The Influence of Brand Equity Toward Customer Buying Decision on Cosmetic Product in Jakarta

THE INFLUENCE OF BRAND EQUITY TOWARD CUSTOMER BUYING DECISION ON COSMETIC PRODUCT IN JAKARTA

By Nurinda Febriyanti ID No. 014201000183

A skripsi presented to the Faculty of Business President University in partial fulfillment of the requirements for Bachelor Degree in Economics Major of Management

February 2014

PANEL OF EXAMINERS APPROVAL SHEET

The Panel of Examiners declares that the skripsi entitled “THE INFLUENCE OF BRAND EQUITY TOWARD CUSTOMER BUYING DECISION ON COSMETIC PRODUCT IN JAKARTA” that was submitted by Nurinda Febriyanti majoring in Management from the Faculty of Business was assessed and approved to have passed the Oral Examinations on February 18th, 2014.

VinsensiusJajat K., MM, MBA Chair – Panel of Examiners

Drs. Agus B. Adidi, M.A.,C.CA Examiner 1

Dra, Genoveva,MM Examiner 2

SKRIPSI ADVISER RECOMMENDATION LETTER

This skripsi entitled “THE INFLUENCE OF BRAND EQUITY TOWARD CUSTOMER BUYING DECISION ON COSMETIC PRODUCT IN JAKARTA”prepared and submitted by Nurinda Febriyanti in partial fulfillment of the requirements for the degree of bachelor in the Faculty of Business has been reviewed and found to have satisfied the requirements for a skripsi fit to be examined. I therefore recommend this skripsi for Oral Defense.

Cikarang, Indonesia, February 18th, 2014

Acknowledged by, Recommended by,

VinsensiusJajat K., MM, MBA Dra,Genoveva,MM Head of Management Study Program Skripsi Adviser

DECLARATION OF ORIGINALITY

I declare that thisskripsi, entitled “THE INFLUENCE OF BRAND EQUITY TOWARD CUSTOMER BUYING DECISION ON COSMETIC PRODUCT IN JAKARTA” is, to the best of my knowledge and beliefs, an original piece of work that has not been submitted, either in a whole or in a part, to another university to obtain a degree.

Cikarang, Indonesia, February 18th, 2014

NURINDA FEBRIYANTI

ABSTRACT Beautiful and fascinating is the dream of all women in the world. Makeup is an activity to change the appearance of the actual original shape with the help of cosmetic materials and tools. The research is based on the competitive conditions the industry cosmetics in Indonesian, both industry cosmetics national and international. The researcher chose brands such as Bobbi Brown, Etude, Loreal, Mac , Maybelline and Revlon their familiar its for people in Indonesia , especially in Jakarta. The problem in this research is " What if brand equity ( brand awareness , brand association , perceived quality , brand loyalty ) can be affect to the costumer and make costumer choose to buy makeup product. The data are collected by distributing questionnaires to 140 costumer makeup products. The researcher using quantitative analysis includes validity test and reliability, classic assumption and multiple regression to test the hypothesis through the T-test and F- test and coefficient of determination (R ²). Hypothesis testing using T-test showed that three independent variables (brand awareness, perceived quality, brand loyalty) significant influence toward customer buying decision as dependent variable. Then through the F test proven that all independent variables (brand awareness, brand association, perceived quality, brand loyalty) have a significant influence toward customer buying decision. From the R square test show the 0.639 indicates that 63.9 percent the dependent variable (customer buying decision) are influence by independent variable (brand awareness, brand association, perceived quality, brand loyalty), while 36.1 percent are influenced by other factors. Keywords : brand awareness, brand association, perceived quality, brand loyalty, customer buying decision

ACKNOWLEDGEMENT

Alhamdulillahhi Rabbil Alamin

In the name of ALLAH I would like say Allhamdulillah Hirobbil Alamin Finally, the moment that I very wait for a long time is finally come true. This is the happiest moment after struggling with my undergraduate skripsi and finishing my study at President University. I still remember three years ago, Mom and Dad accompany me to President University and moving in to dormitory, time goes by and now I’m finished my undergraduate skripsi and graduated from President University. Through this opportunity, I would like to show my gratitude to 1. First of all I would like say thankyou to Allah SWT who gave me the healty body during I doing my skripsi project and also give me a many good person who always support me and accompany me. 2. To my Parents, Mom and Dad. I don’t know how to describe my gratitude to both of you in words, but I am so glad and proud to have parents like mom and dad. You are the best parents in the world. Thanks for everything, thanks for your unlimited support and care. I love you so much. 3. My Brother Thank you for your love and support during thisskripsi period. 4. My Sister, thankyou for always help me during I do my skripsi. 5. My Cousin, Widya Ayuningtyas thankyou for always become my translator. 6. My Skripsi Adviser, Filda Rahmiati, MBA Thank you so much for your guidance, attention, patience, and kindness. I’m so proud to have you as my skripsi adviser, thanks for being my skripsi adviser. 7. Mr. Orlando thank you so much for helping me a lot in statistic. Thanks for your guidance, care, time, and kindness. You are the friendliest lecturer ever. 8. My super hero Wisnu Arif Setyawan, thankyou for always support and 6

accompany me. 9. My dearest lovely roommate, Ervina Anggraini, Putri Utami Vallen, Salsallya Diska, finnaly guys, we finish our study, thanks for your support, kindness and your help to solve the problem with my skripsi. And don't ever forget that someday we must to be a success people. 10. My friends Sherly Silvia and Joudy Marsya, thank you so much for very help me during thisskripsi. Thankyou for teach me and guidance me during we doing this skripsi project together 11. My best friends, Astri Putria Sari, Siti Eliyana, Alfisyah, Dwi Mauliani, Harizatul, Retno Wulan, Soniya Mayangsari, thankyou for always support me, even though all of you not in here, but you always support me and pray for me until I can finish my skripsi. Thankyou so much guys, I never forget all of you, success for all of us. 12. My friends Fathia Fathia, Trecy Emerald, Ayu Agustafany, Dwini, Fabiola, Noni, Syarifah Ade Mutia, Hardian Ruben, Kania Pinanjungsari, Kak Arcilla,Agus, KrisRasta, Rifka, Rebecca, Alfina, Satriothanks for everything. 13. Sherly, Riri Rachmawati, Dwi puspita, Sherly Intan, Astri Miranda, Dwi Khairunnisa, Kevin, Husni, Sukma, and for all my friend that i can't mentioned in here. 14. My kind hearted senior, Dana Feriyus, Freddy, and Naomi, thankyou for teach me. 15. All the respondents in Jakarta thanks a lot for spending your time to fill the questionnaire.

TABLE OF CONTENT

SKRIPSI ADVISER RECOMMENDATION LETTER ...... i DECLARATION OF ORIGINALITY...... ii PANEL OF EXAMINER APPROVAL SHEET ...... iii ABSTRACT ...... iv ACKNOWLEDGEMENT ...... v TABLE OF CONTENT ...... vii LIST OF TABLE ...... x LISTOF FIGURE ...... xi

CHAPTER I...... i 1.1. Background of the Study...... 13 1.1.1.Cosmetics Industry in Indonesia ...... 14 1.2. Problem Identification...... 17 1.3. Statement of Problem ...... 18 1.4. Research Objective ...... 18 1.5. Scope and Limitations ...... 19 1.6. Benefit ...... 19 1.7. Definition of Term ...... 20

CHAPTER II ...... 22 2.1. Brand ...... 22 2.2. Brand Equity ...... 22 2.2.1. Brand Awareness ...... 25 2.2.2. Brand Association ...... 26 2.2.3. Perceived Quality ...... 27 2.2.4. Brand Loyalty ...... 28 2.3. Consumer Buying Decision ...... 31 2.4. Theoretical Framework ...... 36 2.5. Hypothesis ...... 37 2.6. Previous Research ...... 37

CHAPTER III ...... 40 3.1. Research Method...... 40

3.1.1. Qualitative research ...... 40 3.1.2.Quantitative analysis ...... 41 3.2. Operational Definition ...... 42 3.3. Research Instrument ...... 44 3.3.1. Questionnaire ...... 44 3.3.2. Literature Study...... 45 3.3.3. Scalling...... 45 3.4. Research Framework...... 46 3.5. Validity and Reliability ...... 48 3.5.1. Validity Test...... 48 3.5.2. Reliability Test ...... 49 3.6. Data Collection Method ...... 49 3.6.1. Primary Data ...... 50 3.6.2 Secondary data ...... 50 3.7. Sampling Design ...... 50 3.7.1. Sampling Method ...... 50 3.7.2. Population ...... 51 3.8. Classic Assumption ...... 51 3.8.1. Normality Test ...... 51 3.8.2. Multicollinearity Test ...... 52 3.8.3. Heterocedasticity Test ...... 52 3.9. Testing the Hypothesis ...... 53 3.9.1 Multiple Regression ...... 53 3.9.2. Coefficient of Determination Analysis (R2) ...... 54 3.9.3. T-Test (Partial) ...... 54 3.9.4. F – Test ...... 55

CHAPTER IV ...... 56 4.1. Company Profile ...... 56 4.1.1. Bobbi Brown ...... 56 4.1.2. Etude House ...... 59 4.1.3. L'Oréal Paris ...... 61 4.1.4. Mac Cosmetics ...... 66 4.1.5. Maybelline ...... 70 4.1.6. Revlon ...... 72

4.2. Data Result Analysis ...... 74 4.2.1. Validity Test...... 74 4.2.2. Reliability Test ...... 75 4.2.3. Characteristic of Respondents ...... 76 1. Gender ...... 76 2. Age ...... 77 3. Income ...... 78 4. Marital Status ...... 80 5. FavoriteBrand...... 81 4.2.4. Descriptive Analysis ...... 70 4.2.5. Classic Assumption ...... 83 4.2.5.1. Normality Test ...... 83 4.2.5.2 Multicollinearity...... 84 4.2.5.3. Heteroscedascity Test ...... 86 4.2.6. Testing the Hypothesis ...... 865 4.2.6.1. Multiple regression ...... 87 4.2.6.2. Coefficient of Determination ( R2 ) ...... 88 4.2.6.3. T test ...... 89 4.2.6.3. F – test ...... 90 4.3. Interpretation of Result ...... 91

CHAPTER V ...... 94 5.1. Conclusion ...... 94 5.2. Recommendation ...... 96 Cosmetics Industry in Indonesia ...... 96 Future Researcher ...... 98

REFERENCES ...... 98 APPENDICE ...... 90

LIST OF TABLE

Table 3.1. Operational Definition ...... 42 Table 3.2 Likert Scale ...... 45 Table 4.1. Output Validity ...... 74 Table 4.2. Output Reliability ...... 76 Table 4.3. Grouping Respondents based on Gender ...... 77 Table 4.4. Grouping Respondents based on Age ...... 78 Table 4.5. Grouping Respondents based on Income ...... 79 Table 4.6. Grouping Respondents based on Marital Status ...... 80 Table 4.7. Grouping Respondents based on Favorite Brand ...... 81 Table 4.8. Descriptive Statistics ...... 830 Table. 4.9 Multicollinearity Coefficient Correlations ...... 85 Table. 4.10 Multicollinearity Coefficient ...... 85 Table 4.11. Multiple Regression Table ...... 87 Table 4.12. R2 ...... 88 Table 4.13 T-Test table ...... 89 Table 4.13 F-Test table ...... 90

LIST OF FIGURE

Figure 2.1. : Aaker’s Brand Equity model ...... 24 Figure 2.2. : Aaker’s Brand Awareness pyramid ...... 25 Figure 2.3. : Aaker’s Brand Loyalty pyramid ...... 29 Figure 2.4. : Purchase Decision process ...... 34 Figure 2.5. : Theoretical Framework ...... 36 Figure 3.1. : Research Framework ...... 47 Figure 3.2. : Multiple Regression ...... 53 Figure 4.1. : Grouping Respondents based on Gender ...... 76 Figure 4.2. : Grouping Respondents based on Age ...... 77 Figure 4.3. : Grouping Respondents based on Income ...... 78 Figure 4.4. : Grouping Respondents based on Marital Status ...... 80 Figure 4.5. : Grouping Respondents based on Favorite Brand ...... 81 Figure 4.6. : Histogram normal distribution ...... 83 Figure 4.7. : Normal P-Plot ...... 84 Figure 4.8. : Scattrplot Heteroscedascity ...... 86

CHAPTER I INTRODUCTION

1.1. Background of the Study Beautiful and fascinating is the dream of all women in the world. There are many ways that can be taken to get the face many girls want one of them is by polishing the face or we familiar to called it makeup (Dokter Cantik, 2012). Women is a beautiful creatures and like beauty, including the beauty of her face. Since 5000 years ago, the ancient Egyptians were known to be competing to beautifying themselves, especially the nobility. They are trying to look beautiful likes the gods and goddesses that they worshiped. Although at first the art of face painting is just a religious ritual in their nation. The women framed their eyes resemble almonds and coloring their cheeks with clay ( Resivanis, 2013). The art of face painting continues to grow until one day the Greeks found the plant root extract called polderos that can be made rouge lips and cheeks are longer lasting. Apparently, to be beautiful it has become an obsession that is embedded within every woman.

According to Thasya, (2012) Max factor is the first cosmetic maker in the world of cosmetic industry. He create a many formula to create a cosmetic product. In 1920, a man named Max Factor created a wide variety of cosmetic product formulations. One of his creations is a kohl mixture heated on the fire. When melted, the melt is applied to the eyelashes, and the eyes look more dramatic. And in 1923, created the eyelash curler. The shape is almost similar to the existing eyelash curler now. But certainly not as sophisticated eyelash curler that exist today. It took about 10 minutes to apply the eyelash curler this early. Since the history of make up, a lot of make up products began to appear and increasingly advanced and diverse till today. And "the art of face painting" was already not only limited to the nobility, but any woman who admire the beauty and appreciate themselves as being beautiful. Beside cosmetics, other body care products nowadays become the basic needs that used by women to make them look more attractive. The women usually polish their faces to support the appearance.

Makeup is an activity to change the appearance of the actual original shape with the help of cosmetic materials and tools. The term of make-up more often aimed at changing the shape of the face, despite the fact that the entire body can be ornamental. For some women by using cosmetic can create confidence for themselves. According Korichi, Pelle-de-Queral, Gazano, dan Aubert (2008) psychological make-up has two functions, namely the function of Seduction and Camouflage. The function of Seduction means the individual use make-up to enhance the appearance of their self. In general the individuals who use make-up for the function seduction feel that they interesting and use make-up for the make it their self more interesting.

The function of Camouflage means the individual use make-up to cover the lack of their physically. In general the individuals who use make-up for the function camouflage they feel that uninteresting so they need to use make-up for make their self interesting. Based on Psikologi Ubaya, (2013) there are several kinds of cosmetics one of them is make-up. Make-up is defined as colored cosmetics products, which means when used on the body or a specific body part will produce color. Some examples of make-up such as lipstick, mascara, eyeliner, eye shadow, and blush on. Make-up is identical with women even though the user of make-up does not rule out the possibility is male and is believed to be facilities to make the appearance more attractive. Currently, there are many emerging famous cosmetics brand from local brand such as Sariayu, Mustika Ratu, etc. And some examples of international brands like Makeup Forever, Dior, Bobbi Brown, Mac, Benefit and many more. All of these brands provide their own advantages that can make the costumer interested to buy their products. Several factors may be considered by the customer to choose and decide to buy a product from a brand what they want is the excellence of that brand than another brand, the reviews of the users, the brand experience until the final results are resulting by the product.

