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THE INFLUENCE OF WORD OF MOUTH AND PRODUCT QUALITY TOWARD PURCHASING DECISION OF TUPPERWARE PRODUCT IN PADANG CITY

JOURNAL

BY ERLISMA 2008/11498

MANAGEMENT DUAL DEGREE PROGRAM ECONOMIC FACULTY PADANG STATE UNIVERSITY Graduation on 29 September 2012
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PENGARUH WORD OF MOUTH DAN KUALITAS PRODUK TERHADAP KEPUTUSAN PEMBELIAN PRODUK TUPPERWARE DI KOTA PADANG The Influence of Word of Mouth and Product Quality toward Purchasing Decision of Tupperware Product in Padang City Erlisma Economic Faculty Padang State University Jl. Prof.Dr. Hamka Kampus Air Tawar Padang Email : erlismaerlis@yahoo.com

ABSTRACT The purpose of this study is to identify the influence of word of mouth and product quality toward purchasing decision of Tupperware product in Padang city. Design/methodology that used in this research is a self administrated questionnaire spread to 102 respondent in Padang city that know Tupperware product but never buy Tupperware product. Results were analyzing by path analysis. Finding of this research are word of mouth and product quality have significant influence on purchasing decision of Tupperware product in Padang city. Product quality was found to be more influential on purchasing decision of Tupperware product in Padang city. Keyword: WOM, Product Quality, Purchasing Decision, Tupperware.

ABSTRAK Tujuan dari penelitian ini adalah mengidentifikasi pengaruh word of mouth dan kualitas produk terhadap keputusan pembelian produk Tupperware di kota Padang. Metode yang digunakan dalam penelitian ini menggunakan kuisioner yang disebarkan kepada 102 responden di kota Padang yang mengetahui produk Tupperware, tapi belum pernah membeli. Hasilnya di analisis dengan menggunakan analisis jalur. Hasil dari penelitian ini menemukan bahwa word of mouth dan kualitas produk memiliki pengaruh yang signifikan pada keputusan pembelian produk Tupperware di kota Padang. Dari hasil penelitian ini terlihat bahwa kualitas produk memiliki pengaruh yang lebih besar pada keputusan pembelian produk Tupperware di kota Padang. Kata kunci : WOM, Kualitas Produk, Keputusan Pembelian, Tupperware

