <.05, thus all the other 

alternative hypothesis were accepted. 

 

 

Table 2: Summary of the Hypothesis Finding 

Hypothesis Contents Statistical 

Analysis 

Results 

AH1 
Alternative Hypothesis: 

There is relationship between product design and 
β = 11.712 

p< .05 

Accepted 



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product survival in-terms of intention to purchase. 

 

AH2 

Alternative Hypothesis: 

There is relationship between product specifications 

and product survival in-terms of intention to purchase. 

 

β = 6.128 

p< .05 
Accepted 

AH3 

Alternative Hypothesis: 

There is relationship between product features and 

product survival in-terms of intention to purchase. 

 

β = 8.412 

p< .05 
Accepted 

AH4 

Alternative Hypothesis: 

There is relationship between product performance and 

product survival in-terms of intention to purchase. 

 

β = 6.174 

p< .05 
Accepted 

AH5 

Alternative Hypothesis: 

There is relationship between price competitive and 

product survival in-terms of intention to purchase. 

 

β = 8.468 

p> .05 
Rejected 

AH6 

Alternative Hypothesis: 

There is relationship between price costs of ownership 

and product survival in-terms of intention to purchase. 

 

β = 8.665 

p< .05 
Accepted 

AH7 

Alternative Hypothesis: 

There is relationship between price affordability and 

product survival in-terms of intention to purchase. 

β = 3.142 

p< .05 
Accepted 

 

 

5. Discussion 

The finding from this study was consistent with the finding from many similar studies published in 

the past. According to Takeuchi &Nonaka (1986), new product development was like a relay 

process, where the activities were passed phase by phased starting from conceptualization to design 

to market verification and the rest. 

Design was one of the factors affecting the success of the product (Mishra, Kim & Lee, 1996). 

Design would influence customers’ preference significantly (Raj, Sasikumar & Sriram, 2013), 

whilst Reid, MacDonald & Du (2013) confirmed that product design gave major impact on 

customers’ judgment. Design defined the trend and trend influenced the purchase as much as the 

price (Mohamed, Shamsul, Rahman, Jalil& Aswan, 2015).  

Specifications were like menu of choices offered by manufacturers to customers (ElMaraghy, 

Schuh, ElMaraghy, Piller, Schonsleben, Tseng &Bernad, 2013).It dictates the contents of the 

product, thus influenced the purchase intention by the customers (Spenner& Freeman, 2012). It was 

important to offer relevant specifications in the product to ensure success (Otto & Wood, 2001). 

Wrong decision on specifications by the manufacturer led to failure of the product (Kuester, 

Homburg & Hess, 2012).  

A product without sufficient features was like a house without sufficient furniture (Park, Milberg & 

Lawson, 1991). Safety features of a product became more crucial with greater awareness of its 

benefits (Crane, 2011). Features reflected the status symbols of the buyers (Menon, 2012). Younger 

buyers would appreciate gadget-linked items, which would greatly influence their decision to 

purchase (Zhan, Porter, Polgar&Vrkljan, 2013). 

 

Product performance would be the subject of interest in purchase decision (LeBlance, 2015). In the 

eyes of customers, performance should always be superior regardless of the price paid (Kapur, 

&Pecht, 2014). They also added that performance was considered as given benefit from the 



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purchase. To be competitive, product should not just came with proven performance but better than 

the others (Safiullin,  Novenkova, &Safiullin, 2015). Product performance would be evaluated and 

compared thoroughly in order to ensure wise and valuable purchase(Poetz, &Schreier, 2012). 

(Guajardo, CohenKim, &Netessine, 2011). Customers paid for performance when they paid for the 

products. Products would be rejected once they realized that the performance was lower than their 

expectation. Similarly, products would be rejected once they realized of false claims in the 

catalogue (Christensen, 2013).  

Price competitive was important to customers though it was deemed as not critically important. 

Customers would put their money as long as they got what they want. (Dodds, Monroe, &Grewal, 

1991).Competitiveness in other aspects such as the design, the features, the specifications and the 

performance would justify the willingness to purchase even if the price of the product was not 

competitive as long as the price was within the budget.(Cantner,  Krüger,  &Söllner, 2012).Less 

emphasis was given on price competitiveness when all other purchase elements were already 

satisfying enough. Customers would compare prices but not independently. They would compare 

what come with the price and what would they get for the price (Staudt, 2014). 

Costs of ownership also included costs of operating and maintaining the product (Dusuki,  & 

Abdullah, 2006). Customers would calculate all these as factors influencing the purchase (Madani, 

2015). Cost for after sales service was one of the main contributors to costs of ownership. For cars, 

regular service and maintenance were necessary to ensure long lasting and smooth performance 

(Huber, Herrmann, & Hoyer, 2015). Cost of financing also part of costs of ownership, included the 

interest rate on the loan amount secured to purchase the product. Such element need to be factored 

in deciding the selling price to ease the burden of the buyers in maintaining the product as such 

could be unfavorable for purchase decision (Aminar Rashid Salleh, 2015). 

The product introduced in the market should meet the price expectation of the target customers. 

Affordability factor could easily become an unfavorable when the product was positioned 

wrongly(Ray & Ray, 2011). Affordability mismatched could happen either when the product was 

overly priced with less features or inferior performance or overly priced with unnecessary features 

and specifications. Affordability occurred when the price and the product effectively satisfied 

customers budget and expectation(Poynder, 2014).The selling price had always been the key 

consideration to purchase (Soon, de Run, & Hong, 2013). Cheapest price not necessarily mean a 

winning product, instead affordable price would be the best. Customers would appreciate product 

with reasonable selling price, relative to the value of features and performance of the product. 

