SERVICE QUALITY AND STORE ATMOSPHERE EFFECTS TOWARDS CUSTOMER PURCHASING DECISION (A STUDY CASE AT COFFEE PALACE JABABEKA)
By Ekadiman Kasmanto ID No.014201000112
A thesis presented to the Faculty of Business President University In partial fulfillment of the requirements for Bachelor Degree in Economy Major in Management
January 2014
PANEL OF EXAMINER APPROVAL SHEET
The Panel of Examiners declared that the thesis entitled “SERVICE QUALITY AND STORE ATMOSPHERE EFFECTS TOWARDS CUSTOMER PURCHASING DECISION (STUDY CASE AT COFFEE PALACE JABABEKA)” that was submitted by EKADIMAN KASMANTO majoring in HOTEL TOURISM MANAGEMENT from the faculty of ECONOMICS was assessed and approved to have passed the Oral Examination on JANUARY 16th 2014.
Ir. Erny Hutabarat, MBA Chair - Panel of Examiner
Purwanto, ST, MM. Examiner I
Ir. Yunita Ismail Masjud, M. Si Examiner Signature
THESIS ADVISER
RECOMMENDATION LETTER
This thesis entitled “SERVICE QUALITY AND STORE ATMOSPHERE EFFECTS TOWARD CUSTOMER PURCHASING DECISION (A STUDY CASE AT COFFEE PALACE JABABEKA)” prepared and submitted by EKADIMAN KASMANTO in partial fulfillment of the requirements for the degree of Bachelor of Economy in the Faculty of Economics has been reviewed and found to have satisfied the requirements for a thesis fit to be examined. I therefore recommend this thesis for Oral Defense.
Cikarang, Indonesia, January 16th 2014
Vinsensius Jajat Kristanto SE., MM., MBA. Ir. Yunita Ismail Masjud M, Si. Head of Management Study Program Thesis Advisor
DECLARATION OF ORIGINALITY
I declared that this thesis, entitle “SERVICE QUALITY AND STORE ATMOSPHERE EFFECTS TOWARD CUSTOMER PURCHASING DECISION (A STUDY CASE AT COFFEE PALACE, JABABEKA)” is, to the best of my knowledge and belief, an original piece of work that has not been submitted, either in whole or in part, to another university to obtain a degree.
Cikarang, Indonesia, January 16th 2014
Ekadiman Kasmanto
ABSTRACT
This research is done to solve the anomalies that occurred in Coffee Palace regarding the difference in monthly visitors and monthly sales where monthly visitors keep decreasing but somehow it didn‟t influence the monthly sales. This research focuses on the decreasing of monthly visitors and thus using the service quality and store atmosphere. There are 9 variables that will be used in this research are service quality (tangible, empathy, responsiveness, reliable, assurance) and store atmosphere (exterior, general interior, store layout, display) towards the customer purchasing decision from the perspective of majority customer in there which is the students of President University. For this purpose, the questionnaire as the tool of this research is created to measure those aspects and ensure the quality of research that also bring valid outcome to public. From the results, there are only 2 (two) variables from 9 (nine) that significantly influence customer purchasing decision which are assurance from service quality and store layout from store atmosphere. When all variables measured altogether, it has value of 0.000 which means all of the variables influence the dependant variable; while when they measured one by one, assurance has value of 0.021 and store layout has value of 0.000 which shown that they significantly influence the dependant variables compare to other variables. The independent variables have strong correlation with the dependant variables that shown in the model summary where the R value is 0.729. The result of this research shows that service quality and store atmosphere has 53.2% influence power towards President University students purchasing decision with the conclusion that the comfortable and secure place (assurance) and the wide atmosphere and not too crowded (store layout) have the most significant influence towards their customer purchasing decision.
Keyword: Service Quality, Store Atmosphere, Customer Purchasing Decision, Tangible, Empathy, Responsiveness, Reliable, Empathy, Exterior, General Interior, Store Layout, Display
ACKNOWLEDGEMENT
First of all, the author wants to say his grateful to the Almighty God as he can finally finished this thesis “SERVICE QUALITY AND STORE ATMOSPHERE EFFECTS TOWARDS CUSTOMER PURCHASING DECISION IN COFFEE PALACE, JABABEKA”. This thesis is consisted of research about the factors that coming from service quality and store atmosphere and they relation with customer purchasing decision in Coffee Palace, Jababeka. All important findings will be described and analyzed and also tested by the author and give to the company so later in the future they can use it to improve their performances both in service quality and store atmosphere. The author realized that this thesis is still far from perfect and still need improvement in many aspects. In this chance, the author wants to say thank you to: 1. Mr. Irfan Habsjah as the Dean of Faculty of Management. 2. Ms. Yunita Ismail as the thesis advisor that really patient even though she‟s busy with other students but still want to give me advice so the author can finished this thesis. 3. Parents, sisters and brother; Sherly, Indah Banarni, and Arbi Kasmato who always give him support and pushed him to finish this thesis even when he lose confidence and spirit. Especially to his eldest sister, Sherly that really support him not only when writing this thesis but in all of his year in President University. 4. His buddy, Joke Muliahu Karta who share the difficulties, stress, and happiness together through all this year. 5. His buddies, Faizhal Ghazali and Mikhael Sebastian who keep support me during the preparation of oral exam using their own crazy way and be there during the exam. 6. His roommate, Johnson Wang Yangyang and my dorm-mate Sean Feng Jinhao that gave him support and not complaining when he has to sleep late at night and created the noise. 7. His buddy, John Nguyen Tuong Huy who help the author and give help in many ways that any author can asked. 8. The focus group discussion group, Putri Anjatsari, Irene Yostina, Felicia, Billy Homario, Catherine Ria Cahyadi, Kaisie Buy Thi Thuy, Rendy Putra Tjhientoso, and Rebecca Roberts that willing to spent their time to answer and review the questions one by one. 9. Ko Reagan who willing to let the author use Coffee Palace as the research place without any complaints. 10. And many other that involved and supported the author for the whole time. As the imperfect human being, the author realized that there are so many mistakes when he wrote this thesis and hopefully this research can be used on any purposed as it found effective and useful.
Cikarang, January 16th 2014
The author Ekadiman Kasmanto
List of Figures Figure 1. 1 Sales per product of Coffee Palace ...... 15 Figure 1. 2 Visitor number of Coffee Palace ...... 16 Figure 2. 1 Mehrabian-Russell model ...... 37 Figure 2. 2 Theoretical Framework...... 41 Figure 3. 1 Research Framework ...... 50 Figure 4. 1 Coffee Palace logo (left-previous logo; right-current logo) ...... 62 Figure 4. 2 Coffee Palace Organization Structure ...... 63 Figure 4. 3 Demographic Views (Gender) ...... 67 Figure 4. 4 Demographic Views (Monthly Expenses) ...... 67 Figure 4. 5 Demographic View (Batch) ...... 68 Figure 4. 6 Histogram Graph ...... 69 Figure 4. 7 P-plot graph ...... 69 Figure 4. 8 Scatterplot ...... 71
List of Tables Table 3. 1 Likert Scale ...... 52 Table 4. 1 Reliability test results ...... 65 Table 4. 2 Validity test results ...... 66 Table 4. 3 Multicollinearity Test ...... 70 Table 4. 4 Durbin Watson ...... 72 Table 4. 5 F-test result ...... 73 Table 4. 6 T-test result...... 74 Table 4. 7 Significant Table ...... 76 Table 4. 8 Model Summary ...... 77
Table of Contents Chapter I ...... 8 Introduction ...... 12 1.1 Research Background ...... 12 1.1.1 Background of study ...... 12 1.1.2 Problem Identification ...... 15 1.2 Statement of Problem ...... 17 1.3 Research Objective ...... 17 1.4 Research Limitation ...... 18 1.4.1 Scope of the Study ...... 18 1.4.2 Limitation of the Study...... 18 1.5 Definition of Terms ...... 19 1.6 Benefits of the study ...... 20 1.6.1 The researcher ...... 20 1.6.2 Coffee Palace ...... 21 1.6.3 The Reader...... 21 Chapter II ...... 22 Review of Literature ...... 22 2.1 Theoretical Review ...... 22 2.1.1 Customer Purchasing Decision ...... 22 2.1.2 Service Quality ...... 27 2.1.3 Store Atmosphere ...... 32 2.2 Previous Research ...... 38 2.3 Theoretical Framework ...... 41 2.4 Hypothesis ...... 41 Chapter III ...... 44 Methodology ...... 44 3.1 Research Method ...... 44 3.2 Operational Definition ...... 48 3.3 Research Instrument ...... 50 3.3.1 Data Collection ...... 50 3.3.2 Measurement Scale and Data Analysis ...... 51 3.4 Sampling Design...... 54 3.4.1 Sample Size ...... 54 3.4.2 Margin of Error ...... 55 3.4.3 Sampling Technique Applied ...... 56 3.4.4 Descriptive Statistic ...... 56 3.4.5 Statistical Tools...... 56 3.5 Data Analysis ...... 61 Chapter IV ...... 62 Analysis and Interpretation ...... 62 4.1 Company Profile ...... 62 4.2 Data Analysis ...... 64 4.2.1 Pilot Test...... 64 4.2.2 Descriptive Statistics ...... 67 4.3 Multiple Regressions ...... 68 4.3.1 Normality Test ...... 68 4.3.2 Multicollinearity Test ...... 70 4.3.3 Heteroskedasticity Test ...... 71 4.3.4 Autocorrelation Test...... 71 4.3.5 Testing the Hypothesis Results ...... 72 4.4 Interpretation of Results ...... 78 Chapter V ...... 83 Conclusions and Recommendation ...... 83 5.1 Conclusions ...... 83 5.2 Recommendation ...... 84
Chapter I
Introduction
1.1 Research Background
1.1.1 Background of study The restaurant industries nowadays are growing significantly to follow the changing of market needs. As it can be seen in National Restaurant Association analysis that stated the restaurant industry added more than 560,000 jobs in the last 24 months (Brandau, 2012). In restaurant industry, food not only the products that offered by restaurant to the customer, service also provided to maintain their satisfaction and in the end increase the customer retention (Fornell, 1992). People not only just want to buy something that they need, but they also want to be satisfied when they do that. That‟s why most of today‟s business are combination of goods and service where people can also get a service when they purchasing something and the satisfaction that they feel will made them to be more willing to engage in repeating business.
Restaurant is one of the businesses that growing really fast as well as other service industry like hotel. According to Indonesia Statistic Center, the Hotel and Restaurant industry has increase 8.6% in the first semester of 2012 compare to the first semester of 2011 and make it as the second largest business growth right after communication industry (BPS, 2012). Java Island and Bali Island have the most restaurant business in their area and contribute more than 73.6% from all Indonesia area. This show the growth and development of restaurant industry where people tend to go there over and over again. The reason of why restaurant is very popular nowadays is not only the food that they provide but also the service given by the restaurant itself. The more satisfied the customer, the more they will come back and visit the restaurant again. The high satisfaction some time will make the customer to promote the restaurant to their relatives and friends.
Coffee Shop is one of the type of restaurant that specialist in coffee products. The consumption of coffee in United States has increase from 9% to 16% from 2000 until 2004. US contribute the consumption of coffee by 52 million from 108.9 million around the world. Compare to fast food chain that increase 2% every year, coffee shop has increased for more than 10% every year. In 2003, according to Specialty Coffee Association of America the count of coffee shop had reached 17,400 stores while the market size has reached $8.96 billion at the same year (H. Holmes). While in China, according to Mintel the consumption of coffee has doubled from 15,898 in 2007 to the 31,783 in 2012. Director of Asia Pacific Research at Mintel, Matthew Crabbe said that café or coffee shop started to appear in the late 1990s and until 2012 the value of coffee shop in China stands at RMB 71,599 billion and Mintel predicts that the market value will continue growing by 70% until 2017 (FD business, 2012). The growth of coffee store in China even make Starbucks as the world‟s largest coffee shop chain said that they will double their staff in China by 2015 to 30,000 employee from 12,000. Starbucks reported that they got 9% increase sales in US while in China and Asia Pacific their revenues rose 23% in the fourth quarter in 2012 to $198 million (Bloomberg News, 2012).
Indonesia is one of the biggest coffee producer countries and in fact the biggest four in the world right after Brazil, Colombia, and Vietnam. In the economical world, Indonesia contributed 23.6% Robust Coffee as Indonesia is the country with the biggest Robust Coffee production. Indonesia as the coffee-producer country has targeted coffee as its main commodity. 67% of the productions were export to other countries such as USA, European countries, and Japan. The changing in Indonesia life-style increase the demands of coffee that can be seen from the changes of coffee consumption, 120,000 tons in the 90s until now became 180,000 tons (Kopi). The consumption by Indonesian people themselves has increased 6-8% each year and the demand for each year is around 121.107 tons per year (Dimyati, 2012). International Coffee Organization recorded significant increase in coffee consuming which are 2,750,000 bags of coffee in 2006; 3,208,000 bags of coffee in 2007; and 3,333,000 in 2008 (Soempono, 2010). The growth after that aren‟t as much as in those year even though it still growing along with the changing in Indonesian people life style.
Coffee shop is one of the restaurant types where people didn‟t order heavy food but instead a light food to spend their time with their friends or relatives. Coffee shop is also became the place where business man and woman or young executives can enjoy their break time. Many coffee shop like Coffee Toffee, Starbucks Coffee, Semerbak Coffee, Javapuccino, Amadeus, and Kopi Bali House started out as a little outlet focus on selling their specialty coffee where they sell the unique taste of their own coffee line. Coffee is one of the products that served in the coffee shop but nowadays coffee shop started to offer their product other than coffee such as desserts and yogurts and sometime they provide general restaurant food. The variety of products makes people more interest in visiting coffee shop to spend their time. The service given in the coffee shop also has young and fresh feeling make people more comfortable to hang out in café. But not only the products and the service that make people like to come to the coffee shop, another reason is the atmosphere that they can get from the there. The cozy and comfortable place is the perfect place for people to hang out and that‟s why the store layout, the store interior in general have a certain influence towards customer decision to come to the coffee shop. Starbucks as one of the most famous coffee shop around the world gained their sales from the students for more than 40% as they positioned themselves by providing place for students to hang out, study, write their assignment, and also as the place for meeting. They are using social networking to create the „cool‟ image in the students‟ perspective. The young adult audience (students) grows 4.6% every year (Farrell).
Kotler stated that the store atmosphere itself has higher influence than the products itself in purchase decision (Kotler, 1973). Donovan and Rossiter also have studied the environmental psychology as the attempts to predict the various effects of stimuli in certain environment towards people‟s feeling and behavior (Donovan, Robert, and John Rossiter, 1982). Kotler also stated that the atmosphere is “the effort to create and design buying environments to produce specific emotional effects in the buyer that enhance his purchase probability” (p. 50). There are some testimony related to the proven of influence caused by the atmosphere created by some retailers. They said that by manipulating the store layout, color, lighting, and music, they able to manipulate customer purchasing behavior (Stevens, 1980) (Wysocky, 1979). Café Lenggahan that located in Seturan Condongcatur Yogyakarta said that they were able to increase the sales and survive after for more than 6 months didn‟t have a single customer. They able to do that by manipulate the store atmosphere and create the mini-theater-store-feeling for customer to enjoy while eating / drinking their foods (Bisnisukm, 2010). This shows that manipulating store atmosphere is also able to influencing customer purchasing decision.
