Is this Truly Healthy? Consumer's Trust in a Healthy Product
Extension in Traditionally Unhealthy Products
ANTON AGUS SETYAWAN1, HUDA MAULANA1, PUTRI DEWI WULAN KUSUMAWATI1,
SRI MURWANTI1, EDY PURWO SAPUTRO1
Management, Faculty of Economics and Business,
Universitas Muhammadiyah Surakarta,
Jalan A Yani Tromol Pos 1, Sukoharjo,
INDONESIA
Abstract: - Global health awareness trend has been increasing even before the pandemic. Companies jump on
this bandwagon by introducing a healthier product line or extension. Problems arise when the parent brand is
widely perceived as unhealthy, as it may hinder the process of building trust in the new brand. This research
examined how brand trust of a healthy brand extension mediates the relationship between perceived
competence and benevolence on customer loyalty. Structural Equation Modelling was employed in answering
this question, involving a survey on respondents’ attitudes toward a recently-launched healthy instant noodle.
The study found that brand trust mediates the relationship between perceived competence and benevolence and
brand loyalty. Therefore, this study found that it is advisable to introduce a newer product line to form trust
instead of relying on brand extension when the public's attitudes towards the original brand are too strong.
Key-Words: - brand trust; brand loyalty; perceived competence; healthy products; consumer behavior; product
extension
Received: August 15, 2022. Revised: February 19, 2023. Accepted: March 10, 2023. Published: March 31, 2023.
1 Introduction
With over 12,5 million servings demanded in a year,
Indonesia is the second biggest instant noodle
consumer worldwide in 2020, only after China, [1].
To put that into perspective, Indonesia’s demand for
instant noodles is bigger than USA’s and Japan’s
combined. Indonesians’ fondness for the food is not
only explained by its preparation simplicity but
instant noodle consumption has also been engrained
culturally within the community. As such, a study
even revealed that their Indonesian respondents
wrongfully perceived that instant noodles help them
avoid obesity, [2].
However, the food is known for its danger as
opposed to its benefits, and rightfully so. A rich
body of health sciences knowledge has associated a
number of risks with instant noodles, [3], [4], [5].
Not only that, the instant food contains next to no
nutritional value, [6]. It is encouraging that, at least
in Indonesia’s case, the annual demand for instant
noodles is going through a decline, [7]
Indeed, healthy eating awareness, [8] and
fondness towards organic food, [9] have been a
worldwide trend even before the pandemic. The
global demand for organic food had doubled in less
than a decade prior to the pandemic, [10]. After the
pandemic, the trend persists if not intensifies. A
recent survey by Statista reported that not only half
of their respondents tried to eat healthily, half of the
rest also actively tried to avoid preservatives, [11].
Acting on this recent trend, ISM, a leading
instant noodle manufacturer in Indonesia, released a
healthy instant noodle product line, referred to as
LM noodles hereafter
1
. The company is a dominant
force in Indonesia’s instant noodle market, with an
overwhelming 72% market share, [12]. Their
dominance may provide a solid foundation to instill
trust in the customers, who have long thought that
instant noodle is an unhealthy product, that the
healthy product is indeed healthy. However,
research on how the attitudes toward the healthier
version of a traditionally-perceived unhealthy
product is few and far between.
Among the few, a study examined how a
healthier product extension fits the parent brand, [8].
It studied the snacks market in Mexico, which
makes the study very similar to the one presented.
Firstly, snacks and instant noodles can satisfy due to
their ease of use. Secondly, both Indonesia and
Mexico are viewed as third-world countries. They
found that the attitudes towards the parent brand, the
less-healthy option, are too pervasive. This makes
1
Both ISM and LM are pseudonyms
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DOI: 10.37394/23207.2023.20.69
Anton Agus Setyawan, Huda Maulana,
Putri Dewi Wulan Kusumawati, Sri Murwanti,
Edy Purwo Saputro
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the reformulated product have low nutritional value
credibility. Moreover, Kemp and Bui who studied
product extensions offered as the healthier
alternative, found that brand familiarity and
credibility on a healthier brand both positively
stimulate purchase intentions, [13]. However, they
did not extend their inquiry on whether the healthier
alternative’s perceived familiarity and credibility
originated from the parent brand.
