THE INFLUENCE OF BRAND EQUITY TOWARD CUSTOMER BUYING DECISION ON COSMETIC PRODUCT IN JAKARTA By Nurinda Febriyanti ID No. 014201000183 A skripsi presented to the Faculty of Business President University in partial fulfillment of the requirements for Bachelor Degree in Economics Major of Management February 2014 PANEL OF EXAMINERS APPROVAL SHEET The Panel of Examiners declares that the skripsi entitled “THE INFLUENCE OF BRAND EQUITY TOWARD CUSTOMER BUYING DECISION ON COSMETIC PRODUCT IN JAKARTA” that was submitted by Nurinda Febriyanti majoring in Management from the Faculty of Business was assessed and approved to have passed the Oral Examinations on February 18th, 2014. VinsensiusJajat K., MM, MBA Chair – Panel of Examiners Drs. Agus B. Adidi, M.A.,C.CA Examiner 1 Dra, Genoveva,MM Examiner 2 2 SKRIPSI ADVISER RECOMMENDATION LETTER This skripsi entitled “THE INFLUENCE OF BRAND EQUITY TOWARD CUSTOMER BUYING DECISION ON COSMETIC PRODUCT IN JAKARTA”prepared and submitted by Nurinda Febriyanti in partial fulfillment of the requirements for the degree of bachelor in the Faculty of Business has been reviewed and found to have satisfied the requirements for a skripsi fit to be examined. I therefore recommend this skripsi for Oral Defense. Cikarang, Indonesia, February 18th, 2014 Acknowledged by, Recommended by, VinsensiusJajat K., MM, MBA Dra,Genoveva,MM Head of Management Study Program Skripsi Adviser 3 DECLARATION OF ORIGINALITY I declare that thisskripsi, entitled “THE INFLUENCE OF BRAND EQUITY TOWARD CUSTOMER BUYING DECISION ON COSMETIC PRODUCT IN JAKARTA” is, to the best of my knowledge and beliefs, an original piece of work that has not been submitted, either in a whole or in a part, to another university to obtain a degree. Cikarang, Indonesia, February 18th, 2014 NURINDA FEBRIYANTI 4 ABSTRACT Beautiful and fascinating is the dream of all women in the world. Makeup is an activity to change the appearance of the actual original shape with the help of cosmetic materials and tools. The research is based on the competitive conditions the industry cosmetics in Indonesian, both industry cosmetics national and international. The researcher chose brands such as Bobbi Brown, Etude, Loreal, Mac , Maybelline and Revlon their familiar its for people in Indonesia , especially in Jakarta. The problem in this research is " What if brand equity ( brand awareness , brand association , perceived quality , brand loyalty ) can be affect to the costumer and make costumer choose to buy makeup product. The data are collected by distributing questionnaires to 140 costumer makeup products. The researcher using quantitative analysis includes validity test and reliability, classic assumption and multiple regression to test the hypothesis through the T-test and F- test and coefficient of determination (R ²). Hypothesis testing using T-test showed that three independent variables (brand awareness, perceived quality, brand loyalty) significant influence toward customer buying decision as dependent variable. Then through the F test proven that all independent variables (brand awareness, brand association, perceived quality, brand loyalty) have a significant influence toward customer buying decision. From the R square test show the 0.639 indicates that 63.9 percent the dependent variable (customer buying decision) are influence by independent variable (brand awareness, brand association, perceived quality, brand loyalty), while 36.1 percent are influenced by other factors. Keywords : brand awareness, brand association, perceived quality, brand loyalty, customer buying decision 5 ACKNOWLEDGEMENT Alhamdulillahhi Rabbil Alamin In the name of ALLAH I would like say Allhamdulillah Hirobbil Alamin Finally, the moment that I very wait for a long time is finally come true. This is the happiest moment after struggling with my undergraduate skripsi and finishing my study at President University. I still remember three years ago, Mom and Dad accompany me to President University and moving in to dormitory, time goes by and now I’m finished my undergraduate skripsi and graduated from President University. Through this opportunity, I would like to show my gratitude to 1. First of all I would like say thankyou to Allah SWT who gave me the healty body during I doing my skripsi project and also give me a many good person who always support me and accompany me. 2. To my Parents, Mom and Dad. I don’t know how to describe my gratitude to both of you in words, but I am so glad and proud to have parents like mom and dad. You are the best parents in the world. Thanks for everything, thanks for your unlimited support and care. I love you so much. 3. My Brother Thank you for your love and support during thisskripsi period. 4. My Sister, thankyou for always help me during I do my skripsi. 