1.1.2 Problem Identification
Figure 1. 1 Sales per product of Coffee Palace
Source : primary data from Coffee Palace
Figure 1. 2 Visitor number of Coffee Palace
Source: Primary data from Coffee Palace
Coffee Palace is the first coffee store that located in City Walk, Resto Plaza Cikarang Jababeka. With the theme of coffee store different with many common restaurants around it, Coffee Palace has gained interested of many students in President University and known for its cozy modern place to hang out which is very popular to teenager like university students. Following the success of famous coffee store like Starbucks and giving statement that the products that offered by Coffee Palace are equal with other higher class coffee store make the researcher put 2 dimensions to compare Coffee Palace with other coffee store chain. Based on the Figure 1.1 which is the primary data that the researcher got from Coffee Palace about the number of visitors that came despite the repetition in the same day; we can see that there are some decreasing in the third quarter 2012 which is in August 2012. According to Coffee Palace, in that period most of regular customers which the researcher assumed are coming from batch 2010 and 2011 hasn‟t returned from their semester break and the customers that come at that time mostly are new students (batch 2012). The decreasing at first only expected until the regular customers (batch 2010 and 2011) are returned from their semester break, but apparently the amount of visitors keep decreasing after that. Based on the sales record of Coffee Palace, it can be seen that people like the products of Coffee Palace but somehow didn‟t like to come directly to Coffee Palace to purchase the products and thus decrease the number of visitors.
Based on that problem, the researcher want to find the reason of the decreasing in monthly visitors in Coffee Palace using the service quality and store atmosphere and see its influence towards the customer purchasing decision. The results of this research hopefully can give insight to Coffee Palace about which variables among service quality and store atmosphere that needed to improve to increase their visitors. Based on the discussion above, the researcher wants to find out the analysis of Service Quality and Store Atmosphere towards customer purchasing decision of Coffee Palace products among customers between ages of 16-24 where in this study the research focus on President University student that has visited Coffee Palace or at least has purchased its products as its object.
1.2 Statement of Problem The problem statements that will be discussed and evaluated in this research can be formulated in the form of questions as stated below:
1. Is there any influence between Service Quality variables and Store Atmosphere variables simultaneously towards customer purchasing decision of President University students? Which variables partially influence the customer purchasing decision? 2. Which variables among all of Service Quality and Store Atmosphere variables that has most significant influence towards customer purchasing decision?
1.3 Research Objective The main purpose of this research is to find the correlation between store atmospheres and service quality with customer purchasing decision towards coffee store.
The store atmosphere is related to the general layout of the café that can create proper coziness for the customer to make them comfortable while spending their time there while the service quality is related to the services performed by the employees and measured by 5 different dimensions which are tangible, empathy, responsiveness, reliability, and assurance. By comparing and make the research about those 2 factors, it will enable the researcher to determine which the most dominant factors that influences customer purchasing decision.
In short the objectives of this research are: 1. To analyze the influence of Service Quality and Store Atmosphere simultaneously and partially towards customer purchasing decision in Coffee Palace 2. To determine the most significant variables among the factors that significantly influence power towards customer purchasing decision in Coffee Palace
1.4 Research Limitation In this research the researcher spread the questionnaire from February 27 2013 to February 28 2013 in President University and President University student housing. The content of the questioner is based on the Service Quality and Store Atmosphere and also customers purchasing decisions theory with total respondents of 100 students.
1.4.1 Scope of the Study This research scope is only focused on the President University students that have purchased Coffee Palace products or at least visited Coffee Palace within the range of ages between 16-21 years old despite of genders. The questionnaires were given only if the respondents said that they had visited or purchased products in Coffee Palace. In this research the researcher limited the range of the respondents to 100 which only limited for the President University students who study at President University.
1.4.2 Limitation of the Study There are some limitation in this research related about the theory used which is among the tangible aspect coming from Service Quality where usually its explanation related with the physical aspect of the products or the company such as the employee uniform and the physic or the building. This aspect is similar with the explanation of all variables in Store Atmosphere.
According to the researcher, tangible from Service Quality and Store Atmosphere variable can be differentiated with: a. Tangible is focusing on the cleanliness, employee uniform, and the equipment technology such as machine cashier and the lightning used inside and outside the store b. Store atmosphere variables are focusing more to the „accessories‟ such as painting, artificial botanical plant, and aquarium which they put inside or outside the store and the layout within the store to create certain atmosphere.
The reason why the researcher chose to erase the building physical aspects from both variables is the location where the store exists is between the shopping streets in City Walk Jababeka with the uniform building. Since all stores in there are in the same size and shape, thus the researcher decided to erase that factors since can‟t be measured and compared to other store and not included in this research.
1.5 Definition of Terms Customer purchasing decision: the decision taken by customer/consumer to buy certain goods/service that they considered can fulfill their needs. Service quality: the services given in the service business such as hotel or restaurant and the quality will determine how much gap between the customer expectation and the expectation. Tangible: one of the service quality aspects that focus on physical appearance of the store / restaurant / company including the cleanliness and employee appearance. Empathy: one of the service quality aspects that focus on the understanding level of the store / restaurant / company towards the customer needs. Responsiveness: one of the service quality aspects that focus on the responds that mainly coming from the employee towards the customer needs. Reliable: one of the service quality aspects that focus on the image or promise that held by the store / restaurant / company and how they deliver it to the customers. Assurance: one of the service quality aspects that focus on the safety of the customer including the transaction and the product quality offered by store / restaurant / company. Store atmosphere: the atmosphere that was purposely created by the businessmen or the store owner to create the comfortable feeling and indirectly influence customer purchasing decision. Exterior: one of the store atmosphere aspects that focus on the outer appearance of the store / restaurant / company such as entrance door and name sign that can be manipulated and change the atmosphere. General Interior: one of the store atmosphere aspects that focus on the inner appearance of the store / restaurant / company such as lighting and sound that can be manipulated and change the atmosphere. Store Layout: one of the store atmosphere aspects that focus on the tool arrangement inside the store / restaurant / company that can be manipulated and changed the atmosphere. Display: one of the store atmosphere aspects that focus on the decoration both inside and outside the store / restaurant / company like theme decoration that can be manipulated and change the atmosphere.
1.6 Benefits of the study This research is expected to give contribution in knowledge, theoretical and practical area for any parties:
1.6.1 The researcher This research has important meaning for the researcher, not only as the requirement that researcher have to fulfill in order to get bachelor degree and to graduate from university, through this research also give chance for researcher to apply and implement what researcher have learned from the class into practical study. This research also gives researcher more knowledge and information about the development and situation of coffee store market preference in the world and Indonesia.
1.6.2 Coffee Palace This research is expected to give contribution and additional information about the coffee store customer decision through the analysis of Service Quality and Store Atmosphere for Coffee Palace store. The Service Quality consists of five factors which are tangible, empathy, responsiveness, reliable and assurance while Store Atmosphere consists of four factors which are exterior, general interior, store layout, and display. This study also gives information for Coffee Palace about which factors among all of the factors which giving significant effect to the customer purchasing decision. So that through this study it can help Coffee Palace to be able to increase their performance so the amount of visitors can increase like before.
1.6.3 The Reader The researcher hope that this research is able to give more information and knowledge for reader and as reference for other researcher to solve the problem that is related to analysis of Service Quality and Store Atmosphere towards the customer purchasing decision.
Chapter II
Review of Literature
2.1 Theoretical Review
2.1.1 Customer Purchasing Decision The desire of buying or purchasing will be appear only after the customer see what they like and feel that they want to use that (or in certain case, consume the products). Howard and Shay (Howard, J. A. & Shay, R. P., 1988) determine the buying intention process into 5 stages which are: 1. Fulfillment of needs 2. Recognition of needs 3. Products searching 4. Evaluation process 5. Purchasing decision making
Marketing inside the company has one goal which is to reach customers at the moments that can influence their purchasing decision (Court, D., Elziga, D., Mulder, S. & Vetvik., O. J., June). Customers as a decision maker sometimes assume that purchasing products or services are their way to solve their problem. They usually make decision by which products or services that can solve their problems.
The information about products will be act as the basic of purchasing decision making where it will trigger the customer understanding and create the needs thus make the customer to start searching the products. The evaluation will be done when the customer found the products and at this stage, the customer can decide to purchase or not to purchase or postpone the purchasing until certain period of time. The evaluation of the products not only towards the importance or the usefulness but customer will also make the mental evaluation about certain factors such as service given during the transaction, price, comfortableness of the place where the transaction will be held, store personnel, and the physical condition overall. Customer will make a decision influenced by the factors that important according to them.
The purchasing decision won‟t be happened only by knowing the information of the products, the price and directly owned the products. According to John Dewey (Dewey, 1910), the purchasing decision making is divided into 5 stages which are: 1. Recognition of problem 2. Search of problem 3. Evaluation of alternatives 4. Choice 5. Outcome
The purchasing decision not only happened by the understanding of the need by the customer and make a decision whether they want to buy or not, but the purchasing decision will be made after the customer make a selection and comparison among all the alternatives and which will be able to fulfill the need and in the same time give the most advantage to the customer (cheaper price, more quantity, etc).
According to Philip Graves (Ehret, 2010), there are 4 major factors that influence people in making a purchasing decision which are: 1. Preference to buy without thinking, too many choices and too much information will make people less likely to purchase from the store even for the products that they consider they need or want. 2. People didn‟t like to try something new as their unconscious prefer the safety 3. The first impression that the customer get from the store can give high influence to them 4. The crowded store will attracted the customers as they see it trustworthy
Purchasing decision also influence by customer purchasing behavior which means people use money or its substitutions in exchange for goods or service resulted in the process of decision-making (Baumgartner, H. and Steenkamp, J.B.E.M., 1996). Wu (Wu, Y.S., 1999) also stated that purchasing behavior is in the same term with decision making process that includes on how to perceive the information, motivation, what products to buy, how to buy the products, and when to buy the products before the final decision has been made. Customer also will evaluate the satisfaction that they will get after they do the purchasing.
Customer purchasing always related to the behavior of the customers which can be defined as the individual acts that involved directly in getting or consuming goods or services, including the purchasing decision and what influences it (Basu Swastha dan T. Hani Handoko, 1997). According to Kotler and Armstrong (Philip Kotler dan Gary Amstrong, 1997), factors that influence customer behavior are: 1. Cultural factors Cultural factors divided into 3 factors which are the culture which is the most prominent factor in determining someone primary needs, sub-culture which is the group where people belong that has similar life style, and social class which is a permanent and organized structure in a circle of society that has same value, interest, and behavior. 2. Social factors Social factors divided into 3 factors which are group, family that has bigger influence in purchasing decision and behavior and how big the influences are based on the relationship between each member, social status that make the one who hold it have to do something to maintain it and in the end will affecting their purchasing behavior and decision. 3. Personal factors Personal factors divided into several factors such as age, job, economy condition, life- style, personality and the purchasing concept of the customer itself. 4. Psychology factors Psychology factors divided into several factors such as purchasing motivation, perception towards certain products, learning process, trust and attitude.
Customer purchasing behavior to make a purchasing decision was supported with so many calculation and evaluation before finally make a decision (James Engel et al., 1994). The more complicated the decision will involved many influence from different perspective and also a lot more evaluation. There are so many factors that influence the customer before they make a final decision because of human‟ rational thought and taking all information into accounts. Customer purchasing decision is the customer decision to purchase certain products after making a calculation and evaluation using any information they have with the final consideration after see the products directly with their own eyes. Before making a purchase decision, customers usually make a consideration of its quality, price, and whether the products are well-known or not. According to Kotler(Philip Kotler, 2002), there are 5 steps slightly different with Dewey before customers decide to do the purchasing which are: 1. Problem recognition In this stage, customers will realize their needs and what kind of products or services that they can use to solve their problem. Usually in this stage customer will be affected by many factors like social, peer pressure, and advance in technology. 2. Information searching Customer starts to search the products information and making the evaluation whether the products or service will be able to solve their problems (in this case, their need), whether the products worth it to purchase and many other evaluation. 3. Alternatives evaluation After the customers found what kind of products they want and made the evaluation, they start to search the alternatives. Usually on this stage, customers will make a comparison using price and quality of the products even though still many factors that can be used to compare the products. 4. Purchasing decision After making the evaluation and comparing with the alternatives, the decision will be made and customer will purchase the products that meet their expectation and able to solve their problem. 5. Post purchasing behavior Making a purchasing means the customer will use or consume the products to solve the problems (their needs). If the products gave the high satisfaction to the customers, it will increase the possibility that the customer will purchase the products again; but when they didn‟t satisfy with products result, they will feel disappointed and make the customers didn‟t want to purchase the same products again in the future.
The purchase intentions mean the customers has purchase behavior after making some evaluation towards the product. The behavior can be seen as a key point to forecast customers purchasing intention (Keller, K.L., 2001). Ghosh(Ghosh, A., 1990) tried to combine purchasing behaviors with the purchasing decision. He found that when customers choose one product, the final decision will be depend on the intention that they have. Because of that, many marketers think customer purchasing intention is the most effective method to forecast the purchasing. Zeitamhal(Zeitamhal, V.A., 1988) thought purchasing intention will be influenced by several factors which are objective price, quality perception, and value perception.
Yu (Yu, L. Y., 2007) determined the diverse of customer purchasing intentions based on the different purchasing ways which are: a. Prior planned purchasing – customers usually will make a „shopping list‟ before they go to the store as they tried to be more effective (Putrevu, S. and Lord, K.R., 2001) b. Partial planned purchasing – customers who usually decide to buy only the products that familiar to them, they will look for the promotion or discounts and if they didn‟t find that they won‟t buy it. c. Unplanned purchasing – some customers decided to buy some products after they enter the store and not before enter the store (Beatty S. and Ferrell E., 1998). Keller also said that this kind of purchasing is an urgent purchase without pre-purchasing intention
Customer purchasing behavior patterns generally related to each other especially in the aspects like quality, price, and decision making (Kumar, R., 2011). The customer satisfaction and products quality have a parallel relationship with price, expertise, timeliness, service and the physical environment (Lacobucci, D., Ostrom, A., Grayson, K., 1995). According to Zeitamhal (1988), customers‟ perception towards products quality will be changed over a time due to the additional information, increasing in changing expectations and completion in the product category. According to Samiee(Samiee, S., 1994), customers base their purchasing decision on how many information they have and the products attribute like name, design & price.
2.1.2 Service Quality The word „Service‟ has many meaning which lead to some confusion in several different aspect where it could means an industry, a performance, an output or offering or a process. Service also stated out by Johns (Johns, 1999) as an „intangible‟ and the output was considered as an activity rather than a tangible object and became a question as some service outputs have some substantial tangible components like equipment and personnel.
The assessment of service quality has attracted the attention of some academia in some decades ago. According to Kang, James, and Alexander (Kang G.D., James J., Alexander K., 2002) there are 2 different thought on measuring service quality which are American and European point of view. American perspective focus on functional quality attributes (the process of service delivery to customers) while European perspective has 2 additional attributes beside functional quality which are technical quality (outcomes resulted from service given to the customers) and image quality (customer perspective towards company) (Grönroos C., 1984).