1.1.1. Cosmetics Industry in Indonesia According on Indonesia Finance Today (2012) The woman is a being that is identic with beauty, women always want to look beautiful in various situation and 14 has always wanted to be the center of attention for her surrounding. This is the reason why women like to beautify herself with use of various kinds of cosmetics used. This condition is used well by cosmetic manufacturers. Based on Marieska Harya Virdhani (2013) Total population up to 245 million makes Indonesia has a huge potential market for beauty care products. Although the majority of the cosmetics industry targeting the major consumer are women, but recently the cosmetics industry has begun to innovate with products for men. (Indonesia Finance Today, 2012) . CosmoBeaute Indonesia (2013) had researched data from market research agency Euromonitor International, the value of Indonesian cosmetics industry reached more than $ 5 billion with an average growth of 12 percent per year. Beauty industry in Indonesia is not affected by the financial crisis that occurred in 2008. Indonesia is predicted to be the country with the greatest growth potential in the beauty industry. Cosmetics industry market Indonesia continues to growth. Beauty is no longer considered to be something luxurious, but it has become a necessity. From the side of society Indonesia formerly beauty is a luxury, now it needs. Foreign brands also see Indonesia is a big market with a large population. Tiara Sarastika (2012) shows that the use of cosmetics in Indonesia is very large. As the times, cosmetics as a primary need for most women. This provides opportunities for the cosmetics industry in Indonesia, which can give rise to the competition tight enough.

The government claims the national growth of cosmetics industry until the end of this year reached 15 %. Directorate General of Industrial Manufacturing (BIM) of the Ministry of Industry, cosmetic industry turnover is forecast to rise reached Rp11,2 trillion or grew 15 percent from 2012, which amounted to Rp9,7 trillion (Marieska Harya Virdhani, 2013). Currently the development of the cosmetics industry in Indonesia appertain solid. . This can be seen from increasing of cosmetics sales in 2012 14 % to Rp 9.76 trillion from the previous Rp 8.5 trillion, based on data from the ministry of industry. Beauty and body care products globally in 2012 reach U.S. $ 348 billion, growing thin U.S. $ 12 billion over the previous year based on data the Euro Monitor. Although in 2012 the world economy is still tinged financial crises such as those in the European region, even 15 though economic slowdown china, a branded beauty products has proven to still be able to grow with the solid. Branded beauty products are forecast to grow 6% this year, higher than the growth of common cosmetic products by 4%.

Association of Indonesian Cosmetics (Perkosmi) estimates that this year the sales of cosmetics can grow up to Rp 11.22 trillion, up 15% compared to the projected 2012 amounting to Rp 9.76 trillion. In terms of exports, the cosmetics industry is estimated to grow 20% to US$ 406 million (Indonesia Finance Today, 2012). According to Business News (2013) volume of cosmetics sales growth fueled by an increase in demand, especially from consumers in the middle class. Cosmetics sales growth was also driven by the trend of increasing use of cosmetics by men. Cosmetic market opportunities in Indonesia is still very large. Therefore, cosmetics manufacturer national needs to meet the needs of consumers who are on the rise. In the past man not interest to buying masculine skin care products but now they have high interest in skin care products. Moreover, the Ministry of industry also provide incentives to encourage the development of the cosmetic industry in the country. Cosmetic market opportunities in Indonesia is still very large.

Yunia Safitri (2012) state that the other hand consumers has their own judgments and expectations of the cosmetics they use. To be able to compete and satisfying the costumers of course a product should have a competitive advantage compared to the product of the competitors and able to meet the needs of customers. The cosmetics companies is prosecuted for perusal in digging information about preference of consumers and able to implement marketing strategies proper. In this case anticipated strategy possibilities which are going to be applied by competitors are needed. One of the ways that can be used to analyze marketing strategies is to use game theory which is a mathematical model used in conflicting situations or competition between different interests that face each other as competitors. Based on Oki Baren (2012) Indonesia is third-largest market cosmetics in ASEAN after Thailand and the Philippines. Even sometimes Indonesia ranked 2nd, because the population of Indonesia greater than 16

Philippines. The existence of free markets of ASEAN and China (AC-FTA) which will take effect in 2015, in addition to into opportunities for Indonesia, cosmetics industry market can also be a challenge for this agreement make Chinese products more free to enter the market Asean. This could potentially increasing competition that must be faced by Indonesia players. (Indonesia Finance Today, 2012)

Some of the famous top brand in Indonesia and has many loyal users for cosmetics products are Bobbi Brown, Etude, Loreal, Mac, Maybelline, Revlon. who do not know Bobbi Brown, Etude, Loreal, Mac, Maybelline, Revlon. A lot of good reviews and comments from costumers who has been using several products from Bobbi Brown, Etude, Loreal, Mac, Maybelline, Revlon, because good comments from the users of this brand cause the curiosity of the costumer who are confused in choosing to buy cosmetic what they want . Products from Bobbi Brown, Etude, Loreal, Mac, Maybelline, Revlon known for having good quality and interesting of the packaging.

1.2. Problem Identification In line with the background, a lot of the consumer of cosmetics cause many cosmetic industries competing to get more costumers who are interested in their products and they are competing to make their products more excellent than the other. The marketing of any cosmetic companies are competing to develop strategies to make their products more excellent and increase sales of their products. That is why the product is necessary to establish the unique character of their brand name, because one of the benefits of brand equity is to prevent erosion of a product's or service's market share, even when there is many endless promotional maneuvers from the competitors (Clow and Baack, 2010), because the strong brand name is the thing that is hard to be imitated by the competitors.

The role of Brand Equity very influential in the customer buying decision towards a product. The customer that very thorough against a product definitely think of the origin of a product before deciding to buy it. By doing asset mapping, brand

17 equity is possible to determine whether some aspects of brand equity is seen as more important than others for the consumer, or if the brand behind in one or more dimensions. In order for a brand to maintain high brand equity and become the preferred choice of consumers, it is important that it stays in tune with how the brand is perceived by its customer base. However, so far little research has been done on how brand equity has a role in the cosmetics industry which influence customer buying decision toward cosmetic product.

The main problem of this research is to find the influence of Brand Awareness, Perceived Quality, Brand Association, and Brand Loyalty as elements of Brand Equity towards customer buying decision choosing cosmetic product. In this research the researcher choose 6 brand of the famous product in Indonesia especially in Jakarta such as : Bobbi Brown, Etude, Loreal, Mac, Maybelline, Revlon. All of this product can we reached in mall in Jakarta.

1.3. Statement of Problem The formulation of the problem from the background above is as follows: 1. How the influence of brand awareness towards customer buying decisions on cosmetic products? 2. How the influence of perceived quality towards customer buying decision on cosmetic products 3. How the influence of brand association towards the costumer buying decision cosmetic products? 4. What is the effect of brand loyalty towards the costumer buying decision on cosmetic products? 5. How the influence of Brand Equity towards customer buying decision on cosmetic products?

1.4. Research Objective The Objective of this research is to evaluate the relationship between brand equity and customer buying decision in choosing cosmetic product. The

18 specified objectives are to find out : 1. To identify the effect of brand awareness toward costumer buying decisions on cosmetic products 2. To identify the effect of perceived quality toward costumer buying decisions on cosmetic products 3. To identify the effects of brand association toward costumer buying decisions on cosmetic products 4. To Identify the effects of brand loyalty toward costumer buying decisions on cosmetic products 5. To identify the effect of brand equity toward costumer buying decisions on cosmetic products

1.5. Scope and Limitations The scope and limitations of this study was made in order to identify those who have not been fulfilled by this analysis. It defines the limitations, or obstacles of this analysis. The researcher will be analyze the effects of Brand Equity toward customer buying decision to choosing the brand of cosmetics accordance with their needs. The brand such as Bobbi Brown, Etude, Loreal, Mac, Maybelline, Revlon . The scope of this research is the consumer makeup in Jakarta, why the researcher choose Jakarta because Jakarta is capital city where the customers can find the cosmetic product from Bobbi Brown, Etude, Loreal, Mac, Maybelline, Revlon very easily in some mall in Jakarta. The setting of the study is Customer buying decision to choosing cosmetic products as their makeup needs, the reason is to gain information about the customer behavior. The respondents have been limited to age range between 15-30. The respondents have used cosmetic product.

1.6. Benefit Researchers hope this research that conducted can give the benefit for : Cosmetic and Skin Care Company From the analysis of the data that obtained, the researcher would like to give contribute in cosmetic and Skin Care Company to find out more what factors

19 causing the customer feel satisfied with their products and decide to purchase their products.

Costumer Can provide information about the quality of a product and provide a review-a review of the costumer who has used the product, so it can give an idea for another costumer to decide to buy the product. And for the costumer should be better to evaluate and determine the quality of a product is very important, before they decide to buy the product, especially for cosmetic and skin care because not all cosmetic and skin care products suitable for them, and the most important is the quality because not all of the cosmetic and skin care products have good quality. With this research the customer can determine the cosmetic and skin care products that suit with them and have a good standard for the quality.

Researcher With this research, the researchers also enhance the knowledge and skill in doing the observation, also improve the writing and reading skills, and also having knowledge about Brand Equity of cosmetic product and the related between customer satisfaction and customer buying decision and more importantly learn to implement the theories that have been learned.

Future Researcher The study will provide additional knowledge and a baseline parameter, thus to enhance the existing knowledge about the relationship between brand equity influence the customer satisfaction and customer buying decision.

1.7. Definition of Term 1. Brand Equity : A set of characteristic that are unique to a brand 2. Brand Awareness : The strength of the existence of a brand in the minds of consumers 3. Perceived Quality: The consumer perception of the overall quality or

superiority of a product or service with respects to its intended purpose 4. Brand Association: Anything which is deep seated in the customers mind about the brand 5. Brand Loyalty : The attachment that a customers have on brand. 6. Costumers Buying Decision : Series of choices made by a consumer prior to making a purchase that begins once the costumers have established a willingness to buy. The consumer must then decide where making the purchase, what brand, model, or size to purchase, when to make the purchase, how much to spend, and what method of payment will be used.

CHAPTER II LITERATURE REVIEW

2.1. Brand Based on American Marketing Association (2011) a brand is a name term, design, symbol, or any other feature that identifies one seller. According to Brian and Fjelddhal (2007) A brand is a promise: it contains a set of emotional attributes for a which a costumer to pay a premium. Every aspect of company message, product and service needs to be aligned with brand the promise. That promise must be unique, valued and consistently delivered. While Kapferer (2008) state that there are no brands without products or services to carry them. This will have great consequences for the method of measuring, financial value. Knowing a brand is giving costumer more advantage; Brand offer consumer a means of minimizing information search and evaluation. According to Leslie and Malcom (2003) Through seeing a brand name, which has been supported by continual marketing activity, consumers can use this as a rapid means of interrogating memory and if sufficient relevant information can be recalled, only minimal efforts is needed to make a purchase decision.

2.2. Brand Equity Today in global economy where the competition is getting stronger and customers are bombarded with the options that very important for the success of any company who differentiate their self from their competitors by building personal relationships with their customers. The brands that successful build relationships with their customers by allowing products and services not only to meet their functional, but also their emotional needs. Therefore, a successful brand is built on more than just their excellent products and services will have a different characteristic from their competitors. Products and services can be copied by competitors, but the intangible factors that enable customers to identify the products or services.

In such a competitive industry, has a strong brand and become the preferred choice among consumers over your competitors is important. Brand is the preferred choice by consumers who are said to have high brand equity and there is no agreement in the scientific community that a strong brand has high brand equity. Over the years many studies have been carried out on brand equity, one reason is that 'brand equity has the potential to add value for the firm by generating marginal cash flows in at least a dozen ways' (Aaker, 1991, p.16). In his Brand Equity model, David A. Aaker identifies five brand equity compo- nents: (1) brand loyalty, (2) brand awareness, (3) perceived quality, (4) brand associations and (5) other proprietary assets. Aaker defines brand equity as the set of brand assets and liabilities linked to the brand - its name and symbols - that add value to, or subtract value from, a product or service. These assets include brand loyalty, name awareness, perceived quality and associations.

Clow and Baack (2010) stated that one of the major problem for many established companies is brand parity. Brand parity occurs when there are few tangible distinctions between competing brands in mature markets. Brand parity means consumers see only minor product differences, one of the solution to fight, the brand parity is brand equity. The real value of a strong brand is its a power to capture consumer preference and loyalty. A powerful brand form the basis for building strong and profitable consumer relationship. A powerful brand has high brand equity (Kotler and Amstrong, 2008). According to Kotler (2008) define brand equity as the positive differential effect that knowing the brand name has on consumer response to the product or service.

Clow and Bacck (2010) define Brand Equity is a set of characteristic that are unique to a brand. In essence, brand equity is the perception that a good or service with a given brand name is different and better. David A. Aaker (1991) state that Brand Equity is a set of brand assets and liabilities associated with a brand, name and symbol, that add or diminish the value provided by a good or service to the company or its customers. The purpose of brand equity is to measure the value of a brand. A brand encompasses the name, logo, image, design and perceptions that 23 identify a product, service, or provider in the minds of customers. Brand Equity will usually allow higher margins by permitting both premium pricing and reduce reliance upon promotions. For costumer, Brand Equity assets generally add or subtract the value. They can help them interpret, process, and store huge quantities of information about brands and products. They can also affect costumer confidence in the purchase decision ( due to either past use experience or familiarity with the brand and its characteristics ).

Figure 2.1 : Aaker’s Brand Equity model Source : David A. Aaker (1991)

Keller (2003) he also define that although brand equity is one of the most crucial concepts in brand management, there is not a commonly accepted definition for it. From the definition above, we can see that brand equity is the different perception of customers for the brand name, and customer will see that brand with have good brand equity is better than competitors brand. On the other hand, from the marketer point of view, the concept implies the importance of a brand to its costumers.

2.2.1. Brand Awareness According to David A. Aaker (1997), brand awareness is the ability of a potential buyer to recognize or recall that a brand is a part of a particular product category. There are four levels of brand awareness as describe by Aaker (1997). The following is the order from the lowest level to the highest level :

Figure 2.2 : Aaker’s Brand Awareness pyramid Source : David A. Aaker (1991)

1. Unaware Of Brand Unaware Of Brand It is the lowest level in the pyramid of brand awareness where consumers are not aware of the existence of a brand. 2. Brand Recognition Minimum level of brand awareness. This is important as a buyer to choose a brand when making a purchase. 3. Brand Recall Recall of a brand based on request for someone to mention a particular brand in a product class. This termed the warning again without help. Because it is different from recognition test, respondent do not need to be help to raise

brand. 4. Top Of Mind Top Of Mind is if someone asked directly without any help of admonishment and he can mention the brand name, the brand most mention first is top of mind. In other word, the brand is the brand that exist in the mind of customers.

