CHAPTER 3 METHODOLOGY

3.1

Previous Research

3.1.1 An

Empirical

Model

For

Brand

Loyalty

Measurement

This research is conducted by Punniyammoorthy and M. Prasanna Mohan raj in 2007. This research is talking about the measurement of brand loyalty of newspaper in India. For this research, the measurement that writer used are : 1. Involvement Writer wanted to prove that higher level of involvement would lead to higher level of brand loyalty. 2. Perceived value Writer wanted to prove that higher level of perceived value would lead to higher level of brand loyalty. 3. Emotional value Writer wanted to prove that higher level of emotional value would lead to higher level of brand loyalty.

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4. Price Writer wanted to prove that higher level of price worthiness would lead to higher level of brand loyalty. 5. Brand trust Writer wanted to prove that higher level of brand trust would lead to higher level of brand loyalty. 6. Customer satisfaction Writer wanted to prove that higher level of customer satisfaction would lead to higher level of brand loyalty. 7. Commitment Writer wanted to prove that higher level of commitment would lead to higher level of brand loyalty. 8. Repeated purchase behavior Writer wanted to prove that repeated purchase pattern would lead to higher level of brand loyalty.

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Picture below is showing the framework that Punniyammoorthy and M. Prasanna Mohan raj used for this research

Figure 3.1 An Empirical Model For Brand Loyalty Measurement Model From the result we can see that the entire factors (stated before) are significantly influencing the customers’ loyalty. Repeated purchase and perceived value have relatively strongest influence on loyalty. Follow by commitment, emotional value, brand trust, price, customer satisfaction, social value, and customer involvement.

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3.1.2 Consumer’s Trust in a Brand Link to Brand Loyalty

This research is conducted by Lau and Lee (1999). This research was talking about the measurement of brand loyalty link to trust in brand in consumer goods product in Singapore. For this research, the measurement that writer used are :

1. Brand characteristic •

Brand Reputation

•

Brand Predictability

•

Brand Competence

2. Company characteristic •

Trust in company

•

Company reputation

•

Company perceived motives

•

Company integrity

3. Consumer – brand characteristic •

Similarity between consumer self concept and brand personality

•

Brand liking

•

Brand experience

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•

Brand satisfaction

•

Peer support.

All this variable will link to trust in brand and trust in brand will kink to brand loyalty. Model is bellow.

Figure 3.2 Consumer’s Trust in a Brand Link to Brand Loyalty First Model After doing the research, the findings reveal that brand characteristic is relatively more important in their effects on a consumer’s trust in a brand. The result also shows that trust in brand is positively related to brand loyalty. Below is the revised model for this research.

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Figure 3.3 Consumer’s Trust in a Brand Link to Brand Loyalty Revised Model

3.2

Framework

Figure 3.4 Framework of Research

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3.3

Hypothesis

According Sunyonto and Danang ( 2009 ) , Hypothesis are:

1. A proposition, or set of propositions, set forth as an explanation for the occurrence of some specified group of phenomena, either asserted merely as a provisional conjecture to guide investigation (working hypothesis) or accepted as highly probable in the light of established facts.

2. A proposition assumed as a premise in an argument.

3. The antecedent of a conditional proposition.

4. A mere assumption or guess.

Hypothesis is divided into two ( Malhotra, 2010 ) :

1. Null Hypothesis is a statement in which no difference or effect is expected. If the null hypothesis is not rejected, no changes will be made.

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2. Alternatives hypothesis is a statement that some difference or effect is expected. Accepting the alternative hypothesis will lead to changes in opinions or action.

From previous theory we can describe the relationship between variables variables that affect the consumer to the Paseo brand. From that, we can make alternatives hypothesis for this research :

1. Ho : Brand reputation is not factors which is giving influence to Paseo’s brand loyalty. H1 : Brand reputation is one of the factors which is giving influence to Paseo’s brand loyalty.

2. Ho : Company reputation is not factors which is giving influence to Paseo’s brand loyalty. H2 : Company reputation is one of the factors which is giving influence to Paseo’s brand loyalty.

3. Ho : Brand competence is not factors which is giving influence to Paseo’s brand loyalty. H3 : Brand competence is one of the factors which is giving influence to Paseo’s brand loyalty.

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4. Ho : Price is not factors which is giving influence to Paseo’s brand loyalty. H4 : Price is one of the factors which is giving influence to Paseo’s brand loyalty.

5. Ho : Repeat purchase is not factors which is giving influence to Paseo’s brand loyalty. H5 : Repeat purchase is one of the factors which is giving influence to Paseo’s brand loyalty.