Servqual is founded due to the paramount of customer assessment point of view about service quality. The concept was coming from the gap of the expectation of the services that will be taken and the quality performances that given measured by the customer itself. At first Servqual or SQ is presented in multidimensional construct. In the original formulation (Parasuraman, A., Zeithaml, V., & Berry, L.L, 1985), Servqual identified 10 components of Servqual which are 1. Reliability that focuses on consistency of performance and dependability. Reliability also means that the service given was correct at the first time and matching with the company promises. The example of reliability are billing accuracy and also performing the service at the scheduled time. 2. Responsiveness focuses on the employees‟ readiness and willingness to give service. The example of responsiveness are sending a transaction slip immediately, calling the customer back quickly, and quickly setting up appointments. 3. Competence focuses on the availability of the required skills needed to perform services and it can be seen from the knowledge and skills or contact personnel and research capability of the organization. 4. Access focuses on approachability and ease to contact where the service can easily accessible and having convenient hours of operation as well as convenient location. 5. Courtesy where it focuses on friendliness of contact personnel and can be seen from the clean and neat appearance of public contact personnel. 6. Communication focuses on the how the company understand and used the language that customer used by listening to them. 7. Credibility focuses trustworthiness and believability and having the customer‟s best interest at their heart. 8. Security focuses on providing the sense of freedom from danger and risk including physical safety or even the financial security. 9. Understanding and knowing the customer focuses on how the company making the effort to understand the customer‟s needs like providing individualized attention. 10. Tangibles includes the physical aspect of the service such as tool and equipment used to provide the service (Buttle, 1996)
This theory was changed due to the fallen of several dimensions and reduced into five dimensions (Andaleeb, 1998) which are 1. Tangibility means the appearance and physical equipment in the workplace 2. Trust means the organizations ability to practices and also provide their promises continuously 3. Responsibility means the desire to provide in-time customer service 4. Assurance means the knowledge and competencies the organization has to perform the service 5. Empathy means a harmonious relation with customer and effort to understand their need
Tangibility is the measurement of physical attribute of the service itself. It includes general physical dimensions such as the attire of the service performers, the place where the service will be performed, the equipment that used in the store, the variety of products offered by the store, and anything that visible through the eyes of the customer.
Empathy is relating with the direct service and detail attention given by service performers that influence customer satisfaction. The professionalism of the service performers can be seen by how they realized the need of the customer and the understanding level towards the needs of the customer.
Responsiveness is the flexibility shown by the service performers during the service performance to the customers. The need and satisfaction of each customer are different and sometime there are uncertain event happened during the business operation, how the service performers endure these uncertainties and be flexible is related to the responsiveness.
Reliability is about the fulfilling the customer expectation towards the „promise‟ that given by the store / company before the transaction. How they deliver their „promise‟, how long time it took and whether it fulfill the customer expectation is what will be discussed in the reliability.
Assurance is the feeling of secure that given by how the service performers give their service confidently and whether the courtesy is high during the transaction. Assurance point is to make customer feel more comfortable and feel secure.
Later after Correspondent Analysis was done, the similarity made the dimensions change again by losing the Trust dimensions and became Reliable where it focuses on how the company fulfill their promises and maintain the right way of service performances.
The Servqual model is created based on five service quality dimensions, which are tangibles (physical facilities, equipment and employee uniforms), reliability (ability to perform the service dependably and accurately according to the promised offered), responsiveness (willingness to help customers and provide direct service), assurance (confidence, knowledge of employees and their ability to gain trust) and empathy (providing attention to each customers). Despite the service quality study that conducted in most of service industry, the service quality also studied in the industry that not really related to the service like an accounting and audit firms (Ismail, 2006). Not only wide usage by several study, the criticized also come from some academics (Carman, 1990) talking about the validity, reliability, operation of expectations, and dimensional structure from the model of service quality. The general agreement counter the criticism stating that the servqual dimensions and items are reliable measurement of overall service quality (Khan, 2003). The adjustment of the service quality model is done to the related industry. The model that used to measure restaurant service quality is dineserv model (B. Knutson, P. Stevens, and M. Patton, 1995). The model contains 29 items and five servqual dimensions.
According to Lupiyoadi, service quality is one of the factors that influence customer purchasing decision beside other factors such as product quality. According to him, service quality is a dynamic condition consisted of products, services, human, process, and environment to fulfilled the expectation by five other dimensions which is tangible, empathy, reliable, responsiveness, and assurance thus the service quality influence customer in making purchasing decision. (Lupiyoadi, 2001)
While according to Dwi and Febrina service quality is the main factor that determine the purchasing decision of the service users, because the performance of the service provider can be seen and it will determine the satisfaction of the customer. Whether the customer satisfied or not towards certain service will affecting customer decision on next purchasing. It‟s fit with the Joko Sugihartono statement that to create and improving the relationship with customer is by providing the consistent service performance and better value compare to other competitor. The service quality will be known as good one if it can fulfill the customer requirement. If the need of customer can be fulfilled, it will give big contribution to both of their purchasing decision and repurchasing decision. (Sugihartono, 2008)
This concept of service quality is mostly coming from the concept in the context of service marketing (Lee, H., Y. Lee, & D. Yoo, 2000) thus it deals with the perceived service quality. Perceived service quality is the extent to which a fir m successfully serves the purposes of customers (Zeitamhal, A. Parasuraman, and L.L Berry, 1990). The value of service is determined by the customers based on the experience on how the service delivered. Ghobadian, Speller and Jones found that customer expectation, service delivery process and the outcome of the service are a critical element in enhancing perceived service quality (Ghobadian, A., S. Speller, and M. Jones, 1994); while according to Edvardson, the service quality perception are formed during the production, delivery, and consumption process (Edvardsson, 2005). The perception of service quality itself is coming from the past experience of the similar experience, so the customer expect the service they will get will be the same or even better than last time they received (O'Neill M. and A. Palmer , 2003). Rowley stated that perceived service quality itself is an attitude towards satisfaction (Rowley, 1998).
According to Parasuraman, there are 3 important aspects needed to be considered in providing service quality which are: 1. Service quality measurement is harder to measured or evaluated compare to the goods product quality 2. The perception of service quality is directly done by comparing the service expectation and the service given 3. The measurement of service quality is not by the finished end of the products which in this case is service but during the service performance
In servicing food and beverages especially in restaurant or food store, service quality is act as added value to the overall service experience. Similar like their perception on goods products where they compare it with their own perception, it also happened to service quality. Eventually in formulating the good service strategy, one needs to focus on customer needs and the quality of the service itself, it because the service quality has big influence towards the customer decision whether they will make purchasing or not. (Walker and Lunderg in Ridwan Zia Kusuma, 2011)
2.1.3 Store Atmosphere Store atmosphere is a planned atmosphere that can attract its target and grab the customer attention. Store atmosphere has a certain influence towards customer emotional feeling which resulting in purchasing the products. The emotional feeling given will make 2 dominant feeling which are the joy and the desire to want something. According to Sutisna and Pawitra, store atmosphere is the affection and cognition status that understood by customers even though it more into unconsciously (Sutisna & Pawitra, 2001). According to Peter and Olson, store atmosphere related to general things like the air circulation, store layout, color pallet, flooring, storage cabinet material and shape, etc (Peter, J. Paul & Jerry, C. Olson, 1999).
Store atmosphere has a deep connection with store image. Sutisna and Pawitra said that store atmosphere is one of the store image aspects. Various factors used to create store image is the products offered by the store, in-store service, loyal customers, store promotion activity, and the last but not least is store atmosphere. The creation of store image depends on combination of physical adjustment which directed to ability to develop artistic value from the store environment so it has attractive values towards customers.
According to Kotler, the store atmosphere can have three types of effects on purchasing behavior which are: a. Attention creating – where customer can see the store and attracted to it as it stand-out compare the competitors b. Message creating – where the retailer / store owners express their target audience c. Affect creating – by manipulating the atmosphere in store using music, sound, and lighting can stimulate the reactions whereas will increase the purchasing probability (e.g. the fresh baked bread that has certain smell where people will feel more hungry and want to eat the bread, finally decided to enter the store and purchase the bread)
The store atmosphere are can be divided into instore and outstore to focus on creating comfortable environment to the customers. This supported by Levi and Weitz (Levy Michael A. & Weitz Bortom, 2001) theory that store atmosphere divided into 2 categories which are: 1. Instore atmosphere Instore atmosphere is relating to the general interior design that focus on internal layout, sound system, scent, internal textures, and interior design. 2. Outstore atmosphere Outstore atmosphere is relating to the general exterior design that focus on external layout, external texture, exterior design,
According to Barry and Evans (Berman Berry & Joel Evans, 1997), store atmosphere is including several things which are: 1. Exterior – the exterior design has strong impact to the store to make it look unique, attractive, and has the inviting feels or it can be a disaster if didn‟t do correctly. a. Storefront – part of the exterior design including the name sign, entrance door, and building construction. It will act as the first impression provider to the customer that never comes before. b. Marquee – part of exterior that focus on how the store showing its own name. Marquee has a role to make the store stands out and different by using several of material like neon sign. c. Entrance door – part of the exterior that very critical as it has to be able to invite the customer and also handle the traffic inside the store. d. Window display – part of the exterior that show the uniqueness of the store by putting several items that can be used to identified the store thus able to attract the customers. e. Height and size of building – part of the exterior that seem not important but has influence in creating store atmosphere, for example the ceiling area that can make the store very tight or very wide. f. Uniqueness – part of exterior that can be used to show the unique part of the store, for example some store create a building with the theme of zen garden to create the unique peace atmosphere. g. Surrounding area – part of exterior which influenced by where the store location and the other store around it. h. Parking lot – part of exterior which considered as most important things for the customers. If the customer can get easy access to park, comfortable and has a close distance with the store, it will indirectly create a positive atmosphere for that store. 2. Interior – the most important part to create the store atmosphere right after the customers enter the store is the display. The interior design must focus on maximizing the visual merchandising. The perfect display is the one that can attract customers and allow them to do some checking or evaluating before finally make a purchasing. a. Flooring – part of interior that can influence customer perception towards the store to some extent due to the type, size, design, and color of its floor. b. Color and lightening – part of interior that can direct customer attention towards certain products that the store want to sell or towards something that show the store in general. Good combination of color and lightening will give better image and situation compare with the real things. c. Scent and sound – part of interior that has high influence towards creating attractive atmosphere and able to reduce the customer turn over which in turn ordering more products (e.g. food or drink) d. Fixture – part of interior which consent to placement of equipment to create the „not-too- tight‟ atmosphere e. Wall texture – part of interior that can add more points to impress customers. f. Temperature – part of interior that need to be concern as the customers didn‟t want to be in the room where it‟s too cold or too hot. g. Width of aisles – part of interior related to fixtures where the correct placement will make the customer more comfortable. h. Dead area – part of interior where the store display can‟t be put as it creates awkward feeling, for example is the toilet. i. Personnel – part of interior which related to the employee attire and providing high service will make customer feel welcomed and more relaxed. j. Service level – part of interior that can create different impression for each level which are self service, self selection, limited service, and full service k. Price – part of interior where putting the price where it can be seen by customers will make the customer easier to find the price without much effort. l. Cash register – part of interior where the cash register must be placed in location with easy access by the customers m. Technology – part of interior that can show the professionalism of the store, for example is the modern cash register that can increase the transaction process to reduce the waiting time. n. Cleanliness – part of interior that very vital to determine whether the store has good store atmosphere or not. 3. Store layout – the store owner has to be able to maximize his / her space and use it effectively. a. Allocation of floor space for selling, personnel, and customer – part of store layout where each space (selling, personnel, and customer) must be visible and clear without need to telling the customer every minute because it supposed to be personnel space. b. Traffic flow – part of store layout that focusing on controlling and managing the traffic of customers. Some layout that can be used are grid layout (straight), racetrack layout (turning), spine layout (opposite), free-flow layout (no restriction) 4. Interior point of interest display – the part of general design that uses specific decoration to attract customer and give clear information to the customers. a. Theme setting display – part of interior display that has uniformity in term of decoration or even personnel attire. Some hotel or restaurant uses this kind of setting which called boutique. b. Wall decoration – part of interior display which is the combination of pictures or posters on the wall or the color pallet used to the wall. It must be consistent and has the correct flow since the entrance until the smallest detail.
Retailers have realized some significance of store atmosphere which increase experience of purchasing by customers (Muge Yalcin & Tunkay Kocamaz, 2003). While according to Bitner(Bitner, M. J., 1992), customers pay attention to 3 store atmosphere dimensions which are ambience, space and signs, symbols and artifacts used.
According to Donovan (Donovan R. J. and Rossiter J. R., 1982), having a high pleasure feeling during shopping that influenced by environmental factors will increase the money-spent by the customers than they intended before. Kotler (Philip Kotler, 1973- 1974) stated that even though the designer or the owner created some atmosphere on their store (intended atmosphere), different customer will perceive the atmosphere differently as this caused by different perspective towards colors, scents, and sounds.
Physical environment that can directly influenced customers behaviors can be seen mostly in service business such as hotel, restaurant, and hospitals; this because the service are produced and consumed directly by the customers in the same area.
The design and layout of the store such as the width area and the aisle will increase the satisfaction level and purchase pattern. According to Bireham(Bireham, J., 1995), the crowding level of buyers also will affect purchase behavior. Too crowded will make the purchasing very fast and in the same time will lower the amount of products purchased while in the same time, people who shopping together will stimulate each other to buy more. The store atmosphere will attract the customer to enter the store but to complete the sales, interior layout also need to be considered such as waiting time in the cashier, music that played inside the store will stimulate the customer to purchase more and spend time longer inside as they feel comfortable and indirectly influence the customer behavior Kumar (Kumar, V. and Karande, 2000). Baker and Grewal (Baker, J. and Grawel, D., 1994) made a study that internal environment will have higher influence that drive the customer to finally do the purchasing.
Bitner (Bitner, M.J., 1990) said that the built environment (or she also called it as „servicescape‟) affects not only customers but only the employees where both of them has interaction within organization physical facility. In the first stage, Bitner said that the effects of planned atmosphere are moderated by personal traits, behavior, and also mood states of individuals. While mood are leaning to personal trait, the study also shown that it was affected by the environment itself. Gardner (Gardner, M. P., 1985) said that the atmosphere will give different effect to people who in different state like anxious and relaxed while Harell and Hutt (Harell, M. D. and Hutt, M. D., 1976) also said that people who have high time-sensitivity will be more affected by crowded store than those who are more relaxed and patient. On the second stage, the internal responses towards planned atmosphere lead to arousal behavior in employees as well as customers (e.g. sales personnel can approach customers depends on the suitable layout). While on the last stage, the internal responses by individuals will affect the interaction between employees with customers and customers with customers.
Figure 2. 1 Mehrabian-Russell model
source: Bitner 1992
Store atmosphere according to Kotler in the early time is the “buying environments designed to produce specific emotional effects in the buyer that enhance his purchase probability”. Some research studies able to determine 2 typical group that do the possible reactions into 2 forms of behaviors which are to approach the store or to avoid the store.
