Corresponding Author: Denti Kusuma Wardani
Email: [email protected]
INTRODUCTION
Competition for potential
customers and retaining existing customers is an increasingly significant
challenge companies must face in marketing their products (Heryanto,
2015). The rapidly developing business world makes marketing
an essential factor for company progress. Remember that marketing is an
activity that generates income for the company to keep it alive. Companies are
required to work hard and innovate in the products, services and goods they
offer. Sales activities are essential because a company's success in achieving
its goals is greatly influenced by its ability to market its products (Lubis, 2015).
To understand
the level of consumer involvement in a product or service, a marketer at a
company must identify things that cause consumers to feel involved or not in
the decision to purchase a product. (Kotler &
Armstrong, 2016) defines "the decisions of individuals, groups,
and organizations to choose, buy, use, and how goods, services, ideas, or
experiences to satisfy their needs and wants" (Kotler & Keller,
2002). Companies that want to attract consumers' interest
in buying their products need marketing. An integrated marketing program design
can provide superior value for customers. Marketing programs in the form of a
marketing mix consisting of product, price, place and promotion are considered
by consumers in purchasing decisions. According to (Tjiptono, 2019), "Marketing mix is a series of controlled
activities used by companies to respond to the desires of the target
market." Suppose companies can respond appropriately to their target
market. In that case, they can certainly increase sales volume, and consumers
will feel satisfied because their desires are fulfilled.
Products and
prices are fragments of the marketing mix. They are considerations for
consumers before making a purchasing decision on a product. This statement is
supported by research conducted by (Gain et al., 2017), which concluded that product quality and price
positively and significantly affect purchasing decisions.
According to
Kotler et al. (2018:51), "Price is the amount of money that customers have
to pay for the product" (Maulana, 2016). Price is the product's value, so consumers must
spend a certain amount of money to get the product (KABANJAHE, 2021). Most consumers will be price-sensitive, depending on
individual characteristics and backgrounds. According to (Habibah and Sumiati,
2016), "Price is an important component of a product
because it will affect the producer's profits." Price is also one of the
determinants of a company's success because price determines how much the
company profits from selling its products, whether in the form of goods or
services. Setting a price that is too high will cause sales to decrease, but if
the price is too low, it will reduce the company's profits.
The definition
of a product, according to (Tjiptono, 2019), is "everything that can be offered to consumers
to satisfy consumer needs or desires". Product quality is part of the
actual product, namely the physical product or delivered service that provides
product benefits. Product quality is a characteristic of products and services
that depends on their ability to satisfy stated or implemented customer needs (Kotler &
Armstrong, 2008). The product quality variable is related to efforts
to develop the right product for the targeted market. Product quality is one of
the leading marketing positioning tools, Kotler et al. (2018:238). A company's
marketing activities can run smoothly if it offers quality products, goods, and
services. With good product quality and appropriate prices, the company can
maintain its business and compete with its competitors. Product quality can be
maintained if it needs to be improved further to provide more satisfaction to
consumers so that they can make purchasing decisions on the products offered,
automatically increasing the company's revenue.
Panjaitan & Hutapea (2022)
find that two key factors, product quality and price, influence farmers'
purchasing decisions regarding pesticide products. In addition, Ratnasari & Suswardji (2016) �research demonstrates that product quality is
a significant factor in farmers' decision-making when purchasing pesticides,
which aligns with the findings of Magdalena & Winardi's (2020) study.
According to Ratnasari & Suswardji (2016)
research demonstrates that the price of fungicides has a significant impact on
customers' purchasing decisions. The implementation of price reductions has a
favourable influence on consumers' attitudes towards purchasing pesticides (Gamage et al., 2022).
Meanwhile, price did not have a significant impact on the choice to buy
pesticides on Riamawahyu�s (2011) study.
PT Perusahaan
Dagang Indonesia is a state-owned enterprise (BUMN) in domestic and foreign
trade. PT Perusahaan Dagang Indonesia
(Persero) Semarang branch sells five kinds of commodities with various types of
each commodity. The products traded by PT Perusahaan Dagang Indonesia (Persero)
Semarang branch in 2021 are as follows:
1.
Pesticide
2.
Non-Subsidized Fertilizer
3.
Pharmacy
4.
Consumption
5.
Chemical material
Pesticide products are the product of the PT
Perusahaan Usaha Indonesia factory, which operates in Gresik, East Java and has
been operating since 1982. The types of pesticide products offered are expected
to help farmers control, reject or eradicate plant pest organisms. The use of
each pesticide product can be seen in Table 1.