The aforementioned research gap calls for further
studies on how customers perceive and trust the
healthier option of products that are largely seen as
unhealthy. The current research sought to examine
how brand trust of a healthy brand extension
mediates the relationship between perceived
competence as well as benevolence on customer
loyalty, using LM noodle as a case in point.
Consumers are said to show brand trust when
they have confidence in the specific aspects of a
brand, [14], [15], [16], and this is especially true in
credence-based products of which quality is difficult
to judge, [17]. Trust is also associated with the
confidence one has in the risk of using a product, or
lack thereof, [18], [19]. Indeed, "reliance" is the
keyword in a consumer putting trust in a product,
[20, p. 644], as trust lowers the perceived
uncertainty associated with the purchase and in turn
also decreases the perceived risk, [21]. Therefore, it
can be said that consumers who put trust in a brand
not only believe that it will satisfy their needs, [21]
but also believe that it possesses the right intention
to do so and minimize the risk while doing that.
Indeed, two variables commonly associated with
brand trust are perceived competence and perceived
benevolence, [15], [16], [22]. Perceived
competence refers to the extent to which customers
view a product can solve their problems and satisfy
their needs. A brand is perceived to be competent
when it can be relied upon and possess the ability to
do the thing it is purchased for, [20]. In regards to
this research, perceived competence can be divided
into competence perception towards the parent
brand and the extended brand, [23], even though
"brands are proprietary quality signals linked to a
specific firm", [22, p. 622].
Benevolence is another deciding factor of brand
trust, [24], [25], [26]. Perceived benevolence is
when a customer believes that a company has a
sincere intention to do good for the customer, [25].
Some past researchers proposed an interesting
definition of the term, they suggested that
benevolence is the ability of an organization to first
serve the needs of their customers before their own,
[27]. Pertaining to this, a well-cited longitudinal
study found that consumers who create a
relationship with a brand perceived as sincere
resemble a relationship with a close friend, [28].
Trust is crucial in forming purchasing decisions,
[17] as well as maintaining customer loyalty, both in
the business and customer markets, [17], [29]. Trust
has been recognized as having a crucial role in
consumer purchasing decisions and product loyalty,
[17]. A company is more likely to generate brand
loyalty when they are able to instill trust among the
customers, [30], with this especially true in high-
involvement purchases, [31], [32]. Indeed, trusted
brands generate not only behavioral loyalty, but also
attitudinal loyalty, [33].
2 Methodology
Employing quantitative methods, this study relied
on online questionnaires to obtain its data.
Purposive sampling was used, with most of the
recruited respondents coming from a mid-size city
in Java, Indonesia. As loyalty is one of the
constructs studied, respondents should have already
purchased LM noodles. One hundred forty
respondents were invited to fill in the questionnaire,
which is a representative number.
2.1 The Structural Model and Hypothesis
The study employed variant-based Structural
Equation Modeling (SEM). The Partial Least Square
method is employed to test measurement errors and
hypotheses, with the calculation conducted using
SmartPLS 3.0.
As aforementioned, the study sought to identify
the influence of perceived competence and
benevolence on brand loyalty mediated by brand
trust. Therefore, the study can be summed up by the
following framework.
Fig 1: Research Framework
Based on the aforementioned or otherwise
mentioned further below, the following hypotheses
can be stated.
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Anton Agus Setyawan, Huda Maulana,
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H1: perceived competence
positively influences brand
trust
H2: perceived benevolence
positively influences brand
trust
H3: brand trust positively
influences brand loyalty
H4: mediated by brand trust,
perceived competence
positively influences brand
loyalty
H5: mediated by brand trust,
perceived benevolence
positively influences brand
loyalty
2.2 Construct Measurement
Each construct was measured using two to three
items modified from commonly used measures
within the marketing, consumer behavior and
psychology realms and further adapted to suit the
instant food industry better. The wording was also
simplified, considering that the respondents might
not all have a college degree. Albeit simplified, the
survey questions aimed to elicit the respondents’
overall attitudes and perceptions of LM noodles.
