chapter 1 -3

CHAPTER 1

INTRODUCTION

1.1. Background of study

Business competition nowadays getting tighter, where mobilization rate getting higher

followed by the technology growing rapidly. With 248 million of inhabitants, 39

million is internet users and 5 million is digital buyers. Not really big amount, but it

has been much increase since 2013 and it has the potential to grow 25 to 57 percent a

year through 20171.

This condition demand people in business to be more careful in doing marketing

strategy in order to maintain their business. It needs an innovative and fresh marketing

strategy to increase the marketing and selling and be ready to compete in market. One

of marketing strategy that is evolving is through media online, specifically website.

Website is very expand nowadays, many businesses make their own website and

through website the information spread over faster, wider and easy to access with an

affordable cost.

Almost all new businesses either big or small doing marketing activity through online.

Activity to advertise the product through internet called as e-marketing. Doing

business activity through internet can decrease the cost and time because the activity

can be done within 24 hours and 7 days, wherever and whenever as long the connection

is available.

1 http://business.inquirer.net/187215/unleashing-aseans-potential-in-e-commerce

Figure 1.1: 70% of Indonesian online users intend to make an online purchase2

By looking Indonesia market, and Jakarta as the biggest market also a capital city Top3

Media looks opportunity in Indonesia, Top3 Media Singapore expand their business to

Indonesia by open the 360 degree branding and digital marketing communication

partner in Jakarta, known as Top3 Media Indonesia and also Grab! Indonesia for design

expert. Top3 Media is a full-service marketing agency working alongside companies

and business in Singapore to help them grow globally through a strong online presence

and precise control over the digital space. Headquartered in Singapore with a presence

in Australia, Indonesia, Vietnam and China. Top3 Media is SAP Partner, Google

Partner, Oracle Partner and IBM Business Partner.

The services Top3 Media Indonesia provides are: Branding, Copy writing, website

design and development, e-commerce design and development, mobile apps design

2 www.acnielsen.co.id/news/NEWS14072010.shtml

and development, social media management, SEO (Search engine optimization), SEM

(Search Engine Marketing) and GDN (Google display network).

1.1 Problem Identification

Jakarta is the country's economic, cultural and political center. It is the most populous

city in Indonesia and in Southeast Asia, and is the tenth-largest city in the world.

Jakarta as the capital city of Indonesia, it has own magnetism to make people from

every region in Indonesia to come to Jakarta with the thought to make their life better.

Jakarta has 50.306 registered company, many business goes online also more than 20

big e-commerce based in Jakarta, such as: Lazada, tokopedia, zalora, tiket2.com,

traveloka, rajakamar, kaskus, olx, Rakuten and many more but still many people and

other business still don’t understand about what is online business which is give more

benefit to the business. Many people refuse to make their business goes online when

people in marketing agency sees that the market for online business is getting larger.

Despite that digital marketing holds many great possibilities not all business segments

utilize them to its maximum (Kumar & Mirchandani, 2012). The business-to-business

(B2B) marketers have difficulties to fully utilize digital marketing as a marketing tool

(Swani, Brown & Milne, 2014). Business-to-customer (B2C) marketers are on the

other hand relatively well equipped for the challenge and have long experience from

marketing through digital (Swani, Brown & Milne, 2014; Kumar & Mirchandani,

2012). Even if most studies have found utility in using relationship-oriented digital

marketing to improve the selling process, communication and improvements of brand

awareness have mainly existed in B2C contexts (Moore & Raymond, 2013; Mangold

& Faulds 2009; Vernuccio, 2014).

It is of great importance that B2B companies understand digital marketing and learn

what possible effects that the usage of these could have (Kärkkäinen, Jussila &

Väisänen, 2013). While there is a general understanding how digital marketing can

affect the direct relationship between business and customers there is a lack of research

on the impact that these types of applications can have on a firm’s competitiveness in

a B2B context. An efficient digital marketing strategy can lead to a strong demand

generation all over the world and in the long term perspective be decisive for a firm’s

ability to compete (Coughlan, Anderson, Stern & El-Ansary, 2006).

1.3 Problem Identification

1. Is there any partial significant influence of Website design and development

toward businesses in Jakarta?

2. Is there any partial significant influence of E-commerce design and

development toward businesses in Jakarta?