Table 1. Pesticide Specifications Pt Indonesian
Trading Company
|
Product name
|
Product Specifications
|
|
Dharmabas
|
Carbamate insecticide controls plant pests (OPT), especially plant
hopper pests on rice, shallots, chillies and sugar cane.
|
|
Dharmasan
|
Organophosphate insecticides work as contact poisons to control
caterpillar pests on onions, chillies, peppers, sugar cane, cotton, soybeans
and tobacco. This type of insecticide can
also be used to poison milkfish pond parasites.
|
|
Dharmafur
|
Carbamate insecticide is used to prevent and control pests and prevent
root rot/red root disease.
|
|
Dharmapara
|
After-contact herbicides, which are effective for controlling weeds,
are usually used by farmers by spraying them on the fields before planting
rice.
|
Source:
Processed Secondary Data, 2021.
This research focuses on the
Dharmasan 100 ml product because of sales fluctuations, and it is a pesticide
product with the highest profit. Knowing the influence of price and product
quality on purchasing decisions for Dharmasan 100 ml will likely increase
product sales and automatically increase the company's income. Data on sales
volume and sales turnover of Dharmasan 100 ml PT Perusahaan Dagang Indonesia
(Persero) Semarang branch for 2020-2021 can be seen in Table 2:
Table 2. Volume and sales turnover
of Dharmasan 100 ml
PT PPI (Persero) Semarang branch
in 2020-2021
|
Month
|
Sales Volume
(Bottle)
|
Sales Turnover (Rp)
|
|
September
|
3,235
|
IDR
77,640,000
|
|
October
|
5,250
|
IDR
126,000,000
|
|
November
|
2,800
|
IDR
67,200,000
|
|
December
|
4,513
|
IDR
108,312,000
|
|
January
|
8,100
|
IDR
194,400,000
|
|
February
|
3,114
|
IDR
74,736,000
|
|
March
|
5,050
|
IDR
121,200,000
|
|
April
|
2,987
|
IDR
71,688,000
|
|
May
|
8,950
|
IDR
214,800,000
|
|
Total
|
43,999
|
IDR
1,055,976,000
|
Source:
Processed Secondary Data, 2021
Based on the data in Table 2, it can be
described as follows:
1. There were sales fluctuations from
September 2020 to May 2021.
2. The most significant decrease in sales
volume occurred in February 2021, amounting to 4,986 bottles, with a decrease
in turnover of IDR 119,664,000
3. The most significant increase in sales
volume occurred in May 2021, namely 5,963 bottles with an increase in turnover
of IDR 143,112,000
Based on Table 2, the sales volume of
Dharmasan 100 ml of the Indonesian Trading Company, Semarang branch, can be
depicted as a line graph in Figure 1.
Figure 1. Graph of Sales
Volume of Dharma 100 ml PT PII Semarang 2020-2021
Source: Secondary Data from PT PPI (Persero)
Semarang Branch Office, 2021
Based on
Figure 1, the total sales volume of Dharmasan is 100 ml, presented as a table
and line graph of PT Perusahaan Dagang Indonesia Semarang branch in 2021, which
saw an increase and decrease in sales. The decline in sales of Dharmasan 100 ml
at the Semarang branch of the Indonesian Trading Company (Persero) is a reality
that must be resolved immediately, and the cause must be found. This research
aims to determine how the price and quality of the product Dharmasan 100 ml PT
Perusahaan Dagang Indonesia Semarang branch influences. It is hoped that the company
can know and understand the reasons for consumers' needs or even desires so
that it can influence their purchasing decisions. If consumers decide to
purchase company products, the company's turnover will increase.
Several
researchers with various research objectives have studied purchasing decisions
influenced by price fragments and product quality (KABANJAHE, 2021). The results of the research analysis
show that the product's price and quality have a significant and positive
effect on purchasing decisions. Based on other research conducted by (Kumala and Anwar, 2020),
the results show that product price and
quality partially and simultaneously influence purchasing decisions. Research
also conducted by (Gain et al., 2017), partial and simultaneous research results
show a significant and positive influence between price and product quality on
purchasing decisions.
Based on
the background above, this research aims to determine and analyze the influence
of price and product quality on purchasing Dharmasan 100 ml at the Semarang
branch of PT Perusahaan Dagang Indonesia (Persero). Hopefully, this research
will increase knowledge and insight regarding the influence of price and
product quality on purchasing Dharmasan 100 ml at PT Perusahaan Dagang
Indonesia (Persero) Semarang branch. It is also hoped that this research can
provide additional information regarding the influence of the price and quality
of the 100 ml Dharmasan product on the Semarang branch of PT Perusahaan Dagang
Indonesia (Persero) so that it can be used as input for the company in
improving consumer product purchasing decisions.
