Consumers’ Perception Of Agricultural Market Products In Selangor: A Preliminary Study
Abstract
Pasar Tani, known as farmers markets, is an important direct-to-consumer market that allows non-farmers to purchase locally and offer sustainably grown produce and products. Besides that, state marketing promotional campaigns are becoming more popular as the market potential grows due to consumer interest in locally sourced foods. As a result, consumers gain access to local produce and products at lower prices while learning about their food, local products, and how they are produced. In addition, farmers keep some of their profits by increasing their interaction with customers to gain loyalty to their products. Understanding the factors that influence consumer motivations for purchasing sustainable agricultural products would provide producers and policymakers with more information to help improve economic development and farmer market growth. This study aims to examine the consumers’ perception of agricultural market products in Selangor. The quantitative approach is used by distributing questionnaires to the consumers of Pasar Tani in Selangor. This study suggests that the trustworthiness, quality, and price of the agriculture products significantly impact their intention to purchase. Furthermore, economic value, wealth, and income level are important factors for consumers to choose sustainable products at the Pasar Tani. These findings are necessary to develop and maintain sustainable agricultural products.
Keywords: Agricultural markets, price, quality products,trustworthiness
Introduction
Pasar Tani, also called farmer’s market, was established in 1985 by the Federal Agricultural Marketing Authority (FAMA) as a marketing institution to expand marketing channels and enable farmers to promote their agricultural products directly to consumers (FAMA, 2021). FAMA Pasar Tani’s business strategy is to establish a niche market for farmers or producers to promote their products directly and relieve consumers’ financial burdens associated with daily food and beverage spending (Alaudeen et al., 2015). The goal of local production for local consumption is to save money on transportation (Tsai, 2019). In addition, when the demand for locally grown foods has changed traditional large-scale agriculture and food supply chains, farmers’ markets have played an increasingly important part in the growth of retail food channels (Sneed et al., 2019). Furthermore, shortening the distance between farmers and consumers allows them to establish face-to-face communication channels and build confidence, which can help consolidate interpersonal interactions and institutional norms and improve consumer-agriculture ties (Tsai, 2019). In addition, an important direct-to-consumer market allows non-farmers or consumers to buy fresh, locally grown, organic food, often sustainably cultivated produce and products.
Modern consumers are increasingly demanding that their food meet many quality criteria, including those related to its origin, sustainability, and livestock treatment (Saitone & Sexton, 2017). However, they may be unaware of the long distances that the food has travelled through intricate supply chains; and the length of time elapsed between the initial production or picking of the fruits and vegetables and the final delivery (Besik & Nagurney, 2017). A food’s relevant features and ‘quality,’ as well as its dimensions, have expanded dramatically in recent years (Saitone & Sexton, 2017). According to Brata et al. (2017), consumers have the freedom to pick based on their requirements and purchasing power, while sellers compete to give competitive prices. In addition, the rising cost of living and spending for Malaysians is a result of the increase in the price of energy and other economic issues, which has resulted in customers being forced to pay higher prices for food such as fresh vegetables, fish, meat, and fruits (Alaudeen et al., 2015). Therefore, consumers want to acquire things of the highest quality at the lowest possible price.
Consumer trust in the food value chain was another important factor when purchasing fresh food and agricultural products from FAMA Pasar Tani. Pasar Tani serves a vital role in rebuilding trust between producers and consumers. Credibility qualities of food include nutritional value, sustainability, authenticity, and safety. Credibility features of food are product attributes that cannot be validated by the typical consumer and that, as a result, must be communicated by a credible seller or provider (Macready et al., 2020).
In addition to allowing farmers to build relationships with customers, farmers’ markets also give a good opportunity to educate the general public about local agriculture and create customer loyalty (Ball et al., 2018). Customer loyalty is described as the repurchasing behaviour and customers’ positive feedback towards the company which provides excellent products and services (Sudari et al., 2019). Wantara and Tambrin (2019) stated that while customer loyalty can be utilised to generate sustained competitive advantage, the effectiveness of marketing is measured by the volume of products sold to customers, and this is affected by a variety of factors, including pricing, the brand’s image and how satisfied they are with the product. Customer satisfaction is frequently considered an important antecedent of customer loyalty (Leninkumar, 2017).
