The Analysis of Influence Customer Unsatisfaction, Advertising, Price, Word of Mouth (WOM) and Brand Image to Brand Switching
THE ANALYSIS OF INFLUENCE CUSTOMER UNSATISFACTION, ADVERTISING, PRICE, WORD OF MOUTH (WOM) AND BRAND IMAGE
TO BRAND SWITCHING
(Case study on user of Specs futsal Shoes lived at the east ciputat)
Surya Dinata (109081100022)
DEPARTMENT OF MANAGEMENT INTERNATIONAL CLASS PROGRAM FACULTY OF ECONOMICS AND BUSINESS
SYARIF HIDAYATULLAH STATE ISLAMIC UNIVERSITY JAKARTA
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CURRICULUM VITAE
Personal Identities
Name : Surya Dinata
Gender : Male
Place of Birth : Padang
Date of Birth : May 09th 1991
Address : Jl. Veteran No 70, Padang, Sumatera Barat, Indoensia Phone/Mobile : 085921856135
E-mail Address : Desurya1991@gmail.com
Formal Education
College : UIN SyarifHidayatullah Jakarta Senior High School : Al-ZaytunInternationalSchool Junior High School : Al-ZaytunInternationalSchool Elementary School : SD BaiturrahmahPadang Kindergarten : TK BaiturrahmahPadang
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vii FOREWORD
Thank and blessed the researcher give for the Allah SWT, because of Him I can finish the one requirement to get bachelor degree in UIN Syarif Hidayatullah Jakarta, with the title “The Analysis Of Influence Customer Unsatisfaction, Advertising, Price, Word Of Mouth, And Brand Image, To Brand Switching”. Shalawat and salam the researcher also give to the holy prophet Muhammad SAW, his family, and his comrades, and his followers that will follow his teaching to the end of the day. Amin
In this opportunity the researcher want to say thank you to all people that help me to fulfill this bachelor thesis. Particulary to:
1. My beloved parents, Mrs. Eha Zulaikha and Mr. Rismar Hatta that always give me support to finish this bachelor thesis.
2. All my brother (M. Hidayat, M. Tri Fajar, M. Riski and My lovely sister Dara Riskha Oktavira).
3. Mr. Dr. Yahya Hamza, MM as the first thesis supervisor who give me support, guidance, motivation and spent his time to supervise my thesis. 4. Mrs. Cut Erika Ananda Fatimah, SE.,MBA as the second supervisor who
give me support, guidance, motivation and spent hers time to supervise my thesis.
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5. Mr. Dr. Arief Mufraini, Lc., M.Si as the Dean of Faculty of Economics and Business.
6. Mrs. Titi Dewi Warninda, SE., M.Sc as the Lead of Department.
7. All the lecturer and staff in faculty of economics and business, particularly in International Program.
8. All staff of the faculty of economics and business, Bang Bonik and Bang Alfred, thanks for helping in administration progress.
9. Ashabul Torino, Bianca Plaza and Dzulfiqar Faris Thanks for your little “Magic”
10. All Friend from Management International, Regular, Warna-Warni Block and my futsal team MI “PB” Aly Fayruzy, Ari Budiman, Anggana Agusty, Yaseer Arafat, Ghaarieth diederick, Iqbal Wijaya, Rizki Wahyu, Arfian, Andre Eko, Chairul Siregar, Sahmi Sitompul, Pakde, Taufik Fatur, Aditya Prasetya, Oki Ahmadiansyah, Lukman Nul Hakim, Dimas Satya, Eko Wahyu, Aditya yudha, Fajar Sugiarto, Uji Tholib, Azka and Radit. Thank you for jokes been laughed, story been told, and history been made. Thanks for spent many times, thank you for togetherness in talking, joking, singing and laughing that I will never forget in the rest of my life.
11. All respondents that cooperative and spent their time in order to fill the data in this research.
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May Allah give bountifully rewarded. Suggestions and criticisms will researcher accept for the sake self of further improvement. In the last word, May Allah SWT give easiness to the all of us, and this thesis can be useful for all of us, particulary for the researcher.
Jakarta, November 2015
Surya Dinata
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THE ANALYSIS OF INFLUENCE CUSTOMER UNSATISFACTION, ADVERTISING, PRICE, WORD OF MOUTH (WOM) AND BRAND IMAGE
TO BRAND SWITCHING
(Case study on user of Specs futsal shoes lived at the east ciputat) ABSTRACT
This research aims to show the influence of customer unsatisfaction, advertising, price, word of mouth and brand image toward brand switching of Specs futsal shoes. This research uses the quantitative method that gathered by distributing the questionnaire directly to the respondents of Specs futsal shoes in east Ciputat areas. The sampling technique is the purposive sampling taken 60 respondents. The data analysis for the hypothesis test uses the multiple regression analysis method. The research result shows partial test that the customer unsatisfaction has significance value 0.006, the advertising has significance value 0.119, the price has significance value is 0.004, the
word of mouth has significance value 0.033 and the brand image has significant value 0.000. Meaning all variables have partially significant positive influence to the brand switching except the variable of advertising. The simultaneous test shows that the customer unsatisfaction, advertising, price, word of mouth and brand image have 0,000 significance value. Hence, customer unsatisfaction, advertising, price, word of mouth and brand image have simultaneously significance positive influence to the brand switching. Keyword: Customer unsatisfaction, advertising, price, word of mouth, brand
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ANALISIS PENGARUH KETIDAKPUASAN KONSUMEN, IKLAN, HARGA,
WORD OF MOUTH DAN CITRA MERK TERHADAP PERPINDAHAN MERK
(STUDI KASUS: PENGGUNA SEPATU FUTSAL SPECS DI CIPUTAT TIMUR) ABSTRAK
Penelitian ini bertujuan untuk mengetahui pengaruh ketidakpuasan konsumen, iklan, harga, word of mouth, dan citra merk terhadap perpindahan merk sepatu futsal Specs. Penelitian ini menggunakan metode kuantitatif yang dikumpulkan dengan menyebarkan kuesioner secara langsung kepada pengguna sepatu futsal Specs yang tinggal di daerah Ciputat timur. Teknik pengambilan sampel adalah purposive sampling yang diambil dari 60 responden. Analisis data untuk uji hipotesis menggunakan metode analisis regresi berganda. Hasil penelitian menunjukkan bahwa uji parsial ketidakpuasan konsumen memiliki nilai signifikansi 0,006, iklan memiliki nilai signifikansi 0,119, harga memiliki nilai signifikansi 0,004, word of mouth memiliki nilai signifikansi 0,033 dan citra merek memiliki nilai yang signifikan 0.000. Sehingga, secara parsial semua variabel berpengaruh signifikan terhadap perpindahan merk kecuali variabel iklan. Tes simultan menunjukkan bahwa ketidakpuasan konsumen, iklan, harga, word of mouth,
dan citra merk memiliki nilai signifikansi 0,000. Oleh karena itu, ketidakpuasan konsumen, iklan, harga, word of mouth, dan citra merk secara simultan memiliki berpengaruh signifikan terhadap perpindahan merk.
Kata kunci: Ketidakpuasan konsumen, iklan, harga, word of mouth, citra merk dan perpindahan merk.
