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The Analysis of Product, Price, Place, Promotion and Service Quality on

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International Journal of Advances in Management and Economics
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RESEARCH ARTICLE

The Analysis of Product, Price, Place, Promotion and Service Quality on

Customers’ Buying Decision of Convenience Store: A Survey of Young
Adult in Bekasi, West Java, Indonesia
Junio Andreti, Nabila H Zhafira*, Sheila S Akmal, Suresh Kumar

President Business School, Jababeka Educational Park, Jababeka, Cikarang, Indonesia.

*Corresponding Author: Email: bilhilmy@gmail.com

Abstract

This research aim to analyze why the number of convenience store keep increasing by identify the dominant factors
which are product, price, place, promotion and service quality that affect customer buying decision of convenience
store in Bekasi. This research also as an input to help smaller traders in having better performance in future
market. This research involves 300 Bekasi populations to obtain the required data. Then the questionnaire result
analyzed with SPPS statistics which are frequency, descriptive statistics, validity and reliability test, multi
regression analysis, correlation analysis, F- Test and Analysis of Variance (ANOVA) in order to see the extend
factors influential to customer buying decision. At the end, researcher proves that the most of customers comes to
convenience store because of the price offered, kind of promotion, and also service quality provided.

Keywords: Buying decision, Convenience store, Marketing mix, Place, price, Product, Promotion, Service quality.

Introduction
Living a balanced life between work, family, and and only providing the barcode and the picture of
health care is a very important need for everyone. the product. They will do some online shopping by
There is no exception in terms of practicality to scanning the bar code with their phone with some
meet basic daily needs, such as foods, beverages, application and get the product in their home by a
and personal needs. The product of food stuffs courier [5]. In the other side, Taiwan has 9,800
(groceries) dominated about 67 % composition sale shops in its only 36,000 kilometres with one store
of goods retail trade [1]. One of the places that per 260 square meters There are 40% people in
offering complete needs is convenience store. Taiwan go to convenience store minimum once a
Convenience store can be define as a business day.Convenience store in Taiwan also let shoppers
retail that provide customer quickly purchase of withdraw money, book train tickets, collect goods
consumable products and services in strategic ordered online, eat and washing clothes [6].
location [2]
Based on business research studies report in a
Convenience store provides customers with a good period of the past five years number of modern
service and comfort place to shop. Management retail outlets in Indonesia had higher growth until
Science Associates stated that segment likely to 17, 57% per year. In fact the number of outlets
shop mostly including 18-34 [3]. From the only 10,365 in 2007 and in 2011 the number has
comfortless and hygiene more people will choose reached 18.152 widely distributed in big cities in
Convenience store over traditional market even Indonesia. For example, the growth of Alfamart
traditional market offering customers with lower and Indomaret on 2010 surged rapidly until it
price, bargain system, and fresh products such as reaches about 15.538 stores [7].
vegetables.
As one of a big city in Indonesia, Bekasi has about
In Asia, Convenience Stores total numbers 592,888 householders in 201. Financial and
increasing 29% from 63,450 in 2010 to 81.781 Development Supervisory in Indonesia mention
stores in 2012 with Korea and China as the most that that the growths of household in Bekasi in
significant growth [4]. Korean has subway 2011 are 672.418 and 697.263 in 2012, in fact this
convenience stores that sell their product online increasing number (3.69% per year).