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Introduction In the era of globalization, the development of information technology is running quickly, it will influence consumer to choosing a product. The availability of information that become higher cause consumers to compare product alternatives on the market before make a purchase. The technology also allows consumers to get reliable information from colleagues and relatives about a product or service. The development of information also makes consumer awareness of health issues is increasing. Especially the housewives, they now tend to prepare food for the family members and taken to use save plastic containers during outside activities of family members. This will not only save on household expenses, but also to ensure the safety of food that consumed by family member. One of the famous brand for plastic containers category in Indonesia is Tupperware. In Padang city, the using Tupperware products increasingly in demand as a plastic food storage containers or drinks. As stated by the General Manager of PT. Bundo Sustainable Earth, which is one of the authorized distributors Tupperware in the city of Padang, but the rise in demand was not accompanied by adequate product availability, this is an issue will be the causes a delayed reservation and be one of the factors that will influence which brand will be purchased by consumers at the stage of the purchase decision. The results of preliminary survey on 20 Tupperware users show that word of mouth considerable influence factor. The product
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quality becomes the consideration for consumer to make decision for buys Tupperware products. However, price remains a determining factor their final decision, and the price of Tupperware products are considered expensive. The concept is designed by Tupperware which is Tupperware party as a sales strategy in accordance with the concept of the application of strategic WOM marketing, which is buzz agent, where an agent promote the products into family gathering or meeting or in any other form, and they often get free samples in return from promoting such products. Based on the above explanation, researchers interested in conducting research entitled "The Effect of Word of Mouth (WOM) and Product Quality toward Purchase Decision Tupperware products in Padang City". Theoretical Overview Buying Decision Lamb et al (2010:170), purchasing decisions made by consumers after the consumers get information about products and develop products alternative to be purchased. Kotler (2003:204-208) specific purchasing process consists of the following sequence of events:problem recognition, information search, alternative evaluation, purchase decision and post purchase behavior. According to Pride & Ferrell (2010), the availability of the product will affect which brand to buy, the seller will also affect the selection of the final product to be purchased. According to Kotler and Armstrong (2008:181), there are two factors that affect consumer purchasing decisions, including the
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attitudes of others and unexpected situational factors, unanticipated events could change the purchase intention. Based on the model designed by Schiffman and Kanuk (2010:37) there are elements of the marketing mix of product, showing the relationship between the indirect perceptions of product quality to the purchase decision. Similarly, the socio-cultural factors and consumers psychological factors. Word of Mouth Solomon (2009) defines word of mouth (WOM) as information about a product come from an individual to another individual, and as we get information from people we know, WOM becomes more reliable than the information we get from other marketing channels and WOM communication is very strong especially when consumers are likely not familiar with the product category. Word of Mouth from Receiver Perspective In this study, which will see is word of mouth from the receiver perspective. Merton in Sweeney (2007) states that "WOM is a process of personal influence, in which interpersonal communication between a sender and receiver can change the receiver's behavior or attitudes". The importance of word of mouth on the receiver perspective also support by Godes and Mayzlin statement (2004) in Fang (2011), stating that consumers rely on word of mouth to make purchasing decisions, including the purchase of new products. Arndt (1976) in Sweeney et al (2007) suggested that WOM has a very strong influence on the perspective of the recipient, and several factors will enhance this effect,

including the characteristics of the sender and receiver of WOM and their relationship, in the context of interpersonal and non- interpersonal factors affect each other and the characteristics of the message. Product Quality According to Shaharudin et al., (2010) product is a key element in delivering value to customers. Product is more than just a real object, and also included in its service features, design, packaging, and others. Hardie and Walsh (1994) in Shaharudin et al., (2010) stated that the quality of the products derived from the difference between the actual products and alternative products that available or supplied by a particular industry. It can also be determined from the way customers perceive the quality of products on the market (Wankhade and Dabade, 2006) in Shaharudin et al., (2010). The perception of the product quality is the most important factor in the decision to choose, especially when the level of competition within the market that it is very strong and competitive price (Shaharudin et al: 2010). In general, the product quality has an effect on the desire to make a purchase and repeat purchase decisions, therefore the quality of the product will influence the purchasing decisions of consumers. Acceptable product quality are the main elements that influence consumer buying behavior. Dimensions of Product Quality Kotler and Keller (2007:9) has revealed the presence of eight criteria for product differentiation are the form, features, quality performance, conformance quality, durability,
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reliability, easy to fix and style. Meanwhile, according Tjiptono (1997: 25), the dimensions of the product quality includes performance, features, reliability, conformance to specifications, durability, asthethic. Product quality is generally confined to the postpurchase (Holbrook & Corfman, 1985; Roest and Pieters, 1997), while Rust and Oliver (1994) suggests that perceptions of product quality can be assessed in the idea of prepurchase and post-purchase. The Relationship between the Word Of Mouth (X1) and Product Quality (X2) The influence of the Word of Mouth from the receiver perspective makes a relationship between the Word Of Mouth (X1) and Product Quality and will influence consumers purchasing decisions. According to (Bone, 1995) in Sweeney et al (2007) that word of mouth has a strong influence on perceptions of products and services, leading to a change in the decision, value ratings, and propensity to buy. Previous research Research conducted by Sari (2008) The analysis of Product Quality Influence on Decision of customer Choosing Mudarabah Deposit at PT. Bank Negara Indonesia (BNI) Syariah Persero, Tbk Branch Medan. The results of this study showed all indicators of product quality (performance, appearance, reliability, service, aesthetics and perceived quality) have a positive influence on the dependent variable, namely Decision in Choosing Mudharabah deposits.

