Journal of Economics and Sustainable Development www.iiste.

org
ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.12, No.6, 2021

Analysis on the Influence of Price, Product, and Advertisement on

the Purchasing Decision of Indomie Instant Noodle
*
Vincent Rivaldi Kosasih1 Li Dong Sheng2 Bi Zhan Tian3
Department of International Business and Management,
Zhejiang University of Science & Technology, Hangzhou. PR, CN.
[email protected]

Abstract
This study aims to determine and analyze the influence of price, advertisement, and product quality on Indomie
instant noodle purchasing decisions. The researcher collects the data online in the city of Jakarta. Due to limited
time and money, some of the existing populations were taken to be the sample in the study. Due to limited time
and funds, the researcher determined the number of samples in this study as many as 200 respondents. Data were
collected by spreading the questionnaires online by using Google Form, the variables studied were using a Likert
scale. The list of questions was first tested using validity and reliability testing, then analysed by classic assumption
test and hypothesis test using SPSS software. Simultaneously, the variables of price, advertisement, and product
quality have a significant effect on the purchasing decision of Indomie instant noodles.
Keywords: Price, Advertisement, Product, Purchasing Decision
DOI: 10.7176/JESD/12-6-03
Publication date:March 31st 2021

1. Introduction
Nowadays, the development of food substitution products is going faster. One of them is instant noodles which is
a substitute product which is of great interest in Indonesia and also in some other countries. Some students live in
the dorm, most of their main income comes from their parents every month, because they don’t have steady income.
So here, the behavior of consuming instant noodles is very common, considering instant noodles are products that
are quite affordable. People’s habit of consuming this food products is also influenced by people’s lifestyles that
are more dynamic due to the demands of work or customers are higher. People prefer fast and easy serving food
like instant noodles to support their mobility. Because of this, instant noodles in Indonesia are increasing in demand.
Instant noodle is one of the most practical, quick, and delicious foods ever, and most of the people in this world
love to eat instant noodle. Moreover, instant noodles become the solution in overcoming the problem of hunger in
the world. With the high demand for instant noodles in Indonesia emerged several brands of instant noodles, such
as Indomie, Mie Sedaap, Supermi and Sarimie instant noodles. They compete with each other in terms of taste,
packaging, price, and even promotion to attract consumers in making purchasing decisions. Indonesian brand
instant noodle “Indomie” is one of the most popular instant noodles in the world, even become the favourite one
in some countries.
Purchasing decisions are the characteristics of the buyer and the process. Decision making will lead to
purchase decisions. Factors that need to be considered by producers when consumers make purchases such as
product quality, prices and advertisement made by producers of a product to attract the attention of consumers to
make a purchase. Indomie is a brand of instant noodle products that is very popular in Indonesia, which is produced
by PT. Indofood CBP Sukses Makmur. The success of the Indomie brand instant noodles in achieving the position
of market leader is inseparable from the factors that influence consumers to make purchases. These factors are
product quality, price, and advertisement. This research purpose is to determine how product quality, price and
advertisement affect the purchasing decisions of instant noodle products of brand “Indomie”. This research is to
increase theoretical knowledge and broaden the knowledge of marketing management in the field of instant
noodles and apply theories obtained from lectures. Instant Noodle is a product that is preferred by consumers
because of its practicality. Therefore, it is necessary for companies to analyze the consumer behavior of these
products to find out their purchasing patterns. The research is expected to be beneficial for the company for
information material and can understand how the influence of product quality, price and promotion on purchasing
decisions.