Keller (2003), Brand Awareness is consist of brand recognition, reflecting the ability of consumer to confirm prior exposure to the brand. And brand recall, reflecting the ability of consumer to retrieve the brand when given the product category, the needs of fulfilled by the category, or some other of probe as a cue. According to Kapferer (2008), when a brand is known, each individual known it is know. Astuti and Cahyani (2007) found that brand awareness can help associating the brand to what the company expected. Creating Familiarity, and showing customers the commitments to its brand. Customers tends a product when that they aware to it brand because they feel save with something that is familiar for them and they assume that the brand that they know is reliable and has quality.

2.2.2. Brand Association According to Aaker (1997) brand association is everything related to the memory about the brand. Or in other words, all the impression that comes to mind someone that related with their memory about a brand. The underlying value of the brand is often based on specific associations related to it. Brand association is a collection which related to the brand that consumers remember about. The relations are sort of association from a few things because the information that delivered to consumers through product attributes, organization, personality, symbol, or communication. Keller (2003), brand association in the other informational nodes linked to the brand in memory and contain the meaning of the brand for costumers.

Based on Aaker (1991), as cited in Danang Adhi Putra (2011) the associations that relate to the brand will generally be related with the following matters: 26

1. Product attributes, like the characteristics of the product. 2. Intangible attributes, such as perceived quality, value impressions, and others. 3. Benefits for customers, which consists of the rational benefits and psychological benefits. 4. Relative prices. 5. Brand association with the use of a particular. 6. Brand association with a particular type of customer. 7. Brand association with famous people 8. Lifestyle of the product user. 9. Product class. 10. Knowing the competitors. 11. Linkage to a country or a geographical region.

2.2.3. Perceived Quality According to Aaker (1997), as cited in Danang Adhi Putra (2011) the perceived quality is the consumer's perception of the overall quality or superiority of a product or service with respect to its intended purpose. While Astuti and Cahyadi (2007) states that the perceived quality is a customer's perception of the attributes that are considered important for him/her. There are five values that can describe the perceived quality (Durianto, et al, 2004), as follows : 1. Reasons to buy A good perceived quality can help all the elements of the marketing program to be more effective. If the perceived quality high it is likely that advertising and promotion will be done effectively. 2. Differentiation or position Perceived quality of a brand will affect to determine the position of the brand in competition. Related to the perception of quality, if the brand is the best or only competitive against other brands. 3. Optimum Price The right decesion to determine the optimum price is right can help 27

company to improve the perceived quality of that brand. 4. Interests in the distribution channel The reseller, distributors, and various other channels postal prefer to market products favored by consumers, and customer preferred products with good perceived quality. 5. Brand extension Brand with a strong perception of quality will have a greater chance of success to implement the brand extension policy.

According Durianto, et al (2004), there are dimensions affect the quality of a product, such as: 1. Performance, is the main operational characteristics of the product. 2. Features, is a secondary element of the product or additional parts of the product. 3. Conformance with specifications, there is no defective products. 4. Reliability, is the consistency of product performance. 5. Durability, is the durability of a product. 6. Service ability, is the ability to provide services in connection with the product. 7. Fit and finish, namely shows when the emergence or felt the quality of the product.

In this study, the variable of perceived quality is measured by three indicators, namely: quality of product, level of comfort, and quality of products compared to other product brands.

2.2.4. Brand Loyalty Accroding to David A.Aaker (1991), Brand Loyalty is the measurement of a customer relationship in a brand. Brand Loyalty is a situation where the consumer are afraid to purchase or use the products or service from another brand that he does trust. Brand Loyalty exist when the consumer feel that the brand can give the right products or service characteristic and quality at right price, even if the other 28 brands are offering the cheaper price or better quality, the brand loyal consumer will still using that brand.

The loyalty of the customer base reduces the vulnerability to competitive action. Competitors may be discouraged from spending resources to attract satisfied customers. Aaker (1991) state that there are five levels of brand loyalty that will be described in a pyramid like the following below :

Figure 2.3 : Aaker’s Brand Loyalty pyramid Source: David A. Aker (1991)

In his Brand Loyalty pyramid, Aaker identifies five levels of brand loyalty, ranging from not loyal to very loyal (the lowest level is depicted at the bottom of the pyramid). He describes the customer behavior for each level, and pinpoints challenges faced by marketing professionals in their efforts to lift a customer/ consumer to a higher level. The greater the number of customers/ consumers in the higher sections of the pyramid, the more effective the pursued branding policy.

Aaker’s Brand Loyalty pyramid describes five types of customer behaviour on the brand loyalty scale: (1) switchers, (2) satisfied/ habitual buyers, (3) satisfied buyers with switching costs, (4) brand likers and (5) committed buyers. We will

29 further go into these five types in the following:

1. Switchers These are buyers that are not loyal to the brand in question. This kind of customer/ consumer does not look at the brand at all in his/her purchase behaviour. They tend to buy a brand in the sale, or that they happen to stumble upon. This type of customer/ consumer has no qualms about switching brands. Marketing will be most effective in targeting these consumers by focusing on raising brand name awareness, as that is a precondition for moving up on the pyramid (a brand will, after all, have to be known to people first, before they can even start considering to buy it).

2. Satisfied/ habitual buyer These are customers/ consumers that buy a brand out of habit. These tend to be reasonably satisfied customers, who basically don’t see any reason to change their purchase behaviour (and are therefore not on the lookout for alternatives). When such a customer has to go to some trouble to get his usual brand, he/she will relatively easily buy another brand (instead of going to another shop to get the brand he/she usually buys). Marketing efforts will here have to raise the thresholds between the brand and other brands, which will create opportunities to make a customer more loyal to the brand.

3. Satisfied buyer with switching costs These are satisfied buyers that are reluctant to switch to a competing brand due to existing thresholds (switching costs). Such thresholds can come in the form of: expenses incurred in terms of time (the time it takes to go to another shop to find the usual brand), financial expenses (when switching costs money), and the feeling of making concessions to quality. If marketing efforts look to entice satisfied buyers of another brand into switching to a brand, the brand will have to offer major benefits compensating the switching costs (such as a free iPod when signing up for a credit card). Retaining buyers or attracting new ones at this level of brand loyalty requires a marketing strategy based on increasing perceived 30 quality.

4. Brand likers These buyers can be typified as true brand enthusiasts. Their brand preference is mostly engendered by an experience of emotional benefits alongside more rational benefits, such as price, time and quality. Emotional benefits can be pursued by linking certain associations (through TV ads) and/or experiences (such as the shopping experience) to a brand. This highly positive attitude towards a brand can be seen as a kind of friendship. This is further reflected by the fact that brand likers are generally unable to state why exactly they have such a strong preference for the brand in question (which is normal for people with an emotional bond with a brand).

5. Committed buyer These are the proud users of a brand, in whose (daily) lives the brand in question actually plays an important role. Committed buyers buy this brand because it closely ties in with their personal values. Examples of committed buyers can be found in the customer bases of brands like Harley Davidson and Apple. Retention of customers/ consumers at this level of brand loyalty can best be realized by rewarding their loyalty. This can be done through loyalty cards, reward programs enabling customers to earn points, preferential treatment when issuing limited editions, etc.

2.3. Consumer Buying Decision According to Peter and Olson (2005) that behavior refers to the physical actions of consumers that can be directly observed and measured by others. Example, shopping at the stores, buying products and using credit card. While Kotler, Armstrong, Saunders and Wong (1999, cited in Bornmark, Goransson, Svensson, 2005) there are more than just cultural factors that influence consumer behavior. Other factors are : social (groups of the consumers, the consumers, family and the consumers, role and status), personal (age and lifecycle status of the consumers, in

31 the words, the occupation, economic circumstances, lifestyle, personality and self- concepts that the consumers have), and psychological factors (motivation, perception, learning, the beliefs and the attitudes of the consumers).

Consumer behaviour according to The American Marketing Association (2010) the dynamic interaction of affect and cognition, behaviour, and the environment by which human beings conduct the exchange aspects of their lives. In other words, consumer behaviour involves the thought and feelings people experience and the actions they perform in consumption processes.

Kotler (2008) defines that a person might have a different role in any purchasing decision. Various role that may occur are as follows : 1. User is the one who use the product of service. In many cases, users initiate the buying proposal and help define the product specifications. 2. Influencers are the one who help to define specifications and also provide information for evaluating alternatives. 3. Buyer is the one who have a formal authority to select the supplier and arrange terms of purchase. 4. Deciders are the one who have formal or informal power to select or approve. In routine buying, the buyers are often deciders. And Kotler also defines that there are 4 types of buying decision behavior. There are :

1. Complex buying behavior In complex buying behavior consumer shows high level of involvement while prchase and observe considerable difference among brands. Consumer may be highly involved when the product to be purchased is expensive, risky, purchased infrequntly, and highly self-expressive. Typically, a consumer has much to learn about the product category. So in this case the consumer must collect proper information about the product features and the marketer must provide detailed information regarding the product attributes. For eg. Consumer while buying a 32 motor cycle is highly involved in the purchase and has the knowledge about significant differences between brands.

2. Dissonance buying behavior In dissonance buying behavior consumer involvement is very high due to high price and infrequent purchase with less significance difference among brands. Meaning that consumers will make the process of buying faster because they aren't considered with the differences in term of the brand. When they do that, they might experience post-purchase dissonance, where they will notice a certain disadvantage of the purchase brand. To counter this, the marketer's after-sale communication should provide evidence and support to help consumers feels good about their brand choices.

3. Habitual buying behavior In habitual buying behavior consumers involvement is low as well as low is no significance among brands name. Consumers do not search extensively for information about the brands, evaluate the brand characteristics, and make weighty decisions about which brand to buy. Consumers appears to have low involvment with most low-cost products, frequently purchased product. Marketers of low-involvement products with few brand differences often use price and sales promotion to stimulate the product.

4. Variety seeking behavior In variety seeking behavior situation consumers involvement is very low but there are significance differences among brand. In this situation significant perceived brand differences means that they likely switching brands because consumers want to seek variety, nt because consumers are not satisfied with the product. The marketers of variety seeking products will encourage it by offering lower prices, special deals, coupons, free sample, and advertising that present the reason for trying something new.

Based on Kotler (2008) Purchase decision process will be conducted by costumers 33 will go through several stage, as follow :

Figure 2.4. Purchase Decision process Source : Kotler (2008)

1. Need Recognition This is often identified as the first and most important step in the Customer’s Decision Process. A purchase cannot take place without the recognition of the need. The need may have been triggered by internal stimuli (such as hunger or thirst) or external stimuli (such as advertising or word of mouth). At this stage, marketers should research consumer to find out what kinds of needs or problem arise, what brought them about, and how they led the customer to this particular product.

2. Information Search Having recognised a problem or need, the next step a customer may take is the Information Search stage. Interested consumers may or may not search for more information. If the costumers drive is strong and satisfying product is near at hand, the consumers is likely to buy it then. But if it is not, the consumers may store the need in memory or undertake an information search related to the need. Consumer can obtain information from any several sources (family, friends, advertisement, wensite, evamining and using the product). As the information that obtained, the consumers awareness and knowledge of the available brands and features increase.

3. Evaluation of Alternatives As you might expect, consumers will evaluate different products or brands at this stage on the basis of alternative product attributes – those which have the ability to deliver the benefits the customer is seeking. A factor that heavily influences this stage is the customer’s attitude. Involvement is another factor that influences the evaluation process. Alternative evaluation is a where the consumers processes information and arrives at choosing the brand.

4. Purchase Decision In this stage the consumer chooses the product or brand to be bought. This is the point where an offer is extended to one or more candidates. Two factors can come between the purchase intention and the purchase decision. (Kotler and Armstrong). First is the attitudes of others. The second factor is unexpected situational factors. A consumer may form a purchase intention based on the factors such ad expected income, expected price, expected products benefits. However, the unexpected events may change the purchase intention as well. Marketers can alson influence the purchase decision.

5. Post-Purchase Behaviour In brief, customers will compare products with their previous expectations and will be either satisfied or dissatisfied. Therefore, these stages are critical in retaining customers. If the consumers feel that the product not far from the expectations, the consumer will be feel disappointed. But if the consumers feel that product meet the expectations, the consumers will be feel satisfied, and it will be result in brand loyalty. On the basis of being either satisfied or dissatisfied, it is common for customers to distribute their positive or negative feedback about the product. Companies should be very careful to create positive post-purchase communication, in order to engage customers and make the process as efficient as possible.

2.4. Theoretical Framework Based on the problem and the use of alternative solution that researcher will use to conduct this research, it can be arranged the theoretical framework to analyze the effect of brand equity in the customers buying decision to choose cosmetic product. In analyzing the brand equity, researcher will use brand awareness (X1), brand association (X2), perceived quality (X3) and brand loyalty (X4) as the elements of brand equity. These elements will be assessed to the customers decision in choosing cosmetic product.

Brand Equity and Customer Purchasing Decision

Brand Equity Variables

Partially Brand Awareness (X1)

Customers Brand Association Buying (X2) Decision (Y) Perceived Quality (X3)

Brand Loyalty (X4)

Simultaneously Independent Variables Dependent Variable

Figure 2.5. Theoretical Framework Source : Self construct

2.5. Hypothesis 1. Ho : There is no significant partially between brand awareness into the customer buying decision in choosing cosmetic product. H1 : There is an significant partially between brand awareness into the customer buying decision in choosing cosmetic product. 2. Ho :There is no significant partially between brand association into the customer buying decision in choosing cosmetic product. H2 : There is an significant partially between brand association into the customer buying decision in choosing cosmetic product. 3. Ho : There is no significant partially between perceived quality into the customer buying decision in choosing cosmetic product. H3 : There is an significant partially between perceived quality into the customer buying decision in choosing cosmetic product. 4. Ho : There is no significant partially between brand loyalty into the customer buying decision in choosing cosmetic product. H4 : There is an significant partially between brand loyalty into the customer buying decision in choosing cosmetic product. 5. Ho : There is no significant simultaneously between brand equity into the customer buying decision in choosing cosmetic product. H5 : There is an significant simultaneously between brand equity into the customer buying decision in choosing cosmetic product.

2.6. Previous Research

Research Title Result

Rina Meidianingsih (2008) Using multiple linear regression. Based on THE ANALYSIS OF multiple linear regression analysis is known that BRAND EQUITY TOWARD variable dominant influence to purchasing CUSTOMER BUYING decision is brand awareness variable with value of DECISION (Case Study on coefficient regression is 0.310 or higher than any

Frestea) other independent variables. Reject Ho (F count > F table) it’s means that there is a relation in brand equity with purchasing decision. The result of simultant test (F test) has a decided that all the independent variables together influence to purchasing decision. Adjusted R Square value is 0.278, the meaning is 27,8% implies brand equity (brand awareness, brand association, perceived quality, brand loyalty and advertising) extrinsic can influence purchasing decision, where as the rest as large as 72,2% is determinate by other variables that aren’t know and excluding those in this regression analysis.

