Predicting Millennial Consumers’ Purchase Decisions from Promotion, Price and Design
Bintang Andhyka1, Riska Yustisiana1*, Murti Widyaningsih1, Nurul Hilmiyah1
1 Faculty of Economic and Business, Universitas Pancasila
*Corresponding Author: [email protected]
Accepted: 15 October 2020 | Published: 31 October 2020
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Abstract: Millennial generation have daily activities like learning, meeting, socializing and expanding horizons through devices that often require power banks as power support in their devices to facilitate mobility. Power bank are a product that have been widely circulating in the market with a variety of designs, shapes and features offered at various prices. The purpose of this study was to determine effect of promotion, price and product design on purchase decision of power bank. The sample of this study was 130 millenial consumers (high mobility students using power banks in the campus environment). Data analysis using Multiple Linear Regression Test is used to test and prove the hypothesis of the study. The result showed that partially, price and product design has significant effect on purchase decision of power bank, promotion has no significant effect on purchase decision of power bank. But simultaneously, promotion, price and product design has significant effect on purchase decision of power bank.
Keywords: Price, Product Design, Purchase Decision
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1. Introduction
Millennials currently conducts many daily routine activities such as studying (going to schools or colleges), working, socializing, and various other things that make their mobility higher. When mobilizing in a long duration, smartphones become a means of support for their activity continuity. Therefore, portable chargers start to become their needs because it provides practicality in meeting the needs for power to stay connected to various applications and social networks on their smartphones. Power banks are one of the solutions for their mobility needs when using their smartphones.
The sales of power banks in Indonesia turn out to be tempting. In an internal survey conducted by Satu Pro Global Niaga, the sales of power banks in Indonesia reached an average of Rp. 60-70 Billion per month for all brands with a total of 500,000 units sold per month since 2017, and are predicted to be even sold more, and valuations are predicted to increase by 5 times in the next five years as well.
Designs are one thing to consider in purchasing a power bank. Meanwhile, based on a survey by Satu Pro Global Niaga, as many as 30% or around 15,000 units sold in Indonesia are premium class power banks. They draw the publics’ attention because they have many features like the ability to charge quickly, elegant and trendy designs, as well as lightweight.
Soewito (2013) showed that in motorcycle products, design is one of the aspects considered
in purchasing decisions, even though product quality is the most dominant factor considered by consumers in purchasing motor vehicles.
Another factor to consider in purchasing a power bank is its price. Now the price of power banks becomes more affordable. Five years ago, a power bank with a capacity of 5,000 mAh reached Rp. 300 thousand, but now its price is lower, which then makes millennials more able to buy. Kristian and Rita (2016) showed that the price of a product influences the purchase decision. Affordability of prices, suitability of prices with benefits and product quality, competitiveness, high resale prices and methods of payment for products that can be done not only in cash, can influence consumers in deciding the purchase of a product.
To make a purchase decision of a power bank, information about the products is needed. This can be obtained from the promotion of the products needed as the basis to know the products, to finally choose a certain product from many choices of similar products available in the market. Promotion can infuence the customer on purchase decision making, but in some products, sometimes promotion can’t make customers buy the products, like Prasetiyo and Yunita (2018) used to do research on department store visitors who showed that promotion has not significant effect on purchasing decisions of convenience store products. In many products, from the promotion, consumers then will be able to make purchase decisions for the products. Product promotion can be done through various media, one of which is social media such as Instagram, Youtube channel, and so on. Promotion can be used as a means of the existing marketing mix to influence consumers in making purchase decisions for a product. This study examines the influence of promotion, price, and product designs of power banks on purchase decisions of power banks.
2. Literature Review
Promotion
Promotion is a means to introduce new products and services to strengthen the brand image of the existing products (Tjiptono, 2011). By promotional activities, a company will try to persuade potential buyers and customers to communicate with. Thus it can be concluded that promotion is an important marketing mix variable and must be carried out by the company to provide information about the company’s products or services to assist consumers in sorting and deciding to purchase goods and services.
Promotion can be done through various promotional media, including advertising in televisions (which are considered to have a broad spectrum of consumers), printed media (magazines, newspapers), radio, or, that are widely used now, namely social media, where advertisements are uploaded through Youtube channel, Instagram, Facebook, and others.
