Chapter 1 INTRODUCTION

1.1 Introduction

Today, there has been a surge of interest on health enhancing benefits

of specific foods or physiologically-active food components that are known as

functional (healthy) foods (Hasler, 1998). This provides a new approach to

healthy eating through a single component that promotes a certain health

effect through the consumption of a certain single product. (Lähteenmäki,

2003). Consumers are interested to improve their life quality by improving

their psychological and physical well being through health enhancing foods

that are also believed to help fight diseases and increase mortality rate (Sloan,

1999).

The functional (healthy) foods were developed with believe that through the

consumption of functional (healthy) food, diet-related diseases such as cancer,

heart disease and osteoporosis could be reduced. This however came with a

significant commercial interest. Functional (healthy) foods are being marketed

as products that could cure or prevent diseases since consumers are taking

proactive steps to disease prevention through certain dietary behaviours that

are believed to reduce risk of chronic diseases. Study by O‟Regan (1999)

reported that functional (healthy) foods have health boosting effects that could

play a major role in reducing health care cost for diseases that are related to

diet.

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With interest from consumers on the relationship between diet and health that

is growing over the years has cause for the demand for information on

functional (healthy) foods. With science and technological advancement,

increase in health care cost, changes in law for food labels and product claims,

aging population and the desire for wellness through diet are among the

factors that drives consumers‟ interested in functional (healthy) foods.

Through scientific researches, many indications of clinically proven health

benefits from food components have been demonstrated.

American‟s awareness and attitude towards functional (healthy) foods was

studied by the International Food Information Council (IFIC) in 2009.

Functional (healthy) foods that claim to provide health boosting benefits can

play a significant role in the reduction of health care cost for diseases that are

related to diet (O‟Regan, 1999). The market of functional (healthy) foods is

seen to be constantly growing and is believed to be growing towards an

optimistic future (Gray, Armstrong, Farley, 2003).

1.2 An overview of Functional (Healthy) Foods in Malaysia

Functional (healthy) food has quite a long history in Malaysia. There

was a proliferation of functional foods and drinks in the market in the 1990s.

This occurred when major local and ASEAN regionally-based food

manufacturers competed to introduce new product lines to create new market

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niches, so capitalising on the emerging health trends at that time, and to

expand their market shares.

Many definitions have been given to functional (healthy) foods

throughout the world. However in the Malaysia market, it carries the meaning

of “food that has one or more components incorporated into for a specific

health, medical or physiological benefit that is beyond its normal nutritional

values. In Malaysia, functional (healthy) foods are categorized into two

categories, which are the modern functional (healthy) foods and traditional

functional (healthy) foods. This shows that functional (healthy) foods are not

entirely new to the Malaysian food industry.

However, most of the traditional functional (healthy) food that has basic

or generic ingredients such as botanical extracts, aromatic oils and complex

sugar are manufactured by small or medium scaled organizations. Major

players in the market are the larger scaled organizations who are equipped

with high end food manufacturing technology that manufactures modern

functional (healthy) foods. The modern functional (healthy) foods category

looks more useful and trendy over the traditional functional (healthy) foods

category.

Although the functional foods trend is one of the smallest segments in

the food industry, it has shown to be growing steadily for over a decade.

Estimates of consumption of these drinks range between 120 million and 130

million liters per [Link] shows that it is undeniable that functional foods

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trend is growing steadily in most countries. With the growth of global economy,

this has accelerated the expansion of the industry into developing countries

as those in South East Asia.

According to the trade sources commented that Malaysia has a

sizeable functional (healthy) food market niche within its very large food and

beverage market, which is now valued at more than RM 30 billion (about

C$ 11.5 billion) as reported by the Counselor and Regional Agri-Food Trade

Commissioner, Southeast Asia, and the High Commission of Canada in

Malaysia on March 2011.

Figure 1.1 Sales Trends in Functional Drinks in Malaysia – 2000 to 2009

Source: Trade data and estimates by the Counselor and Regional Agri-Food Trade
Commissioner, Southeast Asia, and the High Commission of Canada in Malaysia on
March 2011.

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 From the Figure 1.1, while sales trends are positive, economic shocks

do have an impact on sales because the products are more discretionary that

other beverages. In year of 2009, as a result of a collapse in consumer

confidence due to the onset of the Developed World economic crisis did see a

slump in demand. For year 2010, is that improvements in consumer

confidence will have created new growth in this market and resulted in a

bounce back in demand.