In reality, customer satisfaction is a guarantee of customer loyalty. Furthermore, customer satisfaction and loyalty are critical to a company’s long-term market viability. As a result, it was critical to figure out what elements influenced people’s decision to shop at the FAMA Pasar Tani in Selangor. It is critical to do research and understand the extent of consumer loyalty toward agricultural products accessible in FAMA Pasar Tani. The findings of the research can be used to improve or maintain the current FAMA Pasar Tani programme or policy. Therefore, understanding what consumers anticipate from agricultural products in terms of trustworthiness, quality and price is critical. As a result, a study was needed to look into some of the characteristics that drive consumer loyalty. Liu et al. (2017) found that a positive relationship between service quality and customer satisfaction is positively related to customer loyalty. This finding is also supported by Shahid et al. (2018) stated a positive and significant relationship between service quality, loyalty and behavioural intention via customer satisfaction.
Most previous studies on purchase customer behaviour in farmers’ markets have focused on market transaction components such as purchasing motives, quality, satisfaction, purchase behaviour, and post-purchase behaviour (Tsai, 2019). This research seeks to expand on FAMA Pasar Tani’s growth in Selangor towards better understanding the consumers’ perception of agricultural products by exploring the factors such as the trustworthiness, quality, and price of the agriculture products that influence their intention to purchase. According to Tey et al. (2017), it is reasonable to assume that the rapid proliferation of farmers’ markets reflects a shift in customer preferences in Malaysia. Therefore, the researchers also believed that economic worth, wealth, and income level are crucial considerations for shoppers while selecting environmentally friendly products at the FAMA Pasar Tani in this study.
Problem Statement
Creating any business and retaining consumers is a vital and critical element that determines a company’s overall performance. Customer loyalty is one of the most important variables for managers to consider in order to improve their customers’ perceptions, which has a positive impact on overall earnings. Customer loyalty is regarded as one of the most critical factors in the success of FAMA Pasar Tani in Malaysia. Many studies have shown that when customers are satisfied with a company or its services, they are more likely to tell others about their experience and remain loyal. Ganiyu (2017) said that customer satisfaction is extremely important in building and enhancing customer loyalty by implementing strategies that will guarantee long term relationships by offering service quality that will meet and exceed their expectations and, by extension, customer satisfaction.
The increasing number of FAMA Pasar Tani in Selangor showed an increase from 47 places in 2017 to 52 locations in 2021 (FAMA, 2021) shows the importance of FAMA Pasar Tani in Selangor and need to be reviewed in order to maintain and keep its relevance to farmers and consumers. The research is necessary for agricultural products sold in FAMA Pasar Tani in Selangor because it explains how quality, trustworthiness, and price strategy affect consumers’ perception of agricultural market products in Selangor. Furthermore, a study in the agricultural products business sector is required to determine to what extent consumer pleasure leads to customer loyalty related to product trustworthiness, quality and pricing. These factors will allow FAMA Pasar Tani farmers and policy makers to make important decisions in order to obtain and maintain a competitive advantage and long-term business sustainability.
Research Questions
The research questions that need to be answered based on the above problem statement are:
What are the factors that influence customer loyalty?
Is customer satisfaction crucial in maintaining customer loyalty?
Purpose of the Study
The study focuses on the essential characteristics that have the most significant impact on consumer happiness, which leads to customer loyalty to agricultural products at Selangor’s FAMA Pasar Tani. FAMA Pasar Tani is currently encountering certain issues as a result of the rapid rise of supermarkets and hypermarkets, which may be discouraging consumers from visiting FAMA Pasar Tani. Customer satisfaction data provides the most value when attaining numerous goals, such as a better knowledge of consumer requirements and desires, maintaining product quality, and charging a fair price. As a result, client happiness is critical to industrial profitability, effectiveness, and vitality. Therefore, understanding the primary contributors to customer happiness and loyalty behaviour is critical for any company with a large consumer base.
This study focuses on the most important aspects that influence consumer loyalty. Investigating these essential aspects provides numerous advantages for Selangor’s FAMA Pasar Tani. FAMA Pasar Tani can retain customers and protect its market shares against other competitors in the market by identifying the factors that have the most significant impact on customer loyalty. They can also earn enough profit in the market by identifying the most important factors impacting customer loyalty.
