The Effect of Packaging and Prices on Intention to Buy with the
Moderation of Income and Store Image
Andreas Ari Sukoco, Sony Heru Priyanto, John J. O. I. Ihalauw and Antonius Surjo Abdi
Universitas Kristen Duta Wacana
Keywords: Purchase Intention, Private Label, Price, Income, Store Image
Abstract: This study aims to analyze the influence of packaging and prices on the intention to buy private label products
with moderating income and store image. This research was conducted in the Special Region of Yogyakarta.
Respondents taken were consumers who shop at outlets that have private labels with diverse socioeconomic
and demographic backgrounds. The sampling method uses the non-probability sampling technique, namely
convenience sampling — data analysis using Structural Equation Modeling (SEM). The results of the study
indicate that packaging and prices have a significant influence on purchase intention. Income moderates the
effect of prices on buying intentions in a negative direction, and the image of a store moderate the effect of
prices with purchase intention in a positive direction..
1 INTRODUCTION
The development of retail business causes changes in
consumer behavior in conducting shopping activities
that lead to entertainment (Nielsen, 2008). This
change in consumer behavior has caused retailers to
rearrange the layout of their stores and packaging
goods with entertainment nuances. As a result, many
retailers use private labels to sell their products. Levy
(2007) and Collins (2008) state that building a private
label can create a competitive advantage. Some
debates about the benefits of private labels can be
explained as follows: (1) Mbaye (2003) states that
there is a cultural influence on consumer behavior
related to private labels. (2) Carmen and Martos
(2013) stated that success in private label products in
Europe and the USA does not necessarily guarantee
successful private label products in Asia. (3)
Mandhacithara et al. (2007), in their research, proved
the existence of unsuccessful private labels in Asia.
Based on the debate on the results of this research,
(Nenycz, 2011) states that research on the intention to
buy private label is important because the private
label can be an alternative positioning in marketing
strategies.
This research was conducted to answer some of
the debates on existing research results. First, the
need for a study of the consumer's intention to buy by
paying attention to consumer characteristics. This is
also in line with the opinion of Goldsmith et al.
(2010), which states that the need for further studies
on private labels by including aspects of consumer
characteristics. Beneke (2010), who conducted
research on consumer perceptions of the private label,
has not discussed the aspects of the store's image.
Even though private labels can show closeness to the
store's image. Second, the need to incorporate
elements of store image in the research model. In
general, previous studies have not found any research
on the effect of simultaneous extrinsic attribute
factors that influence the intention to buy private label
products in certain stores. In addition, there is also no
visible factor in consumer characteristics, store
characteristics, and their influence on the connection
of extrinsic attributes with the intention to buy. Third,
some previous studies have not used a model that
combines aspects of product attributes, profile
aspects, and outlet aspects to analyze intention to buy.
This study analyzes the aspects of product attributes
as exogenous variables, aspects of store image, and
consumer profile as moderating variables, which in
the previous research were rarely studied in the
intention to buy effect. Based on several debates from
previous research results, this study aims to examine
the effect of packaging and price on the intention to
buy private label and to examine the effect of
moderating income and store image on private label
relationships and prices on the intention to buy.
304
Sukoco, A., Priyanto, S., Ihalauw, J. and Abdi, A.
The Effect of Packaging and Prices on Intention to Buy with the Moderation of Income and Store Image.
DOI: 10.5220/0009965303040313
In Proceedings of the International Conference of Business, Economy, Entrepreneurship and Management (ICBEEM 2019), pages 304-313
ISBN: 978-989-758-471-8
Copyright
c
 2020 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved

2 LITERATURE REVIEW
Schiffman and Kanuk (2007) state that intention to
buy is a conative aspect (behavioral). This interest can
not be separated from the process of purchasing
decisions in which there are external and internal
influences of individuals. According to Kotler and
Keller (2009), intention to buy is understood as the
intention of making a purchase, and this intention is
influenced by an understanding of the product. The
packaging is a product attribute that has an important
role in marketing strategies and business competition
(Kotler and Keller, 2009). The tight competition in-
store layout is the reason for the importance of
packaging management besides price, which also has
a relationship with value. Consumers usually have a
sensitivity to prices that are reflected in the form of
demand elasticity and consideration of benefits and
satisfaction received (Loudon and Bitta, 1993). The
concept of value takes into account the amount that
must be spent with the benefits received. According
to Serenko and Turel (2006), income can be seen in
terms of monthly monetary income. In his research on
consumer satisfaction in America, income was
chosen as one of the moderating variables. According
to Park et al., (2011), the image of a store can bring
consumers to certain perceptions about the product
offered. A good image has a positive influence and
benefits of the marketing of retail sellers.
