CHAPTER I INTRODUCTION

1.1 Research Object Overview 1.1.1.1 An overview of PT Sumber Alfaria Trijaya Tbk Founded in 1989 by Djoko Susanto and family, PT Sumber Alfaria Trijaya Tbk (Alfamart/Company) started business in the field of trade and distribution. In 1999, it expanded the business to minimarket. Exponential expansion began in 2002 with the acquisition of 141 Alfa Minimart outlets and a new name ‘Alfamart’ (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013). Currently, Alfamart is at the forefront of the retail business, serving more than 2.7 million customers each day in more than 8,500 stores across . Supported by more than 90,000 employees, Alfamart is currently one of the largest job providers in Indonesia (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013). Alfamart carries out its vision, mission and philosophy to be a community store. Therefore, in addition to trying to meet the needs and convenience of the customer by providing basic needs at affordable prices, convenient shopping place as well as an easily accessible location (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013). The Company is also seeks to improving the community welfare through Corporate Social Responsibility programs based on 6 pillars: Alfamart Care, Alfamart Smart, Alfamart Sport, Alfamart Clean and Green, Alfamart SME’s and Alfamart Vaganza. In addition, Alfamart also empowers local people and institutions through franchising schemes that give rise to new entrepreneurs and new jobs (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013). Alfamart committed to fostering a service culture at each organizational level and for every stakeholder. It is the value that stands out as a differentiating factor and competitive advantage in order to gain a place in the hearts of more

1 people and win the competition (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013). Alfamart has received awards from various well-known institutions: Service Quality Award 2010-2013, Top Brand Award 2008-2013, Brand Award 2008-2013, Indonesia’s Most Admired Company 2009-2013, SPEX2 Award 2011-2012, Digital Marketing Award 2010-2013, Word of Mouth Marketing Award 2009-2013, Middle Class Brand Champion Award 2013, Woman No.1 Choice award 2013 (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013).

1.1.2 Vision, Mission and Values 1) Vision Statement “To be Indonesia’s largest and globally competitive widely owned retail distribution network that empowers small entrepreneurs and fulfills customer needs and expectations” 2) Mission Statement a. To satisfy customer needs and expectations by focusing on high quality products and services. b. To implement ethical business practices, to be the best in all of our actions. c. To develop entrepreneurial spirits and skills in the Company and the society. d. To develop a reliable, healthy and growing organization which benefits all stakeholders. 3) Values 2IK3 Values a. High Integrity Honest, discipline, and consistent in working based on ethics as well as being responsible towards the duties.

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b. Innovation for Better Improvement Work creatively, committed to make continuous improvements in work methods. c. Highest Quality and Productivity Able to perform tasks as well as being able to focus on better work outcomes. d. Teamwork Actively involved as well as encouraging team spirit and harmony. e. Customer Satisfaction through the Best Services To have high initiative to meet needs and to ensure customer satisfaction.

1.1.3 Brand Identity Figure 1.1 is Alfamart Logo. “Alfa” is the first letter in Greek alphabet arrangement which has a value of one. The word “Alfa” in Alfamart logo means Alfamart always wanted to be number one in the field they do. The blue color in the “Alfa” word means loyalty and perseverance, means that Alfamart and their employee always loyal and gives the best to the customer. And certainly they also have perseverance in carrying out the task to continue to push Alfamart be the best. (Source: http://jhekos.blogspot.com/, cited on March 2015) The red color in “mart” word means courage and a strong desire that characterizes the word, means that Alfamart will always be brave and strong desire to become the best in the field. (Source: http://jhekos.blogspot.com/, cited on March 2015) The presence of two lines under the word “Alfamart” in the logo is an affirmation for the word. While the red color has meaning brave and strong desire, and yellow which means glory and greatness means that Alfamart will always be brave and have a strong desire to achieve success and become the best in their field. (Source: http://jhekos.blogspot.com/, cited on March 2015)

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Figure 1.1: Alfamart Logo with Pantone Source: http://www.alfamartku.com, cited on November 2014