3. Is there any partial significant influence of Mobile Apps design and

development toward businesses in Jakarta?

4. Is there any partial significant influence of SEO, SEM and GDN toward

businesses in Jakarta?

5. Is there any partial significant influence of Social Media Management toward

businesses in Jakarta?

6. Is there any partial significant influence of Digital Marketing Strategy toward

businesses in Jakarta?

1.4 Research Objectives

This research will analyze whether Website design and development, E-commerce

design and development, Mobile Apps design and development, SEO, SEM and

GDN, Social Media Management has significant influence toward businesses in

Jakarta.

The objectives to conduct this research are:

1. To be able to know if there is partial significant influence of Website design

and development toward businesses in Jakarta

2. To be able to know if there is partial significant influence of E-commerce

design and development toward businesses in Jakarta.

3. To be able to know if there is partial significant influence of Mobile Apps

design and development toward businesses in Jakarta.

4. To be able to know if there is partial significant influence of SEO, SEM and

GDN toward businesses in Jakarta.

5. To be able to know if there is partial significant influence Social Media

Management toward businesses in Jakarta.

6. To be able to know if there is simultaneous significant influence of Digital

Marketing Strategy toward businesses in Jakarta.

1.5 Significant of Study

The significant of the study not merely just to achieve good grades but also to

contribute to theoretical and practical:

1.5.1. Significance study for University

Hopefully this study will help for education needs of student that are

looking for theory about digital marketing strategy. It also can be

guidance and reference for students who will conducts similar research.

1.5.2. Significance study for Company

It will help the company especially Top3 Media Indonesia and Grab!

Indonesia to determine what variable that has the most impacts from

digital marketing strategy to business in Jakarta. So, company can do

an improvement to increase the sales.

1.5.3. Significance study for researcher

By doing this research, researcher is able to implement the theory that

got from class and give more knowledge about digital marketing

strategy. The researcher will able to know the impacts of digital

marketing strategy to business in Jakarta.

1.5.4. Significance study for future researcher

This study is conducted with the expectation that it will be useful for

future researcher. Hopefully it can be a reference for the future

researcher that conducts similar research about digital marketing, and

can be improve by adding other variables that might be related.

1.6 Definition of Terms

Website: an information page available through internet line and can be

accessed by people all around the world with internet connection.

E-commerce: a process of selling and buying products electronically by the

consumer and from business to business with the computer as the transaction

tools.

Mobile apps: a software application developed specifically for use on small,

wireless computing devices, such as smartphones and tablets, rather than

desktop or laptop computers.

SEO (Search Engine Optimization): a methodology of strategies, techniques

and tactics used to increase the amount of visitors to a website by obtaining a

high-ranking placement in the search results page of a search engine.

SEM (Search Engine Marketing): a type of Internet marketing associated

with the researching, submitting and positioning of a website within search

engines to achieve maximum visibility and increase your share of paid, usually

called as pay per click.

GDN (Google Display Network): a type of Internet marketing that has been

partnered with Google (display partners), YouTube, and specific Google

properties that display AdWords ads. These ads, which can be in text, image,

video, or rich media format, can be targeted automatically based on themes in

your keyword list, manually (matching specific placements you select), or

based on specific audiences you want to reach.

Social Media: is the collective of online communications channels dedicated

to community-based input, interaction, content-sharing and collaboration.

Websites and applications dedicated to forums, microblogging, social

networking , social bookmarking, social creation, and wikis are among the

different types of social media.

Digital Marketing Strategy: a channel strategy which means that it should

1 Be informed by research into customer channel behavior and marketplace

activity = intermediaries, publishers and competitors

2 Based on objectives for future online and offline channel contribution %

3 Define and communicate the differentials of the channel to encourage

customers to use it,

4 need to manage channel integration

1.7 Scope and Limitation of Study

In doing this research, researcher had scope and limitation. Where the usage of

scope is to make sure the data that are collected is as what researcher need. The

limitation occurs because of researcher capability.

1.7.1. Scope of study

The scope in this study is Business people with acknowledge in digital

marketing and Top3 Media Indonesia as digital marketing strategy services

providers with the total population which are limited.

