“In-store promotion and customer value on private label product purchase intention”

This study aims to determine the influence of in-store promotion in the form of price discount and price package on customer value and purchase intention. The research sample was 120 consumers purchasing the private label products in modern stores us- ing a purposive sampling technique. The data were then analyzed using SEM PLS. The result revealed that all hypotheses were accepted and each variable studied showed a strong and significant influence on each other, especially in terms of its influence on the purchase intention. In-store promotion is a more influencing variable of purchase intention in private label products than customer value. The result also pointed out the three most dominant items forming in-store promotion, customer value, and purchase intention. Those items are the frequency of discount program, the products’ quality, and the reference group that helps the company promoting private label products, usu- ally friends’ recommendation. These findings are expected to be used by decision-mak-ers in retail businesses to formulate in-store promotional activities and create customer value following the target market to increase consumers’ willingness to buy private label products.


INTRODUCTION
In Indonesia, private label product as a part of the retail sector has contributed 18.63% to employment absorption and 13.20% to gross domestic product (Badan Pusat Statistik [Statistics Indonesia], 2020). Goods exclusively owned and traded only by certain retailers and bring the retailers' name are called store brands/private labels (Sprott & Shimp, 2004;Levy et al., 2014) sold by the retailers to increase their margins, provide choices for customers, and encourage customer loyalty (Kumar & Steenkamp, 2007). Sethuraman and Gielens (2014) state that store brand sales throughout the world have increased for the last two or three decades, especially in the developed countries, has a retail sales contribution of 43% of to the employment absorption and gross domestic product. Unfortunately, the private label product sales in Asian countries, including Indonesia, have only reached less than 10% because customers in Asia have a strong loyalty to a brand and lack of retailers' investment to promote the private label products in the market (Nielsen, 2014). Herstein et al. (2017) suggest that to increase private label product sales, the retailers must use promotion. According to Grewal et al. (1998), Abril and Sanchez (2016), and Bues et al. (2017), one factor causing the consumers' purchase intention in stores is attractive promotion, price reductions, and pleasant price.
The previous studies on the forms of in-store promotion have been conducted by the researchers and resulted in the research on demonstration (Nordfalt & Lange, 2013), sample (Sprott and Shimp, 2004), discount (Ailawadi et al., 2009), and display product at the hallway end (Philips et al., 2015). Furthermore, some researchers previously used in-store promotional instruments, such as price discount, to encourage non-private label product purchase (Buyukdag et al., 2020: Crespo & Garcia, 2016Akaichi et al., 2015;Faryabi et al., 2012). However, previous studies still rarely discussed the influence of price discount on private label product purchase intention (Grewal et al., 1998;Neves, 2018).
The Indonesian consumers' attitude on private label product is always looking for lower prices with the same quality because they are very sensitive to prices (Retnawati et al, 2018). Thus, most retailers use price discounts in marketing private label products. Abril and Canovas (2016) argue that price reduction and coupon distribution provided by retailers to private label brand make the consumers feel receiving more values at lower prices and consequently strengthening the value position of private label brand.
Besides in-store promotion, customer value also becomes one factor driving the purchase intention on a product ( Thus, this research will be different from the previous studies as the authors focused on in-store promotion in the form of price discounts and packages and evaluated the other factors driving the purchase intention on a private label product, such as customer value. This research was conducted on respondents purchasing products in three modern retail types: minimarkets, supermarkets, and hypermarkets. (2020) emphasize that a special discount in price promotion implemented in a store influences the customers' purchase intention. Crespo and Garcia (2016) and Pai et al. (2017) suggest that in-store promotion in the form of price discounts positively influences purchase intention.

LITERATURE REVIEW AND HYPOTHESES
The items used to provide some statements in the questionnaires for in-store promotion consist of attractiveness and frequency of price discounts and price packages (

Customer value
Consumer evaluation of product benefits is simultaneously based on the perception of what is sacrificed compared to what is obtained, called customer value (Zeithmal, 1988). In contrast, Gallarza and Gil (2008) argue that the value arising when consumers own and consume the purchased goods/services is called customer value.