Figure 1.2 is Albi the mascot of Alfamart. Albi, our friendly bee is a sweet guy ready to jump in anytime to help anyone in need for help. It represents Alfamart employee who is readily available to assist customers with sincere dedication to serve. Albi fosters communal living and goals, avoids conflicts, and is insightful of surrounding changes. He epitomizes Alfamart’s commitment to achieving a common goal: Fulfilling the needs of Indonesian households with quality products at competitive prices and with friendly services, by embracing the surrounding community and healthy competition. (PT Sumber Alafaria Trijaya Tbk Annual Report, 2013)

Figure 1.2: Albi the Mascot Source: http://www.alfamartku.com, cited on November 2014

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1.1.4 Organization Structure There are 9 (nine) divisions in Alfamart’s organization structure which are operation, finance, property and development, information technology, marketing, human capital, merchandising & procurement, franchise, and corporate affairs. Board of Commissioners is the highest position in the Alfamart’s organization structure.

Board of Commissioners

Audit Committee

Board of Directors

Corporate Audit

Operation Finance

Property and Development Information Technology

Human Capital Marketing

Franchise Merchandising & Procurement

Corporate Affairs

Figure 1.3: Alfamart’s Organization Structure Source: Company 2013 Annual Report

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1.2 Problem’s Background 1.2.1 Indonesia’s Current Economic Condition Table 1.1 shows Gross Domestic Product (GDP) per Capita of Southeast Asia country from 2009 until 2013. Indonesia’s GDP per capita in 2013 is about $1,731. Even though Indonesia is not the biggest GDP per capita compared with another Southeast Asia country, but Indonesian GDP is quite big for foreign company to expand their market.

Table 1.1: GDP per Capitra Southeast Asia in (USD) GDP Per Capita Southeast Asia in (USD) Country 2009 2010 2011 2012 2013 Singapore 30,750 29,601 33,380 34,378 33,988 Brunei 25,186 24,341 24,586 24,746 24,947 Malaysia 6,185 5,984 6,302 6,512 6,764 Thailand 3,104 2,940 3,163 3,158 3,350 Indonesia 1,451 1,498 1,570 1,650 1,731 Philippines 1,332 1,325 1,403 1,433 1,501 Vietnam 775 808 854 895 931 Laos PDR 561 591 628 666 707 Cambodia 588 580 605 637 671 Source: Tradingconomics, 2014

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Figure 1.4 shows GDP per Capita growth of Indonesia from 2009 - 2013. Indonesian GDP per Capita is in the uptrend from 2009 until 2012. In 2013 Indonesia experienced declining growth of GDP per capita by 0.29%.

1,800 6% 1,750 5.09% 5% 1,700 4.80% 4.90% 1,650 4% 1,600 GDP per Capita 1,550 3.23% 3% (USD 1,731 1,500 % Change 1,650 2% 1,450 1,570 1,400 1,498 1,451 1% 1,350 1,300 0.00% 0% 2009 2010 2011 2012 2013

Figure 1.4: Indonesian Annual GDP per Capita Growth

However, in table 1.2 shows the Gross Domestic Product (GDP) in Indonesia expanded 5.72 percent in the fourth quarter of 2013 over the same quarter of the previous year. GDP Annual Growth Rate in Indonesia is reported by the Statistics Indonesia. GDP Annual Growth Rate in Indonesia averaged 5.43 Percent from 2000 until 2013, reaching an all-time high of 7.16 Percent in the fourth quarter of 2004 and a record low of 1.56 Percent in the fourth quarter of 2001. Indonesia can categorize as large economy in South East Asia supported with the growth of GDP. Industry accounts for the largest share of GDP (46.5 percent of total GDP). Within industry, the most important is manufacturing, which has been one of the main growth, engines (24 percent of total output), Mining and quarrying accounts for 12 percent, construction for 10 percent and electricity, gas and water supply for 0.75 percent. Services constitute 38 percent of total GDP. Within services, the most important are trade, hotel and restaurants (around 14 percent of GDP); transport and communication (7 percent of GDP); finance, real estate and business services (7 percent of GDP) and government

