The Impact of Brand Image and Discounted

Price on Purchase Intention in Outlet Mall:

Consumer Attitude as Mediator
Dr. Ren-Fang Chao, Corresponding Author, Department of Leisure Management,
I-Shou University, Taiwan
Ping-Chu Liao, Master, Postgraduate Programs in Management, I-Shou University, Taiwan

ABSTRACT

Outlet malls have become important retail spaces. In order to understand the influence of outlet
malls’ brand image and discounted price on purchase intention, and to explore the mediating effect of
consumer attitude in this model, the present study used an outlet mall in southern Taiwan as a case study.
A questionnaire of outlet mall consumers was conducted and structural equation modeling (SEM) was
used to analyze the results. The results show that brand image does indeed influence consumers' purchase
intention. However, when the mediating variable of consumer attitude was included, the relationship was
fully mediated. This showed that for the brand image of outlet malls to obtain the benefit of encouraging
the purchase intention of consumers, a supportive attitude of consumers is necessary. In other words, it is
necessary to win the trust of consumers. Since the most important features of malls—discounted
prices—are equivalent to long-term price promotions, they also significantly influence consumers'
purchase intention. In addition, consumers are increasingly demanding that outlet malls provide more
diverse and leisure-orientated functions. This development should be an important focus for both
researchers and operators of outlet malls.
Keywords: Shopping mall, Retail, Price promotion, Consumer trust, Leisure space

INTRODUCTION

Outlet malls are retail clusters that sell branded products at discounted prices (Reynolds, Ganesh, &
Luckett, 2002; Whyatt, 2008). By definition, outlet malls are used by manufacturers to clear excess
product inventory or products with small visual defects (Coughlan & Soberman, 2005). Birkett (2000)
argued that outlet malls also serve functions of brand building and market testing. Outlet malls provide
entertainment and leisure functions, and are also an important factor in encouraging consumers to shop
(Sierra & Hyman, 2011). Even though consumers are increasingly shopping online, outlet malls remain
an extremely important outlet for goods and services (Larsen, Shelton, & Wright, 2015). Therefore, due to
the development of outlet malls over the past 30 years, these malls have gradually replaced traditional
markets as major retail locations (Sierra & Hyman, 2011). Whyatt (2008) pointed out that outlet malls are
the fastest growing retail format in Europe, and are a widely popular retail format in the United States,
Japan, and Dubai (Sierra & Hyman, 2011).
Traditionally, outlet malls have been established at major road junctions or tourist attractions
(LaBay & Comm, 1991) based on consideration for the convenience of consumers to visit outlet malls
(Huff, 1966). However, in recent years, developers have been increasingly building outlet malls in
metropolitan areas (Sierra & Hyman, 2011). This trend is based on area/location considerations (Bucklin,
1971). However, even though there are different considerations when choosing the location of outlet

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malls, Eppli and Shilling (1996) argued that location is not the main factor predicting propensity to
consume. Instead, outlet mall brands and synergy with brand outlets are the most important predictors of
performance. This suggests the importance of outlet mall operators in building brand image. In addition,
discounted prices are the main feature of outlet malls, and the most important factor attracting shoppers.
Sierra and Hyman (2011) found that consumers are attracted by price discounts primarily due to the
euphoric feelings that they produce. However, previous studies have also shown that consumer attitudes
also affect decision to purchase (Hartmann & Apaolaza-Ibáñez, 2012; Priester, Nayakankuppam, Fleming,
& Godek, 2004; Zhang & Kim, 2013). The “euphoria” that Sierra and Hyman (2011) referred to may be a
factor in forming consumers’ consumption attitudes.
Compared to other advanced countries, the development of outlet malls in Taiwan has been
relatively slow. Although in the past individual brands have established factory outlet centers, the first
large-scale outlet mall bringing together a large number of brands was not established in Taiwan until
2010. Subsequently, more new outlet malls have been established. In other words, outlet malls in Taiwan
are an emerging market. Therefore, the location of these malls tends to be on the urban periphery. Aside
from reflecting the trend for locations of outlet malls identified by Sierra and Hyman (2011), competition
between different outlet malls also reveals the value of brand image in the minds of consumers. In a
preliminary review of research on outlet malls, Whyatt (2008) found rich literature on the relationship
between individual characteristics of consumers (lifestyle, expectations, and psychological state) and the
characteristics of outlet malls. However, while there is rich literature on other retail formats, research on
consumer behavior in outlet malls is limited. In particular, for Taiwan where outlet malls are an emerging
market, research on the perceptions of consumers regarding outlet malls is needed. Therefore, the present
study examined consumers at outlet malls in Taiwan. Specifically, to investigate the effect of brand image
and discounted prices on consumers’ purchase intention and whether this process is mediated by
consumer attitudes, in order to understand the behavior patterns of outlet mall consumers in Taiwan.

