THE ANALYSIS OF INFLUENCE CUSTOMER UNSATISFACTION,
ADVERTISING, PRICE, WORD OF MOUTH (WOM) AND BRAND IMAGE
TO BRAND SWITCHING
(Case study on user of Specs futsal Shoes lived at the east ciputat)
Surya Dinata (109081100022)
DEPARTMENT OF MANAGEMENT INTERNATIONAL CLASS PROGRAM FACULTY OF ECONOMICS AND BUSINESS
vi
CURRICULUM VITAE
Personal Identities
Name : Surya Dinata
Gender : Male
Place of Birth : Padang
Date of Birth : May 09th 1991
Address : Jl. Veteran No 70, Padang, Sumatera Barat, Indoensia
Phone/Mobile : 085921856135
E-mail Address : Desurya1991@gmail.com
Formal Education
College : UIN SyarifHidayatullah Jakarta
Senior High School : Al-ZaytunInternationalSchool
Junior High School : Al-ZaytunInternationalSchool
Elementary School : SD BaiturrahmahPadang
vii FOREWORD
Thank and blessed the researcher give for the Allah SWT, because of Him I
can finish the one requirement to get bachelor degree in UIN Syarif Hidayatullah Jakarta, with the title “The Analysis Of Influence Customer Unsatisfaction, Advertising, Price, Word Of Mouth, And Brand Image, To Brand Switching”.
Shalawat and salam the researcher also give to the holy prophet Muhammad SAW,
his family, and his comrades, and his followers that will follow his teaching to the
end of the day. Amin
In this opportunity the researcher want to say thank you to all people that help
me to fulfill this bachelor thesis. Particulary to:
1. My beloved parents, Mrs. Eha Zulaikha and Mr. Rismar Hatta that always
give me support to finish this bachelor thesis.
2. All my brother (M. Hidayat, M. Tri Fajar, M. Riski and My lovely sister
Dara Riskha Oktavira).
3. Mr. Dr. Yahya Hamza, MM as the first thesis supervisor who give me
support, guidance, motivation and spent his time to supervise my thesis.
4. Mrs. Cut Erika Ananda Fatimah, SE.,MBA as the second supervisor who
give me support, guidance, motivation and spent hers time to supervise my
viii
5. Mr. Dr. Arief Mufraini, Lc., M.Si as the Dean of Faculty of Economics and
Business.
6. Mrs. Titi Dewi Warninda, SE., M.Sc as the Lead of Department.
7. All the lecturer and staff in faculty of economics and business, particularly
in International Program.
8. All staff of the faculty of economics and business, Bang Bonik and Bang
Alfred, thanks for helping in administration progress.
9. Ashabul Torino, Bianca Plaza and Dzulfiqar Faris Thanks for your little “Magic”
10.All Friend from Management International, Regular, Warna-Warni Block and my futsal team MI “PB” Aly Fayruzy, Ari Budiman, Anggana Agusty,
Yaseer Arafat, Ghaarieth diederick, Iqbal Wijaya, Rizki Wahyu, Arfian,
Andre Eko, Chairul Siregar, Sahmi Sitompul, Pakde, Taufik Fatur, Aditya
Prasetya, Oki Ahmadiansyah, Lukman Nul Hakim, Dimas Satya, Eko
Wahyu, Aditya yudha, Fajar Sugiarto, Uji Tholib, Azka and Radit. Thank
you for jokes been laughed, story been told, and history been made. Thanks
for spent many times, thank you for togetherness in talking, joking, singing
and laughing that I will never forget in the rest of my life.
11.All respondents that cooperative and spent their time in order to fill the
data in this research.
ix
May Allah give bountifully rewarded. Suggestions and criticisms will
researcher accept for the sake self of further improvement. In the last word, May
Allah SWT give easiness to the all of us, and this thesis can be useful for all of us,
particulary for the researcher.
Jakarta, November 2015
Surya Dinata
x
THE ANALYSIS OF INFLUENCE CUSTOMER UNSATISFACTION, ADVERTISING, PRICE, WORD OF MOUTH (WOM) AND BRAND IMAGE
TO BRAND SWITCHING
(Case study on user of Specs futsal shoes lived at the east ciputat) ABSTRACT
This research aims to show the influence of customer unsatisfaction, advertising, price, word of mouth and brand image toward brand switching of Specs futsal shoes. This research uses the quantitative method that gathered by distributing the questionnaire directly to the respondents of Specs futsal shoes in east Ciputat areas. The sampling technique is the purposive sampling taken 60 respondents. The data analysis for the hypothesis test uses the multiple regression analysis method. The research result shows partial test that the customer unsatisfaction has significance value 0.006, the advertising has significance value 0.119, the price has significance value is 0.004, the word of mouth has significance value 0.033 and the brand image has significant value 0.000. Meaning all variables have partially significant positive influence to the brand switching except the variable of advertising. The simultaneous test shows that the customer unsatisfaction, advertising, price, word of mouth and brand image have 0,000 significance value. Hence, customer unsatisfaction, advertising, price, word of mouth and brand image have simultaneously significance positive influence to the brand switching. Keyword: Customer unsatisfaction, advertising, price, word of mouth, brand
xi
ANALISIS PENGARUH KETIDAKPUASAN KONSUMEN, IKLAN, HARGA,
WORD OF MOUTH DAN CITRA MERK TERHADAP PERPINDAHAN MERK
(STUDI KASUS: PENGGUNA SEPATU FUTSAL SPECS DI CIPUTAT TIMUR) ABSTRAK
Penelitian ini bertujuan untuk mengetahui pengaruh ketidakpuasan konsumen, iklan, harga, word of mouth, dan citra merk terhadap perpindahan merk sepatu futsal Specs. Penelitian ini menggunakan metode kuantitatif yang dikumpulkan dengan menyebarkan kuesioner secara langsung kepada pengguna sepatu futsal Specs yang tinggal di daerah Ciputat timur. Teknik pengambilan sampel adalah purposive sampling yang diambil dari 60 responden. Analisis data untuk uji hipotesis menggunakan metode analisis regresi berganda. Hasil penelitian menunjukkan bahwa uji parsial ketidakpuasan konsumen memiliki nilai signifikansi 0,006, iklan memiliki nilai signifikansi 0,119, harga memiliki nilai signifikansi 0,004, word of mouth memiliki nilai signifikansi 0,033 dan citra merek memiliki nilai yang signifikan 0.000. Sehingga, secara parsial semua variabel berpengaruh signifikan terhadap perpindahan merk kecuali variabel iklan. Tes simultan menunjukkan bahwa ketidakpuasan konsumen, iklan, harga, word of mouth, dan citra merk memiliki nilai signifikansi 0,000. Oleh karena itu, ketidakpuasan konsumen, iklan, harga, word of mouth, dan citra merk secara simultan memiliki berpengaruh signifikan terhadap perpindahan merk.