Research that conducted by Amalia (2011) Analysis of electronic word of mouth Effect toward Consumer Decisions to choose ETicketing airline Agent. The results of this study indicate that external information which is E-WOM have significant influence in decision to select E-ticketing airline agent. Research conducted by Rahman (2011) Analysis of Saving Product Qualitys Effect and Word of Mouth Marketing toward Customer Purchasing Decision (Case Study: Customer of Monas headquarter PT Bank DKI). The results of this study indicate that the variable savings quality and word of mouth marketing significantly influence customers purchasing decisions. Research Sweeney et al (2007) on "Factor Influencing word of mouth effectiveness: receiver perspective". The results of this study indicate that the ability of word of mouth that affects the perception or action depends on the nature of the relationship between the sender and receiver of WOM, the strength of the message and its delivery, as well as a variety of situational factors and personal factors. Research Shaharudin et al (2010) which is the relationship between product quality and purchase intention: The case of Malaysia's national motorcycle / scooter manufacturer. The results showed that the level of customer perceptions have no significant impact on consumer purchasing decisions. Good or bad the consumer perception of product quality still encourages customers to buy or not buy a motorcycle / scooter.

Conceptual Framework When consumers have used a product, they will tell you the excess or deficiency of the product or service to the people closest to them like family and friends. If prospective buyers get more positive stories about a product or service from the people closest to them who already have experience, this can affect purchasing decision, which is consumer will know what things are the strengths and weaknesses of a product that will lead to the purchasing decisions . Similarly, the effect of product quality on purchase decisions, the notion that a product quality can influence consumers to buy a product (Shaharudin et al., 2010). The fact that the assessment of the product quality does not require any past experience with a particular product. Even so, marketing experts agree that the existence of an interaction or there are directly or indirectly impact between product quality and purchasing decisions. Word of mouth is an informal communication has an influence on the perception of product quality in the market; word of mouth will positively affect the perception of the quality of a product. In accordance with the theory stated by Bone (1995) in Sweeney et al (2007) that word of mouth has a strong influence on perceptions of products and services, leading to a change in the decision, value ratings and the tendency to buy. Hypothesis Based on the formulation of research problems and the theory that underlying, the hypothesis can be formulated as follows:

H1: There is significant influence between word of mouth on purchase decisions of Tupperware products Padang city. H2: There is significant influence between the product qualities on purchase decision of Tupperware products in Padang City. H3: There is a significant influence of word of mouth toward product quality. Research Methods This research is a causal explanatory. The data used in this study is primary data collected directly from the data on the answers of the respondents to the questionnaire were given, that associated with variable word of mouth, the product quality and purchasing decisions. Method of Data Analysis This study used descriptive analysis with conducted the descriptive analysis of variable by displaying data in a frequency distribution table, calculate the percentage of the mean, and the total performance of respondents to interpret. This study also uses inductive analysis by Classic Assumptions Test, the normality test and heterocedastisity test. In this study, data were analyzed with path analysis were performed using correlation and regression analysis using SPSS. Structure of path analysis in this study is as follows:

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on the purchasing decisions of Tupperware products. On the variable product quality, it consist of 18 items divided into 5 indicator. The results showed that performance indicators have an average score of 4.12 with a TCR of 82.47%. This illustrates that overall respondents stated that they felt the performance of Tupperware products are very good. For durability indicator is equal to 4.12 with a TCR of 82.54%, which means that respondents categorized as very strong that endurance Tupperware products are guaranteed by Tupperware. Indicator feature has an average score of 79.80% 3.99 TCR. For reliability indicators had an average score of 4.07 with a TCR of 81.37%. It can be concluded respondents felt reliability of Tupperware products are very good. As for the design of indicators had an average score of 3.99 with a TCR of 79.83%. This means that overall the respondents stated that they felt the design of Tupperware products is very good. Analysis of Research Findings Classical Test Assumptions
Normality Test