Nabila H Zhafira et.al | Nov.-Dec. 2013 | Vol.2 | Issue 6|72-78 72

 Available online at www.managementjournal.info

This increasing number of population

strategy for a company has a major impact on the
automatically will affect on daily need and raise
decision making process in a competitive market
the number of store. Based on Trade Industry and
like nowadays [12]. In some related studies,
Cooperatives Department convenience market in
customer buying decision defines as the process
Bekasi has increased. In 2011, there are 310
when customer purchases goods or services for
stores exist.
their personal needs in [13]. Consist of several
process, those are: need recognition, information
The problem comes when the existence of
search, evaluation of alternatives, purchase
convenience store has become a threat for
decision, and post purchase behaviour [14].
traditional market development. Based on
Nielsen, 11.8% retail consumer of Indonesia move Product
to convenience store from traditional market in
2001-2006 [8]. As the improvement of Indonesian Anything that offer to market to get some
economy, it will improving the level of purchasing attention, acquisition, or consumption including
power, consumption, and changing of society’s life physical objects, services, personalities,
style because people will look for more organizations and desires [15]. Several things
comfortable, safe and clean shopping places with a such as goods, services, or ideas that offering for
qualified and healthy product (Pudjianto, Vice the satisfaction of consumer, includes needs and
president Director of PT Sumber Alfaria Trijaya requirements. [16].
Tbk). According to [12] on ‘The relationship between
marketing mix and customer decision-making over
Although some researcher have paid attention to travel agents; an empirical study’, product is one
the comparison among retail store image in of the strongest predictors, there are two
Brazilian [9], the researcher in this study would perceptions that will lead to high levels of
like to analyze why the number of convenience purchase intention and repeat buying at the final,
store keep increasing by identify the dominant those perceptions are high product quality and
factors of customer buying decision in Bekasi. This high customer satisfaction.
research will use quantitative method and
Statistical Package the Social Sciences (SPSS) Another researcher, [17] on their research ‘The
version 20.0 to analyze data collection in this seven ps of marketing and choice of main grocery
research. store in a hyperinflationary economy’ found that
product has a significant influence towards
Generally, this study expected to give the consumer choice of store for main grocery
advantages as knowledge both of the reader and shopping.
the writer. Especially knowledge about customer Price
buying decision of convenience store and the
dominant factors affected. This research also as an Amount of money that has to pay by consumer to
input to help smaller traders in having better get the product or service [16]. An element that
performance in market. Then if we go to the more affecting the volume of sales and includes
specific objective, the researcher aim to find out determining pricing objectives and policies, price
the extent variables which are product, price, fixation, discount policy, credit policy, etc [18].
promotion and service quality that affect customer According to Satit, Tat, Rasli, Chin, & Sukati, [12]
buying decision of convenience store. price is one of marketing mix elements which
Review of Literature affecting customer buying decision the most, as
the result of their research, travel agents can
Marketing Mix retain existing customers by offering and
According to [10], Marketing mix is a strategy attractive and competitive price, and by giving
before launching any new product or service, special discounts.
consist of those four variables which help in
Ahmetoglu, Fried, Dawes, & Furnham, [19] on
smoothing the strategic decision necessary for an
their research ‘Pricing Practices: Their Effects on
organization. Another definition of marketing mix
Consumer Behaviour and Welfare’ found that
is integrating the company’s offers and access,
price gives a significance influence on customer’s
which consist of products, prices, channel
purchase intention, especially the reference price
distributions, and communications [11].
which affecting the most while customers are not
Identify the right target market is one of main readily able to comparing with other brands.
thing to do by a company. Marketing mix, as said
before, one of tools that helps in creating the

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 Available online at www.managementjournal.info
Place
Sometimes called as distribution, including
company activities that use to ensure the Another research by [30] on ‘Service quality and
availability of the product which later will deliver influencing factor on consumer purchase intention
to the consumers in the proper quantity at he of online Ticketing: An empirical study in Iran’
right time at the right place [16]. Refers to the found that service quality has a strongly impact
way of placing products and services within the on customer purchase intention of an online
reach of consumer [20]. transaction.