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TABLE OF CONTENTS
Title ... i
Thesis Approval Sheet ... ii
Comprehensive Exam Approval Sheet ... iii
Certification of Thesis……….. .iv
Sheet Statement Authenticity Scientific Works ………..v
Curriculum Vitae ... vi
Foreword ... vii
Abstract ... x
Abstrak ... xi
Table of Contents ... xii
List of Tables ... xvi
List of Figures ... xvii
List of Appendix ... xix
CHAPTER I INTRODUCTION A. Background ... 1
B. Problem Formulation ... 11
C. Objectives Research ... 12
D. Benefits of Research ... 12
CHAPTER II LITERATURE REVIEW A. Consumer Behavior ... 13
B. Customer Unsatisfaction ... 14 1. Definition of Satisfaction and unsatisfaction of
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Customers ... 14
2. Measurement of consumer unsatisfaction ... 15
C. Advertising ... 17
1. Definition of advertising ... 17
2. The purpose of advertising ... 17
3. Hierarchy of advertising ... 19
D. Price... 21
1. Understanding of the Price ... 21
2. Pricing ... 22
3. Purpose of Pricing ... 23
4. Factors Affecting the Price Level ... 24
E. Word of Mouth ... 27
1. Definition Word of Mouth ... 27
2. Create Word of Mouth ... 30
3. Dimension Word of Mouth ... 33
4. Satisfaction ... 36
5. Incentives ... 37
6. Opinion Leader... 37
F. Brand Image ... 39
1. Definition of Brand ... 39
2. Measurement of Brand Image ... 42
G. Brand Switching ... 43
1. Factors Affecting Brand Switching ... 44
2. Models or Type Brand Switching ... 46
3. Reasons Consumers Doing Switching Brands ... 47
H. Previous Research ... 49
I. Research Framework ... 54
J. Hypothesis ... 55
CHAPTER III RESEARCH METHODOLOGY A. Scope of Research ... 57
B. Determination Sample Method ... 57
1. Population ... 57
2. Sample ... 58
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D. Type and Source of Data ... 61
1. Primary Data ... 61
2. Secondary Data ... 61
E. Data Analysis Methods ... 62
1. Validity Test ... 62
2. Reliability Test ... 62
3. Classical Assumption Test... 63
4. Multiple Linear Regression Analysis ... 64
F. Variable Operational Research ... 68
1. Operational Definition ... 68
2. Independent Variable ... 68
3. Dependent Variable ... 69
CHAPTER IV RESEARCH FINDINGS AND ANALYSIS A. General Description of Research Object ... 74
1. Product Overview ... 74
2. Respondent Characteristic ... 75
B. Instrument Test Result ... 78
1. Validity and Reliability Test Result ... 78
2. Descriptive Statistical Test ... 82
3. Classical Assumption Test... 83
a. Normality Test Result ... 83
b. Multicollinearity Test Result ... 84
c. Heteroscedasticity Test Result... 85
4. T Test Statistical Result ... 86
5. F test Statistical Result ... 89
6. Hypothesis Test Result ... 91
1. Multiple Linear Regression Test ... 91
2. Determination Coefficient Test Result ... 93
7. Analysis ... 95
a. Customer Unsatisfaction... 95
b. Advertising ... 95
c. Price ... 96
d. Word of Mouth ... 96
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CHAPTER V CONCLUSION AND IMPLICATION
A. Conclusion ... 98
B. Implication ... 99
REFFERENCES ... 102
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LIST OF TABLES
1.1 Top Brand Index Futsal Shoes in 2012-2014……….7
2.1 Summary of Previous Research………50
3.1 Likert Scale Table……….61
3.2 Variable Operational Table………...70
4.1 Validity and Responsibility test result………..79
4.2 Descriptive Statistical Test………...82
4.3 Multicollinearity test result Table……….84
4.4 T Test Result Table………...87
4.5 F Test Result Table………90
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LIST OF FIGURES
2.1 Research Framework……….54
4.1 Respondents Age………...76
4.2 Respondents Expenditure………..76
4.3 Respondents Occupation………...77
4.4 Normality Probability Plot ………83
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LIST OF APPENDIXES
1. Questionnaire Research………...106
2. Tabulation of Costumer unsatisfaction………112
3. Tabulation of Advertising………114
4. Tabulation of Price………..116
5. Tabulation of Word of Mouth………..118
6. Tabulation of Brand Image………..120
7. Tabulation of Brand Switching………122
8. Costumer unsatisfaction Testing………..124
9. Advertising Testing……….124
10. Price Testing………124
11. Word of Mouth Testing………...124
12. Brand Image Testing………124
13. Brand Switching Testing……….124
14. Multicollinearity Test Result………...125
15. Coefficient Determination, t Test Result……….125
16. F test result………...125
17. Normal Probability Plot………...126
18. Heterosdecasticity test result……….. 126
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1 CHAPTER I
INDTRODUCTION A. BACKGROUND
In the era of globalization many emerging new producers who sell similar goods. So that the consequences of these changes are the customer will be more careful and smart in facing every product in the market. The company empowers all functions, including in the field of marketing. Along with increasing competition pose new phenomenon that occurs in the consumer, which is the presence of brand switching behavior that performed by consumers.
Various kinds of products either goods or services offered by the manufacturer provides an opportunity for consumers to choose what brand will be consumed. The diversity of brands offered to consumers provides the opportunity for consumers to switch from one brand to the other brands. Brand switching behavior of the customer is a complex phenomenon which is influenced by factors behavioral, competition and time (Srinivasan in Shellyana and Dharmesta, 2002: 92).
Along with the increasing competition, the marketers are required to conduct marketing research and determine strategy to achieve the purpose of marketing itself to a product. So marketing is very important for many leading company. The whole company or organization carry out marketing activities, whether small, medium or large, both companies are only as niche or follower, as well as
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2 competitors, even market leader can never relax, they also continue to develop ideas or strategies better marketing and continue to improve the company.
According to Kotler (2008: 5) found that the success of the ongoing demand for establishing and managing the marketing department capable. So to achieve success and maintain the success of a company's products must be supported by marketers that reliably and continuously improve its capabilities. Marketers companies continually need to innovate and create new ideas that can break the closure and revolutionize the expectations of consumers for a product.
According to Kotler and Armstrong (2008: 6), Marketing is the process by which companies create value for customers and build strong relationships with customers with the aim to capture the value of customers in return. A marketer also needs to pay attention to what is desired by the target market. One to note is the need for a product by someone. Humans have many needs. According to Kotler and Armstrong (2008: 7), the need is a state of feeling shortage of certain basic satisfaction. Humans need a few things to survive, according to Kotler and Armstrong (2008: 7), these needs are food, clothing, home, security, a sense of belonging and self-esteem.
Futsal has become a phenomenon around the year 2007 until today it has been growing public desire to exercise, these conditions create business opportunities for producers futsal shoes. Someone needs to exercise, especially futsal increase public demand for futsal shoes, with the development of futsal in Indonesia was trying to various industry companies began competing to create a quality indoor
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3 soccer shoes. With the increasing interest in futsal indirectly increase the demand someone will use futsal footwear products (Suryadi, 2012).
Therefore, each company trying to become a market leader in indoor soccer shoes manufacturer, which means the products are well received in the market. Companies whose products were well received would definitely got a good advantage too. In an effort to fulfill their needs, a person will choose the product that gives the highest satisfaction. In particular, the factors that create the highest satisfaction for each person will be different, but in general the factors such as the product itself, the price of the product and how to get the product often becomes a consideration. A rational consumers will choose a product with good quality, reasonably priced products or cheaper and easily available. Quality products desired by consumers regarding the benefits to meet the needs of consumers and safety for themselves, so that consumers feel calm outwardly and inwardly in using the product (Suryadi, 2012).
Look a futsal phenomenon that occurs when this shift occurred in the market brand futsal shoes, indoor soccer shoes Some famous brand in Indonesia is Adidas, Nike, Specs, Joma, Mizuno and others. Brand is already embedded in the minds of consumers because once the product is long enough to market share in Indonesia. Even some of them became a pioneer and market-leading futsal shoes sales in Indonesia. The increasing advances in technology, increases also technological developments by manufacturers futsal shoes. Developments undertaken futsal shoes manufacturer in its product it is also due to the
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4 competition between companies in order to retain customers and a market share of its products.
