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“Effect of Brand Image and Price on Purchase Decisions LG Mobile Phone”

pada 24 Juni 2013

English Business Tasks


“Effect of Brand Image and Price on Purchase Decisions LG Mobile Phone”



Name : Khoirunnisa Diah Parwitasari

NPM: 14209187

Class : 4EA01




ATA 2012/2013




Khoirunnisa Diah Parwitasari





1.1  Background

Means of communication is something that is very important and necessary in public life. The development of increasingly sophisticated technology to make communication tool turned into a primary need for humans. Technological developments such as this that has brought the business community in a very tight competition to attract consumers. Competition mobile phone manufacturers to provide the best to the consumers has put consumers as decision makers. Since the number of mobile phone manufacturers it did not rule out the existence of a very tight competition among the mobile phone manufacturers to be able to win the competition with the advantages of relying on technology, quality, and strive to create new innovations in consumer-loved features.

The role of mobile phones at this time not only as a tool to communicate with just sending a message and phone, but mobile phones have now become a way of life for the people of Indonesia. Full-featured mobile phone that has made ​​everyone very dependent on cell phone wherever they are, like the camera app, music player, browser, social networks like twitter and facebook and others. Features in the phone that will be able to create a higher level for the product in the eyes of consumers. Not only the features or applications contained in mobile phones, but also the price factor consumers consider in making a decision. A great feature of course have a high enough price. It is inevitable that, the more expensive the price of its phones would be getting better and more sophisticated technology.

At this time brand image constitute one of the factors who influencing decision of purchases which done by consumers, because of market which faced by the company is market consumer, wherein consumers have influence which very strong in determining purchasing decisions. Many things can make a product survive many years in the market. Brand which good be a definite asset for the company, because the brand such having an impact on every perceptions consumer, whereby the community will have a positive impression against product and company’s. By because it, for maintain as well as improve consumer market, required image and perception who good against product and company’s.

LG is one of the brands of electronic devices that are well known in the market, especially the people of Indonesia. Initially, LG only manufactures electronic devices such as radios, televisions, refrigerators, washing machines and air conditioners. However, in 1997 LG for the first time developed a digital handset cdma. In 2001, LG began to manufacture GSM mobile and export them to various countries including Indonesia. In 2005 LG became a major supplier of 4 mobile handset market in the world.

LG mobile phone is not a leader in the Indonesian mobile market. However, the presence of LG mobile phone to be reckoned with. Although the current position of the LG mobile phones are increasingly threatened with vendors emerging as blackberry, Samsung, and Apple are carrying smartphones.

Based on the explanation above, this article entitled “Effect of Brand Image and price on Purchase Decisions LG Mobile Phone”


1.2 Problem Formulation

Based on the above, the issue in this study is formulated as follows:

  1. Is the Brand Image and Price, simultaneously affect on purchase decision LG Mobile Phone ?
  2. Is the Brand Image and Price, partially affect on purchase decision LG Mobile Phone ?



The purpose of this article are :

1. To find a variable Brand Image and Price, affect on purchase decision LG Mobile Phone is simultaneously.

2. To find a variable Brand Image and Price, affect on purchase decision LG Mobile Phone is partially.





The benefits of this article are :

1. Helped develop the field of management science in marketing management specifically related to brand image and the price,

2. As a reference for University Students Gunadarma in making purchasing decisions LG mobile phones























2.1 Theory Framework

2.1.1 Definition of Marketing

Marketing is often viewed as an task for creating, promote, and channeling goods and services to consumers and unitunit business. Marketing expected to have expertise and stimulating demand for will be products which generated by the company. Whereas according to Lamb Jr.. et al (Ogi Sulistian, 2011:21), marketing is a process of planning and run the the concept of price, promotion, and a distribution a number of ideas, goods and services to create exchanges who capable satisfying individual goals and organizational.

From definitions-definition in above can be pulled conclusion that the concept of marketing not just a sell and promote products or services, but it is a process that aims for satisfying the needs and desire of individuals nor the groups of through exchange of as well as constitute corporate activities inside through marketing tool, namely designing concept, determines the price, and distribute goods or services.

2.1.2 Marketing Purposes

The aim of marketing is to know and understand the customer such that the product fits with and may be sold by itself. Ideally marketing lead customers ready to buy, so manufacturers have to get the product remains available.

