The Effect of Digital Marketing and Product Diversity on Interests and Impact on Student Decisions in Choosing Private
Universities in Padangsidimpun City
Masnilam Hasibuan
Faculty of Economics, Universitas Graha Nusantara, Padangsidimpuan, Medan. Indonesia masnilam75@gmail.com
*corresponding author
ARTICLE INFO ABSTRACT
Article history:
Received 31 Ags 2022 Revised 6 Sept 2022 Accepted 13 Sept 2022
The research aims to analyze the role of digital marketing and product diversity on purchasing decisions through consumer interest as an intervening variable. Digitalization in the era of the industrial revolution 4.0 is vital for every business unit as input to be considered in consumer decision-making.
Product diversity is a measure that is no less important than digital marketing because its role is very helpful as a medium in determining purchasing decisions. This research uses quantitative research methods with descriptive and verification analysis. The research unit is a private tertiary institution in the city of Padangsidimpun, namely Padangsidimpuan Graha Nusantara University, Padangsidimpuan Aufa Royhan University, South Tapanuli Muhammadiah University, and South Tapanuli Educational Institute with research subjects being active students and the sampling technique was carried out by proportional random sampling. Sources of data in this study are primary data and secondary data. The analysis technique in this study uses the structural analysis technique of the equation model. The study results show that digital marketing and product diversity influence purchasing decisions directly and through consumer interest. The findings of this study indicate that product variety has the greatest influence on customer interest, which indicates that students, before making their choice, first pay attention to product diversity consisting of a choice of the study program, choice of study program accreditation, absorption of the study program for work and program offers scholarship studies.
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All rights reserved.
Keywords:
Digital Marketing Product Diversity Consumer Interest Purchase Decision
I. Introduction
The industrial revolution 4.0, also known as the "cyber physical system" itself, is a phenomenon where collaboration between cyber technology and automation technology occurs. This revolution itself brings many changes in various sectors. One of these changes is marked by the growing development of digitization and computerization systems through internet media so that the internet becomes an activity in business. Internet activity in this era is limited to using information that can be accessed through one medium and can also be used to make transactions [1]–[3]. The internet can also help adults or older people to increase their social network by avoiding some restrictions on communication [4], [5].
The use of the internet has now been optimized in almost all life activities, including in the economic field, which includes the marketing of goods and services. Buying and selling transactions using internet media is better known as e-commerce. E-commerce is a business activity involving consumers, manufacturing, services, and intermediary trading using computer networks, namely the internet; with the presence of the internet, some business people have begun to divert their promotion methods and transactions through e-commerce, although they have not abandoned the previous promotional methods. This is caused by several factors of the advantages of the internet compared to other media [6].
Digital marketing is present as an innovation in the world of marketing. Digital marketing is marketing a product or service via digital or the internet. In Indonesia, digital marketing has been
very developed. Using a computer system that is interconnected through a telecommunications network allows sales transactions to be carried out automatically and quickly. By conducting sales and marketing electronically, sellers can minimize costs incurred for operational purposes.
Marketing via the internet allows customers to choose the product or service they want without wasting time going to the place where they need the product or service. Marketing through digital marketing requires products or services first, then to display products or services, the seller needs a site, website, or application related to the buying and selling process and uploading the available product or service options.
Seeing the rapid growth of e-commerce, many small and large entrepreneurs sell their products through e-commerce platforms such as Tokopedia, Shopee, Blibli, Lazada, and Bukalapak (CNN, 2020). There are several factors that consumers consider when choosing to shop for a product through e-commerce. A very important factor is the application's ease of use; consumers and sellers will exchange information online through the application. Convenience is the extent to which a person believes that using technology will be free of effort. Consumers will shop online when they get the convenience and certainty of the products they need [7].
In its development, internet media is not only the promotion and marketing of e-commerce business platforms but is also used as a media promotion by the service industry. Internet media has become a method in the industry both in product marketing and as a promotional medium [8]. The internet has become a new opportunity and media to make changes in promotions [9], so the internet has become a force and an ecosystem in business activities [10]. Organizations have responded to this change in consumer behavior by making digital and social media an important and integral component of business marketing plans [11]–[14].