Purchase intention
Consumer purchase intention refers to the efforts made to purchase a product or service or consume the products available in the retail stores they have visited (Diallo, 2012;Retnawati et al, 2018). Diallo (2012) states that the intention to buy a product is usually manifested in purchasing a product. Engel et al. (1990) and Schiffman and Wisenbilt (2015) emphasize that purchase intention reflects the behaviors planned by the potential customers and possibly translated into purchase behaviors. Wang et al. (2012) assert that the customers take several steps when they want to purchase goods by looking for information, considering information, and evaluating the products to possibly purchase.
Not only having a direct influence on purchase intention, but customer value is also a variable, which mediates the influence of in-store promotion on purchase intention. Grewal et al. (1998) state that the discounts implemented by the retailers will influence customer value and store image and positively influence purchase intention. Vazifehdoost and Jamali (2017) add that purchase intention is positively influenced by customer value and store image resulted from the price discounts and the perceived brand quality. Pai et al. This study examines retailers who apply in-store promotional tools to increase economic, performance, social, and conditional value, which, in turn, will encourage consumers' willingness to buy private label products. Based on the research objectives, the formulations of the research problem are as follows: (1) How does in-store promotion influence customer value? (2) How does instore promotion influence purchase intention? (3) How does customer value influence purchase intention? and (4) How does in-store promotion influence purchase intention through customer value as a mediating variable?
To reach the objectives of this research, the authors use the following hypotheses: H1: In-store promotion has a positive and significant influence on customer value.
H2: In-store promotion has a positive and significant influence on purchase intention.
H3: Customer value has a positive and significant influence on purchase intention.
H4: In-store promotion has a positive and significant influence on purchase intention through customer value as a mediating variable.

RESEARCH METHODS
This research used both descriptive and verification methods. The descriptive method was con-ducted by providing explanations of the research variables based on survey data with a descriptive statistical approach, such as means and standard deviation.
The data were collected using a questionnaire. The distributed questionnaires contained 19 statement items regarding in-store promotion, customer value, and purchase intention. The questionnaire uses a Likert scale with the answer category of 1 to 5 (Strongly Disagree -Strongly Agree). The questionnaire was distributed to the consumers in modern stores (minimarkets, supermarkets, and hypermarkets) who have purchased private label products in every modern shop. The sample was consumers in Bandung, West Java, Indonesia. West Java is one of the provinces in Indonesia, which has the most modern stores in 2017 (Good News from Indonesia, 2020). Bandung city, located in West Java, is the city with the fifth largest population in Indonesia (Badan Pusat Statistik [Statistics Indonesia], 2019). A total of 120 questionnaires were collected.

Variance Based Structural Equation Modeling
(VBSEM), or better known as Partial Least Squares-Path Modeling (PLS-PM), was conducted to test the hypotheses (Hair, Hult, Ringle, & Sarstedt, 2017). The hypotheses in this research can be more clearly described in the path diagram (see Figure 1).

RESULTS
Before discussing the research results, the respondents' characteristics were explained in this section, as presented in Table 1 The research validity was seen from the loading factor of minimally 0.50, while the research reliability was seen from the combination of Cronbach's alpha (alpha), composite reliability (CR), and average variance extracted (AVE). The value of Cronbach's alpha and composite reliability should be greater than 0.700, while AVE should also be greater than 0.50 ( The research instruments were in the second-order format, which was then used as the measurement since having variable structures, dimensions, and items. The first-order model was presented in Table  2, while the second-order model was presented in Table 3. The measurement model evaluation results found that 1 item in the in-store promotion variable was invalid since the loading factor value was less than 0.50. The other invalid item was in the customer value variable, and two invalid ones were in the purchase intention variable. Those items include (1) price package frequency with a loading factor (0.363), (2) well-produced private label product with a loading factor (0.357), (3) comparing private label product info and national product with a loading factor ( 0.255), and (4) purchasing more products when needed with a loading factor (0.470). model analysis for items on all dimensions was considered valid and reliable with a validity coefficient of greater than 0.500. the reliability coefficient has met the minimum limit of 0.700 for alpha and CR, while that for AVE was above 0.500. The second stage measurement process also concludes that all dimensions were considered valid and reliable in measuring the research variables with a loading factor value of greater than 0.500 and a reliability coefficient of greater than the minimum limit.
The results of the second-order measurement model (Table 3) analysis found one dimension with a low loading factor, that is, the condition-al value dimension, which indicated that this dimension was not considered important in explaining the customer value variable. However, this dimension was maintained because the hypothesis testing results had the p-value (0.031) smaller than 0.05. It means that this dimension had a significant relationship with the customer value variable. Besides, the customer value variable still had a high-reliability value indicated by the value of CR = 0.712. Based on the instrument testing results, it can be concluded that both items or dimensions were valid and reliable. Thus, the conclusions obtained in this research were expected to present both valid and reliable results. Furthermore, a model analysis on the influence of in-store promotion on customer value and its influence on purchase intention was conducted. The influence parameter estimation was conducted using the ordinary least squares (OLS) method, and hypotheses testing was based on the boostrap method (Hair, Ringle, & Sarstedt, 2011).
The analysis results (Table 4) showed that the direct influence of in-store promotion on customer value was shown with a standard deviation of 0.275 and a p-value of 0.002. The influence of in-store promotion on purchase intention was direct, with a stand-ard deviation of 0.289 and a p-value of 0.001. the influence of customer value on purchase intention was equal to the standard deviation of 0.225 with a p-value of 0.011. The p-value of each influence was less than 0.05. Thus, it can be concluded that the instore promotion variable had a significant influence on customer value and purchase intention. It means that increasing in-store promotion influenced customer value and encouraged purchase intention. The customer value variable also had a significant influence on purchase intention. Thus, it can be concluded that increasing customer value resulted in higher purchase intention on private label product.  Apart from direct influence, this research also involved the indirect influence of the in-store promotion variable on purchase intention through customer value. The analysis result found the indirect influence with the standard deviation of 0.062 and p-value of 0.031. The p-value of less than 0.05 indicated a significant indirect influence of the in-store promotion variable on purchase intention through customer value. Thus, it can be concluded that customer value had played its function as a variable, which could mediate the influence of in-store promotion on purchase intention. Based on the calculation of direct and indirect influence, it was found that instore promotion variables had a total influence of 0.3512 on purchase intention.
The analysis results also found that the determination coefficient magnitude from the in-store promotion variable on customer value was 0.075, while the determination coefficient of the in-store promotion variable and customer value on purchase intention was 0.170. The relatively small determination coefficient indicated that changes in customer value and purchase intention influenced complex systems involving more variables than those included in this study. However, the goodness of fit (Gof) value was 0.476, greater than 0.36. It indicated that the proposed model was in accordance with the data. In other words, this model greatly described the existing phenomena. The changes made by the in-store promotion variable had a positive influence directly on customer value, directly and indirectly on purchase intention, while changes in customer value were also proven to cause changes in purchase intention.

