FACTORS INFLUENCING THE PURCHSE DECISION MAKING OF LUXURY COMPACT SPORTS CAR
(CASE STUDY OF ABARTH INDONESIA)
By Brian Aditama
13110004
In partial fulfillment of the requirements for the
BACHELOR’S DEGREE In
BUSINESS ADMINISTRATION
BUSINESS ADMINISTRATION AND HUMANITIES
SWISS GERMAN UNIVERSITY EduTown BSD City
Tangerang 15339 Indonesia
January 2015
Revision after the Thesis Defense on January 15th 2015
Brian Aditama STATEMENT BY THE AUTHOR
I hereby declare that this submission is my own work and to the best of my knowledge, it contains no material previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at any educational institution, except where due acknowledgement is made in the thesis.
Brian Aditama
_____________________________________________
Student Date
Approved by:
Mrs. Dibia Abduh, B.B.A., M.S.
_____________________________________________
Thesis Advisor Date
Dr. rer. Nat. Linus Pasasa
_____________________________________________
Thesis Co-Advisor Date
Prof. Eric Jos Nasution, MBA, MA, Ph.D
_____________________________________________
Dean Date
Brian Aditama 1 ABSTRACT
Factors Influencing the Purchase Decision of Luxury Compact Sports Car (Case Study of Abarth Indonesia)
By Brian Aditama
Mrs. Dibia Abduh, B.B.A., M.S., Advisor Dr. rer. Nat. Linus Pasasa, Co-Advisor
SWISS GERMAN UNIVERISTY
The luxury compact sports car Abarth has entered the Indonesian automobile industry early 2014, whereas the competition in the Indonesian automotive industry is getting tougher. The Indonesian Automotive Industry is a fast growing industry, which provides challenging obstacles for new automotive car brands to enter.
Not only does the Indonesian Automotive Industry provide challenging obstacles, there are also two major car brands that have already dominated the target market for Abarth. This means that there will be a tight competition for Abarth.
The research question for this study is: what is the most significant factor that affects the purchase decision of luxury compact sports car. The impact of price, fuel economy, driving comfort, and maintenance cost, design/style, resale value, technology, quality, status symbol and also brand will also be analyzed in this study.
The main objective of this thesis research is to analyze and measure what factors are significantly influencing the purchase decision making of luxury compact sports car, in this case, Abarth Indonesia within the Jakarta area.
Brian Aditama collection. A quantitative approach is used for primary and secondary data. The data collection method uses a questionnaire survey, which is then distributed to target respondents of this study. The target respondents are people who have purchased an Abarth car or prospective customers of Abarth in the Jakarta area. For the purpose of validity and reliability test, a pre-test questionnaire was distributed to the targeted respondents to test the validity of the factors and questions.
In this research, the SPSS software was used to tabulate the data, whereas the SEM (structural equation modelling) analysis was used to test the validity of the hypothesis of this study. The application that was used to create the SEM analysis is AMOS, which was used to see the relationship between the factors used in this study.
The result of this study indicates that the factors that influence Purchase Decision Making of Luxury Compact Sports Car the most are Quality, Brand Image and Status Symbol compared to the other factors. Whereas Fuel Economy, Driving Comfort and Resale Value are the weaker and even insignificant factors that influence Purchase Decision Making of Luxury Compact Sports Car.
Keywords: Purchase Decision Making, Price, Fuel Economy, Driving Comfort, Maintenance Cost, Design/Style, Resell Value, Technology, Quality, Status Symbol, Brand, Abarth.
Brian Aditama
© Copyright 2015 By Brian Aditama All rights reserved
Brian Aditama 2 DEDICATION
“I dedicate this thesis for my beloved family, My Father (Dr. Ir. Petrus Gunarso, PhD), My Mother (Asri Ambarwati, S.H.) and my two brothers (Septa Inigopatria, B.
Des and Roren Nugraha, B. Arch) and also for the future of the automotive industry in Indonesia.
Brian Aditama 3 ACKNOWLEDGEMENTS
First and foremost, I would like to thank our Father Jesus Christ, the Almighty, for blessing me with the courage and wisdom to complete this journey.
I would like to thank my parents, Dr. Ir Petrus Gunarso, PhD and Mrs. Asri Ambarwati, S.H. for their endless love, prayer, understanding, motivation, and for always supporting me during the making of this thesis. I would also like to thank my brothers, Septa Inigopatria, B. Des and Roren Nugraha, B. Arch, for all your prayers and support for this thesis.
I would also like to express my deepest gratitude to Abarth Indonesia for giving me this oppurtunity. Especially to Mrs. Viyata Devi, who has dedicated her time to help support this study personally. Also to Mr. Ocky Putranto and Mrs. Roxanne Akil and other Abarth Indonesia staff who have been very helpful in providing inportant data for this thesis.
Furthermore, I would like to thank my thesis advisor, Mrs. Dibia Abduh, for her guidance, patience, support, and advice throughout the making of this thesis until the end of the journey.
I would like to give a big appreciation to all my friends, Nindyo Utomo, Bellarminus Ariest Elmara, Nastiti Prawitasari, Hannan Bahalwan, Rendy Salim Putra, Alvin Gunawan, Benardo Reinaldi, for supporting me and helping me throughout the process of making this thesis. You guys are the ones who gave me the motivation to finish this thesis.
Last but not least, I would like to thank my special someone, Franka Purwanto, who gave me all the courage, and believes I can also be better. You are the best.