7 services (6 percent). Agriculture accounts for the remaining 15 percent (Trading Economics: 2014). BadanPusatStatistik (, Statistics Indonesia) article stated that at the fourth quarter of 2013 the Gross Domestic Product (GDP) of Indonesia grew by 5.72 percent compared to the fourth quarter GDP of 2012. Even though GDP fourth quarter of 2013 dropped by 1.42 percent compared to Quarter GDP III- 2013. Decreasing of GDP was caused by a decline in the agricultural sector by 22.5% due to the seasonal cycle, but from the trade sector it was increase about 1, 47%. (Suryamin: 2014)

Table 1.2: GDP Growth of Indonesia from 2008 to 2013 Indonesia GDP Annual Growth Rate Year Q1% Q2% Q3% Q4% Average 2008 6.24 6.38 6.41 5 6.0075 2009 4.53 4.08 4.16 5.43 4.55 2010 5.69 6.17 5.8 6.9 6.14 2011 6.5 6.5 6.5 6.5 6.5 2012 6.3 6.4 6.17 6.11 6.245 2013 6.03 5.81 5.63 5.72 5.795 Source: Tradingeconomics | Badan Pusat Statistik, 2014

GDP reflects the economic progress condition of a country. Increasing GDP’s of a country it means the economics of a country is grown also the purchasing power and living standards will grown, and it will affect to the lively hoods of the people. Gross Domestic Product is the market value of all final goods and services produced during a given period by factors of production located in a country" (Case &Fair: 2009). Improved purchasing power and living standards have ensured the continued shift of Indonesian consumers towards buying the import retail industry product, and away from the more traditional practice of buying from traditional market to modern retail outlets.

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1.2.2 Indonesia’s Current Retail Market Condition Retail industry is a kind of business that the process is about selling finished products to the end users. Retail shops could be found in wide range of formats, from large to small, from hypermarkets and department stores through convenience stores and general stores. There are a lot of kind of retail industry, It primarily includes six sub categories: food & general retail, fashion apparels, fast food restaurants, fast manufacturing consumer goods (FMCG), luxury products and electronic appliances & consumer durables (GBGIndonesia, 2012). Figure 1.4 shows Indonesia retail sales value share from 2002 – 2011. Minimarket value share has increase about 17.5 % from 2002 – 2011. Meanwhile, traditional market retail sales value share has decline about 19% from 2002 – 2011. Minimarket has slowly takeover traditional market retail sales value share.

100% 4.9 10.2 90% 22.4 20.2 80% 22.2 70% Minimarket 21.8 60% 50% /Hypermark 40% 74.8 et 67.6 30% 55.8 Traditional Market 20% 10% 0% 2002 2005 2011

Figure 1.5: Indonesia Retail Sales Value Share Source: Kontan March 4-10, 2013

Convenience stores are expanding rapidly in Indonesia. Following the introduction of 7-Eleven in 2009, the stores have grown in popularity amongst young consumers and students. Convenience stores differ from Indonesian minimarkets in that they offer fewer SKUs (Stock Keeping Units) than minimarkets while offering ready to eat foods and a dining area. Locally owned

9 minimarkets are progressively expanding to residential and office areas throughout Java, Bali and other provinces. Minimarkets are in direct competition with traditional independent small grocers (warungs), on the basis of price, cleanliness, food safety, and comfort. Independent small grocers face this challenge by offering personalized, flexible services to their community (Global Agricultural Information Network, 2013). Minimarkets, convenience stores, and other shops carry a wide range of convenience food items such as readymade meals, bakery products, processed foods, ice cream, and beverages. They sometimes carry a limited offering of fresh fruits and are open 24 hours. In addition to food and beverages, minimarkets also provide train tickets, concert and sporting event tickets, pre-paid mobile phone credits, ATMs, Citilink airline tickets, laundry, bill payment services (electricity, motorcycle loan payments), BNI bank and Western Union remittances, taxi ordering, and online shopping and delivery (within the region). Franchising is driving the rapid growth of minimarkets and convenient stores (Global Agricultural Information Network, 2013). The Indonesian retail sector began its rapid expansion in 1999, when a Presidential Decree (No. 96/2000 and 118/2000) allowed Carrefour, a French retailer, to expand retail operations in Jakarta. As other retailers followed, the Indonesian retail sector became more competitive, benefitting consumers and taking market share from traditional retail outlets. Foreign retailers in Indonesia include Carrefour (Operated by CT Corp/PT Trans Retail), Giant, Lotte Mart (formerly Makro), Lion Superindo, , Seven Eleven, , Family Mart and . Some modern retailer chains have multi-format outlets. Hypermarket, , convenience shops and minimarkets are all present in Jakarta (Global Agricultural Information Network, 2013).