xii
TABLE OF CONTENTS
Title ... i
Thesis Approval Sheet ... ii
Comprehensive Exam Approval Sheet ... iii
Certification of Thesis……….. .iv
Sheet Statement Authenticity Scientific Works ………..v
Curriculum Vitae ... vi
Foreword ... vii
Abstract ... x
Abstrak ... xi
Table of Contents ... xii
List of Tables ... xvi
List of Figures ... xvii
List of Appendix ... xix
CHAPTER I INTRODUCTION A. Background ... 1
B. Problem Formulation ... 11
C. Objectives Research ... 12
D. Benefits of Research ... 12
CHAPTER II LITERATURE REVIEW A. Consumer Behavior ... 13
xiii
Customers ... 14
2. Measurement of consumer unsatisfaction ... 15
C. Advertising ... 17
1. Definition of advertising ... 17
2. The purpose of advertising ... 17
3. Hierarchy of advertising ... 19
D. Price... 21
1. Understanding of the Price ... 21
2. Pricing ... 22
3. Purpose of Pricing ... 23
4. Factors Affecting the Price Level ... 24
E. Word of Mouth ... 27
1. Definition Word of Mouth ... 27
2. Create Word of Mouth ... 30
2. Measurement of Brand Image ... 42
G. Brand Switching ... 43
1. Factors Affecting Brand Switching ... 44
2. Models or Type Brand Switching ... 46
3. Reasons Consumers Doing Switching Brands ... 47
H. Previous Research ... 49
I. Research Framework ... 54
J. Hypothesis ... 55
CHAPTER III RESEARCH METHODOLOGY A. Scope of Research ... 57
B. Determination Sample Method ... 57
1. Population ... 57
2. Sample ... 58
xiv
D. Type and Source of Data ... 61
1. Primary Data ... 61
2. Secondary Data ... 61
E. Data Analysis Methods ... 62
1. Validity Test ... 62
2. Reliability Test ... 62
3. Classical Assumption Test... 63
4. Multiple Linear Regression Analysis ... 64
F. Variable Operational Research ... 68
1. Operational Definition ... 68
2. Independent Variable ... 68
3. Dependent Variable ... 69
CHAPTER IV RESEARCH FINDINGS AND ANALYSIS A. General Description of Research Object ... 74
1. Product Overview ... 74
2. Respondent Characteristic ... 75
B. Instrument Test Result ... 78
1. Validity and Reliability Test Result ... 78
2. Descriptive Statistical Test ... 82
3. Classical Assumption Test... 83
a. Normality Test Result ... 83
b. Multicollinearity Test Result ... 84
c. Heteroscedasticity Test Result... 85
4. T Test Statistical Result ... 86
5. F test Statistical Result ... 89
6. Hypothesis Test Result ... 91
1. Multiple Linear Regression Test ... 91
2. Determination Coefficient Test Result ... 93
xv
CHAPTER V CONCLUSION AND IMPLICATION
A. Conclusion ... 98
B. Implication ... 99
REFFERENCES ... 102
xvi
LIST OF TABLES
1.1 Top Brand Index Futsal Shoes in 2012-2014……….7
2.1 Summary of Previous Research………50
3.1 Likert Scale Table……….61
3.2 Variable Operational Table………...70
4.1 Validity and Responsibility test result………..79
4.2 Descriptive Statistical Test………...82
4.3 Multicollinearity test result Table……….84
4.4 T Test Result Table………...87
4.5 F Test Result Table………90
xvii
LIST OF FIGURES
2.1 Research Framework……….54
4.1 Respondents Age………...76
4.2 Respondents Expenditure………..76
4.3 Respondents Occupation………...77
4.4 Normality Probability Plot ………83
xviii
LIST OF APPENDIXES
1. Questionnaire Research………...106
2. Tabulation of Costumer unsatisfaction………112
3. Tabulation of Advertising………114
4. Tabulation of Price………..116
5. Tabulation of Word of Mouth………..118
6. Tabulation of Brand Image………..120
7. Tabulation of Brand Switching………122
8. Costumer unsatisfaction Testing………..124
9. Advertising Testing……….124
10.Price Testing………124
11.Word of Mouth Testing………...124
12.Brand Image Testing………124
13.Brand Switching Testing……….124
14.Multicollinearity Test Result………...125
15.Coefficient Determination, t Test Result……….125
16.F test result………...125
17.Normal Probability Plot………...126
18.Heterosdecasticity test result……….. 126
1 CHAPTER I
INDTRODUCTION A. BACKGROUND
In the era of globalization many emerging new producers who sell similar
goods. So that the consequences of these changes are the customer will be more
careful and smart in facing every product in the market. The company empowers
all functions, including in the field of marketing. Along with increasing
competition pose new phenomenon that occurs in the consumer, which is the
presence of brand switching behavior that performed by consumers.
Various kinds of products either goods or services offered by the
manufacturer provides an opportunity for consumers to choose what brand will be
consumed. The diversity of brands offered to consumers provides the opportunity
for consumers to switch from one brand to the other brands. Brand switching
behavior of the customer is a complex phenomenon which is influenced by
factors behavioral, competition and time (Srinivasan in Shellyana and Dharmesta,
2002: 92).
Along with the increasing competition, the marketers are required to conduct
marketing research and determine strategy to achieve the purpose of marketing
itself to a product. So marketing is very important for many leading company.
The whole company or organization carry out marketing activities, whether small,
2 competitors, even market leader can never relax, they also continue to develop
ideas or strategies better marketing and continue to improve the company.
According to Kotler (2008: 5) found that the success of the ongoing demand
for establishing and managing the marketing department capable. So to achieve
success and maintain the success of a company's products must be supported by
marketers that reliably and continuously improve its capabilities. Marketers
companies continually need to innovate and create new ideas that can break the
closure and revolutionize the expectations of consumers for a product.