More research and development has to be done in this field

considering the Malaysian functional (healthy) foods industry is still in its

infancy stage. This is to cater for the growing demand on functional (healthy)

foods in Malaysia. Long term development trends in this market have been

positive, although the niche has been a challenge to develop in a price

sensitive market that is very noisy in terms of the competitive activities.

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1.3 Problem statement

The health problems issue is on the uptrend as consumers face high

stress levels, lack exercise, high fat consumption and other factors.

Consequently, they face difficulties to maintain a quality or healthy lifestyle,

with the attendant attraction that the functional (healthy) food products may

help them to maintain, prevent and reduce the chances of being down with

illnesses.

Lack of consumer awareness and interest to functional (healthy) food

products are amongst the factors which prevent them from realising the health

benefits of these food items and the need to maintain a healthy lifestyle.

There are several approaches adopted by various studies on consumers‟

attitude towards functional (healthy) foods. However, the issue of functional

(healthy) foods do not have a broad discussion in the Malaysian context.

Marketers from different countries are trying to influence and penetrate the

Malaysian market with their functional (healthy) products by targeting different

& respective segmentation. The demand of consumers in Malaysia for

functional (healthy) foods is increasing day by day. Therefore, the issue is

whether Malaysian consumers‟ attitude towards functional (healthy) foods

should be raised for further discussion because understanding consumers‟

attitude will help marketers, particularly Malaysian manufacturers to develop

better strategies.

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1.4 Research questions and objectives

This primary purpose of this research to study to closing the information gap

between functional (healthy) foods, consumers‟ attitude and purchase

decision towards functional (healthy) foods remains unanswered in the minds

of marketers in Malaysia.

The research questions have been raised and listed as below:

1. How consumers attitude‟ influence on intention to purchase of the

functional (healthy) foods in Malaysia?

2. How does the subjective norm‟s influence on intention to purchase of

functional (healthy) foods in Malaysia?

3. How do the perceived behavioral control‟s influence on intention to

purchase of functional (healthy) foods in Malaysia?

4. Does this intention to purchase lead the consumer to purchase

functional (healthy) foods in Malaysia?

5. What are the important factors or attributes influence consumers‟

intention to purchase of functional (healthy) foods in Malaysia?

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The following are the specific objectives of the study:

1. To examine the influence consumers‟ attitude on Intention purchase of

functional (healthy) foods in Malaysia

2. To examine the influence subjective norm‟s on intention to purchase of

functional(healthy) foods in Malaysia

3. To determine the influence perceived behavioral control‟s on intention

to purchase of functional (healthy) foods in Malaysia; and

4. To identify the relationship between intention to purchase and

purchase of functional (healthy) foods in Malaysia.

5. To identify what are the important factors which influence intention on

purchase.

1.5 Significance of the Study

The findings of this research would give an exposition of theoretical

contributions, which can further expand from the existing literature on the

subject. This study is intended to investigate further on the factors that

influenced consumers‟ perceptions and attitude in selecting functional (healthy)

food in Malaysia, particularly in Kuala Lumpur area.

buyers) and manufacturers for better understanding the consumer behavior in

functional (healthy) food shopping. Furthermore, the results of this research

will provide manufacturers with a better understanding of the important factors

that influence the attitude of consumers on functional (healthy) food selection,

which will enable them to focus on the areas that strategically engender

purchase attitude. Manufacturers may improve their overall marketing

strategies in improving the awareness of consumers to increase the demand

to achieve the final intention of consumer to make purchases.

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1.6 Organization of the Study

This dissertation is organized in six chapters. The organization of the study is

as follows:

Chapter 1: This chapter covers the introduction, problem statement,

research objectives and questions, and significance of the study.

Chapter 2: This chapter addresses the overview of issue of functional

(healthy) food in Malaysia, and reviews of the literature on

factors that influence consumer behavior in the selection of

functional food..

Chapter 3: This chapter presents the development of a conceptual model,

study approach on proposed variables and hypothesis

development. This also included the research methodology,

which covers sampling technique, instrument design, and the

data collection process.

Chapter 4: This chapter presents the results from data analysis that covers

descriptive analysis of respondents‟ characteristics and findings

from normality test and also the reliability test.

Chapter 5: This chapter focuses on the in-depth discussion of the results,

conclusions, implementation of the study, recommendations,

contribution of the study and suggestions of future research.

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1.7 Chapter Summary

This chapter discusses the general view of the present study, which

includes the problem statement, research objectives and questions which are

clearly defined. Furthermore, the significance of the study will be discussed

followed by limitations of the study. This chapter ends with the organization

of the study. Following that, the literature regarding to antecedents of

functional (healthy) food purchase is reviewed in Chapter 2.

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