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Table 1.3 shows Indonesia’s grocery retailers brand shares from 2009 until 2012. Alfamart brand shares slowly increasing from 2009 until 2012 by 0.9%.

Table 1.3: Indonesia’s Grocery Retailers Brand Shares Brand Company 2009 2010 2011 2012 Wholesale/Hypermarket Carrefour Trans Retail Indonesia, PT 1.5 1.4 1.5 1.4 Hypermart Matahari Putra Prima Tbk, 0.9 1.0 1.0 1.1 PT Giant Hero Supermarket Tbk, PT 0.9 0.9 1.0 1.1 Lotte Mart Lotte Shopping Indonesia, - 0.0 0.0 0.1 PT Supermarket Superindo Lion Superindo – Gelael, 0.3 0.3 0.4 0.4 PT Alfa Midi Midi Utama Indonesia Tbk, 0.1 0.2 0.3 0.4 PT Foodmart Matahari Putra Tbk, PT 0.1 0.1 0.1 0.1 Hero Hero Supermarket Tbk, PT 0.1 0.1 0.1 0.1 Minimarket/ Alfamart Sumber Alfaria Trijaya, PT 1.6 2.0 2.3 2.5 (Minimarket) Indomart ( Indomarco Prismatama, PT 1.2 1.5 1.8 2.0 Minimaket) Circle K Indonesia Utama, PT 0.1 0.1 0.1 0.1

Others 93.4 92.5 91.5 90.8 Source: Euromonitor, 2013

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1.2.3 Indonesia’s Current Minimarket Market Condition Minimarkets are rapidly growing in popularity throughout urban and suburban Indonesia. This is especially true in cities outside of Jakarta. Indonesian minimarkets carry essential staple goods, some frozen items, and fresh fruits. They are located close to residential areas, office buildings, or areas with high footfalls. Most minimarket chains have their own distribution facilities. Purchasing from manufacturers, importers or distributors is centralized and items can be delivered to a central warehouse or directly to stores. Imported fruits are available in some of these stores (Global Agricultural Information Network, 2013). Table 1.4 shows the number of convenience store/minimarket outlets in Indonesia. There are over 15,000 numbers of convenience and/or minimarket in Indonesia. Alfamart has 7,064 outlets by 2012 including 2,055 franchise store.

Table 1.4: Convenience Store/Minimarket Outlets in Indonesia Retail Name Ownership No. of Locations Purchasing & Market Outlets (city/region) Agent Type Type 2012 Alfa Sumber 7,064 Jakarta, Agent/Importer, Minimarket Afaria (Includes Bogor, Distributor. Trijaya, PT 2,055 Bekasi, franchise , (Local) store) Java, Bali, Lampung. Circle K CircleKa As of June Jakarta, Agent/Importer, (convenience) Indonesia 2013 300 Bogor, Distributor. Utama, PT outlets. Batam, Bandung, Franchise Bali, Yogyakarta.

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Indomaret Indomarco 8,039 outlets Java, Madura, Agent/Importer, Prismatama, (Includes Bali, Sumatra, Distributor. PT 2,837 Sulawesi franchise (Local) stores) Mini-mart (Sentra 80 outlets Bali Agent/Importer, (convenience) Ritelindo, PT) Distributor.

(Local) Star Mart (PT Hero 151 Outlets Jakarta Agent/Importer, Supermarket Distributor. Tbk, PT)

(Local) Yomart Yomart 203 Outlets West Java Agent/Importer, Rukun Selalu, Distributor. PT & Griya Pratama, PT

(local) Lawson Midi Utama 80 outlets Jakarta, Agent/Importer, (Convenience) Indonesia Bogor, Distributor. Tbk, PT Depok, Tangerang. Seven Eleven Modern Putra As of may Jakarta, Agent/Importer, Indonesia, PT 2013 125 Tangerang Distributor. outlets Franchise Family Mart (P Fadjar As of march Jakarta Agent/Importer, Mitra Indah) 2013 6 Distributor.

