THE ANALYSIS OF BRAND EQUITY TOWARDS

CONSUMER PURCHASING DECISION

OF NOKIA SMARTPHONE

(A Case study in President University batch 2011 - 2013)

By

Harley Maximiliaan D. P.

014201000004

A Skripsi presented to the

Faculty of Business President University

in partial fulfillment of the requirements for

Bachelor degree in Economics Major in Management

March 2014

i

PANEL OF EXAMINERS

APPROVAL SHEET

The Panel of Examiners declares that the Skripsi entitled “THE

ANALYSIS OF BRAND EQUITY TOWARDS CONSUMER

PURCHASING DECISION OF NOKIA SMARTPHONE (A Case

Study in President University batch 2011 – 2013)” that is submitted

by Harley Maximiliaan Davy Putra majoring in International Business

from the Faculty of Business was assessed and approved to have

passed the Oral Examinations on March 24, 2014.

Ir. Erny E. Hutabarat, MBA

Chair – Panel of Examiners

Vinsensius Jajat Kristanto SE., MM., MBA.

Examiner I

Purwanto ST., MM

Examiner II

ii

SKRIPSI ADVISER

RECOMMENDATION LETTER

This skripsi entitled “THE ANALYSIS OF BRAND EQUITY

TOWARDS CONSUMER PURCHASING DECISION OF

NOKIA SMARTPHONE (A Case Study in President University

batch 2011 – 2013)” prepared and submitted by Harley Maximiliaan

Davy Putra 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, March 17, 2014

Acknowledged by, Recommended by,

Vinsensius Jajat Kristanto SE., MM., MBA Purwanto ST., MM

Head of Management Study Program Advisor

iii

DECLARATION OF

ORIGINALITY

I declare that this Skripsi, entitled “THE ANALYSIS OF BRAND

EQUITY TOWARDS CONSUMER PURCHASING DECISION

OF NOKIA SMARTPHONE (A Case Study in President

University batch 2011 – 2013) ” 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, March 17, 2014

Harley Maximiliaan Davy Putra

iv

ABSTRACT

The Smartphone industry is getting more competitive. Nokia was the market

leader in this industry until feature phone getting replaced by Smartphone.

However, Nokia still in the top three smartphone vendors although it is keep

declining in the market; shows the brand Nokia still exist and strong in consumers

mind. This research is aimed to analyze does elements of Brand Equity have

influences towards Purchasing Decision of Nokia Smartphone. This research use

96 respondents as calculated with Slovin formula that had purchase Nokia

Smartphone. The population of this research is President University students,

batch 2011 - 2013. Hence, data were analyzed using quantitative analysis; contain

validity and reliability test, classic assumption test, and multiple regression

analysis to test the hypothesis through F-test, T-test, and coefficient of

determination. The data that have met validity test, reliability test, and classical

assumptions processed, resulting regression equation as follows: This research

shows that Brand Association (X2), Brand Awareness (X3), and Perceived

Quality (X4) have significant influence towards Nokia Purchasing Decision (Y).

The F test showed that brand loyalty, brand association, brand awareness, and

perceived quality simultaneously influence the purchase decision. Figures

adjusted R square of 0.453 indicates that 45.3 percent of the variations of purchase

decision can be explained by four independent variables used in the regression

equation, while the rest 54.7 percent is explained by another variable outside the

four variables used in this research.

Keywords: Brand Loyalty, Brand Association, Brand Awareness, Perceived

Quality, Purchase Decision

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ACKNOWLEDGEMENT

Praise to the Lord Jesus Christ, because of His blessings I could complete this

skripsi. This skripsi could not have been completed without motivation, support,

and guidance from many people. Therefore, I would like to express my gratitude

for those who have been supporting me through the making of this research.

First of all, I would like to express my gratefulness for having wonderful parents,

David Rainier Korompis and Nurnantini. They have been supporting me in

anything I do all the time. I would thank my little brother, Saul Christopher

Matthew, for supporting me to complete this skripsi. Also big thanks for my

grandparents, uncle, aunt, cousins, and all my Korompis family for motivating me

in completing this skripsi.

Many thank for my skripsi adviser, Mr. Sonny Vinn Sutedjo SE., MM. and Mr.

Purwanto ST., MM. Thank you very much for their guidance, patience, and

kindness for being my adviser in this skripsi. Also thank you very much for all

lecturers in President University that had taught me since the first semester. With

their teachings, I have gain the knowledge to be able to finish this research and for

my future career.

I would express my gratitude for all my friends in President University especially

they that have guide and support me in completing this research. Thank you for

their sharing, support, and accompany since the first semester in President

University. Special thanks for those who have supported and accompanied during

the process of this skripsi, M. Husni, Ihdam F., Siti D., Hafsari D., Yohana M.,

Rezie R., and others I can’t explain one by one. Big gratitude for my ex dorm

mate Dito S., Fakhrul A., Rachdwirianto R., Axle A., Bimo S., and many other

neighbors from D-5, D2-09, N-131, and G-1 student housing.

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Also big thanks for my band mate from HajarBleh Big Band, Jazzy One, and

Soulsitive for supporting me throughout my university life and giving me

wonderful music experiences. I am also very grateful to have my special friends

from Paskibra SMAN 6 especially Paskibra angkatan 29, thank you for their

support and sharing since my high school life until present day. Last but not least,

thank you for all parties that have contributed in this skripsi. Without their support,

I will have difficulties in finishing this research.

vii

TABLE OF CONTENTS

PANEL OF EXAMINERS .......................................................................................... i

SKRIPSI ADVISER .................................................................................................. ii

RECOMMENDATION LETTER ................................................................................ ii

DECLARATION OF ................................................................................................ iii

ORIGINALITY ....................................................................................................... iii

ABSTRACT ........................................................................................................... iv

ACKNOWLEDGEMENT .......................................................................................... v

TABLE OF CONTENTS ......................................................................................... vii

LIST OF FIGURES.................................................................................................. xi

LIST OF TABLES .................................................................................................. xii

CHAPTER I INTRODUCTION .................................................................................. 1

1.1 Research Background ................................................................................. 1

1.2 Problem Identification ................................................................................ 6

1.3 Statement of the Problem .......................................................................... 6

1.4 Research Objective ..................................................................................... 7

1.5 Significance of the Study ............................................................................. 8

1.5.1 Researcher ........................................................................................... 8

1.5.2 Academic ............................................................................................. 8

1.5.3 Nokia ................................................................................................... 8

1.6 Definition of terms ..................................................................................... 8

1.7 Scope and Limitation ................................................................................ 10

1.8 Research benefits ..................................................................................... 10

CHAPTER II LITERATURE REVIEW ........................................................................ 11

2.1 Theoretical Review ................................................................................... 11

2.1.1 Brand ................................................................................................. 11

2.1.2 Brand equity ...................................................................................... 12

viii

2.1.3 Brand loyalty ...................................................................................... 13

2.1.3.1 Relationship of brand loyalty toward purchasing decision ............... 14

2.1.4 Brand association ............................................................................... 14

2.1.4.1 Relationship of brand association toward purchasing decision ........ 15

2.1.5 Brand awareness ................................................................................ 15

2.1.5.1 Relationship of brand awareness toward purchasing decision ......... 16

2.1.6 Perceived quality ................................................................................ 17

2.1.6.1 Relationship of perceived quality toward purchasing decision ........ 18

2.1.7 Theory of purchasing decision ............................................................ 18

2.2 Previous research ..................................................................................... 20

2.3 Theoretical Framework ............................................................................. 22

2.4 Assumptions and Hypothesis .................................................................... 22

CHAPTER III RESEARCH METHODOLOGY ............................................................ 24

3.1 Research Design ....................................................................................... 24

3.2 Research Framework ................................................................................ 25

3.3 Sampling Design ....................................................................................... 27

3.3.1. Research Population ......................................................................... 27

3.3.2. Research Sample ............................................................................... 27

3.4 Research Instruments ............................................................................... 28

3.5 Reliability and Validity .............................................................................. 30

3.5.1 Validity ............................................................................................... 30

3.5.2 Reliabilty ............................................................................................ 31

3.6 Data Collection Procedure ........................................................................ 32

3.6.1 Data Collection ................................................................................... 32

3.6.1.1 Primary data ................................................................................... 32

3.6.1.2 Secondary data ............................................................................... 33

3.6.1.3 Measurement Scale......................................................................... 33

3.6.2 Data Analysis ...................................................................................... 34

3.7 Testing the Hypothesis ............................................................................. 34

3.7.1 Multiple Regressions .......................................................................... 34

ix

3.7.2 Normality Test ................................................................................... 35

3.7.3 Multicollinearity Test ......................................................................... 36

3.7.4 Heteroscedasticity Test ...................................................................... 37

3.7.6 T Test ................................................................................................. 38

3.7.7 Coefficient of determination (adjusted R2) ........................................ 38

CHAPTER IV ANALYSIS AND INTERPRETATION .................................................... 40

4.1 Company Profile ....................................................................................... 40

4.2 Data Result Analysis.................................................................................. 43

4.2.1 Pilot Test ............................................................................................ 43

4.2.2 Respondent Information .................................................................... 45

4.2.3Multiple Regression ............................................................................ 47

4.2.4 Multicollinearity ................................................................................. 48

4.2.5 Heteroscedasticity Test ...................................................................... 49

4.2.6 Testing the Hypothesis Result ............................................................ 50

4.2.6.1 F Test .............................................................................................. 51

4.2.6.2. T Test ............................................................................................. 51

4.2.6.2.1 Brand Loyalty toward Purchasing Decision ................................... 53

4.2.6.2.2 Brand Association toward Purchasing decision ............................. 53

4.2.6.2.3 Brand Awareness toward Purchasing Decision ............................. 53

4.2.6.2.4 Perceived Quality toward Purchasing Decision ............................. 54

4.2.6.3 Coefficient Determination (R2) ........................................................ 54

4.3 Interpretation of Results ........................................................................... 55

4.3.1 Brand loyalty towards purchasing decision of Nokia Smartphone ...... 55

4.3.2 Brand association towards purchasing decision of Nokia Smartphone 55

4.3.3 Brand awareness towards purchasing decision of Nokia Smartphone 56

4.3.4 Perceived Quality towards purchasing decision of Nokia Smartphone 56

CHAPTER V CONCLUSION AND RECOMMENDATION .......................................... 57

5.1 Conclusion ................................................................................................ 57

5.2 Recommendations .................................................................................... 58

5.2.1 For Nokia ........................................................................................... 58

x

5.2.2 For Future Researchers ...................................................................... 59

REFERENCES ...................................................................................................... 60

Books ............................................................................................................. 60

Journals .......................................................................................................... 61

Websites ........................................................................................................ 63

APPENDICES ....................................................................................................... 65

Appendix 1 Questionnaire .............................................................................. 65

Appendix 2 Questionnaire Result ................................................................... 69

Appendix 3 SPSS Results ................................................................................. 74

xi

LIST OF FIGURES

Figure 1.1 Global Market Share of Nokia Smartphone Q1’07 – Q2’13 ............................... 3

Figure 2.1 Brand Equity Model ......................................................................................... 13

Figure 2.1 Theoretical Framework .................................................................................... 22

Figure 3.1 Research Framework ....................................................................................... 26

Figure 4.1 Respondents Gender Information ................................................................... 46

Figure 4.2 Respondent Batch Information ........................................................................ 46

Figure 4.3 Histogram ......................................................................................................... 47

Figure 4.4 Normal P-P Plot of Regression Standardized Residual .................................... 48

Figure 4.5 Scatterplot ........................................................................................................ 50

xii

LIST OF TABLES

Table 1.1 Top Five Smartphone Vendors ............................................................................ 4

Table 1.2 Brand Performances of Smartphone Industry by Top Brand Index .................... 5

Table 2.1 Five Stages of consumer decision making ......................................................... 20

Tables 3.1 Illustration of Likert Style Rating scale Questionnaires ................................... 28

Table 3.2 Operational Definition ....................................................................................... 29

Table 3.3 Likert Scale ........................................................................................................ 33

Table 4.1 Validity and Reliability Results .......................................................................... 44

Table 4.2 Tolerance and VIF scores ................................................................................... 49

Table 4.3 F Test Result - ANOVA ....................................................................................... 51

Table 4.4 Coefficients – T Test .......................................................................................... 52

Table 4.5 Model Summary ................................................................................................ 54

1

CHAPTER I

INTRODUCTION

1.1 Research Background

A brand in its simplest form is a mark of differentiation. Yet, the evolution of

brands shifted its focus from differentiation to representation and furthermore

from embodiment to meaning (Berthon et al., 2011). As consumers in developed

markets found numerous ways of satisfying their basic consumption needs, they

focused on higher meaning in making brand choices, which is an important

implication for brand management. (Simon, 2011)

It is said that strong brand equity results in customers showing a preference for

one product over another, although the products could be basically identical.