LITERATURE REVIEW AND HYPOTHESES

The Relationship between Brand Image, Consumer Attitude, and Purchase Intention
Brand Image. Brand image plays an important role in corporate marketing, and is seen by
consumers as a type of information, which not only impacts on the overall image of the enterprise, but
also acts as a basis for consumers' purchase intention. Henderson, Cote, Leong and Schmitt (2003) argued
that brand image involves communicating the significant external features of products to consumers.
When consumers wish to purchase products, consumers are expressing brand association and awareness,
and therefore inferring the product quality, which stimulates their purchase behavior (Sierra, Heiser,
Williams, & Taute, 2010). Keller (2001) suggested that firms with good brand image have higher product
value in the minds of consumers. For enterprises, brand image can differentiate the products and services
provided by different suppliers. This is primarily used to indicate the products and services provided by
the enterprise (Smith & Wheler, 2002). Howell and Rogers (1980) also pointed out that the image of
shopping malls has more appeal for consumers compared to their size. Although outlet malls are at their
initial stage in Taiwan, due to limited space and fierce competition between different outlet malls,
building brand image in the minds of consumers is an important competitive factor to highlight the
features of the outlet mall. With regards to the content of brand image, Park, Jaworski, and Macinnis
(1986) approached this problem from the perspective of consumer benefits, proposing three factors:
experiential, functional, and symbolic. The approach proposed by Park et al. (1986) has become widely
used for measuring brand image (Chao & Kuo, 2013).

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 Purchase Intention. “Intention” refers to an individual’s behavior to attain certain desired future
goals. It also refers to whether, during the decision making process, consumers decide to adopt certain
behaviors. Bendall-Lyon and Powers (2004) defined intention as consumers’ perception of their future
behavior. This means that when consumers have a stronger intention toward a particular behavior, they
have a greater probability of carrying out this behavior in the future. High consumer motivation is the best
way to predict the possibility of particular consumer behavior in the future (Molinari, Abratt, & Dion,
2008). Understanding consumers’ purchase intention helps to identity reasons for their purchase
decisions. Once factors influencing consumers’ purchase intention have been identified, corresponding
adjustments and improvements to marketing strategy can be made, producing beneficial solutions to
attract more consumers and strengthening business growth (Cretu & Brodie, 2007). Brands with a good
image can increase consumers’ loyalty to the brand and trust in its products, therefore strengthening
consumers’ purchase intention (Aaker & Keller 1990; Lee, Shin, Park, & Kwon, 2010). In addition, Eppli
and Shilling (1996) argued that brand image has an important role in the purchase intention of outlet mall
consumers. Thus, this study hypothesized:
H1: Brand image of outlet mall has a positive and significant impact on purchase intention.
Consumer Attitude. Consumer attitude refers to an individual’s positive or negative views toward
people, events, objects, or behaviors, reflecting preferences toward these people, events, objects, or
behaviors, thereby generating positive or negative intention toward continued purchase behavior
(Blackwell, Miniard, & Engel, 2006). For outlet mall consumers, consumer attitude is also an important
factor affecting purchase intention (Sierra & Hyman, 2011). Consumer attitudes are an important factor
when planning marketing strategies. Therefore, all components of consumer attitudes must be considered,
including cognitive, affective, and behavior components (Rosenberg & Hovlland, 1960). In recent years,
the relationship between consumer attitudes and purchase intention has been widely considered in
different fields, showing that consumer attitudes have a positive effect on purchase intention (Kang, Tang,
& Bosselman, 2011; Sierra & Hyman, 2011). In addition, in a study on the relationship between brand
image and consumer attitudes in the sports apparel market, Ranjbarian, Fathi and Jooneghani (2013)
found that brand image has a positive influence on consumer attitudes. Accordingly, we expect that
attitudes of outlet mall consumers have a mediating role in the relationship between brand image and
purchase intention. Thus, this study hypothesized:
H2: Consumer attitudes have a mediating effect on the relationship between the brand image of the
shopping mall and the purchase intention of consumers.