According to Baker (Baker, J., 1987), there are 3 factors that can be used to identify store atmosphere which are ambient factors, design factors, and social factors. Ambient factors are the factors like music, scent or circulation of air that didn‟t influence purchasing decision when they just in the same level with customer expectations instead the extreme ambient factors like the temperature that too cold or too hold will make the customer to avoid that store. Design factor are the factor that related to aesthetic and functional in the same time. Aesthetic factors are the factors that usually will be observed by customers such as color, architecture, and material used while the functional factors are the factors that facilitate customer behaviors inside the store such as layout and comfort. Social factors are the factors that influence by human presence within the store atmosphere such as personnel appearance and other customer behavior.
2.2 Previous Research According to Amin Asadollahi, Abdollah Rajabi Khangha, and Seyed Sina Fallahhoesseini published by American Journals made a research about the service quality, value and customer satisfaction on consumer buying behavior. They do their research in the University of Tehran with the students as its object. They put several factors to measure the service quality and then split it into service value and service satisfaction and in the end making the relation from three of those with the consumer buying behavior. From their research, they found out that the service quality has significant relation and strongly influence consumer purchasing behavior. They suggested doing the similar research in other industry such as automotives industry and also the food industry to see whether service quality has influence in other industry or not (Amin Asadollahi, Abdollah Rajabi Khangha, and Seyed Sina Fallahhoesseini, 2011).
Ika Putri Iswayanti (2010) conduct a research about the influence of Product Quality, Service Quality, Price, and Place towards customer purchasing decision as the study case in Soto Angkring Mas Beed restaurant in Semarang. In her research, the most significant influence variable is coming from product quality with regression coefficient 0.206, followed with service quality with regression coefficient 0.253, price with regression coefficient 0.239 and last but not least is place variable with regression coefficient 0.206. All variables simultaneously influence customer purchasing decision by 52.4%.
According to Faris Nabhan and Enlik Kresnaini (2005) research which talking about the influence factors of customer purchasing decision in Kota Batu restaurant showing that the independent variables used in the research which are products, service quality, place, price, social class and promotion simultaneously influence the dependent variable which is the customer purchasing decision by 98.2%.
According to Yesi Apriyani research about the influence of brand image, price, and service quality towards the repurchasing decision in Pizza hut Semarang; showing that the all variables simultaneously and partially are significantly influence customer repurchasing decision.
According to Lia Natalia (2010) regarding the research of the perception factor analysis which influence customer purchasing decision in Giant Hypermarket Bekasi; the independent variables which are location, products availability, product quality, price, service quality, shopping comfort, and promotion simultaneously influence customer purchasing decision even though service quality and shopping comfort partially didn‟t have significant influence towards customer purchasing decision with promotion as the most dominant factors that influence customer purchasing decision with contribution percentage as 39,592%.
Jeni Raharjani (2005) make a research of factor analysis related with the factors that influence customer purchasing decision in choosing Super Market as shopping place. The research is done in area around Simpang Lima Semarang. The result of the research shows that location is the first factor that influence customer purchasing decision before choosing Super Market as shopping place, followed with products availability, facilities, and last but not least the service quality. Statistically the location variable gives contribution in decision making by 63% which means that there are significant and positive influence between location, service quality, facilities, and products availability towards customer decision in choosing super market as shopping place.
According to the research that done by Ivan-Damir Anic and Sonja Ranjas that coming from Institute of Economy, Zagreb which is the impact of situational factors on purchasing outcomes in the Croatian hypermarket retailer. The result of their research is the store atmosphere that didn‟t has influence towards the customer purchasing decision. On their research, store atmosphere is one of the situational factors to measure whether the surrounding condition can influence customer shopping behaviors. They stated that the other research about customer purchasing behavior and decision with store atmosphere in other type of store other than supermarket are needed to be done to see whether the same pattern of situation dimensions and consumer purchasing behaviors emerge too or not (Ivan Damir Anic and Sonja Ranjas, 2006).
According to the research done by Glenn Voss, Dhruv Grewal, Julie Baker, and Michael Levy (Glenn Voss, Dhruv Grewal, Julie Baker, and Michael Levy, 2002) about the influence of waiting expectation, store atmosphere, and gender effects on store patronage intention or purchasing decision. The result of this research shows store atmosphere has influence the customer purchasing decision. In this research, certain music or visual communication is used as the aspect of store atmosphere and they suggest using other aspect of store atmosphere to customer purchasing decision.
2.3 Theoretical Framework
Figure 2. 2 Theoretical Framework
Source: Store Atmosphere theory (Berman Barry and Joel Evans, 1997), Service Quality theory (Andaleeb, 1998), and Customer purchasing decision theory (Dewey, 1910).
2.4 Hypothesis Hypothesis that will be answered in this research will focus in the literature review that will be discussed in the following chapter related to the customer purchasing decision, service quality, and also the store atmosphere.
The hypothesis that will be taken will be coming from 9 variables that influence customer purchasing decision as dependant variables.
H0.1 : Service quality of tangible has no influence on the Coffee Palace customer purchasing decision
H1.1 : Service quality of tangible has influence on the Coffee Palace customer purchasing decision
H0.2 : Service quality of reliable has no influence on the Coffee Palace customer purchasing decision H1.2 : Service quality of reliable has influence on the Coffee Palace customer purchasing decision
H0.3 : Service quality of responsiveness has no influence on the Coffee Palace customer purchasing decision
H1.3 : Service quality of responsiveness has influence on the Coffee Palace customer purchasing decision
H0.4 : Service quality of assurance has no influence on the Coffee Palace customer purchasing decision
H1.4 : Service quality of assurance has influence on the Coffee Palace customer purchasing decision
H0.5 : Service quality of empathy has no influence on the Coffee Palace customer purchasing decision
H1.5 : Service quality of empathy has influence on the Coffee Palace customer purchasing decision
H0.6 : Store atmosphere of exterior has no influence on the Coffee Palace customer purchasing decision
H1.6 : Store atmosphere of exterior has influence on the Coffee Palace customer purchasing decision
H0.7 : Store atmosphere of general interior has no influence on the Coffee Palace customer purchasing decision
H1.7: Store atmosphere of general interior has influence on the Coffee Palace customer purchasing decision
H0.8 : Store atmosphere of store layout has no influence on the Coffee Palace customer purchasing decision
H1.8: Store atmosphere of store layout has influence on the Coffee Palace customer purchasing decision
H0.9 : Store atmosphere of display has no influence on the Coffee Palace customer purchasing decision
H1.9: Store atmosphere of display has influence on the Coffee Palace customer purchasing decision
Chapter III
Methodology
In this chapter of study presents the research method and process in which the researcher used and implement in the study. It involves such process of investigation, sampling scheme, selection of respondents, the sets of survey questionnaire, validation and reliability check process, statistical application, SPSS test, and process of gathering data and information.
3.1 Research Method In the process of making this research, there are two method or ways which different and distinguish to each others; there are quantitative and qualitative method. The main difference thing between quantitative and qualitative is quantitative method is more focused on the number and utilizing of statistical tools, on the other side qualitative method is more concern on the comparison and usage of many theories from various of sources. However both of the methods have it own advantages and disadvantages.
A quantitative method or approach is often being used with aim to verify and prove existing theories or test hypothesis developed based from the previous research or study. In the other side qualitative method is require its user to have a deeper understanding of the study problem, collecting, analyzing and interpreting that cannot be expressed in numbers.
The most popular used by researcher especially the novice researcher are the research based on how the information is sought which is the quantitative and qualitative research. The researcher used quantitative research as the research method and thus the explanation will focus on the quantitative research and explanatory research as according to MasriSingarimbun(Masri Singarimbun, 1995), explanatory research explains the causal relation and hypothesis testing.
According to Burns and Grove (Burns N. and Grove S. K., 2005), quantitative research is a formal, objective, systematic process in which numerical data are used to obtain information about the world and this research method is used for to describe variable, examine relationship among variables, and to determine cause-effect interactions between variable . The quantitative research is used widely in natural and social sciences. Cohen (Cohen, L. and Manion, L., 1980) said that quantitative research is defined as social research that employs empirical methods and statements. Empirical statement means a descriptive statement about what is the case instead of what ought to be the case. This statement is generally expressed in numerical figures. Empirical evaluations are applied in this research which is a form that seeks to determine the degree to which a specific policy empirically fulfills or does not a particular standard. Creswell (Creswell, J.W., 1994) stated that quantitative research is a type of research that explaining certain phenomenon by collecting numerical data that are analyzed by methods based on mathematic calculation in certain statistic.
There are several steps to explain the phenomenon that analyzed using this method. The first one is to explain the phenomena itself. Whether using quantitative or qualitative as the research method, the key is always looking to explain something and the explaining of the phenomena also known as the questions in educational terms (Suphat Sukamolson, p.2).
Quantitative research as its name is always related to the number thus the collection of numerical data. After collecting the information of some numerical data, the analysis will be done using mathematically-based methods. The analyzing using this mathematic methods are not necessarily used in qualitative research as the data are not always in numerical and because of this it can‟t be analyzed using statistics. The mathematic methods that will be used are particularly statistics and it always became the top of mind when people hear the word of quantitative research. This became the misconception of many people who always think that the statistics are the most important part of quantitative studies and it created the complicated and frightening image as mathematics are the foundation of this type of research (Suphat Sukamolson, p.2-3).
Because the quantitative method is focusing in collecting numerical data to explaining certain problems, the question also builds so the respondent can answer it quantitatively. Even though many data that do not naturally appear in numerical data; by carefully designing research instruments, we can collect the information and convert it to the quantitative form despite the fact that it didn‟t occurred naturally as quantitative data and it will enable us to analyze statistically. The most common information that didn‟t occurred naturally in numerical data but often used as the problems to be solved are attitudes and beliefs. This can be transform into certain statement where the respondent can answer it with agree or disagree that represent by numbers. Using this way, the researcher can get the data with the numerical data that can be analyzed mathematically. Quantitative research after all focuses on measuring social reality and searching for questions in something and received the answered in numeric form. Quantitative method divided into several types which are survey research, correlational research, experimental research, and causal-comparative research. Each research represents its own typical characteristics (Suphat Sukamolson, p.3-5). The researcher use the causal-comparative research as according to Gay (Gay, R. L., 1996), causal-comparative research attempts to established cause-effect relationship and to determined whether and do what degree a relationship exist between two or more quantifiable variables.
The usage of quantitative methods can be determined by understand the particular questions. There are 6 main types of research question matching with quantitative research which are: 1. When we want a quantitative answer by asking directly how many or how much 2. To find the numerical change by asking whether certain interest has increase or decrease in term of number 3. Used to conducting audience segmentation by dividing population into groups that similar to each other 4. When we want to quantify opinions, attitudes and behaviors and find out how the whole populations feels toward particular problem 5. When we want to explain some phenomena and the factors that cause them 6. When we want to testing of hypotheses and the cause and effect of certain phenomena
The types of problem from 1 until 4 are descriptive research as the researcher want to describe the situation while the types of problem in 5 and 6 are inferential research as the researcher are trying to give explanation instead of simply describe it (Suphat Sukamolson, p.8-10). As the problem of this research is to find the factors that influence customer purchasing decision, the researcher decided to use quantitative research method.
According to Suphat Sukamolson(Suphat Sukamolson, p.12-15), the most popular approach to do the quantitative research is survey research. Survey research is systematic gathering information from respondent to understand and/or predict some aspects of the behavior towards particular problem. The survey research is consisted with sampling, questionnaire design, questionnaire administration and data analysis. These are several types of surveys: 1. In-person interviews - Interviewer asking the respondent question in a face-to-face situation. 2. Telephone interviews – interviewer asking the respondent to answer questionnaire through telephone with computer-assisted telephone. 3. Omnibus survey – interview that similar with telephone survey with the wider population (minimum 1000 interviews) and using random digit dialing sample of telephone household. 4. Self administered questionnaires – respondents fill out the questionnaire that distributes through mail and sometime distributes via magazine or newspaper. This research uses this method where the researcher directly asked the respondent to fill out the questionnaire and measured by Likert scale.
3.2 Operational Definition
No Variable Definition Source
customer the decision taken by customer / consumer to John Dewey 1 purchasing buy certain goods / service that they consider decision can fulfill their needs 1910
the services given in the service business such as hotel or restaurant and the quality Parasuraman, A., 2 service quality will determine how much gap between Zeithaml, V., & the customer expectation and the Berry, L.L, 1985 expectation.
one of the service quality aspects that focus on physical appearance of the store 3 tangible Andaleeb 1998 / restaurant / company including the cleanliness and employee appearance.
one of the service quality aspects that focus on the understanding level of the 4 empathy Andaleeb 1998 store / restaurant / company towards the customer needs. one of the service quality aspects that focus on the responds that mainly coming 5 responsiveness Andaleeb 1998 from the employee towards the customer needs. one of the service quality aspects that focus on the image or promise that held 6 reliable Andaleeb 1998 by the store / restaurant / company and how they deliver it to the customers.
one of the service quality aspects that focus on the safety of the customer 7 assurance including the transaction and the product Andaleeb 1998 quality offered by store / restaurant / company. the atmosphere that was purposely created by the businessmen or the store Levy Michael A. store 8 owner to create the comfortable feeling & Weitz Bortom, atmosphere and indirectly influence customer 2001 purchasing decision. one of the store atmosphere aspects that focus on the outer appearance of the store Berman Berry & 9 exterior / restaurant / company such as entrance Joel Evans, 1997 door and name sign that can be manipulated and change the atmosphere.
one of the store atmosphere aspects that focus on the inner appearance of the store general Berman Berry & 10 / restaurant / company such as lighting interior Joel Evans, 1997 and sound that can be manipulated and change the atmosphere.
one of the store atmosphere aspects that focus on the tool arrangement inside the Berman Berry & 11 store layout store / restaurant / company that can be Joel Evans, 1997 manipulated and changed the atmosphere.
one of the store atmosphere aspects that focus on the decoration both inside and Berman Berry & 12 display outside the store / restaurant / company Joel Evans, 1997 like theme decoration that can be manipulated and change the atmosphere.
3.3 Research Instrument Figure 3. 1 Research Framework
Source: Self-developed by the researcher
3.3.1 Data Collection According to Indriantoro and Supomo (Indriantoro, Nur & Bambang Supomo, 2002), primary data is the data that coming directly from the source and specifically collected with direct relation with the research problem. 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; it collected and gathered throughout questionnaire that given to the third parties. On the other hand secondary data 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. The method of data collection to conduct this study or research is consists of:
3.3.1.1 Primary data The method that the researcher used to collect and gathered primary data is by using survey method in which the researcher distribute and spread questionnaire to third parties who qualified and fulfill the requirement that researcher set for to be respondent in this study.
The questionnaire is designed and constructed by the researcher with guidance from previous research. The questionnaire is consists of two part which first part is consist of questions that asked related to respondent profile or demographic status. The second part is consist of statements that represent the five independent variable of Service Quality (Tangible, Empathy, Responsiveness, Reliable, and Assurance) and four independent variable of Store Atmosphere (Exterior, General Interior, Store Layout, and Display) and one dependent variable (Consumer Purchasing Decision). The questionnaire is print and copy in the form of papers in which distributed to all students in President University despite of major and gender but differentiate in batch.
3.3.2 Measurement Scale and Data Analysis
3.3.2.1 Measurement Scale The Likert Scale was developed by RensisLikert. It is the most frequently used variation of the summed rating scale. Summed rating scales consist of statements that express either a favorable or an unfavorable attitude toward the object of interests. The participant is asked to agree or disagree with each statement. Each response is given a numerical score to measure the participants overall attitude (Cooper, D. and Schindler, P., 2006).