2.1 Research Hypothesis
2.2.1 Packaging and Intention to Buy
Garber (1995) states that packaging can influence
consumer choice of products. Product packaging that
fits the needs of consumers. Halstead and Ward
(1995) suggest that the management of a good private
label can have an appeal to the intention to buy that is
not inferior to the manufacturer's brand. According to
Batra and Sinha (2000), the packaging aspects of both
national brands and private labels contribute to
purchasing decisions. Batra and Sinha (2000), Fandos
and Flavian (2006) state that the packaging aspects of
both the private label and manufacturer's brand
contribute to consumer purchasing decisions. Fandos
and Flavian (2006) examined the packaging aspects,
and the results showed that there were positive effects
of packaging attributes on the consumer's intention to
buy. Deliya (2012) explained that good packaging
perceptions would increase consumers' intention to
buy products
Hypothesis 1: Packaging has an effect on the
intention to buy.
Hoch and Banerji (1993) conducted a study on the
possibility of private label success. The success of the
private label is largely determined by several aspects,
which include quality aspects, namely packaging.
The packaging is one of the parameters of the
attractiveness of consumer purchases. Consumers
with high-income levels will be more interested in
products with attractive packaging. Narasimhan
(1998) explained that product quality becomes a
parameter of consumer attraction. Products with
private labels should pay attention to the packaging
aspects to increase consumer purchase intention.
Narasimhan (1998) also states that there is a category
of consumers who have high-income levels that are
more concerned with quality than low prices. Serenko
et al. (2006), who examined customer satisfaction in
America, found that income variables were one of the
determining factors in buying behavior.
Hypothesis 1a: The better the level of income, the
stronger the influence of packaging on the intention
to buy the product
Richardson et al. (1996) states that consumers pay
attention to aspects of extrinsic cues in the form of
packaging when deciding on a purchase. The
packaging is one of the attractions to increase the
intention to buy on private label products. According
to Archna, Vahie, and Paswan (2006), product
packaging, which is part of product quality, will be
related to the image of the store. The results of his
research show that private labels can be a reflection
of the store's image. The store's image, according to
Paul (2010), has a positive influence on the
consumer's intention to buy. Mbaye (2012) also
explained the relationship of store image to packaging
and the intention to buy. Vachie and Paswan (2006)
say that a good store image will create the impression
of good quality and will affect the intention to buy
private label products.
Hypothesis 1b: The better the image of the store,
the stronger the influence of packaging on the
intention to buy.
2.2.2 Price and Intention to Buy
Yu Lin and Marshall (2009) say that price and risk
aspects influence consumer purchasing decisions. In
this case, if the price paid is in accordance with the
quality received, it will have a positive influence on
the consumer's intention to buy, on the other hand, the
risk has a negative relationship. Alfred (2013), who
examines the perception of quality and price
perception in relation to the intention to buy, explains
that price perception is an important attribute in
The Effect of Packaging and Prices on Intention to Buy with the Moderation of Income and Store Image
305

determining the intention to buy consumers. Beneke
(2010), states that prices can be an indicator of
quality. Horvat and Sandra (2011) identified several
factors that allegedly influenced attitudes towards
private labels. The results of his research show that
prices are one of the factors that influence the attitude
towards the private label.
Hypothesis 2: Perception of prices affects the
intention to buy.
Chen (2009) states that groups with lower middle
income have a price sensitivity, so they tend to choose
private label products that are considered to offer low
prices. This is different from the upper-middle-
income group that has a buying behavior pattern that
tends to choose premium products. The same thing
was stated by Beneke (2010). His research in South
Africa explained that for consumers with upper
middle income, they tend to be less interested in
private label products that are considered to offer
products at low prices. Morwitz and David (1992)
explained that income has a great influence in
moderating customer satisfaction with the intention to
buy. The lower the level of income, this will become
an obstacle in the intention to buy consumers. Glynn
(2009), Mbaye (2012), in his research on the factors
influencing the purchase intention of private label
products, explained that the income factor became the
control variable in the intention to buy private label
products.