1.7.2. Limitation of Study

The limitation that the researcher faces in this study is time limitation,

questionnaire distribution, people who knowledgeable with digital marketing

and unfamiliar method for the researcher. Since researcher has a limited time

to complete the research, researcher needs to have an undivided attention to

make sure the research finished on time. This makes the researcher to only be

able to deliver the questionnaire in center of Jakarta and the client of Top3

Media.

CHAPTER II

REVIEW OF LITERATURE

2.1 Theoretical Review

Marketing is one of main activity in every aspect of businesses in order to maintain

the continuance of the business, development and to get profit. Marketing was

expanded from ‘market’ which means a tools or place where people gathering to

sell their product. In abstract description, marketing means an activity, process of

the whole system. According to Kotler and Keller ( 2009, 45) marketing is a

process to plan and execute the concept, price, promotion and idea distribution,

product and services to make satisfied exchange activity, for individual also

organization’s goal. Marketing keep expand, until 2004 we can know digital

revolution. Digital Marketing has impacted consumers and businesses alike. Over

the past decade technology and the way it is used has changed drastically. The

Internet, once purely a source of information has become a place where people

meet to share their stories and experiences, a platform for discussion and debate, a

source of entertainment and much more. Furthermore, the Web has several

important marketing aspects that enable companies to boost their performance: 24

hours online; multimedia compatible; globally available; interactive;

micromarketing compatible; integration ready. (Rowley, 2004, p. 26) As a result,

the marketing profession has also changed. A variety of new tools are available

that can build brand awareness, increase brand loyalty and improve the bottom line.

Now more than ever marketers can interact with their consumers, understand what

they want and communicate the benefits of their solutions. Furthermore,

technology provides marketers with an opportunity to add value in ways that were

once unthinkable.

The fact is the Internet’s influence is growing and it is not a fad that will be

replaced. It is here to stay. It is important to understand how well marketers have

adapted to the digital revolution and why. By understanding the reasons

companies have or have not successfully adapted to a web oriented world,

recommendations can be made as to how businesses can optimize their digital

marketing strategies.

2.1.1 Website Design and Development

By having a website, a business can be seen as professional, since website is

open to everyone, can be accessed by everyone in everywhere and if the design

good, it would be a bonus for the business to increase their conversion rate,

According to Scott states (2010: 6) that the website has created a huge

opportunity to reach niche buyers directly with targeted information that costs

a fraction of what big-budget advertising costs. As such, smaller companies

can even reach their target market via digital marketing without necessitating

huge marketing budgets. They only have to find the best and more suitable

digital marketing tools such as newsletters, social media, online banners, blogs,

and pay-per-click marketing. Only problem is that digital marketing requires

innovation, since it can reach millions of people with well-planned marketing,

or only few. Creative campaigns usually get the most attention and sometimes

even have to be a bit bold and annoy the public.

2.1.2 E-commerce Design and Development

E-commerce is similar to website, but there is only a different is that e-

commerce has payment gate away in it. In order to understand business model

of Design with Benefits it is important to define the term e-commerce. It refers

to online transactions: selling goods and services on the Internet, either in one

transaction or over time with an ongoing subscription price. Online retail firms

buy products and resell them online. Physical products are delivered by using

traditional transportation methods and digital products, such as software and

music, can be delivered via the Internet. (Strauss and Frost 2009: 33)

According to Kril (2013) online shopping can be considered to be a sub-

category of ecommerce as it strongly refers to business-to-consumer

transactions such as online retail or online auctions. Online shopping has

increased significantly in recent years and therefore many traditional

department stores have expanded to include online sales. Like what Matahari

mall doing now, they are expanding their business to online. In addition, some

new companies have concentrated on selling only through online store.

2.1.3 Mobile Apps

A mobile application (or mobile app) is a program, embedded into a mobile

device that performs a specific purpose. They are distributed through software

platforms called Application Store, such as the Apple App Store, Google Play,

Windows Phone Store. According to Buyens ( 2001 ), mobile apps came from

word of application and mobile. Application means applying, and application

is a program that ready to use, which was created to do a function for the user

or another application. While mobile can be meant as flexible and can be

moved. So that the mobile application is a nick name for the application

running in mobile devices. By using mobile application, users can do many

activity, means mobile apps very helpful. No wonder, nowadays, businesses

moving to here. For example is traditional Ojek moves to GoJek, GrabBike,

etc. GPS application moves to Google Maps and Waze, Books turns to be

Scribd Apps, ATM machine and Banking activity turn to M-Banking, and

many more.