According to Suryadi and Rinaldi (2013), the number of foreign brands of sport shoes do not make Specs afraid to compete. SPECS are a product of the domestic focus to develop and improve the quality of specific futsal shoes. shoes no less than foreign brands. According to Arif (2012), president director of PT. PANATRADE CARAKA, since the beginning of its development SPECS already positioned as sport shoes, unclear target market being targeted to make entry-level Specs lower-middle class. In 2001 SPECS and the management team to reoriented the market segment of middle-upper class. Reorientation because the price gap that occurs between local brand sport shoes with overseas like Nike and Adidas. The fall of the Rupiah against the Dollar led to a segment futsal shoes at moderate prices to be empty. This makes SPECS and the team reoriented to fill the void. "We attack spot by spot" to look at the unique sports shoe market but not as a whole, the initial category targeted by the Specs is a category of football boots, with the desire to target a large market category. Since 2001 SPECS already lead the market 4-5 years in that category.
After feeling well established, in 2004 began to enter the market SPECS futsal shoes, but at that futsal is not booming as it is now, with analysis and market predictions regarding the development, Specs already established categorized feel it. Further Specs are also working on a number of clubs and players to be a brand ambassador. Some Specs sponsored clubs such as FC Sriwijaya (Indonesia Super
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5 League champions / ISL 2012), Persipura Jayapura (ISL champion 2011), Semen Padang FC (Indonesia premier league champion 2012). "In every club jersey, Specs made the hallmark of their respective regions”. As for the brand ambassador of players, Specs make the famous players like Christian Gonzales (Gonzales habibi Mustafa) and Greg Nwokolo. for futsal, Specs made famous players to serve as brand ambassadors such as Socrates matulesi, beny Hera, Hendra Kurniawan, Hanif Salim, bambang bayu saptaji, etc.
In terms of Specs vigorous advertising campaign in television and print media, especially in the media and tabloid sports such as football magazine. Specs also be a sitcom sponsor of the “Tendangan si Madun” likely a lot of viewers. Advertising spending relatively large Specs, According to Nielsen data in the first quarter / 2012 Specs spent Rp 1.28 billion. While in 2011 reached Rp 6.50 billion. Specs advertising spending continues to rise from a year-earlier. As in 2009 and 2010, respectively Rp 1.82 billion and Rp 2.34 billion.
In addition to actively advertise, promote Specs below the line or brand activation. Such as makes coaching clinic, in cooperation withsome football schools. As in futsal, Specs sponsoring some Junior High Schools in Jakarta, Bandung, and Makassar to be given a coaching clinic by futsal brand ambassador of Specs. Next Specs also held a tournament “futsalogy tournament”. sales continue to rise in the last 10 years. fantastic growth in the years (2010-2013), which reached more than 50%, focus and consistency is the key to achieve high growth in this sector. Consistency one brand development is done, although there
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6 are still many Indonesian people who prefer foreign brands than local brands. Since the beginning of Specs is not ashamed to call himself a local product. it can be seen from the image of product advertising slogan "Buktikan indonesiamu". Arif also said the Specs control 30% market share and futsal soccer shoes. Greater than outside brands such as Nike and Adidas.
Based on the SWA research, last year, Specs produce 3 million more shoes. Football boots with a contribution of approximately 30% and futsal shoes 20% of total sales Specs. According to the research institute MARS, specs are already on track to outperform products futsal shoes on the market in the sales industry competition futsal shoes, Specs working on several communities and clubs of some sports he entered, this spot can be interaction between both. SPECS also hold events to introduce more products. Moreover, foreign futsal shoes continue to aggressively work on the market in Indonesia.
According to the 2012-2014 index of top brand futsal shoes market is still dominated by NIKE, ADIDAS, JOMA and followed by SPECS in order to four. The survey results are summarized in the Top Brand Award as well as a prestigious event at the top of the competition between brands Top Brand Index subsequently obtained by calculating the average weight of each parameter were obtained from the survey results directly to the customer a product / service of various brands in certain categories. The first parameter is the top of mind brand awareness (TOM BA), which is an indicator of the extent to which a particular brand strength to master the customer's mind (mind share). The second parameter
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7 is the last usage (LU), which brands the respondents use the current / last (market share). The third is a future intention (FI), which is an indicator of respondents' loyalty to the brand of products / services that want to used / consumed in the future.
The survey results illustrated in table 1.1 below Table 1.1
Top Brand Index Futsal Shoes in 2012-2014 (In percent unit)
Product 2012 2013 2014
Nike 17.5 25.3 41.4
Adidas 15.1 17.3 22.4
Joma 9.6 13.1 15.5
Specs 6.9 7.5 9.7
Reebok 5.4 4.9 4.2
Mizuno 3.4 4.2 3.3
Piero 2.1 3.3 2.3
Kelme 1.5 2.2 1.3
Source: www.topbrand-award.com (2014)
According to the survey index of top brand in the year 2012-2014, indicated Nike, Adidas and Joma better than Specs, but judging from the development, Specs increased fairly. It indicates that Specs has been favored by users futsal shoes. With continued product innovation, Specs is not afraid to compete against top brands such as Nike and Adidas, with several well-known futsal players to
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8 serve as ambassador, in addition they also provide links to some of the
Indonesian team futsal league (www.Specs-sports.com)
According to Peter and Olson (2002) in Wardani (2010: 15) brand switching is purchasing patterns characterized by alteration or replacement of one brand to another brand. Many factors can affecting brand switching behavior, there are: consumer unsatisfaction, advertising, price, word of mouth and brand image. That indicates brand switching by users of other brands to Specs. Consumer unsatisfaction is one factor contributing to the displacement of the brand because of dissatisfied customers will look for another product option information, and will probably stop buying products or influencing others not to buy (Kotler& Keller, 2008: 177-193). Business Review Weekly (1997) in Tjiptono and Diana (2000: 117), revealed that customer satisfaction occupies the second place in the ranks of business performance index most widely used in Australia. Where the first is the net profit (net profit). Of course, customer satisfaction is very important for every company. Therefore in this study will measure the impact if consumers are not satisfied with a product that is the business performance of an enterprise.
Advertising is one of the components of the marketing mix that is commonly done by the company. Advertising According to Kotler (20013: 202) is defined as any form of non-personal presentation and promotion of ideas, goods or services by a specific sponsor that requires payment. Even the advertising
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9 activity is considered very important if company want a successful product on the market. No wonder every year, even every new product introductions, the company spent hundreds of millions and even billions of rupiah for advertising expenses. Conditions of tight competition makes these costs increase every year. Companies competing to make advertising to build a favorable position in the market. Ads can indeed affect consumer behavior toward the advertised brand. The influence of advertising on consumer behavior is extremely varied, ranging from encouraging consumers to look for products that are intended to encourage people who previously disloyal be loyal or perhaps vice versa, people who were previously loyal to a product becomes loyal to the product due to the emergence of advertising new products.
Price differences between brands can also affect the behavior of switching brands. It can be concluded that a change in one or several brands in the same product class can affect the behavior of moving the brand to the consumer, because of the price differences between brands. According Mowen& Minor (2001: 109) "a particular brand can be purchased because of convenience, availability, or price. If any of these factors change, then consumers may quickly switch to another brand ". It means that prices can have an impact for consumers to switch to other brands. Price is the amount of money charged on the products and services or the amount of value exchanged on benefit consumers as having or using the product or service (Kotler and Armstrong, 2008: 439).
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10 The next factor that encourages brand switching is word of mouth (WOM). WOM has greater strength than advertising and other forms of promotion. A consumer attitude shows that effective WOM will quickly build credibility of a brand, which led to the recommendation by the consumer to another consumer. If consumers feel satisfied on a product, it will create a positive WOM about the product. However, if consumers are not satisfied with the product, it will create a negative WOM about the product and result in the migration of customers or potential customers who fail to buy the product (Rahmawati and Taurina, 2011: 3). Kotler and Keller (2007: 204) argues that the Communication word of mouth (WOM) or word of mouth communication is a process of communication that the form of recommendations either individually or in groups to a product or service that aims to provide personal information.
Another factor that affect switching brand is the brand image. Monroe study, Dodd and Grewal (1991) in Khairani (2011: 4) states that the buyer has a high brand image that will generate buying interest. If a brand already known and then in the minds of consumers there are certain associations for a brand that different with other brands and consumers will perceive the quality is high. Creating the right brand image for a product, would be very useful for marketers, because the brand image will influence consumer ratings on alternative brand expected. This not only can meet the needs of consumers, but can provide better satisfaction and more secure (Keller, 2008: 56).