Samosir and Arief (2015) conducted a study on the effect of promotion, perceptions, and prices on consumer purchase decisions for vitamin C products. The study shows that promotion and price perceptions have a positive and significant influence on purchase decisions. While Achidah et.al (2016) state that promotion is one of the factors that influence consumer purchase decisions on certain brands of motorcycle products. Brata et.al (2017) conducted a study that shows that promotion is one of the factors that influence consumers in making purchasing decisions for Nitchi products.
Price
Price is one element of the mix that generates income, while other elements generate costs.
Companies typically develop pricing structures that reflect variations in demand and costs
geographically, market segment requirements, purchase times, order levels, delivery frequency, guarantees, service contracts, and so on. The process done by customers to arrive at price perception is an important marketing priority. There are three key topics of price:
reference price, quality price, and assumption price (Kotler and Keller, 2009). Price is one of the factors that is highly considered by consumers and affects consumers’ purchase decisions (Komaladewi and Indika, 2017).
Swasta (2012) expresses a price as a sum of money (plus a few items if possible) needed to get a combination of goods and services. Thus it can be concluded that the price is the amount of money paid by consumers to obtain an item or service, and the price is often used to perceive the value of the goods or services. Igir et.al (2018) prove that a price has a positive and significant influence on purchase decisions. Besides, a price is the most dominant variable in influencing consumers’ purchase decisions compared to any other variables. Albari and Indah (2018) state that prices (fair price and fixed price) positively influence consumers’ purchase decisions mediated by brand images. This research conducted on consumers who have never used replica products and consumers who make purchases on replica products. Alfred (2013) conducted a study on mobile phone products in Ghana and concluded that in deciding to purchase a mobile phone product, consumers consider two factors, namely price and product quality, as consideration of making purchasing decisions.
Design
Design is to give different appearances or determination on a product (Kotler and Keller in Achidah et.al, 2016). Furthermore, Kotler and Keller in Saidani et.al (2013) define design as the totality of features that affect how a product looks, feels, and functions for consumers.
Design offers three things namely function, aesthetics, and attractiveness. For consumers, a good design is a product that is good to see, easy to open, install, use, repair, and dispose of.
Several studies were carried out related to design. Saidani et.al (2013) examined the effect of quality and design of shoe products on purchase satisfaction. The study shows that both product quality and product design equally influence consumers’ purchasing decisions for shoe products. Saraswati et.al (2014) concluded that product design and price are factors that positively and significantly influence the decision to purchase batik products in the Batik Pekalongan village. Chen and Ming (2018) examine the influence of children’s toy product design on consumers’ purchase decisions which indicate that product design is a factor that consumers consider in purchase decisions for children’s toy products.
Purchase Decision
Purchase decision is defined as the choice of an action from two or more choices. A consumer who wants to choose must have choices. Stages in making purchase decisions include the introduction of needs, information search, alternative evaluations, purchase decisions, and results, where this stage is very important because it can provide information for companies whether or not the products and services that have been sold can satisfy consumers (Sangadji and Sopiah (2013) in Zulaicha and Rusdi (2016). Djatmiko and Pradana (2015) explained that the purchase decision process is the stage where consumers buy products or services that are considered to be purchased.
According to Zulaicha and Rusdi (2016), there is a significant influence of products and prices on purchasing decisions, where the price is a variable that is more influential on purchase decisions compared to product quality. Imaningsih and Saiful (2018) concluded that the purchase decision was strongly influenced by several factors, including product quality,
price, and promotion which, if increased, would have a positive influence on a product’s purchasing decision.