According to [21] on his research ‘The influence of Hypothesis

Marketing Mix towards customer decision-making
to saving on PT Bank Mandiri Makassar’, place H1: Product will influence customer buying
has a significant influence towards customer decision-making for choosing a convenience store.
decision-making at PT. Bank Mandiri Cabang H2 : Price will influence customer buying decision-
Kartini. making for choosing a convenience store.
Another research found that there is an impact of H3: Place will influence customer buying decision-
place towards customer buying decision. [22] on making for choosing a convenience store.
‘the analyze of product, price, promotion, and H4: Promotion will influence customer buying
distribution towards customer buying decision’. decision-making for choosing a convenience store.
H5: Service will influence customer buying
Promotion decision-making for choosing a convenience store.
Communication by marketers that informs, Methodology
persuades, and reminds potential buyers of a
product in order to influence their opinion [23]. Sampling
According to Kotler, promotion is marketing and Some geneticist stated that population is "a local
communication activities which later can change group of … organisms sharing a common gene
the price-value relationship of product or service pool" in other side, anthropologist might define a
that perceived by target [24]. population as a group of people who share a
common language and can communicate with each
According to [25] on their research ‘Impact of
other. The population in this research were young
Sales Promotion Tools on Consumer’s Purchase
adult based on segment likely to shop mostly [31]
Decision towards White Good (refrigerator) at
that live in Bekasi Area and likely to shop in
Durg and Bhilai Region of CG, India’, promotion
convenience store.
plays a significant role in consumer purchase
decision, those customers are influenced the most
Reseacher have choosen the samples which are
by offer further followed by premium and contest.
student and employee, both female and male
Consumers are sceptical about the advertised from starts from 18 -34 years old in Bekasi. Sampling
retailers and discount, Gupta and Cooper also method used to select the sample unit from
found that offering discounts on a brand name has population [32]. This study use convenience
bigger impact on customer’s purchase intention sampling method as one of the non probability
[26] sampling which is attempt to obtain a sample
convenient elements because the samples is
Service available in the right time and in the right place
Refers to several types of service to be provided for [33]. Totally 300 questionnaires were prepared
customer before and after sale period [27]. and distributed among subject using non
According to Kotler, service also refers to a market probability convenience sampling method by direct
transaction by entrepreneur where the object of way. Researcher also asked about respondents
the transaction is not something tangible, nor the feeling or emotion about convenience store
transfer of ownership [28]. performance in Bekasi. The data that already
collect are analyzed by using Statistical Package
Research ‘the analysis of product quality and the Social Sciences (SPSS) version 20.0.
service quality towards customer buying decision Data Collection
(a case of Restoran Waroeng Taman Singosari)’
found that there is a significance influence of This quantitative research is provide large
product and service quality towards customer samples, interviews, and structured
buying decision of foods and beverages at that questionnaires to closed questions as a data
restaurant [29]. collection. This research also use secondary data
which is collecting data and information existing

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 Available online at www.managementjournal.info

sources from websites, electronic book, and neutral, agree, strongly agree, very strongly agree.
electronic journal. There are 32 questions that cover all variables
which are costumer buying decisions, product,
Questionnaires usually composed of several price, place, promotion and service quality which
questions and answered by respondent and the are describe about the preferences, opinion and
result can be collected as table of result. The perception of convenience store.
distribution of questionnaire can be finished in
Result and Analysis
many ways such as verbal, written and online. In
this research, the questionnaire will be distributed Result
by written questionnaire that will be given
There are several statistical tools that used in this
directly to respondent which is selected before.
study which are frequency, descriptive statistics,
validity and reliability test, multi regression
In order to distribute questionnaire, there are
analysis, correlation analysis, F- Test and
some criteria of respondent that relate with the
Analysis of Variance (ANOVA) in order to see the
demographic such as age, gender, location,
extend factors influential to customer buying
occupation and income. In this research, the
decision. Ftest is used to understand the influence
respondent that will be chosen is male and female
of both independent variables toward dependent
starts from 18-34 years old include in the lower to
variables. KMO or Kaiser-Meyer-Olkin in this study
middle until high class in Bekasi area as a
is (0.865) which greater than (0.5) and the
location. Type of questionnaire that used is the
significance value of Bartlett’s test in this study is
likert scale, which provides those seven choices;
(0.001), it indicates that factor analysis can be use
very strongly disagree, strongly disagree, disagree,
in processing the data.