The Relationship between Price, Consumer Attitude, and Purchase Intention

Discounted Price. Price is typically an important factor influencing consumers' purchasing behavior.
Consumers respond to discounted prices primarily as a result of the values and benefits that discounted
prices offer to consumers (Keller, 1998). Although discounted prices do not only refer to reduced prices,
and may also refer to differences in the price of services obtained by consumers for goods of the same
price (Raghubir & Corfman, 1999). However, Chen, Marmorstein, Tsiros and Rao (2012) found that for
high priced products, discounts have a greater influence on consumers compared to the increased value
from bonus packs. One of the important features of outlet malls is price. In outlet malls, consumers are
able to benefit from discounted products (Barnes, 1998). Based on the importance of price in the minds of
consumers, previous research has confirmed that price influences the purchase intention of consumers
(Alford & Biswas, 2002; Biswas, Pullig, Yagci, & Dean, 2002; Jiang & Rosenbloom, 2004; Tarkiainen &
Sundqvist, 2005). For outlet malls that attract consumers through price promotions, price may also be a
factor influencing purchase intention. In addition, the price paid by consumers for products creates the

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product value. During the process, consumers generate value consciousness (Lichtenstein, Netemeyer, &
Burton, 1990; Zeithaml, 1988). Therefore, the value consciousness created by price promotions affect the
attitude of consumers, thereby influencing consumers’ purchase intention. Thus, this study hypothesized:
H3: Discounted prices at outlet malls have a positive and significant impact on purchase intention.
H4: Consumer attitudes have a mediating effect on the relationship between price promotions of the
shopping mall and the purchase intention of consumers.
Base on the above research purpose, literature review, and hypotheses, this study proposes the
following research model (Figure 1):

Figure 1: Research Model

METHOD

Measurement
Questionnaires were used to measure the views of outlet mall consumers on brand image,
discounted price, consumer attitude, and purchase intention. The questionnaires for the above four
dimensions are independent from each other. The brand image questionnaire items were based primarily
on the questionnaire developed by Chao and Kuo (2013), and the design of these questionnaire items
followed the experiential, functional, and symbolic sub-dimensions developed by Park et al. (1986). The
discounted prices questionnaire items were based on the questionnaire design of Grewal, Monroe and
Krishnan (1998), with appropriate modifications to tailor to the current study. The consumer attitudes
questionnaire items were based on the questionnaire developed by Huang, Lee and Ho (2004), and the
design of these questionnaire items followed the cognitive, affective, and behavior sub-dimensions
developed by Rosenberg and Hovlland (1960). The purchase intention questionnaire items were based on
the scale developed by Sierra and Hyman (2011), with appropriate modifications. We used a seven-point
Likert scale, with the response items: “strongly disagree,” “disagree,” “somewhat disagree,” “neither
agree nor disagree,” “somewhat agree,” “agree,” and “strongly agree,” producing a score of between one
and seven points.

Data Collection, Sample, and Statistical Analysis

The questionnaire was distributed at a large outlet mall in southern Taiwan. We used a random
sampling method to distribute total of 450 questionnaires. After eliminating invalid questionnaires, 420
questionnaires were returned, producing a response rate of 93.33%. Of the respondents, 48.10% were
male and 51.90% were female. The age group 21–30 had the largest number of respondents, accounting

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for 33.57% of the total. The age group 61 and over had the smallest number of respondents, accounting
for 5.24% of the total. A total of 30.48% of respondents spent between NT$1,000 and NT$3,000, while
only 11.19% of respondents spent more than NT$15,000. We used structural equation modeling (SEM)
for statistical analysis. During the data analysis process, we followed the recommendation of Hau and
Marsh (2004), using item parceling for the brand image and consumer attitudes sub-dimensions, and
Bollen-Stine bootstrap recommended by Enders (2005) for model fit. We used Amos 22 as the analytical
tool to understand the influence of brand image, discounted prices, and consumer attitudes on the
purchase intentions of outlet mall consumers.

RESULTS

Measurement Model
The measurement model used observed variables to estimate latent variables or the hypothetical
structure, and showed that the observed variables had validity and reliability in reflecting the latent
variables (Hair et al., 2006). Table 1 shows the observed variables, factor loadings, t-values, average
variance extracted (AVE), and composite reliability (CR). These values were necessary to assess our
measurement model. Since all factor loadings were greater than .5, this indicates that the measurements of
the observed variables have convergent validity at the item level. In addition, the associated t-values of
the standardized factor loadings for the observed variables were all greater than 1.96, indicating statistical
significance (Anderson & Gerbing, 1988). Table 2 shows that the intercorrelations of the four latent
variables, ranging from 0 to .835, were lower than the recommended threshold of .85 (Kline, 2005),
providing evidence of discriminant validity.