Research Framework
Hypothesis:
H1: Promotion influences purchase decisions H2: Price influences purchase decisions
H3: Product design influences purchase decisions
H4: Promotion, Price, and Product design simultaneously influence purchase decisions 3. Methodology
Research Variables and Operational Variables
There are 4 (four) variables used in this study consisting of 3 (three) independent variables namely promotion, price, and design and 1 (one) dependent variable namely purchase decision. Operational variables from this study can be seen in the table below:
Research Variables Definitions Indicators Purchase Decisions
(Y)
Purchase decisions are stages of the purchasing process where consumers will buy a product or service (Achidah et.al, 2016)
1. The desire to buy a product 2. The purchase quality of the
product
3. Recommendations from people closest to consumers 4. Consideration of the needs of
the product
5. The desire to repurchase (Achidah et.al, 2016) Promotion (X1) Promotion is one of the variables
in the marketing mix that is very important to be carried out by companies in marketing their products and services (Lupiyoadi 2009: 120)
1. The quality of the ad serving in promotional media 2. The quality of delivering
messages in the ad serving in promotional media
3. The scope of promotion 4. Giving a special offer within a
certain period (Lupiyoadi 2009: 120)
Price (X2) Price is the amount of money that has been agreed to be paid by consumers to obtain goods and services (Achidah et.al,
1. Price is the same with what conveyed through promotional media
2. Price affordability Promotion (X1)
Price (X2) Design (X3)
Purchase Decision (Y)
2016) 3. Price compatibility with product quality
4. Price competitiveness 5. Price appropriateness with
function Design (X3) Design is to give a different
appearance or determination on a product.
1. Attractive design with sophisticated features
2. Variation in shapes and colors 3. Designs that follow trends.
Population and Samples
The population used in this study were all power bank users while the sample used in this study were high mobility students using power banks in the campus environment of Universitas Pancasila Jakarta.
4. Result
Classical Assumption Test Normality Test
Based on the results of the above output, it can be concluded that the data are normally distributed because they have an Asiymp.Sig (2-tailed) significance value of 0.2 greater than 0.05.
Multicollinearity Test
Table 2: Multicollinearity Test
Coefficientsa
Model
Unstandardized Coefficients
Standardized Coefficients
t Sig.
Collinearity Statistics
B Std. Error Beta Tolerance VIF
1 (Constant) .730 .438 1.665 .099
Promosi .170 .120 .140 1.424 .158 .818 1.223
Harga .285 .140 .208 2.040 .044 .763 1.311
Desain .282 .102 .280 2.765 .007 .769 1.301
a. Dependent Variable: Keputusan Pembelian
Table 1: One-Sample Kolmogorov-Smirnov Test
N 100
Normal Parametersa,b Mean .0000000
Std. Deviation .34945382 Most Extreme Differences Absolute .064
Positive .064
Negative -.053
Test Statistic .064
Asymp. Sig. (2-tailed) .200c,d
a. Test distribution is Normal.
b. Calculated from data.
c. Lilliefors Significance Correction.
d. This is a lower bound of the true significance.
The result of the above output indicates that the VIF value obtained from each variable is less than 10 and the tolerance must be more than 0.1. Then it can be concluded that the data is not affected by multicollinearity.
Heteroscedasticity Test
Table 3: Heteroscedasticity Test Coefficientsa
Model
Unstandardized Coefficients
Standardized Coefficients
t Sig.
.274
B Std. Error Beta
1 (Constant) .311 .282 1.101
Promosi -.051 .077 -.075 -.665 .508
Harga -.032 .090 -.041 -.353 .725
Desain .060 .066 .106 .916 .362
a. Dependent Variable: Abs_RES
The result above shows that the significance value obtained from each variable is greater than 0.05. This proves that there is no heteroscedasticity in the regression model so that the regression model is feasible to use.
Autocorrelation Test
Table 4: Autocorrelation Test Model Summaryb
Model R R Square
Adjusted R Square
Std. Error of the
Estimate Durbin-Watson
1 .491a .241 .217 .35487 2.040
a. Predictors: (Constant), Desain, Promosi, Harga b. Dependent Variable: Keputusan Pembelian
The table above shows the value of Durbin-Watson obtained for is 2.040 while the significance value is 0.05 with the amount of data (N) of 100 and variable (k) of 3, so the DL value of 1.613 and DU value of 1.736 can be obtained. Then the autocorrelation test results are DL <DW <DU that is 1.613 <2.040 <1.736, so autocorrelation does not occur.
Hypothesis Test
Table 5: F-Test ANOVAa
Model Sum of Squares df Mean Square F Sig.
1 Regression 3.837 3 1.279 10.155 .000b
Residual 12.090 96 .126
Total 15.926 99
a. Dependent Variable: Keputusan Pembelian b. Predictors: (Constant), Desain, Promosi, Harga
It is known that Sig is obtained at 0.00 <0.05 meaning that the independent variable has a significant effect on the dependent variable simultaneously or as a whole.