2. Research Methodology
This research was conducted using a survey approach, the survey approach is the activity of collecting as much
data as possible regarding the facts that are supporting the research, with the aim of knowing the status, symptoms
of determining the similarity of status by comparing with the standards that have been selected and / or determined.
The data collection method used in this study was a questionnaire method. The questionnaire method in its form
is based on self-report or at least on personal knowledge and beliefs. The assumption held by the researcher in
using this method is that the research subject is the person who knows best about himself and that the subject

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Journal of Economics and Sustainable Development www.iiste.org
ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.12, No.6, 2021

statement given to the researcher is true and reliable. Due to limited time and money, some of the existing
populations were taken to be the sample in the study. Due to limited time and funds, the researcher determined the
number of samples in this study as many as 200 respondents.
Data collection was done by using questionnaires to respondents regarding:
1. Questions about the identity of the respondent, which consists of several questions consisting of name, age,
gender, and education. This question is used to analyze the answers given by respondents to closed questions,
because the level of education will be an important factor in answering closed questions.
2. Questions regarding a series of data relating to product excellence and customer understanding. Questions in
closed questions are made referring to the Likert Scale, where each is made using a scale of 1 - 5 in order to obtain
interval data and are given a score as follows:
1: Strongly disagree
2: Disagree
3: Neither agree nor disagree
4: Agree
5: Strongly agree

3.0 Data Analysis Method

In this study, researchers used multiple regression analysis according to Malhotra (2010: 577) is a statistical
technique that simultaneously develops a mathematical relationship between two or more independent variables
and the dependent variable. In this study, the SPSS program was used to process and analyze research data, namely
the validity test, reliability test, normality test, multicollinearity test and heteroscedasticity test. The regression
model used in this study is multiple regression to test the t test, f test and the coefficient of determination.

3.2 Research Model and Hypothesis

Based on the theoretical framework mentioned above, it can be argued that through price, advertisement, and
product variables either partially or simultaneously it is suspected that it has an influence on the purchasing
decision of instant noodle products. Then the hypothesis can be proposed as follows:
H1: Price variable has influence on the purchasing decision of instant noodle.
H2: Advertisement variable has influence on the purchasing decision of instant noodle.
H3: Product variable has influence on the purchasing decision of instant noodle.
H4: Price, Advertisement, and Product variables have influence on the purchasing decision of instant noodle.

4. Research Results and Discussions

4.1 Descriptive Analysis
Data obtained from the results of descriptive analysis, shows the highest value (maximum), lowest value
(minimum), average (mean) and standard deviation of each variable under study for the hypothesis, the
independent variables are price, advertisement, product, and the dependent variable is the purchasing decision.
The result of descriptive analysis is stated on the table below.

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Vol.12, No.6, 2021

Table 1: Descriptive Statistics

From the table above, it’s stated that the mean of X1 variable (price) is 11.06, maximum is 15 and minimum
is 6, with the standard deviation of 1.899. The mean of X2 variable (advertisement) is 19.40, maximum is 25, and
minimum is 8, with the standard deviation of 3.140. The mean of X3 variable (product) is 19.62, maximum is 25,
and minimum is 11, with the standard deviation of 2.627. The mean of Y Variable (purchasing decision) is 15.94,
maximum is 20, and minimum is 8, with the standard deviation of 2.104.

4.2 Validity Test

Price Variable Validity Test Result
According to the table above, the results obtained from testing the instrument variable price as a whole have a
Corrected Item Total Correlation value that is greater than 0.30, so thus it can be concluded that all statement
instruments of the price variable used are valid and this instrument can be used in research, this is also reinforced
by the significance value (2-tailed) which is entirely below 0.05.
Table 2: Correlations

Advertisement Variable Validity Test Result

Table 3: Correlations
According to the table above, the results obtained from testing the instrument variable price as a whole have a
Corrected Item Total Correlation value that is greater than 0.30, so thus it can be concluded that all statement
instruments of the advertisement variable used are valid and this instrument can be used in research, this is also
reinforced by the significance value (2-tailed) which is entirely below 0.05.

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ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.12, No.6, 2021

Product Variable Validity Test Result

Table 4: Correlations

According to the table above, the results obtained from testing the instrument variable price as a whole have
a Corrected Item Total Correlation value that is greater than 0.30, so thus it can be concluded that all statement
instruments of the product variable used are valid and this instrument can be used in research, this is also reinforced
by the significance value (2-tailed) which is entirely below 0.05.