Brian Aditama 4 Table of Contents
1 ABSTRACT ... 3
2 DEDICATION ... 6
3 ACKNOWLEDGEMENTS ... 7
5 TABLE OF FIGURES ... 11
1 CHAPTER 1 - INTRODUCTION ... 13
1.1 Background ... 13
1.1.1 Automobile Market in Indonesia ... 13
1.1.2 Market Share of Indonesian Automotive Industry ... 14
1.1.3 Luxury sports car in Indonesia ... 15
1.1.4 Luxury Compact Sports Car ... 16
1.1.5 ABARTH Luxury Compact Sports Car ... 17
1.1.6 Automobile Consumer Report ... 18
1.1.7 Factors that consumers consider in buying cars... 19
1.1.8 Previous Studies and Research on Luxury Compact Cars. ... 19
1.2 Research Problems ... 21
1.3 Research Objectives ... 21
1.4 Significance of Study... 21
1.5 Research Questions ... 22
1.6 Hypothesis ... 22
2 CHAPTER 2 - LITERATURE REVIEW ... 24
2.1 Theoretical Perspectives ... 24
2.1.1 Purchase decision making ... 24
2.1.2 Theory of Reasoned Action (TRA) and Theory of Perceived Behavior (TPB) 28 2.2 External and Internal Stimulus in Marketing... 28
2.3 Previous Studies ... 29
2.4 Differences of Study ... 32
2.5 Scope and Limitation ... 33
2.6 Framework of Thinking – Research model ... 34
3 CHAPTER 3 – RESEARCH METHODS ... 35
3.1 Research Process ... 35
3.2 Type of Study ... 36
3.3 Type of Data ... 37
3.4 Data Collection ... 37
3.5 Population ... 37
3.6 Sample ... 38
3.7 Validity and Reliability Test ... 38
3.7.1 Validity ... 38
3.7.2 Reliability ... 39
3.8 Data Analysis Method ... 39
3.8.1 SPSS ... 40
3.8.2 AMOS ... 40
3.8.3 Question Design ... 41
Brian Aditama
3.8.4 Model Fit Analysis (Using AMOS) ... 49
4 CHAPTER 4 – RESULTS AND DISCUSSIONS ... 50
4.1 Respondent Profile ... 50
4.1.1 Age ... 50
4.1.2 Educational Background ... 51
4.1.3 Domicile ... 52
4.1.4 Income ... 53
4.1.5 How customers found out about Abarth ... 54
4.1.6 Number of cars currently owned ... 54
4.1.7 Brand of Cars Currently Owned ... 55
4.2 Validity and Reliabilty test (PRE-TEST) ... 56
4.2.1 Validity and Reliability test of Price (X1) ... 57
4.2.2 Validity and Reliability test of Fuel Economy (X2) ... 58
4.2.3 Validity and Reliability test of Driving comfort (X3) ... 59
4.2.4 Validity and Reliability test of maintenance Cost (X4) ... 60
4.2.5 Validity and Reliability test of Design/Style (X5) ... 61
4.2.6 Validity and Reliability test of Resell value (X6) ... 62
4.2.7 Validity and Reliability test of Technology (X7) ... 63
4.2.8 Validity and Reliability test of Quality (X8) ... 64
4.2.9 Validity and Reliability test of Status Symbol (X9) ... 65
4.2.10 Validity and Reliability Test of Brand (X10) ... 66
4.2.11 Validity and Reliability test of Purchase Decision Making (Y) ... 67
4.3 Validity and Reliability test (POST TEST) of all respondents ... 68
4.3.1 Validity test on all respondents ... 68
4.3.2 Price ... 68
4.3.3 Fuel Economy ... 68
4.3.4 Driving Comfort ... 69
4.3.5 Maintenance Cost Factor ... 69
4.3.6 Design/Style ... 69
4.3.7 Resell Value ... 70
4.3.8 Technology ... 70
4.3.9 Quality ... 70
4.3.10 Status Symbol ... 71
4.3.11 Brand ... 71
4.3.12 Purchase Decision Making ... 72
4.3.13 Reliability test (POST-TEST) on all respondents ... 72
4.3.14 Impact of Age and Income on Purchase Decision: Cross-tab analysis .... 74
4.3.15 Relationship between age and purchase decision of luxury car ... 74
4.3.16 Relationship between monthly income and Purchase Decision of Luxury cars 76 4.4 Structural Equation modeling ... 79
4.4.1 Path Diagram ... 79
4.4.2 Measurement Model Test ... 80
4.5 Path Diagram Interpretation ... 81
4.5.1 Hypothesis #1 ... 84
4.5.2 Hypothesis #2 ... 85
4.5.3 Hypothesis #3 ... 86
4.5.4 Hypothesis #4 ... 87
Brian Aditama
4.5.6 Hypothesis #6 ... 89
4.5.7 Hypothesis #7 ... 90
4.5.8 Hypothesis #8 ... 91
4.5.9 Hypothesis #9 ... 92
4.5.10 Hypothesis #10 ... 93
5 CHAPTER 5 – CONCLUSIONS AND RECOMMENDATIONS ... 94
5.1 Conclusions ... 94
5.1.1 Research Question and Hypothesis #1: Price ... 94
5.1.2 Research Question and Hypothesis #2: Fuel Economy ... 96
5.1.3 Research Question and Hypothesis #3: Driving Comfort ... 97
5.1.4 Research Question and Hypothesis #4: Maintenance Cost ... 98
5.1.5 Research Question and Hypothesis #5: Design/Style ... 99
5.1.6 Research Question and Hypothesis #6: Resale Value ... 100
5.1.7 Research Question and Hypothesis #7: Technology... 101
5.1.8 Research Question and Hypothesis #8: Quality ... 102
5.1.9 Research Question and Hypothesis #9: Status Symbol ... 103
5.1.10 Research Question and Hypothesis #10: Brand ... 104
5.2 Main Conclusion ... 105
5.3 Recommendations ... 106
5.4 Future Studies ... 107
6 Bibliography ... 108