Currently, the internet is used in business-oriented activities and in various activities as a promotional medium [15], [16]. Many studies have been conducted on digital marketing that links it to purchasing decisions [17]–[20]. At the same time, other studies discuss the application of digital marketing to educational services with its influence on decisions in choosing education [17], [21]. However, most of these studies are still focused on business aspects and the pattern of their direct relationship to purchasing decisions. Looking at the descriptions of previous researchers, this research finds an opportunity that the path of digital marketing influence is not only directly on customer decisions but can also be through intervening variables, namely consumer interest. In addition, this study adds a variant of product diversity which is considered to have the same influence on purchasing decisions through consumer interest. Therefore, the position of the research to be carried out is to complement the results of previous research that digital marketing does not only directly influence customer decisions but can also be through interest as an intervening variable.
This study will empirically examine how digital marketing is influenced when implemented in a university. Higher education institutions generally use internet facilities not only for information purposes for lecturers but also as a medium of marketing and promotion for both public and private tertiary institutions.
II. Method
This type of research is included in quantitative research with descriptive and verification analysis. This research is based on the built hypothesis, namely whether or not there is influence from digital marketing and product variety on the determinants of student interest in choosing private tertiary institutions so that, in the end, it will produce a consumer decision in making their choice. The variables in this study are divided into three parts, namely the independent variables, intervening variables, and dependent variables. The independent variables consist of digital marketing variables and product variety, the intervening variable is consumer interest, and the dependent variable is purchasing decisions. The selection of indicators as a measure in this study refers to the basic theory of each variable, which is then developed according to the characteristics of the research being conducted. The digital marketing indicators in this study consist of websites, search menus, complete information, online promotions, institutional e-mail, and interactive dialogue services. The product diversity indicators consist of the choice of the study program, the choice of study program accreditation, the study program's absorption of work, and the study program's offer of scholarships. Indicators of customer interest in this study consisted of interest,
trust, and reputation of the college, and indicators of purchasing decisions in this study consisted of stability in choosing study programs, ease of making payments, quality of colleges, and the number of people interested in colleges.
Sources of data in this study consisted of primary data and secondary data. Primary data is data taken directly by researchers at the research site, while secondary data is supporting data or other information sourced from books, research journals, and other sources that are still relevant to the theme of this research. The population in this study were active students who had chosen private tertiary institutions in Padangsidimpuan City, namely Padangsidimpuan Graha Nusantara University, Padangsidimpuan Aufa Royhan University, South Tapanuli Muhammadiah University and the South Tapanuli Institute of Education. The total population in this study was 25,000 students, consisting of Graha Nusantara University Padangsidimpuan with 7,000 students, the Muhammadiah University of South Tapanuli with 10,000 students, the Institute of Education in South Tapanuli with 3,000 students and University of Aufa Royhan padangsidimpuan with 5,000.
The sample determination technique in this study used the slovin formula with a sampling error of 5%; from 25,000 students, 394 students were taken as a sample by proportional random sampling.
The main instrument used in this study was a research questionnaire using a Likert scale, and the nature of the questions were closed questions. In addition, researchers also conduct interviews to support or seek new information as reinforcement of the research results that have been obtained.
The analysis technique in this study uses structural equation modeling, complete with smart PLS software.
III. Results and Discussion
The indicators of digital marketing variables in this study refer to the theory developed by Eun Young Kim, which defines four dimensions of digital marketing, namely cost/transaction, interactive, incentive program, and site design which were later adopted and developed by research [22], [23] that digital marketing indicators include web sites, search engine marketing, web banners, social networking, viral marketing, e-mail marketing, and affiliate marketing. Referring to the indicators explained, this research in measuring digital marketing in a tertiary institution includes a website, search menu, online information and promotions completeness, institutional e-mail, and interactive dialogue services. The product diversity variable collects all products and goods offered [24].
Diversity is product completeness that concerns the depth, breadth, and quality of the products offered and the availability of these products in each store. Completeness of all products offered to be owned, used, or consumed. Completeness produced by producers will increase consumer buying interest if the desires and needs of consumers are met. Product diversity is a product planning and control process in one group or the number of product groups in stock at retail stores. Based on the type and level of diversity, product groups are further classified to make it easier for retailers to plan the variety of products they must have [25], [26]. Consumer interest in various products will greatly affect the increased sales volume, meaning consumers' purchase intentions will also increase. The theory of Kotler and Keller regarding product diversity, namely having a certain width, length, depth, and consistency; Width refers to how many different product lines the company has. Depth refers to the total number of items in the mix. Breadth refers to how many types each product offers in that line. Product mix consistency refers to how closely related the various product lines are in end use, production requirements, distribution channels, or others [27].