In this research, data is interpreted using five-Likert Scale (Malhotra, N. K., 2010) as the same as the basis for the interpretation of the result of the computer data where the boundary of numeral and option includes:
Table 3. 1 Likert Scale Relative Grading Statement Score Strongly Agree 5 Agree 4 Neither Agree / Disagree (Neutral) 3 Disagree 2 Strongly Disagree 1 Source: Malhotra 2010
3.3.2.2 Data Analysis Statistical Package for Social Science (SPSS) V. 17.0 Refers to the free library by Farlex about Statistical Package for Social Science (SPSS) is the most widely program or software that used to analyze data; for example basic statistical procedures such as frequencies , t-test, linear regression, multiple regression, means, factor analysis, and so on. In this research, the researcher will use SPSS to analysis the data that get from the questionnaire.
Validity Test The validity test show how far questionnaire able to measure what the researcher want measure in this study. The validity test help 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.
The Pearson‟s correlation coefficient is using to measure the validity of variables in research. The coefficient of correlation of Pearson Product Moment can be based on the actual values of X and Y. The equation as follow: The Formula is:
푁 푋푌 − 푋 ( 푌) 푟 = 푁 푥2 − ( 푋)2 푁 푌2 − ( 푌)2
Source: (Sugiyono, 2007)
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
According to Sugiyono (Sugiyono, 2007) state that “item which has high positive correlation with total score means that item has high validity” minimum standard in order to fulfill validity test is if r = 0.361, where if r < 0.361 is categorize as invalid. In this research, the researcher use 0.05 for significance level in the validity test.
Reliability Test Refers to (Cooper, D. and Schindler, P., 2006), “reliability is a characteristic of measurement concerned with accuracy, precision, and consistency”. Reliability test used to shows how far the measurement result is relatively consistence if the measurement re- done for twice or more. Reliability test as an index to show the degree of trusted and relied of the instrument, in this research is refers to questionnaire.
Where: α = instrument reliability‟s coefficient r = mean correlation coefficient between variables N = number of questions
According to Malhotra (Malhotra, N. K., 2010) that to achieve the moderate scale reliability, the alpha value of all items that indicated the reliability statistics has to exceed criterion of 0.60. the variable will be categorize as unreliable if the cronbach‟s alpha of that certain variable is less than 0.60.
3.4 Sampling Design In this research, the questionnaire was distributed to the all of researcher friend and junior in President University that has visited Coffee Palace or purchased Coffee Palace products despite of their major and gender but differentiate in batch.
3.4.1 Sample Size The sample size or number sample of respondent that researcher have to take is an important issues when in this research; the researcher used the quantitative analysis. According to Sekaran (Uma Sekaran and Roger Bougie, 2010) that “the determination of sample size number should be among 30 to 500 elements”, therefore in this research, the researcher take 100 respondents for its sample size even though the questionnaire used only 93 as some of the questionnaires are lost or not returned to the researcher. The researcher is using the stratified purposive sampling method with the limitation of only President University that has visited or purchased product of Coffee Palace, stratified into 3 batches which are 2010, 2011, and 2012. 2010 consisted of 644 students (representing 29.9% population), 2011 consisted of 753 students (representing 35.0% population), and 2012 consisted of 750 students (representing 34.9%) in total of 2,147 students. Based on the stratified sampling method and the sample needed for this research which is 100 respondents, each batch/stratum percentage will be times the amount of respondent wanted and the result is 30 students from 2010, 35 students from 2011, and 35 students from 2012. The questionnaire that will be distributes to the respondents will be tested in two approaches. The first one is by distributing the questionnaire towards 10 respondents using purposive sampling method and doing the Focus Group Discussion and revise some questions so it will be more understandable by respondents. Purposive method is the deliberate choice of an informant due to the qualities the informant possesses so basically it‟s a nonrandom technique that doesn‟t need and theory or set number of informants. So the researcher decides what needs to be known and sets out to find people who can and able to provide information (Bernard, H. R., 2002). According to Krueger, focus group discussion (FGD) is a way to discuss particular topics by gathering people with similar backgrounds or experiences (Krueger, R.A, 1988). The researcher gathered 10 people that he knew which are his classmates that have visited Coffee Palace and then discuss about the questions. After some revision, the new questionnaires are built. Then the questionnaire will be distribute again to other 10 respondents using purposive sampling method sampling method and directly interview each of them about their perception towards the questionnaire as the pre-test. After that, the questionnaires that passed two testing will be accepted to be used as this research instrument as the reliable and valid instrument.
3.4.2 Margin of Error The margin of error is the percentage of allowance for no precision or error that occurs due to the use of sample instead of population. In the margin of error, there are two level of percentage that usually many people used. There are 0.01 percent and 0.05 percent. Although 0.01 percentage level margin of error is more accurate than 0.05 percent, however in this research, the researcher used the 0.05 percentage margin or error in which means that in this study or research the level of error is will be 5% and with the confidence level of 95%.
3.4.3 Sampling Technique Applied In order to collect all the data from the respondents who have visited Coffee Palace or purchased their products, the researcher used snowball sampling method to conduct the research. Due to not all students have visited Coffee Palace or purchased their products, the researcher use snowball sampling method which is part of non probability sampling method. The snowball sampling method is a sampling method that required researcher to ask helped his or her friends that have friends who also fulfill the requirement to fill the questionnaire. According to Castillo (Castillo, J. J., 2009) “Snowball sampling is a non probability sampling technique that is used by the researcher to identify potential subjects in studies where subjects are hard to locate”. By using snowball sampling method, there are some advantages that researcher can obtain, such as the process is cheap, simple, and cost efficient, it allow the researcher to be able to reach populations that are difficult to sample when using other sampling method, snowball sampling method only require little planning and little workforce compared to another sampling method.
3.4.4 Descriptive Statistic In this research, the researcher used descriptive statistics with aim to give description of each variable that used in this research where it will be related with collecting and summarizing data and with the presentation of data.
3.4.5 Statistical Tools To conduct this study, the researcher used multiple regression as the function or formula to see and verify the relationship between independent variables (service quality; tangible, empathy, responsiveness, reliable, and assurance and store atmosphere; exterior, general interior, store layout, and display) and dependent variable (Coffee Palace customers purchasing decision), and also to see what is the most significant factors from independent variables that affecting the dependent variable.
3.4.5.1 Multiple Regressions In this study, the researcher uses multiple regression tools to conduct the research. According to Render, Stair and Hanna(Render, Stair, and Hanna, 2005), “multiple regression models is a practical extension of simple regression in which it allow user to build a model with several independent variables”.
Y= βo + β1X1 + β2X2 + β3X3 + β4X4 + β5X5 +β6X6 + β7X7 + β8X8 + β9X9 + ε Where: Y = Coffee Palace Customer Decision (dependent variable)
β0 = Y intercept
β 1 – β9= Regression Coefficient
X1= Tangible (independent variable)
X2 = Empathy (independent variable)
X3 = Responsiveness (independent variable)
X4= Reliable (independent variable)
X5= Assurance (independent variable)
X6= Exterior (independent variable)
X7 = General Interior (independent variable)
X8= Store Layout (independent variable)
X9= Display (independent variable) ε = Random Error
In order to see the influence level between dependent variable and independent variables in this study, there are four tests or requirements that have to pass in the regression model. There are normality test, multicollinearity test, heteroscedasticity test, and autocorrelation test.
3.4.5.2 Normality Test Normality test is test that used for determined whether the data is well set – modeled by a normal distribution or not, or to compute how an unlikely random variable is to be normally distributed. In this research, the researcher will use the graphical method in the normality test. The researcher wills analysis the normality from the output that comes out from the SPSS V.17 process for accurate results.
Graphical method visualized the distribution of a random variable compare the distribution to a theoretical one using plot. These method is either descriptive or theory driven. In this study, the researcher implements those two methods. Among of types in descriptive plots, the researcher will use histogram in which the researcher just need to see whether the data is normal or not by analyze the shape graph of histogram. The data will normally distribute if histogram line is in bell shaped.
Theory driven plot consist of P-P plot (probability-probability plot) and Q-Q plot (quantile-quantile plot), in this part the researcher will get normal data if the plot is distributed by following the shape of line.
3.4.5.3Multicollinearity Test Multicollinearity test is a test that used to know or detect whether any independent variable that correlated strongly to each others in the multiple regression models. Multicollinearity is situation that researcher have to avoid, because it will not good for independent variable correlated strongly to each others. In order to measure multicollinearity, variance inflation factor (VIF) is used to measure. Normally, VIF measure how much the variance of the estimated coefficients is increased over the case of no correlation among the X variables. The formula for VIFk is:
Where: 2 2 th R k = the R value obtained by regressing the k predictor on the remaining predictors. And R2 = 푆푆푅 푆푆푇 SSR = Regression sum of squares SST = Total sum of squares
The researcher will determine whether is there any correlation between one or two independent variable by looking at VIF value. If VIF value of one variable is around or greater than 10, it means that there is collinearity occurs in that variable. If there are two or more variable which has VIF value around or greater than 10, it means that those two variables has strong correlation and one of these variables are need to be eliminated directly from the multiple regressions models.
3.4.5.4 Heteroskedasticity Test Heteroskedasticity 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. It can be seen from the scatter plot by looking at distribution of residual value toward the predicted value. If the distribution is spread randomly without any systematic pattern, then the data is passed the heteroskedasticity test.
3.4.5.5 Autocorrelation Test The autocorrelation test is used to determine whether any correlation between variables in t-period with variables in prior period (t-1). This test is used only for time series data and not for cross sectional data. If any correlation exists it means there is an autocorrelation test (Ghozali, Imam, 2009).
3.4.5.6 F Test F test is used to determine whether there is a significant relationship between independent variables and dependent variable. F test works by statistically test the null hypothesis that there is no linear relationship between independent variable and dependent variable. In below showed f test formula that used in this research:
Where: F = statistic test for F distribution R2 = coefficient of determination k = number of independent variables in the model n = number of sample
The level of significance that used in this research is α = 0.05. Ho is accepter if the f test value is greater than the level of significance α = 0.05 and Ho is rejected if the f test value is less than the level of significance α = 0.05.
H0: β1 = β2 = β3 =β4 =β5 = β6 = β7= β8 = β90, if significant F > 0.05, accept H0
Ha: at least there is one β ≠ 0, if significant F < 0.05, reject H0
3.4.5.6 T Test T test is used to determine the partial relationship of each independent variable toward dependent variable. The level of significance α is 0.05. Ho is rejected if t test value lower than α = 0.05 and Ho is accepted if t test value greater than α = 0.05.
H0: βi = 0, if significant T > 0.05, accept H0i = 1,2,3,4,5,6,7,8,9
Ha: βi ≠ 0, if significant T < 0.05, reject H0
3.4.5.7 Coefficient of Determination Test (R2) The coefficient of determination test is used in this research in order to know about the correlation of independent variables toward the dependent variable and also to know how far the dependent variable is can be explained by independent variables. In this test it will looks at the R2 value and adjusted R square value. The value of R2 and adjusted R square is range from 0 till 1. If the value of adjusted R square is close to 0, means that the capability of independent variables to explain the dependent variable is weak. In the other side if the value of adjusted R square is close to 1, means that the capability of independent variable to explain the dependent variable in this research is strong. 3.5 Data Analysis In this research, the researcher is going to be used is quantitative data because the quantitative data expressed the numeric data that we can analyze non mathematical data or information. The quantitative data taken is based on variables that already decided before doing this research, such as Tangible, Reliable, Responsiveness, Assurance, Empathy, Exterior, General Interior, Store Layout, and Display.
The researcher use the causal-comparative research as according to Gay (Gay, R. L., 1996), causal-comparative research attempts to established cause-effect relationship and to determined whether and do what degree a relationship exist between two or more quantifiable variables. As the problem of this research is to find the factors that influence customer purchasing decision, the researcher decided to use quantitative research method. This research uses this method where the researcher directly asked the respondent to fill out the questionnaire and measured by Likert scale. The researcher gain the information of problem from the Coffee Palace thus using it as the primary data as the problem identification information and gathering the data that will be used in this research by building the questionnaire. The questionnaire consisted of 33 questions that spread to the specific respondents which are President University students class 2010, 2011, and 2012 and only given to those who answered that they have been visited Coffee Palace or purchase Coffee Palace products.
Chapter IV
Analysis and Interpretation
4.1 Company Profile
Figure 4. 1 Coffee Palace logo (left-previous logo; right-current logo)
Source: Coffee Palace
Coffee Palace is one of many restaurants that available in Resto Plaza City Walk Jababeka. Located near in President University made Coffee Palace famous by the students where it‟s the first restaurant with coffee store as its theme.
The owner of Coffee Palace is Reagan, the young businessman that graduated from the university in 2010. After working in Starbucks for 1 year and gaining some experience, he decided to build his own café. Coffee Palace established on November 29th 2011 with the first name Coffee Story. Reagan decided to change the name to Coffee Palace after some problem with the copyright as apparently the name of Coffee Story already used by other people. The name of Coffee Story was official replaced by Coffee Palace on October 2nd 2012.
Coffee Palace coming with the theme of coffee store thus the products offered also the products that offered by general café which are coffee, snack, and dessert. Coffee Palace provided 2 types of beverages which are coffees and non coffees while each type divided into other 2 types which are cold and hot. The hot coffee such as Espresso, Americano, and Mocha Latte; while the cold coffee is blended coffees with various flavor like Blended Mocha, Mocha Frappe and also the Iced Coffee. The non coffee products that Coffee Palace offered are hot chocolate, Thai green tea as hot non coffee products while for the cold non coffee products they offered Smoothies with many flavors like Strawberry Smoothies, Peach, or blueberry. Not only beverages, Coffee Palace also offered the dessert to accompany the beverages. Ice cream pancake is one of the most famous desserts along with banana split and fried ice cream (eskrimgoreng). Coffee Palace also offered the heavy foods to compete with other competitors in Resto Plaza City Walk but as they tried to consistent with their concept, they only provide 2 kind of foods which are Black Pepper Chicken and Coto Makassar.
Figure 4. 2 Coffee Palace Organization Structure
Source: Coffee Palace
Coffee Palace currently has 3 employees including the owner who act as manager while the other two is Cashier and Barista. The cashier has the responsibility in receiving all transaction and product promotion while Barista has the responsibility to make the order (coffee, desserts, etc.) and ensure the store cleanliness.
Coffee Palace used one unique strategy that didn‟t use by other restaurant used which is the stamp collection where the customers will be given a card with 10 blank boxes that can be filled with the stamp of company logo every time they visit Coffee Palace and purchase the products. The stamp collection is based on amount of visit not based on the amount of purchasing and without limited time. For the customers who filled all the 10 boxes with the Coffee Palace stamp, they will get one of any desserts free of charge.
With the experience as barista in Starbucks, Reagan established Coffee Palace with the basis that they offered products which have equal quality with Starbucks but with much lower price that still affordable with students‟ pocket.
Based on the record of visitor that done by Coffee Palace which counted monthly; the amount of visitors is fluctuates with small differences. The significant decreasing can be seen in August 2012 with the average visitors per day are 42 people (rounded) and total 1332 visitors. The lowest visitors recorded is in February 2013 with the average visitors only 24 people per day and 673 people in the end of the month. The monthly sales record came differently with the monthly sales record that the Coffee Palace provided, where the sales has increased in July 2012 and keep increasing with a little decreasing in September 2012 until December 2012.