5. My Cousin, Widya Ayuningtyas thankyou for always become my translator. 6. My Skripsi Adviser, Filda Rahmiati, MBA Thank you so much for your guidance, attention, patience, and kindness. I’m so proud to have you as my skripsi adviser, thanks for being my skripsi adviser. 7. Mr. Orlando thank you so much for helping me a lot in statistic. Thanks for your guidance, care, time, and kindness. You are the friendliest lecturer ever. 8. My super hero Wisnu Arif Setyawan, thankyou for always support and 6 accompany me. 9. My dearest lovely roommate, Ervina Anggraini, Putri Utami Vallen, Salsallya Diska, finnaly guys, we finish our study, thanks for your support, kindness and your help to solve the problem with my skripsi. And don't ever forget that someday we must to be a success people. 10. My friends Sherly Silvia and Joudy Marsya, thank you so much for very help me during thisskripsi. Thankyou for teach me and guidance me during we doing this skripsi project together 11. My best friends, Astri Putria Sari, Siti Eliyana, Alfisyah, Dwi Mauliani, Harizatul, Retno Wulan, Soniya Mayangsari, thankyou for always support me, even though all of you not in here, but you always support me and pray for me until I can finish my skripsi. Thankyou so much guys, I never forget all of you, success for all of us. 12. My friends Fathia Fathia, Trecy Emerald, Ayu Agustafany, Dwini, Fabiola, Noni, Syarifah Ade Mutia, Hardian Ruben, Kania Pinanjungsari, Kak Arcilla,Agus, KrisRasta, Rifka, Rebecca, Alfina, Satriothanks for everything. 13. Sherly, Riri Rachmawati, Dwi puspita, Sherly Intan, Astri Miranda, Dwi Khairunnisa, Kevin, Husni, Sukma, and for all my friend that i can't mentioned in here. 14. My kind hearted senior, Dana Feriyus, Freddy, and Naomi, thankyou for teach me. 15. All the respondents in Jakarta thanks a lot for spending your time to fill the questionnaire. 7 TABLE OF CONTENT SKRIPSI ADVISER RECOMMENDATION LETTER .......................................... i DECLARATION OF ORIGINALITY.................................................................... ii PANEL OF EXAMINER APPROVAL SHEET .................................................... iii ABSTRACT ........................................................................................................... iv ACKNOWLEDGEMENT .......................................................................................v TABLE OF CONTENT ....................................................................................... vii LIST OF TABLE ......................................................................................................x LISTOF FIGURE .................................................................................................. xi CHAPTER I............................................................................................................ i 1.1. Background of the Study.................................................................................13 1.1.1.Cosmetics Industry in Indonesia ...................................................................14 1.2. Problem Identification.....................................................................................17 1.3. Statement of Problem ......................................................................................18 1.4. Research Objective .........................................................................................18 1.5. Scope and Limitations .....................................................................................19 1.6. Benefit .............................................................................................................19 1.7. Definition of Term ...........................................................................................20 CHAPTER II ........................................................................................................22 2.1. Brand ...............................................................................................................22 2.2. Brand Equity ...................................................................................................22 2.2.1. Brand Awareness ..........................................................................................25 2.2.2. Brand Association ........................................................................................26 2.2.3. Perceived Quality .........................................................................................27 2.2.4. Brand Loyalty ..............................................................................................28 2.3. Consumer Buying Decision ............................................................................31 2.4. Theoretical Framework ...................................................................................36