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outlets Franchise Ministop Supra Boga 1 Outlet Tangerang Agent/Importer, Lestari Selatan Distributor.

Franchise Source: Global Agricultural Information Network, 2013

1.2.4 Alfamart’s Current Condition Another data to support this research is Alfamart’s annual revenue from 2009 until 2013. Figure 1.5 shows Alfamart’s annual revenue. Alfamart’s revenue grows in positive direction every year. The highest revenue happened in 2013, it is Rp 34,897 billion.

40,000 45.00% 40.00% 35,000 38.62% 35.00% 30,000 33.18% 31.06% 30.00% 25,000 28.10% 25.00% 20,000 Revenue (Rp Billion) 34,897 20.00% 15,000 % Change 27,177 15.00% 10,000 20,735 15,569 10.00% 5,000 11,231 5.00% 0 0.00% 0.00% 2009 2010 2011 2012 2013

Figure 1.6: Alfamart’s Annual Revenue Source: Alfamart’s Annual Report 2013 presentation

Alfamart net profit happened to declined in the last three quarter comparing to previous three quarter as shown in figure 1.6. The first quarter (Q1) of 2014 Alfamart net profit is Rp 11 billion declined 69.4% comparing to the

14 same quarter in 2013 which is Rp 36 billion. At the second quarter (Q2) of 2013 Alfamart net profit is Rp 150 billion declined by 18.7% to Rp 122 billion in 2014. The third (Q3) quarter of 2014 Alfamart net profit is Rp 338 billion declined by 6.6% comparing to the same quarter in 2013 which is Rp 362 billion.

Alfamart's Net Profit (Rp Billion) -6.6% 400 362 350 338

300

250 -18.7% 200 2013 150 2014 150 122

100 -69.4%

50 36 11 0 Q1 Q2 Q3

Figure 1.7: Alfamart’s Net Profit Source: Alfamart Management Presentation Q1, H1, Q3, 2014

1.2.5 Alfamart’s Marketing Mix A. Price Alfamart carries out its vision, mission and philosophy to be a community store. Therefore, in addition to trying to meet the needs and convenience of the customer by providing basic needs at affordable prices, convenient shopping place as well as an easily accessible location. Researcher has done a little price comparison at Jalan Geger Kalong, Bandung, between Alfamart and its competitor which is Indomart. Alfamart and Indomart both has set the price of the product which affordable to the customer.

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The different of the price of Alfamart and is not big, several products that sold in Alfamart is cheaper and also more expensive. The price of “Chitato keju supreme 75gr” at the Alfamart is Rp 10,100.00 and the price of the same product at the Indomaret is Rp 10,200.00. The Alfamart set the price of “susu ultra milk 1L” at Rp 16,700.00 but the Indomaret sell it at Rp 16,200.00. “Vaseline man oil control” is sold in Alfamart at Rp 22,900.00 yet Indomaret sell it at Rp 23,000.00. And also the price of “minyak goring Tropica 2L” in Alfamart is Rp 24,900.00 and Indomaret sell it cheaper by Rp 200 at Rp 24,700.00.

B. Product In 2013, the Company introduced a Product Mix policy with a composition of 70% food and 30% non-food. Alfamart has more than 400 active suppliers who supply more than 4,000 Stock Keeping Unit (SKU’s) for all stores (Alfamart management presentation, 2013).

C. Place Alfamart stores are present in 16 provinces and over 350 cities in Indonesia. Currently Alfamart has 8,557 stores across Indonesia with compound annual growth rate of 26.2% from 2009 until 2013 as shown in figure 1.8 (Alfamart annual report, 2013).