Referring to this description, this study in determining product diversity indicators developed the theory of Kotler and Armstong, which other researchers later adopted. In this study, indicators of product diversity after adjusting for research characteristics include the study program, choice of study program accreditation, absorption of study programs for work, and offers of study programs for scholarships.
Interest is a psychological aspect that considerably influences behavior, and interest is also a source of motivation that will direct someone to do what they do. Purchase intention is part of the behavioral component in the attitude of consuming. According to Kinnear and Taylor, buying interest is part of the component of consumer behavior in consuming attitudes, the tendency of respondents to act before buying decisions are implemented. In Yuniati and Kharnolis' research, interest indicators were used, which consisted of advertising attractiveness, service quality,
reputation, and product attributes [28]. Meanwhile, in Wardani's research, interest is formed by trust and convenience in transactions [29]. Judging from the theory and some of the research conducted, this study uses indicators of interest adjusted to the characteristics of the research.
Interest in this research consists of indicators of interest, trust, and the university's reputation.
Meanwhile, purchasing decisions are consumer purchasing decisions, which are the final consumer purchasing decisions of individuals and households who buy goods and services for private consumers [30, p. 235].
Consumer decision-making varies, depending on the types of purchase decisions. More complex decisions may lead to more participation and greater buying freedom. According to Kotler, a purchasing decision is an action taken by a consumer to purchase a particular product after receiving purchase stimuli. Decision-making is a consumer activity directly involved in obtaining and using the goods offered [30, p. 44]. Purchasing decisions have indicators: product selection, brand choice, dealer selection, number of purchases, the timing of visits, and payment methods [30]. researchers then developed this theory, as was done [31], including indicators of purchasing decisions influenced by product selection, brands, and payment methods similar to research conducted by Akbar that the factors that influence purchasing decisions, including emotional values, social values, quality values and functional values [32]. Referring to the description above, this study uses purchasing decision indicators that have been adjusted to the characteristics of the research, including stability in choosing a study program, ease of making payments, the quality of the college, and the number of enthusiasts for the college.
Figure 1 Inner Model
The accumulated questionnaire data was processed using SmartPLS 3.2 software. Data analysis begins with building a structural model, testing the validity and reliability of the measurement model (outer model), and the significance of the relationship between variables (inner model) to determine the effect of digital marketing and product diversity on purchasing decisions through interest as intervening. The structural model is made by designing the relationship between latent variables. Exogenous latent variables in research are digital marketing, product diversity, and consumer interest intervening. The endogenous variable in this study is the Purchase Decision.
A. Convergent Validity
Evaluating convergent validity by examining individual item reliability can be seen from the standardized loading factor. The following is the outer loading value of each indicator on the research variables:
Tabel 1. Outer Loading
Indicator Variable Outer Loading Digital Marketing
X1.1 0.865
X1.2 0.876
X1.3 0.849
X1.4 0.793
X1.5 0.649
Product Diversity X2.1 0.892
X2.2 0.883
X2.3 0.848
X2.4 0.893
Customer Interest Y1 0.914
Y2 0.909
Y3 0.859
Buying decision
Z1 0.854
Z2 0.893
Z3 0.900
Z4 0.825
Based on the data presented in 1, it is known that each of the research variable indicators has an outer loading value of > 0.7. However, one indicator still has an outer loading value <0.7.
According to Chin, as quoted by Imam Ghozali, the outer loading value between 0.5 – 0.6 is considered sufficient to meet the requirements of convergent validity. The data above shows that there are no variable indicators with extreme loading values below 0.5, so all indicators are declared feasible or valid for research and can be used for further analysis.
B. Construct Reliability and Validity
Discriminant Validity is looking at and comparing discriminant validity and the square root of the average extracted (AVE). Suppose each construct's AVE square root value is greater than the correlation value between the construct and the other constructs in the model. It is said to have good discriminant validity, and the expected AVE value is > 0.5. Composite Reliability is an index that shows the extent to which a measuring device can be trusted to be relied on. Data that has composite Reliability> 0.7 has high Reliability. The composite Reliability of the indicator block that measures a construct can be evaluated with two kinds of measures: internal consistency and Cronbach's Alpha.
Tabel 2 Construct Reliability dan Validity
Variable AVE Composite
Reliability
Cronbach’s Alpha
Digital marketing 0.657 0.905 0.867
Product Diversity 0.773 0.931 0.875
Customer Interest 0.800 0.923 0.891
Buying decision 0.754 0.925 0.902
Based on the data presented in table 2, it is known that the AVE value of the digital marketing variable, product diversity, consumer interest, and purchasing decisions is > 0.5. Thus, each variable has good discriminant validity. Composite reliability value of all research variables > 0.7.