3.4

Research Design

Research design ( Malhotra, 2010 ) is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the information needed to structure or solve marketing research problems. There are two types of research design :

1. Exploratory research Exploratory research is research design which has as its primary objective the provision of insights into and comprehension of the problem situation confronting the researcher.

2. Conclusive research

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Conclusive research is a research that designed to assist the decision maker in determining, evaluating, and selecting the best course of action to take in a given situation. Conclusive research has two types of research:

a. Descriptive research is a type of conclusive research that as its major objective the description of something – usually market characteristic or functions.

b. Causal research is a type of conclusive research where the major objective is to obtain evidence regarding cause and effect relationships.

For this research, writer using conclusive research and type that writer use is causal research. The reason why writer causal research because in this research is talking about the relationship between independent variable with dependent variable. Moreover, this research talking about cause and effect from independent variable to dependent variable. In this research, writer want to see is there any cause happen in brand reputation, company reputation, brand competence, price, and repeat purchase to Paseo’s brand loyalty.

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3.5

Research Object

After writer decided which one research design is use it, next step is deciding the research object. For this research, writer used sample. Sample is a subgroup of the elements of the population selected for participation in the study ( Malhotra , 2010 ).

To decide how many sample writer will use, writer using Slovin formula. Based on Ghozali (2006), Slovin's formula is used to calculate the sample size (n) given the population size (N)and a margin of error (e). It is computed as

n = N / ( 1 + N . e2 )

Based on (Selamet Saragih, www. http://www.mediaindonesia.com ), writer know number of DKI Jakarta citizen is 9.580.000 people. Besides that, based on www.topbrand-award.com, writer knows that Paseo has 26.5 % of market tissue. Writer assumes that all DKI Jakarta citizens are using tissue so writer calculates number of Paseo population is 2.538.700 person.

After get the number of paseo population, writer using slovin formula to get the number of sample that will use for this research.

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n = N / ( 1 + N . e2 ) = 2.538.700 / ( 1 + 2.538.700 * ( 0.05 )2 ) = 99,99606 person = 100 person

For sampling technique, writer use purposively sampling. Purposively sampling is samples taken with the intent or

purpose. Someone or

something is taken as a sample because the researchers believe that someone or something has the information needed for research. (Malhotra, 2010).

For this research, writer split the sample into 3 type : traditional market; mini market such as alfamart and indomart ; and supermarket such as carrefour and hypermart.

The reason why writer split into 3 different location because writer does not want to see from one perspective (only from traditional, mini market, or supermarket). Writer want to get the whole picture of Paseo loyalty from different market to get the picture of Paseo’s consumer behavior without limitation of the market.

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3.6

Research Variable

Based on Sugiyono (2004), Research variable is an attribute or attitude or value from people, object or activities that has specific variation which is determine by researcher to be learned and take conclusion. Based on Malhotra (2010) there are two type of research variable :

1. Dependent variables

Dependent variables are the variables that measure the effect of the independent variables in the test units. In this research, dependent variable is Paseo’s brand loyalty.

2. Independent variables

Independent variables are variables or alternatives that are manipulated (i.e., the levels of these variables are changed by the researcher) and whose effect are measured and compared. In this research, independent variables are brand reputation, company reputation, brand competence, price, and repeat purchase.

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3.7

Data Collection Method

Method that writer use to get the information is using survey. Survey method is a structured questionnaire given to a sample of a population and designed to elicit specific information from respondents. (Malhotra , 2010)

Survey method has several advantages:

1. The questionnaire is simple to administer. 2. The data obtained are reliable because the responses are limited to the alternatives stated. The use of fixed response questions reduces the variability in the results that may be caused by differences in interviews. 3. Coding, analysis, and interpretation of data are relatively simple.

Questionnaire is a structure technique for data collection that consist of a series of questions, written or verbal, that a respondent answers. The objectives of a questionnaire are : 1. It must translate the information needed into a set of specific questions that the respondents can and will answer. 2. A questionnaire must uplift, motivate, and encourage the respondents to become involved in the interview, to corporate, and to complete the interview. 3. A questionnaire should minimize responses error.

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3.8

Measurement Scale

Method that writer use to gathering the information is questionnaire. In questionnaire, writer using likert scale. Likert scale is a measurement with five responses categories ranging from “strongly disagree” to “strongly agree” which requires the respondents to indicate a degree of agreement or disagreement with each of a series of statements related to the stimulus objects. ( Malhotra , 2010 )

Likert scale that writer use are : 1 = Strongly disagree 2 = Disagree 3 = Neither agree nor disagree 4 = Agree 5 = Strongly agree

3.9

Operational variable

Operational variables writer use are :

1. Brand competence ¾ This brand performs better than other brand. ¾ This brand is more effective than other brand. ¾ This brand meets my needs better than competitor.