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Figure 1.8: Alfamart’s Store Source: www.panoramio.com, cited on November 2014

Strore Growth

10,000 8,557 8,000 7,063 5,797 6,000 4,812 4,000 3,373 Strore Growth 2,000 0 2009 2010 2011 2012 2013

Figure 1.9: Alfamart’s Annual Store Growth Source: Alfamart’s Annual report 2013 presentation

Once present in nearly every city on Island of Java and Bali, the Company has further expanded the distribution network and distribution centers with a presence in Pekanbaru and Jambi and began to get into Kalimantan area (Alfamart Annual report presentation, 2013).

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100% 5 6 9 11 15 80% 44 46 Outside Java 46 46 60% 45 Java (exclude greater 40% jakarta), Bali & Lombok

51 48 Greater Jakarta 20% 45 43 40

0% 2009 2010 2011 2012 2013

Figure 1.10: Alfamart’s Geogprahic Breakdown of Store Location Source: Alfamart’s Annual report 2013 presentation

Figure 1.10 shows store composition of Alfamart which own by Alfamart and franchisee. Along with the Company’s vision to become an advanced retail network owned by the wider society, the Company and its Subsidiaries continuously market the franchising opportunities to the wider community, especially with the local businessmen where the Company and its Subsidiaries operate. Marketing is done through exhibitions, cooperation with certain parties such as banks, and direct approaches to the prospective franchisee. Until the end of 2013, the number of franchised stores of the Company and its Subsidiaries were 2,514 and 17 stores respectively. During 2013, the Company added 460 franchise stores, an increase of 22% compared to 2012.The Company recorded its highest growth in the number of franchised stores over the last 5 years

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9,000 8,000 7,000 2,514 6,000 2,054 5,000 1,677 Franchise Store 4,000 1,284 Company owned store 3,000 898 6,043 5,009 2,000 3,528 4,120 1,000 2,475 0 2009 2010 2011 2012 2013

Figure 1.11: Alfamart’s own and Franchise Store Composition Source: Alfamart’s Annual report 2013 presentation

Table 1.5 shows Alfamart’s per store data in 2013. Alfamart selling area is 90m2 in average with daily revenue of Rp 10,427,000. Customer spends about Rp 29,000 per transaction and the member spends Rp 72,000 per basket. Capital expenditure needed for new store is approximately Rp 800,000,000 – Rp 900,000,000. Table 1.5 Alfamart’s per Store Data Per Store Data Average Selling Area 90 m2 Average Sales/day Rp 10,427,000 Spend per basket Rp 29,000 Member’s Spend per basket Rp 72,000 Number of SKU +_ 4,000 Average Capex for new store Approx 800-900 million Sales mix 70% Food and 30% non-food Source: Alfamart’s Annual report 2013 presentation

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D. Promotion In November 2014, Alfamart launch a promotion called “Belanja Hemat, Hadiah Berlipat” that only addressed to the member of Alfamart card holder. This promotion is a part of “Bukti Kasih untuk Anda” Campaign which shown in figure 1.11.

Figure 1.12: Alfamart’s Promotion Source: http://www.alfamartku.com, cited on November 2014

Along with the growth of the rapidly increasing number of stores, warehouse supply efforts are a Company priority. In 2013 the Company added 3 (three) new warehouses in Jambi, Pekanbaru and Banjarmasin to support expansion outside Java. Until the end of 2013 the number of operating warehouses were 24 warehouses of the Company (2012: 21 warehouses) and 7

20 warehouses of the Company’s Subsidiaries (2012: 6 warehouses) (Alfamart’s Annual report, 2013). Selection of the appropriate warehouse location in the middle of a widespread network of stores is one of the strategies of supply chain management. Each warehouse is designed to serve the supply needs for around 200 to 600 stores. To ensure efficiency and speed of service, the Company developed a system to increase the capabilities of warehouses as an integrated Information Communication Technology (Alfamart’s Annual report, 2013). In the effort of reaching long term growth targets, the Company and its Subsidiaries always committed with their roles as the responsible business citizens. Through the Company’s participation in Aprindo, the Directors voice their opinion about the variety of important topics like trade regulation especially in retail and franchise areas and other related regulations (Alfamart’s Annual report, 2013). Marketing Mix that consists of 7 variables which are: product, price, place, promotion, people, physical evidence and process sought as much as possible in order to create purchase decision by customer. These things are usually processed by a company in order to enter the competition in the increasingly fierce market today. the concept of the marketing mix is typically used by companies to create interest and consumer purchasing decisions process on products offered by the company as well as to measure how much of the effect of the marketing mix of product purchasing decisions process made by consumers. This study aims to determine the effect of marketing mix towards customer purchase decision process at Alfamart. The reason of doing this research is because there is a limited published study about the effect of marketing mix towards customer purchase decision process for Alfamart. Therefore the title of this study is “The Effect of Marketing Mix towards Customer Purchase Decision Process (a Study on Alfamart Gegerkalong Hilir no. 44 November 2014 – April 2015)”