According to Kotler and Armstrong (2008: 6), Marketing is the process by
which companies create value for customers and build strong relationships with
customers with the aim to capture the value of customers in return. A marketer
also needs to pay attention to what is desired by the target market. One to note is
the need for a product by someone. Humans have many needs. According to
Kotler and Armstrong (2008: 7), the need is a state of feeling shortage of certain
basic satisfaction. Humans need a few things to survive, according to Kotler and
Armstrong (2008: 7), these needs are food, clothing, home, security, a sense of
belonging and self-esteem.
Futsal has become a phenomenon around the year 2007 until today it has been
growing public desire to exercise, these conditions create business opportunities
for producers futsal shoes. Someone needs to exercise, especially futsal increase
public demand for futsal shoes, with the development of futsal in Indonesia was
3 soccer shoes. With the increasing interest in futsal indirectly increase the demand
someone will use futsal footwear products (Suryadi, 2012).
Therefore, each company trying to become a market leader in indoor soccer
shoes manufacturer, which means the products are well received in the market.
Companies whose products were well received would definitely got a good
advantage too. In an effort to fulfill their needs, a person will choose the product
that gives the highest satisfaction. In particular, the factors that create the highest
satisfaction for each person will be different, but in general the factors such as the
product itself, the price of the product and how to get the product often becomes a
consideration. A rational consumers will choose a product with good quality,
reasonably priced products or cheaper and easily available. Quality products
desired by consumers regarding the benefits to meet the needs of consumers and
safety for themselves, so that consumers feel calm outwardly and inwardly in
using the product (Suryadi, 2012).
Look a futsal phenomenon that occurs when this shift occurred in the market
brand futsal shoes, indoor soccer shoes Some famous brand in Indonesia is
Adidas, Nike, Specs, Joma, Mizuno and others. Brand is already embedded in the
minds of consumers because once the product is long enough to market share in
Indonesia. Even some of them became a pioneer and market-leading futsal shoes
sales in Indonesia. The increasing advances in technology, increases also
technological developments by manufacturers futsal shoes. Developments
4 competition between companies in order to retain customers and a market share
of its products.
According to Suryadi and Rinaldi (2013), the number of foreign brands of
sport shoes do not make Specs afraid to compete. SPECS are a product of the
domestic focus to develop and improve the quality of specific futsal shoes. shoes
no less than foreign brands. According to Arif (2012), president director of PT.
PANATRADE CARAKA, since the beginning of its development SPECS already
positioned as sport shoes, unclear target market being targeted to make entry-level
Specs lower-middle class. In 2001 SPECS and the management team to
reoriented the market segment of middle-upper class. Reorientation because the
price gap that occurs between local brand sport shoes with overseas like Nike and
Adidas. The fall of the Rupiah against the Dollar led to a segment futsal shoes at
moderate prices to be empty. This makes SPECS and the team reoriented to fill
the void. "We attack spot by spot" to look at the unique sports shoe market but not
as a whole, the initial category targeted by the Specs is a category of football
boots, with the desire to target a large market category. Since 2001 SPECS
already lead the market 4-5 years in that category.
After feeling well established, in 2004 began to enter the market SPECS futsal
shoes, but at that futsal is not booming as it is now, with analysis and market
predictions regarding the development, Specs already established categorized feel
it. Further Specs are also working on a number of clubs and players to be a brand
5 League champions / ISL 2012), Persipura Jayapura (ISL champion 2011), Semen
Padang FC (Indonesia premier league champion 2012). "In every club jersey,
Specs made the hallmark of their respective regions”. As for the brand
ambassador of players, Specs make the famous players like Christian Gonzales
(Gonzales habibi Mustafa) and Greg Nwokolo. for futsal, Specs made famous
players to serve as brand ambassadors such as Socrates matulesi, beny Hera,
Hendra Kurniawan, Hanif Salim, bambang bayu saptaji, etc.
In terms of Specs vigorous advertising campaign in television and print
media, especially in the media and tabloid sports such as football magazine. Specs
also be a sitcom sponsor of the “Tendangan si Madun” likely a lot of viewers.
Advertising spending relatively large Specs, According to Nielsen data in the first
quarter / 2012 Specs spent Rp 1.28 billion. While in 2011 reached Rp 6.50 billion.
Specs advertising spending continues to rise from a year-earlier. As in 2009 and
2010, respectively Rp 1.82 billion and Rp 2.34 billion.
In addition to actively advertise, promote Specs below the line or brand
activation. Such as makes coaching clinic, in cooperation withsome football
schools. As in futsal, Specs sponsoring some Junior High Schools in Jakarta,
Bandung, and Makassar to be given a coaching clinic by futsal brand ambassador
of Specs. Next Specs also held a tournament “futsalogy tournament”. sales
continue to rise in the last 10 years. fantastic growth in the years (2010-2013),
which reached more than 50%, focus and consistency is the key to achieve high
6 are still many Indonesian people who prefer foreign brands than local brands.
Since the beginning of Specs is not ashamed to call himself a local product. it can
be seen from the image of product advertising slogan "Buktikan indonesiamu".
Arif also said the Specs control 30% market share and futsal soccer shoes. Greater
than outside brands such as Nike and Adidas.
Based on the SWA research, last year, Specs produce 3 million more shoes.
Football boots with a contribution of approximately 30% and futsal shoes 20% of
total sales Specs. According to the research institute MARS, specs are already on
track to outperform products futsal shoes on the market in the sales industry
competition futsal shoes, Specs working on several communities and clubs of
some sports he entered, this spot can be interaction between both. SPECS also
hold events to introduce more products. Moreover, foreign futsal shoes continue
to aggressively work on the market in Indonesia.
According to the 2012-2014 index of top brand futsal shoes market is still
dominated by NIKE, ADIDAS, JOMA and followed by SPECS in order to four.
The survey results are summarized in the Top Brand Award as well as a
prestigious event at the top of the competition between brands Top Brand Index
subsequently obtained by calculating the average weight of each parameter were
obtained from the survey results directly to the customer a product / service of
various brands in certain categories. The first parameter is the top of mind brand
awareness (TOM BA), which is an indicator of the extent to which a particular
7 is the last usage (LU), which brands the respondents use the current / last (market
share). The third is a future intention (FI), which is an indicator of respondents'
loyalty to the brand of products / services that want to used / consumed in the
future.