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11 Based on the background that has been described, the authors are interested in researching the above four factors, namely consumer unsatisfaction, advertising, price, brand image and word of mouth. Then want to analyze how the influence of these factors on brand switching to Specs as outlined in the thesis with the title:
“The analysis of influence Customer unstisfaction, Advertising, Pricing, word of mouth (WOM) and Brand image to the Brand Switching other futsal shoes to brands SPECS (Case study SPECS user in east Ciputat)”.
B. Problem Formulation
1. Does customer unsatisfaction significantly influence brand switching? 2. Does advertising significantly influence brand switching?
3. Does price significantly influence brand switching?
4. Does word of mouth (WOM) significantly influence brand switching? 5. Does brand image significantly influence brand switching?
6. Does customer unsatisfaction, advertising, price, word of mouth (WOM) and brand image significantly influence brand switching?
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12 C. Objectives research
1. To analyze influence of customer unsatisfaction to brand switching
2. To analyze influence of advertising product to brand switching
3. To analyze influence of price to brand switching
4. To analyze influence of word of mouth (WOM) to brand switching
5. To analyze influence of brand image to brand switching
6. To analyze the influence of customer unsatisfaction, advertising, price,
word of mouth (WOM), brand image to brand switching
D. Benefits Of Research 1. For the company
This result of this research are expected to be used as strategy material consideration which will be pursued company to maintain customer from switch to another brand.
2. For the author
The results of this research are expected to provide an opportunity to increase knowledge and insight of marketing, especially about customer unsatisfaction, advertising, price, word of mouth (WOM), brand image and brand switching.
3. For other researchers
The results could be useful as a reference for future researches related to marketing especially customer unsatisfaction, advertising, price, word of mouth (WOM), brand image and brand switching.
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13 CHAPTER II
LITERATURE REVIEW A. Consumer Behavior
According to Tjiptono and Diana (2000: 121) consumer behavior is dominated by the paradigm of information processing (information processing paradigm). This paradigm assumes that each consumer is rational economic man who made a purchase on the basis of motive and rational choice. But in fact, consumers purchase and consuming the products not only for functional value, but also because of the social and emotional values. Consumer behavior is defined as the study of unit purchases (buying units) and exchange processes involving the acquisition, consumption, and disposal of goods, services, experiences, and ideas - ideas (Mowen and Minor, 2002: 6).
Unit purchases (buying units) are consumers for products, services, experiences, and ideas offered by marketers. This purchase units consisting of individuals, families, or groups who decide to buy. Furthermore, the unit can be either consumer purchases (such as, individuals and households) or for-profit organizations / non-for-profit making purchases. Consumer behavior has strong impact on the marketing management. Modern marketing managers also use the idea of "marketing concept" about understanding the needs and desires of consumers which facilitates the exchange process and the achievement of corporate profits. Therefore, they are (marketing manager)
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14 saw that satisfy the consumer is important in all marketing efforts (Mowen and Minor, 2002: 28). The center of the field of science is the study of consumer behavior exchange process. Exchange is the process whereby something tangible or intangible, actual or symbolic, is transferred between two or more social actors (Mowen and Minor, 2002: 28).
B. Customer Unsatisfaction
Customers are all those which requires product or services given by companies to meet a sacrificing to certain quality standard, and because it will affect the performance of the company (Nasution, 2005: 45).
1. Definition of satisfaction and unsatisfaction of customers
The formulation of the dominant and most widely used and referenced in the literature of Marketing and Consumer Behavior is unsatisfaction based on the paradigm of disconfirmation (Oliver in Tjiptono and Diana, 2000: 118), that customer satisfaction is defined as an evaluation, where the perception of the performance of the products or services chosen are meet.
From these definitions it can be concluded that basically the definitions of customer satisfaction include the difference between expectations and perceived performance or results (Tjiptono and Diana, 2000: 10).
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15 Meanwhile, according to Peter and Olson (2005: 160) and Kotler and Armstrong (2008) consumer unsatisfaction arise when the performance of a product turns out worse than expected performance. Consumers who are not satisfied with a product less likely to be re-purchasing, tend to switch brands, and appealed to manufacturers, retailers, and even tell the other customers.
2. Measurement of consumer unsatisfaction
In essence, measuring the level of satisfaction / unsatisfaction of customers the same as measuring the quality of a product, which is determined by variable and performance-based expectations (perceived performance) (Tjiptono& Diana, 2001: 46). Quality and customer satisfaction are closely related. Quality gives an impulse to the customer to establish a strong bond with the company (Tjiptono& Diana, 2001: 2).
The concept of quality itself is often regarded as a measure of the relative goodness of a product or service consisting of quality of design and quality of the suitability (Tjiptono and Diana, 2001: 2).
According Tjiptono (2008: 67), in the quality of the products there are eight main dimensions which are usually used, namely:
1. Performance basic operating characteristics of a product and is the main characteristic considered when the customer wants to buy a product.
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16 2. Feature, specific complementary characteristics that can increase
product usage experience.
3. Reliability is the probability of failure or damage to the product within a certain time. The smaller the possibility of damage, the more reliable the product concerned.
4. Durability is the amount of usage of the product before the product concerned should be replaced. The greater the frequency of normal use is possible, the greater the durability of the product.
5. Conformance with regard to the level of product conformity to specifications predetermined by the customer's wishes.
6. The ability of service (serviceability) is a characteristic that is related to the speed/courtesy, competence, ease, and the handling of complaints satisfactorily.
7. Aesthetics (Aesthetics) is a characteristic of the beauty is subjective so with regard to personal considerations and reflections of individual preference or choice.
8. The perceived quality (perceived quality), the characteristics associated with a reputation (brand name, image).
A company would not survive without consumers who use or wear the products of the manufacturers, therefore, to improve the quality of the products produced by a company must be based on customer satisfaction
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17 by knowing the customer satisfaction, the goods and services produce it has more value as more consumers demand as users of the product. According to Umar (2001: 93) quality of the product is important for consumers. Product quality, whether in the form of goods or services should be determined by its dimensions, which is called the dimension of the quality of goods or products.
C. Advertising
1. Definition of advertising
Advertising all forms of paid up non-personal presentation and promotion of ideas, goods, or services by a clear sponsor (Kotler and Keller 2013: 202). Advertising can be seen as a form of communication and promotion (Kotler, 2005: 23). Called as a form of communication in the process of advertising there is a flow of information that the advertising message from a source (companies) that are presented to a customers and there is also the purpose of the message that the target market or audience. Meanwhile, as a form of promotion, because the ads are efforts to influence the market in order to buy the products offered by the sponsoring company. 2. The purpose of advertising
Advertising purposes namely specific communication task and the level of achievement that must be achieved with a specific audience in a specific period of time (Kotler and Keller 2013: 203). Advertising purposes
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18 can be classified according to the target market, which is to provide information, persuasion or enhance buyers, adding value and helping other business enterprises.
a. Normative advertising, aiming to form a first request to inform the market about new products, proposing a new use of a product, inform the market about price changes, explain the workings of a product, explain the services available, correct the erroneous impression, reduce anxiety buyers and establish a corporate image.
b. Persuasive advertising, aimed to establish selective demand a certain brand, made on a competitive stage by establishing brand preference, pushing over the brand, change the perception of buyers about product attributes, persuade buyers to buy now, and persuade buyers receiving / try to stimulate the use of the product.
c. Reminder advertising, aims to remind the established product by reminding buyers that can afford to make buyers still remember the product, even though not in season, and maintain awareness of the peak.
d. Advertising adder value, aims to add value to the brand in the consumer's perception with innovation, quality improvement and strengthening consumer perceptions.