METHOD
This research uses a quantitative type
of research. The population in this study were direct users (end users) who
purchased Dharmasan 100 ml at PT. PT Indonesian Trading Company Semarang Branch
in 2021, totaling 120 people. The sample used was 55 respondents who were
consumers of Dharmasan 100 ml PT PPI (Persero) Semarang branch. The data
collection methods used were observation and questionnaires. The type of data
used is primary data. Primary data in this research was obtained by filling out
a questionnaire from an assessment of price, product quality, and purchasing
decisions. Secondary data was obtained from PT. Indonesian Trading Company
Semarang branch regarding brief history, product knowledge, sales volume,
organizational structure, consumer data, job description, and other data that
supports research reports. The data analysis used is instrument testing,
descriptive analysis, classical assumption testing, and multiple linear
regression analysis.
RESULTS AND DISCUSSION
Validity test
The results of the validity test of the questionnaire,
which was tested on 30 respondents, can be seen in Table 3.
Table 3. Validity Test Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance (X2.1)
|
|
|
|
|
|
|
|
|
|
Reliability (X2.3)
|
|
|
|
|
|
|
|
|
|
|
Steadiness in a product (Y.1)
|
|
|
|
|
Easy purchasing procedure (Y.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on Table 3, the validity test results
showed that the calculated rvalue> rtable, so it can
be concluded that all the questionnaire questions in this study are declared
valid.
Reliability
Test
The results of the reliability
test, which were tested on 30 respondents, can be seen in Table 4.
Table
4. Reliability Test Results
|
Variable
|
Cronbach's
Alpha (α) Count
|
Cronbach's
Alpha (α) Standard
|
Information
|
|
Price (X1)
|
0.806
|
0.70
|
Reliable
|
|
Product Quality (X2)
|
0.803
|
0.70
|
Reliable
|
|
Purchase Decision (Y)
|
0.952
|
0.70
|
Reliable
|
Based on Table 4, Cronbach's Alpha n value of
each variable processed using SPSS version 25 software is more significant than
0.70, so it can be concluded that the questionnaire questions indicators of
each variable are declared reliable or reliable.
Classic assumption test
Multicollinearity Test
The results of the
multicollinearity test in this study can be seen in Table 5.
Table 5.
Multicollinearity Test Results
|
Collinearity
Statistics
|
|
Tolerance
|
VIF
|
|
0.230
|
4,351
|
|
0.230
|
4,351
|
Source: Processed primary data, 2021
Based on Table 5, the results of the multicollinearity test from
SPSS version 25 of this study on the price variable obtained a VIF (Variance
Inflation Factor) value of less than 10 (VIF < 10) and a tolerance value of
more than 0.10 (0.230 > 0.10), while on the variable Product quality
obtained a VIF (Variance Inflation Factor) value of less than 10 (VIF < 10)
and a tolerance value of more than 0.10 (0.230> 0.10) so that it can be
concluded that there is no multicollinearity in the regression model.
Autocorrelation Test
Table 6.
Autocorrelation Test Results
|
Unstandardized
Residuals
|
|
Asymp.
Sign. (2-tailed)
|
0.135
|
Source: Processed primary data, 2021
Based on Table 6, the results of the autocorrelation test using the
run test show that the asymptomatic significance value is 0.135, which is
greater than the significance level of 0.05 (0.135 > 0.05), so it can be
concluded that the regression equation is free from autocorrelation.
Heteroscedasticity Test
Figure
2. Scatterplot graph
Source: Processed primary data, 2021
Based on Figure 2, in the form
of a Scatterplot graph of the results by SPSS version 25, it can be seen that
there is no clear pattern. The points are spread above and below the number 0
on the Y-axis, so the regression model does not have heteroscedasticity. The
classic heteroscedasticity assumption test results were processed using SPSS
version 25.
Normality
test
Figure
3. Standard PP Plot of Regression Standardized Residual
Source: Processed primary data, 2021
Figure
4. Histogram
Source: Processed primary data, 2021
Based on Figure 3, the histogram graph and Figure 4, the average plot
graph of the SPSS version 25 results, it can be seen that in the standard plot
graph, the data is spread around the diagonal line and follows the direction of
the diagonal line and the histogram graph shows a typical distribution pattern.
Hence, the regression model fulfils the assumption of normality.
The statistical test used to test normality is the Kolmogorov-Smimov
non-parametric statistical test because the data used is more than 50. The
results of the normality statistical test from SPSS version 25 can be seen in
Table 7.