Wahyu Arti Wirastomo Using multiple regression. These results indicate (2012) that all the independent variables tested are ANALYSIS THE positive and significant impact on consumer’s INFLUENCE OF BRAND buying decision through the F test and t test, EQUITY TOWARD whereas the number Adjusted R Square of 0.436 PURCHASE DECISION ON indicates 43,6% of the variation in consumer’s MOTORCYCLE (Study on buying decision PT Yamaha Agung Motor the customer PT Yamaha Semarang which can be explained by the fourth General Motors Semarang) independent variable (Brand Equity), where the remaining 56,4% is explained by other factors outside of the study.

Darma Kusuma Moh.Zen Using multiple regression. Where the buying (2012) decision variable (Y), Brand Awareness (X1), ANALYSIS THE EFFECT Brand Association (X2) and Perceived Quality OF BRAND EQUITY (X3). Testing the hypothesis using the F test TOWARD CONSUMER showed that the four independent variables PURCHASE DECISION ON studied together proved a significant effect on the

POCARI SWEAT dependent variable. Then through the t-test can be ISOTONIC (Case Study in seen that brand awareness, brand associations and the Faculty of Economics and perceived quality. shown to Business Universitas significantly influence the purchasing decisions Diponegoro) partially. Figures Adjusted R Square of 0.512 indicates that 51,2 percent of purchase decisions variation can be explained by the four independent variables in the regression equation. The remaining 48,8 percent described other variables outside the four variables used in this study.

CHAPTER III METHODOLOGY

3.1. Research Method There are two types of research method, quantitative and qualitative. In this study, the writer would like to use quantitative method rather than qualitative method. The writer use quantitative method in order to make people easily to absorb what the writer has studied. Quantitative method is research based on the numbers and the analysis based on statistic. Quantitative method also can be defined as research method that used to research on specific population or specific sample, data analysis based on statistic, where the objective to test the hypothesis that has been set. (Sugiyono, 2011).

3.1.1. Qualitative research Qualitative research is a naturalistic, interpretative approach concerned with understanding the meanings of certain observed phenomena or actions (Richie and Luwis, 2003). It exemanis, analyzes and interorets observations for the purpose of discovering underlying manings and patterns of relationship in a manner that does not involve mathematical models. The qualitative approach to gathering information focuses on describing a phenomenon in a deep comprehensive manner. This is generally done in interviews, open-ended questions, or focus groups. In most cases, a small number of participants participate in this type of research, because to carry out such a research endeav or requires many resources and much time. Interviews can vary from being highly structured and guided by open-ended questions, or be less structured and take the form of a conversational interview. Because of the investment in this type of research and the relatively few number of participants, findings from qualitative research cannot be generalized to the whole population. However, such research serves as a spring board for larger studies and deeper understanding that can inform theory, practice, and specific situations.

3.1.2.Quantitative analysis Based on Michael Hanna (2009, Quantitative analysis for management) that quantitative analysis is the scientific approach of managerial decision making. The quantitative analysis approach consist of defining a problem, developing a model, acquiring input data, developing solution, testing the solution, analyzing the result and implementing the result. The quantitative approach to gathering information focuses on describing a phenomenon across a larger number of participants thereby providing the possibility of summarizing characteristics across groups or relationships. This approach surveys a large number of individuals and applies statistical techniques to recognize overall patterns in the relations of processes. Importantly, the use of surveys can be done across groups. For example, the same survey can be used with a group of mentors that is receiving training (often called the intervention or experimental groups) and a group of mentors who does not receive such a training (a control group). It is then possible to compare these two groups on outcomes of interest, and determine what influence the training had. It is also relatively easy to survey people a number of times, thereby allowing the conclusion that a certain features (like matching) influence specific outcomes (well-being or achievement later in life).

This research is conducted by using quantitative method, since according to Sugiyono (2007) quantitative method is used to conduct the research on current population or representative sample. The process of the research is deductive, where in order to answer the problem identified, theories is used to get the hypothesis, later on the hypothesis is tasted by collecting data on the field. Quantitative research commonly done to the random sample, so the result of the research can be generalized into the population where the sample was taken. This research is causal, means research that are trying to find out is there any effect between two or more variable, and how much is the effect, after that results of this research can give some suggestion that can help the organizations decision making process.

3.2. Operational Definition

Table 3.1. Operational Definition

NO Variable Indicator Code

1 Brand 1. The cosmetic products from that brand I Awareness like the most were very familiar for me. (X1)1 (X1) 2. In the purchasing cosmetic products, the (X1)2 first brand in my mind is that brand.

3. The shape of the product packaging and slogan on the cosmetic product from that (X1)3 brand is easily recognized and memorized

4. The cosmetic that I wear from that brand is a brand that is well known in society. (X1)4

5. Cosmetic products from the brand has a specific characteristic that make me able to (X1)5 remember

2 Brand 1. Cosmetic products from that brand we (X2)1 Association can easily find in the mall in Jakarta

(X2) 2. I can easily remember the advantage of (X2)2 cosmetic products from that brand

3. The variation cosmetic product from that (X2)3 brand are very various.

4. The price of cosmetic product from that brand can be affordable with my income (X2)4

3 Perceived 1. The quality of cosmetic products from that brand meet my expectation (X3)1

Quality (X3) 2. The price for cosmetic product from that (X3)2 brand is worth with the quality

3. The cosmetic product from that brand has advantage among the others (X3)3

4. No problems in my face when using (X3)4 cosmetic products from that brand

4 Brand Loyalty 1. When I want to buy cosmetic products, (X4) that brand is my first choice for cosmetic (X4)1 product.

2. If there any friends or relatives confused to determine the brand for cosmetic (X4)2 products that match with them, I would recommend that brand

3. I gave reviews about my cosmetic products from the brand that I have used (X4)3 frequently, to my friends or relatives

4. I don't want to buy cosmetic products from other brands, because I already feel (X4)4 comfortable with cosmetic products from that brand

Customer 1. After I bought the product from that Buying brand and I felt the advantage from Decision (Y) cosmetic product from that brand, I would recommend people who ask me about the (Y)1 cosmetic products, and I suggested them to buy the products from the same brand that I use

2. I often looking for information about that (Y)2 brand before I buy cosmetic products.

3. That brand has more advantages over cosmetic products from the other brand (Y)3

4. I interest to buy the cosmetic product (Y)4 from that brand because that brand already proven have a good quality.

Source : David A.Aker Theory

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).

3.3.1. Questionnaire Questionnaire is an efficient data collecting technique if the researcher knows exactly what is required and how to measure the variable of interest (Sakaran and bougie, 2009). Questionnaire can be in form of question whether close or open ended questions, that can be delivered directly to the responents or by using mail. Questionnaire is used for a bias number of population (Sugiyono, 2007). The questionnaire that made by the researcher consists of three parts. The first part consists of four questions related to the general information of the respondents, which are: 1. Gender 2. Age 3. Marital status 4. Income

The second part, consist of 17 questions which are related to brand equity is constructed based on four variables of brand equity (brand awareness, brand association, perceived quality, brand loyalty). The last part is the questions that are related to customer buying decision in terms of whether they will buy cosmetic product because of brand equity’s variables, consist of four questions.

3.3.2. Literature Study Literature study is the method of data collection obtained from books and other literature that related with the research materials. Literature study that is used in this study is the use of data as the basic theory obtained and studies in the literature on the subject costumer buying decision, brand awareness, perceived quality, brand association, and brand loyalty.

3.3.3. Scalling In quantitative research, the researcher will use instrument in order to collect the data. Instrument of the research will be used to measure the researched variable. The researcher used Likert Scale on this research, Likert Scale its tools to measure the degree of agreement from the respondents. Likert scale is used to measure the variable value to be shown in form of number, so it can be analyzed accurately, efficiently, and more communicative (Sugiyono, 2007). Likert scale is designed to examine how strongly subjects agree or disagree with the statements on a five- point scale (Sekaran and Bougie, 2009). Like we can see in the table 3.1. Table 3.2 Likert Scale Scale Rating 1 Strongly Disagree 2 Disagree 3 Neutral 4 Agree 5 Strongly Agree Source : Sugiyono, 2007

In this scale, the distance between different categories cannot be quantified. The only possible operation is to determine whether a certain state is greater or smaller than another: the variables produced are, then, ordered categories. Likert scale techniques used because it easy for researcher to analyze the dat and also easy for respondents to understand.

3.4. Research Framework In doing this research, there are some steps which have to be done by the researcher before get the result from the analysis in this study. The figure below show the step for formulating the background of the study, study the literature review to find the solution to solve the problem that stated in the background, collecting data through the questionnaire, transforming and analyzing it using SPSS v16, interpretation of the result, and lastly is conducting the conclusion and recommendation.

NO YES

Figure 3.1. : Research Framework Source : Self constructed

3.5. Validity and Reliability 3.5.1. Validity Test

The validity test show how far questionnaire is able to measure what the researcher want measure in this study. Validity test is used to determine whether the questionnaire is valid or not. The measure that is valid measure is what it claims to measure. Validity is measured by the use of correlation coefficient. To measure the validity of the questionnaire, each questionnaire is calculated by using the coefficient of correlation of Pearson Product Moments, the formula is :

푁 ∑ 푋푌 − (∑ 푋)(∑ 푌) 푟 = √푁 ∑ 푥2 − (∑ 푋)2 √푁 ∑ 푌2 − (∑ 푌)2

Source: Berenson, Levine & Timothy C. Krehbiel (2011)

Where: n = the number of paired observations Σ X = the X variable summed Σ Y = the Y variable summed Σ X2 = the X variable squared and the squares summed (Σ X)2 = the X variable summed and the sum squared Σ Y2 = the Y variable squared and the squared summed (Σ Y)2 = the Y variable summed and the sum squared Σ XY = the sum of the product of X and Y The basic of decision making: 6. If Positive, and ≥ the item of the question is valid 7. If Negative, and < the item of the question is invalid

3.5.2. Reliability Test Reliability of measure indicates the extent to which it is without bias and hence ensures consistent measurement across time and across the various item in the instruments. According to Cooper & Schindler (2006) reliability is a characteristic of measurement concerned with accuracy, precision and consistency. According to Ghozali (2005, cited in Hardian 2010) Reliability test is a measure of data from questionnaire, which indicates the variable or construct.

A questionnaire can be reliable, if someone answers the statements are consistent or stable over time. Reliability concern consistency reply if tested repeatedly on different sample. SPSS provides the facility to measure reliability with Cronbach Alpha Statistical test (ơα) . A construct or variable said to be reliable if it delivers value Cronbach Alpha > 0.60.

The formula is as follow:

Where: α : instrument reliability’s coefficient n : number of questions Vi : variance of scores on each question Vtest : total variance of overall scores (not %’s) on the entire test

3.6. Data Collection Method In this study the researcher use two sources to collect data and information. Those are primary data and secondary data. Primary data is data which consists all the information that the researcher needs for conduct the study, its collected and

49 gathered through questionnaire that given to the respondents. And for secondary data, it is information that collected and gathered by the researcher for conduct the study, the process of gathering secondary data is could from internet, books, or any other resources that can be used for this study purpose. In order to produce accurate, valid and reliable data, the researcher needs to do an appropriate data collection process.

3.6.1. Primary Data Primary data is the which is obtained directly from the source of the data, observed, and noted for the first time by the researcher. According to Donald Currie (2005) primary data definition is "data that were previously unknown and which have obtained directly by the researcher for a particular research object" and the other side Malhotra (2010) define primary data as data originated by the researcher for the specific purpose of addressing the research problem. Primary data in this research was obtained by distributing the list of question in form of questionnaire to the customer cosmetic product in Jakarta

3.6.2 Secondary data According to Malhotra (2002) secondary data is “data collected for some purpose other than the problem at had”. In this research the researcher collect and get the secondary data from internet, journals, articles, and previous studies.

3.7. Sampling Design Sample is a subgroup or subset of the population by studying the sample, researcher should be able to make conclusions that can be generalized to the population (Sakaran and Roger Bougie, 2009). In this research, the questionnaire was distributed to the all of the customer cosmetic product.

3.7.1. Sampling Method Since the number of population is unknown, this number is attained from Malhotra (2004, p. 103) theory whom stated that the number of samples taken can

50 be determined by multiplying the number of items of variables being observed by 4 or 5. In this research, the researcher will take 140 samples because the minimum of the respondent that match with the statement of Malhotra the minimum respondent are 105 sample.

Sample will be chosen by using non-probability sampling. Non-probability is a technique which the probability of any particular member of the population being chosen is unknown . Units of the sample are selected on the basis of personal judgment of convenience.

3.7.2. Population Uma Sekaran and Roger Bougie (2009) define population as the entire group of people, events, or things of interest that the researcher wishes to investigate. Population is the set of elements that the research focuses upon and to which the results obtained by testing the sample should be generalized. It is absolutely essential to describe accurately the target population . This research, aimed to observes about brand equity and customer buying decision on cosmetic product, so the population is the consumers cosmetic product on Jakarta

3.8. Classic Assumption 3.8.1. Normality Test Normality test aims to test whether the regression model, the variable residual confounding or have a normal distribution or not. According to Ghozali (2005, cited in Hardian, 2010) there are 2 ways to detect whether or not the residuals are normally distributed with graph analysis and statistical analysis. A regression model is good if the distribution is normal or approaching normal (Santoso, 2000, p. 212-213). The normality assumption could be analyze by using the Normal P-P Plot of Regression Standardized Residual graphic and Kolomogorov-Smirnov method. In this research, the researcher used the Normal P-Plot of Regression Standardized Residual graphic. The indicators of normality assumption could be based on:

1. If the spread of the data is around the diagonal line, and keeping up with the diagonal line, then the regression is meet the normality assumption. 2. If the spread of the data is far from the diagonal line and/or not keeping up with the diagonal line, then the regression is not meeting the normality assumption.

3.8.2. Multicollinearity Test Multicollinearity test is one of the key assumption test of multiple regression that wanted to know whether the independent variable are independent one another. Multicollinearity means a statistical problem in which two or more independent variable in multiple regression model are highly correlated. The higher level of intercorrelation among the independent variables the worse the problem becomes (Sakaran and Bougie, 2009; Churchill, Brown, Suter, 2010) According to Santoso (2000), the indicators of multicollinearity assumption could be based on: 1. The value of VIF is around 1 which means the regression does not have a multicollinearity problem. 2. The value of Tolerance is close to 1 which means the regression does not have a multicollinearity problem.

3.8.3. Heterocedasticity Test According to Ghozali (2005, cited in Hardian, 2010) the Basic analysis for Heterocedasticity analysis. If there is a specific pattern, such as the existing dots form a pattern Regular (corrugated, wide then narrows), it indicates has occurred heterocedasticity and if there is no clear pattern, and the points are spread above and below 0 on the Y-axis, heterocedasticity does not occur.