Table 1: Confirmatory Factor Analysis and Scale Reliability

Observed Variables Factor Loading t C.R. AVE
Brand image
Experiential .838 - .897 .745
Functional .863 21.416
Symbolic .887 21.980
Discounted price
Discounted prices are attractive .855 - .942 .763
Discounted prices give me the feeling of value .915 26.569
Discounted price is very cost-effective .877 23.587
Discounted price will give me real benefits .877 22.954
Discounted prices make me feel the value of purchase .843 21.510
Consumer attitude
Cognitive .771 - .776 .538
Affective .630 14.011
Behavior .790 17.629
Purchase intention
I will consider shopping at the outlet mall .818 - .910 .669
In future, there is high probability that I go to the outlet mall to shop .815 22.363
As long as there is a chance, I am willing to go to the outlet mall to shop .822 22.663
I have the urge to go shopping at the outlet mall .842 23.180
I would recommend my friends to shop in the outlet mall .793 21.218
Note: *t-value is significant at p＜.05 when the t-value exceeds 1.96; **C.R.: composite reliability; ***AVE: average variance
extracted.

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 Table 2: Correlation matrix of the latent variables
Discounted price Brand image Consumer attitudes Purchase intention
Discounted price 1
Brand image 0 1
Consumer attitudes .237 .792 1
Purchase intention .333 .697 .835 1

Structural Model
In the SEM statistical analysis, there are many approaches to measuring the goodness-of-fit of the
structural model. Typically, methods such as GFI, AGFI, RMSEA, TLI, and CFI are used (McDonald &
Ho, 2002). In the present study, we used the maximum likelihood method to test the structural equation
model. From Table 3, a comparison of the goodness-of-fit indicators and corresponding recommended
values shows a good goodness-of-fit (χ2= 145.981, df = 99, GFI = .976, AGFI = .968, RMSEA = .034,
TLI = .990, CFI = .992). From the path analysis in Table 3, although brand image did not have a
statistically significant influence on purchase intention, the paths Brand Image  Consumer Attitudes,
and Consumer Attitudes  Purchase Intention were both statistically significant. Therefore, H1 was still
supported. In addition, the Discounted Price  Purchase Intention path was also statistically significant,
therefore H3 was supported.

Table 3: SEM Path Coefficients

Path Standardized estimate t* Significant
Brand image  Consumer attitudes .792 11.672 Y
Discounted price  Consumer attitudes .237 4.100 Y
Consumer attitudes  Purchase intention .644 6.564 Y
Discounted price  Purchase intention .181 3.400 Y
Brand image  Purchase intention .188 1.950 N
Fit Indices**
χ2=145.981, df=99, GFI=.976, AGFI=.968, RMSEA=.034; TLI=.990; CFI=.992
Note: *t-value is significant at p＜.05 when the t-value exceeds 1.96; ** Fit Indices are the values corrected by the Bollen-Stine
method.

Mediation Effect Verification

The bootstrapping method was used for the path coefficients of the latent variables to verify the
mediating effect of the structural model (Bollen & Stine, 1990). Consumer attitude was the mediating
variable in the present study. We therefore tested its mediating effects on the impact of brand image and
discounted price on purchase intention. With consumer attitude as a mediating variable, the confidence
interval (CI) of the indirect effects between brand image and purchase intention did not include 0,
indicating indirect effects between the two variables (Table 3; Bollen & Stine, 1990). However, the CI
indirect effect of brand image on purchase intention included 0, indicating no direct relationship between
the two variables. This result shows that consumer attitude has a fully mediating role in the relationship
between brand image and purchase intention, supporting H2. When discounted price was an independent
variable, for both direct and indirect effects, the CI between discounted price and purchase intention did
not include 0, indicating that consumer attitude plays a mediating role between discounted price and
purchase intention, supporting H4.

