THE EFFECT OF AD FEES AND PERSONAL SELLING COSTS ON SALES VALUE: CASE STUDY AT
PT.TELEKOMUNIKASI INDONESIA, TBK
Aneu Kuraesin RS1, Silvi Apriliyani Chaidir1
1,Accounting;STIE Ekuitas Bandung Indonesia
*Corresponding Author: [email protected] Accepted: 1 August 2019 | Published: 15 August 2019
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Abstract:
Promotional activities consisting of advertising and personal selling needs to be done so that people know the capabilities of products offered by the company. The greater the cost incurred by PT. Telekomunikasi Indonesia, Tbk (Telkom), then the achievement of the company's goal in communicating its products to the public will also be greater, resulting in an increasing number of buyers.The increasing number of buyers will ultimately increase the value of the sale. The purpose of this study is to determine the effect of advertising costs and personal costs seling on the value of sales.The method used in this research is quantitative research method using descriptive verifikatif analysis. Population in this research is all data of financial statements of PT. Telekomunikasi Indonesia, Tbk 2007-2016 period. Sampling technique used is Nonprobability Sampling for sample data used is data financial statements of PT. Telekomunikasi Indonesia, Tbk 2007-2016 period. Technique of data collecting is done by library research and report of publication data. Statistical analysis using multiple linear regression analysis to test the hypothesis using t test and F test to test its significance.Based on the results of the data. Multiple linear regression model does not occur deviation on the classical principle test. From the test results partially explain the cost.
Simultaneously, the cost of advertisement and personal selling cost also have a significant effect on Sales Value equal to 71,06%, while the rest 28,94% by other factor not examined in this research.
Keywords: Advertising Cost, Personal Selling Cost, Sales Value
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1. Introduction
In Indonesia, many technology companies utilize a variety of ways to introduce their products to the public. PT. Telekomunikasi Indonesia, Tbk (Telkom) is one of the largest telecommunications companies in Indonesia according to Forbes Indonesia Magazine which has been listed on the Indonesia Stock Exchange.
But the problems that occur at PT. Telekomunikasi Indonsesia, Tbk is a value of sales that continues to increase, but advertising costs and personal selling costs for ten years have fluctuated, and even advertising costs and personal selling costs have decreased but the sales value continues to increase as seen in the table below:
Table 1.1
Fluctuations in Advertising Costs, Personal Selling Costs and Sales Values PT. Telecommunication Indonesia, Tbk in 2007-2016
(in billion rupiah) Years Advertising
Costs
% Enhansemen
Person Costs
% Enhansemen
Value Of Sale
% Enhansemen
2007 Rp 944 - Rp 425 - Rp 59.400 -
2008 Rp 1.301 37,82% Rp 417 -1,81% Rp 60.690 2,10%
2009 Rp 1.724 32,52% Rp 438 5,04% Rp 67.627 11,43%
2010 Rp 1.994 15,66% Rp 398 -9,13% Rp 68.629 1,48%
2011 Rp 2.743 37,56% Rp 427 7,29% Rp 71.253 3,82%
2012 Rp 2.494 -9,08% Rp 491 14,99% Rp 77.143 8,27%
2013 Rp 2.401 -3.73% Rp 253 -48.53% Rp 82.967 7.55%
2014 Rp 2.383 -0.75% Rp 333 31.66% Rp 89.696 8.11%
2015 Rp 2.525 5,96% Rp 376 12,92% Rp102.470 14,24%
2016 Rp 3.134 24,12% Rp 495 31,67 % Rp116.333 13,53%
Source : : www.idx.co.id
Promotional activities consisting of advertising and personal selling need to be done so that the public knows the capabilities of the products offered by the company. The greater the costs incurred by PT. Telekomunikasi Indonesia, Tbk (Telkom) then the achievement of corporate objectives in communicating its products to the public will also be greater, resulting in an increase in the number of buyers.