(Kotler, 2003) For many companies, their single biggest asset is their brand,

(Simon, 2011) and it is therefore relevant to understand what influences consumer

brand preferences and how preferences translate into purchase intentions.

Many companies have come to believe that one of their most valuable assets is

their products and services brands (Kapferer, 2004). Today’s world are more

challenging, people are facing increasing options of brands causing more effort to

decide which are more preferable. The rising of consumer awareness has made

consumers to purchase their favorable brand.

As technologies grow, mobile phone currently is a common gadget for every

people. It is no longer a luxury thing, because it reach wide market segment. Since

the first mobile cell phone created in 1973 by Dr. Martin Cooper, the way people

communicate has changed. For more than forty years, mobile phone has

transformed into a useful gadget for daily use. Presently, mobile phone is used not

only for phone calls or short message service (SMS), but it has many features for

2

business purpose, for entertainment purpose, and even for learning purpose, or we

defined it as a ‘Smartphone’. According to Oxford Dictionary, Smart phone is a

mobile phone that can perform the functions of a computer, usually has large

touch screen, and operating system that is able to run general-purpose applications.

Nokia has been a major player in mobile phone market since 1998 (nokia.com,

2014). Nokia was the top selling mobile phone vendor globally. Its revenue

increased almost five times from EUR 6.5 billion to EUR 31 billion between 1996

and 2001. An analyst at CCS Insight, Ben Wood, said that in 1990s Nokia were

dominant. People didn’t talk about the brand of the phone; it was about the

number, as Nokia were named its series by numbers.

Nokia was the top-selling Smartphone vendor in the world by a wide margin,

however it totally changed since apple introduced their first iPhone in 2007. The

market shares of Nokia were declined while the iPhone sales grow drastically.

According to the latest quarterly numbers from Gartner researchers, Nokia's sales

of smartphones fell by 3.1% while sales of Apple iPhones grew by 327.5% as it

took third place with a market share of 12.9% in 2008 (The Guardian, 2013).

Since the rise of iPhone, many mobile phone manufacturers start to develop their

own smartphones, causing Nokia to struggle in higher competitive market.

Smartphone is still growing, feature phone (non Smartphone) still exist in the

market and it still outsell Smartphone sales.

Figure 1.1 Global Mark

Source: International Da

Figure 1.1 above shows

quarter of 2007 until sec

iPhone sales in 2007.

industry in 2009. The r

their consumers drastica

arket Share of Nokia Smartphone Q1’07 – Q2’1

Data Corporation, Gartner; taken from Statista.co

ws that Nokia market share is diminishing sinc

econd quarter of 2013. It was the effect of the inc

. Hence, Android operating system first appe

rise of iPhone and android phones forcing Nok

cally.

3

2’13

.com

nce the first

increasing of

pears in the

okia to lose

4

Table 1.1 Top Five Smartphone Vendors

Source: International Data Corporation and Strategy Analytics, taken from

mobithinking.com

Table 1.1 shows that Nokia is still exist in the top three Smartphone vendors,

followed by HTC and Blackberry. But Nokia market shares fall more than ten

percent from 2011 to 2012. In just five years (2007-2012) Apple and Samsung

could defeat Nokia from the major player in the mobile phone industry into third

position in the market.

As seen in the perspective of brand performances, Nokia is the second popular

brand in Indonesia according to the data of Top Brand Award by Frontier

Consulting Group. Frontier Consulting Group analyzes brand performances in

Indonesia with the brand strength indicator called Top Brand Index. It is

formulated based on 3 variables. The first variable is Mind Share; it indicates a

brand's strength inside the minds of the consumers of the respective product

category. Second variable is Market share that shows a brand's strength in a

certain market in terms of consumers' actual buying behavior. The third variable is

commitment share that indicates a brand's strength in encouraging consumers to

buy that brand in the future. To determine the value of the three variables, Frontier

uses 3 parameters: top of mind awareness, last use, and future intention.

5

Table 1.2 Brand Performances of Smartphone Industry by Top Brand Index

in Year 2012 - 2014

No 2012 2013 2014

Brand TBI Brand TBI Brand TBI

1 Blackberry 40.7% Blackberry 39.0% Blackberry 44.30%

2 Nokia 37.9% Nokia 37.0% Nokia 22.70%

3 Samsung 6.6% Samsung 11.1% Samsung 18%

4 Nexian 3.9% Nexian 3.6% iPhone 4.30%

5 iPhone 3.8% iPhone 2.0% Sony Ericsson 3.30%

6 Sony Ericsson 3.6% Cross 1.9% Nexian 2.20%

Source: Top Brand Award, topbrand-award.com

As seen on the table above, the brand performances of Nokia according to Top

Brand Index are on downward trend from 2012 until 2014. Nokia should be aware

because if the TBI is diminishing, means the market share of Nokia is also

decreasing because 30% of TBI assessment is based on market share as its second

assessment variable. It is shown by the table below

While Nokia lost its market share bit by bit, other vendors are trying their best to

dominate the market. This highly competitive market pushes Nokia to improve its

product. Improving the brand value might be one of the strategies to improve sales

performances. Thus, the purpose of this research is to analyze the influence of

brand loyalty, brand association, brand awareness, and perceived quality towards

consumer purchasing decision of Nokia Smartphone.

According to the theory of Brand Equity by David Aaker (2010) ‘Building String

Brands’, Brand Equity dimensions into major subcategories which are brand

awareness, brand associations, and brand loyalty. Through this Aaker model,

brand awareness is the extent to which a brand is known among the public, brand

associations is associations triggered by a brand, and brand loyalty is the extent to

which people are loyal to a brand. Along with the Brand Equity, perceived quality

6

is the extent to which a brand is considered to provide good quality product

(Aaker, 2010), they might have an impact to consumer purchasing decision.

Consumers will compare their information that they already know before about

different products and brands with what they consider before finally deciding

which one to buy.

1.2 Problem Identification

Based on the data shown, Nokia is no longer the leader of the market. It has lost

its market share in this highly competitive market. Smartphone industry is rapidly

growing which is more difficult for Nokia to catch up with Samsung and Apple

sales. However, Nokia is still able to stay at the top three Smartphone vendors. It

shows that Nokia still have a strong Brand as the fundamental to regain its market.

Because of that reason, the researcher would like to study: “The Analysis of

Brand Equity towards Consumers’ Purchasing Decision of Nokia Smartphone (A

case study in President University)”

1.3 Statement of the Problem

Based on the background of the study above, the problem statements of this study

are stated below:

1. Is there a partial significant influence of brand loyalty towards purchasing

decision of Nokia Smartphone in President University?

2. Is there a partial significance influence of brand association towards purchasing

decision of Nokia Smartphone in President University?

3. Is there a partial significance influence of brand awareness towards purchasing

decision of Nokia Smartphone in President University?

7

4. Is there a partial significance influence of perceived quality towards purchasing

decision of Nokia Smartphone in President University?

5. Is there a simultaneous significant influence of brand loyalty, brand association,

brand awareness, and perceived quality towards purchasing decision of Nokia

Smartphone in President University?

1.4 Research Objective

The objectives of this research are:

1. To analyze if there a partial significant influence of brand loyalty towards

purchasing decision of Nokia Smartphone in President University.

2. To analyze if there a partial significance influence of brand association towards

purchasing decision of Nokia Smartphone in President University.

3. To analyze if there a partial significance influence of brand awareness towards

purchasing decision of Nokia Smartphone in President University.

4. To analyze if there a partial significance influence of perceived quality towards

purchasing decision of Nokia Smartphone in President University.

5. To analyze if there a simultaneous significant influence of brand loyalty, brand

association, brand awareness, and perceived quality towards purchasing decision

of Nokia Smartphone in President University.

8

1.5 Significance of the Study

This research hopefully provides benefit for:

1.5.1 Researcher

This research contributes more knowledge about brand equity dimension

influencing consumer purchasing decision. This research is also a requirement for

the researcher to graduate from President University.

1.5.2 Academic

This research may contribute knowledge and information in management studies,

especially about factors that are influencing consumer purchasing decision.

Hopefully, this research can be used as a reference for further research.

1.5.3 Nokia

This research contributes suggestion for Nokia about consumer purchasing

decision of Nokia Smartphone.

1.6 Definition of terms

Following are the definition of common terms used in this researched from

various resources.

1. Smartphone

A mobile phone that is able to perform many of the functions of a

computer, typically having a relatively large screen and an operating

system capable of running general-purpose applications.

9

2. Brand

Brand is a type of product manufactured by a particular company under a

particular name.

3. Brand Equity

Brand Equity is the commercial value that derives from consumer

perception of the brand name of a particular product or service, rather than

from the product or service itself.

4. Brand Loyalty

The tendency of some consumers to continue buying the same brand of

goods rather than competing brands. Brand loyalty is defined as the degree

to which a customer hold a positive attitude toward a brand, has

a commitment to it, and intends to continue purchasing it in the future. As

such, brand loyalty is directly influenced by the customer

satisfaction/dissatisfaction with the brand (Mowen, 2002).

5. Brand Association

The feelings, beliefs and knowledge that consumers (customers) have

about brands. These associations are derived as a result of experiences and

must be consistent with the brand positioning and the basis of

differentiation.

6. Brand Awareness

Brand awareness is the likelihood that consumers recognize the existence

and availability of a company's product or service. Creating brand

awareness is one of the key steps in promoting a product.

7. Perceived Quality

Perceived quality can be defined as the customer's perception of the

overall quality or superiority of a product or service with respect to its

intended purpose, relative to alternatives. Perceived quality is, first, a

perception by customers.

8. Purchasing Decision

Series of choices made by a consumer prior to making a purchase that

begins once the consumer has established a willingness to buy. The

consumer must then decide where to make the purchase, what brand,

10

model, or size to purchase, when to make the purchase, how much to

spend, and what method of payment will be used. The marketer attempts

to influence each of these decisions by supplying information that may

shape the consumer's evaluation process.

1.7 Scope and Limitation

There may be several factors lead to the decline of Nokia. The researcher is to

analyze through brand loyalty, brand awareness, brand association, and perceived

quality toward purchasing decision.