Variables
Operational
Definitions
Dependent variable
Brand loyalty
[22], [36], [36]
Long-term commitment
Repeat purchase
Mediating variable
Brand trust
[16], [22], [37]
Brand performance
Quality reliability
Independent
variables
Brand competence
[17], [30]
Brand benevolence
[22], [30], [38]
Ability to solve
customers’ needs
Ability to safely serve
customers’ needs
Perceived sincerity in
the customers’ welfare
Perceived responsibility
in the production
process
3 Results
3.1 The Respondents
Table 1. Respondents' demographic characteristics
Gender
Frequency
Male
34
Female
89
Unspecified
17
Total
140
Age range
Frequency
17 – 22
98
23 – 24
19
Total
140
Occupation
Frequency
Students
87
Housewives
11
Factory workers
8
Part-time workers
1
Office workers
19
Self-employed
14
Total
140
Table 1 briefly describes the demographic
characteristics of respondents involved in the study.
This research employed purposive sampling by
filtering respondents to only those who had
purchased LM to ensure that they had formed
attitudes toward the product. Therefore, the sample
typifies LM’s target market. For instance, only a
small fraction of the respondents was grassroots
workers. Indeed, LM was marketed as healthier
instant noodles, so the price is significantly higher
than other brands.
3.2 Validity and Reliability Test
The Validity test in the study includes convergent
validity and discriminant validity. Table 2 shows
that the outer loading for each variable was more
than 0.7, indicating that all variables were deemed
valid, [39]. In regard to the discriminant validity in
table 3, each variable’s average variance extracted
(AVE) exceeded the 0.5 thresholds, suggesting that
each variable has acceptable discriminant validity,
[22], [39].
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Table 2. Outer loading
Variables
Indicators
Outer
Loading
Note
Perceived
Competence
X1
PC1
0.921
Valid
PC2
0.882
Valid
PC3
0.836
Valid
Perceived
Benevolence
X2
PB1
0.936
Valid
PB2
0.942
Valid
Brand Trust
Z
BT1
0.935
Valid
BT2
0.928
Valid
Brand Loyalty
Y
BL1
0.962
Valid
BL2
0.946
Valid
Table 3. Average Variance Extracted
AVE
Perceived Competence
0.775
Perceived Benevolence
0.882
Brand Trust
0.868
Brand Loyalty
0.910
The reliability test conducted involved a composite
reliability test. A variable having a composite
reliability value exceeding 0.7 is said to be a reliable
construct, [39]. Table 4 suggests that all constructs
measured were proved to be reliable.
Table 4. Composite reliability
Composite
Reliability
Perceived Competence
0.912
Perceived Benevolence
0.937
Brand Trust
0.929
Brand Loyalty
0.953
3.3 Direct Effect Test
Table 5. Path coefficient
Original
Sample
(O)
T-
Statistic
P-
Value
Perceived Benevolence on
Brand Trust
0.466
8.129
0.000
Perceived Competence on
Brand Trust
0.473
8.044
0.000
Brand Trust on Brand
Loyalty
0.659
11.548
0.000
H1: perceived competence positively influences
brand trust
H2: perceived benevolence positively influences
brand trust
H3: brand trust positively influences brand loyalty
In terms of the study result, as suggested by table 5,
across the first three hypotheses, which concern the
immediate influences, all the p values were under
the threshold level of 0.05 set in this study. This
suggests that all hypotheses one, two and three were
accepted.
3.4 Mediating Effect Test
Table 6. Indirect effects
Original
Sample
(O)
T-
Statistic
P-
Value
Perceived Competence
Brand Trust Brand
Loyalty
0.312
6.093
0.000
Perceived Benevolence
Brand Trust Brand
Loyalty
0.307
7.070
0.000
H4: mediated by brand trust, perceived
competence positively influences brand loyalty
H5: mediated by brand trust, perceived
benevolence positively influences brand loyalty
Furthermore, the calculated p-values in the indirect
effect test were under 0.05, as shown in Table 6.
Therefore, this suggests that both H4 and H5 were
accepted. This means that brand trust mediates both
perceived competence and perceived benevolence
on brand loyalty.
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4 Discussion
This research aimed to identify the relationships
between perceived competence and benevolence
and brand loyalty which is mediated by brand trust.