2. Literature Review
According to Kotler and Keller (2012; 498-501):
"Advertising is all paid forms of non-personal presentation and promotion, goods or services through clear sponsors through print media (newspapers and magazines), radio broadcast media (radio and television), network media (telephone, cable, satellite, wireless), and electronic media (sound recordings, video recordings, CD-ROMs, website pages), and exhibition media (billboards, road signs and posters). "
According to Kotler and Keller (2012: 478) suggest that:
"Sales Promotion is a collection of mostly short-term incentive tools designed to encourage the trial or purchase of products or services including consumer promotions (such as samples, coupons and premiums), trade promotions (such as advertising and hosting) and business and promotion sales force (context for sales reputation) ".
According to Mulyadi (2014) sales are activities carried out by sellers in selling goods or services in the hope that they will profit from the existence of these transactions
3. Discussion
Multiple Linear Regression Analysis
Multiple linear regression analysis is used for the relationship of mathematical relationships between output / dependent relations (Y) with one or several input variables / independent
(X). Mathematical relationships are used as regression models that are used to predict or predict output values (Y) based on certain input values (X).
The main objective of multiple regression analysis is to measure the ratio of the relationship between two or more variables and make an estimate of the percentage of Y over X. In this study, we will discuss the relationship between advertising costs and personal selling costs as independent variables on sales value as the dependent variable. By using the SPSS Version 23 program, the results of multiple regression analysis are as follows:
Table 1.2
Results of Multiple Linear Regression Coefficientsa
Model
Unstandardized Coefficients
Standardized Coefficients
T Sig.
Collinearity Statistics
B Std. Error Beta Tolerance VIF
1 (Constant)
71,202 10,175 3,31
2 ,013
Biaya Iklan ,137 ,079 ,432 ,377 ,017 ,984 1,016
Biaya Personal Selling
,285 ,098 ,684 1,09
5 ,020 ,984 1,016
Based on the table above, multiple linear regression equation can be obtained as follows:
Y = α + b1x1 + b2x2 + ε
Value of sales = α + 71,202 + 0,137 x1 + + 0,285 x2+ ε
The regression equation can be interpreted as:
1. The constant value of 71.202 indicates that if the advertising costs and personal selling costs are zero, then the sales value obtained is 71.202.
2. The advertising cost coefficient of 0.137 shows a positive direction, which means that if the advertising costs increase by 1 unit with the assumption that other variables remain, the sales value will increase by 0.137. The advertising cost coefficient value is positive, indicating that the more local taxes increase, the sales value will increase.
3. The personal selling cost regression coefficient of 0.285 shows a positive direction which means that if personal selling costs increase by 1 unit with the assumption that the other variables are fixed then the local revenue will increase by 0.285. The regression coefficient value of the regional retribution is positive, indicating that the more regional levies increase, the original regional income will increase.
Multiple correlation analysis
Model Summaryb
Model R R Square
Adjusted R Square
Std. Error of
the Estimate Durbin-Watson
1 ,760a ,152 ,090 5,29361 1,698
a. Predictors: (Constant), Personal Selling Costs, Advertising Fees b. Dependent Variable: Value of sales
R in multiple linear regression shows the value of multiple correlation, namely the correlation between two or more independent variables on the dependent variable. based on the table above it can be seen that the calculation results obtained by the correlation coefficient of
0.760. If we compare with the table of interpretation of the correlation coefficient, the above values are in the interval of 0.600 - 0.799 which has a strong level of relationship so the independent variable of advertising costs and personal selling costs has a strong level of relationship with the Sales Value variable.
Effect of Advertising Costs on Sales Values
Based on the processing of the data obtained, with the value of t table with the number of samples (n) = 10, the number of independent variables (k) = 2, the significance rate is α = 0.05 / 2 = 0.025, degrees of freedom (dk) = nk-1 = 10-2-1 = 7 for the variable cost of advertising (X1) the result of tcount ≥ ttable (2,377 ≥ 2,36462) then H0 is rejected and Ha is accepted, meaning that there is a partial influence between the cost of advertising on the value of sales. Besides that, it can be seen from the significance level of 0.017 <0.05 so that the result of H01 is rejected. So that we can conclude that advertising costs have a partial effect on sales value with a positive value obtained.
