1. INTRODUCTION

1.1. Research Background Indonesia is known as the biggest economy in South East Asia, with huge domestic market as Indonesia own population reaching 250,585,668 people. Making it become the world’s 4th most populous country. Its population centralized in Java Island with 60% of the population lives within the island. Moreover, Indonesia economy itself has been continuously dominated by Java Island. In the second quarter of 2013, Java contributed 58.15% to the nation’s total economic growth. The greater Jakarta area accounts for 16.5% of the country's total economic growth, followed by East Java (15.21%) and West Java (14.05%). Within those areas, the capital cities that represent the center of Indonesia economic development itself are Jakarta, , and . Those urban cities rapid development could be seen trough the availability of government capitals, business districts, corporate headquarters, shopping malls, and other decent infrastructures (Oxford, 2012). For this research study the scope will be within Surabaya, as Indonesia’s second biggest city and second biggest economy. For the industry, it will be focused in shopping malls, as shopping mall within the city experience a rapid development with several new entrants and old players’ expansion.

For shopping mall, it is important to remain competitive and innovative over a longer period of time during their life cycle, since most of the shopping malls usually have a long active period (Singh et al. 2010). Shopping malls in Surabaya also face challenges to become more attractive and outstand its competitor to increase its mall’s traffic. Based on Assosiasi Pengelola Pusat Belanja Indonesia East Java (2011) there are currently 23 shopping malls in Surabaya, such as Ciputra World Surabaya, , , Grand City Mall, City of Tomorrow, Surabaya Town Square, Pasar Atom Mall, , etc. However among those 23 shopping malls, 2 shopping malls are chosen to be the main focus of this research. They are Ciputra World Surabaya (CWS)

1 Petra Christian University and Tunjungan Plaza. These two are chosen based on their similarity level on tenant and promotion focus as stated by the Chief Promotion of CWS. Both of the malls have wider range of tenants and more frequent event and promotion held compare to the other malls. Furthermore the biggest competitor now for CWS is none other than Tunjungan Plaza. Showing further that the shopping malls indeed have similar strategy and position in the market.

CWS is currently the newest entrant for shopping mall in Surabaya. CWS is a property of Ciputra Surya, Tbk, a subsidiary company under Ciputra Development, Tbk, and developed by PT. Win Win Realty Centre, which is also a part of Ciputra Group. It established on 22nd July 2011, and it is the first round project of Ciputra’s Superblock. It accompanied by two apartment towers with 415 units, aimed to create a new standard for lifestyle in Surabaya. It also located on West Surabaya that has been rapidly developing and growing into the most desired middle and upper class residential area, surrounded by upper class real estates, offices, banks & across five stars hotel, ShangriLa Hotel, making all of those surroundings as a big market opportunity for CWS to serve. In its second year after opening, July 2012, 205 tenants have opened and 220 space of tenant has been rented. CWS, as the shopping mall’s new entrant, introduced a new concept of shopping mall that completed with many anchor tenants such as Metro Department Store, Hypermart, Cinema XXI with 10 screens, lobby lounge, and first exclusive lounge in Surabaya that are no where in other Surabaya malls. (Ciputra World Promotion Report, 2012). It also keeps trying to expand their attending tenant and attract many big global brands to continuously offer something new for their visitors. With the strategy in mind, CWS has considered as succeeded attracting a lot of crowd with its continuous development, promotion and events.

The other shopping mall that will be discussed within this research study is Tunjungan Plaza. Tunjungan Plaza has experienced a steady decrease for its shopper’s traffic (Nuryanti, 2013). Despite its condition within the decline phase, it has still managed to become CWS main competitor. Moreover Tunjungan Plaza reveal that it will expanding their areas to built Tunjungan Plaza V and VI that

2 Petra Christian University will target the upper middle class, which likely similar with CWS current target market.

Nowadays, for the concept of shopping mall itself keeps changing and improved to meet the target market expectation (Singh and Bose, 2008). There are many crucial factors that translated to change the shopping center concept from traditional shopping markets to the more modern shopping malls. Shopping mall nowadays become the place where urban people do most of their activities, they function as a transactional space as well as a space for social purposes (Abaza, 2001). As a transactional space, shopping mall have more benefits compare to traditional market or offices, because of its comfortable design that able to provide both trading and recreational functions. They also offer ease of shopping, saves time and cost of search. As a social interaction space, the presence of a shopping center really helps. The location of a shopping center is usually carefully chosen by the developer to make sure that it is strategically located and easy to reach. It is also equipped with various forms of open plaza or atrium to replace Town Square as community space although it is not as open as other public areas (Kusumowidagdo, 2011).