4.2 Data Analysis On this chapter, all important findings that found by researcher will be showed. The findings will be divided into two main issues which are the demographic of the sample (profile of respondents) in the form of graph and diagrams. And in the second part will gives the data analysis process results from SPSS V.17.
4.2.1 Pilot Test
4.2.1.1 Reliability Test According to Malhotra(Malhotra, N. K., 2010); when the result of Cronbach‟s alpha is less than 0.6 it means it is not reliable. The computed Alpha values for the research variables indicated in Table4.1:
Table 4. 1 Reliability test results
Source: Primary Data-SPSS V.17
From table 4.1 it show that each of variable in the dependent and independent variable has reliability more than 0.60 which it means all of the dependent variables and independent variable that used in this study is reliable. It also means that each of variables above is well correlated to each other.
4.2.1.2 Validity Test
Table 4. 2 Validity test results
Source: Primary Data-SPSS V.17
In the survey, the researcher use 30 respondents as sample for the validity test. Table 4.2 above has show that from 34 statements there are 2 statements that got criterion as invalid statements which means that they have to be removed from this research. As it has been stated in chapter three about validity test, according to Sugiyono (Sugiyono, 2007) the minimum score for variable to be valid is if r = 0.361 and if r < 0.361 that certain variable is not fulfill the requirement to be valid and it has to be eliminate from the research. From table 4.2 above variable X7.1 r = 0.306 and X7.3 r = 0.237, this statement are invalid because it cannot fulfill the requirement of r value have to be at least 0.361.
4.2.2 Descriptive Statistics
4.2.2.1 Respondent Profile Figure 4. 3 Demographic Views (Gender) Respondents Gender
47% Male 53% Female
Source: Primary Data-Microsoft Excel 2010
The respondents that answered they had visited Coffee Palace or purchased their products are woman. This research is fit with the information that coming from Scottish Grocer (Scottish Grocer Web, 2012)that coffee shop tends to be more popular with woman than man. From the report in March 2011, 61.7% the customers are woman that coming at least once a week. It shows that the same phenomenon happened in President University as most customers are woman. Figure 4. 4 Demographic Views (Monthly Expenses) Monthly Expsenses in thousands
Monthly Expsenses in thousands
27 25 26
10 5
< Rp 500 Rp 500 - Rp 1,000 Rp 1,000 - Rp Rp 1,500 - Rp > Rp 2,000 1,500 2,000
Source: Primary Data-Microsoft Excel 2010
From the graph, it can be seen that most of the customers (with total 27 respondents) are those who spent their money in a range of Rp 500,000 until Rp 1,000,000 while the least customers are those who spent their money for more than Rp 2,000,000.
Figure 4. 5 Demographic View (Batch) Respondents Batch
33 32 31 30 Respondents Batch 29 28 27 2010 2011 2012
Source: Primary Data-Microsoft Excel 2010
This research sample actually is 100 respondents with the stratification 30 respondents from batch 2010, 35 respondents from batch 2011, and 35 respondents from batch 2012. Due to some problem during the questionnaire distribution, there are 7 questionnaires lost and in total the researcher only got 93 questionnaires with the stratification 29 respondents from batch 2010, 31 respondents from batch 2011, and 33 respondents from batch 2012.
4.3 Multiple Regressions
4.3.1 Normality Test The use of multiple regression in every research or study as it statistical tools is necessary to test the normality of the data that used in the research. In this research, the researcher used histogram and P-P plot (Probability-Probability plot) to test the normality of each data.
Figure 4. 6 Histogram Graph
Source: Primary Data-SPSS V.17
Figure 4. 7 P-plot graph
Source: Primary Data-SPSS V.17
From Figure 4.6, the data can be seen has distributed normally which is shown by the line on histogram that depicts the form bell shape. From Figure 4.7, shows that the 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 that the data in the regressions model is fulfilling the requirement in the normality test.
4.3.2 Multicollinearity Test To do the Multicollinearity test, Variance Inflation Factor (VIF) is going to be used. Variance inflation factor or (VIF) has function to measure how much the variance of the estimated coefficients is increased over the case of no correlation among the variables. According to Render, Stair and Hanna (Render, Stair, and Hanna, 2005), a variable categorize or having a high collinearity if VIF value or results more than 10 or it has tolerance tend to approach 0.
Table 4. 3 Multicollinearity Test
Source: Primary Data-SPSS V.17
From table 4.3 shows that all the variables have variance inflation factor (VIF) values which less than 10. It means that in this regressions model the multicollinearity doesn‟t exist.
4.3.3 Heteroskedasticity Test Heteroskedasticity is a phenomenon that often occurs in the process of analysis if the data is not normally distributed or if the variance of the error term differs across observations. The data will fulfill the heteroskedasticity assumption test if the distribution of residual values toward the predicted values in the scatter plot is spread randomly and does not make certain pattern such as decreasing or increasing pattern.
From figure 4.8, it shows that there is no pattern that occurs inside. The plots were spread randomly without creating a certain or systematic pattern such as decreasing or increasing pattern, it means there was no heteroskedasticity exist or occurs between independent variables and dependent variable.
Figure 4. 8 Scatterplot
Source: Primary Data-SPSS V.17
4.3.4 Autocorrelation Test The autocorrelation test is used to determine whether any correlation between variables in t-period with variables in prior period (t-1). This test is used only for time series data and not for cross sectional data. To determine the autocorrelation within the model, this research will use Durbin-Watson test (DW test) where if the number of D-W is lower than -2 means there is positive autocorrelation within the model, if the D-W is between -2 until +2 means there is no autocorrelation within the model, and if D-W is greater than +2 means there is negative autocorrelation.
From Figure 4.7, we can see that the D-W value is 1.875 which is located between -2 and +2 thus it means there is no autocorrelation between variables with the variable in prior period.
Table 4. 4 Durbin Watson
Source: Primary Data-SPSS V.17
4.3.5 Testing the Hypothesis Results In chapter three, the researcher has stated some hypothesis related to the problem related to this study. The researcher will used T test and F test in order to determine which hypothesis that researcher have to accept or reject.
4.3.5.1 F Test F test is used to test the effect of all independent variables toward independent variable simultaneously.
H0:β1 = 0, Null hypothesis is accepted if F value is greater than 0.05 (there is no significant factor of service quality (tangible, reliable, responsiveness, assurance, and empathy) and store atmosphere(exterior, general interior, store layout, and display) that influence the Coffee Palace customers purchasing decision
Ha:β ≠ 0, Alternative hypothesis is accepted if F value less than 0.05 (there is a one significant factor of service quality (tangible, reliable, responsiveness, assurance, and empathy) and store atmosphere (exterior, general interior, store layout, and display) that influence the Coffee Palace customers purchasing decision
In this study, the researcher used SPSS V.17 to do the f test, and it showed in table below:
Table 4. 5 F-test result
Source: SPSS Version 17.0
The requirement value that has to achieve in this F test is the significance value has to be less than 0.05 and F value has to be greater than 1.994709. From Table 4.5 above, it can be seen that the significance value is 0.00 which is less than 0.05 and the f value is greater than 1.994709 which is 10.488. From that results it can be conclude that all of the independent variable of service quality (tangible X1, reliable X2, responsiveness X3, assurance X4, empathy X5) and store atmosphere (exterior X6, general interior X7, store layout X8, display X9) has significant influence toward independent variable of Coffee Palace customers purchasing decision. It means in this study the researcher will accept the Ha and reject H0.
4.3.5.2 T Test T test is used to examine whether each independent variable factor of service quality (tangible X1, reliable X2, responsiveness X3, assurance X4, empathy X5) and store atmosphere (exterior X6, general interior X7, store layout X8, display X9) has influence toward dependent variable of Coffee Palace customer purchasing decision. Each of independent variable will be significance toward the dependent variable if each value of p of each independent variable is less than 0.05.
Table 4. 6 T-test result
Source: SPSS Version 17.0
From the table 4.6, it has shown each significance value of each independent variables, here are the results as following:
Tangible (X1) has significance value of 0.641 which is greater than 0.05. It means that tangible (X1) is not significance toward the dependent variable of Coffee Palace customer purchasing decision and H0.1 is accepted and rejected H1.1 from the hypothesis.
Reliable (X2) has significance value of 0.462 which is greater than 0.05. It means that reliable (X2) is not significance toward the dependent variable of Coffee Palace customer purchasing decision and H0.2 is accepted and rejected H1.2from the hypothesis.
Responsiveness (X3) has significance value of 0.859 which is greater than 0.05. It means that responsiveness (X3) is not significance toward the dependent variable of Coffee
Palace customer purchasing decision and H0.3 is accepted and rejected H1.3 from the hypothesis.
Assurance (X4) has significance value of 0.021 which is less than 0.05. It means that assurance (X4) is significance toward the dependent variable of Coffee Palace customer purchasing decision and H0.4 is rejected and accepted H1.4 from the hypothesis.
Empathy (X5) has significance value of 0.353 which is greater than 0.05. It means that empathy (X5) is not significance toward the dependent variable of Coffee Palace customer purchasing decision and H0.5 is accepted and rejected H1.5 from the hypothesis.
Exterior (X6) has significance value of 0.782 which is greater than 0.05. It means that exterior (X6) is not significance toward the dependent variable of Coffee Palace customer purchasing decision and H0.6 is accepted and rejected H1.6 from the hypothesis.
General Interior (X7) has significance value of 0.934 which is greater than 0.05. It means that general interior (X7) is not significance toward the dependent variable of Coffee
Palace customer purchasing decision and H0.7is accepted and rejected H1.7from the hypothesis.
Store Layout (X8) has significance value of 0.000 which is less than 0.05. It means that store layout (X8) is significance toward the dependent variable of Coffee Palace customer purchasing decision and H0.8 is rejected and accepted H1.8 from the hypothesis.
Display (X9) has significance value of 0.400 which is greater than 0.05. It means that display (X9) is not significance toward the dependent variable of Coffee Palace customer purchasing decision and H0.9 is accepted and rejected H1.9 from the hypothesis.
According from the table above, it can be conclude that among the five independent variable of service quality and four independent variable of store atmosphere showed that the most significant factor is Store Layout (X8). It can be seen at Standardized Coefficient column where the beta value of store layout (X8) in t column was 0.490 which is the highest among others independent variables. Where for the others independent variable (tangible, reliable, responsiveness, empathy, exterior, general interior, and display) which not significant towards customer purchasing decisions of Coffee Palace among President University students, those independent variables partially still give influence toward the customer purchasing decision as it still has values in t values as it showed in T table.
4.3.5.3 Multiple Regression Model 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 variables.
Y= βo + β1X1 + β2X2 + β3X3 + β4X4 + β5X5 +β6X6 + β7X7 + β8X8 + β9X9 + ε
From table 4.6, it has showed each significance value of each independent variable and it showed that there are three independent variable which not significance and it cannot be used in the multiple regression model.
Table 4. 7 Significant Table Independent Significance Standard Value of 0.05 Variables value Tangible (X1) 0.641 Not Significance Reliable (X2) 0.462 Not Significance Responsiveness (X3) 0.859 Not Significance Assurance (X4) 0.021 Significance Empathy (X5) 0.353 Not Significance Exterior (X6) 0.782 Not Significance General interior (X7) 0.934 Not Significance Store layout (X8) 0.000 Significance Display (X9) 0.400 Not Significance
There are seven independent variables which are eliminated, Tangible (X1), Reliable (X2), Responsiveness (X3), Empathy (X5), Exterior (X6), General interior (X7), Display (X9). The remaining variables will be put in the multiple regression models.
Y= 0.247X4 + 0.490X8 + ε Where: Y = Coffee Palace customer purchasing decision X4 = Assurance X8 = Store layout ε = Random Error term/ Residual
4.3.5.4Measuring the Variability of Regression Models This measurement is used to examine whether this multiple regression modelis able to help in predicting the Coffee Palace customer purchasing decision based on service quality (tangible, reliable, responsiveness, assurance, and empathy) and store atmosphere (exterior, general interior, store layout, and display).
Table 4. 8 Model Summary
Source: Primary Data-SPSS V.17
Table 4.8 showed that R value which to describe the coefficient of correlation, where the R value is 0.729 which means that there is a quite strong correlation between independent variables and dependent variable of customer purchasing decision. The adjusted R square is to show how far or large these all independent variables can describe or affecting the independent variable. From table 4.8 it shows that R square value is only 0.532, which means that the service quality which consists of tangible, reliable, responsiveness, assurance, empathy and store atmosphere which consists of exterior, general interior, store layout, and display only can describe and affecting 53.2% about Coffee Palace customer purchasing decision and the rest of 46.8% is explained or described by another factors which not discussed in this research.
4.4 Interpretation of Results 1. Tangible toward Coffee Palace customer purchasing decision According to the result of T test and F test, tangible variable is influencing customer purchasing decision however it‟s not significant toward the customer purchasing decision. The t value of product variable in T test table is 0.468 which means it has lower influence toward the dependant variable and the significance value is 0.641 greater than 0.05 means that Tangible (X1) is not significance towards the customer purchasing decision.
Based on above statement and related with questionnaire in tangible part statement. Means that the customer didn‟t really care about the appearance either the store or the overall appearance of Coffee Palace employee as they are mostly similar with other coffee store thus not became the attractive points to the customer that can make them visit or purchased Coffee Palace products.
2. Reliable toward Coffee Palace customer purchasing decision According to the result of T test and F test, reliable variable is influencing customer purchasing decision however it‟s not significant toward the customer purchasing decision. The t value of product variable in T test table is 0.738 which means every change in reliable like improvement of its image will influence positively towards the customer purchasing decision but the significance value is 0.462 which greater than 0.05 means that Reliable (X2) is not significance towards the customer purchasing decision.
Based on above statement and related with questionnaire in reliability part statement. Means that the customer care about the image of the coffee store and from information or suggestion by other people to visit the coffee store but it doesn‟t have significant influenced towards their decision.
3. Responsiveness toward the Coffee Palace customer purchasing decision According to the result of T test and F test, responsiveness variable is influencing customer purchasing decision however it‟s not significant toward the customer purchasing decision. The t value of product variable in T test table is 0.178 which means it has lower influence toward the dependant variable and the significance value is 0.859 greater than 0.05 means that Responsiveness (X3) is not significance towards the customer purchasing decision.
Based on above statement and related with questionnaire in responsiveness part statement. Means that the customer in President University didn‟t really care at all about the service or responds provided by Coffee Palace and only concern about other factors as for typical coffee store where most people take their order and not stay to consume their order thus reduce the chance to receive the service.
4. Assurance toward the Coffee Palace customer purchasing decision According to the T test and F test result, assurance variable is categorized as variable that can influence the consumer buying decision and significantly influence customer purchasing decision. It showed on the t value in T test table is 2.354 which mean that every increase of assurance variable such as security and safeties during the transaction will influence to increase in customer purchasing decision. The significance value 0.021 which is less than 0.05 means that assurance is significant towards the customer purchasing decision.
Based on above statement and related with questionnaire in assurance part statements showed that customer or in this research is President University students are prefer the safety place to do transaction and while consuming their order. This also shows that the customer tends to think that secure place is comfortable and thus will increase their visit frequency to Coffee Palace.