According to Fandy Tjiptono (in Ogi Sulistian, 2011:22) there are several goals to be achieved through marketing including:

1. Create customer satisfaction through quality products

2. Improve the company’s marketing-related competencies

3. Responding to the challenges of competition in the business world

4. Establish long-term relationships between the company and the consumer

5. Earn profits through rapid changes in the business world

Based on the above opinion, it can be concluded that the purpose of marketing it is to understand the customer’s wants and needs. products or services that are offered by manufacturers can fit in the hearts of consumers and customers.

2.1.3        Definition of Brand

A very unique skill of professional marketers is the ability to create, maintain, protect, and enhance the brand. The marketers say that branding is an art and an important part of marketing.

A brand in turn signaled to consumers about the source of the product. In addition, both brands to protect consumers and producers from competitors who strive to provide products that look identical. Actually a seller’s brand promise to consistently provide privileges, benefits, and certain services to the buyer. Best brands provide quality assurance, but the brand is more than just a symbol.

2.1.4        Definition of Brand Image

Brand Image is a representation of the overall perception against the brand and was formed from information and experiences past against the brand it. Citra against brand relate with attitudes who the form of beliefs and preference against an brand. Consumers who has a image of which a positive against the an brand, will more allow to perform a purchase.

Characteristic the brand can be considered as types of association that appearing in the minds of consumers when remembering a particular brand. These associations it can simply be appear in the form of of thought or a certain image who is associated an brand, equally well as when we think about other people. This association can be conceptualized based types of, support, strength, and uniqueness. Types of associations brand, covering attributes, the benefits, and attitude. Attributes consists of attributes who relate with product, for example design, color, size, and attributes which do not relate with product, for example price of, wearer, and the image of usage. Whereas the benefits, covers the benefits is functionally, benefits symbolically, and benefits based on experience. (Ogi Sulistian, 2011:32).

2.1.5        Price

According to Kotler and Armstrong (2008:345) price terms are defined as follows: “Price is an amount of money that must be paid by the consumer to obtain a product.” Price will be an important consideration for consumers receive training in deciding the purchase, consumers will compare the prices of the products of their choice and then evaluate whether or not the price is in line with the product as well as the amount of money that must be spent.

2.1.6        Purchase Decision

            In an effort to get to know customers, companies need to study the consumer behavior that is a manifestation of the whole soul of man in his daily life. Perception-perception and influence others internally motivasimotivasi will interact to determine the final decision is deemed most appropriate (Rosvita, 2010).

            There are two important aspects of consumer behavior, namely:

            1. Decision-making process.

2. Physical activity all of which involve individuals in assessing, acquire and use goods and services economically.

            A person who makes a purchase for his personal needs or household consumption can be called the end consumer. But that does not mean others are not involved in the purchasing process, a lot of people who will be involved in the decision to buy. Where each person involved had their own role. Role in consumer behavior are as follows:

            1. Originator (Initiator)

            A person who first proposed the idea to buy a particular product or service

            2. Influencers (Influencer)

            Someone who views or opinions influence purchasing decisions

            3. Decision makers (Decider)

Someone who decides each component in the purchase decision, whether to buy, what to buy, how to buy, or where to buy

            4. Buyer (Buyer)

            Someone who is doing the actual purchase

            5. User (User)

            A person who consumes or uses the product or service

            In the consumer behavior, consumer characteristics and decision process lead to certain purchase decisions. Marketers task is to understand what happens in consciousness buyers ranging from the stimulation from the outside to the emergence of buyers purchasing decisions, understanding the purchase decision, is in the stage of the buyer decision process in which consumers actually buy.


2.2 Hypothesis

The hypothesis of this study is:

H1: Brand Image and Price simultaneous influence on purchasing decisions LG Mobile Phone.

H2: Brand Image and Price, partial effect on purchasing decisions LG Mobile Phone


















3.1.1 Population and Sample

Population is a region consisting of generalization objects or subjects that have qualities and characteristics assigned certain researchers to learn and then be deduced (Sugiono, 2002; 720). The population in this study were students Gunadarma Univesity Programs Management class of 2009 mobile phone users brand Nokia. Number of population is 100 people.

3.1.2 Sources of Data

Sources of data in this study using primary data. data Primary data is obtained directly from the object research, namely Gunadarma University Programs management of 2009 mobile phone users brand LG

3.1.3 Data Analysis

  • Regression Analysis

              Quantitative analysis is a statistical tool of analysis, linear multiple, implies that there is a regression equation one or more of the dependent variable independent variable (Algifari, 2000:62). So the multiple linear regression analysis will be performed when the number of variables independent at least two (2).  Regression equation is:

         Y = a + b1X1 + b2X2 +b3X3

            Keterangan :

Y = Purchase decision

a = constants

X1 = Brand Image

            X2 = Price



4..1 Object Profile Research

LG mobile phones is one of the products of the company are famous in the world and reputed company who are involved in the world of technology and electronics. With increased with time and look at the phone centers in the world that are more advanced and there are always new technologies and markets many mobile prey. So that makes LG Mobile LG as one type of electronic product. In a period of years, and until now, LG has created a lot of cell phone products and introduced to the world as well as the worldwide mobile phone market.