Table 6: T-Test Coefficientsa
Model
Unstandardized Coefficients
Standardized Coefficients
t Sig.
B Std. Error Beta
1 (Constant) .730 .438 1.665 .099
Promosi .170 .120 .140 1.424 .158
Harga .285 .140 .208 2.040 .044
Desain .282 .102 .280 2.765 .007
a. Dependent Variable: Keputusan Pembelian
In the table above, Sig obtained is less than 0.05 except for propositions, where promotion does not significantly influence the purchase decision, then the regression that is formed is as follows:
[Purchase Decision = 0.730 + 0.170 (Promotion) + 0.285 (Price) + 0.282 (Design)]
Overall, the independent variables used can improve purchase decisions. Based on the theory when want to buy something, the average people in Indonesia must adjust the price with their budget as a basic reference, and then the design offered becomes the main value to consider.
If a product provides a unique and good design, it will make buying decisions greater. It happens because consumers can post the product on their social media due to the power banks having a unique, cool, beautiful, or trendy design.
Determination Test
Table 7: Determination Test Model Summaryb
Model R R Square
Adjusted R Square
Std. Error of the Estimate
1 .491a .241 .217 .35487
a. Predictors: (Constant), Desain, Promosi, Harga b. Dependent Variable: Keputusan Pembelian
In the table above, it is known that the output of the correlation coefficient and the determination of stage one is an R-value of 0.491. This number approaches the value of one which means there is a very strong and positive correlation among design, promotion, and price with purchase decision while the adjusted determination coefficient (Adjusted R Square) is 0.217. This figure explains that 21.7% of the dependent variable, namely purchase decisions can be explained by the independent variables, namely design, promotion, and price while the remaining 78.3% is explained by other variables.
5. Discussion
Effects of Promotion on Purchase Decisions
This study proves that promotion has no effect on purchase decisions. This is in line with the findings of research conducted by Prasetiyo and Yunita (2018) that promotion is not a factor considered in a purchasing decision. Implication of this study is the fact that we rarely see advertisements in printed and social media promoting power bank products. Based on observations, it appears that some YouTubers who usually become influencers to promote certain products, do not promote power bank products. In this case, YouTubers who are gadget reviewers usually refuse to promote power bank products because there are no unique features that make these influencers have to review and promote the products to their subscribers who are potential buyers. Thus it can be said that for power bank products,
consumers will look for information about these products only when they want to purchase these products, and they rarely make repeat purchases for these products.
Effect of Prices on Purchase Decisions
From this research, price has a significant effect on purchase decision. This is in line with research conducted by Kristian and Rita (2016) that the price of a product influences the product's purchasing decisions. It can be seen that price is something to consider for consumers in making purchase decisions for power bank products. Price is associated with the quality of the product and also the function of the product. Also, consumers also do price comparisons of several power bank products. Consumers, who in this study are millennials, tend to choose power banks that have a reasonable price, in the sense that they will decide to buy power bank products with prices that are considered to be in the average price range, neither in the highest nor in the lowest price range. The price chosen is the price that fits the function and quality offered by the power bank product.
Effect of Design on Purchase Decisions
In this study, the design is one of the variables that influences the purchase decision of a power bank, this is in line with research conducted by Soewito (2013) that product design is considered in the purchase decision.
Millennials prioritize design in purchasing power bank products. Designs that are trendy, thin, lightweight, attractive colors, and powerful features such as fast charging, are considered to be factors that are of interest to millennials and influence the purchase decisions of power bank products in the millennial consumer segment.
6. Conclusion
Millennials have many daily routine activities such as studying, working, socializing, and various other things that make higher mobility in long duration and need a powerbank for their smartphones to support the activity. Powerbanks are available in market with various prices and design with some promotion strategies to stimulate purchase desicision of the powerbank product. From this study, it can be concluded that promotion is not a matter to consider by millennial consumers in making purchase decisions for power bank products.
However, millennial consumers are concerned with price and design in making purchase decisions for power bank products. For this reason, for gadget manufacturers including power bank producers, they should consider designing attractive, trendy, and up-to-date products in addition to being equipped with attractive, distinctive, and even new features that can attract potential consumers from the millennial segment to buy.
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