Research Methods
The study used a quantitative method where a structured questionnaire was created to collect data. The questionnaires were divided into four main parts, namely demographic, and three parts covered seven constructs; repurchase intention, purchase value, trustworthiness, quality perception, price perception, customer satisfaction and consumer loyalty. The first part of the questionnaires is about the demographic section with 14 items. At the same time, the second part focused on repurchase intentions with eight items. The third part involved purchase value with seven items. Finally, the last part comprised trustworthiness, quality perception, price perception, and customer satisfaction and consumer loyalty with 24 items.
Questionnaire Development
The items selected for this study were measured on four-point Likert scales (1 for strongly disagree to 4 for strongly agree). The four-point Likert scales were used for the quick response, and its lower bias guarantees a more accurate selection of items for the final scale and, thus, the generation of more valid and reliable instruments (Asún et al., 2016; Chyung et al., 2018).
The measurement items for each construct were taken from previous researchers. There were five measurement items each for repurchase intention, purchase value, quality perception, price perception, customer satisfaction and consumer loyalty (Amin et al., 2016; Fikri & Simanjuntak, 2020; Kushwah et al., 2019; Listyowati et al., 2020; Li et al., 2019; Liew & Falahat, 2019; Mohamad et al., 2015; Sumi & Kabir, 2018; Tsai, 2019; Tey et al., 2017; Haron, 2016). Trustworthiness involves four measurement items: purchase experience, product information, trust, and dependability on the product (Li et al., 2019; Liew & Falahat, 2019; Wang & Chen, 2019). For demographic sections, the questions were related to the location of Pasar Tani, frequency to Pasar Tani, type of product purchased, the reason to visit, constraint, assistance, online purchase, Agrobazar Online and respondents’ background including gender, age, race, marital status, income, and education level.
Sample and Data Collection
This study aims to examine the consumers’ perception of agricultural market products in Selangor; thus, the study emphasised FAMA Pasar Tani. FAMA is a government agency that aids in the expansion of the agro-food market and ensures that agriculture and food industry products are available and accessible to consumers at reasonable pricing. Selangor was selected since the state has the highest population in Malaysia (20.1%), as reported by the Department of Statistics, Malaysia in 2021, and this provides a significant household expenditure.
Respondents were being approached directly to answer the questions. According to Szolnoki and Hoffmann (2013), face-to-face survey yielded more representative results in terms of responses to survey questions. However, data gathering using the face-to-face method was the most expensive and costly (Saloniki et al., 2019). There is no limitation in terms of age, race, income and education. The questionnaires were randomly distributed to FAMA Pasar Tani buyers in Section 13, Shah Alam, Selangor. A total of 30 respondents participated in the pilot test.
Data Analysis
The data were analysed using Statistical Package for the Social Sciences (SPSS) version 25. The descriptive statistics of the respondents has been identified in first section of the questionnaire. The sample of consumers comprised more females (86.7 %) than males (13.3 %). The majority of the respondents (40%) were 46- 50 years old, and all respondents were Malay (100%). The majority of them are married (80%), and the balance is single (20%). The Income category M40 was the highest percentage (43.3%), followed by B40 (11%) and T20 (6%).
Findings
The pilot study results will be discussed as the findings for this paper. The pilot study was designed to evaluate the model and variables before the final questionnaire survey. SPSS software was employed to analyse the data in this pilot test, while PLS-SEM would be used to analyse the data in the final survey.
Pilot Test Result
Table 1 shows that the customer satisfaction construct represented the highest Cronbach’s alpha value with α = 0.971. Meanwhile, the values of other variables were highly satisfactory, in which all the values ranged between 0.7 and 0.9. Therefore, it can be defined as these variables having good reliability and confirming that the items employed for this study are reliable.
Repurchase Intention
There are five items related to the repurchase intention that the researchers examined through the findings in Table 2. The data revealed that 96.7% of the respondents either strongly agreed or agreed that they like easy purchases at FAMA Pasar Tani. 90% strongly agreed or agreed that they will come to FAMA Pasar Tani more often and will always buy fresh products at Pasar Tani. The following item showed 83.3% being willing to buy more at FAMA Pasar Tani. Although 16.7% disagreed with buying more at FAMA Pasar Tani, another 10% disagreed about the statement in items RI1, RI2 and RI5, and none strongly disagreed. The consumer’s attitude can have an impact on their intention to repurchase. If the product continues to attract the interest of the consumers, they will purchase it for a second time (Bupalan et al., 2019). The findings above indicate that consumers prefer to buy fresh products from FAMA Pasar Tani, which contributes to repurchase intention.