Figure I. Path Analysis Structure Where : Pyx1-Pyx2 = direct influence of independent variable toward dependent variable Rx2x1 = relationship between independent variable Results and Discussion
Description Characteristics of Respondents

The results from the characteristics of the respondents indicated that the majority of respondents in the study were between 20-24 years (34.3%). By sex, the majority of respondents were female (81.37%). Based on the type of work, the majority of respondents were civil servants (31.4%). As for the level of spending, the majority of respondents were found mostly the respondent expenditure is 1-2 million per month (35.3%), and by region, the majority of respondents were from Koto Tangah districts (24.5%). Description of Research Variables Word of mouth variable consists of 4 sub-indicators and 7 item statement. From the results, the variable WOM has an average score of 3.86 with a TCR of 77.31%. This illustrates that overall respondents stated that they felt a variable word of mouth has a strong influence
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The results of normality test that using the test statistic PP plot shows that the value of PP Plots located around the diagonal line and PP Plots do not stray far from the diagonal line. It means dristribusion of data is normal. Heteroscedasticity test Heterocedastisity test performed using a scatter plot graph analysis, results showed residual spread is regular. This can be seen in
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the plot that makes up a particular pattern (Idris, 2011: 86). Thus be concluded that the symptom does not occur because the regression equation heterocedastisity meet the assumptions of homogeneity. F Test From the above test results obtained F F-hitung equal to 43.453 with the sig. 0.000 <0.05. This means based on the F test, it find that word of mouth (X1) and product quality (X2) as a whole has a significant influence on the purchase decision (Y). Path Analysis (Path Analysis) The results of the analysis showed that all variables causes (exogenous) as word of mouth and product quality significantly because all the value of Sig <0.05. From the results of the data processing, for the variable word of mouth obtained t-hitung for 2.773 at sig. 0.007 <0.05 means that Ho is rejected and Ha accepted. This means that word of mouth significantly influence the purchasing decision of Tupperware products in Padang city. For product quality variable obtained thitung of 5.960 on the sig. 0.000 <0.05 means that Ho is rejected and Ha accepted. This means that product quality significantly influence the purchasing decisions of Tupperware products in Padang. For word of mouth influence on product quality, the analysis showed a significant effect of word of mouth on product quality. With t-hitung equal to 6.482 in the sig. 0.000 <0.05. That is word of mouth as significant influence on product quality of

Tupperware. From calculation above, path coefficients obtained as follows:

Figure II. Path Analysis Coefficient Here is the recapitulation the result of data processing: Table I. Recapitulation of Data Processing Result

Discussion of Research Findings Influence of Word Of Mouth toward Purchasing Decisions Tupperware Products In this research, word of mouth influence purchasing decisions of Tupperware
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product as much as 0.242. It means that word of mouth influence the purchasing decisions of Tupperware products in Padang city as much as 0.242. Therefore, marketers should pay attention to this factor, because word of mouth has a significant influence. Influence Product Quality toward Purchasing Decisions Tupperware Products In this research, the quality of the product effect of 0.521 on purchase decisions Tupperware products in the city of Padang. This means that the quality of products significantly influence the purchasing decisions of Tupperware products 0.521. It can be concluded that the quality of products such as performance, durability, features, and design reability influence consumers in making purchasing decisions Tupperware products in the city of Padang. Word of Mouth Influence toward Product Quality Based on the results of hypothesis testing found that word of mouth significantly influence the quality of Tupperware products. It is identified that the word of mouth affects product quality as much as 0.544. This means that the more positive WOM respondents get from people they know, then the notion of quality Tupperware products in their thinking will get better. Conclusion Based on the hypothesis, it can conclude that word of mouth significantly influence the purchasing decisions of Tupperware products in Padang city. For the variable product quality,
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the analysis shows that the quality of products significantly influence the purchasing decisions of Tupperware products in the city of Padang. Based on the hypothesis is also known that word of mouth significantly influence the quality of Tupperware products. From the second dependent variable that is word of mouth and product quality, the most dominant variable is the quality of the product. This means that the influence of the quality of product is greater than the word of mouth on purchase decisions Tupperware products in Padang city. Suggestion 1. Improving the quality of products to enhance the buying decision Tupperware products through: a. Feature: Clarify the mechanisms lifetime warranty provided to consumers. Increase the collection of new recipes in the product catalog as well as on the official website of Tupperware. Increase the range of useful tips in the use of Tupperware. b. Design: Display the logo in each unit of product produced and the look of the Tupperware logo or design the look of the logo that is remindable and recognizable by consumers. Producing more products vary in terms of design or style.