Heterocedasticity test is used for knowing whether the data is not normally distributed and it also use to know if the variance terms of errors are difference across observations. Whether there is inequality of variance of the residual from one observation to other observation. It can be seen from scatter plot by looking at distribution of residual value toward the predicted value. If the distribution is 52 spread randomly without any systematic pattern, then the data is passed the heterocedasticity.

3.9.Testing the Hypothesis 3.9.1 Multiple Regression In this research, the researcher used multiple regressions method to find out brand awareness, brand association and brand that can affect the consumer buying decision. According to Stair, JR and Hanna, (2009), “multiple regression models is a practical extension of simple regression in which it allow user to build a model with several independent variables”. Multiple regressions is used as a quantitative method and computed by SPSS. The general purpose of multiple regressions is to learn more about the relationship between several independent or predictor variable and a dependent or criterion variable.

Y=a + b1X1+ b2X2+ b3X3+ε

Source : http://www.csulb.edu/~msaintg/ppa696/696regmx.htm

Figure 3.2. Multiple Regression

Y : Value of the Dependent variable a : Constant or intercept b1….b4 : Regression Coefficient x1 : Dimension score of brand awareness x2 : Dimension score of brand association x3 : Dimension score of perceived quality x4 : Dimension score of brand loyalty ε : Sampling error

3.9.2. Coefficient of Determination Analysis (R2) This analysis is used to find out the percentage how much the influence of independent variables to the dependent variable in this multiple regression model. This analysis is used to find out the percentage how much the influence of independent variables to the dependent variable in this multiple regression model. The value R Square is range from 0 till 1. If the value R square is close to 0, means that the capability of independent variable to explain the dependent variable is week. In other side if the value of R square is close to 1, means that the capability of independent variable to explain the dependent variable in this research is strong.

3.9.3. T-Test (Partial) Based on Ghozali (2005, cited in Hardian 2010) T statistic test shows how much influence the individual independent variable (partial) in explaining the variation in the dependent variable.

1. Ho : 1 = 0 or if significant > a rejected Ho (Brand Awareness has no influence toward customer buying decision)

Ho : 1 ≠ 0 or significant < a, accepted Ho (Brand Awareness has influence toward customer buying decision)

2. Ho : 2 = 0 or if significant > a rejected Ho (Brand Association has no influence toward customer buying decision)

Ho : 2≠ 0 or significant < a, accepted Ho (Brand Association has influence toward customer buying decision)

3. Ho : 3 = 0 or if significant > a rejected Ho (Perceived quality has no influence toward customer buying decision)

Ho : 3 ≠ 0 or significant < a, accepted Ho (Perceived quality has influence toward customer buying decision)

4. Ho : 4 = 0 or if significant > a rejected Ho (Brand Loyalty has no influence toward customer buying decision)

Ho : 4 ≠ 0 or significant < a, accepted Ho (Brand Loyalty has influence toward customer buying decision)

T statistical test is conducted by comparing the t value with the value of t table using a significance level of 5%. If the t value is grater than t table then individually independent variables would affect the dependent variable. The test can also be done by reviewing the value of probability. If the probability value is less than 0.05 ( for a significance level = 5% ), then the individual independent variables affect the dependent variable. Meanwhile, if the probability is grater than 0.05, meaning the independent variable as individually had no effect on the dependent variable.

3.9.4. F – Test F test is used to determine whether there is a significant relationship between independent variables and dependent variable. According to Ghozali (2005, cited in Hardian, 2010), F statistic test shows whether all the independent variables that include in the model have an influence on the dependent variable. This test is done by comparing the value of F calculated by the value of F table using significant level of 5%. If the count value of F is > F table then the independent variables is affecting the dependent variable. The hypothesis :

a) If the table > F count, then Ho is accepted and H1 rejected If the F table < F count, then Ho is rejected and H1 accepted b) If the probability of significance > 0.05, Ho is accepted and H1 rejected If the probability of significance < 0.005, Ho is rejected and H1 accepted.

Formally we can say that if the significance value is greater than 0.05 we have to reject the null hypothesis. The general ways to evaluate influence of independent variables towards dependent variable simultaneously is by analyzing the F column in ANOVA table

CHAPTER IV ANALYSIS OF DATA AND INTERPRETATION OF RESULT

4.1. Company Profile 4.1.1. Bobbi Brown Bobbi's Story

Bobbi's Beginnings Even as a young girl, Bobbi was enthralled by makeup. "I remember watching my mother apply her white eye shadow and black liner in her blue gilded bathroom she was glamorous, but fresh-looking." And as soon as she was able to work, Bobbi raced to the small cosmetics store in town, where she got her first taste of formal training. Bobbi's education continued at Boston's Emerson College, where she earned a B.F.A. in theatrical makeup. Upon graduation, she moved to New York City to make it as a professional makeup artist. She showed her ever- growing portfolio to anyone who would look at it, slowly built up contacts, and experienced the challenges typical of most freelance makeup artists trying to make it in Manhattan.

But despite the ups and downs, her talent and drive earned her coveted gigs with top magazines, photographers, and models. Bobbi began her collaboration with photographers Bruce Weber, and Arthur Elgort for American Vogue, as well as with the late Francesco Scavullo for Cosmopolitan and Self. A seven-page spread of full-face beauty shots of supermodel Tatiana Patitz shot by Wayne Maser also

56 put Bobbi's work front and center. Bobbi's big breakthrough was her first American Vogue cover. The image was shot by famed photographer Patrick Demarchelier and featured the soon to be supermodel Naomi Campbell, made up by Bobbi Brown. Seven years after arriving to New York City knowing no one, Bobbi was part of the club. The industry took notice.

Bobbi's Big Idea As a successful makeup artist with access to everything in the market, Bobbi found nearly all products looked too artificial, making it impossible to create a gorgeous, no-makeup look. Ten years into her freelance career, a chance meeting with a chemist at a magazine photo shoot changed everything. "I had the idea to create a lipstick that didn't smell, wasn't dry or greasy, and looked like lips, only better and I told the chemist about it," she says. The chemist made the lipstick following Bobbi's unprecedented specifications and the result was Brown Lip Color, a pinky-brown shade. Nine other brown-based lipstick shades followed soon after, and Bobbi’s set of lipsticks was complete. In 1991, her 10 lipsticks debuted at the Bergdorf Goodman under the name of Bobbi Brown essentials. Bobbi was expecting to sell 100 in a month. She sold 100 within the first day. The message was clear: Women wanted makeup that was simple, flattering, and wearable.

The Birth of Bobbi Brown Cosmetics Word spread quickly. Bobbi's unique approach to cosmetics was a long-awaited gift for women who wanted a more natural look. The magazine industry’s most prominent beauty editors got behind Bobbi, and her small, insider brand garnered big time buzz. The range expanded beyond lipstick. Bobbi's foundations were yellow-based, not pink, revolutionizing face makeup as it’s known today. And, before long, she showed that she was as adept at neutrals as she was at bright and bold colors. This sea change in the beauty market caught the attention of cosmetics empire Estée Lauder, who bought Bobbi Brown Cosmetics in 1995, just four years after the company’s inception. Today, Bobbi Brown retains creative control of the brand.

Bobbi Brown Today In addition to running her company, Bobbi continues to pursue her craft by creating the runway looks for New York Fashion Week. A permanent fixture backstage, she works with the industry’s best designers including Rachel Roy, J. Mendel, Erin Fetherston, Tory Burch and Cynthia Rowley. Bobbi often does how- to segments on The Today Show and The Oprah Winfrey Show, and her advice can be found in syndicated columns and advice features for magazines and websites around the globe. Of course, you can always find Bobbi where she began on the set. Bobbi is still the world's most celebrated makeup artists for personalities and fashion magazines.

A New York Times bestselling author, Bobbi has written five instructional and engaging beauty and lifestyle books: Bobbi Brown Beauty, Bobbi Brown Teenage Beauty, Bobbi Brown Beauty Evolution, Bobbi Brown Living Beauty and Bobbi Brown Makeup Manual. For Bobbi, making other people's lives better simply makes sense. "I love helping others because it feels good," she says. On a year- round basis, Bobbi Brown Cosmetics donates generous financial and in-kind support to organizations including Dress for Success and the Jane Addams Vocational High School.

4.1.2. Etude House

Etude House is a South Korean cosmetics brand owned by Amore Pacific. Etude House name was inspired Frederic Chopin, Polish Composer. Mission of company To beautify young women through lovely product and friendly counseling.

Company History The company was established in 1966, and the corporate name was changed to Oscar Corporation in 1985. In 1990, it was incorporated by Amore Pacific Group. The name was changed to Etude Corporation in 1997.

1985.12 Identity changed to Oscar Corp

1990.07 Incorporated by Amore Pacific Group

1994.01 Launched exports to Hong Kong

1996.05 R&D facility established for color cosmetics

1997.08 Name changed to Etude Corp.

1998.11 Awarded by Korea’s Ministry of Commerce, Industry for surpassing 1 Million USD in exports annually.

2003.11 Awarded by Korea’s Ministry of Commerce, Industry for surpassing 5 Million USD in exports annually

2005.08 Launch of Etude House Seoul

2006.04 Consolidation with eSpoir Corp. (Fragrance)

2007.04 Etude House opens its 100th brand shop

2007.11 Awarded by Korea’s Ministry of Commerce, Industry for surpassing 10 Million USD in exports annually

2009.04 Etude House opens its 200th brand shop

2009.05 Taiwan launch

2009.06 Singapore launch

2009.11 Home Shopping launch in Japan

2009.12 Philippines launch

2012.02 Awarded top honour by First Brand Korea

2012.09 Myanmar & Brunei launch

2010.12 Etude House opens its 100th overseas branch

2011.02 Awarded by IF International Design Award for Packaging

2011.11 Japan Branch Launch (Shinjuku, Tokyo)

2013.11 Awarded by Korea's Ministry of Commerce, Industry for surpassing 5 million USD in exports annually.

Brand Identity

Etude's brand logo represents the Sweet Dreams of all young women. 'Sweet Star' symbolize the witty charm and bright shine of a beautiful heroine. 'Sweet Heart' symbolize a pure and beautiful heart the sincerely loves the world. 'Sweet Dream' symbolize a magical carriage ride to a majestic castle full of power and imaginations.

Etude House Indonesia

Etude House is a Korean cosmetic brand that is worldwide. Etude House mission is to beautify women through cosmetic products are attractive and friendly counseling. In addition, the product Etude House has 4 basic concepts are the best quality, reasonable price, beautiful design and the interesting color variants. Etude House realize the dream of every woman to look beautiful and alluring with the makeup way that is easy and also fun. More than 270 retail stores spread all over the world. Till today Etude House has been in 11 countries including: Indonesia, Singapore, Japan, Thailand, Philippines, Taiwan, Myanmar, Vietnam, Malaysia, Brunei and Hong Kong. Etude House in cooperation with PT Jaya Bhakti as a solo intercostal distributor and opened the first store in 2008 in Jakarta, Indonesia. Until now there are 32 stores Etude House in Indonesia (such as Jakarta, Bekasi, Surabaya, Bandung, Medan, Palembang, Semarang, Manado, Bali, Borneo or Kalimantan).

4.1.3. L'Oréal Paris

The history of the company Eugène Schueller graduates from France’s national chemical engineering school Ecole Nationale Supérieure de Chimie de Paris in 1904. In 1907, Eugéne Schueller, a young French chemist, developed an innovative hair colour formula. He called this new, perfectly safe, hair duy “Aurelióne” .With this, the history of L‘Oréal began. Eugéne Scheller formulated and manufactured his own products, which he then sold to Parisian hairdressers. The dyes are an outstanding

61 breakthrough at the time, providing a subtle range of colors in contrast to other methods on the market, which use henna or mineral salts but produce a bright, somewhat artificial look. Schueller files for a patent (n°383920) on 24th March 1908.

In 1909, Schueller registred his own company, the, Société Francaise de Teintures Inoffensives pour Cheveux“, the future L‘Oréal. The two guiding principles of the company were research and innovation in the interests of beauty, and these were put into place from the start.

La Coiffure de Paris : already a partnership with the press The first issue of La Coiffure de Paris is published in October 1909, featuring contributions from doctors, writers and chemists. Eugène Schueller is part of the Editorial Team and heads the science column, breaking new ground with an article on hair coloring in which he is the first to recommend patch tests. Schueller buys the magazine in 1912. With the war finally over, a new age begins. Around the world, women are working, earning money, growing more concerned about their appearance and seeking ways to prevent grey hairs from revealing their age. Oréal hair dyes are a great success, even beyond the borders of France, breaking new ground in Italy in 1910, Austria in 1911 and the Netherlands in 1913, even reaching as far afield as the United States, Canada, the UK and Brazil. In 1920, the small company employed 3

In 1912, Eugéne Schueller started to export his hair colouring product to Holland, Austria and Italy. A few years later, agents distributed these products to the USA, South America, Russia and the Far East. Today, the L’Oréal Group is present worldwide through its subsidiaries and agents. L’Oréal got its start in the hair colour business, but the company soon branched out into other beauty products. 62

Currently, The Group markets has over 500 brands and more than 2,000 products in all sectors of the beauty business: e.g. hair colour, permanents, styling aids, cleaners and fragrances and body cosmetics. These products are found in all distribution channels, from hair salons and perfumeries to hyper and supermarkets, health and beauty outlets and direct mail.

Another key word in L’Oréal’s history is communication. Back when advertising was still in its infancy, L’Oréal commissioned promotional posters (still famous today) from graphic artists like Colin, Loupot, Savignec, to publicize the company’s products. In 1933, Eugéne Schueller created and launched Votre Beauté, a magazine devoted to women and their look. In 1935: Women are now enjoying greater emancipation and are revealing more skin. Gone are the days of sober dress and pale skin; the sun tan is now the hallmark of health and a modern outlook. In line with this new trend, Schueller develops a skin-protection oil called Ambre Solaire. The new solution reflects a complex blend of innovative ideas including a warm, amber color, attractive scent, easy-to-hold wavy bottle design, and a pin-up to die for... The product release date is also perfect, with the French people preparing to take their first paid holidays in 1936. This was the start of the “leisure” age, with Ambre Solaire as its first icon. The rose and jasmine perfume of 1937 would soon become synonymous with holiday air.

Eugène Schueller always believed that insufficient purchasing power was the source of economic imbalance between production and consumption. It was this belief that gave rise to his original idea of “proportional salaries”, which made wages proportional to changes in company sales. This meant the true start of an employee profit-sharing scheme, which has since been extended to employees the world over. Its success far exceeded forecasts, with 2,000 companies applying “proportional salaries” in 1947.

On 4th April 1939, the Société des Teintures Inoffensives pour Cheveux officially changes its name to L’Oréal, with premises at 14 Rue Royale in Paris, still the company’s head office today.Four years later, he took part in a popular radio 63 broadcast and started a campaign. The 1950s saw the advent of a new and exciting advertising medium: the movies. L’Oréal made its on screen debut with a campaign for Ambre Solaire, which was making a comeback on the market.