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1.3 Problem Formulation There are several factors that support a very competitive condition of retail business in Indonesia; to win this situation Alfamart management has already done formulating the marketing mix as their strategy especially to get sales from their customer. Marketing mix should be able to increase the value of the company in its business such as revenue. There is limited published study regarding the effect of marketing mix to customer purchase decision process at Alfamart store. Alfamart management should measure the benefit of their marketing mix for their customers in Indonesia. Several previous studies that publish related to the marketing mix towards customer purchase decision process is not related with Alfamart.

1.4 Research Question The research questions of the issues raised in this study are: 1. Is product effect customer purchase decision process of Alfamart? 2. Is price effect customer purchase decision process of Alfamart? 3. Is place effect customer purchase decision process of Alfamart? 4. Is promotion effect customer purchase decision process of Alfamart? 5. Is people effect customer purchase decision process of Alfamart? 6. Is physical evidence effect customer purchase decision process of Alfamart? 7. Is process effect customer purchase decision process of Alfamart? 8. Is marketing mix effect customer purchase decision process of Alfamart?

1.5 Research Objectives The aims of this study are: 1. Determine that product is affecting customer purchase decision process of Alfamart? 2. Determine that price is affecting customer purchase decision process of Alfamart?

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3. Determine that place is affecting customer purchase decision process of Alfamart? 4. Determine that promotion is affecting customer purchase decision process of Alfamart? 5. Determine that people is affecting customer purchase decision process of Alfamart? 6. Determine that physical evidence is affecting customer purchase decision process of Alfamart? 7. Determine that positive is affecting customer purchase decision process of Alfamart? 8. Determine that marketing mix is affecting customer purchase decision process of Alfamart?

1.6 Research Function 1.6.1 Theoretical Function The results of this research are hopefully can give useful information to develop more knowledge in the field of marketing management that related to the effect of marketing mix on purchase decision process.

1.6.2 Practical Function 1. For Researcher This study is one of my way (as a researcher) to show I have been able to apply knowledge of theories obtained during the study authors. Hopefully, this research can be taken into the working area as well as a media to explore additional knowledge in the field that related to marketing management, especially in the purchasing decisions process of customers.

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2. For Company This study can be used as a reference for the company that has to do with this research, especially Minimart Company that has the same business as Alfamart. This research can be used to improve the company’s knowledge.

3. For Telkom Business School This study is expected to give more knowledge in the library of Telkom Business School, Bandung and provide references for students who want to learn about marketing management, especially marketing mix and the customer purchase decision process.

1.7 Systematic of Writing Systematic of writing in this study are divided into five chapters as follows:

1. Chapter I: Introduction This chapter is describing the review of the research object, problem’s background, problem’s formulation, research objective, research function, and scope of research

2. Chapter II: Literature Review In this chapter, I describe the theoretical basis of understanding about the marketing, marketing concept, marketing mix, marketing communications, purchasing decisions and the steps that influence purchasing decisions, conceptual framework, and hypotheses.

3. Chapter III: Research Methodology In this chapter, I describe the definition of research methodology, type of research, scope of research, population and sample, data type resource, definition of operational and variable measurement, data collections method, and data analysis method.

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4. Chapter IV: The Research Result and Data Analysis This chapter is describing about the characteristic respondent, result of research, and discussion about the result of research itself.

5. Chapter V: Conclusion and Suggestion In the last chapter, I explain about the meaning of research on the result of research, that describes the conclusion of research. It also explains about the suggestion that I give to the company regarding to the result of study

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