Hypothesis 2a: The higher the level of income, the
stronger the influence of price perception on the
intention to buy.
Richardson et al. (1996) state that consumers pay
attention to aspects of extrinsic cues in the form of
product prices. Private labels require the right pricing
to be able to increase consumers' intention to buy.
Paul C.S (2011) conducted a study on the relationship
between purchasing private labels with store images.
The better the image of the store will encourage
consumers to purchase private label products.
Pacheco (2015) shows that a positive store image
makes consumers have a positive perception of prices
and promotions. Positive outlet image will also have
a positive influence on the intention to buy (Mbaye,
2012)
Hypothesis 2b: The better the store image, the
stronger the influence of price perception on the
intention to buy.
3 RESEARCH METHOD
3.1 Research Design
This research is a survey research with the aim to
analyze the influence of packaging and prices on the
intention to buy private label products along with the
factors that moderate them. The population and unit
of analysis of this study are consumers who have
bought private label products in the Special Region of
Yogyakarta. The sampling technique is non-
probability sampling with the criteria of adult
consumers who can decide for themselves to buy
products with private labels. Data collection using a
questionnaire. The data analysis technique used is
descriptive and explanatory statistics using Structural
Equation Modeling (SEM). Model testing is done by
observing the value of goodness of fit, including Chi-
Square, Adjusted Goodness of Fit Index, Root Mean
Square Error of Approximation, Normed Fit Index,
Goodness of Fit Index, and Comparative Fit Index.
There are several structural equations proposed in the
study.
Structural equations without moderation:Y = α +
β
1
X
1
+ β
2
X
2
+ ε
Information:
Y :intention to buy.
X
1
: packaging
X
2
: price
ε: error
Structural equations with moderating income: Y
= α + β
1
X
1
+ β
2
X
2
+ β
3
M
1
+ β
4
X
1
M
1
+ β
5
X
2
M
1
+ ε
Information:
Y : intention to buy
X
1
: packaging
X
2
: price
M
1
: moderating variable (income)
ε : error
Structural equation with moderating store image:
Y = α + β
1
X
1
+ β
2
X
2
+ β
3
M
2
+ β
4
X
1
M
2
+ β5X
2
M
2
+ ε
Information:
Y : intention to buy
X
1
: packaging
X
2
: price
M
2
: moderating variable (store image)
ε: error
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306

4 RESULT
4.1 Respondent Characteristic
Data collection is done by distributing questionnaires
to shops that provide private labels in DIY. In each
shop, an average of 25 respondents can be obtained.
There were 12 shops visited. Out of the 300
questionnaires distributed, there were 12
questionnaires issued from the analysis because they
were indicated as outliers. Questionnaires that can be
processed are 288 (96%). The results of data
collection on respondents' characteristics were
obtained by 124 respondents (43.1%) men and 164
respondents (56.9%) women. The age of most
respondents is in the range of 17-25 years, which is as
many as 121 (42%). The majority of respondents'
work are students (98.1%). Based on income level,
respondents who had an income of 1-3 million
rupiahs were 147 (51%), 3-5 million were 73
(25.3%), below 1 million were 48 (16.6%), and above
5 million were 20 (7.1%).
4.2 Estimation toward Measurement
Model
Validity analysis was measured using factor analysis,
namely CFA (confirmatory factor analysis), with
varimax rotation. For samples below 300, loading
factor values above 0.5 indicate a valid indicator
(Hair et al., 2000). The results of the measurement
model test from each construct in table 1 show that
the loading factor value is above 0.5. This shows that
the items in this research variable have good
convergent validity. The results of the analysis of
validity with factor analysis can be seen in table 1.
Table 1. Results of testing of the CFA
Path Estimate Information
Pk1 Packaging 0.691 Valid
Pk2 Packaging 0.625 Valid
Pk3 Packaging 0.642 Valid
Pk4 Packaging 0.755 Valid
P1 Price 0.780 Valid
P2 Price 0.777 Valid
P3 Price 0.751 Valid
P4 Price 0.775 Valid
I1 Income 0.780 Valid
I2 Income 0.785 Valid
I3 Income 0.854 Valid
Im 1 Image 0.716 Valid
Im 2 Image 0.732 Valid
Im 3 Image 0.700 Valid
Im 4 Image 0.798 Valid
Int1Intention to
buy 0.760
Valid
Int2 Intention to
buy 0.791
Valid
Int3 Intention to
buy 0.764
Valid
Int4 Intention to
buy 0.813
Valid
Reliability test is a measuring instrument that can
give the same relative results if a measurement is
made on the same object. The measurement results of
construct reliability (> 0.7) and variance extracted (>
0.5) indicate that all items used in this study are
reliable.