Besides that, the ANOVA significant in this this research, researchers get the valid data
research is (0.001) or less than (0.05) which means because the indicators have correlation with it
the data is good enough. factors or called as convergent. Reliability test is
purposed to describe the overall consistency of a
Validity test is purposed to seek the valid measurement and seek the correlation’s answer
conclusion about the independent variables caused
the effect of dependent variables on the study. In

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 Available online at www.managementjournal.info

between respondent [33]. To make it reliable, the

number of Cronbach alpha in the SPSS program The result of this research are consistent with the
should be > 0.7. The alpha point of study literature reviewed [12] found that price is the
instrument one item is greater than 0.70, which is most affecting influence on customer buying
mean the data in questionnaire is reliable. decision of travel agents as their case [25].

Reliability analysis for the questionnaire reveals

the cronbach alpha value of each variable are got to support this research by getting the same
above 0.7 (Product 0.727, Price 0.824, Place 0.877, result that promotion plays a significant role in
Promotion 0.819, and Service Quality 0.876) and it customer purchase decision. The latest is which
indicates that research instrument (questionnaire) mentioned that service quality has a significant
have internal consistency and reliability. Then all influence towards customer buying decision of
the communalities value for this research are foods and beverages at that certain restaurant on
above 0.5 with total variance explained 65.8%, by her research.
deleted several questions in product variable and
price in questionnaire. By getting the result of this research which price,
promotion, and service quality are having biggest
The statistical technique that being used in the influence on customer buying decision of
analysis of this research is descriptive statistic. convenience store. By keep the price standard, do
Frequency and percentage is the type of analysis more attractive promotion, give more discount,
that being used in this research. The items in the and serve customer well, the convenience store
instrument that were measure base on 5 point can encourages more participation, visitors,
Likert scale that using 1 -7, where 1 represent Very awareness and hence in the same way increases
Strongly Disagree and 7 is Very Strongly Agree. customer buying intention.
The average total score of independent variable
which are product, price, place, promotion and It is concluded that convenience stores in Bekasi
service quality are calculated one by one. have to improve the performance on product
Frequency analysis used to measure the pattern quality because customers are worry about the
the background of respondents of this hygienist and safety of the products offered. Since
questionnaire (gender and occupation ) which is a convenience store deals with many variance of
analyzed using percentages. There are 56 % brand so they have to concern on each product to
female and 44 % male, with 5 % of employee, 6% ensure it safe to consume. In the other side,
entrepreneur, 7.3 % housewife and 79 % college convenience store should add more interested lay
student. out, provide a wide place and public facilities such
as toilet and musholla. Researcher suggests the
Discussion
products layout should be one of the concern
because customer pay more attention when they
are choosing the products to purchased. Some of
the public facilities in convenience store also found
not clean and make customer uncomfortable.

On the other hand, a traditional market no need

to worry about those convenience store existences,
they just need to improve the service, place, and
promotion strategy in order to attract more
Fig. 1: shown that the VIF for each independent customer to make them more comfort while
variable shopping. Bargaining is one of an interesting
transaction in traditional market that cannot be
Figure 1. shown that the VIF for each independent found in other market, so they have to keep this
variable is around 1 which is mean no strategy. Traditional market also needs to
multicollinearity there. There are several variable facilitate the customer with comfortable place for
below 0.05 which are price (0.016), promotion shopping, for example on the hygienist and public
(0.001), and service quality (0.001). it means that facilities that will make them better and gives
most of customer s comes to convenience store opportunity to attract more customers [34-44].
because of the price offered, kind of promotion,
and also service quality provided.

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 Available online at www.managementjournal.info
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