The research is limited based on the research area. The respondents that will be

measured in this research are the students of President University that are using

Nokia Smartphone, or had use Nokia Smartphone.

1.8 Research benefits

The benefit of this study is the researcher can apply theories and knowledge

gained during studying activities to the problem exists in the reality, especially

about brand equity, brand loyalty, brand association, brand awareness, and

perceived quality that are influencing consumer purchasing decision. Hopefully,

this research will also contribute knowledge and information for further research.

11

CHAPTER II

LITERATURE REVIEW

2.1 Theoretical Review

2.1.1 Brand

A brand is a mixture of attributes, tangible and intangible, symbolized in a

trademark, which, if managed properly, creates value and influence. Brands often

provide the primary points of differentiation between competitive offerings, and

as such they can be critical to the success of companies. Thus, it is important that

the management of brands is approached strategically.

Brand is a type of product made by a particular company. The early definition of

Brand comes from the action that usually done by cattle raiser in Wild West of the

United States through giving mark on their cattle for easy identification reason of

its ownership or origin from one ranch to another ranch and also to ensure that the

cattle is not stolen (Kapferer, 2012).

Since there are lots of various marketing observers and professional perspectives,

brand has got lots of definitions. American Marketing Association as quoted by

Kotler and Keller (2012) defined Brand as a name, term, sign, symbol, or design

or a combination of them intended to identify the goods and services of one seller

or group of sellers and to differentiate them from those of competitors. Hammond

(2008) defined brand as the total emotional experience a customer has with the

company and its product or service. Godin (2009) described brand as the set of

expectations, memories, stories and relationships that, taken together, account for

a consumer’s decision to choose one product or service over another. From those

perspectives can be concluded that a brand can start from the name, term, sign,

12

symbol that intend to differentiate a product with the competitor’s product

through its uniqueness and added value.

2.1.2 Brand equity

“Brand Equity is the added value given to products and services. Brand equity

and value is reflected in how consumers think, feel and act with respect to the

brand, as well as the prices, market share and profitability that the brand

commands for the company.”

(Kotler, Keller, Brady, Goodman, & Hansen, 2009, pp. 446)

Brand Equity is the most valuable asset in every business activity, underlying

image, personality, identity, attitudes, familiarity, associations, and brand

awareness. This asset, along with channel, trademarks, and patents, is the main

source of future earnings and competitive advantage (Chiranjeev, K & Lance, L,

2011). Brand becomes a signal to customers about the source of the product, and

protects the customer and the producer from competitors who will try to provide a

product that looks identical. Strong consistency is considered a good image.

Ability to generate brand equity will provide a different advantage, a form of

wealth which is closely related to the so-called "goodwill". For this purpose the

company did not hesitate to allocate budget in bulk for activities that can add sale

value of a brand.

Kotler and Keller (2007), defines brand equity as the added value given to

products and services. This value can be reflected in the form of a consumer's way

of thinking, feeling, and acting on brand, price, market share, and profitability of

the company.

There are a lot Suggest and Classification for dimensions of brand equity That

first and most famous of them presented by Aaker (2010) that it can be said it is a

model purely psychological that equity can be measured from the perspective of

13

Brand

Equity

Brand

Loyalty

Brand

Association

Brand

Awareness

Perceived

Quality

consumer and includes 5 dimension brand awareness, brand associations,

perceived quality, brand loyalty and other assets associated brand equity relate to

a company. That has been raised that Practically 4 dimensions first will be

considered to analyze the consumer-based brand equity that even Aaker have used

from this 4factors in other theories and fifth factor is discussed as a

communication channel between the company and other factors.

Figure 2.1 Brand Equity Model

Source: Aaker (2010)

2.1.3 Brand loyalty

Customer loyalty gives large contribution to a brand’s value to a firm. A loyal

customer is extremely important. It is expected to predict the number of sales and

finally generate profits, it is important not to ignore the existing loyal customers,

because it is much cheaper to retain them than to attract new customers. Focusing

on loyalty segmentation provides strategic and tactical insights that will assist in

building strong brands (Aaker, 2010, pp.21-22).

When a brand make a change in prices or product features, strong brand loyalty

would indicate that it is unlikely for a customer to switch brand. Brand loyalty can

be categorized into five levels ranking from non-loyal buyer, habitual buyer,

satisfied buyer, and likes the-brand buyer to committed buyer. According to

Ukpebor and Ipogah (2008), it is presumed that consumers understanding of

14

quality will be associated with their brand loyalty. As the more loyal a consumer

to a brand, the more he/she is presumed to see the brand as a superior quality and

vice versa. Also, the more favorable association’s consumers have towards a

brand, the more their loyalty and vice versa.

2.1.3.1 Relationship of brand loyalty toward purchasing decision

Brand loyalty is a measure of closeness of customers to the brand, and positive

feelings toward a brand. That's why customers will tend to use the product on a

regular basis. Purchase intention significantly influenced by the level of brand

loyalty of the customers (Marcel G,. Krish S. K & Katrin B. S., 2011). Brand

Loyalty has a direct effect and highest level of relationship to the purchase

decision according to the study conducted by Lekprayura (2012). Brand Loyalty

affect to the customer’s purchasing decision by continuous purchase behavior of

that brand (Bouazza, et al., 2013).

2.1.4 Brand association

Aaker (2010) stated Brand associations as anything relate to the preference of a

brand. It is the element of brand equity that helps a brand to be remembered.

Brand Association reflects the depth of associations and consumer attitudes on

brand (Crosno, et al., 2009). Brand association is anything which related to brand

in memory (Hosseini, et al., 2013)

Different brands have different associations to their prospective customers. Brand

associations are driven by the brand identity, which is what the company wants

the brand to stand for in the customer’s mind. Thus, the development and

implementation of a brand identity, is a key to build strong brands. (Aaker, 2010)

Brand association is anything relate to the preference of a brand (Aaker, 2010).

This factors in brand association assist in the building of brand image. Brand

image is seen as the perceptions-reasoned or emotional- consumers attach to

15

specific brands. Brand image consists of functional and symbolic brand beliefs. It

is based on the suggestion that consumers buy not only a product but also the

image association of the product, such as power, wealth, sophistication, and most

importantly identification and connection with other users of the brand (Evans et

al., 2006, p.138).

2.1.4.1 Relationship of brand association toward purchasing decision

Kapferer (2012) described that a brand is a shared desirable and exclusive idea

embodied in products, services, places, and or experiences. The more this idea is

shared by a large number of people, the more power the brand has. Therefore,

Brand Association will lead to favorable purchasing decisions for the brand, and

increased brand equity. Positive associations attached to the brand enable

customers to process and recall information about the various brands that are very

useful in the purchase decision process (Khasanah, 2013). The high brand

associations can be a sign of the high quality, commitment, and encourage

consumers to think of a particular brand in their purchase decision making process

(Yaseen etal., 2011).

2.1.5 Brand awareness

“Awareness refers to the strength of a brand’s presence in the consumer’s mind. If

consumers’ minds were full of mental billboards–each one depicting a single

brand–then a brand’s awareness would be reflected in the size of its billboard.”

(Aaker, 2010, pp.10)

David Aaker mentioned that Brand Awareness is refers to the ability of a potential

consumer to recall and recognize the brand, linking the brand with its

corresponding product class. Consumers remember brands in different ways, the

ways started from the recognition, recall, to top of mind, and finally become

16

dominant. Brand equity can thus remarkably be enhanced by creating awareness

for the brand. (Aaker 2010, pp.10-17)

Development of brand awareness on a product or a company consisting of four

stages: unawareness brand, brand recognition, brand recall, brand top of mind,

brand dominance of mind (Chieng F. Y. L., and Goi C. L., 2011).

1. Brand unawareness, consumers are not aware of the existence of an existing

brand that is circulating in the market.

2. Brand recognition, a minimum level of brand awareness. Perhaps the buyers

know the brand, but do not remember, and buyers will remember having seen

or reminded again.

3. Brand recall, consumers need to be helped to revitalize the brand. Here lies the

need for advertising and services.

4. Top brand, consumers have a strong memory of the main categories of a

product, it could be a brand that first appeared in the memory.

5. Dominance brand of mind, consumers only considering only a single brand or

brand. This concept is most often used in the form of brand loyalty.

Consumer awareness of the brand can be used by companies as a means to

provide a deeper understanding of the brand to consumers ( Humdiana , 2005) .

Companies can create brand awareness values so that consumers can better

understand the brand message to be delivered ( Humdiana , 2005) .

2.1.5.1 Relationship of brand awareness toward purchasing decision

Sadat (2009) explained the role of brand awareness in purchase decision. If a

brand is in consumers’ memory, then the brand will be considered for selection in

the purchase decision. In addition, customers will also always consider the brands

top of mind before deciding to buy a particular product, despite the fact that not

all brands occupying top of mind also privileged customers. When customers are

familiar with the product, they will involve in a repeated purchase decision as

their preference (Elliott, 2011, pp. 4 & 5). Therefore, recollecting the brand is

17

important. Because in general if a brand is in the consumers’ mind, the brand will

be considered for selection in a purchase decision (Khasanah, 2013). At the time

of the purchase decision made, brand awareness plays an important role.

Customers tend to buy brands that are well known because they feel safe with

something that is known and thought well-known brands are reliable and quality

can be accounted for (Lee & Leh, 2011).

2.1.6 Perceived quality

Consumers often judge the quality of product or service on the basis of a variety

of informational cues that they associate with the product (Schiffman & Kanuk,

2000, p.145). Some of these cues are intrinsic to the product and others are

extrinsic. Other study about the concept of product quality was analyzed by

Espejel et al. (2007) which categorized product quality under the two main

different perspectives; the objective quality and the perceived quality (Espejel et

al., 2007). Objective quality refers to the technical, measurable and verifiable

nature of products/services, processes and quality controls. Subjective or

perceived quality refers the consumers’ value judgments or perceptions of quality.

Intrinsic cues are concern in physical characteristics of the product itself, such as

color, flavor, aroma, form and appearance; while extrinsic cues are related to the

product but not in the physical part such as brand name, stamp of quality, price,

country of origin, packaging, advertising and production information (Schiffman

& Kanuk, 2000, p. 146; Espejel et al., 2007).

Perceived quality is the extent to which a brand is brilliant and considered to

provide good quality of product and service in comparing with the rivalry

products. Perceived quality is at the heart of what customers purchase and in order

to generate high quality, an understanding of what quality means to various

customer segments is required. Creating a quality product or service is only a

partial victory, perceptions must be created as well (Aaker, 2010, pp.19-20).

18

Perceived quality is attached to consumers; a perception that describes the total

quality of product (Hajipour, et al., 2013). Erenkol and Duygun (2010) explained

that perceived quality is different from quality of the product itself because the

perceived quality is the buyer’s subjective judgment of the product. Perceived

quality can be explained through the consumer’s evaluation on degree of

excellence of a product (Alfred, 2013). Positive impression of quality can be built

through identification of the dimensions of quality that are important to customers,

and build on the quality perception of the brand on that important dimension

(Zhou & Ziang, 2011).

2.1.6.1 Relationship of perceived quality toward purchasing decision

Perceived quality of the brand described overall customer response to the quality

and benefits offered by the brand (Lee &Leh, 2011). Perceived quality is a factor

that is the reason why the brand is being considered and purchased (Khasanah,

2013). This perception of quality affects what brand will be selected by the

customer to the next can take the decision to make a purchase on a brand (Yaseen

etal., 2011). Hajipour, et al. (2013) also added that high quality will directly affect

to purchase decision, supporting the price and also the loyalty. Perception of

quality is the reason to buy a product (Moradi &Zarei, 2011). According to the

study conducted by Choy, et al., (2011) perceived quality influence the consumer

purchasing decision through the reason to buy and differentiating the brand from

competing brands.