A survey by AC Nielsen disclosed that 93% of the Indonesian people consider shopping centers as a place for recreation (Marketing Mix, 2009). Moreover for Surabaya case here, it has limited other options for recreation spots, making Surabaya people would most of the case visit shopping center in their spare time. Nowadays, with customers getting pickier than ever, they keep demanding a lot of things from one shopping center to keep them visit that certain shopping center. They prefer shopping malls that provide a different experience, mostly in their physical design, also brings added value to retailers’ products. Shopping mall as a design product must function as a creator of those expected experience that can suit the current condition of the people, both for economic benefit as well as emotional benefit that is generated by the customers, (Williams, 2006). Thus for shopping mall to design their effective marketing strategies, they need to fulfill and pay attention towards all of the shopping center attributes that help to create the new expected shopping experience. The shopping malls’

3 Petra Christian University attributes could be classified into several grouped, they are Convenience, Mall’s Environment, Tenant Presence, Service Quality, (Wong et al., 2012), and Marketing Focus (Singh & Prashar, 2013).

With many attributes need to be handled within one shopping mall, to know which of the attributes have not yet maximized, are the customer satisfy yet with the attributes and to know which of the shopping attributes need to be improved to compete with the competitor. With those speculations and questions, author wish to solve that problem trough the title of: “The effect of Shopping Malls’ Attributes toward Customer Satisfaction of Ciputra World Surabaya and Tunjungan Plaza.”

1.1.1. Description of Internship

Author here, have her internship at Ciputra World Surabaya’s management office. CIputra World Surabaya is a newly entrant shopping mall in Surabaya, it established in midyear 2011 and keep strengthen its position as megamalls in Surabaya. Author is joining the promotion team at the management office, with Mr. Hendra Linanda (Chief Promotion) as the main supervisor. For malls, every month’s thematic moments are important to be used towards its promotion and event plan. Thus led to author’s job keep changing based on the months. Ideas sharing and inputs, feedback are also very welcomed by the main team. Specifically, author job are as following:

1. Social Media Planning

Author trusted to handle Ciputra World Surabaya social media platforms, Facebook Page, Twitter Account, and its newly Instagram account. Using author’s past experience in digital agency in Jakarta, author has tried to apply it to this social media planning to increase likes and followers, as well as social activities in those platforms. Using thematic moments within the month to keep updating the pages and

4 Petra Christian University accounts to inform and attract the communities to visit Ciputra World Surabaya. Author also trusted to hold an event with prizes, thus making it needed to create a attractive theme and title concepts. Author also has to keep on track of the current event and promo to be uploaded in all social media platforms.

2. Media Coverage Report

Media coverage always done both online and offline, and will be reported on every end of the month. Online will be trough browsing the Internet on related articles regarding ongoing promotion and event within the mall, the website links will be compressed into one file. It goes the same with the offline one, every day there are several kind of newspapers (Jawa Pos, Kompas, Sindo, Radar Surabaya, Surya), and author have to check whether there are coverage about the ongoing mall and event, and later on group it together.

3. Events and Promotion Planning Proposal

Since, Ciputra World Surabaya has been actively doing their marketing focus on event and promotion, every month will be come out differently based on the thematic moments. Thus, author has the chance to propose ideas with further specific information regarding the possible upcoming events and promotion with the given budget. Later on present it to the chief promotion for further process.

4. On-the-spot event control and media coverage

Within the mall, there are a lot of stuff happens everyday, whether it is grand opening of a new shop, live show, and media coverage. Author usually will pay a visit at the shop an event to see whether the event going smoothly or whether something is needed. Sometimes there will be reporters that will shoot the event or doing news coverage within the mall, and usually authors have to accompany them along the coverage.

5 Petra Christian University 5. Customer Database

There is a ongoing promotion program, Lucky draw, where customer that spend a quite sum of money will have the chance to put their name as the candidates of winning the grand prize. The lottery will be done every month or every two weeks. Thus there hundreds of personal information regarding the customers that need to be recapped, and that is author’s job to put up the data together within the same file.

6. Tenant Product Photo

Whereas there are new arrivals of the store, or there are a sale and other promotion. Author will visit the tenant and take documentation photos for the products to be uploaded later at the social media platforms, to boost the tenant sale. Thus, as the photos need to be as appealing as possible to attract customers to make a purchase, it is author job to take good photos. These product photo mainly for the high end brand, such as Tommy Hilfiger, Armani Jeans, Salvatore Ferragamo, Versace Collection, Versus, Furla, and Mango. For other tenants, product photo will be taken, if the management team believes that the original promotional poster is not good enough to deliver to the customers.

7. Goods/Other Necessities Preparation

Author also helps the management team to take care of additional necessities regarding the event and promotion. Such as trophy design, goodies bag, voucher and coupon stamp, prizes, official letter and brochure.