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19 e. Advertising support other activities, aimed at helping to facilitate the activities of other companies in the process of marketing communications, such as advertising helps in the release of sales promotion (coupons), assisting salespeople (product introduction), refine the results of other marketing communications.
For producers, advertising is not just a promotional tool of goods and services, but also to instill the image to customers and prospective customers about the products offered. Image formed by advertising often leads the public to believe in the product, thus encouraging potential customers to consume and maintain customer loyalty.
3. Hierarchy of advertising
According to Umar (2005: 246-247) consumer interest in the potential of a product offered on the market, is basically divided into three stages, namely stage know, affected, and act to make a purchase. Models are generally used for looking at these stages is modeled AIDCA.
a. Attention
At this stage the ads served must be able to attract the attention of target market audience, if this step is not successful, the next step becomes useless. By knowing the results at this stage the company has been able to evaluate the advertising program implemented.
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20 b. Interest
If successfully captured the attention of the target audience, ads delivered should be able to make the audience interested to know more about the product being advertised. For that viewers should be stimulated to want to follow the advertising messages.
c. The desire
Ads must be managed to move the viewer desires to have or enjoy the product. needs or wants them to have, wear, or do something as a continuation phase of interest.
d. Trust (Conviction)
Up to this stage the company's goals through advertising has successfully created a need for prospective buyers. A number of prospective buyers has begun to waver and emotions begin untouched, but still doubts. In these conditions should be able to convince the ad or cause the confidence of prospective buyers.
e. Action
At this stage, the prospective buyer should already be able to take decisions, to buy or not. Perhaps the desire to buy has been decided but the purchase has not been done because there are considerations influenced the customer desire to buy a product. For that advertising should be able to lead prospective buyers to take the final step in the form of a purchase decision.
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21 Lu-shu, and Chang (2003) in Ermayanti (2006: 99) argues that the advertising gives a stimulant and incentive for consumers to switch brands and stated that consumers with different levels of perception have various possibilities to switch brands.
D. Price
1. Understanding the price
Price is an element of the marketing mix that produces revenue; other elements generating costs (Kotler and Keller 2013: 67). Price variables in the marketing mix refer to what should be the consumer sacrifice to buy a product or service which normally uses the value of money. The price of a product is determined not only by the cost of production but also other factors, such as competition and consumer perception of the product (Morissan, 2010: 78).
According to Gary Armstrong and Kotler (2008: 439) "the price is the amount of money charged for a product or service or the amount of value exchanged for consumers on its benefits for owning or using a product or service". While Mowen and Minnor according to Ermayanti (2006) says that the price is one of the factors considered by consumers, because consumers are sensitive to price, other than that, according to Mowen and Minor also said that a brand was purchased because of convenience, availability or price. If any of these factors change, then most likely the consumer will quickly switch brands.
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22 2. Pricing
Pricing has various strategies according to the stage through which a product or service. Kotler and Armstrong (2008) are classifying such pricing strategies as follows:
a. New product pricing strategies, namely pricing flushed markets and pricing for market penetration.
b. Product mix pricing strategies, namely pricing of the product line, additional product pricing, product pricing bound, pricing of products, and pricing of the product package.
c. Price adjustment strategy, which consists of pricing discounts and price reductions, segmented pricing, psychological pricing, promotional pricing, dynamic pricing, international pricing and pricing based on geography.
d. Strategies for coping with changes in prices, which pioneered the price changes, how to react to price changes, and respond to changes in price.
3. Purpose of Pricing
Pricing should be directed to a destination. Before pricing is done, the goal should be set in advance. Pricing objectives include: (a) profit orientation: achieve profit targets and increase profit: (b) sales orientation: increase sales volume, and maintain or grow market share. (Machfoedz, 2007: 88).
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23 a. The purpose of profit-oriented
Companies can choose one of two goals in a profit-oriented pricing policy. Profit-oriented goals can be reached in the short term or long term. 1) Achieving the target profit
Companies can choose to set the price of its product reaches a certain percentage of the sales or investments. Achievement of objectives as it is applied by a broker or producer. Many retail and wholesale trade businessman using profit targets on net sales as pricing objectives of short-term period.
2) Increase profit
Pricing objectives to earn money as much as possible followed by a large number of companies than other purpose. Difficulties faced this purpose is that the term connotes bad maximize profits associated with high prices and monopoly. The purpose of enlarging profits the company would be more profitable if applied in the long term. However, to apply these companies have to accept losses in the short term.
b. Goal-oriented sales
1) Increase the volume of sales
Pricing of several companies focused on sales volumes during a certain period, for example, 1 year or 3 years. Management aims to increase sales volume by providing discounts or aggressive
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24 pricing strategy although others should experience a loss in the short term.
2) Maintaining or increasing market share
Some companies large or small set the price for the purpose of maintaining or increasing market share of the company. For example, when the Japanese currency (YEN) value exceeds the value of the US dollar, Japanese products become more expensive in the United States. Japanese companies are faced with the prospect of reduced market share. To maintain market share, Japanese companies accept smaller profit margins and reduce costs so it can sell products at a price below the selling price should.
4. Factors affecting the price level
According to Hasan (2007: 304) companies must understand the factors that directly affect the price level to be determined:
a. Economic conditions
Economic conditions (inflation, boom or recession, interest rates), government policies and regulations, and social aspects (environmental awareness) greatly affects the price level prevailing.
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25 b. Demand and supply
Request a number of products purchased at a certain price level. Important issues in this factor are to estimate how buyers respond to the prices offered an alternative. While offers a number of products offered by the company (seller) at a certain price level. Generally, the higher prices encourage the offered amount becomes larger, but in certain cases it turns into a scarcity of goods is higher. c. The company's goals
The company's goal to be achieved is stated explicitly, such as: 1) Achieving maximum profit
2) Maintaining the viability of the company 3) Creating a quality leadership
4) To increase the volume of sales
5) Reaching a large market share, maintain and improve market share
6) Creating a stabilization of prices and overcome the competition 7) Return of capital tied up in a certain period
8) And so forth
d. Legal and ethical factors
These factors usually becomes a tool of government oversight in determining the maximum, minimum, or a certain price (for grain, freight, fuel, interest on the loan), price discrimination (dues Tv,
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26 electricity) as well as the practice of other practices that prevent efforts towards monopoly.
e. Marketing mix
Pricing should be coordinated and mutually supportive with other marketing mix of product, distribution and promotion.
f. Cost
Cost is the basic factor in determining price is minimal, because the level of price that cannot cover the costs will result in losses. The costs that must be considered in the determination of prices at least as:
1) The cost of out-of-pocket costs increase, opportunity costs, controllable costs, replacement costs, non-operating expenses 2) Structure costs
3) The cost volume relationship 4) Competitive advantage 5) Effect of experience costs
6) How much influence the cost of the company's future g. Size of business
Management needs to decide who should set prices, for example, by top management, product line management, sales managers, production managers, financial managers, and accountants.
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27 h. Competition
The forces that influence the competition in the industry is the competition in the relevant industry, product substitution, suppliers, customers, and the threat of new entrants.
i. The nature of the market
Each company needs to understand the nature of market linkages and demand that it faces, whether including perfect competition, monopolistic competition, oligopoly or monopoly.
E. Word of Mouth
1. Definition Word of Mouth
Word of Mouth communication is communication that is done through word of mouth conversation by telling experience or excellence of a product. Initially this term specifically referred to the oral communications but now includes all types of human communication, such as face-to-face, telephone, e-mail and text messages. Word of mouth is considered to be the most powerful force in the market. In the fact, consumer choice is usually influenced by word of mouth (Casalo and Flavia: 2008).
Kotler and Keller (2007: 204) argue that the communication word of mouth is a process of communication that the form of recommendations either individually or in groups to a product or service that aims to provide personal information. Communication word of mouth is one of
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28 the communication channels that often used by companies that produce both goods and services because of communication and word of mouth (word of mouth) considered to be very effective in expediting the process of marketing and can provide benefits to the company. According to Hasan (2010: 32) word of mouth is the act of consumers providing information to other consumers (interpersonal) noncommercial both brands, products and services.