2. Giving attention to the word of mouth about Tupperware products to attract consumers make purchasing decisions, by increasing the frequency of tupperware party held in a family event like a family gathering that will improve the level of information obtained from relatives, so it will impact on purchasing decisions. 3. Consider to begin producing the product at a price that is affordable for the middle class, because some people still think that the price of Tupperware products are too expensive. 4. Distributing Tupperware products at kiosks or shops with the goal of buyers is easier to find Tupperware products to be purchased. REFERENCE Hawkins, Del I.et al.2010. Consumer Behavior: Building Marketing Strategy, Eleventh Edition. New York : McGraw Hill Companies Inc. Idris. 2011. Aplikasi Model Analisis Data Kuantitatif dengan program SPSS. Padang: UNP Press. Kotler, Philip. 2003. Marketing Management, Eleventh Edition. New Jersey : Pearson Education, Inc. Kotler, Philip dan Keller, Kevin Lare. 2007. Manajemen Pemasaran, edisi kedua belas. Jilid 1. Diterjemahkan oleh Benyamin Molan, Jakarta: Indeks. ,2009. Manajemen Pemasaran, edisi ketiga belas. Jilid 1. Diterjemahkan oleh Bob Sabran, MM. Jakarta: PT. Gelora Aksara Pratama.

dan Amstrong, Gary. 2008. Prinsip-Prinsip Pemasaran. Edisi 12.Jilid 1. Diterjemahkan oleh Bob Sabran, MM. Jakarta: Erlangga. dan Amstrong, Gary. 2008. Prinsip-Prinsip Pemasaran. Edisi 12.Jilid 2. Diterjemahkan oleh Bob Sabran, MM. Jakarta: Erlangga. Lamb, Charles W. et al.2010.Marketing, Tenth Edition. United States: South Western Cengage Learning. Pride, William M., Ferrel,O.C. 2010. Marketing, Fiftheen Edition. United States : South Western Cengage Learning. Schiffman, Leon G & Kanuk, Leslie Lazar. 2010. Consumer Behavior, Tenth Edition. New Jersey : Prentice Hall. Shaharudin, Mohd R.et al. (2011). The relationship between product quality and purchase intention: The case of Malaysias national motorcycle/scooter manufacturer dalam African Journal of Business Management Vol. 5(20), pp. 8163-8176 Sitepu, Nirwana SK. (1994). Analisis Jalur (Path Analysis). Bandung: Unit Pelayanan Statistika Jurusan Statistika, FMIPA UNPAD. Solomon, Michael R. 2009. Consumer Behavior: Buying, Having, and Being. New Jersey : Prentice Hall. Tjiptono, Fandy. (1997). Strategi Pemasaran. Yogyakarta : Andi Yogyakarta.