The survey results illustrated in table 1.1 below
Table 1.1
Top Brand Index Futsal Shoes in 2012-2014 (In percent unit)
Product 2012 2013 2014
Nike 17.5 25.3 41.4
Adidas 15.1 17.3 22.4
Joma 9.6 13.1 15.5
Specs 6.9 7.5 9.7
Reebok 5.4 4.9 4.2
Mizuno 3.4 4.2 3.3
Piero 2.1 3.3 2.3
Kelme 1.5 2.2 1.3
Source: www.topbrand-award.com (2014)
According to the survey index of top brand in the year 2012-2014, indicated
Nike, Adidas and Joma better than Specs, but judging from the development,
Specs increased fairly. It indicates that Specs has been favored by users futsal
shoes. With continued product innovation, Specs is not afraid to compete against
8 serve as ambassador, in addition they also provide links to some of the
Indonesian team futsal league (www.Specs-sports.com)
According to Peter and Olson (2002) in Wardani (2010: 15) brand switching
is purchasing patterns characterized by alteration or replacement of one brand to
another brand. Many factors can affecting brand switching behavior, there are:
consumer unsatisfaction, advertising, price, word of mouth and brand image.
That indicates brand switching by users of other brands to Specs. Consumer
unsatisfaction is one factor contributing to the displacement of the brand because
of dissatisfied customers will look for another product option information, and
will probably stop buying products or influencing others not to buy (Kotler&
Keller, 2008: 177-193). Business Review Weekly (1997) in Tjiptono and Diana
(2000: 117), revealed that customer satisfaction occupies the second place in the
ranks of business performance index most widely used in Australia. Where the
first is the net profit (net profit). Of course, customer satisfaction is very
important for every company. Therefore in this study will measure the impact if
consumers are not satisfied with a product that is the business performance of an
enterprise.
Advertising is one of the components of the marketing mix that is commonly
done by the company. Advertising According to Kotler (20013: 202) is defined
as any form of non-personal presentation and promotion of ideas, goods or
9 activity is considered very important if company want a successful product on
the market. No wonder every year, even every new product introductions, the
company spent hundreds of millions and even billions of rupiah for advertising
expenses. Conditions of tight competition makes these costs increase every year.
Companies competing to make advertising to build a favorable position in the
market. Ads can indeed affect consumer behavior toward the advertised brand.
The influence of advertising on consumer behavior is extremely varied, ranging
from encouraging consumers to look for products that are intended to encourage
people who previously disloyal be loyal or perhaps vice versa, people who were
previously loyal to a product becomes loyal to the product due to the emergence
of advertising new products.
Price differences between brands can also affect the behavior of switching
brands. It can be concluded that a change in one or several brands in the same
product class can affect the behavior of moving the brand to the consumer,
because of the price differences between brands. According Mowen& Minor
(2001: 109) "a particular brand can be purchased because of convenience,
availability, or price. If any of these factors change, then consumers may quickly
switch to another brand ". It means that prices can have an impact for consumers
to switch to other brands. Price is the amount of money charged on the products
and services or the amount of value exchanged on benefit consumers as having or
10 The next factor that encourages brand switching is word of mouth (WOM).
WOM has greater strength than advertising and other forms of promotion. A
consumer attitude shows that effective WOM will quickly build credibility of a
brand, which led to the recommendation by the consumer to another consumer. If
consumers feel satisfied on a product, it will create a positive WOM about the
product. However, if consumers are not satisfied with the product, it will create a
negative WOM about the product and result in the migration of customers or
potential customers who fail to buy the product (Rahmawati and Taurina, 2011:
3). Kotler and Keller (2007: 204) argues that the Communication word of mouth
(WOM) or word of mouth communication is a process of communication that the
form of recommendations either individually or in groups to a product or service
that aims to provide personal information.
Another factor that affect switching brand is the brand image. Monroe study,
Dodd and Grewal (1991) in Khairani (2011: 4) states that the buyer has a high
brand image that will generate buying interest. If a brand already known and then
in the minds of consumers there are certain associations for a brand that different
with other brands and consumers will perceive the quality is high. Creating the
right brand image for a product, would be very useful for marketers, because the
brand image will influence consumer ratings on alternative brand expected. This
not only can meet the needs of consumers, but can provide better satisfaction and
11 Based on the background that has been described, the authors are interested in
researching the above four factors, namely consumer unsatisfaction, advertising,
price, brand image and word of mouth. Then want to analyze how the influence
of these factors on brand switching to Specs as outlined in the thesis with the
title:
“The analysis of influence Customer unstisfaction, Advertising, Pricing, word
of mouth (WOM) and Brand image to the Brand Switching other futsal shoes to
brands SPECS (Case study SPECS user in east Ciputat)”.
B. Problem Formulation
1. Does customer unsatisfaction significantly influence brand switching?
2. Does advertising significantly influence brand switching?
3. Does price significantly influence brand switching?
4. Does word of mouth (WOM) significantly influence brand switching?
5. Does brand image significantly influence brand switching?
6. Does customer unsatisfaction, advertising, price, word of mouth (WOM)
12 C. Objectives research
1. To analyze influence of customer unsatisfaction to brand switching
2. To analyze influence of advertising product to brand switching
3. To analyze influence of price to brand switching
4. To analyze influence of word of mouth (WOM) to brand switching
5. To analyze influence of brand image to brand switching
6. To analyze the influence of customer unsatisfaction, advertising, price,
word of mouth (WOM), brand image to brand switching
D. Benefits Of Research 1. For the company
This result of this research are expected to be used as strategy material
consideration which will be pursued company to maintain customer
from switch to another brand.
2. For the author
The results of this research are expected to provide an opportunity to
increase knowledge and insight of marketing, especially about
customer unsatisfaction, advertising, price, word of mouth (WOM),
brand image and brand switching.