These results indicate that each variable has met composite reliability, so it can be concluded that all variables have a high level of reliability. Cronbach's alpha value of each research variable > 0.7.
Thus these results indicate that each research variable has met the requirements for Cronbach's alpha value, so it can be concluded that all variables have a high level of reliability.
C. Evaluation of the Inner Model
Based on Figure 1, it is found that the marketing digitization variable influences the consumer interest variable by 0.350 or 35.00%. The product diversity variable influences purchasing decisions by 0.550 or 55.00%. In addition, the marketing digitization variable influences consumer interest by 0.337 or 33.70%. The variable product diversity influences consumer interest by 0.114 or 11.40%. We have seen from the value of the coefficient of determination that the two variables, namely marketing digitalization and product diversity, have a simultaneous influence on purchasing
decisions of 0.735 or 73.50%. Digital marketing variables and product diversity simultaneously affect consumer interest by 0.730 or 73.00%. At the same time, the consumer interest variable influences purchasing decisions by 0.444 or 44.40%. Based on the data processing that has been done, the results can be used to answer the hypothesis in this study. Hypothesis testing in this study was carried out by looking at the T-Statistics values and P-Values. The research hypothesis can be declared accepted if the P-Values <0.05. The following are the results of hypothesis testing obtained in this study:
Tabel 3 T-Statistics dan P-Values Hypothesi
s
Influence T-Statist
ics
P-Valu es
Hasil H1 Consumer interest => Marketing digitalization 5.558 0.000 Diterima
H2 Consumer interest => Product diversity 9.043 0.000 Diterima
H3 Buying decision => Marketing digitalization 4.061 0.000 Diterima
H4 Buying decision => Product diversity 2.199 0.031 Diterima
H5 Consumer interest => Buying decision 6.983 0.000 Diterima
The hypothesis test results show that digital marketing and product diversity have a positive and significant effect on customer decisions, both directly and through customer interest. The results of this study indicate that digital marketing implemented by each private university through its website page that displays the required information and academic activities shows a positive impression on students in making their choices. In addition, the diversity of products, in this case, owned by private tertiary institutions, is information regarding the choice of study programs, accreditation, absorption of graduates, and scholarship offers which are factors of attraction for students in increasing interest in making their choice of private tertiary institutions in Padangsidimpuan City. The research findings show that product diversity is the biggest contribution that influences student decisions in making their choices, both directly and through interest. This shows that students prioritize their choices on the quality of each study program, accreditation, absorption of graduates, and scholarship offers compared to the role of digital marketing.
Based on research findings show that there is a positive influence of digital marketing variables on consumer decisions both directly and through consumer interest, and the results of this study support the results of previous studies related to digital marketing having a direct influence on purchasing decisions [33], [34], while other studies state that digital marketing has a direct effect on purchasing decisions [33], [34]. Another finding in this study is that product diversity directly affects purchasing decisions, both directly and through consumer interest. These findings support and strengthen previous research that product diversity directly influences purchasing decisions [25], [35]. Other studies show that product diversity influences consumer interest [36].
IV. Conclusion
Digital marketing and product diversity, based on research findings, show that these two variables have a very vital role for private tertiary institutions as determinants of students in making their decision to choose a private tertiary institution. The findings show that students still prioritize their choice of private tertiary institutions based on the quality criteria of each study program, accreditation, the absorption capacity of graduates, and scholarship offers. Even so, digital marketing still has a quite strategic role as a means of providing information to the public about aspects that are considered to increase public interest in making their choices. Digital marketing can be used optimally in providing information related to the diversity and advantages of each study program that is owned, the achievement of current accreditation, information on the absorption of graduates in work, and the availability of scholarships for both those who excel and those who are considered to be less fortunate.
The results of this study make a significant contribution to scientific development, especially marketing management, that digital marketing and product diversity are not only carried out in profit-oriented companies but can also be developed into educational services by making adjustments to the use of dimensions and indicators according to research characteristics. The results of this study also provide a recommendation that private tertiary institutions pay more
attention to the quality of study programs, excellence in accreditation, Improving the quality of graduates and scholarship information to the public because these four aspects significantly influence student decisions in choosing private tertiary institutions and either directly or through student interests
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