2.1.4 SEO, SEM, GDN

2.1.4.1 SEO ( Search Engine Optimization )

This is a process that aims to enhance the website’s listing in search

engine results. SEO is done by improving the website’s search

engine friendliness. In other words, phrases on the site, blog, or

other online content are found by the search engines. SEO is often

outsourced. (Damian 2011: 273; Scott 2012: 298)

There are wide variety of marketing tools for companies to use.

That is why every company or businesses should evaluate their

goals and their target customer in order to choose the best tools for

their purposes. This applies to traditional marketing as well as

digital marketing, since the purpose of marketing in general is to

reach the target market.

2.1.4.2 SEM ( Search Engine Marketing )

SEM called as pay per click, this is also known as sponsored search

or paid search. PPC marketing offers to the potential for marketers

to bid for placement in the paid listings search results by choosing

relevant search terms for their business. Companies pay the

amount of their bid only when consumer clicks on their listing.

Undoubtedly, the most well-known PPC tool is Google AdWords,

and Google Analytics for monitoring the results, but Yahoo and

Microsoft are also offering the same tools. (Damian 2012: 273)

Through these tools it is possible to increase website visibility and

evaluate its effectiveness. AdWords is a service to create PPC

campaigns by setting relevant keywords. It allows the user to add,

delete, and manage bids. Google Analytics is a tool designed to

evaluate a company’s performance in Google searches, clicks on

the website, how users entered the website, and customer

acquisition. These two tools have evolved as a unified tool. (Ramos

and Cotta 2009: 48, 180-182)

2.1.4.3 GDN ( Google Display Network )

This can be, for example, in the form of banner ads on websites or

in emails. For marketers this is a visible way to create brand

awareness but it does not necessarily translate into direct clicks.

Targeted product recommendations based on user’s clicks are also

a rapidly growing means of advertising which may increase

product awareness and trigger purchase action. (Blanding 2013;

Damian 2011:267; Court 2009)

2.1.5 Social Media Campaign

This chapter goes over the social media aspect in digital marketing, and

identifies its possibilities for the company. The general definition of social

media according to Kaplan and Haenlein (2010:61), is that, “social media is a

group of Internet-based applications that build on the ideological and

technological foundations of Web 2.0, and that allow the creation and

exchange of User Generated Content, and it really helps to spread the

information. No wonder many business using this opportunity to spread the

information through it.” Some of the most well-known examples of social

media which mostly used by people in Jakarta to penetrate the market and

make their brand being known by public are Facebook, Twitter, YouTube,

Instagram, and Pinterest. According to Nielsen’s study (2013) consumers

spend more time on social networks than on any other category of website.

Approximately 20 percent of their total time online was used on a personal

computer (PC) and 30 percent of total time online on a mobile device. Other

devices such as tablets, game consoles, handheld music players and e-readers

also increased in popularity for accessing social media. In addition, Nielsen’s

(2012:7) survey indicated that social media is not solely connected from home,

but for example, more than half of people aged 25-34 use social networking

in the office. It also revealed that social media has fundamentally changed the

consumer decision journey. In other words, the days when companies could

tightly control brand messaging and progress consumers along a linear

purchase funnel have ended. Consumer decisions and behaviors are

increasingly driven by the opinions, tastes and preferences of an exponentially

larger, global pool of friends, peers and influencers. It came up that 70 percent

of the social media users hear others’ experiences online, 65 percent learn

about brands, products and services, 53 percent compliment brands, 50

percent express concerns and complains about brands and services, and 47

percent of them share monetary incentives. (Nielsen 2012:11) Ryan and Jones

state in their book (2011: 14) that the shift towards social media is perhaps the

most significant recent development in online marketing. It can be seen that

social media represents a great opportunity for companies and brands to gain

positive favor with consumers.