Company should understand their target market and positioned the price within their acceptable 

range (Evanschitzky, Eisend, Calantone, & Jiang, 2012). 

Based on the above, there were abundant of literatures supporting the research finding that the 

variables such as product and price were critical to the success of product introduction. Evidently, 

product elements like design, specifications, features and performance were important in to 

influence the purchase intention. Similarly, the price elements such as cost of ownership and 

affordability were found relevant in many past studies. Previous findings were consistent with the 

alternative assumption that there is relationship between these elements with the success of product 

introduction. Exceptionally, price competitive was found not related and there were also evidences 

from the past studies to support the finding. The following table summarized some of the past 

findings in relation to respective questions asked during the study 

 



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Table 3: Related Discussion of the Research Questions 

 Research Question Alternative  

Hypothesis 

Support  Reject 

RQ1 Is the design 

important for 

survival of product 

during its 

introduction? 

Accepted Urban, Hauser & Urban (1993) 
Takeuchi &Nonaka  (1986)  

Mishra, Kim & Lee (1996) 
Gemser&Leenders(2001) 

Raj, Sasikumar&Sriram  (2013) 

Reid, MacDonald & Du(2013) 
Helander, Khalid, Lim, Peng& 

Yang(2013) 

Duerringer(2015) 
Grönninger, Hartmann, Krahn, Kriebel, 

Rothhart&Rumpe (2014) 

Bayley, Curtis, Lupton& Wright (2004) 
Noseworthy, Wang & Islam(2012).  

Dewey (2011) 

Engel(2014) 
Mohamed, Shamsul, Rahman, Jalil& 

Aswan (2015) 
Syed ZainalAbidin (2015) 

 

Aminar Rashid (2015) 

RQ2 Is the specification 

important for 

survival of product 

during its 

introduction? 

Accepted ElMaraghy, Schuh, ElMaraghy, 
Piller,Schönsleben, Tseng & Bernard 
(2013) 

Spenner,  & Freeman (2012).  

Cooper (1999) 
Lemmens, Croux&Stremersch (2012) 

Otto  & Wood (2000) 

Kuester, Homburg & Hess(2012) 
Aminar Rashid  (2015) 

 

Ottum& Moore (1997) 

Madani (2015) 

RQ3 Is the feature 

important for 

survival of product 

during its 

introduction? 

Accepted Crane (2001) 
Park, Milberg& Lawson (1991) 

Zhan, Porter, Polgar&Vrkljan(2013) 

Ray & Ray(2011) 
Chung, Nixon, Yu  &Mylopoulos(2000) 

Menon(2012) 

 

Syed ZainalABidin (2015) 

RQ4 Is the performance 

important for 

survival of product 

during its 

introduction? 

Accepted LeBlanc(2015) 
Kapur, &Pecht(2014) 

Safiullin,  Novenkov,  &Safiullin(2015) 

Hiemstra-van Mastrigt, Kamp, Van 
Veen, Vink& Bosch(2015) 

Poetz&Schreier(2012).  
Guajardo, CohenKim&Netessine (2011) 

Syed ZainalAbidin (2015) 

 

Aminar Rashid (2015) 

RQ5 Is the price 

competitive 

important for 

survival of product 

during its 

introduction? 

Rejected Dodds, Monroe &Grewal(1991) 
Cantner,  Krüger&Söllner(2012) 

Aminar Rashid (2015) 

(Syed ZainalAbidin(2015) 
Lee &Govindan(2014) 

 

Staudt (2004) 

RQ6 Is the cost of 

ownership 

important for 

survival of product 

during its 

introduction? 

Accepted Dusuki& Abdullah(2006) 
Madani(2015) 

Huber, Herrmann & Hoyer(2015) 
Murry& Schneider(2015) 

Aminar Rashid (2015) 

Rashid, Sidin&Daud(2015) 
Simmons, Shaver, Tyner 

&Garimella(2015) 

 

Syed ZainalAbidin (2015) 

RQ7 Is the affordability 

important for 

survival of product 

during its 

introduction? 

Accepted Ray & Ray (2011) 
Poynder(2014) 

Soon, de Run & Hong(2013) 
Lee &Govindan (2014) 

Talib(2000) 

Madani (2015) 
 

Syed ZainalAbidin (2015) 

 

 



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6. Limitation 

Unavoidably, there were some limitations during the study. The first was during the interview 

session, which biasness was detected either in the part of interviewer, interviewee as well as the 

situational. One of the main issues was when opinionated response was given to serve the 

interviewer’s expectation rather than giving the truth answer. The second limitation was on the 

sampling, particularly on reaching out to the randomly identified sample due to invalid contact 

references. The third limitation was on the FGI during the qualitative research, particularly on the 

observation of the respondents’ non-verbal actions when answering the questions. Nonetheless, 

such limitations were negligible and not in anyway compromise the finding of the study. 

 

7. Conclusion 

It was conclusive that the two independent variables studied in relation to the purchase intention 

during the product introduction were validated and confirmed through the mixed statistical finding 

during the study. The findings were also matched with past findings. It is empirical for the national 

car companies to give emphasis on the product development, particularly in the areas of product 

design, specifications, features and performance as well as in cost of ownership and price 

affordability to ensure successful product introduction. This is to ensure their ability to compete in 

the stiff competitive environment once the Malaysian automotive market is liberalized in 2017. 

 

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