Rangkuti (2009: 77) defines WOM as a marketing effort that triggers the customer to discuss, promote, recommend and sell a product, service or brand to another customer. Mowen and Minor (2002: 180) says that the word of mouh communication refers to the exchange of comments, thoughts or ideas between two or more consumers are neither a source of marketing. WOM is defined as a form of communication of goods and services between people who are independent, not part of the provider of such products, which occurs through the medium is also believed to be independent.
Hasan (2010: 25) suggests the reason that makes WOM can become powerful resources in influencing purchase decisions, which is:
1) WOM is an independent source of information and honest, which means when the information comes from a friend it is more credible because no relation of the person with the product company.
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29 2) WOM is very powerful because it provides benefits to those who ask with direct experience of the product through the experience of a friend.
3) WOM tailored to people who are interested in it. A person will not join the conversation, unless they are interested in the topic of interest.
4) WOM produces informal media information.
5) WOM can start from a single source depends on how the power of influencers and social networks that spread rapidly and widely to others.
6) WOM is not limited by space or other constraints, such as social cohesion, time, family or other physical obstacles.
According to Kotler (2007: 206), receiving and responding to consumer WOM on the conditions and the situation in:
1) Consumers lack sufficient information to assist in making a choice.
2) The product is very complex and difficult to assess using the criteria of assessment.
3) Consumers are less able to judge the product, no matter how the information is distributed and addressed.
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30 5) Effect of other people more easily accessible than other sources
and because it can be consulted by saving time and effort.
6) Strong social ties that exist between disseminator and recipient information.
7) Individuals have a high requirement on the approval of the social environment.
Thus the word of mouth is one way to reduce the uncertainty, because by asking others who have already used the product concerned, will produce information that is more reliable, so it will also save time and brand evaluation process. So, word of mouth cannot be invented or created. Because of WOM conducted by the consumer voluntarily or without reward, all of them purely from personal experience of other consumers who ultimately formed consumer confidence of consumers on the other. Trying making up WOM actually make the company will fail and can lead to more severe effect. Making up WOM can damage the brand and image of the company so that the company will eventually fail completely. 2. Create Word of Mouth
Word of mouth will be created when the products are delivered to provide benefits to the audience. According to Rosen (2000: 19), stated that there are
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31 several elements that must be possessed of a product in order to generate positive WOM and sustainable, including:
a. The product must be able to evoke an emotional response.
b. The product or the brand should be able to give the effect of something that delight or excitement. Means that the product must be able to provide something that exceeds consumer expectations. c. The product must have something that can advertise themselves or
inspire someone to ask it.
d. A product becomes more powerful when many users.
e. The product must be compatible with other products, in particular can be applied in products that rely on technology.
f. The experience of consumers using the product the first time. Once consumers were disappointed, they are not going to use your product again and they will act like a terrorist.
Based on the research of Diamond Management & Technology Consultants in Mix Magazine (2007: 17) there are some forms of the method for creating word of mouth, among others:
a. Buzz marketing, use or entertainment activities are good news for people who have been involved with a product can discuss these products to others.
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32 b. Evangelist marketing, the disseminator of news (evangelist), speakers or volunteers who became a leader in the active dissemination activities on behalf of the company.
c. Community marketing, establishing and supporting community niche (niche community) which happily divide their interest in a brand, provide tools, content, and information to support the community.
d. Conversation creation, interesting or funny ads, e-mail, as well as entertainment to start WOM activity.
e. Influencer marketing, identifying key communities and opinion leaders are happy to tell you the product and have the ability to influence the opinion of others.
f. Cause marketing, providing support for outreach programs through fundraising to get the respect and support of the people who have the same concert with the company.
g. Viral marketing, creating an entertaining and informative messages and is designed to spread exponentially through electronic media or e-mail.
h. Grassroots marketing organize and motivate volunteers to get involved in a personal or local.
i. Brand blogging, creating blogs and participating in the blogosphere, in the spirit of openness, transparent communication,
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33 sharing information of value that may be discussed blog community.
j. Product seeding, putting the right products in the right hands, at the right time, providing information or samples to influential individuals.
k. Referral programs, creating tools for customers who are satisfied that they recommend the same product to the relatives.
3. Dimension Word of Mouth
Referring to the concept that has been implemented Basel et. al. in Barata (2005: 27), there are two variables of word of mouth, the perception of risk and consumer knowledge. And in a study conducted by Surya Sutriono (2008: 31), which draws on research conducted by Brown and dacin there are three variables, which is satisfaction, incentives, and opinion leaders.
1) Risk Perception
Word of mouth can affect a person's perception of the value of a product or the perception of risk that would arise when consuming the product. The perception of the risk of becoming one of the important components of information processing performed consumers. If the information obtained through the word of mouth is negative, it will also result in the perceived level of risk that is higher
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34 (Rini, 2011: 3). According to Gods (2005: 27) in the marketing process, consumers always face with the risk in any decision making.
According to Mowen and Minor (2002: 89) the perception of risk is understood as the likelihood of consumers to experience the negative consequences of using products and services. According Trocchia in Suhartomo (2010: 29), there are six dimensions of risk perception, which is:
a. Financial risk is the perception that the product would not be in accordance with the price.
b. Risk promotion is the perception that the product will not have the promotion as expected.
c. Risk perception that time is the time spent to search for the product will be wasted when the product is not performing as expected.
d. Physical risk is the perception that the product will harm or threaten the safety of consumers or others.
e. Psychological risk is the perception that the product would not be in keeping with the concept of self or consumers.
f. Social risk is the perceptions that the product is not good will embarrassing consumers.
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35 2) Consumer Knowledge
Through WOM, consumers create knowledge about the products that will be chosen. If consumers know more about the products that will be chosen, then the risk he would receive would be less than he has no knowledge about the product. According to Gods (2005: 29), consumers have to have the level of knowledge about the products offered so that it will ignore more information from others before making the purchase.
Consumer knowledge about the product also has influence not only on the search WOM actively, but also on consumers' perceptions of risk. Consumers with little knowledge of the products tend to have a greater perception of risk and benefit that is greater than searching for information through WOM activity. In the decision, the information possessed formed into consumer knowledge needed to assess the risks of all alternative products that will be chosen, so that consumers have more information to be able to assess the choice of products to be consumed which a minimum risk has compared with consumers who do not have sufficient information.
According to research conducted by Mishra, Umesh, and Stem in Barata (2005: 30) there are three sizes to measure the level of consumer knowledge, which is:
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36 a. Knowledge is the knowledge of consumers about the products consumers know exactly what is offered by the provider of the product concerned.
b. Experience of consumer-related products are consumer knowledge about the product as what is obtained when using the product.
c. Information owned by consumers about the product is consumer knowledge about the products concerned which he obtained from other sources.
4. Satisfaction
Customer satisfaction will affect the consumers' desire to disseminate information about the product or service is consumed. If consumers are satisfied with the products they use it instinctively consumers will tell the people around him about his satisfaction and word of mouth spread, both positive and negative among these people. Word of mouth behavior can be linked to consumer satisfaction and unsatisfaction with previous consumption experience.
Consumers who are satisfied after consuming a product certainly will spread positive word of mouth, while consumers who are not satisfied after consuming a product would spread negative word of mouth basis. According to Zeithaml (2003: 85), consumer
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37 satisfaction will be influenced by the specific features of the product and the perception of the quality. Product quality basically describes how much the perceived benefit of consumers so as to satisfy their expectations.
5. Incentives
In the word of mouth communication, necessary incentives to stimulate consumers who have used a product spread it to others. The incentive to be creative although it can also be in the form of money. Erida (2009: 2), explained that incentives, both monetary and non-monetary form can reduce the negative word of mouth behavior and reinforce positive word of mouth.
When linked with the satisfaction of consumers, the incentive is considered as a catalyst to improve the behavior of consumers are satisfied WOM and dampen the negative WOM than consumers who are not satisfied with the product consumed (Erida, 2009: 3).