In 1953, L’Oréal won an advertising Oscar, the first in a long series of awards. As part of its bid to steadily gain a foothold in all distribution channels, L’Oréal, signs technical agreements with the Société hygiene Dermatologique de Vichy in 1954. In the wake of success with hair salons and perfume stores, L’Oréal thus cements its position among pharmacies, with Vichy eventually joining the L’Oréal fold in 1980. As soon as he takes over the helm at L’Oréal on Eugène Schueller’s death, François Dalle gives fresh impetus to the company. Creator of “Le Grand L’Oréal”, always mindful of the social conscience of the day and initiator of in- company training, François Dalle keeps one eye on the future which, for him, is the only factor of progress. He is a visionary who is to run a policy of targeted acquisitions in order to expand the Group’s positions in new market sectors and new distribution channels; develop research, the driving force behind internal growth; increase the Group’s international presence; and make beauty more accessible to win new consumers. In recognition of its spectacular yet sound development, the L’Oréal Group is listed on the Paris Stock Exchange which gives it access to new financial resources. The Group’s market capitalisation has increased more than 750 times since 1967. An intuitive man, a people person and a great leader, François Dalle is an innovative manager. The initiatives he introduces – sales force motivation seminars, highly original at the time; debate style meetings (still held today) that give all participants the opportunity to express their views and win people over; setting up, with other companies, the European Centre for Executive Development CEDEP which offers excellence training programmes for all its members; founding the “Entreprise & Progrès” association in 1970 in conjunction with other company heads – all bear witness to his highly 64 humanistic approach to running a company, continued by his successors. Another notable fact is that he has no hesitation in giving responsibility to very young men and women: “We have 27-year-old managers”. Is it not he who spots a young Welsh product manager by the name of Lindsay Owen-Jones?

Synthelabo is one of the leading lights in the French pharmaceutical industry. With L’Oréal’s research teams now reaching beyond cosmetics and getting closer to remedial dermatology, this acquisition gives the Group the means to develop its dermatological and dermopharmaceutical activities.The agreement, which adds to the stability of the Group’s shareholders, is also conducive to L’Oréal’s international development in certain markets, particularly Japan, the future bridgehead of L’Oréal’s expansion in Asia.

From year to year, L' Oréal grow very fast, L' Oréal group was acquiring several famous brands , such as Mininurse. This leading mass-market skincare product is already very well known and has a strong local customer base. Garnier’s first skincare products are launched under the name “Mininurse by Garnier”. L' Oréal continues to expand their business , to Japan. The alliance with Mr. Shu Uemura,

65 a great make-up artist and beauty genius, enables L’Oréal’s Luxury Division to enter the strategic Japanese market, traditionally served by only local brands. To respond to Chinese aspirations for brands that respect the specific qualities of Asian skins, L’Oréal acquires Yue Sai, an affordable luxury skincare and make-up brand that epitomises the modern Chinese woman. L'Oréal also created some new products from the brand Kiehl's. The first Kiehl’s skincare product to benefit from L’Oréal Research, Abyssine Cream is an instant best-seller. And several famous brands are also acquisition by L'Oréal, such as SkinCeuticals, SkinEthic, The Body Shop, Sanoflore, Pureology, a high-end American professional haircare brand, YSL Beauté and its crown jewel YSL L'Oreal's Luxury Products join, Essie Cosmetics, an American brand known for its ultra-trendy nail varnishes, Pacific Bioscience, creator of the Clarisonic ® brand, and Cadum company.

4.1.4. Mac Cosmetics

MAC cosmetics was founded with a creative vision to fill the gap between makeup artistry and fashion photography. Make-up Art Cosmetics, or M.A.C as it's more commonly known, was founded in 1984 by two Canadian chaps named Frank - make-up artist and photographer Frank Toskan and beauty salon owner Frank Angelo. Frustrated because of the lack of colours that would shoot well with photography; their aim was to develop a studio line makeup line that would fulfill their professional needs. M·A·C was homegrown in Canada – literally. The two entrepreneurs cooked up the cosmetics in their kitchen and sold them from the hair salon. Their first customers: fellow makeup artists, models, photographers, then came stylists and editors. With every colour, and every magazine credit, word-of-mouth popularity grew. In March 1984, the duo officially launched the line from a single counter in a department

66 store in Toronto.

It was staffed with professional makeup artists, an industry innovation. Package- wise, it stood out too: it was chic utility. Everything came in black pots rather than compacts. One of the most popular new offerings was an intense matte red lipstick that was used on a photo shoot with a New York cabaret star named Madonna, later photographed wearing a M·A·C T-shirt, the revolution was on. While other major makeup brands were predominantly skincare companies, M·A·C chose instead to establish itself as the ultimate color authority.

The company took the industry by storm, offering a wide range of products that managed to blend street savvy with glamorous style and panache. Behind the counter, the M·A·C approach was notably different. It was the first brand in cosmetic history to invest in the training and education of its staff as well as the customer’s point-of-sale experience. Rather than driving sales through traditional advertising, gifts-with-purchase promotions and heavy sampling, M·A·C relied on the integrity of its carefully formulated product line. Adding to the image was a touch of outrageousness. A company that honored individuality and self- expression above all else, this leaning inevitably brought a brilliant sense of drag and theatre into the sleek M·A·C stores and department store counters. In 1994, as AIDS spread across the globe, M·A·C’s co-founders searched for a way to respond to the epidemic. Encouraged by input from employees, they decided to make HIV/AIDS organizations the beneficiaries of the company’s charitable focus: the M·A·C AIDS Fund was born. To date, through various fundraising initiatives such as Viva Glam, “Kids Helping Kids Greeting Cards” and with the help of celebrity spokespeople from the entertainment and fashion industries. The company’s strong bond with its customers, intimate relationships with professional makeup artists, hip and irreverent attitude and impressive array of award-winning products did not go unnoticed by the cosmetics industry. In 1995, The Estée Lauder Companies purchased a percentage of M·A·C, effectively extending 67 the brand’s distribution across the globe. Estée Lauder Companies purchased 51% of the company. Freestanding stores and counters at the world’s leading retailers opened at a record pace. With its enhanced profile, M·A·C teams began working backstage at international fashion collections. In 1998 Estée Lauder acquired the remaining shares of the company, and John Demsey was named president of M·A·C. Under his leadership, the link between fashion, beauty and culture has been strengthened, allowing M·A·C to stay on the edge. Mr. Demsey has also spearheaded M·A·C’s participation at prestigious film festivals worldwide and in support of the M·A·C AIDS Fund has also encouraged the sponsorship of pop music concert tours for such Viva Glam spokespeople as Mary J. Blige and Missy Elliott. In addition, he has been instrumental in collaborating with celebrities such as Linda Evangelista, Liza Minnelli, Pamela Anderson, Catherine Deneuve and more, to endorse the M·A·C Viva Glam and Beauty Icon programs.

Moving forward, M·A·C continues to satisfy the needs of its customers. Constantly developing existing and new categories, each of which grows out of a demand from professional makeup artists, M·A·C’s ultimate ambassadors. Equally important as the growth of its worldwide business is the company’s ongoing involvement in fundraising efforts and social awareness programs. Besides its commitment to the M·A·C AIDS Fund, the “heart and soul” of M·A·C, the company supports animal-free testing. M·A·C Cosmetics is owned by The Estée Lauder Companies, one of the world’s leading manufacturers and marketers of quality skincare, makeup, fragrance and hair care products.

Unlike most cosmetic brands on the market, MAC cosmetics employs some of the world's best makeup artists for their platform and show work. Many of MAC artists have backgrounds in entertainment makeup artistry. Women shopping the MAC line at either their small boutiques or at high end department stores, can 68 meet with industry professionals on a daily basis. With no sales obligation, you can walk into a MAC store and ask for expert advice to create a natural, trendy, or glamorous look. Trustworthy advice for your skin type, coloring, and application techniques will help get you well on your way to creating the most beautiful you.

Makeup artists working for the MAC line are a highly trained team of professionals who take great passion in foolproof trends and natural beauty. You don't need to feel intimidated when walking into a MAC store. Expect that every visit will be friendly, professional, and information packed. The MAC sales force is strong with industry leaders and passionate artists. If you're in a makeup rut or need help planning a MAC palette for your special day, it's worth every moment of your time to meet with a free of charge MAC professional cosmetic artist.

Celebrity Faces MAC has had top celebrity endorsement and faces representing their line. Currently, Fergie is the glamourous face for the cosmetic line, but many remember that Boy George, Pamela Anderson, Lisa Marie Presley, and Debbie Harry have each been a celebrity spokesperson for the cosmetic line. Every season MAC launches a cosmetic palette that is current with trends and seasonal color. New trends bring new faces, and MAC is constantly changing and rising up to meet the needs of celebrities and their stylists.

Staying Power Because the MAC line was geared for professionals in the fashion photography and entertainment industry, MAC cosmetics have serious staying power. If you've ever experienced the MAC line of cosmetics, you know firsthand that the velvet textures found in the shadows, blushes, and MAC Lipstick moisturize while maintaining a flawless and smudge proof application.MAC cosmetics is certainly the line to seek out if you're looking for a fashion forward palette. MAC products 69 are rich, true to tone and are composed of pure pigments for the gal who likes to go bold or keep it natural.

4.1.5. Maybelline

T.L. Williams founded The MAYBELLINE Company in 1915 and introduced MAYBELLINE Cake Mascara in 1917 as the first modern eye cosmetic to be produced for everyday use. The firm and brand name MAYBELLINE was adopted in honour of his oldest sister, Mabel, from whom he originally received the idea of producing an easy-to-use product to darken the eyelashes which could be sold commercially. MAYBELLINE now operates as a separate division within L’Oréal USA, Inc.

Cake mascara was originally advertised and sold exclusively by mail. It was received so well by the general public that women started asking for it in drug stores. The MAYBELLINE success story didn’t really start until mascara first appeared in the nation’s variety stores. In September 1932, a special 10-cent package of MAYBELLINE mascara was designed for sale in these stores. The subsequent success of this product has become legend. MAYBELLINE eyebrow pencils came along a few years later. Eyebrow pencils were the natural follow-up to the solid mascara as the company’s second eye cosmetic. Eye shadows of various shades were added in the 1920′s and have increased in popularity and general usage year after year.

MAYBELLINE introduced Ultra Lash Mascara, a waterproof product, in the early 1960′s. A true breakthrough, Ultra Lash was the first mass market automatic mascara, which means the mascara is applied directly to the brush in the tube.

Then in 1971, Great Lash, a water-based mascara, was introduced. With a truly legendary history, it is still the number-one best selling mascara in the marketplace. Today, a Great Lash mascara crosses a drugstore scanner every 1.5 seconds. Its winning formula is closely guarded and its hip appeal is undeniable. A makeup artist’s staple, this mascara is always in plain sight backstage at fashion shows. MAYBELLINE currently offers 13 mascara formulas ranging from high tech to high fashion.

New entries to the MAYBELLINE line have consistently made headlines. In the 1970′s, MAYBELLINE successfully branched into other cosmetic categories – face, lip and nail. In 1983, Shine Free, an oil-control makeup line featuring non- comedogenic formulas, was introduced. Shine Free was one of the first lines designed expressly for women with oily skin and is still an important category for the company today. Skin looks fresh and natural all day while keeping oil under control. In 1991, another MAYBELLINE milestone – the “Maybe she’s born with it. Maybe it’s MAYBELLINE” advertising tagline was created. It continues to be a great success for the brand today and is recognized around the world.

In February, 1996, MAYBELLINE was purchased by L’Oréal USA, Inc. and the company headquarters were subsequently moved to New York City. In addition to establishing MAYBELLINE as a colour authority, creating technologically advanced products became a company priority. Since then, the innovation has been nonstop. One of MAYBELLINE’S biggest success stories is the introduction of the Express Finish Fast-Dry Nail Enamel in 1997. It’s every woman’s dream come true – a nail enamel that goes from wet to set in one minute! Express Finish Fast-Dry Nail Enamel is the number-one best selling nail enamel on the market today. Additional Express products soon followed including Express Lipstick ‘n Liner in One, Volum’ 71

Express Mascara and Eye Express Liquid Eyeliner. In 1998, technological advances continued with new products such as HydraTime Extended-Wear Moisturizing Lipcolor and True Illusion Makeup. In 1999, the company expanded the Express product segment with the introduction of Express Makeup 3 in 1 and debuted the new Cool Effect Cooling Cream Shadow and Shadow/Liner and Pure Blush – two more cutting edge products. Today, MAYBELLINE products are carried in more than 70 countries worldwide. The MAYBELLINE message is all about colour, style and innovation. Now recognized as a colour authority, MAYBELLINE creates seasonal colour stories with products in the season’s hottest shades. The MAYBELLINE image is hip, intelligent, stylish and charming – brought to life by MAYBELLINE’S spokespeople: Josie Maran, Tomiko Fraser and Sarah Michelle Gellar. These women embody the MAYBELLINE image in a modern, approachable way. Technology continues to be in the forefront. Through their parent company, L’Oréal USA, Inc., MAYBELLINE has the top research and development teams and resources needed to create the newest, most innovative products available today. MAYBELLINE – a leading mass-market retailer with a strong heritage and bright future – is clearly one to watch.

4.1.6. Revlon

Revlon is a household name all over the world as a result of its successful lines of cosmetics and fragrances. The company was founded in 1932, and within six years, it was a multi- million dollar business conglomerate with brand recognition and sales in about 175 countries and territories internationally. "Revlon" is an amalgamation of letters in the last names of the three principals, namely Charles Revson; his brother, Joseph Revson and a chemist, Charles Lachman. In 1930 The company began its success with opaque long-lasting nail enamel sold to beauty salons. Revlon sold its nail enamel through department stores and selected drugstores. llicitudin. In 1940

Revlon contributed directly to the war effort, by manufacturing first aid kits and dye markers for the navy. At war's end, Revlon began to produce manicure and pedicure instruments. In 1950 Following the war, Revlon launched twice-yearly nail enamel and lipstick promotions tied to seasonal clothing fashions. Revlon also turned to television sponsorship to boost sales. In December 1955, Revlon first offered stock to the public. At the end of the following year, Revlon was listed on the New York Stock Exchange. In 1960 Revlon laid the ground work for its highly successful international presence in the 60's, bringing the "American Look" to the rest of the world through advertising featuring U.S. models. 1973 saw the introduction of Charlie® fragrance, designed for a young, working woman market and by the mid 70's, Charlie® was the #1 Fragrance in the world.

Revlon sales figures passed the $1 billion mark in 1977. In 1980 Growth and innovation led the way for Revlon. In 1985, Revlon was sold to a subsidiary of MacAndrews & Forbes Holdings. In 1987 Almay joined the Revlon lineup. In the 1990's, Revlon revitalized its cosmetics business and strengthened its industry leadership role. Revlon introduced the first transfer resistant lipcolor which led to a full ColorStayTM Collection of transfer-resistant products. The company closed the gap on its closest competitors and reached a dramatic goal - the #1 brand in mass color cosmetics. Revlon again became a public company in 1996, listed on the New York Stock Exchange (NYSE: REV). In 2000, the company launched "Rouge De Revlon," a floral green fragrance. In 2002, Revlon took the unusual step of participating in the storyline of the soap opera, "All My Children." Revlon was the competition to the fictitious "Enchantment" line of products marketed by the show's main character, Erika Kane (played by Susan Lucci). In 2005, Revlon posted a $46 Million fourth quarter profit, ending a series of quarterly losses. The following year, the company announced the launch of a prestige fragrance in cooperation with Gemini Cosmetics, Inc. Revlon DoubleTwist, a new mascara franchise, debuts in 2009, as does ColorStay Mineral Mousse foundation.