2.1.7 Theory of purchasing decision

A decision involves a choice between two or more alternative, action or behaviors.

Consumers actually choose between alternative behaviors concerning from each

of objects even though marketers regularly refer to choices between objects (Peter

and Olson, 2005, p.165)

19

Consumer decision-making process can sometimes be a complex process and

consumers can rely on the information about specific products and brands and

their consumer experience gathered to reach purchase decision (Jiang&

Rosenbloom, 2005). Operational definition of the purchase decision can be

defined that every consumer has 5 stages of decision making, especially in

complex decision situations: recognizing the problem, research to gather

information, evaluate options, and make decisions about purchases, behavior after

purchase. Purchasing process is started much before the actual time of purchase

and its consequences continue until long time after the purchase.

Kotler (2006) revealed that one might have different roles in any purchasing

decision. various roles that may occur are as follows:

1. The initiator, the person who first suggested or thinks of the idea of buying

a particular product or service.

2. The influencer, that is, those who view or counsel taken into account in

making a final decision.

3. The decider, the one that will determine the decisions regarding the

product to be purchased, payment method, where make a purchase.

4. Buyer, that a person who makes a purchase.

5. User, the person or persons who enjoy or use the product or service.

Purchase decision making takes place in five stages coherently. Maybe not every

consumer goes through all these stages when they make a decision to buy, due to

the fact that some stages may be skipped depending on the type of purchase

20

Table 2.1 Five Stages of consumer decision making

Stages Explanation Psychological Process

Problem Recognition

Consumer perceives a need and

becomes motivated to solve

problems

Motivation

Information Search

Consumer search the information

needed to make a purchasing

decision

Perception

Alternative

Evaluation

Consumer compares different

brands and products Attitude

Purchase Decision Consumer decides to buy branded

products Integration

Post Purchase

Behavior

Consumers evaluate their

purchasing decision Learning

Source: Kotler (2012)

2.2 Previous research

1. Impact of Brand Equity on Customer Purchase Decisions: An Empirical

Investigation with Special Reference to Hatchback Car Owners in Central

Haryana by Ashutosh Nigam and Rajiv Kaushik (2011). The research result

showed that strong brand equity has significant influence on the purchasing

decision of the cars. Strong brand equity allows the companies to retain

customers better, service their needs more effectively, and increase profits. The

study concluded that brand loyalty has the highest significant impact on

purchase decision, followed by brand association, perceived quality, and brand

awareness.

2. The influence of Brand Equity dimensions on purchase decisions of Telkomsel

cellular phone card in Malang by Nur Ida Iriani (2011). Brand Awareness

Variables not have influence on Consumer Purchase Decisions, whereas

impression for variable quality, brand associations, and brand loyalty has a

positive influence on Consumer Purchase Decision.

21

3. The impact of brand on Thai female consumer in purchase decision of foreign

makeup product by Ponbamrungwong and Sirada Chandsawang (2009). Brand

equity does not totally affect Thai female consumer in their purchasing

decision of buying foreign make up products. The respondents have the

concept of brand loyalty, brand awareness, brand associations and perceived

quality in their mind but they did not generally relate the whole concepts to

make a final purchase decision of foreign makeup products.

4. The Analysis of Brand Equity towards Purchasing Decision of Motorcycle

(Case Study of PT Yamaha Agung Motor Semarang) by Wahyu (2012). This

research showed that Brand Awareness, Perceived Quality, Brand Association,

and Brand Loyalty have significant influence towards motorcycle Purchasing

Decision of PT Yamaha Agung Motor consumers Semarang.

5. The Analysis of Brand Equity towards Purchasing Decision of Pocari Sweat

Isotonic Drink by Darma (2012). This research showed that brand awareness,

brand associations and perceived quality significantly influences the

purchasing decisions of Pocari Sweat Isotonic Drink among Diponegoro

University students.

22

2.3 Theoretical Framework

Figure 2.1 Theoretical Framework

Source: Based on Aaker (2010) Brand Equity model

2.4 Assumptions and Hypothesis

This research will be focus on the Nokia “smartphone” purchasing decision. The

researcher assumes that every smartphone by Nokia is all the same, not to mention

the type, operating system, or specification. It is because the object of this

research is President University student batch 2011-2013 who have used or who

are currently using Nokia Smartphone.

A hypothesis is a proposed explanation for a phenomenon. For a hypothesis to be

a scientific hypothesis, the scientific method requires that one can test it. During

this research, the variables will be analyzed as factors that may influence Nokia

Smartphone purchasing decision.

Purchasing

Decision

(Y)

Brand

Loyalty (X1)

Brand

Association

(X2)

Brand

Awareness

(X3)

Perceived

Quality (X4)

23

Thus the hypotheses are:

1. Ho1: There is no partial significant influence of brand loyalty towards

purchasing decision of Nokia Smartphone among president university student

Ha1: There is partial significant influence of brand loyalty towards purchasing

decision of Nokia Smartphone among president university student

2. Ho2: There is no partial significant influence of brand Association towards

purchasing decision of Nokia Smartphone among president university student

Ha2: There is partial significant influence of brand association towards

purchasing decision of Nokia Smartphone among president university student

3. Ho3: There is no partial significant influence of brand awareness towards

purchasing decision of Nokia Smartphone among president university student

Ha3: There is partial significant influence of brand awareness towards

purchasing decision of Nokia Smartphone among president university student

4. Ho4: There is no partial significant influence of perceived quality towards

purchasing decision of Nokia Smartphone among President University students

Ha4: There is partial significant influence of perceived quality towards

purchasing decision of Nokia Smartphone among President University

Students

5. Ho5: There is no simultaneous significant influence of brand loyalty, brand

association, brand awareness, and perceived quality toward purchasing

decision of Nokia Smartphone among president university student

Ha5: There is simultaneous significant influence of brand loyalty, brand

association, brand awareness, and perceived quality toward purchasing

decision of Nokia Smartphone among president university student

24

CHAPTER III

RESEARCH METHODOLOGY

3.1 Research Design

Two types of method used in the making of scientific research, qualitative and

quantitative method. The type of data, research instrument, research process, and

the purpose of the research are factors that differentiate qualitative with

quantitative method. Quantitative method is focused on the number and utilizing

statistical tools, while qualitative method is focused on utilizing and comparing

theories from various sources. Both qualitative and quantitative methods have it

own advantages and disadvantages. The researcher uses the quantitative method

in conducting this research.

Quantitative research made using scientific tools and measurements, means the

results can be measured or counted. Information in quantitative method should be

able to be counted mathematically. It is usually collected through surveys from

numbers of respondents that is randomly selected. It is analyzed using statistical

methods best used to answer when, what, and who questions

The quantitative research before based on the statistic data that gathered from the

field. Statistic refer to the numerical information which also define the science of

collecting, analyzing, organizing, deducting, presenting and interpreting data to

provide a clear perspective of data to make an accurate and effective decision and

conclusion (Lind, Marchal & Wathen, 2010). The analysis start from defining the

problem, conduct the model, collect the required input data, developing a solution,

testing the solution, and summarize the results and implementing the results in

quantitative method (Render, Stair, Jr, &Hanna, 2006).

25

3.2 Research Framework

The main topic of this research is the impact of brand equity and perceived quality

on purchase decision. As described in Chapter 2, Brand Equity is the most

valuable asset that a company has, and it creates value for customers and firms.

Therefore, perceived quality, brand awareness, brand associations, and brand

loyalty affects the purchase decision.

Questionnaires were checked for validity and reliability test. Pearson correlation

matrix used to measure the validity and Cronbach Alpha used to measure the

reliability of the questionnaire. Pearson correlation matrix will indicate the

direction, strength, and significance of the bivariate relationships among all the

variables that were measured at an interval or ratio level (Sekaran and Bougie,

2010, pp.321). Cronbach Alpha is a reliability coefficient that shows how well the

items in a set are positively correlated to one another (Sekaran and Bougie, 2010,

pp.324).

In this research, SPSS was utilized to analyze the data. Finally, the points of

conclusion and recommendation are drafted. All steps conducted by the researcher

from problem identification to the result accomplishment are reflected in the

following figure of research framework.

Figure 3.1 Research FrFramework

Source: constructed by researcher

Problem

Identification

Problem

Statement

Literature Review

Theoretical

Framework

Research Design

Pre Questionnaire

Validity and Reliability

Distribute real

questionnaire

Data collection

Data analysis

Conclusions and

Recommendations

26

27

3.3 Sampling Design

Sampling Design referred to a process of selecting several essentials from a

population where the size of sample is expected to be as close as 100% or only

few errors. The data will be more accurate with larger sample. (Sugiyono, 2012).

3.3.1. Research Population

Population is defined as the entire group as specified by the objectives of the

research project. Population is a collection of all possible individual, object, or

measurement of interest (Lind D.A, Mason W.G & Marchal, R.D., 2005). The

population of this research is President University Student all major batch 2011,

2012, and 2013 with total 2,143 persons.

3.3.2. Research Sample

A formula needed to figure out the sample size of this research. The researcher

use Slovin formula to determine the sample size of this population with 10%

precision.

Slovin Formula:

� = �(1 + ���)

Where: n = sample size

N = population size

E = margin of error * desired

Therefore:

� = �(1 + ���)

28

� = 2143(1 + 2143(0.10)�)

� = 214322.43

� = 95.54 = 96

Thus, the researcher will distribute the questionnaire for 96 respondents.

3.4 Research Instruments

The researcher uses primary data to collect information. 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.

In this research, there are three independents variables (X) and one dependent

variable (Y) and every variable has few statements. Brand Loyalty (X1), Brand

Association (X2), Brand Awareness (X3), Perceived Quality (X4), and

Consumer’s Loyalty (Y).

Tables 3.1 Illustration of Likert Style Rating scale Questionnaires

No. Statements SD D N A SA

1 1 2 3 4 5

Source: Self Constructed

To measure this primary data, the researcher used likert scale which was

developed by Rensis Likert because it is the most frequently used variation of the

summed rating scale. The type of rating is agreement and there are five categories,

Strongly Disagree (SD), Disagree (D), Neutral (N), Agree (A), and Strongly

Agree (SA).

29

Table 3.2 Operational Definition

Variables Dimension Statement Code

Brand

Loyalty

(X1)

Customers’

Commitment

I consider to be loyal to Nokia BL1

I would buy Nokia Smartphone

product even its increasing the price BL2

Attracting New

Customer

I would love to recommend Nokia to

my friend BL3

Brand

Association

(X2)

Reason to buy Nokia has very unique brand image

compared to other competing brands BAS1

Create positive Attitude

I admire people who are using Nokia

Smartphone BAS2

I trust Nokia branded Smartphone BAS3

Brand

Awareness

(X3)

Familiarity liking I am familiar with Nokia

Smartphone BAW1

Ability to recognize

brand

Nokia is the first brand that shows in

my mind BAW2

Ability to memorize

product variant

I can recognize Nokia products

quickly among other competing

brands

BAW3

Perceived

Quality

(X4)

Product Quality I trust the quality of Nokia

Smartphone PQ1

Reason to buy Nokia Smartphone products offer

excellent features PQ2

Product quality Product from Nokia would have very

good quality PQ3

Purchasing

Decision

(Y)

The actual selection of

a specific product

Nokia is my first choice when

deciding to buy a Smartphone PD1

Consideration in buying I purchase Nokia Smartphone

because of my own decision PD2

Suitable with

customers’ needs

I purchase Nokia Smartphone

because it meets my needs PD3

Source: self constructed based on five asset model of brand equity by Aaker

(2010) and from other various sources

30

3.5 Reliability and Validity

3.5.1 Validity

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:

� = � ∑ �� − (∑ �)(∑ �)�� ∑ �� − (∑ �)� �� ∑ �� − (∑ �)�

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

31

Σ XY = the sum of the product of X and Y

According to Sugiyono (2006) in Rahmawati research (2005) 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= 0.3, where if

r<0.3 is categorize as invalid. In this research, the researcher use 0.10 for

significance level in the validity test.