6. Opinion Leader
Widyaharsana (2009: 44) argues, an opinion leader of consumers that regularly affect the views, attitudes, and behaviors of others. Furthermore, Widyaharsana provide an explanation of the roles performed by opinion leaders, including:
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38 a. They provide a stimulus to other consumers, so that
consumers become aware of the needs that have been unaware.
b. They provide information to other consumers about a product. In many cases, consumers are more likely to trust a third party rather than promotion by the first party.
c. They give advice that allows consumers to choose products that best of many options. These suggestions are useful in helping consumers to shorten the evaluation process significantly choice.
d. They provide feedback that is trusted by other consumers. The expertise and credibility of the opinion leader can sometimes affect other consumers in determining a product.
Furthermore, Widyaharsana (2009: 52) explains that the good opinion leader must have two main requirements so that they play a major role in the process of WOM, including:
a. Networking, they should have an extensive network. The numbers of listeners that many
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39 will increase the chances of people listen to the
information of an opinion leader.
b. Credibility, addition to an extensive network, the opinion leader must have credibility. Credibility is the quality, capability, or power to generate trust. There are two factors that make a person has credibility, honesty and the ability or expertise. Someone who is not considered to have expertise not wants to hear his opinion. Furthermore, an expert who is not considered fair also will not be able to influence others.
F. Brand Image
1. Definition of Brand
Positive image consumer to a brand more allows consumers to make purchases. Good brand also became the basis for building a positive corporate image. The benefits of a positive brand image, the company bias expand product lines by utilizing the positive image which has been formed to brand old products. The thing to note is how to maintain and improve the already positive brand image.
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40 Here is some understanding of brand image (brand image) in
the view of the experts:
a. Brand image simply by Rangkuti (2009: 43) is a set of associations brand / brand formed in the minds of consumers. b. Keller (2008: 66) defines brand image as a perception or
impression of a brand by a group of associations that connect customers to the brand in their memories.
From the above understanding can be concluded that brand image is the result of perception and understanding of consumers on the brand of a product is seen, thought and imagined. By creating the right brand image for a products, would be very useful for marketers, because the brand image will influence consumer ratings on alternative brand faces.
Fournier said that consumers' perception of a brand is one of the keys to building a long term relationship. Furthermore, Morris (1996) in Rahma (2007: 28) reveals that building a strong perception of the brand is the top priority at some companies today. Meghan (1995) in Rahma (2007: 28) also noted the importance of brand image development in business organizations. Meenaghan states that the image of a well-managed brand will produce positive consequences, including:
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41 a. Improving the understanding of knowledge on aspects
consumer behavior in making decisions.
b. Enhancing consumer orientation toward things that are symbolic over the functions of the product.
c. Improving consumer confidence in the product.
d. Increase sustainable competitive advantage in view of technological innovation is very easy to be imitated by competitors.
Another opinion expressed by Graeff (1996) in Rahma, (2007: 30) states that the rapid development of the market, will encourage consumers to more expensive brand image then attention to the characteristics of the products offered. The condition indicates that the product is in mature stages in the product life cycle. Cover proprietary, competitive and stage image. Proprietary explains that the brand is able to show the uniqueness of some products on the market. Competitive explains that the brand is able to describe a product has a competitive advantage that the drive competitors to perform product development in order to survive in the market. While the stage to explain that the brand image of a product capable of being decisive in differentiating a product in the minds of consumers in their purchase decision than other products.
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42 It can be concluded based on the opinion of experts that the brand is
the brand associations that exist in the minds of consumers, which is created by an Association strong brand, unique and good. And consumer associations to the brand determine brand image.
2. Measurement of brand image is based on aspects of a brand According to Keller (2008: 56) that the measurement of a brand can be performed based on the aspect of a brand, namely: strength, uniqueness, and favorable:
a. Strength
Strength leads to various advantages owned brand relevant physical, and not found in other brands. Such as product design, the products have good quality, and a brand name that already has a reputation in the field of the technology world. The brand of excellence refers to the physical attributes of the mark in question so that it can be considered as an advantage over other brands.
b. Favorability
Favorability leads to their ability to be easily remembered by customers. Included in the group of favorability among others: the ease of the brand to say, the ability of a brand to keep in mind the customer, as well as
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43 correspondence between the impressions in the minds of
customers with the desired image of the company on the brand concerned.
c. Uniqueness
Uniqueness to differentiate a brand with another brand. This impression arises from the attributes of the product. Unique impression means there is a differentiation between the products with other products.
G. Brand Switching
According Dharmmesta in Suzy (2008: 109) brand switching brand switching behavior Behavior is made by consumers for certain reasons or could be interpreted as well as the vulnerability of consumers to switch to another brand.
Meanwhile, according to Menon and Kahn in Manuadi (2011: 26) that the switching behavior (switching behavior) is defined as the freedom to choose a preferred against a special item "(Menon and Kahn, 1995). Switching behavior can come from very diverse other product offerings, or because of a problem with the product purchased.
Chaarlas (2012: 1) provide some review on brand switching as follows.
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44 1. Factors Affecting Brand Switching.
a. Advertising
Mostly, the purpose of advertising is to encourage brand switching on consumers to increase market share. Convincing consumers to switch brands is a difficult task. It is not uncommon for customers to build brand loyalty due to many factors such as quality, price and brand loyalty. To encourage switching brands, advertisers will target three areas at once, as part of a strategy to encourage brand switching.
b. Price
Price is an important factor for the price-conscious consumers. Advertisers often use price comparisons as a model to attract old users of the brand tries to brand new ones. The idea is to convince end users that it is possible to purchase the same amount of product while spending less money. Ideally, this means that consumers can use the savings for other purchases, perhaps even luxury goods of some sort.
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45 c. Quality
The price is not enough to encourage brand switching. When this happens, compare the quality of one brand with another brand is an approach by consumers. After that the brand will work together, as well as the brand becomes more established if it has a good quality. When coupled with cost savings, can affect the quality comparison for a long time on the consumer, at least long enough to begin to try new products.
d. Brand Loyalty
It is important to understand the brand loyalty to be able to understand the movement of the brand (brand switching). It is also useful to segment the market based on brand loyalty and to understand the needs of loyal customers and potential do brand switching, as well as their attitude towards the brand attributes.
e. Resistance to Change
There are many factors that influence consumer attitudes change. But the most important is the resistance of the consumer. "People do not resist change; they resist what is being changed." If consumers have changed, they should be
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46 assisted in decide that change is the best thing for them. People
need to be influenced, not forced.
2. Models or Type Brand Switching
There are 3 types of brand switching that can be grouped based on factors that influence the process of choosing.
a. Zero-Step Model
This model states that the choice of today's consumers in making a purchase is not influenced by the purchasing behavior and previous experience.
b. Markovian Stochastic Process
In a Markov stochastic process, the final choice of consumers affect their current selection. Brand switching models made by Blumen said that today's consumer choice is affected by the last impression on a previous choice, thatMarkov models of stochastic processes. In this model, the degree of consumer satisfaction past affect his choice in the current product. If you previously have chosen the brand increases the likelihood of re-selecting the same brand, it is referred to as brand loyalty or as inertia. However, if the
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47 consumer preferred brands previously not reduce the likelihood
that they would choose the same brand today, is called variety seeking.
c. Three - Choice Model
McCarthy developed a choice of two models made by Blumen, namely Three-Choice Model. As in two choice models, the choice of past consumer products influence consumer choice of products currently in the Three-Choice Model. However, in the Three-Choice Model, the level of customer satisfaction with the current product choices affect the behavior of replacement options, such as those affected by the introduction of the brand and the attitude toward the brand. Thus, the Model Three-Choice's possible that when the consumer is not satisfied with the current selection, replacement or future choices will result.