5. Empathy toward the Coffee Palace customer purchasing decision According to the T test and F test value showed that empathy variable is categorizes as variable that can influence the customer purchasing decision of Coffee Palace among the President University students however empathy variable is not significance toward the customer purchasing decision of Coffee Palace. It showed on T value of people variable in T test table which only about 0.935 that means every increase in empathy variable will influence positively toward the customer purchasing decision and significance value of people variable is 0.353 greater than 0.05 which means that the empathy variable is not significance toward the customer purchasing decision of Coffee Palace among the President University students.
Based on above statements and related with the questionnaire in empathy part statements showed that customer or in here is President University students quite have the interest and prefer to visit Coffee Palace when the employee able to show their sincerity in giving service to customer however it doesn‟t significantly influence their decisions to visit or purchase Coffee Palace products.
6. Exterior toward the Coffee Palace customer purchasing decision According to the T test and F test results, showed that exterior variable is categorized as variable that can influence the customer purchasing decision however it‟s not significant towards customer purchasing decisions. It showed in t value in T test table is -0.278 which means that every decrease in exterior variable will lead to increasing of customer purchasing decision of Coffee Palace among the President University students and the significance value is 0.782 greater than 0.05 which means that it‟s not significance toward the customer purchasing decision of Coffee Palace products among the President University students.
Based on above statement and related with the questionnaire in exterior part statement showed that the customer or is President University students didn‟t like the change that Coffee Palace has made recently like steel gate and prefer to have simpler exterior that Coffee Palace has earlier as all restaurant in Resto Plaza area has simpler exterior compare to Coffee Palace.
7. General interior toward the Coffee Palace customer purchasing decision According to the T test and F test results, showed that general interior variable is categorized as variable that can influence the customer purchasing decision of Coffee Palace among the President University students however it doesn‟t significantly influence customer purchasing decision among President University students. The t value of general interior variable in T test table is 0.083 which means the change in general interior like improvement in interior decoration and interior design will influence customer purchasing decision however the significance value 0.934 is greater than 0.05 thus it doesn‟t significantly influence customer purchasing decision.
Based on above statements and related with the questionnaire in general interior part, it showed that customer or President University student didn‟t really care about what Coffee Palace put inside their store as most of the customers are coming with their friends, colleague, and relatives and spending times chatting thus they didn‟t really pay attention to the decoration.
8. Store Layout toward the Coffee Palace customer purchasing decision According to the T test and F test results, showed that store layout variable is categorized as variable that can influence the customer purchasing decision of Coffee Palace products among the President University students and it has the most significance affect toward the customer purchasing decision of Coffee Palace products among President University students. The t value of store layout variable in T test table is the highest compare with other t value of other independent variables. The t value is 4.634 which mean that it can strongly influence the customer purchasing decision of Coffee Palace products among President University students and the significance value of physical evidence is 0.000 less than 0.05, means that it significance affect the customer purchasing decision among President University students.
Based on above statements and related with the questionnaire in store layout part, it showed that customer or President University student will more prefer to buy product or visit a restaurant / coffee store with a wide place and not feels too crowded. It showed that President University students more concern about the comfort they can get and spend their time compare to other factors.
9. Display toward the Coffee Palace customer purchasing decision According to the T test and F test results, showed that display variable is categorized as variable that can influence the customer purchasing decision of Coffee Palace products among the President University students however it‟s not significantly affect the customer purchasing decision of Coffee Palace products among President University students. The t value of display variable in T test table is -0.847 which means any decrease in display inside Coffee Palace will increase positively towards customer purchasing decision among President University students and the significance value of display is 0.400 greater than 0.05, means that it‟s not significance affect the customer purchasing decision of Coffee Palace products among President University students.
Based on above statements and related with the questionnaire in display part, it showed that customer or President University student didn‟t really pay attention to the display that put both inside and outside the store as they didn‟t really care about both exterior and interior decoration and only focus on how they can sit comfortably inside the store.
Chapter V
Conclusions and Recommendation
In this chapter the researcher will presents the conclusion and recommendation which derived from the analysis in chapter four aboutthe influence of service quality and store atmosphere toward the Coffee Palace customer purchasing decision among students at President University. This analysis is to know whether the service quality (tangible, reliable, responsiveness, assurance, empathy) and store atmosphere (exterior, general interior, store layout, display) has influenced simultaneously toward the Coffee Palace customer purchasing decision and which factor of service quality and store atmosphere that significant influence Coffee Palace products purchasing decision partially among student at President University.
5.1 Conclusions According to chapter four about the analysis of service quality and store atmosphere influence the Coffee Palace customer purchasing decision among students at President University, here are some conclusions that researcher get as following:
According to the F test result which derived from chapter four, it show that all of independent variables of Service quality (tangible X1, reliability X2, responsiveness X3, assurance X4, empathy X5) has significance simultaneously influence toward the Coffee Palace customer purchasing decision among students at President University. It can be proven by look at the F value and significance value at table 4.4 which presents that F value is 10.590 greater than 1.99 and significance value is 0.00 lower than 0.05. However according to the T test result which derived from chapter four, showed that among of five independent variables in service quality, there are only one independent variable which partially have significance affect toward the Coffee Palace customer purchasing decisions among students at President University. The independent variable which significance toward the independent variable Y is assurance (X4).
According to the F test result which derived from chapter four, it show that all of independent variables of Store atmosphere (exterior X6, general interior X7, store layout X8, display X8) has significance simultaneously influence toward the Coffee Palace customer purchasing decision among students at President University. It can be proven by look at the F value and significance value at table 4.4 which presents that F value is 10.590 greater than 1.99 and significance value is 0.00 lower than 0.05. However according to the T test result which derived from chapter four, showed that among of four independent variables in store atmosphere, there are only one independent variable which partially have significance affect toward the Coffee Palace customer purchasing decisions among students at President University. The independent variable which significance toward the independent variable Y is store layout (X8).
Third, The rest independent variables of service quality and store atmosphere which not significance toward the customer purchasing decision of Coffee Palace products among President University students are tangible (X1), reliability (X2), responsiveness (X3), empathy (X5), exterior (X6), general interior (X7) and display (X9). However although those independent variable were not significance toward the customer purchasing decision of Coffee Palace among President University students but those independent variable still influence the customer purchasing decision based on the t values in T table and the interpretation of results in chapter 4.
5.2 Recommendation Based on those conclusions drawn above and some finding in this study, there are some possible course of action may be identified. The following recommendations are offered as guidelines or suggestion for consideration and possible application by Coffee Palace Company in dealing with their customer visit. The following recommendations are made:
As it stated above in the conclusion part, there are two independent variables of service quality and store atmosphere which have gives significance affect toward the Coffee Palace customer purchasing decision, the first independent variable is Assurance (X4). According to the research that researcher got in this study, a secure place and transaction and also the hygiene of the products that ensure the safety of customers will able to boost the customer visit to Coffee Palace. It means most of customer or students in President University prefer to visit restaurant or coffee store that provide with safe and clear transaction and also the guarantee of its products. Therefore according to the results that the researcher got from this study is that the better secure transaction and products hygiene that Coffee Palace can offer to their customer through their service will boost the customer purchasing decision especially President University students.
The second independent variables is store layout (X8), store layout plays the most important aspect by President University students to visit the restaurant or coffee store. According to the results that researcher got in this study, the researcher got that consumer or students will happily or delightfully visit restaurant or coffee store that offer comfortable and goo table placing where they didn‟t feel the crowded even in busy hours. The better the placement of sitting place, the more they offer the chair that can provide more people to sit without feeling crowded will boost customer purchasing decision to visit or purchase Coffee Palace products especially President University students.
By doing all of those recommendation that the researcher has gives through this study, it hopes that it can works fully as it showed that in R square table showed that the service quality and store atmosphere is only able to describe or affect the customer purchasing decision about 53.2%. However by maintain those two significance variables (assurance and store layout) will makes all independent variable able to affect by 53.3% toward the customer purchasing decision of Coffee Palace products or visit Coffee Palace as it showed in the R square table on chapter four.
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Website Article Bisnisukm. (2010, March 18). Membangun Usaha Kreatifdengan Cafe Lenggahan. Retrieved January 24, 2013, from Bisnisukm Website: http://bisnisukm.com/membangun-usaha- kreatif-dengan-cafe-lenggahan.html Bloomberg News. (2012, December 12). Starbucks to More Than Double China Staff to 30,000 by 2015. Retrieved March 3, 2013, from Bloomberg News: http://www.bloomberg.com/news/2012-12-12/starbucks-to-more-than-double-china-staff- to-30-000-by-2015.html BPS. (2012, August 6). BeritaResmiStatistik No. 54/08/TH.XV, 6 Agustus 2012.PertumbuhanEkonomi Indonesia Triwulan II - 2012 , pp. 2-3. Brandau, M. (2012, April 9). NRA: Restaurant industry posts significant job growth. Retrieved January 24, 2013, from Nation's Restaurant News: http://nrn.com/corporate/nra- restaurant-industry-posts-significant-job-growth Castillo, J. J. (2009). Convenience Sampling. Retrieved March 3, 2013, from Experiment Resources: http://www.experiment-resources.com/convenience-sampling.html Court, D., Elziga, D., Mulder, S. &Vetvik., O. J. (June).The consumer decision journey. Retrieved February 2, 2013, from McKinsey Quarterly: http://www.mckinseyquarterly.com/The_consumer_decision_journey_2 Dimyati, V. (2012, September 13). jurnas.com: Kafemenjamur, penikmat kopi meningkat. Retrieved January 24, 2013, from Jurnas Web site: http://www.jurnas.com/news/71045/Kafe_Menjamur,_Penikmat_Kopi_Meningkat/1/Hib uran/Rehat Ehret, J. (2010, December 9). Four unconscious factors that influence purchase decision. Retrieved February 2, 2013, from Marketing blog: http://themarketingspot.com/2010/12/four-unconscious-factors-that-influence-purchase- decisions.html Farrell, R. O. (n.d.). Who is Starbucks' Target Audience? Retrieved January 30, 2013, from Small Business Chron Web: http://smallbusiness.chron.com/starbucks-target-audience- 10553.html FD business. (2012, December 20). Chinese Consumers Develop a Taste For Coffee Culture. Retrieved March 3, 2013, from Food & Drink business Europe: http://www.fdbusiness.com/2012/12/chinese-consumers-develop-a-taste-for-coffee- culture/ H. Holmes. (n.d.). Coffee Shop Business Overview (SIC Code: 5812 NAICS Code: 72221). Retrieved March 3, 2013, from SBDC Net: http://www.sbdcnet.org/small-business- research-reports/coffee-shop Kopi, T. (n.d.).Industri kopi di Indonesia. Retrieved January 24, 2013, from Aeki-Aice Website: http://www.aeki- aice.org/index.php?option=com_content&view=article&id=5&Itemid=11&lang=in Soempono, F. A. (2010, August 16). Tahun 2009, Konsumsi Kopi di Indonesia Stagnan. Retrieved January 24, 2013, from Kontan Web Site: http://industri.kontan.co.id/news/tahun-2009-konsumsi-kopi-indonesia-stagnan-1 SuphatSukamolson, p.12-15.(n.d.). Fundamental of quantitative research, Language institute, Chulalongkornuniversity. http://ebookbrowse.com/suphat-sukamolson-pdf-d17418288. SuphatSukamolson, p.2. (n.d.). Fundamental of quantitative research, Language Institute, Chulalongkornuniversity. http://ebookbrowse.com/suphat-sukamolson-pdf-d17418288. SuphatSukamolson, p.2-3.(n.d.). Fundamental of quantitative research, Language institute, Chulalongkornuniversity. http://ebookbrowse.com/suphat-sukamolson-pdf-d17418288. SuphatSukamolson, p.3-5.(n.d.). Fundamental of quantitative research, Language institute, Chulalongkornuniversity. http://ebookbrowse.com/suphat-sukamolson-pdf-d17418288. SuphatSukamolson, p.8-10.(n.d.). Fundamental of quantitative research, Language institute, Chulalongkornuniversity. http://ebookbrowse.com/suphat-sukamolson-pdf-d17418288.