3.5.2 Reliabilty

Refers to (Cooper & Schindler, 2006, pp352), “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, Lind, D. A. (2002).

∝= � ∙ �̅1 + (� − 1) ∙ �̅

Where:

α = instrument reliability’s coefficient

r = mean correlation coefficient between variables

N = number of questions

The value of Cronbach Alpha is ranged from 0 to 1, where the higher the value,

the higher reliability it has. Typically, the value above 0.7 is acceptable (Nunnaly,

1978 cited from Khalid, Hilman, & Kumar, 2012)

32

3.6 Data Collection Procedure

3.6.1 Data Collection

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:

3.6.1.1 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

for third parties who are 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 three independent variable

there is Brand Image, Brand Associations, Promotions and one dependent

Variable that is Consumers Loyalty. The questionnaire is print and copy in the

form of papers in which distributed to all students in President University despite

of major, batch and gender.

33

3.6.1.2 Secondary data

According to Malhotra and Peterson (2002) secondary data is “data collected for

some purpose other than the problem at had”. In this study the researcher collect

and get the secondary data from some of these sources in internet.

3.6.1.3 Measurement Scale

The Likert Scale was developed by Rensis Likert. 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 and Schindler (2006).

In this research, data is interpreted using five-Likert Scale. The Likert scale is

designed to examine how strongly subjects agree or disagree with statements on a

five-point scale (Sekaran, Bougie, 2010).

Table 3.3 Likert Scale

Grading Statement Score

Strongly Agree 5

Agree 4

Neither Agree nor Disagree

(Neutral) 3

Disagree 2

Strongly Disagree 1

(Source: Sekaran, Bougie, 2010)

Likert Scales have the advantage that they do not expect a simple yes / no answer

from the respondent, but rather allow for degrees of opinion, and even no opinion

at all. Therefore quantitative data is obtained, which means that the data can be

analyzed with relative ease.

34

3.6.2 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.

3.7 Testing the Hypothesis

To conduct this study, the researcher used multiple regression as the function or

formula to see and verify the relationship between independent variables (Brand

Images, Brand Association and promotion) and dependent variable (Consumers

Loyalty), and also to see what is the most significant factors from independent

variables that affecting the dependent variable.

3.7.1 Multiple Regressions

In this study, the researcher uses multiple regression tools to conduct the research.

According to Stair, JR and Hanna, (2009), “multiple regression models is a

practical extension of simple regression in which it allow user to build a model

with several independent variables”.

Y= βo + β1X1 + β2X2 + β3X3 + β4X4 + ε

Where:

Y = Consumers Purchasing Decision (Dependent Variable)

β0 = Y intercept

β 1 – β 4 = Regression Coefficient

35

X1 = Brand Loyalty (independent variable)

X2 = Brand Associations (Independent Variable)

X3 = Brand Awareness (Independent Variable)

X4 = Perceived Quality (Independent Variable)

ε = Random Error

In order to see the correlation between dependent variable and independent

variables in this study, there are three tests or requirements that have to pass in the

regression model. There are normality test, multicollinearity test and

heteroscedasticity test.

3.7.2 Normality Test

Normality test is to test the independent variable and the dependent variable in the

regresion equation output. The regresion equation is good, if the data independent

and dependent variable is bound to normal or near normal distributed. The

researchers will 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.

36

3.7.3 Multicollinearity 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:

���� = 11 − ��

And R2 = SSR/SST

Where:

R2K = The R2 value obtained by regressing the kth

predictor on the remaining

predictors.

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.

37

3.7.4 Heteroscedasticity Test

Heteroscedasticity 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 Heteroscedasticity test.

3.7.5 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:

� = ! �/#$!(1 − �)/(� − # − 1)$

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 accepted 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 0, if significant F > 0.05, accept H0

Ha: at least there is one β ≠ 0, if significant F < 0.05, reject H0

38

3.7.6 T Test

T-test is another statistical test which is used to test the significance of the

multiple regressions. In contrast with F-test that is used to see the influences of

the predictor variables collectively, t-test is used to see the influence of each

predictor variable in multiple regression models toward the response variable. The

rule of accepting or rejecting the null hypothesis is same with F-test.

If significance level < 0.05, then H0 is rejected and H1 is accepted. It means that

the predictor variable has significant influence to the response variable.

If significance level > 0.05, then H0 is accepted and H1 is rejected. It means that

the predictor variable has no significant influence to the response variable. By

using the t-test, the researcher is able to find out which variable have more

influence in affecting purchase decision of Nokia Smartphone. The T-test is

formulated as follows:

% = &' − (')&'

Where:

%= Statistic test for t distribution

b1= Sample Slope

('= Slope of population

)&'= Standard error of the slope

3.7.7 Coefficient of determination (adjusted R2)

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.

39

The value adjusted R Square is range from 0 till 1. If the value adjusted R square

is close to 0, means that the capability of independent variable to explain the

dependent variable is week. In other side if the value of adjusted R square is close

to 1, means that the capability of independent variable to explain the dependent

variable in this research is strong.

ANALY

4.1 Company Pro

Nokia is a Finnish comp

long history dating as f

later be modern mobil

previously been a v

telecommunication mar

significant share of the S

in recent quarters, when

relatively secure share

company also continues

the Middle East and Afr

Across the North Ameri

sales.

Symbian was the leadin

well in the global marke

system and also App

announcement that they

company was hoping to

CHAPTER IV

YSIS AND INTERPRETATION

rofile

pany head-quartered in Espoo, Finland. The com

far back as 1865 and first began developing w

bile phone technology in the 1960s. The com

very strong competitor in the mobile p

arket. While the company has struggled to m

e Smartphone market, and has also recorded mult

en it comes to feature phones, the company does

e of the market when compared to other ven

es to perform well in the Asia-Pacific region as

frica was they have previously recorded the grea

rican market however, the company has recorded

ing OS developed by Nokia. Until 2010, it was p

rket but has been overtaken by the very dominan

pple’s iOS. As of February 2011, Nokia

ey would be switching to the Microsoft Window

to be able to make a comeback in the Smartpho

40

mpany has a

what would

ompany has

phone and

maintain a

ultiple losses

s maintain a

endors. The

as well as in

reatest sales.

ed very poor

s performing

ant Android

made the

ws OS. The

hone market

41

with the adoption of the Windows operating system. In 2012 however, sales saw

another decrease when compared to the previous 2 years.

In 2011, Superbrands – the world’s leading independent arbiter of brands –

conducted a survey to find the top 50 consumer brands in China. It was the largest

ever survey of its kind in China – and Nokia came out on top. The Superbrands

2011 China ranking surveyed over 2,000 consumer brand preferences across 150

product categories. Nokia’s performance across a range of criteria - including

strong market dominance, longevity, goodwill, customer loyalty and overall

market acceptance - contributed to the number one spot.

In September 2013, Nokia announces that it has entered into an agreement with

Microsoft whereby Microsoft would purchase substantially all Devices &

Services, the Nokia business which makes mobile phones and smartphones. The

transaction is subject to approval by Nokia's shareholders, regulatory approvals

and other closing conditions. Building on the partnership with Nokia and the

increasing success of Nokia's Lumia smartphones, Microsoft aims to accelerate

the growth of its share and profit in mobile devices through faster innovation,

increased synergies, and unified branding and marketing. For Nokia, the

transaction is expected to be significantly accretive to earnings, strengthen its

financial position, and provide a solid basis for future investment in its continuing

businesses.

Here are some awards and accolades Nokia had in recent years:

1. 2011 Forbes Top 10 World’s Most Sustainable Companies (#4)

2. Top spot in Greenpeace’s Guide to Greener Electronics 2010 (eight

consecutive #1 positions since September 2008)

3. Universum’s Top 50 World’s Most Attractive Employers for Students

2011

4. NASSCOM’s Excellence in Gender Inclusivity in India 2010

5. 2010 Best Brand Award in Bangladesh (#1 for third consecutive year)

6. 2010 Bloomberg Business Week Top 25 Most Innovative Companies

42

7. Top 50 Maclean’s Socially Responsible Companies in Canada 2010

8. Economic Times Most Trusted Brand in India 2010 (#1)

9. UK Nordic Business award for Research and Development 2010

10. Modern Consumer magazine’s 2010 Brazil’s “Companies that Most

Respect the Consumer” (#1)

These are some brief history of Nokia:

1. 1865 Nokia is founded as a maker of pulp and paper.

2. 1898 Finnish Rubber Works is founded.

3. 1912 Finnish Cable Works is formed.

4. 1915 Nokia shares are first listed on the Helsinki exchange.

5. 1967 Nokia merges with Finnish Rubber Works and Finnish Cable Works

to form Nokia Corporation.

6. 1979 Mobira Oy is formed as a mobile phone company.

7. 1982 Nokia acquires Mobira, which later becomes the Nokia Mobile

Phones division.

8. 1986 Company markets internationally the first Nokia mobile telephone.

9. 1993 The first Nokia digital cellular phone hits the market.

10. 1998 Nokia surpasses Motorola as the world's number one maker of

mobile phones.

11. 2002 Nokia rolls out its first 3G phone, the Nokia 6650, enabling users to

browse the web.

12. 2003 Nokia launches its Nokia 1100 handset. With over 200 million units

shipped, it was the best-selling mobile phone of all time and the world's

top-selling consumer electronics product.

13. 2005 Nokia celebrates selling 1 billion mobile phones worldwide.

14. 2006 Olli-Pekka Kallasvuo becomes president and CEO of Nokia.

15. 2007 Nokia credited as 5th most valued brand in the world. Apple enters

the Smartphone market with the iPhone, posing a threat to Nokia's

dominance.

43

16. 2009 Nokia posts its first quarterly loss in more than a decade – a year

after handset maker HTC releases the HTC Dream, the first phone using

Google’s Android operating system. Nearly 60 per cent of smartphones

today are powered by Android.

17. 2010 Struggling to keep up with the iPhone and Android devices, Nokia

hires former Microsoft executive Stephen Elop as chief executive.

18. 2011 Elop announces a strategic partnership with Microsoft, saying Nokia

will base its flagship smartphones on the company's Windows mobile-

operating system and move away from its own Symbian system.

19. 2012 Samsung overtakes Nokia as the world's largest maker of mobile

phones.

20. 2013 Microsoft announces plans to buy Nokia's mobile phone business in

a €5.44 billion (£4.61bn) deal, in which will Stephen Elop join the

software giant.

4.2 Data Result Analysis

This chapter will showed all the findings that the researcher got from this research.

It will be divided into two main issues. The data analysis will be given as a results

from SPSS V.17.