3. For other researchers
The results could be useful as a reference for future researches related
to marketing especially customer unsatisfaction, advertising, price,
13 CHAPTER II
LITERATURE REVIEW A. Consumer Behavior
According to Tjiptono and Diana (2000: 121) consumer behavior is
dominated by the paradigm of information processing (information processing
paradigm). This paradigm assumes that each consumer is rational economic
man who made a purchase on the basis of motive and rational choice. But in
fact, consumers purchase and consuming the products not only for functional
value, but also because of the social and emotional values. Consumer
behavior is defined as the study of unit purchases (buying units) and
exchange processes involving the acquisition, consumption, and disposal of
goods, services, experiences, and ideas - ideas (Mowen and Minor, 2002: 6).
Unit purchases (buying units) are consumers for products, services,
experiences, and ideas offered by marketers. This purchase units consisting of
individuals, families, or groups who decide to buy. Furthermore, the unit can
be either consumer purchases (such as, individuals and households) or
for-profit organizations / non-for-profit making purchases. Consumer behavior has
strong impact on the marketing management. Modern marketing managers
also use the idea of "marketing concept" about understanding the needs and
desires of consumers which facilitates the exchange process and the
14 saw that satisfy the consumer is important in all marketing efforts (Mowen
and Minor, 2002: 28). The center of the field of science is the study of
consumer behavior exchange process. Exchange is the process whereby
something tangible or intangible, actual or symbolic, is transferred between
two or more social actors (Mowen and Minor, 2002: 28).
B. Customer Unsatisfaction
Customers are all those which requires product or services given by
companies to meet a sacrificing to certain quality standard, and because it will
affect the performance of the company (Nasution, 2005: 45).
1. Definition of satisfaction and unsatisfaction of customers
The formulation of the dominant and most widely used and referenced
in the literature of Marketing and Consumer Behavior is unsatisfaction
based on the paradigm of disconfirmation (Oliver in Tjiptono and Diana,
2000: 118), that customer satisfaction is defined as an evaluation, where
the perception of the performance of the products or services chosen are
meet.
From these definitions it can be concluded that basically the
definitions of customer satisfaction include the difference between
expectations and perceived performance or results (Tjiptono and Diana,
15 Meanwhile, according to Peter and Olson (2005: 160) and Kotler and
Armstrong (2008) consumer unsatisfaction arise when the performance of
a product turns out worse than expected performance. Consumers who are
not satisfied with a product less likely to be re-purchasing, tend to switch
brands, and appealed to manufacturers, retailers, and even tell the other
customers.
2. Measurement of consumer unsatisfaction
In essence, measuring the level of satisfaction / unsatisfaction of
customers the same as measuring the quality of a product, which is
determined by variable and performance-based expectations (perceived
performance) (Tjiptono& Diana, 2001: 46). Quality and customer
satisfaction are closely related. Quality gives an impulse to the customer
to establish a strong bond with the company (Tjiptono& Diana, 2001: 2).
The concept of quality itself is often regarded as a measure of the
relative goodness of a product or service consisting of quality of design
and quality of the suitability (Tjiptono and Diana, 2001: 2).
According Tjiptono (2008: 67), in the quality of the products there are eight
main dimensions which are usually used, namely:
1. Performance basic operating characteristics of a product and is the
main characteristic considered when the customer wants to buy a
16 2. Feature, specific complementary characteristics that can increase
product usage experience.
3. Reliability is the probability of failure or damage to the product
within a certain time. The smaller the possibility of damage, the
more reliable the product concerned.
4. Durability is the amount of usage of the product before the product
concerned should be replaced. The greater the frequency of normal
use is possible, the greater the durability of the product.
5. Conformance with regard to the level of product conformity to
specifications predetermined by the customer's wishes.
6. The ability of service (serviceability) is a characteristic that is
related to the speed/courtesy, competence, ease, and the handling of
complaints satisfactorily.
7. Aesthetics (Aesthetics) is a characteristic of the beauty is subjective
so with regard to personal considerations and reflections of
individual preference or choice.
8. The perceived quality (perceived quality), the characteristics
associated with a reputation (brand name, image).
A company would not survive without consumers who use or wear the
products of the manufacturers, therefore, to improve the quality of the
17 by knowing the customer satisfaction, the goods and services produce it
has more value as more consumers demand as users of the product.
According to Umar (2001: 93) quality of the product is important for
consumers. Product quality, whether in the form of goods or services
should be determined by its dimensions, which is called the dimension of
the quality of goods or products.
C. Advertising
1. Definition of advertising
Advertising all forms of paid up non-personal presentation and
promotion of ideas, goods, or services by a clear sponsor (Kotler and Keller
2013: 202). Advertising can be seen as a form of communication and
promotion (Kotler, 2005: 23). Called as a form of communication in the
process of advertising there is a flow of information that the advertising
message from a source (companies) that are presented to a customers and
there is also the purpose of the message that the target market or audience.
Meanwhile, as a form of promotion, because the ads are efforts to influence
the market in order to buy the products offered by the sponsoring company.
2. The purpose of advertising
Advertising purposes namely specific communication task and the
level of achievement that must be achieved with a specific audience in a
18 can be classified according to the target market, which is to provide
information, persuasion or enhance buyers, adding value and helping other
business enterprises.
a. Normative advertising, aiming to form a first request to inform
the market about new products, proposing a new use of a
product, inform the market about price changes, explain the
workings of a product, explain the services available, correct
the erroneous impression, reduce anxiety buyers and establish
a corporate image.
b. Persuasive advertising, aimed to establish selective demand a
certain brand, made on a competitive stage by establishing
brand preference, pushing over the brand, change the
perception of buyers about product attributes, persuade buyers
to buy now, and persuade buyers receiving / try to stimulate the
use of the product.
c. Reminder advertising, aims to remind the established product
by reminding buyers that can afford to make buyers still
remember the product, even though not in season, and maintain
awareness of the peak.
d. Advertising adder value, aims to add value to the brand in the
consumer's perception with innovation, quality improvement
19 e. Advertising support other activities, aimed at helping to
facilitate the activities of other companies in the process of
marketing communications, such as advertising helps in the
release of sales promotion (coupons), assisting salespeople
(product introduction), refine the results of other marketing
communications.
For producers, advertising is not just a promotional tool of
goods and services, but also to instill the image to customers and
prospective customers about the products offered. Image formed by
advertising often leads the public to believe in the product, thus
encouraging potential customers to consume and maintain customer
loyalty.