2.2 Theoretical Framework

X1

X2

X3

X4

X5

Business in

Jakarta

Y

Social Media

Campaign

SEO, SEM, GDN

Mobile Apps

E-commerce

Website

Digital

Marketing

Strategy

2.1 Hypothesis

In this research, researcher would like to know whether website, e-

commerce, mobile apps, SEO-SEM-GDN, and Social media campaign as digital

marketing strategy have significant influence toward businesses in Jakarta. The

hypotheses are as follow:

H0: There is no any partial significant influence of website toward businesses

in Jakarta

H1: There is a partial significant influence of website toward businesses in

Jakarta

H0: There is no any partial significant influence of e-commerce toward

businesses in Jakarta

H2: There is no any partial significant influence of e-commerce toward

businesses in Jakarta

H0: There is no any partial significant influence of mobile apps toward

businesses in Jakarta

H3: There is no any partial significant influence of mobile apps toward

businesses in Jakarta

H0: There is no any partial significant influence of SEO-SEM-GDN toward

businesses in Jakarta

H4: There is no any partial significant influence of SEO-SEM-GDN toward

businesses in Jakarta

H0: There is no any partial significant influence of social media campaign

toward businesses in Jakarta

H5: There is no any partial significant influence of social media campaign

toward businesses in Jakarta

H0: There is no any simultaneous influence of website, e-commerce, mobile

apps, SEO-SEM-GDN, and Social media campaign toward businesses in

Jakarta

H6: There is no any simultaneous influence of website, e-commerce, mobile

apps, SEO-SEM-GDN, and Social media campaign toward businesses in

Jakarta

CHAPTER III

RESEARCH METHODOLOGY

3.1 Research Design

There are two methods in doing scientific research those are qualitative

and quantitative research. The differences between qualitative and quantitative

research are the type of data, research process, instrument in collecting data

and the purpose of research. Quantitative method involves smaller numbers of

respondents, Utilizes open-ended questionnaires or protocols, Best used to

answer how and why questions. (Civicpartnership.org, 2013).

Quantitative observations are made using scientific tools and

measurements. The results can be measured or counted, and any other person

trying to quantitatively assess the same situation should end up with the same

results. In Quantitative method pieces of information that can be counted

mathematically, itusually gathered by surveys from large numbers of

respondents selected randomly and it is analyzed using statistical methods Best

used to answer what, when and who questions (Civicpartnership.org,2013).

The researcher use quantitative method in conducting research.

Multiple Regressions analysis is an extension of simple linear

regression. It is used when we want to predict the value of a variable based on

the value of two or more other variables. The variable to be predicted is called

the dependent variable (or sometimes, the outcome, target or criterion

variable). The variables that used to predict the value of the dependent variable

are called the independent variables (or sometimes, the predictor, explanatory

or regressor variables) (statistics.laerd.com, 2013).

Therefore, this study uses the quantitative method with Factor Analysis

and Multiple regressions Analysis to answer the research questions.

3.2 Research Framework

The main topic of this research is the influence of digital marketing

towards businesses in Jakarta Study Case of Top3 Media. As described in

Chapter 2, in doing business digital marketing such as website, e-commerce,

SEO, SEM, GDN, mobile apps, and social media campaign really influence the

business in Jakarta nowadays. This research specifically investigates the

influence of digital marketing towards businesses in Jakarta. After collecting

the data, the researcher directly proceeded to the problem identification. From

the data obtained business Jakarta from 2012. This encouraged the researcher’s

curiosity to find out whether digital marketing strategy is the choice of doing

business in Jakarta or not after knowing the data. After reading some

supporting passages from journals and articles, it could be identified that

website, e-commerce, SEO, SEM, GDN, mobile apps, and social media

campaign really influence the business in Jakarta nowadays. Furthermore, the

problem statement was constructed as the basic view of the topic. To support

the problem statement, theories and opinions are explored. All those findings

are expressed in Chapter 2 of Literature Review. This then brings benefits to

the construction of the questionnaires.

Questionnaires were checked for validity and reliability test. Pearson

correlation matrix used to measure the validity and Cronbach Alpha used to

measure the reliability of the questionnaire. Pearson correlation matrix will

indicate the direction, strength, and significance of the bivariate relationships

among all the variables that were measured at an interval or ratio level (Sekaran

and Bougie, 2010, pp.321). Cronbach Alpha is a reliability coefficient that

shows how well the items in a set are positively correlated to one another

(Sekaran and Bougie, 2010, pp.324).