4.2.1 Pilot Test

A pilot or feasibility study is a small experiment designed to test logistics and

gather information prior to a larger study. To test to the reliability and validity of

items constructed in the questionnaire, pre-test was conducted to 30 first

respondents to conduct the pilot test before the real survey was distributed.

Response of all questions was captured in Likert scale of 1 to 5 scales. Data

computation was performed using a Statistics software package SPSS V.17. The

result of reliability and validity test for the questionnaire is summarized as

follows:

44

Table 4.1 Validity and Reliability Results

Variables

Corrected

item total

correlation

R validity Cronbach's

alpha reliability

Brand

Loyalty (X1)

BL1 0.872 0.361 valid

0.893 Reliable

(α > 0.7) BL2 0.800 0.361 valid

BL3 0.707 0.361 valid

Brand

Association

(X2)

BAS1 0.794 0.361 valid

0.820 Reliable

(α > 0.7) BAS2 0.696 0.361 valid

BAS3 0.568 0.361 valid

Brand

Awaraness

(X3)

BAW1 0.628 0.361 valid

0.870 Reliable

(α > 0.7) BAW2 0.865 0.361 valid

BAW3 0.778 0.361 valid

Perceived

Quality (X4)

PQ1 0.625 0.361 valid

0.812 Reliable

(α > 0.7) PQ2 0.694 0.361 valid

PQ3 0.675 0.361 valid

Purchasing

Decision (Y)

PD1 0.579 0.361 valid

0.814 Reliable

(α > 0.7) PD2 0.746 0.361 valid

PD3 0.676 0.361 valid

Source: Primary data – SPSS V.17

4.2.1.1 Reliability Test

Cronbach’s alpha is used in determining the reliability of individual scale of

constructs dimension to test the reliability. According to Hair (2003), the

Cronbach’s alpha higher than 0.7 is considered as acceptable. It reflects how well

the items were positively correlated to each other. The computed Alpha values for

each research variables as shown in Table 4.1, the α value for BL (0.893), BAS

45

(0.820), BAW (0.870), PQ (0.812) and PD (0.814) are all higher than 0.07 which

means that the scale appeared to have good dependability.

4.2.1.2 Validity Test

Pearson’s Product Moment r is used to test the items’ validity. The validity items

come from comparing the corrected item-total correlation value and the r table.

The significance level of 5% was chosen for two tailed, therefore based on the r

table, the r for n = 30 with df = n - 2 = 30 – 2 = 28 is 0.361. The items which have

r computation greater than 0.361 will be valid and items which have r

computation less than 0.361 will be invalid. From the results in Table 4.1, it

shows that all of the items were having r computation greater than 0.361 which

means those are valid.

4.2.2 Respondent Information

Stated on the questionnaire that respondent needed to fulfill general information

about their background. Researcher only has two questions for that, which are

gender and batch. From total of 96 respondents, 78 respondents are male (81%)

while 18 respondents are female (19%). There are 56 students from batch 2011

(58%), 24 students from batch 2012 (25%), and 16 students from batch 2013

(17%) contributed in fulfilling the questionnaire. The respondent information is

explained by figure 4.1 and figure 4.2 below.

Figure 4.1 Respondents

Source: Primary Data –

Figure 4.2 Respondent

Source: Primary Data –

25%

nts Gender Information

– Microsoft Excel 2010

nt Batch Information

– Microsoft Excel 2010

Male

81%

Female

19%

Gender

58%25%

17%

Batch

2011 2012 2013

46

47

4.2.3Multiple Regression

In order to do the statistical tests, the data is required to be normally distributed.

Normality tests are used to determine if a data set is well-modeled by a normal

distribution and to calculate how liable it is for a random variable underlying the

data set to be normally distributed. In this research, the researcher used histogram

and P-P plot (Probability – Probability) to test the normality of each data.

Figure 4.3 Histogram

Source: Primary data – SPSS V.17

It can be concluded that the data is normally distributed as the histogram formed a

bell-shaped curve. This suggests that the regression model to meet the assumption

of normality.

48

Figure 4.4 Normal P-P Plot of Regression Standardized Residual

Source: Primary data – SPSS V.17

It can be seen that the normal probability plot is basically straight and the plot is

spreading around, surrounding the diagonal direction of the line which means that

the data is sampled from a normal distribution. Moreover, The P-P above also

shows that the data points are slightly deviated from the fitted line. They

consistently show that the variable is normally distributed.

4.2.4 Multicollinearity

Variance inflation factor (VIF) or Tolerance will be used to check the

Multicollinearity test. The VIF score need to be less than 10 and the tolerance

need to be less than 1 in order to indicate that there is no multicollinearity among

predictor variables. If VIF for one of the variables is around or greater than 10 and

tolerance is around 1 or greater, there is multicollinearity associated with that

49

variable and it needs to be deleted. In this research, the multicollinearity test is

conducted by SPSS V.17. The scores shown on the Table 4.13 below:

Table 4.2 Tolerance and VIF scores

Model Collinearity Statistics

Tolerance VIF

1 (Constant)

Brand Loyalty 0.374 2.670

Brand Association 0.396 2.528

Brand Awareness 0.427 2.342

Perceived Quality 0.418 2.393

Source: Primary data – SPSS V.17

The table shows that the variables have VIF values for Brand Loyalty 2.670,

Brand Association 2.52, Brand Awareness 2.342, and Perceived Quality 2.393.

The tolerance score are 0.374 for Brand Loyalty, Brand Association 0.396, Brand

Awareness 0.427 and Perceived Quality 0.418. Which means that there is no

multicollinearity exists in the model since VIF values are all less than 10 and

tolerance value are all less than 1. Thus, there is no existence of perfect linear

relationship among all or some predictor variables. This result gives more

confidence that the coefficient estimated are more precise.

4.2.5 Heteroscedasticity Test

Heteroscedasticity may occur for many reasons, but typically occurs when

responses are not normally distributed or when the variance of the error terms

differs across observations. The result of the test can be seen by looking at the

distribution of residual values towards the predicted values in the scatter plot. If

the distribution spread randomly around zero and does not make any systematic

pattern such as increasing or decreasing pattern, then the Heteroscedasticity

50

assumption is fulfilled. In order to test the Heteroscedasticity, the scatter plot is

constructed as:

Figure 4.5 Scatterplot

Source: Primary data - SPSS V.17

From the figure above, the pattern of the plot is spread randomly without creating

systematic pattern between the variables such as increasing or decreasing pattern.

It means that there is no Heteroscedasticity occurred between independent and

dependant variable.

4.2.6 Testing the Hypothesis Result

The researcher will used F test and T test to determine which hypothesis that have

to accepted or rejected.

51

4.2.6.1 F Test

F test is used to test the effect of all independent variables toward independent

variable simultaneously.

Table 4.3 F Test Result - ANOVA

ANOVAb

Model Sum of Squares df Mean Square F Sig.

1 Regression 20.815 4 5.204 20.648 .000a

Residual 22.934 91 .252

Total 43.749 95

a. Predictors: (Constant), AVE_PQ, AVE_BAW, AVE_BAS, AVE_BL

b. Dependent Variable: AVE_PD

Source: Primary data – SPSS V.17

The ANOVA result above shows the level of significant 0.000. And also the F

Value (20.648) is greater than F table (2.71). It means that Ha5 is accepted and

H05 is rejected. Therefore, there is simultaneous significant influence of brand

loyalty (X1), brand association (X2), brand awareness (X3), and perceived quality

(X4) toward purchasing decision (Y) of Nokia Smartphone among president

university student.

4.2.6.2. T Test

T-test for the partial regression coefficient is proposed to determine how

significant the influence of one variable independent (Brand Loyalty, Brand

Association, Brand Awareness, Perceived Quality) independently in explaining

the dependent variable (Purchase Decision). T table used in this test is 1.986.

52

Table 4.4 Coefficients – T Test

Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

Collinearity

Statistics

B Std. Error Beta Tolerance VIF

1 (Constant) .841 .353 2.378 .019

AVE_BL -.345 .126 -.340 -2.737 .007 .374 2.670

AVE_BAS .421 .125 .406 3.362 .001 .396 2.528

AVE_BA

W

.285 .120 .276 2.372 .020 .427 2.342

AVE_PQ .385 .124 .363 3.094 .003 .418 2.393

a. Dependent Variable: AVE_PD

Source: Primary data – SPSS V.17

From the result in Table 4.4, if written in the standardized form of the equation,

the regression is as follows:

Y = - 0.340 X1 + 0.406 X2 + 0.276 X3 + 0.363 X4

Where,

Y = Purchase Decision

X1 = Brand Loyalty

X2 = Brand Association

X3 = Brand Awareness

X4 = Perceived Quality

53

4.2.6.2.1 Brand Loyalty toward Purchasing Decision

The data shows that Brand Loyalty has significance level 0.007 which is less than

0.05. Therefore, Ha1: “There is partial significant influence of brand loyalty

towards purchasing decision of Nokia Smartphone among president university

student.” is accepted and Ho4 “There is no partial significant influence of brand

loyalty towards purchasing decision of Nokia Smartphone among president

university student.” is rejected. The regression coefficient is -0.345 which means

brand loyalty have negative impacts on Nokia consumer purchasing decision.

4.2.6.2.2 Brand Association toward Purchasing decision

The data shows that Brand Association has significance level 0.001 which is less

than 0.05. Therefore, Ha2 “There is partial significant influence of brand

association towards purchasing decision of Nokia Smartphone among president

university student.” is accepted and Ho2 “There is no partial significant influence

of brand association towards purchasing decision of Nokia Smartphone among

president university student.” is rejected. The regression coefficient is 0.421

which means the stronger the image of Nokia in consumers’ mind, the higher

consumers’ purchasing decision of Nokia.

4.2.6.2.3 Brand Awareness toward Purchasing Decision

The data shows that Brand Awareness has significance level 0.020 which is less

than 0.05. Therefore, Ha3 “There is partial significant influence of brand

awareness towards purchasing decision of Nokia Smartphone among president

university student.” is accepted and Ho3 “There is no partial significant influence

of brand awareness towards purchasing decision of Nokia Smartphone among

president university student.” is rejected. The regression coefficient is 0.285

which means the stronger the image of Nokia in consumers’ mind, the higher

consumers’ purchasing decision of Nokia.

54

4.2.6.2.4 Perceived Quality toward Purchasing Decision

The data shows that Perceived Quality has significance level 0.003 which is less

than 0.05. Therefore, Ha4: “There is partial significant influence of perceived

quality towards purchasing decision of Nokia Smartphone among president

university student.” is accepted and Ho4 “There is no partial significant influence

of perceived quality towards purchasing decision of Nokia Smartphone among

president university student.” is rejected. The regression coefficient is 0.385

which means the more consumers trust the quality of Nokia products, the higher

consumers’ purchasing decision of Nokia.

4.2.6.3 Coefficient Determination (R2)

Multiple Coefficient determination (r2) measures how many percentage of the

variation of predictor variable explained by the predictor variables. The r2 will

show the percentage at how many the variables can predict the influence to the

dependent variable. Using the SPSS V.17, and compute multiple regression, the

result of r2 is shown in table below.

Table 4.5 Model Summary

Model Summaryb

Mod

el R

R

Square

Adjusted R

Square

Std. Error

of the

Estimate

Change Statistics

R Square

Change

F

Change df1 df2

Sig. F

Change

1 .690a .476 .453 .50202 .476 20.648 4 91 .000

a. Predictors: (Constant), AVE_PQ, AVE_BAW, AVE_BAS, AVE_BL

b. Dependent Variable: AVE_PD

Source: Primary data – SPSS V.17

The result shows how much each variable significantly influence the dependent

variables. Adjusted R-square value for the regression model is 0.453. It means that

45.3% variation of Purchase Decision is explained by Brand Loyalty, Brand

55

Association, Brand Awareness, and Perceived Quality. The other 54.7% is

influenced by other variables which are not examined in this research.