3. Hierarchy of advertising
According to Umar (2005: 246-247) consumer interest in the potential
of a product offered on the market, is basically divided into three stages,
namely stage know, affected, and act to make a purchase. Models are
generally used for looking at these stages is modeled AIDCA.
a. Attention
At this stage the ads served must be able to attract the attention
of target market audience, if this step is not successful, the next step
becomes useless. By knowing the results at this stage the company has
20 b. Interest
If successfully captured the attention of the target audience, ads
delivered should be able to make the audience interested to know more
about the product being advertised. For that viewers should be
stimulated to want to follow the advertising messages.
c. The desire
Ads must be managed to move the viewer desires to have or
enjoy the product. needs or wants them to have, wear, or do something
as a continuation phase of interest.
d. Trust (Conviction)
Up to this stage the company's goals through advertising has
successfully created a need for prospective buyers. A number of
prospective buyers has begun to waver and emotions begin untouched,
but still doubts. In these conditions should be able to convince the ad
or cause the confidence of prospective buyers.
e. Action
At this stage, the prospective buyer should already be able to
take decisions, to buy or not. Perhaps the desire to buy has been
decided but the purchase has not been done because there are
considerations influenced the customer desire to buy a product. For
that advertising should be able to lead prospective buyers to take the
21 Lu-shu, and Chang (2003) in Ermayanti (2006: 99) argues that the
advertising gives a stimulant and incentive for consumers to switch brands
and stated that consumers with different levels of perception have various
possibilities to switch brands.
D. Price
1. Understanding the price
Price is an element of the marketing mix that produces revenue; other
elements generating costs (Kotler and Keller 2013: 67). Price variables in the
marketing mix refer to what should be the consumer sacrifice to buy a
product or service which normally uses the value of money. The price of a
product is determined not only by the cost of production but also other
factors, such as competition and consumer perception of the product
(Morissan, 2010: 78).
According to Gary Armstrong and Kotler (2008: 439) "the price is the
amount of money charged for a product or service or the amount of value
exchanged for consumers on its benefits for owning or using a product or
service". While Mowen and Minnor according to Ermayanti (2006) says that
the price is one of the factors considered by consumers, because consumers
are sensitive to price, other than that, according to Mowen and Minor also
said that a brand was purchased because of convenience, availability or
price. If any of these factors change, then most likely the consumer will
22 2. Pricing
Pricing has various strategies according to the stage through which a
product or service. Kotler and Armstrong (2008) are classifying such pricing
strategies as follows:
a. New product pricing strategies, namely pricing flushed markets and
pricing for market penetration.
b. Product mix pricing strategies, namely pricing of the product line,
additional product pricing, product pricing bound, pricing of products,
and pricing of the product package.
c. Price adjustment strategy, which consists of pricing discounts and
price reductions, segmented pricing, psychological pricing,
promotional pricing, dynamic pricing, international pricing and pricing
based on geography.
d. Strategies for coping with changes in prices, which pioneered the price
changes, how to react to price changes, and respond to changes in
price.
3. Purpose of Pricing
Pricing should be directed to a destination. Before pricing is done, the
goal should be set in advance. Pricing objectives include: (a) profit
orientation: achieve profit targets and increase profit: (b) sales orientation:
increase sales volume, and maintain or grow market share. (Machfoedz,
23 a. The purpose of profit-oriented
Companies can choose one of two goals in a profit-oriented pricing
policy. Profit-oriented goals can be reached in the short term or long term.
1) Achieving the target profit
Companies can choose to set the price of its product reaches a
certain percentage of the sales or investments. Achievement of
objectives as it is applied by a broker or producer. Many retail and
wholesale trade businessman using profit targets on net sales as
pricing objectives of short-term period.
2) Increase profit
Pricing objectives to earn money as much as possible followed
by a large number of companies than other purpose. Difficulties faced
this purpose is that the term connotes bad maximize profits associated
with high prices and monopoly. The purpose of enlarging profits the
company would be more profitable if applied in the long term.
However, to apply these companies have to accept losses in the short
term.
b. Goal-oriented sales
1) Increase the volume of sales
Pricing of several companies focused on sales volumes during
a certain period, for example, 1 year or 3 years. Management aims
24 pricing strategy although others should experience a loss in the
short term.
2) Maintaining or increasing market share
Some companies large or small set the price for the purpose of
maintaining or increasing market share of the company. For
example, when the Japanese currency (YEN) value exceeds the
value of the US dollar, Japanese products become more expensive
in the United States. Japanese companies are faced with the
prospect of reduced market share. To maintain market share,
Japanese companies accept smaller profit margins and reduce
costs so it can sell products at a price below the selling price
should.
4. Factors affecting the price level
According to Hasan (2007: 304) companies must understand the
factors that directly affect the price level to be determined:
a. Economic conditions
Economic conditions (inflation, boom or recession, interest
rates), government policies and regulations, and social aspects
25 b. Demand and supply
Request a number of products purchased at a certain price
level. Important issues in this factor are to estimate how buyers
respond to the prices offered an alternative. While offers a number of
products offered by the company (seller) at a certain price level.
Generally, the higher prices encourage the offered amount becomes
larger, but in certain cases it turns into a scarcity of goods is higher.
c. The company's goals
The company's goal to be achieved is stated explicitly, such as:
1) Achieving maximum profit
2) Maintaining the viability of the company
3) Creating a quality leadership
4) To increase the volume of sales
5) Reaching a large market share, maintain and improve market
share
6) Creating a stabilization of prices and overcome the competition
7) Return of capital tied up in a certain period
8) And so forth
d. Legal and ethical factors
These factors usually becomes a tool of government oversight
in determining the maximum, minimum, or a certain price (for grain,
26 electricity) as well as the practice of other practices that prevent efforts
towards monopoly.
e. Marketing mix
Pricing should be coordinated and mutually supportive with
other marketing mix of product, distribution and promotion.
f. Cost
Cost is the basic factor in determining price is minimal, because
the level of price that cannot cover the costs will result in losses. The
costs that must be considered in the determination of prices at least as:
1) The cost of out-of-pocket costs increase, opportunity costs,
controllable costs, replacement costs, non-operating expenses
2) Structure costs
3) The cost volume relationship
4) Competitive advantage
5) Effect of experience costs
6) How much influence the cost of the company's future
g. Size of business
Management needs to decide who should set prices, for example, by
top management, product line management, sales managers, production
27 h. Competition
The forces that influence the competition in the industry is the
competition in the relevant industry, product substitution, suppliers,
customers, and the threat of new entrants.
i. The nature of the market
Each company needs to understand the nature of market linkages and
demand that it faces, whether including perfect competition, monopolistic
competition, oligopoly or monopoly.