Before being spread, the questionnaires went through the stage of

“Tryout.” Ten different people were selected and gathered by the researcher to

examine whether the statements in the questionnaires were clear enough to

understand. This stage is also intended to revise some statements, so that every

respondent will have the same perception towards them. After some reviews

and proof readings, the questionnaires were finally spread to 20 respondents

whose characteristics have been provided in one of the explanations below.

In this research, SPSS was utilized to analyze the data. Finally, the

points of conclusion and recommendation are drafted. All steps conducted by

the researcher from problem identification to the result accomplishment are

reflected in the following figure of research framework.

3.3 Research Instrument

Research Instrument is the tool that used to answer the research

questions that stated in the previous chapter. The Researcher intention is to

gather the information from as much various sources. Data can be obtained

from primary or secondary data, Primary data refers to information obtained

first-hand by the researcher on the variables of interest for specific purpose of

the study and secondary data refer to information gathered from sources that

already exist (Sekaran, Bougie, 2010).

In order to fulfill the validity of this research, the researcher use both

primary and secondary data as shown in the figure 3.2 below:

Figure 3.2: Data Collection Method

(Source: self-constructed)

RESEARCH

DATA

COLLECTION

PRIMARY

DATA

SECONDARY

DATA

SURVEY BOOKS AND

JOURNALS

LITERATURE

STUDY

ARTICLES ON

INTERNET

DATA

SELECTION

3.3.1 Primary Data

Primary data is the specific information collected by the person

who is doing the research. It can be obtained through clinical trials, case

studies, true experiments and randomized controlled studies. This

information can be analyzed by other experts who may decide to test

the validity of the data by repeating the same experiments (Ehow.com,

2013).

Primary data in this research of “The influence of digital

marketing strategy towards businesses in Jakarta study case of Top3

Media” is obtained directly from the questionnaires that used for

survey. Questionnaires are a technique of data collection done by giving

series of written statements that are consists of research variables.

These questionnaires will be spread to the numbers of samples.

3.3.2 Secondary Data

Secondary data is information gathered for purposes other than

the completion of a research project and Secondary data is also used to

gain initial insight into the research problem (steppingstones.ca, 2013).

Secondary data is the data that have been already collected by and

readily available from other sources. Such data are cheaper and more

quickly obtainable than the primary data and also may be available

when primary data cannot be obtained at all

(managementstudyguide.com, 2013).

Secondary data on this research is the literature studies. A

literature studies is a technique of data collection based on information

gathered from books and journals related to the research discussion.

Data collected by learning and selecting from previous literature

studies, books, journals and related websites.

3.4 Sampling Design

Sampling Design is part of statistical methodology that related in taking

a portion of the population. If a sampling is done correctly, statistical analysis

can be used to generalize a whole population. There are two major types of

sampling design: probability and nonprobability sampling. In probability

sampling, the elements in the population have some known non-zero chance or

probability of being selected as sample subjects. In non-probability sampling,

the elements do not have a known or predetermined chance of being selected

as subjects (Sekaran, Bougie, 2010).

3.4.1 Population

Population is all elements, individuals, or units that meet the

selectioncriteria for a group to be studied (businessdictionary.com,

2013). The Population refers to the entire group of people, events, or

things of interest that the researcher wishes to investigate (Sekaran,

Bougie, 2010, pp. 262). In this study, research population is focused on

business in Jakarta with implementation in Digital Marketing Strategy

3.4.2 Sample

Sample is a subset of population (Sekaran, Bougie, 2010, pp.

263). Sample on this research will be used to investigate the research

problems. This Research will use the probability sampling. Unrestricted

sampling design in Probability sampling is more commonly known as

simple random sampling; every element in the population has a

known equal chance of being selected as a subject.

n = 20

Thus, researcher takes 20 samples in this research by using the

method of simple random sampling. Questionnaires then are distributed

to 20 business people in Jakarta

3.5 Statistical Treatment

There are 3 (three) statistical tools used in this study, which are Likert

Scale, Weighted Mean, and Standard Deviation.

3.5.1 Likert Scale

The Likert scale is designed to examine how strongly subjects

agree or disagree with statements on a five-point scale with the

following anchors (Sekaran, Bougie, 2010):

Figure 3.3: Likert Scale

(Source: Sekaran, Bougie, 2010)

The Questionnaire uses Likert Scale and all statements that

express either a favorable and unfavorable attitude will be scaled

through Strongly Disagree, Disagree, Neither Agree Nor Disagree,

Agree, and Strongly Agree.