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 Table 4: Verification of the direct impact of brand image and discounted price on purchase
intention under the mediation effect of consumer attitude
Point Estimate (PE) Bootstrapping
Bias-Corrected 95% CI Percentile 95% CI
PE SE Z
Lower Upper Lower Upper
Brand image as independent variable
Total Effects
.665 .066 10.076 .534 .792 .535 .793
Indirect Effects
.486 .130 3.738 .284 .786 .285 .786
Direct Effects
.179 .141 1.270 -.117 .430 -.131 .422
Discounted price as independent variable
Total Effects
.244 .047 5.191 .160 .347 .155 .342
Indirect Effects
.112 .043 2.605 .047 .217 .045 .214
Direct Effects
.132 .050 2.640 .036 .237 .029 .229
Note: 5,000 bootstrap samples

DISCUSSIONS AND IMPLICATIONS

Although outlet malls have been established for a long time in many advanced countries, they are
still an emerging retail format in Taiwan. The most important feature of outlet malls is price discounts.
Since many consumers are price sensitive (Coughlan & Soberman, 2005), many marketing strategies
adopt price promotions to attract consumers. Li (2013) suggested that attracting customers is related to
the length of sale promotions. Based on Li’s (2013) approach, as the advertised price promotions in outlet
malls are the equivalent of long-term promotional activities, they are able to attract the purchase intention
of consumers over a long period. The present study also found that discounted prices influence
consumers’ purchase intention, regardless of whether this effect works through consumer attitude (Table 3
and Table 4). However, as Whyatt (2008) noted, during the expansion process, outlet malls should avoid
influencing the business of full-price retail outlets. Since new outlet malls in Taiwan have been
established on the periphery of cities, whether establishing brand stores in outlet malls reflects brand
expansion or affect the performance of their own full-priced products should be observed in the future.
Past research has shown that that brand image affects consumers' purchase intention. Brand image
promotes consumers’ attitude and confidence toward brands, thereby directly affecting purchase intention
(Richardson, Jain, & Dick, 1996). The present study confirmed the results of previous studies. As Yilmaz
(2004) pointed out, the brand image of outlet malls cannot be separated from the minds of consumers.
However, the present study found that consumer attitude has a mediating role in the relationship between
brand image and purchase intention. In other words, the key to the effect of brand image on purchase
intention is in the consumer attitude generated by brand image. From the perspective of the three
sub-dimensions of consumer attitude, consumers determine their trust in outlet malls based on brand
image, thereby influencing purchase intention. This phenomenon is an important factor explaining brand
image in the minds of consumers. Research by Whyatt (2008) also pointed out that consumers hope to
experience outlet malls with a wide range of products and famous brands. In this regard, most outlet malls
are able to obtain the economies of scale that consumers hope for. In addition, the synergy of outlet malls

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with its brand outlets is also an important influencing factor (Eppli & Shilling, 1996). Therefore, the
building of the brand image cannot entirely depend on the characteristics of the outlet mall operators, but
must also involve collaboration with each brand outlet in order to generate the consumers’ expected brand
value for the outlet mall.
Brand image also involves functionality. Recent research has found that outlet mall consumers have
moved beyond simply purchasing goods, and are increasingly focused on the leisure functions of outlet
malls (Karande & Ganesh, 2000; Roy, 1994; Sierra & Hyman, 2011; Whyatt, 2008). Sierra and Hyman
(2011) explained this phenomenon through the euphoric feeling generated by consumers. This explains
the change in consumers toward the diverse functions of outlet malls. Therefore, creating diverse leisure
spaces may be an important future trend for outlet malls.

CONCLUSION

Despite the growing popularity of online shopping, outlet malls are still important retail spaces
(Larsen, Shelton, & Wright, 2015). The present study found that the creation of brand image in outlet
malls helps generate consumers’ purchase intention. However, this relationship must pass through the
mediating role of consumer attitude. The main reason for this is that the brand image of outlet malls must
generate trust in the minds of consumers in order to promote consumption. In addition, discounted prices
are the main feature of outlet malls, and can directly influence the purchase intention of consumers. Of
course, passing through the mediator of consumer attitude also has the same effect.
The present study examined an outlet mall in Taiwan. Compared to other countries, the
development of outlet malls in Taiwan has been relatively slow, with their consumer behavior showing
the features of an emerging market. Although this is a limitation of the present study, these results can
serve as a reference for the operation of outlet malls in other countries. In addition, due to consumers’
diverse demands, making outlet malls into leisure venues has become a trend. However, in the existing
literature, there have been few studies on the leisure value of outlet malls. This area is a potential
direction for future research.

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128 The Journal of Global Business Management Volume 12* Number 2 * October 2016 issue