4.3 Interpretation of Results

Using the regression, it is suggested that there is significant relationship between

brand loyalty, brand association, brand awareness, and perceived quality towards

purchasing decision of Nokia Smartphone. It is also discovered that the variation

explained obtained the value of adjusted R-square of 0.453. It means that 45.3%

of Nokia Smartphone consumers’ purchasing decision is explained by brand

loyalty, brand association, brand awareness, and perceived quality, while the other

54.7% is explained by other variables that are not stated in this research. The F-

test also showed the F value is 20.648 which is greater than 2.71. Thus, brand

loyalty, brand association, brand awareness, and perceived quality simultaneously

influence Nokia Smartphone consumers’ purchasing decision. The t-test also

showed the significance of each variable toward the purchase decision.

4.3.1 Brand loyalty towards purchasing decision of Nokia Smartphone

The significance level of brand loyalty to purchase decision is 0.007 with the t

value - 2.737. Thus, brand loyalty has negative significant influence towards

purchasing decision of Nokia Smartphone. It means the loyalty of Nokia

consumers in President University negatively affect their purchase decision. It

might be there are other external factors that made consumer loyalty negatively

influence Nokia purchasing decision. This is contrary with the previous research

result of Ashutosh Nigam and Rajiv Kaushik (2011). Their research showed that

improving consumers’ brand loyalty will improve consumer purchasing decision

of car in Central Haryana.

4.3.2 Brand association towards purchasing decision of Nokia Smartphone

The significance level of brand association to purchase decision is 0.001 which is

less than 0.05 with the t value 3.362. It means brand association significantly

56

influence purchasing decision of Nokia Smartphone. The results of these studies

indicate that the association of the brand can create good brand credibility in the

minds of customers, because the existence of a positive association benefits the

customer in mind, it will raises customer confidence over purchasing decisions

made. Positive benefit association is able to provide the reason for purchasing

decisions. The result support previous research by Jung and Sung (2006) that

stated Brand Association has significant influence with purchase decision

according to South Korean in USA.

4.3.3 Brand awareness towards purchasing decision of Nokia Smartphone

The significance level of brand awareness to purchase decision is 0.020 which is

less than 0.05 with the t value 3.372. It means brand awareness significantly

influence purchasing decision of Nokia Smartphone. Brand awareness has

significant positive influence on consumer confidence over purchasing decisions.

High level of brand awareness can cause customers to have confidence in the

purchase decision making. This support the result of the research by Wahyu

(2012) that stated Brand Awareness has significant influence towards motorcycle

Purchasing Decision of PT Yamaha Agung Motor consumers Semarang.

4.3.4 Perceived Quality towards purchasing decision of Nokia Smartphone

The significance level of brand awareness to purchase decision is 0.003 which is

less than 0.05 with the t value 3.094. It means brand awareness significantly

influence purchasing decision of Nokia Smartphone. Perceived quality affects the

confidence of customers’ purchase decision, as it creates a strong reason for

customers to buy, and considered able to meet the desired customer needs. This

support the result of research by Darma (2012) that stated perceived quality

significantly influences the purchasing decisions of Pocari Sweat Isotonic Drink

among Diponegoro University students.

57

CHAPTER V

CONCLUSION AND RECOMENDATION

5.1 Conclusion

In this chapter the researcher will presents the conclusion and recommendation

which derived from the analysis in chapter four about the Analysis of brand

loyalty, brand association, brand awareness, and perceived quality among students

at President University. This analysis is to find brand loyalty, brand association,

brand awareness, and perceived quality whether has influence simultaneously

toward Nokia Smartphone consumers purchasing decision and which factor of

these variables that significantly influences the Nokia Smartphone purchasing

decision partially among students at President University.

According to the analysis in chapter four, Brand Loyalty, Brand Association,

Brand Awareness, and Perceived Quality has simultaneously influence Nokia

Smartphone Purchase Decision among President University students. Here are the

conclusions that researchers get:

1. There is partial significant influence of brand loyalty towards purchasing decision

of Nokia Smartphone in President University. It means the loyalty of President

University students towards Nokia affect their purchasing decision. But brand

loyalty has negative relationship with purchasing decision of Nokia smartphone.

There might be other external factors that made the loyalty of Nokia has negative

influence towards smartphone purchasing decision. Probably as Nokia left behind

its competitor, Nokia consumers have an eye to other smartphone vendors

although they are loyal to Nokia because of its image. However, the term loyal

seems vague because consumer might still consume other brands than Nokia.

2. There is a partial significance influence of brand association towards purchasing

decision of Nokia Smartphone in President University. It means that Nokia has a

strong brand image among President University students Nokia Smartphone users.

58

That strong image will lead consumers into higher purchasing decision. President

University students choose Nokia Smartphone because it has a good image.

3. There is a partial significance influence of brand awareness towards purchasing

decision of Nokia Smartphone in President University. It shows that Nokia might

be in the top of mind among President University students. They are aware of

Nokia brand and it will lead into confidence of Nokia purchasing decision.

4. There is a partial significance influence of perceived quality towards purchasing

decision of Nokia Smartphone in President University. It means that the product

quality and its features are influencing the purchasing decision of Nokia

Smartphone products among President University students. President University

students purchase Nokia Smartphone because of the quality of its products and it

meets their needs.

5. There is a simultaneous significant influence of brand loyalty, brand association,

brand awareness, and perceived quality towards purchasing decision of Nokia

Smartphone in President University. However, those variables only explain 45.3%

of Nokia Smartphone purchase decision, while the other 54.7% should be

explained by other variables excluded from this research.

5.2 Recommendations

After conducting the research and obtained the results, researcher would like to

suggest some recommendations that can be used as consideration to improve

performance of all parties that could be related with this research topic.

5.2.1 For Nokia

Nokia still have a strong brand image even though there are many competitors in

Smartphone industries. Nokia is known for its strong and durable products.

However, people still aware about Nokia brand and trust the quality of Nokia

products. It shows that Nokia still has a strong foundation, which is the strength of

its brand. Therefore, there is still a chance that Nokia will be the market leader of

Smartphone vendor.

59

Nokia should pay more attention to its features and quality, as it influencing

Nokia purchasing decision. Nokia should be able to catch up with the market

trend, what are the consumer needs currently. There are many other vendors

competing to build their best smartphones. There are a lot of choices a consumer

have to decide. Nowadays Smartphone product varies by their quality, their

features, and also pricing strategy, as the target market is wide. Thus, in this

highly competitive market, Nokia should provide something unique and

competitive to attract more consumers.

Nokia might still have many loyal customers that need to be maintained their trust

and loyalty to Nokia. Hence, Nokia should always improve the quality of the

products, along with the quality of the brand. Nokia must sustain their strong

image to protect their loyal customers’ trustiness. Currently, business globally

especially in Smartphone industry is highly dynamic. Companies compete to

improve their qualities. Each year, a company may produce more than five

variants of Smartphone products. Consequently, Nokia should be able to keep

improving in this highly competitive market.

5.2.2 For Future Researchers

Future researcher may examine other brands with brand equity and purchasing

decision as the independent and dependant variables so it can be used as a

comparison for this research. It is also needed to do a further research by using

other factors beside brand loyalty, brand association, brand awareness, and

perceived quality. It is because independent variables in this research explained

45.3% of Nokia Smartphone purchasing decision among President University

students while the other 54.7% is explained by other variables that were not

explained in this research. Those other variables could be brand preference,

product mix, price mix, promotion mix, brand attitude, brand imagery, brand

feelings, trust attributes, etc. that are based on previous research. Future researcher

also may look for another population and larger population for this research. Thus,

future researcher can provide more precise results for brand loyalty, brand

association, brand awareness, and perceived quality toward purchasing decision.

60

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APPENDICES

Appendix 1 Questionnaire

Dear Respondent,

My name is Harley Maximiliaan, President University student majoring

International Business batch 2010. I am currently writing my skripsi about “The

Analysis of Brand Equity Towards Purchasing Decision of Nokia

Smartphone (A case study in President University)”. Therefore, I hope you are

willing to participate as the respondent of this research by filling out this

questionnaire.

Part I Respondent Information

• Have you ever decided to purchase Nokia Smartphone or are you

currently using Nokia Smartphone?

Answers

Yes No

*Circle your answer

- If your answer is "Yes" then proceed to fulfilling this questionnaire.

- If your answer is "No" then you do not need to continue fulfilling this

questionnaire.

• Gender Information

1. Male 2. Female

• Batch

1. 2011 2. 2012 3. 2013

66

You are asked to give a circle for your answer on scale of 1 to 5 that are

available in the column next to the statement / question to determine how

agree you are on those statement/ questions.

1 = Strongly Disagree (SD)

2 = Disagree (D)

3 = Neutral (N)

4 = Agree (A)

5 = Strongly Agree (SA)

No. Brand Loyalty SD D N A SA

1.

I would love to recommend Nokia to

my friend 1 2 3 4 5

2.

I would buy Nokia Smartphone

product even its increasing the price 1 2 3 4 5

3. I consider myself to be loyal to Nokia

1 2 3 4 5

No. Brand Association SD D N A SA

1.

Nokia has very unique brand image

compared to other competing brands 1 2 3 4 5

2.

I admire people who are using Nokia

Smartphone 1 2 3 4 5

3. I trust Nokia branded Smartphone

1 2 3 4 5

No. Brand Awareness SD D N A SA

1. I am familiar with Nokia Smartphone

1 2 3 4 5

2.

Nokia is the first brand that shows in

my mind 1 2 3 4 5

3. I can recognize Nokia products 1 2 3 4 5

67

quickly among other competing

brands

No. Perceived Quality SD D N A SA

1.

I trust the quality of Nokia

Smartphone 1 2 3 4 5

2.

Nokia Smartphone products offer

excellent features 1 2 3 4 5

3.