4.2. Data Result Analysis 4.2.1. Validity Test Before the instrument of the research is properly spread to the respondents, the researcher needs to test the validity of every question in the questionnaire. In testing the validity of the data, researcher used pearson product-moment coefficient of correlation, with the help of SPSS 16.0 software for Windows. Validity test helps the researcher to ensure that each of question that asked in the questionnaire is the right and appropriate question which each of question able to measure what the researcher want to measure. Validity is measured by the use of correlation coefficient. For validity coefficients, the important thing is that they are statistically significant at the level greater than .05 levels .

Table 4.1. Output Validity Variable R table (α=5%) R compute Result

Brand Awareness (X1-1) .3061 .672 Valid

Brand Awareness (X1-2) .3061 .772 Valid

Brand Awareness (X1-3) .3061 .767 Valid

Brand Awareness (X1-4) .3061 .607 Valid

Brand Awareness (X1-5) .3061 .795 Valid

Brand Association (X2-1) .3061 .697 Valid

Brand Association (X2-2) .3061 .769 Valid

Brand Association (X3-3) .3061 .681 Valid

Brand Association (X4-4) .3061 .766 Valid

Perceived Quality (X3-1) .3061 .791 Valid

Perceived Quality (X3-2) .3061 .613 Valid

Perceived Quality (X3-3) .3061 .769 Valid

Perceived Quality (X3-4) .3061 .751 Valid

Brand Loyalty (X4-1) .3061 .872 Valid

Brand Loyalty (X4-2) .3061 .852 Valid

Brand Loyalty (X4-3) .3061 .823 Valid

Brand Loyalty (X4-4) .3061 .839 Valid

Buying Decision (Y-1) .3061 .655 Valid

Buying Decision (Y-2) .3061 .740 Valid

Buying Decision (Y-3) .3061 .810 Valid

Buying Decision (Y-4) .3061 .867 Valid

Based on the table above, the significances of all questions are lower than 0.05. We can conclude that all of the questions in the questionnaire are valid, and the variables used in this research are also valid and are cleared to be used for further research activities.

4.2.2. Reliability Test Based on Ghozali (2005) reliability test is a measure of data from questionnaire, which indicates the variable or construct. A questionnaire can be reliable, if someone answer the statements are consistent are stable over time. Reliability concerns consistency reply if tested repeatedly on different samples. SPSS provides the facility to measure reliability with Cronbach Alpha statistical test (α). A construct or variable said to be reliable if it delivers value Cronbach Alpha > 0.60. The variables that the research found for the test is reliable. Because it is grater than 0.60.

Table 4.2. Output Reliability Variable Number of Cronbach's Result Questions Alpha

Total Brand Awareness 5 .784 Reliable

Total Brand Association 4 .790 Reliable

Total Perceived Quality 4 .790 Reliable

Total Brand Loyalty 4 .826 Reliable

Total Buying Decision 4 .803 Reliable

4.2.3. Characteristic of Respondents After doing the research, the next step is processing the data with Microsoft Excel software and SPSS 16.0 software for windows. The characteristic of this research can be see in table below as follow :

1. Gender

Male, 5.72%

Female, 94.28%

Figure 4.1. Grouping Respondents based on Gender

Table 4.3. Grouping Respondents based on Gender Gender Frequency Percentage (%)

Male 8 5.72%

Female 132 94.28%

Total 140 100.00%

From the table 4.3 we can see that most respondents of this research are female, as many as 132 people with percentage 94.28%. The second is male, as many as 8 people with percentage 5.72%

Based on this table we can know the results that the most gender of the respondents in this research is dominantly female. From the data we can see more than a half of respondent were female, means that the numbers of consumers cosmetic product are female. In this research most of consumers cosmetic are female than male.

2. Age

Age

70.71%

14.29% 15.00%

15-20 21-25 26-30

Figure 4.2. Grouping Respondents based on Age

Table 4.4. Grouping Respondents based on Age

Age Frequency Percentage

15-20 20 14.29%

21-25 99 70.71%

26-30 21 15.00%

Total 140 100.00%

From the table 4.4 we can see that total of the respondents are 140. The most respondent of this research is around 21-25 old, as many as 99 people with percentage 70.71%. The second is 26-30 old, as many as 21 people with percentage 15%. The third is around 15-20 old, as many as 20 people with percentage 14,29%. Now we can see that most of the respondents in this research is around 21-25 old.

3. Income

Income

29.29%

19.29% 18.57%

12.14% 10.71% 10.00%

< Rp. Rp. 1,000,001 Rp. 2,000.001 Rp. 3,000,001 Rp. 4,000,001 > Rp. 1,000,000 – Rp. – Rp. – Rp. – Rp. 5,000,0000 2,000,000 3,000.000 4,000,000 5,000,000

Figure 4.3. Grouping Respondents based on Income

Table 4.5. Grouping Respondents based on Income

Income Frequency Percentage

< Rp. 1,000,000 41 29.29%

Rp. 1,000,001 – Rp. 2,000,000 27 19.29%

Rp. 2,000.001 – Rp. 3,000.000 15 10.71%

Rp. 3,000,001 – Rp. 4,000,000 14 10.00%

Rp. 4,000,001 – Rp. 5,000,000 26 18.57%

> Rp. 5,000,0000 17 12.14%

Total 140 100.00%

From table 4.5 we can see that total of the respondents based on Income. Total respondent is 140 people. Mostly of the respondents in this research with income around Rp. 5,000,000 as many as 17 people with percentage 12.14%. And the next respondents with income Rp. 2,000,001 – Rp. 3,000,001 as many as people 15 people with percentage 10.71%. The last is respondents with income Rp.3,000,001 – Rp. 4,000,000 as many as 14 people with percentage 10%.

4. Marital Status

Marital Status

Married 16%

Single 84%

Figure 4.4. Grouping Respondents based on Marital Status

Table 4.6. Grouping Respondents based on Marital Status Marital status Frequency Percentage

Married 22 15.71%

Single 118 84.29%

Total 140 100.00%

From table 4.6 we can see the respondents based on the marital status. Total of the respondent is 140 people. Mostly the respondents on this research with single status as many as 118 people with percentage 84.29%. And the respondents with married status as many as 22 people with percentage 84.29%.

5. Favorite Brand

Favorite Brand

35.71%

21.43%

12.14% 10.71% 11.43% 8.58%

Bobbi Brown Etude Loreal Mac Maybelline Revlon

Figure 4.5. Grouping Respondents based on Favorite Brand

Table 4.7. Grouping Respondents based on Favorite Brand Favorite Brand Frequency Percentage Bobbi Brown 15 10.71% Etude 17 12.14% Loreal 12 8.58% Mac 16 11.43% Maybelline 50 35.71% Revlon 30 21.43% Total 140 100.00%

From the table 4.7 we can see the respondents based on favorite brand. Total of the respondent is 140 people. The first favorite brand that chosen by respondent is Maybelline, as many as 50 people like cosmetic product from Maybelline with percentage 35.71%. And then the second favorite brand that chosen by respondent is Revlon, as many as 30 people like cosmetic product from Revlon with percentage 21.43%. And then the next favorite brand chosen by respondent is Etude as many as 17 people like cosmetic product from Etude with percentage

12.14%. And the next favorite brand that chosen by respondent is Mac as many as 16 people like product cosmetic from Mac with percentage 11.43%. And the next favorite brand that chosen by respondent is Bobbi Brown as many as 15 like cosmetic product from Bobbi Brown with percentage 10.71%. And the last favorite that chosen by respondent is Loreal as many as 12 people like cosmetic from Loreal with percentage 8.58%

4.2.4. Descriptive Analysis Descriptive statistics show the mean and standard deviation on perceived quality, brand awareness, brand associations, brand loyalty and purchase decision according to respondent responses. Weighted mean is the most wide spread way to find out which variable is the most (and least) dominant from all variables based on the mean value. Standard Deviation is a measure of how spreads out numbers are. Table 4.8. Descriptive Statistics Mean Std. Deviation N CustomerBuyingDec 3.8768 .57566 140 ision BrandAwarness 3.9557 .47985 140 BrandAssociation 4.0732 .41822 140 PerceivedQuality 3.9750 .46776 140 BrandLoyalty 3.5607 .61594 140

We can see from the table 4.8. the most dominant factor of Brand Equity in this study is Brand Association with the mean value of 4.0732, and then Perceived Quality with the mean value of 3.9750. And the dominant factor after Perceived Quality is Brand Awareness with the mean value of 3.9557. The customers of cosmetic product might be easily to recognized and remember the advantages of the cosmetic product also the quality from the some brand that they already buy before. The least dominant factor is the Brand Loyalty with the mean value of 3.5607. The poorest quality of cosmetic product make the customers of cosmetic product purchase the same product from same brand continuously. 82

4.2.5. Classic Assumption 4.2.5.1. Normality Test Normality test aims to test whether in the regression model, intruders or residual variables are normally distributed or not. If this assumption is violated, the statistical becomes invalid or bias, especially for small samples. Normality test can be carried out through two approaches, graphic analysis, namely charts approach and statistical analysis.

Figure 4.6.: Histogram normal distribution

From figure 4.6 Histogram of normal distribution, it shows the histogram are bell- shaped. We can conclude the data in this research is normally distributed.

Figure 4.7. : Normal P-Plot

From figure 4.7 shows that plot is line close to the diagonal line and lining up along with the diagonal line, which goes from lower left to upper right. It means the data in the regression model is fulfilling the requirement in the normality test.

4.2.5.2 Multicollinearity Multicollinerity test, the research used variance inflation factor of (VIP) to check. Variance inflation factor or (VIP) has function to measure how much the variance of the estimated coefficient is increased over the case of no correlation among the variables. According to Hardian (2010) multicollinearity test can be seen from the value of tolerance and the value of Variance Inflation Factor (VIF). If the value of Tolerance > 0.10 or equal to the value of VIF < 10, it can be concluded that there is no multicollinearity among the independent variables in the regression model this study.

Table. 4.9 Multicollinearity Coefficient Correlations

From table 4.9. show that every independent variable does not correlation with the other independent variable. It means no multicollinearity

Table. 4.10 Multicollinearity Coefficient Coefficientsa

Model T Sig. Collinearity Statistics Tolerance VIF (Constant) -.326 .745 .519 1.926 TotalBrandAwareness 3.453 .001 .784 1.275 TotalBrandAssociation -.048 .962 .572 1.749 TotalPerceivedQuality 5.084 .000 .505 1.979 TotalBrandLoyalty 4.665 .000

a. Dependent Variable: TotalBuyingDecision

From the calculation from SPSS, as shown in table 4.10 .there is no independent variable that have VIF value more than 10 (VIF <10), and there is no independent variable that have tolerance value less than 0.10. We can conclude that there is no

85 multicollinearity.

4.2.5.3. Heteroscedascity Test Heterocedasticity test to find out whether the variance of the residual from observation with other observation is similar or not. If variance from residual of one observation into another observation is same then it is called homocedasticity, and if it is different it is called as heterocedasticity. In this research, researcher using scatter plot graph to see whether any heterocedasticity cases or not.

This test will be conducted through scatter plot generated by SPSS 16.0 software for Windows. X Axis is the predicted value of ZPRED = Regression Standardized Predicted Value and Y Axis is the predicted value of ZRESID = Regression Standardized Predicted Value. If the graphic shows any certain kind of pattern, it means the heteroscedasticity is occurs. If the graphic shows of spread plots and did not indicates any form of pattern, it means there is no occurrence of heteroscedasticity.

Figure 4.8. Scattrplot Heteroscedascity

From figure 4.8 it shows that there is no pattern that occurs inside. The dots spread out in the upper and lower of 0 in Y axis, then it can be assumed that there is no heterocedasticity cases.

3.2.6. Testing the Hypothesis 4.2.6.1. Multiple regression There are more than one independent variables that used in this study, because of that the researcher used multiple regression models in order to explain relationship between dependent variable and those independent variable. Santoso (2009) stated that all the significant numbers are above 0.05, this shows all the variables no effect on the dependent variable.

Table 4.11. Multiple Regression Table

From the table above, the form of linear regression equation is as follow : Y = -0.112+0.297X1 – 0.004X2 + 0.428X3 + 0.317X4+ε

From the data above we can conclude that : 1. Independent variable brand awareness (X1) has a value 0.297 for

regression linear and the value for the significant is 0.001, mean the value of the significant brand awareness less than 0.005. We can conclude that brand awareness (X1) has positive influence towards customer buying decision 2. Independent variable brand association (X2) has a value -0.004 for regression linear and the value for the significant is 0.962, mean the value of the significant brand awareness greater than 0.005. We can conclude that brand association (X2) does not has positive influence towards customer buying decision 3. Independent variable perceived quality (X3) has a value 0.428 for regression linear and the value for the significant is 0.000, mean that value of the significant perceived quality less than 0.005. We can conclude that perceived quality (X3) has positive influence towards customer buying decision 4. Independent variable brand loyalty has a value 0.317 for regression linear and the value for the significant is 0.000, mean that value of the significant brand loyalty less than 0.005. We can conclude that brand loyalty (X4) has positive influence towards customer buying decision

4.2.6.2. Coefficient of Determination ( R2 )

Table 4.12. R2 Model Summaryb Adjusted R Std. Error of Model R R Square Square the Estimate

1 .800a .639 .629 .35078 a. Predictors: (Constant), BrandLoyalty, BrandAssociation, PerceivedQuality, BrandAwarness b. Dependent Variable: CustomerBuyingDecision

Coefficient of Determination ( R2 ) Coefficient of Determination ( R2 ) is 0.639 From the table 4.2.5 above, we can see that the value of R2 of variable brand awareness (X1) brand association (X2) perceived quality (X3) and brand loyalty (X4) is 0.639. That score means that 63.9% the dependent variable (Customer Buying Decision) are influenced by independent variable (brand awareness, brand association, perceived quality, and brand loyalty), while 36.1% are influenced by other factors exclude variables of this research.