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Jurnal : Amalia, Betty. (2011). Analisis Pengaruh Electronic Word Of Mouth Terhadap Keputusan Konsumen Memilih Agen ETicketing Pesawat Terbang. Bogor. Program Studi Manajemen dan Bisnis Sekolah Pascasarjana Institut Pertanian Bogor Fang, Cheng-His et al. 2011. Product type and word of mouth : a dyadic perspective. Jurnal of Research in Interactive Marketing, vol. 5 No.2/3,189-202. Jurnal-sdm.blogspot.com.(2009). Defenisi,klasifikasi produk dan dimensi kualitas produk (online ) http://jurnalsdm.blogspot.com/2009/07/prod uk-definisi-klasifikasi-dimensi_30.html (diakses 14 April 2012) Rahman, Nico.(2011). Analisis pengaruh kualitas produk tabungan dan word of mouth marketing terhadap keputusan pembelian nasabah. Jakarta. Fakultas Ekonomi dan Bisnis - Jurusan Manajemen Universitas Bina Nusantara. Sari, Dewi Comala.(2008). Analisis Pengaruh Kualitas Produk Terhadap Keputusan Nasabah Memilih Deposito Mudharabah PT. Bank Negara Indonesia (BNI) Syariah Persero, Tbk Cabang Medan. Medan. Sekolah Pasca Sarjana Universitas Sumatera Utara. Sweeney, Jillian C. et al. 2007. Factor influencing word of mouth effectiveness:

receiver perspectives. European Journal of Marketing vol.42 No 3/4 , 344-364.

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ATTACHMENT

PATH ANALYSIS
1. Path Analysis Coefficient
Variables Entered/Removed(b) Model 1 Variables Entered KUALITAS_ PRODUK, WOM(a) Variables Removed . Method Enter

a All requested variables entered. b Dependent Variable: KEPUTUSAN_PEMBELIAN Model Summary Adjusted R Square Std. Error of the Estimate .527

.684(a) .467 .457 a Predictors: (Constant), KUALITAS_PRODUK, WOM ANOVA(b) Sum of Squares 24.144 27.503

Model 1

R Square

Model 1

Regression Residual Total

df 2 99

Mean Square 12.072 .278

F 43.453

Sig. .000(a)

51.647 101 a Predictors: (Constant), KUALITAS_PRODUK, WOM b Dependent Variable: KEPUTUSAN_PEMBELIAN Coefficients(a) Unstandardized Standardized Coefficients Coefficients Model 1 B -.696 .047 Std. Error .500 .017 Beta .242

t B -1.391 2.773

Sig. Std. Error .167 .007 .000

(Constant) WOM KUALITAS_PRODUK

.049 .008 .521 5.960 a Dependent Variable: KEPUTUSAN_PEMBELIAN

Correlations KUALITAS_PR ODUK .544(**) .000 102 .544(**) .000 102 1

WOM

Pearson Correlation Sig. (2-tailed) N

WOM 1

KUALITAS_PRODUK

Pearson Correlation Sig. (2-tailed) N

102 102 ** Correlation is significant at the 0.01 level (2-tailed).

1. Analisis jalur (pengaruh word of mouth terhadap kualitas produk)


Variables Entered/Removed(b) Variables Entered Variables Removed

WOM(a) . Enter a All requested variables entered. b Dependent Variable: KUALITAS_PRODUCT Model Summary Model 1 R R Square Adjusted R Square .289 Std. Error of the Estimate 6.401

Model 1

Method

.544(a) .296 a Predictors: (Constant), WOM

ANOVA(b) Model 1 Sum of Squares Regression Residual Total 1721.328 4096.750 5818.078 Df 1 100 101 Mean Square 1721.328 40.968 F 42.017 Sig. .000(a)

a Predictors: (Constant), WOM b Dependent Variable: KUALITAS_PRODUCT Coefficients(a) Unstandardized Standardized Coefficients Coefficients Model 1 B 38.796 Std. Error 4.673 Beta .544

t B 8.303 6.482

Sig. Std. Error .000 .000

(Constant) WOM

1.109 .171 a Dependent Variable: KUALITAS_PRODUCT

Correlations KUALITAS_PR ODUCT .544(**) .000 102 .544(**) .000 102 1

WOM

Pearson Correlation Sig. (2-tailed) N

WOM 1

KUALITAS_PRODUCT

Pearson Correlation Sig. (2-tailed) N

102 102 ** Correlation is significant at the 0.01 level (2-tailed).