Product from Nokia would have very

good quality 1 2 3 4 5

No. Purchasing Decision SD D N A SA

1. Nokia is my first choice when

deciding to buy a Smartphone 1 2 3 4 5

2. I purchase Nokia Smartphone because

of my own decision 1 2 3 4 5

3. I purchase Nokia Smartphone because

it features meets my needs 1 2 3 4 5

-Thank you very much for your cooperation by filling up this questionnaire-

69

Appendix 2 Questionnaire Result

No. BL1 BL2 BL3 BAS1 BAS2 BAS3 BAW1 BAW2 BAW3 PQ1 PQ2 PQ3 PD1 PD2 PD3

1 5 5 5 5 5 4 3 5 5 5 3 5 3 4 3

2 5 4 5 5 5 4 5 5 5 5 4 4 5 5 5

3 4 3 3 4 3 3 3 3 3 3 3 3 3 3 3

4 4 3 4 2 4 3 4 4 4 4 3 3 3 3 2

5 4 4 4 3 3 4 4 4 4 4 3 3 3 2 3

6 4 3 5 5 5 3 3 4 3 4 3 5 3 4 5

7 3 3 4 3 3 3 3 3 3 3 3 3 3 3 3

8 3 3 4 3 3 3 3 3 3 3 3 3 3 3 3

9 5 4 4 5 5 4 5 5 4 5 5 4 5 3 3

10 4 4 4 4 4 4 4 4 4 4 4 4 4 3 3

11 4 4 4 3 3 4 3 4 4 5 5 5 3 4 4

12 4 4 3 4 4 4 4 4 5 4 3 4 3 3 4

13 5 5 5 5 5 5 4 5 5 5 5 5 4 5 4

14 4 4 4 4 4 4 5 5 5 5 5 5 5 4 4

15 4 4 4 3 4 3 3 3 3 4 3 3 4 4 3

16 4 4 4 4 4 5 4 4 4 4 4 4 4 4 4

17 4 4 4 4 4 3 4 4 4 4 3 3 4 4 3

18 5 4 4 5 5 3 2 5 5 5 3 3 4 4 4

70

19 3 2 3 2 4 2 3 3 2 2 4 3 3 4 3

20 4 4 4 4 4 4 3 4 4 4 4 4 3 3 3

21 5 5 4 4 4 4 5 5 5 4 4 5 3 4 4

22 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

23 4 3 5 4 3 3 2 3 4 5 4 2 3 3 2

24 3 3 3 3 3 3 3 3 3 3 3 3 4 4 4

25 3 3 4 3 4 3 4 4 4 4 4 4 4 4 4

26 2 2 2 2 2 3 2 2 2 3 2 2 2 2 2

27 3 3 3 3 3 3 2 3 3 3 3 3 3 3 3

28 4 4 4 3 4 3 4 4 4 4 4 4 4 4 4

29 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3

30 5 4 4 4 5 4 4 4 5 5 5 5 4 5 4

31 3 3 3 3 4 3 3 4 4 3 3 3 4 4 4

32 4 4 4 4 4 4 4 4 4 4 3 3 3 3 3

33 4 4 5 4 4 4 5 5 5 4 4 4 5 5 4

34 5 4 4 4 5 4 4 4 5 5 4 4 4 4 4

35 4 4 4 3 4 3 4 4 4 4 3 3 4 4 4

36 5 3 5 4 5 3 4 5 5 5 5 5 5 5 5

37 4 3 4 3 3 3 3 4 4 4 3 4 3 3 4

38 4 3 3 3 3 3 3 3 4 3 3 3 3 3 3

39 5 3 4 4 4 3 4 4 4 4 3 3 3 3 2

71

40 4 3 3 3 4 4 5 4 4 5 3 4 5 4 5

41 4 4 4 3 4 5 5 4 4 4 5 5 4 4 5

42 4 3 3 4 3 3 2 3 3 4 4 4 4 4 4

43 4 3 4 4 4 3 3 4 4 4 4 4 4 4 4

44 4 4 4 4 4 4 3 4 4 3 4 4 4 3 3

45 5 5 5 5 3 3 4 4 4 4 3 4 3 3 3

46 5 4 4 4 5 5 4 4 5 5 4 4 5 5 5

47 4 4 4 3 4 5 5 4 4 4 5 5 4 4 5

48 5 4 5 4 5 4 4 4 4 4 4 4 5 4 4

49 4 4 3 5 4 3 4 3 3 4 4 3 4 4 3

50 4 4 4 3 4 2 4 4 4 4 4 4 3 4 3

51 5 4 4 3 5 3 5 4 5 5 3 4 5 4 4

52 5 4 4 4 3 2 4 4 4 4 4 4 2 4 3

53 4 5 4 3 4 3 3 3 4 3 3 4 4 4 3

54 4 5 5 4 4 4 5 5 4 5 4 5 5 4 5

55 5 4 5 4 4 3 4 4 3 3 3 5 2 3 2

56 4 3 3 2 3 3 3 3 3 4 4 4 3 3 3

57 4 4 4 4 4 3 4 4 4 4 3 5 4 3 3

58 4 5 5 5 5 4 5 4 5 5 4 4 4 4 5

59 5 5 4 4 4 4 5 5 5 5 5 5 2 4 2

60 4 4 4 2 4 3 4 3 3 4 3 4 3 3 3

72

61 5 5 5 5 5 5 5 5 5 5 5 5 4 5 5

62 3 3 3 3 3 3 4 4 4 4 3 4 3 4 4

63 4 4 5 4 5 4 4 4 4 4 4 4 4 4 4

64 3 2 3 2 3 3 3 3 3 3 2 2 3 2 3

65 4 4 4 3 4 3 4 4 4 4 4 4 3 3 3

66 5 5 5 5 5 5 5 5 5 5 5 5 4 4 4

67 5 5 5 5 5 3 4 4 4 4 4 4 4 4 4

68 4 4 4 4 4 3 4 4 4 4 4 4 4 4 4

69 5 4 5 4 4 3 4 4 4 4 4 4 4 4 4

70 4 3 3 3 2 2 3 4 3 2 3 3 3 3 3

71 4 3 3 3 3 3 4 4 4 4 4 3 3 3 3

72 4 3 4 4 4 2 4 4 4 3 3 4 4 3 3

73 3 4 4 3 4 3 3 3 3 4 4 4 3 4 4

74 5 4 4 3 4 3 5 5 4 5 4 4 3 4 4

75 4 2 2 4 4 3 4 4 4 3 3 3 4 4 4

76 4 4 4 4 4 3 4 4 4 4 4 4 3 3 3

77 4 3 3 4 4 4 4 4 4 4 3 3 3 3 3

78 4 3 4 3 4 5 4 5 4 3 5 4 4 5 5

79 5 5 4 5 4 4 5 5 5 5 4 4 5 5 5

80 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5

81 5 4 4 4 4 3 4 4 5 5 4 5 4 4 5

73

82 5 5 5 5 5 5 3 4 4 4 5 5 4 4 4

83 5 4 4 4 3 3 4 4 4 3 4 4 4 4 4

84 4 4 4 4 3 4 2 4 3 4 5 5 3 4 4

85 5 4 5 3 5 3 4 4 5 3 4 4 3 3 3

86 5 5 5 5 4 5 5 5 5 5 4 5 4 4 4

87 4 3 4 3 3 4 4 3 4 4 4 4 3 3 3

88 4 4 3 5 3 3 4 4 5 3 3 3 3 4 4

89 5 4 4 4 5 5 4 4 5 5 4 4 5 5 5

90 5 5 5 5 3 3 4 4 4 4 3 4 3 3 3

91 5 4 4 5 4 4 4 5 5 4 4 4 3 3 4

92 5 3 2 5 5 4 3 4 3 4 4 5 4 4 4

93 4 3 3 4 4 4 4 4 3 4 4 4 4 3 3

94 5 3 4 4 4 5 3 5 4 3 3 4 3 4 3

95 3 3 3 3 3 4 3 3 3 3 3 3 3 3 3

96 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4

74

Appendix 3 SPSS Results

Validity and Reliability

1. Brand Loyalty

Reliability Statistics

Cronbach's

Alpha

Cronbach's

Alpha Based on

Standardized

Items N of Items

.893 .892 3

Item Statistics

Mean Std. Deviation N

BL1 3.8667 .86037 30

BL2 3.5667 .81720 30

BL3 3.8333 .79148 30

Item-Total Statistics

Scale Mean if

Item Deleted

Scale Variance if

Item Deleted

Corrected Item-

Total Correlation

Squared Multiple

Correlation

Cronbach's

Alpha if Item

Deleted

BL1 7.4000 2.110 .872 .778 .773

BL2 7.7000 2.355 .800 .718 .839

BL3 7.4333 2.599 .707 .528 .916

75

2. Brand Association

Reliability Statistics

Cronbach's

Alpha

Cronbach's

Alpha Based on

Standardized

Items N of Items

.820 .819 3

Item Statistics

Mean Std. Deviation N

BAS1 3.6000 .96847 30

BAS2 3.8000 .88668 30

BAS3 3.4333 .72793 30

Item-Total Statistics

Scale Mean if

Item Deleted

Scale Variance if

Item Deleted

Corrected Item-

Total Correlation

Squared Multiple

Correlation

Cronbach's

Alpha if Item

Deleted

BAS1 7.2333 1.909 .794 .639 .621

BAS2 7.0333 2.309 .696 .558 .729

BAS3 7.4000 3.007 .568 .357 .853

3. Brand Awareness

Reliability Statistics

Cronbach's

Alpha

Cronbach's

Alpha Based on

Standardized

Items N of Items

.870 .873 3

76

Item Statistics

Mean Std. Deviation N

BAW1 3.4667 .89955 30

BAW2 3.8333 .83391 30

BAW3 3.8333 .91287 30

Item-Total Statistics

Scale Mean if

Item Deleted

Scale Variance if

Item Deleted

Corrected Item-

Total Correlation

Squared Multiple

Correlation

Cronbach's

Alpha if Item

Deleted

BAW1 7.6667 2.851 .628 .435 .927

BAW2 7.3000 2.562 .865 .797 .718

BAW3 7.3000 2.493 .778 .754 .793

4. Perceived Quality

Reliability Statistics

Cronbach's

Alpha

Cronbach's

Alpha Based on

Standardized

Items N of Items

.812 .814 3

Item Statistics

Mean Std. Deviation N

PQ1 3.9667 .85029 30

PQ2 3.6000 .81368 30

PQ3 3.6667 .92227 30

77

Item-Total Statistics

Scale Mean if

Item Deleted

Scale Variance if

Item Deleted

Corrected Item-

Total Correlation

Squared Multiple

Correlation

Cronbach's

Alpha if Item

Deleted

PQ1 7.2667 2.478 .625 .393 .779

PQ2 7.6333 2.447 .694 .484 .714

PQ3 7.5667 2.185 .675 .465 .732

5. Purchase Decision

Reliability Statistics

Cronbach's

Alpha

Cronbach's

Alpha Based on

Standardized

Items N of Items

.814 .813 3

Item Statistics

Mean Std. Deviation N

PD1 3.5000 .73108 30

PD2 3.5667 .77385 30

PD3 3.4000 .77013 30

Item-Total Statistics

Scale Mean if

Item Deleted

Scale Variance if

Item Deleted

Corrected Item-

Total Correlation

Squared Multiple

Correlation

Cronbach's

Alpha if Item

Deleted

PD1 6.9667 2.033 .579 .348 .828

PD2 6.9000 1.679 .746 .570 .657

PD3 7.0667 1.789 .676 .508 .733

78

Regression

Model Summaryb

Mod

el R

R

Square

Adjusted R

Square

Std. Error

of the

Estimate

Change Statistics

R Square

Change

F

Change df1 df2

Sig. F

Change

1 .690a .476 .453 .50202 .476 20.648 4 91 .000

a. Predictors: (Constant), AVE_PQ, AVE_BAW, AVE_BAS, AVE_BL

b. Dependent Variable: AVE_PD

ANOVAb

Model Sum of Squares df Mean Square F Sig.

1 Regression 20.815 4 5.204 20.648 .000a

Residual 22.934 91 .252

Total 43.749 95

a. Predictors: (Constant), AVE_PQ, AVE_BAW, AVE_BAS, AVE_BL

b. Dependent Variable: AVE_PD

Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

Collinearity

Statistics

B Std. Error Beta Tolerance VIF

1 (Constant) .841 .353 2.378 .019

AVE_BL -.345 .126 -.340 -2.737 .007 .374 2.670

AVE_BAS .421 .125 .406 3.362 .001 .396 2.528

AVE_BA

W

.285 .120 .276 2.372 .020 .427 2.342

AVE_PQ .385 .124 .363 3.094 .003 .418 2.393

a. Dependent Variable: AVE_PD

79

80