Table 2. Reliability testing results
Construct Construct
reliability
Variance
extracted
Packaging 0.827 0.544
Price 0.800 0.501
Income 0.839 0.634
Image 0.799 0.499
Intention to
buy 0.862
0.611
4.3 Structural Model Test
4.3.1 Basic Model without Moderation
The basic model of the influence of packaging and
prices on the intention to buy is illustrated in Figure
1.
The Effect of Packaging and Prices on Intention to Buy with the Moderation of Income and Store Image
307

Figure 1: Model without moderation
Full test of SEM models using Chi-square, GFI,
AGFI, CFI, TLI, NFI, CMIN/dfand RMSEA are in
the range of expected values and are explained in
table 3.
Table 3. Model Evaluation Results
Index of the
goodness of
fit model
Cut-off
Value
Result Informati
on
Chi-Square Small 66.758 Good
Probability
 0.05
0.068 Good
RMSEA
 0.08
0.033 Good
Chi-square /
DF
1.20
1.309 Good
GFI
 0.90
0.963 Good
AGFI
 0.90
0.943 Good
TLI
 0.95
0.986 Good
CFI
 0.95
0.989 Good
NFI
 0.95
0.955 Good
The results of the data analysis show that the fit
model analyzed is all good, so the model used is fit,
and the hypothesized parameter testing can be
interpreted. Analysis of the results of data processing
at the full stage of the SEM model is carried out by
conducting suitability tests and statistical tests. The
results of data processing for full analysis of SEM
models are shown in table 4.
Table 4. Regression Weight Structural Equational (n=288)
e
stimate S.E. C.R. P Decision
Intention to buy
Packaging
0.423 0.091 4.638
**
*
Significance
Intention to buy
Price
0.383 0.107 3.584
**
*
Significance
It is testing the effect of packaging on the
intention to buy shows that packaging has a positive
effect on the intention to buy. Price also has a positive
effect on the intention to buy products. This is
indicated by the value of p <0.05.
4.3.2 The Model with Moderating Income
This model is the development of the basic model of
the influence of packaging and prices on the intention
to buy by adding income variables as moderating.
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308

Figure 2: Model with moderating income
The results of data processing for path coefficient
analysis in SEM models are shown in table 5.
Table 5.Regression Weight (n=288)
Estimate S.E. C.R. P Keterangan
Intention to buy packaging 0.443 0.094 4.73 *** Supported
Intention to buy Price 0.417 0.131 3.189 0.001 Supported
Intention to buy  Income -0.084 0.097 -0.86 0.39
Not
Supported
Intention to buy  Packaging x
Income
0.03 0.052 0.57 0.568
Not
Supported
Intention to buy Price x Income -0.111 0.054
-
2.077
0.038 Supported
The results of testing the influence of packaging
on the intention to buy, which are moderated by
income, indicate that income has a non-significant
positive influence on packaging relationships and
intention to buy. This is indicated by regression
weight with a value of 0.03 and a significance value
(0.568) or p> 0.05. Testing the effect of prices on the
intention to buy, which is moderated by income,
shows that income has a negative and significant
influence on the effect of prices on the intention to
buy. This is indicated by the regression weight with a
value of -0.111 and a significance value (0.038) or p
<0.05.
4.3.3 The Model with Moderating Store
Image
This model is the development of the basic model of
the influence of packaging and prices on the intention
to buy by adding store image variables as moderating
variables.
The Effect of Packaging and Prices on Intention to Buy with the Moderation of Income and Store Image
309

Figure 3: Full model with store image
The results of the full SEM model analysis moderated
by store image are shown in table 6.