DISCUSSION
The data analysis shows a significant influence of the in-store promotion variable on customer value by 0.275. It means that promotion in an attractive and valuable store will influence customer val-ue. This is following the statement made by Chen (2009), mentioning that private label product promotion, which is attractive, useful, and possessing a good value, will encourage the customers' shopping preference. Akram et al. (2017) argue that monetary promotion in the form of price discounts and packages provides benefits for the consumer in the form of convenience and economical prices. Sinha and Verma (2020) state that customer value in the form of utilitarian benefit, that is, money-saving, comfort, and hedonic benefit, covering exploration and entertainment resulted from the price discounts and generally provided related to food and body care products.
In Indonesia, promotion in private label product stores is usually in the form of price discounts and packages, generally informed in stores and displayed on banners. According to Gorji et al. (2020), sales promotion displayed in the form of banners can attract the consumers' attention and influence purchases if the banner has attractive displays, such as interesting banners with attractive images and information contained in the banners focuses on the discount percentage. Cavusoglu et al. (2020) added that consumer purchase intentions would increase if the price discount is offered at a certain percentage.
Retailers in Indonesia frequently give price discounts or packages several times in the year with a fairly large percentage of price and item discounts. Thus, the promotion should be made weekly or monthly. This is in line with the opinion stated by Nordfalt and Lange (2013), mentioning that in-store promotion will be more effective if regularly made and scheduled. Furthermore, the consumers feel that they have already got private label products at lower prices and are worth purchasing good quality products at lower prices.
Meanwhile, in-store promotions also have a significant direct influence on purchase intentions by Besides having a direct influence, the in-store promotion variable also has a significant indirect influence through customer value on purchase intention by 0.062. It means that the better the store promotion, customer value can also increase purchase intention. This result supported the research conducted by Pai et al. (2017), emphasizing that monetary promotional activities in the form of price discounts increase customer value and encourage the consumers' purchase intention.

CONCLUSION
The results showed that in-store promotions had significant effects on customer value and purchase intention. Moreover, there was a significant effect on in-store promotions on purchase intentions through customer value as a mediating variable. The analysis found that in-store promotions had a greater influence on purchase intention than customer value. Discount frequency, performance value, and willingness to recommend private label products to friends are the most dominant items, which form the variables in this study and can be considered by decision-makers in the retail business.
This research has some limitations. First, the samples were only taken from one area in Indonesia. Second, the research was conducted on several product types. Further research should focus on more extensive regions in Indonesia and conduct research only on one product type. Having some limitations, this study has a strong element concern related to the conditional values, which were less frequently used by the other researchers.
One advises decision-makers in the retail business to implement in-store promotions in the form of price discounts and price packages to pay attention to the following suggestions, namely: (a) implementing scheduled price discounts and price packages more frequently and informing price discounts better in a certain percentage form than in a certain nominal (this information should be displayed in banners that have attractive shapes, fonts, and images); (b) using social media with the theme of recommendation groups of references so that consumers want to recommend products; (c) creating a quality control program to maintain the sustainability of the private label product quality.