Purchase Value
Based on Table 3, items PV1 to PV5 are related to the purchase value. The data showed a total of 100% of the respondents either strongly agreed or agreed that they found positive value in terms of the benefits and purchase cost of buying FAMA Pasar Tani products. While 6.7% of the respondents strongly agreed and 93.3% agreed that the money, they spend on FAMA Pasar Tani products is worth it, 96.6% of respondents either strongly agreed or agreed to buy products from FAMA Pasar Tani is value for money. In contrast, 26.7% of respondents have disagreed that the purchase value of the FAMA Pasar Tani products exceeds the value of money that they spend. All the findings above revealed consumers believe buying products from FAMA Pasar Tani will give purchase value to them.
Trustworthiness
Based on Table 4, 4 items were measured related to trustworthiness. Figures show a total of 100% of the respondents either strongly agreed or agreed that purchasing experience influences the purchase of products at FAMA Pasar Tani. Also, 100% strongly agreed and agreed FAMA Pasar Tani sellers provide accurate information regarding their sales products and 100% of respondents trust products from FAMA Pasar Tani. However, 46.7% of respondents disagreed that they rely on products from FAMA Pasar Tani. Thus, for all items measured, the findings indicated purchasing experience, the information provided by the seller and trust in products could influence consumers’ trustworthiness towards products produced by FAMA Pasar Tani.
Quality Perception
In Table 5, there are five items related to the quality perception that the researcher examined. The data revealed that 100% of respondents strongly agreed or agreed on the consistent quality of products from FAMA Pasar Tani. On other items, 100% of respondents strongly agreed or agreed that there are various products at FAMA Pasar Tani. While 96.6% of the respondents either strongly agreed or agreed that FAMA Pasar Tani sells freshness of products. 83.3% agreed that FAMA Pasar Tani products are better substitutes than imported products, while 13.3% strongly agreed to the same items. None of the respondents either strongly disagree or disagree on the five items measured on the quality perception. This finding means that consumers expect high-quality products that are reasonably priced and easily obtainable. The higher the quality of the products and services offered, the greater the customer’s enjoyment, leading to profits for producers (Yusuf et al., 2019). In a way, the findings above could indicate the consumers have a positive perception of the quality of products from FAMA Pasar Tani.
Price Perception
Table 6 shows perception measured against price. It was found that a total of 100% of the respondents either strongly agreed or agreed the price of products at FAMA Pasar Tani is according to the current market price. As well as for other items (PP3 and PP4), 100% of respondents strongly agreed or agreed that the price of FAMA Pasar Tani products is adequate with the quality and the price also appropriate. In addition, 93.3% of the respondents either strongly agreed or agreed on the competitive price of FAMA Pasar Tani products. Although, 23.3% disagreed on the price of FAMA farmers’ market products being cheaper than the daily market. All the findings above revealed consumers have strong confidence in the price of products at FAMA Pasar Tani.
Customer Satisfaction
Based on Table 7, there are five items related to customer satisfaction that were examined. Figures show that a total of 100% of the respondents strongly agreed or agreed that they are happy to deal with sellers. Item CS2 also indicates 100% are satisfied with the services offered by the sellers at FAMA Pasar Tani. Furthermore, 100% of respondents believe they made the right choice and did the right thing by purchasing products at FAMA Pasar Tani. Overall, 100% of respondents strongly agreed or agreed that FAMA Pasar Tani products and services are satisfactory. In order for customers to be satisfied, the product or service must meet both instrumental and expressive expectations (Ganiyu, 2017). The findings above could, in a way, indicate the consumers are truly satisfied with all services and products provided by FAMA Pasar Tani.
Consumer Loyalty
Based on Table 8, 5 items were measured related to consumer loyalty. The data revealed that a total of 100% of the respondents either strongly agreed or agreed that they would recommend others to purchase products at FAMA Pasar Tani. The finding also indicates 100% of respondents strongly agreed or agreed that they are committed to purchasing products from FAMA Pasar Tani. Moreover; 96.7% are strongly agreed or agreed they will continue to purchase products from FAMA Pasar Tani. Followed by 90% of respondents either strongly agreed or agreed that Pasar Tani is their favourite place to buy fresh products, while another 10% disagreed with the same item. Finally, while 16.7% of respondents disagreed on loyalty to FAMA Pasar Tani products, another 83.3% strongly agreed or agreed to the same items. Through all the findings above it shows that FAMA Pasar Tani has loyal consumers.