This shows that by allocating the right advertising costs it will have an impact on increasing the value of sales at PT. Telekomunikasi Indonesia, Tbk.
Effect of Personal Selling Costs on Sales Values
The cost of personal selling has a value of t count of 3.887 with a significance level of 0.020.
So that we can find out whether personal selling costs have an effect on sales value, we must compare t count with t table. The value of t table with the number of samples (n) = 10, the number of independent variables (k) = 2, the significance rate α = 0.05 / 2 = 0.025, degrees of freedom (dk) = nk-1 = 10-2-1 = 7 obtained a value of 2.36462.
Thus tcount> t table or 3.095> 2.10982 so that the result H02 is rejected and the significance is 0.02 <0.05 so that the result H02 is rejected. So that we can conclude that the cost of personal selling has a partial effect on the value of sales with positive obtained values. This shows that there is a positive influence where the alternating personal costs increase, the sales value will also increase.
The results of this study are in line with the results of Efriza (2014), Rinna (2015), and Lilis (2014) which states that personal selling costs have a significant influence on the value of sales.
4. Conclusion
Advertising costs at PT Telekomunikasi Indonesia, Tbk fluctuated in the period 2007-2016.
The average advertising costs in the 2007-2016 period were 14.01%. The highest advertising costs occurred in 2016 amounting to Rp. 3,134,000,000 while the lowest advertising costs occurred in 2007 amounting to Rp. 944,000,000. PT.Telecommunications Indonesia, Tbk optimizes costs, one of which is advertising costs in 2012-2013 and 2014 which are part of a series of product marketing strategies by reducing advertising costs by 9.08% from 2011, 3.73% from 2012 and 0.75% from 2013 was caused by more selective media selection and changes in inset dealer schemes at Telkomsel.
Personal selling costs at PT Telekomunikasi Indonesia, Tbk fluctuated in the period 2007- 2016. The average advertising costs in the 2007-2016 period were 4.40%. The highest advertising costs occurred in 2016 amounting to IDR 494,700,000, while the lowest advertising costs occurred in 2013 amounting to IDR 252,700,000 In its operations, face-to-
face sales (personal selling) were more flexible compared to other forms of promotion seen in table with an increase of 31.66% in 2014, and a decrease of 1.88% from 2007, 9.13% from 2009 and 48.53% from 2012 due to the optimization of the marketing burden.
The sales value at PT Telekomunikasi Indonesia, Tbk has fluctuated in the period 2007-2016.
The average value of sales in the 2007-2016 period was 7.84%. The highest sales value occurred in 2016 amounting to Rp 116,330,000,000, while the lowest sales value occurred in 2007 amounting to Rp 59,440,000,000. The increase continues to occur in the value of sales even though the percentage increase in sales value of 1.48% in 2010 was greater than the previous year which amounted to 11.43% in 2009 and the same as in 2013 and 2016 increased, but the percentage increase was greater in the previous year.
Partially Advertising Costs have a positive and significant effect on Sales Value. Advertising costs have a value of t count of 1.377 with a significance level of 0.017. Thus thitung> t table or 2,377> 2,36462 so that the result H01 is rejected and the significance is 0,017 <0,05 so the result H01 is rejected. So that we can conclude that advertising costs have a partial effect on sales value with a positive value obtained. This shows that by allocating the right advertising costs it will have an impact on increasing the value of sales at PT. Telekomunikasi Indonesia, Tbk. Personal selling costs have a value of t count of 3.887 with a significance level of 0.020.
Thus tcount> t table or 3.095> 2.10982 so that the result H02 is rejected and the significance is 0.02 <0.05 so that the result H02 is rejected. So that we can conclude that the cost of personal selling has a partial effect on the value of sales with positive obtained values. This shows that there is a positive influence where the alternating personal costs increase, the sales value will also increase. While simultaneously, advertising costs and personal selling costs together have a strong correlation with the value of sales with Fcount> Ftable (10.629> 4.47), with a significance level of 0.009 <0.05. The two variables together have a significant effect on sales value and have an effect of 71.06%. The remaining 28.94% is explained by other factors not examined in this study.
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