4.2.6.3. T test T test is a significant testing in order to know whether the independent variables (brand awareness, brand association, perceived quality, and brand loyalty) is partially have significant influence into the dependent variable (customer buying decision). The requirements of this test is, prove H1, H2, H3, H4 is accepted or rejected if significance value is greater than 0.05 on α = 5%, and if the number in t-column is greater than the value in t-table. The value of the the T-table is 1.656

Table 4.13 T-Test table Coefficientsa

Model t Sig. Collinearity Statistics Tolerance VIF 1 (Constant) -.326 .745 BrandAwarness 3.453 .001 .519 1.926 BrandAssociati -.048 .962 .784 1.275 on PerceivedQualit 5.084 .000 .572 1.749 y BrandLoyalty 4.665 .000 .505 1.979 a. Dependent Variable: CustomerBuyingDecision

The results by using SPSS program v.16 above are : 1. The value of t count in brand awareness (X1) variable is 3.453 > t table for 1.656. The result means that partially brand awareness variable have

significance influence towards customer buying decision in choosing

cosmetic product, thus H1 in this study is accepted. 2. The value of t count in brand association (X2) variable is -0.48 < t table for 1.656. The result means that partially brand association variable does not have significance influence towards customer buying decision in

choosing cosmetic product, thus H2 in this study is rejected. 3. The value of t count in perceived quality (X3) variable 5.084 > t table for 1.656. The result means that partially perceived quality variable have significance influence towards customer buying decision in choosing

cosmetic product, thus H3 in this study is accepted. 4. The value of t count in brand loyalty (X4) variable 4.665 > t table for 1.656. The result means that partially brand loyalty variable have significance influence towards customer buying decision in choosing

cosmetic product, thus H4 in this study is accepted.

4.2.6.3. F – test F test is significant testing in order to know whether the independent (brand awareness, brand association, perceived quality, brand loyalty) variables have a significant influence into dependent (customer buying decision) variable simultaneously or not (Sugiyono, 2007). This test is conducted by comparing the value of F count from SPSS software v.16 and F table. If the value of F count is greater than F table (F count > F table) then the independent variables are simultaneously the dependent variable ( Ho rejected and H1 accepted). If the value of F count is less than F table ( F count < F table ), then Ho is accepted and H1 rejected. Table 4.14 F-Test table

From F-table and table ANOVA, it shown the value of F count is 59.837, and the F table shows the number of 2.44. It means F count 59.837 > F table 2.44 (α = 0.05 ). We can conclude that all of the independent variables (brand awareness, brand association, perceived quality, and brand loyalty) have significant influence into the dependent variable (customer buying decision).

4.3. Interpretation of Result 1. Based on gender most respondents of this research are female, as many as 132 people with percentage 94.28%. The second is male, as many as 8 people with percentage 5.72%. Most of respondents of this research are around 21-25 years old accounted for 99 people with percentage 70.71%. The second is 26-30 old, as many as 21 people with percentage 15%. The third is around 15-20 old, as many as 20 people with percentage 14,29%. Now we can see that most of the respondents in this research is around 21- 25 old. 2. Level of the respondent around :

favorite brand that chosen by respondent is Revlon, as many as 30 people like cosmetic product from Revlon with percentage 21.43%. And then the next favorite brand chosen by respondent is Etude as many as 17 people like cosmetic product from Etude with percentage 12.14%. And the next favorite brand that chosen by respondent is Mac as many as 16 people like product cosmetic from Mac with percentage 11.43%. And the next favorite brand that chosen by respondent is Bobbi Brown as many as 15 like cosmetic product from Bobbi Brown with percentage 10.71%. And the last favorite that chosen by respondent is Loreal as many as 12 people like cosmetic from Loreal with percentage 8.58%. 4. The research instrument is valid and reliable to be used for the test. Because the according to validity and reliability test, significances of all questions are lower than 0.05, and all variable has Cronbach Alpha value are greater than 0.600. 5. The data in this research is normally distributed, because according to Histogram of Normal Distribution, shows the histograms are bell-shaped and P Plot of Regression Standardized Residual shows the pattern of diagonal line. The data in this research is free from multicollinearity, because based on ‘Coefficient table’, all variables show the tolerance of greater than 0.100 and Variance Inflation Factor (VIF) score of lower than 10.000. The data in this research is free from heteroscedasticity, because the pattern of residuals on the scatterplot did not indicate any kind of certain clear pattern. The residuals are also spread below and above of score 0 on Y axis. 6. Based on the table ( R2 )The Independent variable of brand equity (brand awareness (X1) brand association (X2) perceived quality (X3) and brand loyalty (X4) is 0.639. That score means that 63.9% the dependent variable (Customer Buying Decision) are influenced by independent variable (brand awareness, brand association, perceived quality, and brand loyalty), while 31.9% are influenced by other factors exclude variables of this research. 7. T test needed to analyze the significant influence of 4 brand equity’s 92

dimensions (brand awareness, brand association, perceived quality, and brand loyalty) towards customer buying decision. a) The value of t count in brand awareness (X1) variable is 3.453 > t table for 1.656. The result means that partially brand awareness variable have significance influence towrads customer buying

decision in choosing cosmetic product, thus H1 in this study is accepted. b) The value of t count in brand association (X2) variable is -0.48 < t table for 1.656. The result means that partially brand association variable does not have significance influence towrads customer

buying decision in choosing cosmetic product, thus H2 in this study is rejected. c) The value of t count in perceived quality (X3) variable 5.084 > t table for 1.656. The result means that partially perceived quality variable have significance influence towrads customer buying

decision in choosing cosmetic product, thus H3 in this study is accepted. d) The value of t count in brand loyalty (X4) variablel 4.665 > t table for 1.656. The result means that partially brand loyalty variable have significance influence towrads customer buying decision in

choosing cosmetic product, thus H4 in this study is accepted 8. The value of F count show that F count > F table the number of the F count and F table 59.837 > F table 2.44 (α = 0.05 ). We can conclude that all of the independent variables (brand awareness, brand association, perceived quality, and brand loyalty) have significant influence into the dependent variable (customer buying decision), beacause based on F-Test, the significanceb on ‘ANOVA table’ shows the number of 0.000 which is not greater than 0.005.

CHAPTER V CONCLUSIONS AND RECOMMENDATIONS

In this final chapter of the research, the researcher draws the conclusion and recommendation developed from the wholly integrated quantitative analysis, specifically the multiple regression analysis, about the influence of brand equity and on customer buying decision for cosmetic product in Jakarta. The analysis is conducted to discover the specifically impact of perceived quality, brand awareness, brand associations and brand loyalty on customer buying decision.

5.1. Conclusion Based on the research about the impact of perceived quality, brand awareness, brand associations and brand loyalty on customer buying decision of cosmetic product in Jakarta the conclusions are obtained as follows: Based on the results of the multiple linear regression analysis was performed in this study, obtained the following regression equation:

Y = -0.112+0.297X1 – 0.004X2 + 0.428X3 + 0.317X4+ε

1. The results of the respondents responses in table Descriptive shows that the variable Brand Awareness (X1) has means score amounted to3.95750. The test in multiple linear regression coefficient show the result was 0.297 with the value for the significant is 0.001, mean that value of the significant brand awareness less than 0.005. We can conclude that brand awareness (X1) has positive influence towards customer buying decision (Y)

2. The results of the respondents responses in table Descriptive shows that the variable Brand Association (X2) has high means score amounted to 4.073. Even brand associations mean score is high but it doesn’t have any

influence on buying decision. High brand associations does not make the consumers buying the cosmetic product. Is proven by the Brand Associations multiple linear regression coefficient result was -0.004 with the value for the significant is 0.962, mean that value of the significant brand awareness more than 0.005. We can conclude that brand awareness (X2) has positive influence towards customer buying decision (Y) and the t value -0.48 and the t table for 1.656.

3. The results of the respondents responses in table Descriptive shows that the variable Perceived Quality has high means score amounted to 3.9750. Perceived quality has high score in mean, perceived quality has a big influence toward customer buying decision. The test in multiple linear regression coefficient show the result was 0.428 with the value for the significant is 0.000, mean that value of the significant brand awareness less than 0.005. We can conclude that perceived quality (X3) has positive influence towards customer buying decision (Y)

4. The results of the respondents responses in table Descriptive shows that the variable Brand Loyalty (X4) has means score amounted to 3.5607which is not high score. The test in multiple linear regression coefficient show the result was 0.317 with the value for the significant is 0.000. Even brand loyalty mean score is not high but together with perceived quality, it has the big influence on purchase decision where it mean scores only 15.9000. Low brand loyalty affect to the low buying decision. Brand Loyalty multiple linear regression coefficient result was the highest of all variables with 0.317 and the value for the significant is 0.000, mean that value of the significant brand loyalty less than 0.005. We can conclude that perceived quality (X3) has positive influence towards customer buying decision (Y) we can see that brand loyalty (X4) has positive influence towards customer buying decision with the value of t count in brand loyalty (X4) variable 4.665 > t table for 1.656 and the significant level of 0.000. 95

5.2. Recommendation Cosmetics Industry in Indonesia 1. The lack of influence the Brand Association toward customer buying decision on cosmetic product could be happen cause for the customer brand association is not really important, for them the important things that make them buy a cosmetic product is the quality. 2. In this research based on multiple regression linear perceived quality has a big influence toward customer buying decision on cosmetic product, because the quality is the first things that cosmetic customer want to buy a product. The poor quality of the product make the customer does not want to repurchase again the same product from the same brand. 3. The poor quality can be affecting in brand loyalty, because if the product has a bad reputation from the customer that already use that product before, can be affect to other customer if the other customer ask about the same product that they want to use to the customer that already use the same product before. 4. Brand loyalty on this research has a big influence toward customer buying decision same with perceived quality. If the product already proven that they have a good quality the customer will be remember about the product and will be repurchase again. Brand awareness in this research has influence toward customer buying decision, because of the quality made the customer always remember about the advantages of the product. 5. For Industry Cosmetic in Indonesia maintain their quality and their reputation is important. The quality of the cosmetic product made customer want to repurchase again the product from the same brand that they already buy before.

Future Researcher 1. For future research, it is needed doing a further research in other factors besides Perceived Quality, Brand Awareness, Brand Associations, and Brand Loyalty. 2. Future studies are advised to examine the other brands with take another example of the influence of Perceived Quality, Brand Awareness, Brand Associations, and Brand Loyalty in the Buying Decision 3. For future studies it is advisable to look for another different populations and the wider population this study.

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APPENDICES

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Yth, Para pelanggan

Perkenalkan nama saya Nurinda Febriyanti, saya seorang mahasiswa manajemen President University konsentrasi dalam Bisnis Internasional. Saat ini saya sedang mengerjakan tugas akhir skripsi saya mengharuskan saya untuk melakukan penelitian dengan menggunakan kuesioner. Penelitian saya berjudul "Pengaruh Ekuitas Merek Terhadap Keputusan Membeli Pelanggan pada Produk Kosmetik di Jakarta".

Kuesioner ini terdiri dari tiga bagian :

6. Bagian I : Pertanyaan yang berhubungan dengan profile responden 7. Bagian II : Pertanyaan yang berhubungan dengan ekuitas merek 8. Bagian III : Pertanyaan yang berhubungan tentang keputusan pembelian pelanggan

Mohon bantuannya untuk mengisi kuesionare erikut, semua jawaban di kuesionare ini betul dan tidak ada yang salah. Saya menyarankan para pelanggan untuk mengisi kuesionare berikut dengan benar dan jujur

Terima Kasih untuk waktunya

Cikarang, December 2013

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Kuesionare Pengaruh Ekuitas Merek terhadap Keputusan Pembelian Pelanggan pada Kosmetik Produk

Jawab pertanyaan dibawah ini dengan memberikan tanda ( √ ) pada jawaban yang anda pilih. Umur : ◌ 15-20 ◌ 21-25 ◌ 26-30

Status perkawinan ◌ Single ◌ Menikah

Pernahkah anda membeli Produk Kosmetik ? ◌ Pernah ◌ Tidak

Brand apa saja yang pernah anda beli : (boleh pilih lebih dari satu) ◌ Bobbi Brown ◌ Etude ◌ Loreal ◌ Mac ◌ Maybeline ◌ Revlon

Pendapatan perbulan ◌ < Rp. 1.000.000 ◌ Rp. 1.000.001 – Rp. 2.000.000 ◌ Rp. 2.000.001 – Rp. 3.000.000 ◌ Rp. 3.000.001 – Rp. 4.000.000 ◌ Rp. 4.000.001 – Rp. 5.000.000 ◌ > Rp. 5.000.0000 104

PETUNJUK PENGISIAN KUESIONER Pilihlah salah satu brand dibawah, ini yang merupakan brand favorite anda dan brand yang paling sering anda beli : ◌ Bobbi Brown ◌ Loreal ◌ Maybeline ◌ Etude ◌ Mac ◌ Revlon

Pada pernyataan dibawah ini silahkan mengisi sesuai dengan pendapat / opini Anda dengan memberikan tanda √ pada jawaban :

8. Sangat Setuju 3. Netral 5. Sangat Tidak Setuju 9. Setuju 4. Tidak Setuju Ket : “Brand Tersebut” merupakan brand yang anda pilih

Brand Awareness 1 2 3 4 5

Produk kosmetik dari brand tersebut yang sangat saya sukai sangat familiar bagi saya

Dalam pembelian produk kosmetik, brand yang pertama kali ada di benak saya adalah brand tersebut

Bentuk kemasan serta slogan pada produk kosmetik brand tersebut mudah dikenali dan diingat

Kosmetik yang saya pakai dari brand tersebut adalah brand yang terkenal di masyarakat

Kosmetik dari brand tersebut mempunyai ciri khas tertentu yang membuat saya dapat mengingatnya

Brand Association 1 2 3 4 5

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Produk kosmetik dari brand tersebut mudah kita jumpai di mall – mall

Saya bisa dengan cepat mengingat keunggulan produk kosmetik dari brand tersebut

Variasi produk kosmetik dari brand tersebut sangat beragam

Harga produk kosmetik dari brand tersebut dapat terjangkau dengan kantong saya

Perceived Quality 1 2 3 4 5

Kualitas produk kosmetik dari brand tersebut sesuai dengan yang saya harapkan

Harga produk kosmetik dari brand tersebut sesuai dengan kualitasnya

Produk kosmetik dari brand tersebut memiliki keunggulan dibandingkan yang lainnya

Tidak ada masalah pada wajah saya ketika menggunakan produk kosmetik dari brand tersebut

Brand Loyalty 1 2 3 4 5

Ketika saya ingin membeli produk kosmetik, brand tersebut merupakan produk kosmetik pilihan utama saya

Jika ada teman atau kerabat saya sedang bingung menentukan brand untuk produk kosmetik yang sesuai dengan mereka, saya akan merekomendasikan brand tersebut

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Saya memberikan review produk kosmetik dari brand tersebut yang sering saya gunakan, kepada teman atau kerabat saya

Saya tidak ingin membeli produk kosmetik dari brand lain, karna saya sudah merasa cocok dengan produk makeup dari brand tersebut

Customer Purchasing Decission 1 2 3 4 5

Setelah saya membeli produk dari brand tersebut dan saya telah merasakan keunggulannya dari brand tersebut, saya akan merekomendasikan orang yang bertanya kepada saya tentang produk kosmetik, dan menyarankan kepada mereka untuk membeli produk dari brand yang sama dengan yang saya pakai

Saya sering mencari informasi tentang brand tersebut sebelum saya membeli produk kosmetik.

Brand tersebut memiliki kelebihan dibandingkan produk kosmetik dari brand lainnya

Saya tertarik untuk membeli produk kosmetik dari brand tersebut karena brand tersebut terbukti memiliki kualitas yang bagus

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