APPENDICES
No Batch M/F Epx Tangible Reliability Responds Assurance Empathy Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Q13 1 2012 F 4 3 4 4 4 3 3 5 5 5 5 5 4 4 2 2010 F 2 3 4 4 5 4 4 4 4 3 3 3 3 3 3 2012 F 3 5 5 5 5 3 3 5 5 5 5 5 5 5 4 2010 F 2 4 3 4 4 4 4 4 4 4 2 2 4 3 5 2011 F 1 3 4 5 5 4 4 4 4 4 5 4 4 5 6 2012 F 2 3 3 3 4 3 3 3 3 2 3 3 3 2 7 2012 F 2 3 4 3 3 5 5 3 2 4 2 3 3 3 8 2012 F 2 4 4 4 3 3 3 4 4 4 4 4 5 4 9 2011 F 2 5 5 5 5 3 4 4 5 4 5 4 5 5 10 2011 F 1 4 5 4 4 4 4 4 4 3 3 4 4 3 11 2011 F 1 3 4 3 3 4 4 2 2 4 3 4 3 4 12 2011 F 2 3 3 2 3 4 2 4 3 3 3 3 3 2 13 2011 F 4 3 4 4 5 3 4 4 4 3 4 4 4 4 14 2011 F 2 3 4 4 4 5 5 4 4 4 4 3 4 5 15 2011 F 3 3 4 3 4 3 3 4 2 4 2 4 2 3 16 2011 F 3 3 4 4 4 3 4 2 2 3 3 4 4 3 17 2010 F 2 4 4 5 5 5 5 4 4 4 4 3 4 4 18 2012 F 2 3 4 3 3 3 2 4 4 3 3 4 4 4 19 2011 F 3 3 4 3 4 4 4 4 4 3 3 3 3 3 20 2011 F 3 2 3 1 4 3 3 4 4 2 2 2 5 4 21 2011 F 2 4 4 3 4 4 4 3 4 4 4 4 4 4 22 2011 F 3 4 3 3 4 2 3 4 4 3 3 4 4 4 23 2011 F 3 4 4 4 3 4 2 4 4 4 4 4 4 3 24 2010 F 3 4 3 4 4 3 4 4 4 3 3 3 5 4 25 2012 F 3 5 4 4 3 3 4 3 5 3 4 5 3 4 26 2011 F 1 3 3 3 4 3 3 4 3 2 3 4 4 3 27 2010 F 1 3 4 3 4 3 3 4 4 3 4 3 4 3 28 2011 F 2 4 4 3 4 4 3 3 3 1 1 1 4 4 29 2010 F 4 3 3 3 3 3 3 3 3 4 4 4 3 3 30 2012 F 2 3 4 3 4 2 4 4 4 4 5 5 4 3 31 2012 F 2 3 4 4 5 5 4 4 4 4 5 4 5 3 32 2011 F 3 5 4 5 4 4 3 3 4 5 3 4 2 3 33 2010 M 1 4 3 2 4 3 3 4 4 3 3 4 3 3 34 2012 M 3 3 4 3 5 3 3 3 4 5 4 3 3 1 35 2012 M 3 3 3 3 4 4 3 4 5 4 4 4 4 3 36 2010 M 4 3 4 4 4 3 3 4 3 2 2 3 3 2 37 2011 F 3 4 4 3 4 4 4 4 4 3 5 5 5 3 38 2011 F 2 4 4 3 3 4 5 4 3 3 3 3 4 3 39 2011 F 4 2 3 3 4 4 4 3 4 3 4 4 3 4 40 2011 F 2 4 4 4 5 4 5 4 4 4 4 4 4 4 41 2011 F 3 4 3 4 5 3 3 3 3 4 3 4 5 3 42 2011 F 3 4 3 3 3 3 3 4 3 4 3 4 4 2 43 2010 M 2 3 3 4 4 4 3 4 3 3 4 3 3 2 44 2012 M 3 4 4 4 4 2 3 5 5 5 4 5 5 4 45 2012 M 4 4 4 3 4 2 3 4 4 4 4 2 3 2 46 2012 M 3 3 3 3 3 3 4 4 3 4 3 3 4 3 47 2010 M 2 4 4 3 5 4 4 4 4 4 5 3 5 5 48 2012 M 4 4 4 4 4 4 3 4 4 4 3 3 3 3 49 2011 M 2 3 3 4 4 3 4 3 4 4 3 2 4 3 50 2010 M 4 4 4 4 4 2 4 4 3 4 3 4 4 3 51 2012 M 4 5 5 5 5 3 3 5 5 5 5 4 5 5 52 2010 M 2 3 3 4 4 4 3 3 2 3 2 2 4 4 53 2010 M 3 2 3 3 4 3 4 5 5 3 3 4 3 4 54 2010 M 2 4 4 3 4 3 4 4 3 4 3 3 4 4 55 2010 M 2 4 4 4 4 3 4 4 4 4 5 5 5 4 56 2010 F 4 1 4 2 4 3 4 4 5 4 3 3 5 4 57 2010 F 4 2 3 3 4 3 3 3 3 3 4 3 4 3 58 2011 F 4 3 3 3 3 2 3 2 3 4 3 4 4 4 59 2011 F 4 1 4 2 4 3 4 3 3 4 3 3 4 3 60 2011 M 4 4 3 3 4 3 3 3 4 4 4 5 5 5 61 2010 M 4 3 4 3 3 3 4 3 3 3 2 4 3 4 62 2011 M 4 3 4 3 4 3 3 3 3 3 4 5 4 3 63 2010 M 3 4 3 4 5 4 3 4 5 4 5 5 5 4 64 2011 M 2 4 4 3 4 4 4 3 3 2 4 2 3 3 65 2012 M 4 4 3 3 4 4 4 4 3 3 4 3 4 3 66 2012 M 3 3 4 4 5 4 4 3 3 3 4 3 3 4 67 2010 M 1 4 3 3 4 3 4 3 3 5 3 5 4 3 68 2010 M 4 4 4 4 4 4 4 4 3 3 3 3 3 3 69 2010 M 1 2 1 2 1 3 3 2 2 2 2 2 2 2 70 2012 M 3 4 4 3 4 3 2 4 3 4 3 3 3 3 71 2010 M 3 4 4 4 4 3 4 4 4 5 4 4 3 4 72 2010 M 2 4 5 4 3 3 4 3 3 5 4 3 4 3 73 2010 M 3 4 3 3 4 3 5 4 4 4 4 5 5 3 74 2010 F 2 4 4 4 4 4 4 4 3 3 4 3 4 3 75 2010 F 2 3 3 3 4 3 4 4 4 4 4 4 4 3 76 2012 M 3 3 4 4 5 3 3 4 3 4 5 4 4 3 77 2011 M 2 4 5 4 5 3 5 4 4 4 4 3 4 2 78 2011 M 5 3 3 3 4 2 4 4 3 3 3 4 4 4 79 2012 M 1 3 3 4 3 2 3 4 3 3 2 4 3 3 80 2012 M 1 2 3 2 2 3 4 3 3 2 2 4 3 2 81 2010 M 4 5 3 4 3 4 5 4 4 5 3 3 3 4 82 2010 M 3 3 4 4 5 3 4 4 4 3 3 4 4 2 83 2012 M 5 3 2 2 4 3 3 4 3 2 4 3 2 3 84 2012 M 4 3 4 4 4 4 5 5 4 4 3 4 4 5 85 2012 F 4 5 5 3 5 4 3 5 4 3 4 3 5 5 86 2012 F 4 3 3 4 3 4 5 3 4 3 4 5 3 4 87 2012 F 5 3 3 4 4 2 3 3 4 2 3 3 3 3 88 2012 M 4 3 4 4 5 3 4 4 5 4 3 5 3 3 89 2012 F 4 3 4 3 3 3 4 4 5 5 3 3 2 3 90 2012 M 4 4 4 3 4 3 4 4 3 4 5 4 4 3 91 2012 M 5 3 4 4 5 3 3 3 5 4 4 5 3 4 92 2012 M 4 3 3 3 3 3 3 3 3 3 3 3 3 3 93 2012 F 5 4 5 5 5 4 4 4 4 4 4 4 4 4
Dear Sir / Madam,
First of all, allow me to ask for you to spare some of your time to fill this questionnaire. This questionnaire is part of my thesis related to „Determining the influence factor of customer purchasing decision with service quality and store atmosphere given in Coffee Palace‟. However, before the analysis can be done, I would like to spread the questionnaire to some President University student from 3 different batches that each batch representing by 100 respondents to gather the information about the relation between customer satisfaction and service quality. This questionnaire consists of:
1. Respondent profile / information 2. Questions
To answer each questions, simply circle/cross/mark one of the number that representing your opinion towards the statement given (1 = strongly disagree, 2 = disagree, 3 = neutral, 4 = agree, 5 = strongly agree). Thank you for your time and attention. Have a nice day.
Regards,
Ekadiman Kasmanto
Header of questionnaire
Name: Major / Batch: Gender: M / F
Montlhy Expenses: O < Rp 500,000
O Rp 500,001 – Rp 1,000,000
O Rp 1,000,001 – Rp 1,500,000
O Rp 1,500,001 – Rp 2,000,000
O > Rp 2,000,001
Original Questionnaire
Strongly Strongly No Item Disagree Agree SERVICE QUALITY TANGIBLE 1 Coffee Palace has modern-looking equipment 1 2 3 4 5 2 Coffee Palace has attractive and appealing facilities 1 2 3 4 5 3 Coffee Palace employee looks neat and professional 1 2 3 4 5 4 Coffee Palace looks tidy and clean 1 2 3 4 5 RELIABILITY 5 Coffee Palace able to deliver their promise 1 2 3 4 5 6 Coffee Palace sincere in giving help to customer 1 2 3 4 5 7 Coffee Palace able to deliver their promise on time 1 2 3 4 5 RESPONSIVENESS 8 Coffee Palace employee willing to help customer 1 2 3 4 5 9 Coffee Palace employee never too busy to accept request 1 2 3 4 5 ASSURANCE 10 Coffee Palace employee shows confidence 1 2 3 4 5 11 Coffee Palace provide secure transaction 1 2 3 4 5 12 Coffee Palace provide clear information about their products 1 2 3 4 5 EMPATHY 13 Coffee Palace employee give personal attention to customer 1 2 3 4 5 14 Coffee Palace understand the needs of the customer 1 2 3 4 5 15 Coffee Palace employee understand the needs of the customer 1 2 3 4 5 STORE ATMOSPHERE EXTERIOR 16 Coffee Palace has attractive store front (name sign, entrance door, etc.) 1 2 3 4 5 17 Coffee Palace has unique building and different 1 2 3 4 5 18 Coffee Palace has exterior that different from other restaurant 1 2 3 4 5 GENERAL INTERIOR 19 Coffee Palace has attractive color and lighting 1 2 3 4 5 20 Coffee Palace has attractive scent and sound 1 2 3 4 5 21 Coffee Palace has good temperature and air circulation 1 2 3 4 5 22 Coffee Palace price information easy to see 1 2 3 4 5 23 Coffee Palace case register easy to approach 1 2 3 4 5 STORE LAYOUT 24 Coffee Palace didn't has the narrow feeling 1 2 3 4 5 25 Coffee Palace has a good traffic flow 1 2 3 4 5 DISPLAY 26 Coffee Palace has attractive instore decoration 1 2 3 4 5 27 Coffee Palace has consistent theme setting display 1 2 3 4 5 CUSTOMER PURCASHING DECISION 28 I come to the restaurant because of the tangibility of a place where I buy 1 2 3 4 5 29 I come to the restaurant because of consistency of the service given 1 2 3 4 5 30 I come to the restaurant because of quick service responds 1 2 3 4 5 31 I come to the restaurant because I'm comfortable with its transaction 1 2 3 4 5 32 I come to the restaurant because they give sincere care to me 1 2 3 4 5 33 I come to the restaurant because it looks attractive from outside 1 2 3 4 5 34 I come to the restaurant because it feels comfortable inside 1 2 3 4 5 35 I come to the restaurant because it feels not too crowded 1 2 3 4 5 36 I come to the restaurant because it looks attractive from inside 1 2 3 4 5
Header of questionnaire
Name: Major / Batch: Gender: M / F
Montlhy Expenses: O < Rp 500,000
O Rp 500,001 – Rp 1,000,000
O Rp 1,000,001 – Rp 1,500,000
O Rp 1,500,001 – Rp 2,000,000
O > Rp 2,000,001
Questionnaire after focus group discussion
Strongly Strongly No Item Disagree Agree SERVICE QUALITY TANGIBLE 1 Coffee Palace has modern-looking technology 1 2 3 4 5 2 Coffee Palace employee looks neat and professional 1 2 3 4 5 3 Coffee Palace looks tidy and clean 1 2 3 4 5 RELIABILITY 4 Coffee Palace able to give products of what they promised 1 2 3 4 5 5 Coffee Palace sincere in giving help to customer 1 2 3 4 5 6 Coffee Palace able to deliver their promise 1 2 3 4 5 RESPONSIVENESS 7 Coffee Palace employee willing to help customer 1 2 3 4 5 8 Coffee Palace quick in giving help 1 2 3 4 5 9 Coffee Palace employee rarely say no to a request 1 2 3 4 5 ASSURANCE 10 Coffee Palace employee shows confidence when asked 1 2 3 4 5 11 Coffee Palace provide secure transaction 1 2 3 4 5 12 Coffee Palace provide same products on what its advertised 1 2 3 4 5 EMPATHY 13 Coffee Palace employee give personal attention to customer 1 2 3 4 5 14 Coffee Palace understand the needs of the customer 1 2 3 4 5 15 Coffee Palace employee give help before asked 1 2 3 4 5 STORE ATMOSPHERE EXTERIOR 16 Coffee Palace has attractive store front (name sign, entrance door, etc.) 1 2 3 4 5 17 Coffee Palace has unique building and different 1 2 3 4 5 18 Coffee Palace has exterior that different from other restaurant 1 2 3 4 5 GENERAL INTERIOR 19 Coffee Palace has attractive color and lighting 1 2 3 4 5 20 Coffee Palace has attractive scent and sound 1 2 3 4 5 21 Coffee Palace has good temperature and air circulation 1 2 3 4 5 STORE LAYOUT 22 Coffee Palace didn't has the narrow feeling 1 2 3 4 5 23 Coffee Palace has good seat placing 1 2 3 4 5 24 Coffee Palace has a good traffic flow 1 2 3 4 5 DISPLAY 25 Coffee Palace has attractive instore decoration 1 2 3 4 5 26 Coffee Palace decoration are matching with the café theme 1 2 3 4 5 27 Coffee Palace has consistent theme setting display 1 2 3 4 5 CUSTOMER PURCASHING DECISION 28 I come to the restaurant because of the tangibility of a place where I buy 1 2 3 4 5 29 I come to the restaurant because of consistency of the service given 1 2 3 4 5 30 I come to the restaurant because of quick service responds 1 2 3 4 5 31 I come to the restaurant because I'm comfortable with its transaction 1 2 3 4 5 32 I come to the restaurant because they give sincere care to me 1 2 3 4 5 33 I come to the restaurant because it looks attractive from outside 1 2 3 4 5 34 I come to the restaurant because it feels comfortable inside 1 2 3 4 5 35 I come to the restaurant because it feels not too crowded 1 2 3 4 5 36 I come to the restaurant because it looks attractive from inside 1 2 3 4 5
Header of questionnaire
Name: Major / Batch: Gender: M / F
Montlhy Expenses: O < Rp 500,000
O Rp 500,001 – Rp 1,000,000
O Rp 1,000,001 – Rp 1,500,000
O Rp 1,500,001 – Rp 2,000,000
O > Rp 2,000,001
Questionnaire after individual interview
Strongly Strongly No Item Disagree Agree SERVICE QUALITY TANGIBLE 1 Coffee Palace has modern-looking technology 1 2 3 4 5 2 Coffee Palace employee looks neat 1 2 3 4 5 3 Coffee Palace employee looks professional 1 2 3 4 5 4 Coffee Palace looks neat and clean 1 2 3 4 5 RELIABILITY 5 Coffee Palace never late to deliver the products 1 2 3 4 5 6 Coffee Palace rarely say no to request 1 2 3 4 5 RESPONSIVENESS 7 Coffee Palace employee willing to help customer 1 2 3 4 5 8 Coffee Palace quick in giving help 1 2 3 4 5 ASSURANCE 9 Coffee Palace employee shows confidence when asked 1 2 3 4 5 10 Coffee Palace provide secure transaction 1 2 3 4 5 11 Coffee Palace provide same products like what its advertised 1 2 3 4 5 EMPATHY 12 Coffee Palace employee give off friendly impression 1 2 3 4 5 13 Coffee Palace employee give help before asked 1 2 3 4 5 STORE ATMOSPHERE EXTERIOR 14 Coffee Palace has attractive exterior decoration 1 2 3 4 5 15 Coffee Palace has exterior that similar with other coffee store 1 2 3 4 5 GENERAL INTERIOR 16 Coffee Palace lighting generate good ambience 1 2 3 4 5 17 Coffee Palace has good scent 1 2 3 4 5 18 Coffee Palace has good sound 1 2 3 4 5 19 Coffee Palace has fair temperature 1 2 3 4 5 20 Coffee Palace has good air circulation 1 2 3 4 5 STORE LAYOUT 21 Coffee Palace didn't has narrow feeling 1 2 3 4 5 22 Coffee Palace has good table arrangement 1 2 3 4 5 DISPLAY 23 Coffee Palace has attractive interior decoration and display 1 2 3 4 5 24 Coffee Palace decoration are matching with the theme of café 1 2 3 4 5 25 Coffee Palace has consistent theme setting display 1 2 3 4 5 CUSTOMER PURCASHING DECISION 26 I come to coffee store because of its physical appearance 1 2 3 4 5 27 I come to coffee store because of its good image 1 2 3 4 5 28 I come to coffee store because of the service 1 2 3 4 5 29 I come to coffee store because of its clear and safe transaction 1 2 3 4 5 30 I come to coffee store because of their service make me comfortable 1 2 3 4 5 31 I come to coffee store because it looks attractive from outside 1 2 3 4 5 32 I come to coffee store because it feels comfortable inside 1 2 3 4 5 33 I come to coffee store because it feels not too crowded 1 2 3 4 5 34 I come to coffee store because it looks attractive from inside 1 2 3 4 5