E. Word of Mouth
1. Definition Word of Mouth
Word of Mouth communication is communication that is done through
word of mouth conversation by telling experience or excellence of a
product. Initially this term specifically referred to the oral
communications but now includes all types of human communication,
such as face-to-face, telephone, e-mail and text messages. Word of mouth
is considered to be the most powerful force in the market. In the fact,
consumer choice is usually influenced by word of mouth (Casalo and
Flavia: 2008).
Kotler and Keller (2007: 204) argue that the communication word of
mouth is a process of communication that the form of recommendations
either individually or in groups to a product or service that aims to
28 the communication channels that often used by companies that produce
both goods and services because of communication and word of mouth
(word of mouth) considered to be very effective in expediting the process
of marketing and can provide benefits to the company. According to
Hasan (2010: 32) word of mouth is the act of consumers providing
information to other consumers (interpersonal) noncommercial both
brands, products and services.
Rangkuti (2009: 77) defines WOM as a marketing effort that triggers
the customer to discuss, promote, recommend and sell a product, service
or brand to another customer. Mowen and Minor (2002: 180) says that
the word of mouh communication refers to the exchange of comments,
thoughts or ideas between two or more consumers are neither a source of
marketing. WOM is defined as a form of communication of goods and
services between people who are independent, not part of the provider of
such products, which occurs through the medium is also believed to be
independent.
Hasan (2010: 25) suggests the reason that makes WOM can become
powerful resources in influencing purchase decisions, which is:
1) WOM is an independent source of information and honest, which
means when the information comes from a friend it is more
credible because no relation of the person with the product
29 2) WOM is very powerful because it provides benefits to those who
ask with direct experience of the product through the experience
of a friend.
3) WOM tailored to people who are interested in it. A person will not
join the conversation, unless they are interested in the topic of
interest.
4) WOM produces informal media information.
5) WOM can start from a single source depends on how the power of
influencers and social networks that spread rapidly and widely to
others.
6) WOM is not limited by space or other constraints, such as social
cohesion, time, family or other physical obstacles.
According to Kotler (2007: 206), receiving and responding to
consumer WOM on the conditions and the situation in:
1) Consumers lack sufficient information to assist in making a
choice.
2) The product is very complex and difficult to assess using the
criteria of assessment.
3) Consumers are less able to judge the product, no matter how the
information is distributed and addressed.
30 5) Effect of other people more easily accessible than other sources
and because it can be consulted by saving time and effort.
6) Strong social ties that exist between disseminator and recipient
information.
7) Individuals have a high requirement on the approval of the social
environment.
Thus the word of mouth is one way to reduce the uncertainty,
because by asking others who have already used the product
concerned, will produce information that is more reliable, so it will
also save time and brand evaluation process. So, word of mouth
cannot be invented or created. Because of WOM conducted by the
consumer voluntarily or without reward, all of them purely from
personal experience of other consumers who ultimately formed
consumer confidence of consumers on the other. Trying making up
WOM actually make the company will fail and can lead to more
severe effect. Making up WOM can damage the brand and image of
the company so that the company will eventually fail completely.
2. Create Word of Mouth
Word of mouth will be created when the products are delivered to provide
31 several elements that must be possessed of a product in order to generate
positive WOM and sustainable, including:
a. The product must be able to evoke an emotional response.
b. The product or the brand should be able to give the effect of
something that delight or excitement. Means that the product must
be able to provide something that exceeds consumer expectations.
c. The product must have something that can advertise themselves or
inspire someone to ask it.
d. A product becomes more powerful when many users.
e. The product must be compatible with other products, in particular
can be applied in products that rely on technology.
f. The experience of consumers using the product the first time.
Once consumers were disappointed, they are not going to use your
product again and they will act like a terrorist.
Based on the research of Diamond Management & Technology
Consultants in Mix Magazine (2007: 17) there are some forms of the
method for creating word of mouth, among others:
a. Buzz marketing, use or entertainment activities are good news for
people who have been involved with a product can discuss these
32 b. Evangelist marketing, the disseminator of news (evangelist),
speakers or volunteers who became a leader in the active
dissemination activities on behalf of the company.
c. Community marketing, establishing and supporting community
niche (niche community) which happily divide their interest in a
brand, provide tools, content, and information to support the
community.
d. Conversation creation, interesting or funny ads, e-mail, as well as
entertainment to start WOM activity.
e. Influencer marketing, identifying key communities and opinion
leaders are happy to tell you the product and have the ability to
influence the opinion of others.
f. Cause marketing, providing support for outreach programs
through fundraising to get the respect and support of the people
who have the same concert with the company.
g. Viral marketing, creating an entertaining and informative
messages and is designed to spread exponentially through
electronic media or e-mail.
h. Grassroots marketing organize and motivate volunteers to get
involved in a personal or local.
i. Brand blogging, creating blogs and participating in the
33 sharing information of value that may be discussed blog
community.
j. Product seeding, putting the right products in the right hands, at
the right time, providing information or samples to influential
individuals.
k. Referral programs, creating tools for customers who are satisfied
that they recommend the same product to the relatives.
3. Dimension Word of Mouth
Referring to the concept that has been implemented Basel et. al. in
Barata (2005: 27), there are two variables of word of mouth, the
perception of risk and consumer knowledge. And in a study conducted by
Surya Sutriono (2008: 31), which draws on research conducted by Brown
and dacin there are three variables, which is satisfaction, incentives, and
opinion leaders.
1) Risk Perception
Word of mouth can affect a person's perception of the value of
a product or the perception of risk that would arise when consuming
the product. The perception of the risk of becoming one of the
important components of information processing performed
consumers. If the information obtained through the word of mouth is
34 (Rini, 2011: 3). According to Gods (2005: 27) in the marketing
process, consumers always face with the risk in any decision making.