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¾ Most other brands are better than this brand.

2. Brand Reputation ¾ This brand has a reputation for being good. ¾ Other people have told me that this brand is reliable. ¾ I have heard negative comments about this brand*. ¾ This brand is reputed to perform well.

3. Company Reputation ¾ This company has good reputation. ¾ I have heard negative things about this company*. ¾ I feel secured when I use brand from this company because I know that the company will always maintain the brand quality. ¾ I feel that I can rely on this company to manufacture products that work well.

4. Price ¾ This brand offers value for money. ¾ I consider the price is the main factor in purchasing this brand. ¾ This brand's price is more competitive than those competitors have. ¾ I don't mind paying more for this brand compare to other brands.

5. Repeat Purchase ¾ I have been buying this brand since the first time purchased.

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¾ I consider myself to be loyal for this brand. ¾ If I could not find this brand to the the store I visit, I will find it to other stores. ¾ I don't mind changing to other brand*.

6. Brand Loyalty ¾ If competitor having a sale I will stay buy this brand*. ¾ I often tell my friends and relatives how good this brand is. ¾ I would believe a person if that person made a negative comment about this brand*. ¾ If someone makes a negative comment about this brand, I would defend it.

3.10 Validity Test

According Priyatno (2010), Validity is the accuracy or precision of an instrument in measuring what you want measured. Validity test is often used to measure the accuracy of an item in the questionnaire or scale.

According Priyatno (2010), There are two types of validity test :

1. Bivariate Pearson

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The method of this test is correlating each item score with total score. Total score is the sum total of all items. Question items can be said significant when the item score of question significantly correlated with total score. It shows item score capable to support what writer want to reveal in the research.

2. Corrected Item - Total Correlation

The method of this test is correlating each item score with total score and make corrections to over-estimation correlation coefficient. Why do we need to this ? Because to avoid over-estimation correlation coefficient (estimated value is higher than actual).

Testing criteria for the Corrected Item - Total Correlation are: a) If r count ≥ r table , the instruments or question item is correlated significantly to the total score (valid). b) If r count < r table , the instruments or question item is not correlated significantly to the total score (not valid).

3.11 Reliability Test

Reliability refers to the extent to which a scale procedures consistent results if repeated measurement are made. Reliability is assessed by determining the proportion of systematic variation in a scale. This is done

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by determining the association between scores obtained from different administration of the scale. If the association is high, the scale yields consistent results and is therefore reliable.( Malhotra , 2010 )

According to Sunyoto (2009), to measure reliability, there are two types :

1. Repeated measure

The way of this measurement is in different time respondent will get the same questions and the same option of answer. Variable can be said reliable is when the respondent always give the same answer even the question is given in different time.

2. One shoot

The way of this measurement is spreading the questionnaire once in a time and we give the score from each answer. Score from the answer is measured

using

Cronbach

Alpha.

According

to

http://www.ats.ucla.edu/stat/spss/faq/alpha.html , Cronbach Alpha is a measure of internal consistency, that is, how closely related a set of items are as a group. A "high" value of alpha is often used (along with substantive arguments and possibly other statistical measures) as evidence that the items measure an underlying (or latent) construct. However, a high alpha does not imply that the measures are

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unidimensional. If, in addition to measuring internal consistency, you wish to provide evidence that the scale in question is unidimensional, additional analyses can be performed. Exploratory factor analysis is one method of checking dimensionality. Technically speaking, Cronbach's alpha is not a statistical test - it is a coefficient of reliability (or consistency).

Based on Sunyoto (2009), if we using Cronbach Alpha as our tool to test the reliability, one construct we can said reliable when the variable gives Cronbach Alpha value more than 0.6.

For this research, writer using one shoot for reliability test.

3.12 Normality Test

According Priyatno (2010), Normality test is used to determine whether the distribution of data population has normal distribution or not. This test is usually used to measure the ordinal scale data, interval, or ratio

According Ghozali (2006), there are two ways to detect the normality test :

1. Graph Analysis

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The easiest ways to see the normality is by looking histogram chart. Histogram chart is compare between observational data with the distribution of near-normal distribution. But sometimes the histogram test can be misleading, especially for small sample size.

2. Statistic Analysis

Simple statistical tests can be done by looking at the value of kurtosis and skewness values. The value of z statistics for each of kurtosis and skewness compared with the z table. If the count value of z