Table 7. Normality Test Results
|
One-Sample Kolmogorov-Smirnov
Test
|
|
|
Unstandardized
Residuals
|
|
N
|
55
|
|
Kolmogorov-Smirnov
Z
|
,795
|
|
Asymp. Sig.
(2-tailed)
|
,552
|
Source: Processed primary data, 2021
Based on Table 7, the normality test results show a significance value of
0.552, which is more excellent than 0.05 (0.552 > 0.05), indicating that the
data is usually distributed. The results of the classical assumption of
normality test were processed using SPSS version 25.
Linearity
Test
The results of the linearity
test in the research can be seen in Table 8.
Table 8. Linearity Test Results
|
|
|
Sig
|
|
Price (X1)
|
Deviation from Linearity
|
0.063
|
|
Product Quality (X2)
|
Deviation from Linearity
|
0.266
|
Source: Processed primary data, 202 1
From
Table 8, the results of the linearity test processed with SPSS version 25 show
that the significance value of the price variable is 0.063, which is greater
than 0.05 (0.063 > 0.05), and the significance value of the product quality
variable is 0.266 which is more significant than 0.05 (0.266 > 0 .05) so it
can be concluded that the relationship between variables is linear. The results
of the classical assumption of linearity test were processed using SPSS version
25.
Multiple
Linear Regression Analysis
Table 9. Results of Multiple Linear Regression Analysis
|
Model
|
Unstandardized
Coefficients
|
Standardized
Coefficients
|
|
B
|
Std. Error
|
Beta
|
|
1
|
(Constant)
|
,555
|
1,816
|
|
|
Price (X1)
|
,412
|
,097
|
,470
|
|
Product
Quality (X2)
|
,490
|
,112
|
,483
|
Source: Processed primary data, 202 1
Based on Table 9, the multiple linear
regression equation is obtained as follows:
Y = 0.555 +
0.412X1 + 0.490X2 + e
The explanation of the multiple linear
regression equation is as follows:
1. The constant (α) of 0.555 states
that if there is no change in the value of Price (X1) and Product
Quality (X2) or it is equal to 0, then the Purchase Decision (Y)
value is 0.555 units (constant).
2. The Price regression coefficient (X1)
of 0.412 states that every addition or increase in price by 1 value will
increase the number of Purchasing Decisions by 0.412 units, assuming the
Product Quality variable remains unchanged.
3. The Product Quality regression
coefficient of 0.490 states that every addition or increase in Product Quality
by 1 value will increase the number of Purchasing Decisions by 0.490 units,
assuming the Price variable remains unchanged.
Partial Significance Test (t-Test)
Table 10. Results of Partial
Significance Test (t-Test)
|
Variable
|
tcount
|
ttable
|
Sig.
|
|
Price (X1)
|
4,250
|
1.67303
|
,000
|
|
Product Quality (X2)
|
4,364
|
1.67303
|
,000
|
Source: Processed primary data, 2021
Based on
Table 10, the tests in this research can be described in the form of a null
hypothesis (Ho) and an alternative hypothesis (Ha) with the following
hypothesis:
1. Test the hypothesis of the influence of
price on purchasing decisions
Ho1: there is no significant influence between price variables and
purchasing decisions.
Ho1:b1 = 0
Ha1:
There is a significant influence between price variables and purchasing
decisions.
Ha1:b1≠0
From the SPSS version 25 output results, the
significance value of the price variable is 0.000, which is smaller than the
value of α = 0.025 because it was tested in 2 directions (0.000<0.025)
and at degrees of freedom (df) = nk = 55-3 = 52, the t table is 2. .00665 (the
t table can be seen in Appendix 12) meaning that the calculated t value is
greater than the t table (4.250>2.00665). Thus, Ho1 is rejected, and Ha1 is
accepted, so the price variable significantly affects the decision to purchase
Dharmasan 100 ml at PT. Indonesian Trading Company (Persero) Semarang branch.
2.
Test
the hypothesis of the influence of product quality on purchasing decisions.
Ho2:
there is no significant influence between product quality variables and
purchasing decisions.
Ho2:b2
= 0
Ha2:
there is a significant influence between product quality variables and
purchasing decisions.
Ha2:b2≠0
From the SPSS version 25 output results, it is
obtained that the significance value of the product quality variable is 0.000,
which is smaller than the value of α = 0.025 because it was tested in 2
directions (0.000<0.025) and at degrees of freedom (df) = nk = 55-3 = 52,
the t table is obtained at 2.00665 means that the calculated tvalue is
greater than the ttable (4.364>2.00665). Thus, Ho2 is rejected,
and Ha2 is accepted, so the product quality variable significantly and
positively affects the decision to purchase Dharmasan 100 ml at PT. Indonesian
Trading Company (Persero) Semarang branch.