Table 6. Regression Weight Structural Equational (n=288)
Estimate S.E. C.R. P Keterangan
Intention to buy  Packaging 0.389 0.101 3.862 *** Supported
Intention to buy  Price 0.357 0.119 3.014 0.003 Supported
Intention to buy  Store image 0.056 0.12 0.47 0.638 Not Supported
Intention to buy  Packaging x Store image -0.079 0.042 -1.867 0.062 Not Supported
Intention to buy  Price x Store image 0.082 0.041 2.016 0.044 Supported
Testing the effect of prices on the intention to buy
private label products that are moderated by store
images shows that store image variables have a
significant influence in moderating the relationship of
prices with the intention to buy. This is indicated by
the regression weight of 0.082 and the significance
value of 0.044 or p <0.05.
5 DISCUSSION
The results of testing the first hypothesis of this study
which states that packaging has a positive effect on
the intention to buy support. The results of this study
support the opinion of Garber (1995), which states
that packaging affects the intention to buy. The results
of the research by Fandos and Flavian (2006), Venter
(2011), Rompay (2012) state that packaging
attributes have a positive effect on the intention to buy
are also supported. The effect of packaging on the
intention to buy, which is moderated by income,
shows that income has a non-significant effect on
packaging relationships with the intention to buy.
According to Hoch and Banerji (1993), consumers
tend to choose factory products that are better known
than private labels. The reason for choosing a
manufacturer's product is because the manufacturer's
products are considered to have better quality and
packaging. The reason this has an impact on income
is no longer influential in assessing private labels. The
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310

influence of packaging on the intention to buy, which
is moderated by store image, shows that the image of
the store does not have a significant influence on
packaging relationships with the intention to buy.
The results of testing the second hypothesis in this
study state that prices have a positive effect on the
intention to buy support. The results of this study
support William (1991), Faryabi, et al., (2012),
Mbaye (2012), which states that respondents' choice
of products is influenced by price factors. Saktiawan
(2012), in his research, also stated that perceptions of
prices affect the intention to buy. The effect of prices
on the intention to buy, which is moderated by
income, shows that income has a negative influence
on the relationship of prices and intention to buy. The
results of this study support Lee (2007), which states
that the higher a person's income will be the tendency
for someone to be less sensitive to product offerings
at low prices. Ailawadi (2007) also said that the
higher income a person will tend to base decision-
making no longer on products at low prices. The
effect of prices on the intention to buy, which is
moderated by store image, shows that store image has
a significant influence in moderating the relationship
of prices with the intention to buy. The results of this
study support Solomon (2007), which states that the
behavior of the middle class has a tendency to
experience a shift along with the level of income.
Respondents who experience growth in income will
tend to pay attention to aspects that have something
to do with product signals such as an outlet, price, and
packaging aspects. The results of this study also
support Richardson (1996), which states that
consumers pay attention to the image and price in
their purchasing decisions. The better the image et al.,
with the appropriate price, this will affect consumers
to make purchases at these outlets. The results also
support the opinion of Mbaye (2012), which states
that a positive store image and good price will have a
positive effect on the intention to buy.
6 CONTRIBUTION AND
LIMITATION
6.1 Contribution
The results of this study indicate that packaging and
prices influence the intention to buy. This reinforces
the opinion of Garber (1995), Fandos and Flavian
(2006), Faryabi, et al. (2012), Saktiawan (2012), who
say that packaging and prices managed correctly can
affect the intention to buy. The results of this study
indicate that income and store image can be
moderating the relationship between prices and the
intention to buy. This indicates that the income factor
and store image are factors that influence the way
consumers perceive private label product attributes
(in this case price). This result is in accordance with
the opinion of Lee (2007), which states that income
has an influence on the way consumers perceive the
product. Pacheco (2015) and Mbaye (2012) revealed
that store image would influence consumer
perceptions of the product. The results of this study
support previous research by revealing the economic
factors of consumers (income) and store image
factors that influence the way consumers perceive the
attributes inherent in private label products. This
study also shows that simultaneously, the extrinsic
attributes of the product (price and packaging) affect
the intention to buy and how these influences are
moderated by the revenue and image of the store. The
results of the study also indicate that if these private
label products are managed well with packaging and
prices that are able to compete with the
manufacturer's products, this is a threat to the
manufacturer's products.
6.2 Limitation
This research has not discussed the appropriate
formulation related to the combination of private
label product offerings with national products. No
discussion has been conducted regarding the
combination of variations in private label products
with the right national products that produce
optimization of sales. Future research can study the
combination of products with private labels and
national products at convenience store outlets. The
study can be directed at how optimal management is
related to the provision of private label products in
each store.
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