INTRODUCTION Research Background
Smartphones are mobile phones with more advanced computing capabilities and connectivity than regular mobile phones (O'Dea, 2022). Smartphone becomes an indispensable gadget in this modern era. Its worldwide sales have been increasing and are projected to grow by 4% during the period of 2022-2027 (mordorintelligence, 2022). In worldwide market, Samsung and Apple are two smartphone e manufacturers that tend to swap places as the first and second rank in sales, as depicted in the following figure:
Figure 1. Mobile Vendor Worldwide Rank 2018-mid 2022 Source: gs.statcounter.com
While in Indonesian smartphone market, the situation is completely different; Apple smartphone or iPhone has been on rank 5 in five-top best-selling smartphones category.
Figure 2. Mobile Vendor Indonesia Rank 2018-mid 2022 Source: gs.statcounter.com
Such fact is contrary to the news released by liputan6.com which stated that people preferred to own an iPhone rather than any other android smartphones. Some of the reasons where iPhone was considered as something exclusive and cool, with speedy performance, reliable quality of the camera, and product durability (Ramdhani, 2020).
iPhone is a unique phenomenon in Indonesia. It is not only considered as a high-quality product but also a luxurious gadget which is identical to the upper class (Widyananda, 2020).
Owning & using an iPhone create an image of luxury and exclusivity (Bumulo, 2022), even though there are some critiques that iPhone’s high price is not worth it (Edward, 2021). Luxury brand seems to be inseparable from premium price. With a price range of over 10 million rupiahs, making the iPhone more solid as a luxury brand (Kala, 2018).
Adding to the image of being luxurious is the image of being exclusive. iPhone owners in Indonesia, who are mostly young generation, enthusiastically create and join iPhone fans communities such as iDevice Indonesia, id-iPhone Community, iPhone Photography Community, Malang iPhone Community, etc. (Priyo, 2019). There is a community of iPhone users, “iPhonesia is the name for those who have an iPhone and join this community” (Rinandi, 2015), which strengthens the image of exclusivity. Others interesting about iPhone users in Indonesia is according to Onavo insights at 2013 through twitter, Indonesia is used to be number one country which have largest iPhone users through twitter in the world with 64% (Hadi, 2013). It can be said that iPhone users in Indonesia have their own social status, this is because the high price and exclusive image make many people view iPhone owners as having a high social class among other branded smartphone users (Alfianto, 2020).
The price of the iPhone, which is still higher than other smartphone brands, seems to be perceived as a decent price. Consumer’s use they’re of the relative price as a way to creating feeling from the value from the product, so that it can determine their purchase intention (Oosthuizen &
Spowart, 2015). iPhone price are starting at Rp. 6.000.000 until Rp. 39.999.999 based at the price, iPhone is still an excluive brand (iprice, 2023). Price perception is one of the important points in purchase intention, this perception come when someone feels that the product are suitable with price that offer to their needs with having iPhone (Ayub & Kusumadewi, 2021). Because the price
level set by Apple will be a guide for consumers themselves. (Aranca, 2020). From this price perception, consumers create the assumption that the price offered by the iPhone is a reasonable price and accepted by people in Indonesia who use the iPhone. (Anggraini, 2017).
Another reason why iPhone is so in demand is because some people assume that iPhone is perceived as having a decent quality. iPhone provides very high-quality cameras with different characteristics (Abdi, 2020). Another advantage possessed by the iPhone is a system that can always be updated by the iPhone from the old series to the latest series (Yudhistira, 2021). A value that comes out from someone perspective make iPhone brand is better than the other brand in market (Oktavenia & Ardani, 2019). Other than that, iPhone are also offering their consumers another screen resolution that will display graphic that we can’t find in other smartphone in Indonesia market (mybest, 2022). In other words, some consumers in Indonesia allegedly have a perception of the quality of the iPhone that makes them choose the iPhone compared to other competitors. A person's perception of the quality of a product has the potential to overpower their view of other brands or competitor (Riadi, 2021).
Similar research revealed varied results. (Vijaranakorn & Shannon, 2016) stated that the image of a luxury brand has a positive effect on the purchase intention. Meanwhile (Durand, 2017)
& (Chou, 2017) stated that luxury brand image does not affect purchase intention; there is an insignificant correlation between luxury brand image and purchase intention. (Weisstein, Asgari,
& Siew, 2014) (Ra & Narwa, 2021) Said that perceived price influences the purchase intention of consumers. However, (Lee & Stoel, 2014) & (Son & Jin, 2019) stated that price perceptions do not affect purchase intention. The research done by (Core & Suprapti, 2018) & (Aranca, 2020) revealed that perceived quality influences consumers' purchase intentions. Meanwhile, according to (Justin Beneke, 2013) & (Son & Jin, 2019) perceived quality does not lead to purchase intention.
The main reference in this research is (Nazarani & Suparna, 2021) concerning what factors that cause purchase intentions luxury brand. This study will modify the main reference of the research gap by adding price perception and quality perception variables as the factors which are expected to have an influence on the purchase intention of millennial in purchasing iPhone. The
reason why in this research adding purchase intention from purchasing a luxury brand because, the research interests to know and indicate first why people can have intentions to purchase before they make their buying decision to neo luxury brand. That’s why this research not use brand love as mediating variable, because the main variables are based on quality and price perception and also the effect from luxury brand image that affecting people intentions to purchase.
Based on the explanation above, this research aimed to explore the influence of luxury brand image, perceived price, and perceived product quality on the intention of generations Y and Z to purchase iPhone. Generation Y or millennial were born between 1981-1996, while generation Z were born between 1997-2012. They are chosen to be the object of this research since these two generations are well-adapted to technology (Shalihah, 2021) and actively embrace digital life through their smartphones in their daily lives as well as at work (VOGELS, 2019). Based on Indonesian population census 2020 as cited in kompas.com and katadata.com, generations Y and Z dominate Indonesian’s population. 25.87% of Indonesian population is generation Y and 27.94%
is generation Z (Bayu, 2021) and (Shalihah, 2021). Hence, generations Y and Z are an interesting market for high-tech, digital products including iPhone.
Research Question
The questions of conducting this research are;
1. Does luxury brand image influence purchase intention of iPhone among generations Y and Z?
2. Does price perception influence purchase intention of iPhone among generations Y and Z?
3. Does perceived quality influence purchase intention of iPhone among generations Y and Z?
4. Does luxury brand image, perceived price, and perceived product quality simultaneously influence the purchase intention of iPhone?
Research Objective
The objectives of conducting this research are;
1. To determine whether the luxury brand image influences the purchase intention of iPhone
2. To determine whether the price perception influences the purchase intention of iPhone
3. To determine whether the quality perception influences the purchase intention of iPhone
4. To determine whether the luxury brand image, perceived price, and perceived product quality simultaneously influences the purchase intention of iPhone.