The figure of the questionnaire is shown below:

Figure 3.4: Likert Scale Questionnaire

(Source: Self Developed)

No. Statements 1 2 3 4 5

1

2

3

4

5

Note:

1. For Strongly Disagree

2. For Disagree

3. For Neutral

4. For Agree

5. For Strongly Agree

Each of the five responses would have a numerical value which

would be used to measure the attitude under investigation.

Likert Scales have the advantage that they do not expect a

simple yes / no answer from the respondent, but rather allow for degrees

of opinion, and even no opinion at all. Therefore quantitative data is

obtained, which means that the data can be analyzed with relative ease.

The Validity and Reliability testing must be done before the

questionnaire spreads to the respondents. Pre testing is conducted to

check if the statements are proper as research instrument.

3.5.2 Weighted Mean

Arithmetic mean computed by considering relative importance

of each items is called weighted mean. To give due importance to each

item under consideration, numberis called weight to each item in

proportion to its relative importance. Weighted Mean is computed by

using following formula (Emathzone.com, 2013):

Which means;

Where:

= Weighted Mean of the factors related

W = Corresponding Weight

X = A set of number designated / rate of importance

3.5.3 Standard Deviation

The Standard Deviation is a measure of how spreads out

numbers are. Standard Deviation is used when data is drawn

from a larger set chemistry.about.com (2013).

The sample standard deviation is used when a sample

of data is analyzed. In this equation:

s = sample standard deviation

N = number of scores in a sample

N-1 = degrees of freedom or Bessel's correction

x = value of a sample

x bar = mean or average of the sample

3.6 Data Analysis

In analyzing the data obtained, the researcher uses two major programs

that are statistic-related. The first program that the researcher uses is Microsoft

Excel. The employment of this program is intended to tabulate the data

obtained from questionnaires distribution. It simplifies the researcher to

analyze the data.

The second program is Statistical Package for Social Science (SPSS).

SPSS is commonly utilized by researchers to quantitatively examine the data

obtained from questionnaires distribution. It has been recognized to be helpful

to investigate statistical data. SPSS in this research was used to analyze

reliability, validity, weighted mean, factor analysis, classic assumption and

multiple linear regression analysis.

3.7 Reliability and Validity

3.7.1 Reliability Test

The first requirement of a good instrument was reliability. The

Reliability test of a measure indicates the extent to which it is without

bias (error free) and hence ensures consistent measurement across the

time and across the various items in the instrument. In other words, the

reliability of a measure is an indication of the stability and consistency

with which the instruments measures the concept and helps to assess

the goodness of measure (Sekaran, Bougie, 2010). Accurate

questionnaire may deflect the right question which is means when the

question is asked for several times, the interpretation would be the same

from one respondent to another.

Measurement of Reliability (Internal-Consistency) in this research will

use the Cronbach’s Alpha Coefficient; the equation is

(Janzengroup.net, 2013):

Where,

k = number of items

r = average correlation between any two items

α = reliability of the average or sum

3.7.2 Validity Testing

The purpose of validity testing is to eliminate the proper

question that will answer the research objectives. The Pearson product-

moment correlation coefficient (or Pearson correlation coefficient for

short) is a measure of the strength of a linear association between two

variables and is denoted by r. Basically, a Pearson product-moment

correlation attempts to draw a line of best fit through the data of two

variables, and the Pearson correlation coefficient, r, indicates how far

away all these data points are to this line of best fit (how well the data

points fit this new model/line of best fit) (Statistic.laerd.com ,2013).

Cronbach's alpha Internal consistency

α ≥ 0.9 Excellent

0.8 ≤ α < 0.9 Good

0.7 ≤ α < 0.8 Acceptable

0.6 ≤ α < 0.7 Questionable

0.5 ≤ α < 0.6 Poor

α < 0.5 Unacceptable

The valid data is a representative statement of variables that are ready

to spread to the respondents.

In Pearson Correlations, results are between -1 and 1. A result

of -1 means that there is a perfect negative correlation between the two

values at all, while a result of 1 means that there is a perfect positive

correlation between the two variables. A result of 0, on the other hand,

means that there is no linear relationship between the two variables.