This finding is consistent with the argument put forward by Puspaningrum (2018). They suggested that in order to get loyal customers, retailers must first establish a positive image in the eyes of consumers since the image consumers have of the store will ultimately influence consumer ratings of the store’s existence. Besides, according to Ganiyu (2017), consumer loyalty is influenced by a number of other independent variables, including pricing, perceived values, brand image, and psychological and social features.
Customer Satisfaction and Consumer Loyalty
Customer satisfaction and customer loyalty are unquestionably important behavioural outcomes that any service organisation should obtain to succeed (El-Adly, 2018). According to Wantara and Tambrin (2019), customers can become loyal or repeat customers because they are satisfied with a certain product brand, and the key to providing excellent customer service is to make a serious and continual commitment to ensuring that customers remain satisfied. Results from both Table 7 and Table 8 clearly shows that customers are happy and satisfied with the services and product quality of FAMA Pasar Tani, thus leading to repeat purchase. Moreover, customer loyalty increases due to an improvement in overall customer satisfaction (Nuseir & Madanat, 2015, Sudari et al., 2019). Furthermore, Sudari et al. (2019) stated that customer satisfaction is a foundation for establishing and maintaining customer loyalty.
Customer loyalty is a critical component of a company's long-term viability. Retaining current clients and increasing customer loyalty are critical tasks. Previous research has found that customer satisfaction has a favourable impact on customer loyalty (Bitner et al., 2002; Chen & Chen, 2010). Customers who are pleased with a product or service are more inclined to repurchase it and promote it to others (Isiyowati et al., 2020). According to Sudjianto and Japarianto (2017), customer happiness is an intervening variable that has a beneficial impact on perceived service quality and customer loyalty. Customer happiness has a favourable and considerable impact on customer loyalty and impluse purchase, stated by Adi Surya Pranantha and Sri Subawa (2019). Therefore, we conclude that customer satisfaction is critical in preserving customer loyalty because earlier researchers agreed that it will increase customer loyalty. In other words, client pleasure is linked to customer loyalty.
Conclusion
This study emphasised the factors that influence consumers repurchase intentions at FAMA Pasar Tani. Furthermore, there is a significant relationship between purchase value (i.e., trustworthiness, quality perception, price perception, and customer satisfaction and loyalty) and repurchase intention. Consumers’ trust in FAMA Pasar Tani sellers is influenced by their purchasing experience and the authenticity of the information provided by sellers regarding their products. Consumers also stated that the products sold at FAMA Pasar Tani were consistent in freshness, quality, and diversity of options, which were always better than imported products. Therefore, consumers are prepared to spend more money at FAMA Pasar Tani because the products are cheaper or at a level with the current market price and the quality and freshness are presumed. Furthermore, consumers are pleased with the service offered by the vendors, and their devotion to FAMA Pasar Tani contributed to the repurchase intention.
This study is a preliminary study by distributing 30 questionnaires to the FAMA Pasar Tani customers. Further study should be conducted to generalise the results. Factor analysis will be used to assists analysts focus and clarify the findings. Due to MCO, which restricts movement, there was challenging to obtain the data. Aside from that, all of the FAMA Pasar Tani were closed during MCO 1.0, and MCO 3.0 has hindered the research process. Nevertheless, the study’s findings indicate that the Pasar Tani has provided fresh products at a competitive price in the market.
Acknowledgements
We would like to thank Selangor State for funding this research under Geran Industri Semesta-MBI 2020 (Grant No: I/SEM-MBI/SS/2020/06).
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Muhammad Yunus, I. F., Supian, K., Ahmad, A., Syed Abdullah, S. H., & Sabli, N. (2022). Consumers’ Perception Of Agricultural Market Products In Selangor: A Preliminary Study. In H. H. Kamaruddin, T. D. N. M. Kamaruddin, T. D. N. S. Yaacob, M. A. M. Kamal, & K. F. Ne'matullah (Eds.), Reimagining Resilient Sustainability: An Integrated Effort in Research, Practices & Education, vol 3. European Proceedings of Multidisciplinary Sciences (pp. 141-154). European Publisher. https://doi.org/10.15405/epms.2022.10.14