While other similar inquiries have been conducted,
[15], [16], [22], the present study specifically
investigated the relationship between the variables
in the context of a newly launched healthier product
line of which the parent product was widely
perceived as unhealthy products. Nevertheless, the
results of the study largely confirm the findings of
prior studies.
Li et al., proposed an alternative way of
identifying brand trusts, [15]. They argued that
brand trust is a "second-order measurement" of
which formulation is determined by "first-order
measurements", which are competence and
benevolence, [15, p. 1]. The current study found a
positive link between perceived competence,
perceived benevolence and brand trust. This means
that this finding not only confirms that of Li et al.,
but also extends their findings into the context of
new and improved product lines introduced as a
healthier alternative to the original products, [15].
Therefore, the current study also contributes to
the debate on whether a brand extension is a suitable
strategy when a company wants to launch a new
healthier product line of which the original line is
widely known as unhealthy, [8]. The current study's
findings suggest that when the public's perception
and attitudes towards the original brand are too
strong, introducing a newer product line is necessary
to instill trust in the new line. This study's case was
deliberately picked to represent such a case since
ISM's share in Indonesia's instant noodle market is
well over 70%, most, if not all, of which rely on
product lines perceived as unhealthy.
Moreover, this study confirms previous findings
on the relationship between brand trust and brand
loyalty. Prior studies, [16], [22], [33], [35]
unanimously argued that brand trust has a linear and
positive relationship to brand loyalty. As for this
case, this suggests that for ISM and other companies
in similar positions, building brand trust is a crucial
foundational block for forming brand loyalty.
Finally, this research also confirms the mediating
effect of brand trust on the relationship between
Perceived Competence and Benevolence and brand
loyalty, [16], [17], [22], [30]. In other words, the
higher the perceived competence and benevolence,
the higher the customer's trust in the new brand,
which will lead to stronger brand loyalty, and vice
versa. Therefore, it is essential for LM noodles and
other brands in similar positions to show their
ability to fulfil the needs they have purchased and
express the right intention in doing so. Both will
form competence and benevolence as perceived by
the customers.
5 Conclusion
This study proposed a suggestion suitable for both
the academia and business realms. While there has
been a growing debate on the sufficiency of brand
extension when introducing an altered or improved
branding, introducing a new product line is
especially urged for companies whose original
brand might risk overwhelming the new branding.
Nevertheless, future studies are suggested to
conduct similar inquiries but use a less-strong
original brand. It is intriguing to see whether the
same pattern will hold in a different context.
Finally, the current study possesses some
limitations. Firstly, the study investigated fast-
moving consumer goods in a confined time period.
Attitudes towards this type of goods are always
volatile depending on the current trends. Future
studies might yield different results depending on
the time frame and the current ongoing trend.
Therefore, future studies should examine this in
post-covid markets. Secondly, the study only
investigated one product line within a specific
market region. This study might have failed to
capture result variations across different brands and
markets. It might be worth doing for future studies
to replicate similar inquiries using other brands with
varying market shares within a single study.
Acknowledgement:
The authors wish to thank Universitas
Muhammadiyah Surakarta, which facilitated this
research, particularly the Faculty of Economics and
Business.
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Contribution of Individual Authors to the
Creation of a Scientific Article (Ghostwriting
Policy)
-Anton Agus Setyawan and Putri Dewi Wulan
Kusumawati collected the research data and
performed the PLS-SEM Analysis,
-Huda Maulana, Sri Murwanti, and Edy Purwo
Saputro collectively wrote the research article
Sources of Funding for Research Presented in a
Scientific Article or Scientific Article Itself
The authors wish to thank Universitas
Muhammadiyah Surakarta, which facilitated this
research, particularly the Faculty of Economics and
Business.
Conflict of Interest
The authors have no conflict of interest to declare
that is relevant to the content of this article.
Creative Commons Attribution License 4.0
(Attribution 4.0 International, CC BY 4.0)
This article is published under the terms of the
Creative Commons Attribution License 4.0
https://creativecommons.org/licenses/by/4.0/deed.en
_US
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2023.20.69
Anton Agus Setyawan, Huda Maulana,
Putri Dewi Wulan Kusumawati, Sri Murwanti,
Edy Purwo Saputro
E-ISSN: 2224-2899
758
Volume 20, 2023