Drivers of Quality Perception and Willingness to Pay in Nepal's FMCG Sector: A PLS-SEM Analysis of Packaging Attributes

Abstract

Background: Packaging is increasingly recognized as more than a protective or aesthetic element, it functions as a strategic marketing tool capable of shaping consumers' perceptions of product quality and influencing their purchasing decisions. Despite growing global interest in this relationship, limited empirical research has examined how specific packaging attributes affect quality perception and willingness to pay within the Fast-Moving Consumer Goods (FMCG) sector of developing markets such as Nepal, leaving a notable gap in context-specific understanding.

Purpose: This study examines the impact of packaging attributes on consumers' quality perception and willingness to pay for FMCG products in Nepal, while classifying these attributes into the five categories proposed by the Kano Model.

Design/methodology/approach: An explanatory research design was employed, with data collected from 388 respondents across Nepal using convenience sampling and, to a limited extent, snowball sampling. The Kano Model and Theory of Planned Behavior informed the study's conceptual framework. Both descriptive and inferential analyses were conducted, with Partial Least Squares Structural Equation Modeling (PLS-SEM) used for hypothesis testing.

Findings: Results indicate that functionality, design and aesthetics, uniqueness and innovation, and brand alignment significantly influence willingness to pay, mediated by quality perception. Conversely, sustainability and information clarity showed no significant impact.

Conclusion: Quality perception and willingness to pay for FMCG products are meaningfully shaped by functionality, design and aesthetics, uniqueness and innovation, and brand alignment, offering practical insights for packaging strategy in Nepal's FMCG sector.

Keywords: Packaging, Functionality, Design and Aesthetics, Quality Perception, Willingness to Pay, PLS-SEM