Simultaneous
Significance Test (F Test)
Table 11. Simultaneous Significance Test Results (F Test)
|
ANOVAa
|
|
Model
|
Sum of Squares
|
Df
|
Mean Square
|
F
|
Sig.
|
|
1
|
Regression
|
1522,389
|
2
|
761,195
|
151,575
|
,000 b
|
|
Residual
|
261.138
|
52
|
5,022
|
|
|
|
Total
|
1783,527
|
54
|
|
|
|
|
a. Dependent Variable: Purchase Decision (Y)
|
|
b. Predictors: (Constant), Product Quality (X2),
Price (X1)
|
Source: Processed
primary data, 2021
����������� Based on the calculation results in
Table 11, the significance value of 0.000 is smaller than the value of α =
0.025 because it was tested in 2 directions (0.000 < 0.025). The value of
the f Table is at a significance level of 5% and df (1) = k-1 = (3-1 = 2 ), df
(2) =nk =(55-3=52), the f table value is 3.18 (the F table can be seen in
Appendix 13) meaning the calculated f is greater than the f table (151.575 >
3.18). Thus, Ho3 is rejected, and Ha3 is accepted, so the price and quality of
the product together (simultaneously) affect the decision to purchase Dharmasan
100 ml at PT Perusahaan Dagang Indonesia (Persero) Semarang branch.
Analysis
of the Coefficient of Determination (R2)
Table 12. Determination Coefficient Test Results
|
Model
|
R
|
R Square
|
Adjusted R Square
|
Std. Error of the Estimate
|
|
1
|
,924 a
|
,854
|
,848
|
2,241
|
|
a.
Predictors: (Constant), Product Quality (X2), Price (X1)
|
Source:
Processed primary data, 2021
Based on Table 12, it can be concluded that the
Adjusted R square value is 0.848. This means that the price and product quality
variables contribute to purchasing decisions by 84.8%. In comparison, the
remaining 15.2% (100%-84.8%) is determined by other variables not examined in
this research.
Implications
of Research Results
Based on the results of this
research, price and product quality significantly influence purchasing
decisions for the 100 ml Dharmasan product at PT Perusahaan Dagang Indonesia
(Persero) Semarang branch. The results of this research strengthen research by (Gain et al., 2017) and (Kumala and Anwar, 2020), which revealed that price and product quality variables can
partially and simultaneously positively influence purchasing decisions.
Based on the results of data
analysis and discussion regarding the influence of price and product quality on
the decision to purchase Dharmasan 100 ml at PT Perusahaan Dagang Indonesia
(Persero) Semarang branch, the results of the regression equation can be
obtained as follows:
Based on the results of the
multiple linear regression equation, it can be seen that all independent
variables consisting of price (X1) and product quality (X2)
have a positive effect on purchasing decisions (Y).
The product quality variable (X2)
influences purchasing decisions with a regression coefficient value of 0.490,
meaning that every addition or increase in product quality by one value will
increase the number of purchasing decisions by 0.490 units assuming the price
variable remains unchanged. The price variable (X1) with a
regression coefficient value of 0.412 means that every addition or increase of
one value will increase purchasing decisions by 0.412 units, assuming the
product quality variable remains unchanged.
The product quality variable (X2)
consists of performance indicators, additional features, reliability, and
conformity to specifications. The reliability indicator has the most
significant index value based on the results of respondents' responses, with a
value of 47.9%. The price variable (X1) consists of price
affordability, price suitability to quality, price competitiveness, and price
suitability to benefits. The price match indicator with benefits has the most
significant index value based on the results of respondents' responses, with a
value of 48.6%.
CONCLUSION
The study investigates the influence of price
and product quality on purchasing decisions for Dharmasan 100 ml at PT
Perusahaan Dagang Indonesia (Persero) Semarang branch. The questionnaire's
validity and reliability tests indicate that all variables are valid and
reliable. The majority of respondents were male, aged 37-46, with a high
school/high school education and working as a farmer. The descriptive analysis
of respondents showed high scores for price suitability to benefits,
affordability, product quality, and purchasing decision. The classical
assumption test revealed a linear relationship between variables, and the
multiple linear regression equation showed that price and product quality had a
positive effect on purchasing decisions. The partial significance test and
simultaneous significance test also showed significant influences on purchasing
decisions. The Adjusted R square value of 0.848 indicates that price and
product quality variables contribute to purchasing decisions by 84.8%, while
the remaining 15.2% is determined by other variables not examined in the
research.
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