6 Petra Christian University Table 1.1. Author Job Description and Success Measurement

No. Job Descriptions Success Measurement 1. Social Media Planning Increased likers, followers on Facebook, Twitter, Instagram. 2. Media Coverage Report Complete and tidy 3. Events and Promotion Accepted and Event/Promotion Planning Proposal Realization. 4. On-the-spot event control and No error and serious problem live media coverage happen during the event and live media coverage 5. Customer Database Complete and tidy 6. Tenant Product Photo Photos taken with good angle and placement 7. Goods/Other Necessities Complete and finished on time Preparation

1.1.2. Justification for The Research For shopping malls, mall’s traffic has been one of the ways to show the malls’ performance. As seen on Figure 1.1., Ciputra World Surabaya as the latest established mall within the city has still enjoyed an increasing pattern for its mall’s traffic, while Tunjungan Plaza has been experiencing declined number of mall’s traffic (Nuryanti, 2013). Making a first priority for malls, to develop their internal strategy for maintaining as well as increasing the mall’s traffic.

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Figure 1.1. Ciputra World Surabaya Mall’s Traffic 2011- 2013

Based on APPBI (Assosiasi Pengelola Pusat Belanja Indonesia) East Java, the growth of shopping malls in Surabaya is worrisome since the numbers of shopping malls within the city is much greater than the visit rate of the citizen. (“APPBI Khawatirkan Pertumbuhan Mal di Surabaya”, 2011, August). Shopping malls in Surabaya has reached above the market demand, seeing most of the attending tenants are similar between each mall and the average occupancy rate is below 60%. With the current 23 shopping malls operating within Surabaya, APPBI also stated that there will be concept war among the shopping malls in 2014. With the effort from the shopping malls to outstand each other, there is a possibility of confusion for people to decide which of the malls should they visit.

For Ciputra World Surabaya case, the management team also realizing the importance of tenant variety mix, event, promotion, service quality to fulfill the shopping experience expected by visitors. It is proven by its monthly-distributed questionnaire to the mall’s visitors to get a quick feedback regarding malls’ overall performance. Unfortunately from the questionnaire itself the management team still not be able to find the focus of their strategy. Since within the questionnaire distributed it has not yet completely classify all of the shopping malls’ attributes clearly and completely. Due to lack of time, the management

8 Petra Christian University team current focus is just to increase the mall’s traffic. However, whether the increasing number of mall’s traffic is really show the customer satisfaction or not, is still big questions for the management team itself.

Thus this research study hoped to help the shopping malls in Surabaya, especially Ciputra World Surabaya and Tunjungan Plaza as this research‘s main focus, to stay good in mall’s performance. These two malls, they will receive scores on each aspect of the shopping mall attributes, to see how they will affect their customer satisfaction. Thus, it will able to give Ciputra World Surabaya and Tunjungan Plaza a big picture and detail regarding the importance of each of the shopping mall attributes towards their customer satisfaction.

1.1.3. Statement of Research Problem Based on the research background, there are several problems arise and need to be answered trough this research study:

 Do Shopping Mall’s Attributes have a simultaneously significant effect towards customer satisfaction for both Ciputra World Surabaya and Tunjungan Plaza?  Which shopping malls’ attributes have significant effect towards customer satisfaction for both Ciputra World Surabaya and Tunjungan Plaza?

1.2. Research Objective Thus the objective of this research study will focus to answer all of the problem arise, which are:

 To know whether shopping mall’s attributes have a simultaneously significant effect towards customer satisfaction for both Ciputra World Surabaya and Tunjungan Plaza.  To know which shopping mall’s attributes have significant effect towards customer satisfaction for Ciputra World Surabaya and Tunjungan Plaza.

9 Petra Christian University 1.3. Research Benefits There will be several parties that might be beneficial from this research studies. The parties are as following below:

1.3.1. The Company/Industries

 Both of Ciputra World Surabaya and Tunjungan Plaza will be able to pay more attention to each of the shopping mall attributes that specified in detail  Both of Ciputra World Surabaya and Tunjungan Plaza will be able to focus on specific attributes that it most significant towards the customer satisfaction  Both of Ciputra World Surabaya and Tunjungan Plaza will be able to improve and maintain on specific attributes to increase their customer satisfaction  Other Shopping Malls in Surabaya will get an insight about fulfilling all of the shopping malls attribute to increase their customer satisfaction

1.3.2. The Academician

 Give reference for future research that is related or have similar scope with this research study  Give insight on how the shopping mall attributes are important and give impact to customer satisfaction

1.3.3. The Author

 Enhance author’s ability to conduct a formal research study  Enhance author’s knowledge regarding shopping malls attributes towards customer satisfaction  Giving the chance for the author to apply the theories and concept learnt in real ongoing case  Giving the chance for the author to know about real case in Ciputra World Surabaya and Tunjungan Plaza

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