Most research will very rarely get a correlation of 0, -1 or 1. Result

would be somewhere in between. The closer the value of r gets to zero,

the greater the variation the data points are around the line of best fit.

The Quantitative interpretation of the degree of linear

relationship existing is shown in the following range of values.

±1.00 perfect Positive (negative) correlation

±0.91 - ± 0.99 very high positive (negative) correlation

±0.71 - ± 0.90 high Positive (negative) correlation

±0.51 - ± 0.70 moderately positive (negative)

correlation

±0.31 - ± 0.50 low positive (negative) correlation

±0.01 - ± 0.30 negligible positive (negative) correlation

0.0 no correlation

Correlation r formula:

For any two variables, X and Y, the correlation coefficient between

them is given by the formula:

Where

n = number pair of scores

∑𝑥𝑦= sum of the products of pair scores

∑𝑥 = sum of x scores

∑𝑦 = sum of y scores

∑𝑥 ² = sum of squared x scores

∑𝑦 ² = sum of squared y scores

The first requirement of a good instrument was validity. Thus, the

researcher chooses Pearson Product Moment Correlation by using the

software SPSS 16.0 to fulfill the requirement of the instrument’s

validity.

3.8 Classic Assumption Test

Classical assumption is the statistical requirements that must be met in

multiple linear regression analysis (hellomgz.blogspot.com, 2013). In order to

use multiple regression models, classic assumption test need to implement such

as normality testing, heteroscedascity testing and multicollinearity.

Normality Test used to testthe independent variable(X) and the

dependent variable(Y) onthe resultingregressionequation, whethernormally

distributedornotdistributednormally. Normality Tests performed using the test

chart Histogram and P-P plots to test the regression model

residuals(dawaisimfoni.wordpress.com, 2013).

Heteroscedasticity Testgenerates chart patterns point spread

(scatterplot). In amultiple regression equation, it is neededto be testedfor the

sameornotthe varianceofthe residuals oftheobservationswithotherobservations.

If theresidualshave thesame variance, it is calledhomoscedascity. Andif

the residuals have thedifference variance, it is called

heteroscedascity(dawaisimfoni.wordpress.com, 2013).Multiple regressions

equation is good if there is noheteroscedasticity.

Analysis of heteroscedasticity assumption SPSS output through the

scatterplot graph between Z prediction (ZPRED) for the independent variable

(X axis = Y outcome prediction), and residual value (SRESID) is the dependent

variable (Y-axis = Y predicted - Y rill).

Multicollinearity test aims to test whether the regression model found

a correlation between the independent variables. Good Regression model

should not have correlation between independent variables

(dawaisimfoni.wordpress.com, 2013). Dawaisimfoni.wordpress.com (2013)

added that Multicollinearityoccurswhenthe coefficient

ofcorrelationbetweenindependent variablesis greater than0.60. And

multicollinearity occurs when the VIF value is more than 10 and tolerance

values less than 0.1.

3.9 Multiple Regression Analysis

Multiple regression is a statistical tool used to derive the value of a

criterion from several other independent, or predictor, variables. It is the

simultaneous combination of multiple factors to assess how and to what extent

they affect a certain outcome (technopedia.com, 2013).

Multiple regression is a statistical method used to examine the

relationship between one dependent variable Y and one or more independent

variables Xi. The regression parameters or coefficients bi in the regression

equation are estimated using the method of least squares (medcalc.org, 2013):

There are 3 steps in doing Multiple Regression Analysis such as T-test,

F-test and coefficient of determination (R²):

T-test for the partial regression coefficientis intended to determinehow farthe

influence ofone variableindependent(perceived quality, brand awareness,

brand associations, and brand loyalty) individually inexplainingthe

dependentvariable(purchase decision).

F-Test is also used to determine the influence of perceived quality, brand

awareness, brand associations, brand loyalty together on purchase decision. If

F value > F table, Ho rejected and Ha accepted. Oppositely, if F value < F table,

then Ho accepted and Ha rejected.

The coefficient of determination (R²) was essentially measures how much the

ability of the model to explain the variations dependent variable. The

coefficient ofdetermination is between zero and one.