3. Reasons Consumers Doing Switching Brands
a. stochastic Reason
If a brand switching occurs to the main stochastic reasons then transfer under the control of the service provider. For example, displacement may occur because the perpetrators of
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48 the displacement has changed locations and providers of
financial services (Bank) used currently does not have a branch in the new place.
b. Expectation Disconfirmation reason
Disconfirmation hopes of becoming a big cause the transfer of the brand. In this paradigm, the consumer evaluates the experience of consumption of a product and make a decision regarding the level of satisfaction perceived by comparing performance with standards of satisfaction regarding the consumption. For example, if the level of service provided by branches of banks that use them do not meet expectations, it may poses the possibility of brand switching.
c. Utility Maximization Reasons
Maximize utility (use value) assumes that consumers are consistently looking for better utility, and when consumers have a better living standard of the consumer then it would be possible to shift the brand. For example, if a financial services provider (bank) offers a yield and a lower cost, then switching may occur.
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49 Another brand of alternative search process conducted by
consumers through inquiries from print, electronic, or directly to the seller or the manufacturer to the ultimate goal which resulted in the displacement of the brand.
H. Previous Research
Research on consumer unsatisfaction, advertising, pricing, word of mouth, brand image and brand switching has been done by previous researchers. These studies provide a lot of input as well as additional contributions to other parties concerned to make any approaches so that research can be developed and applied properly.
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50 Table 2.1
Summary of previous research
No
Research
Title Variable of
research dependent Variable
Result of research 1. Grace
Y.D.Radam uri, Naili Farida & Reni Shinta Dewi (2013) Influence Brand image, Word of mouth, and Advertising to Brand switching on user Blackberry 1.Brand image 2.Word of mouth 3.Advertising Brand switching Result this research use method Linear Regression multiple Which one the results can be shows that
dimensional brand image, word of mouth, and advertising have significant influence to Brand switching. 2. Dwi
Ermayanti. S (2010) Analysis influence of advertising, price, and customer unsatisfaction toward brand switching consumer on shampoo sunsilk in surabaya 1.Advertising 2.Price 3.Customer unsatisfaction Brand switching The research use analysis linear regression multiple shows that advertising, price, and customer unsatisfaction have significant influence to Brand switching.
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51 No
Research Title
Variable of research Variable dependent Result of research 3. Anandhitya
Bagus Arianto (2013) Influence attribute products, price, needs look for variations and consumer unsatisfaction toward brand switching from Samsung Galaxy Series in Malang city 1.Attribute product 2.Price 3.Look for variations 4.Customer unsatisfaction Brand switching This research method multiple linear regression analysis in which the results are the attribute products and price negative effect on Brand switching, And the need to find variations and customer unsatisfaction have significant positive effect on brand switching decision.
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52 No
Research Title
Variable of research Variable dependent Result of research 4. Debora
Ratna Nilasari, Yoestini (2012) Analysis of the influence of customer unsatisfaction , price and the need to find a variation toward brand switching of Lifebuoy soap brand in Semarang city.
1. Customer unsatisfaction 2. Price
3. Needs look for variations Brand switching Results of research on 100 respondents in the city of Semarang shows that customer unsatisfaction, price, and the need to find variations Simultaneousl y significant influence toward brand switching and Partially seen that three independent variables are positive and significant impact on brand switching.
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122
Tabulation of Brand Switching
NO
BS1
BS2
BS3
BS4
BS5
TOTAL
1
4
4
5
5
4
22
2
4
4
4
5
4
21
3
4
4
4
4
5
21
4
5
5
4
4
4
22
5
5
5
4
4
4
22
6
4
5
5
5
4
23
7
4
4
4
4
4
20
8
3
4
4
4
3
18
9
4
5
4
4
5
22
10
4
4
4
5
4
21
11
4
4
4
4
4
20
12
4
5
4
5
5
23
13
4
4
4
4
4
20
14
5
4
4
5
5
23
15
4
4
4
4
5
21
16
4
4
5
4
4
21
17
4
5
4
5
4
22
18
4
4
4
4
4
20
19
5
4
4
5
4
22
20
4
5
4
5
5
23
21
4
4
5
5
4
22
22
4
4
4
4
4
20
23
5
4
4
5
5
23
24
5
4
4
5
5
23
25
4
4
4
4
4
20
26
5
5
5
5
5
25
27
4
4
5
5
5
23
28
5
4
4
5
4
22
29
5
5
5
4
5
24
30
4
5
4
5
4
22
31
4
4
4
4
4
20
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123
33
5
5
4
5
5
24
34
4
5
4
4
5
22
35
4
4
4
4
4
20
36
4
4
4
4
4
20
37
5
5
5
4
5
24
38
5
5
5
5
4
24
39
5
4
4
5
4
22
40
5
4
4
4
4
21
41
5
4
4
5
4
22
42
4
4
4
4
5
21
43
4
4
4
4
5
21
44
4
5
5
4
4
22
45
5
4
5
4
4
22
46
4
5
4
5
5
23
47
4
4
4
4
4
20
48
3
3
4
4
4
18
49
4
5
4
4
5
22
50
4
4
4
5
4
21
51
4
4
4
4
4
20
52
4
5
4
5
5
23
53
4
4
4
4
4
20
54
5
4
4
5
5
23
55
4
4
4
4
5
21
56
4
4
5
4
4
21
57
4
5
4
5
4
22
58
4
4
4
4
4
20
59
5
4
4
5
4
22
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Model SummarybModel R R Square Adjusted R
Square
Std. Error of the Estimate
1 .850a .722 .697 .88661
a. Predictors: (Constant), BI, ADV, WOM, CU, PRC b. Dependent Variable: BS
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 110.401 5 22.080 28.089 .000b
Residual 42.449 54 .786
Total 152.850 59
a. Dependent Variable: BS
b. Predictors: (Constant), BI, ADV, WOM, CU, PRC
Coefficientsa
Model Unstandardized
Coefficients
Standardized Coefficients
t Sig. Collinearity Statistics
B Std. Error Beta Tolerance VIF
1
(Constant) 5.822 2.148 2.710 .009
CU .144 .050 .233 2.858 .006 .776 1.288
ADV -.087 .055 -.117 -1.582 .119 .945 1.058
PRC .273 .092 .279 2.971 .004 .584 1.713
WOM .068 .031 .164 2.187 .033 .915 1.093
BI .305 .058 .491 5.262 .000 .590 1.694
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Collinearity DiagnosticsaModel Dime
nsion
Eigenvalue Condition Index
Variance Proportions
(Constant) CU ADV PRC WOM BI
1
1 5.965 1.000 .00 .00 .00 .00 .00 .00
2 .017 18.701 .00 .00 .04 .02 .81 .00
3 .010 25.032 .00 .01 .67 .04 .01 .08
4 .004 38.590 .00 .92 .04 .09 .03 .11
5 .002 50.260 .12 .01 .13 .54 .03 .81
6 .002 50.436 .87 .06 .11 .31 .13 .01
a. Dependent Variable: BS
Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 23.3887 28.6190 25.9500 1.36792 60
Std. Predicted Value -1.872 1.951 .000 1.000 60
Standard Error of Predicted
Value .140 .476 .274 .061 60
Adjusted Predicted Value 23.5388 28.5774 25.9448 1.37888 60
Residual -1.82276 1.80156 .00000 .84821 60
Std. Residual -2.056 2.032 .000 .957 60
Stud. Residual -2.158 2.110 .003 1.010 60
Deleted Residual -2.00829 1.98452 .00524 .94691 60
Stud. Deleted Residual -2.236 2.182 .003 1.024 60
Mahal. Distance .479 15.997 4.917 2.803 60
Cook's Distance .000 .153 .020 .030 60
Centered Leverage Value .008 .271 .083 .048 60
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127
One-Sample Kolmogorov-Smirnov TestUnstandardized Residual
N 60
Normal Parametersa,b Mean 0E-7
Std. Deviation .84821498
Most Extreme Differences
Absolute .056
Positive .056
Negative -.048
Kolmogorov-Smirnov Z .434
Asymp. Sig. (2-tailed) .992
a. Test distribution is Normal. b. Calculated from data.