According to Mowen and Minor (2002: 89) the perception of
risk is understood as the likelihood of consumers to experience the
negative consequences of using products and services. According
Trocchia in Suhartomo (2010: 29), there are six dimensions of risk
perception, which is:
a. Financial risk is the perception that the product would not be in
accordance with the price.
b. Risk promotion is the perception that the product will not have
the promotion as expected.
c. Risk perception that time is the time spent to search for the
product will be wasted when the product is not performing as
expected.
d. Physical risk is the perception that the product will harm or
threaten the safety of consumers or others.
e. Psychological risk is the perception that the product would not
be in keeping with the concept of self or consumers.
f. Social risk is the perceptions that the product is not good will
35 2) Consumer Knowledge
Through WOM, consumers create knowledge about the
products that will be chosen. If consumers know more about the
products that will be chosen, then the risk he would receive would be
less than he has no knowledge about the product. According to Gods
(2005: 29), consumers have to have the level of knowledge about the
products offered so that it will ignore more information from others
before making the purchase.
Consumer knowledge about the product also has influence not
only on the search WOM actively, but also on consumers'
perceptions of risk. Consumers with little knowledge of the products
tend to have a greater perception of risk and benefit that is greater
than searching for information through WOM activity. In the
decision, the information possessed formed into consumer knowledge
needed to assess the risks of all alternative products that will be
chosen, so that consumers have more information to be able to assess
the choice of products to be consumed which a minimum risk has
compared with consumers who do not have sufficient information.
According to research conducted by Mishra, Umesh, and Stem
in Barata (2005: 30) there are three sizes to measure the level of
36 a. Knowledge is the knowledge of consumers about the products
consumers know exactly what is offered by the provider of the
product concerned.
b. Experience of consumer-related products are consumer
knowledge about the product as what is obtained when using
the product.
c. Information owned by consumers about the product is
consumer knowledge about the products concerned which he
obtained from other sources.
4. Satisfaction
Customer satisfaction will affect the consumers' desire to
disseminate information about the product or service is consumed. If
consumers are satisfied with the products they use it instinctively
consumers will tell the people around him about his satisfaction and
word of mouth spread, both positive and negative among these
people. Word of mouth behavior can be linked to consumer
satisfaction and unsatisfaction with previous consumption
experience.
Consumers who are satisfied after consuming a product certainly
will spread positive word of mouth, while consumers who are not
satisfied after consuming a product would spread negative word of
37 satisfaction will be influenced by the specific features of the product
and the perception of the quality. Product quality basically describes
how much the perceived benefit of consumers so as to satisfy their
expectations.
5. Incentives
In the word of mouth communication, necessary incentives to
stimulate consumers who have used a product spread it to others.
The incentive to be creative although it can also be in the form of
money. Erida (2009: 2), explained that incentives, both monetary
and non-monetary form can reduce the negative word of mouth
behavior and reinforce positive word of mouth.
When linked with the satisfaction of consumers, the incentive
is considered as a catalyst to improve the behavior of consumers
are satisfied WOM and dampen the negative WOM than
consumers who are not satisfied with the product consumed
(Erida, 2009: 3).
6. Opinion Leader
Widyaharsana (2009: 44) argues, an opinion leader of
consumers that regularly affect the views, attitudes, and
behaviors of others. Furthermore, Widyaharsana provide an
38 a. They provide a stimulus to other consumers, so that
consumers become aware of the needs that have been
unaware.
b. They provide information to other consumers about a
product. In many cases, consumers are more likely to
trust a third party rather than promotion by the first
party.
c. They give advice that allows consumers to choose
products that best of many options. These suggestions
are useful in helping consumers to shorten the
evaluation process significantly choice.
d. They provide feedback that is trusted by other
consumers. The expertise and credibility of the opinion
leader can sometimes affect other consumers in
determining a product.
Furthermore, Widyaharsana (2009: 52) explains that
the good opinion leader must have two main requirements
so that they play a major role in the process of WOM,
including:
a. Networking, they should have an extensive
39 will increase the chances of people listen to the
information of an opinion leader.
b. Credibility, addition to an extensive network,
the opinion leader must have credibility.
Credibility is the quality, capability, or power
to generate trust. There are two factors that
make a person has credibility, honesty and the
ability or expertise. Someone who is not
considered to have expertise not wants to hear
his opinion. Furthermore, an expert who is not
considered fair also will not be able to
influence others.
F. Brand Image
1. Definition of Brand
Positive image consumer to a brand more allows consumers to
make purchases. Good brand also became the basis for building a
positive corporate image. The benefits of a positive brand image,
the company bias expand product lines by utilizing the positive
image which has been formed to brand old products. The thing to
note is how to maintain and improve the already positive brand
40 Here is some understanding of brand image (brand image) in
the view of the experts:
a. Brand image simply by Rangkuti (2009: 43) is a set of
associations brand / brand formed in the minds of consumers.
b. Keller (2008: 66) defines brand image as a perception or
impression of a brand by a group of associations that connect
customers to the brand in their memories.
From the above understanding can be concluded that brand
image is the result of perception and understanding of consumers on
the brand of a product is seen, thought and imagined. By creating
the right brand image for a products, would be very useful for
marketers, because the brand image will influence consumer ratings
on alternative brand faces.
Fournier said that consumers' perception of a brand is one of
the keys to building a long term relationship. Furthermore, Morris
(1996) in Rahma (2007: 28) reveals that building a strong perception
of the brand is the top priority at some companies today. Meghan
(1995) in Rahma (2007: 28) also noted the importance of brand
image development in business organizations. Meenaghan states that
the image of a well-managed brand will produce positive
41 a. Improving the understanding of knowledge on aspects
consumer behavior in making decisions.
b. Enhancing consumer orientation toward things that are
symbolic over the functions of the product.
c. Improving consumer confidence in the product.
d. Increase sustainable competitive advantage in view of
technological innovation is very easy to be imitated by
competitors.
Another opinion expressed by Graeff (1996) in Rahma, (2007: 30)
states that the rapid development of the market, will encourage
consumers to more expensive brand image then attention to the
characteristics of the products offered. The condition indicates that the
product is in mature stages in the product life cycle. Cover proprietary,
competitive and stage image. Proprietary explains that the brand is able
to show the uniqueness of some products on the market. Competitive
explains that the brand is able to describe a product has a competitive
advantage that the drive competitors to perform product development
in order to survive in the market. While the stage to explain that the
brand image of a product capable of being decisive in differentiating a
product in the minds of consumers in their purchase decision than other