The growing audience of mobile phones and mobile phone users, the significant progress seen from year to year, so the LG also created a smartphone to follow the development of mobile phone technology. Try this in order to compete with other smartphones. Different types of HP LG, LG Mobile price range also. LG Mobile price varies, depending on the type of HP LG, specification and quality HP HP LG LG is given.


4.2 Research Results

From the results of the data analysis using SPSS for Windows 19 obtained the following regression equation:

Y = 69.937 + 2.522 X1 + 1.659 X2

  • Constants of 69.937 states that if there is or is not considering the brand image and price, then there are 21 people (69.94) of the respondents who decide to buy LG Mobile brand. From these results it can be seen that the decision to purchase LG Mobile brand is still sufficient good.
  • Regression coefficient of 2.522 X1 states that every additions (because the sign +) 1% Mobile brand image brand LG will increase by 2,522 purchasing decisions. It can means that the image of the brand in this case is LG Mobile can improve the buying decision because of the better brand image and is completely proven, then the customer will increasing.
  • X2 regression coefficient of 1.659 states that any reduction (because the + sign) 1% product price LG Mobile brand will increased purchasing decisions 0.659. From these results we can means that with an increase in prices, it turns out the buying decision are not diminishing but it increased even slightly.


Hypothesis Testing Results

To see whether the significance of the independent variables affect the dependent variable and determine whether the regression equation will be made whether or not usable for predicting variables dependent, then used ANOVA test.

From the results of ANOVA test, F value is the value obtained 65,712 with a significance level of 0.000. Because Fhit (65,712)> F (2.468533) then Ho is rejected it means variable brand image, price, and quality of products simultaneously influence the purchase decisions LG phone.


4.3 Discussion

Testing with variable brand image, price and purchasing decisions, shows the influence of variables together brand image, price and purchase decisions as indicated by the calculated F value of 121.246 and sig. F of 0.000. therefore the probability of <0.05, then Ho is rejected and Hi is accepted, then the 85 has been shown to influence brand image then there has been shown no influence of brand image and price simultaneously or jointly purchasing decisions or first hypothesis has been proven. This can mean buying decision apparently LG Mobile brand is largely influenced by brand image and product prices.

Now consumers have turned attention to the brand image of a given product and are willing to pay to get the brand image and ultimately if both of these continue to be met by the manufacturer, then the level of purchase decision on the product will also be higher so that the level of brand switching will also lower or reduced. But it can also happen vice versa. If it turns out the customer was not able to get the image of the brand and the price is appropriate or desired, the customer will lose interest in buying because of disappointment or many other alternatives in other brands but not in the brand LG.

So based on the results of data processing, it can be seen that the image of the brand and price of the product will jointly affect the purchasing decision of the LG mobile. If one of them is not met then the purchase decision will decrease.






















5.1 Conclusions

Based on research results and discussion, the influence of brand image and price against purchasing decisions can be taken kesimpulansebagai the following:

1. Testing of collectively-equally variables brand image and the price simultaneously towards purchasing decision indicate the presence of the influence who simultaneous. This case indicated by the value probability < 0,00.

2. Based on the results partial testing (test t), also can be known that the independent variable brand image and the price there is influence of who significant with purchasing decisions. This case can be evidenced of value of t count bigger dri t table. t count (5,974), t table (0.974) for the variable price of t count (5,974) t table (0.974)













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Erna Ferrinadewi. 2008. “Brand and Consumer Psychology.” Yogyakarta: Graha Science


Fandy Tjiptono. 2008. “Marketing Strategy.” Yogyakarta : ANDY


Margaretha Fiani .S dan Edwin Japarianto. 2012. “Analysis of the Effect of Food Quality and Brand Image To Purchase Decision Kecik Bread Bakeries Ganep’S in Solo.” Journal of Marketing Management”, Vol. 1, No. 1.


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http://gs.statcounter.com/, Website Survey Handphone ,di akses pada tanggal 27 Maret 2013


http://lg.com/ , , Website PT. LG Indonesia ,di akses pada tanggal 27 Maret 2013


http://topbrand-award.com/, Website Survey Merek, di akses pada tanggal 30 Maret 2013















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