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ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.12, No.6, 2021

Purchasing Decision Variable Validity Test Result

Table 5: Correlations

According to the table above, the results obtained from testing the instrument variable price as a whole have
a Corrected Item Total Correlation value that is greater than 0.30, so thus it can be concluded that all statement
instruments of the purchasing decision variable used are valid and this instrument can be used in research, this is
also reinforced by the significance value (2-tailed) which is entirely below 0.05.

4.3 Reliability Test

Table 6: Reliability Test Result

According to the table above, the Cronbach’s Alpha value for all of the variables is more than 0.6 which
means these variables are reliable.

4.4 Classic Assumption Test

a) Data Normality Test
In this study, the researcher used P-Plot Graph for data normality test. On this P-Plot Graph below, it can be seen
that the dots spread out around the diagonal line and the spread follows the direction of the diagonal line. From
this graph it can be concluded that the regression line model fulfills the assumption of normality.

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Vol.12, No.6, 2021

Graph 1
b) Multicollinearity Test
Multicollinearity testing in this study was carried out by looking at the collinearity statistic and the value of the
correlation coefficient between the independent variables. Multicollinearity occurs when the tolerance value <
0.10 and Variance Inflation Factor (VIF) >10.
On the table below shows the VIF value for the variable price, promotion, quality and decision to choose less
than 10. While the tolerance value is greater than 0.10, this indicates that the independent variables in this study
do not correlate with each other or there is no correlation between independent variables.
Table 7: Coefficientsa

c) Heteroscedasticity Test
An important assumption of the classical linear model is that the errors that appear in the population regression
function are homoscedastic, is all errors have the same variance (Gujarati, 1995). One of the methods used to check
for heteroscedasticity is with the Scatterplot, under the scattered dots and not above the number 0, and not forming
a pattern so that the regression model can be ignored to avoid heteroscedasticity problems. The graph of the
Scatterplot is as shown below:

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ISSN 2222-1700 (Paper) ISSN 2222-2855 (Online)
Vol.12, No.6, 2021

Graph 2
From the SPSS output graph above, clearly shows that the dots spread below and above the number 0, and do not
form a pattern, it can be concluded that in the regression model there is no element of heteroscedasticity.

3.4 Hypothesis Test

a) Coefficient Determination (R-test)
The determination test aims to measure how far is the capability of the variation of the independent variables in
explaining the variation of the dependent variable in a model.
Table 8: Model Summaryb

From the table above, the value of R Square (R2) that’s obtained is 0.205 or 20.5% which shows the capability
of the independent variables in explaining the variation that happened in the decision of buying Indomie, while
the remaining 79.5% is explained by the other variables that are not in the model. The low value of R2 can explain
that the capability of the independent variables in explaining the dependent variable is very limited. Ghozali (2005)
stated that generally coefficient determination for cross-section data relatively low because of the presence of the
big variation between each observation.
b) Partial Test (t-test)
To test the hypothesis of the influence of the variable price, advertisement, and product partially t-test was
performed. This test is carried out in two directions, using an alpha significance level of 5%.

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Table 9: Coefficientsa

According to the table above, it is known that the constant value is 8.112 and the coefficient value of each
variable is 0.107 for X1, 0.177 for X2, and 0.163 for X3 respectively, so the regression model for this research is:
Y= 8.112 + 0.107 X1 + 0.177 X2 + 0.163 X3
where:
Y = Decision
X1 = Price
X2 = Advertisement
X3 = Product
From the table above, the result is obtained:
1. The sig value for price variable is 0.165 which is greater than the alpha value 0.05.
According to the obtained result, H0 will be accepted and H1 will be rejected for price variable, which is also
mean that price doesn’t significantly influence the decision to choose Indomie instant noodle.
2. The sig value for price variable is 0.001 which is less than the alpha value 0.05.
According to the obtained result, H0 will be rejected and H1 will be accepted for advertisement variable, which is
also mean that advertisement significantly influences the decision to choose Indomie instant noodle.
3. The sig value for price variable is 0.007 which is less than the alpha value 0.05.
According to the obtained result, H0 will be rejected and H1 will be accepted for product variable, which is
also mean that product significantly influences the decision to choose Indomie instant noodle.
c) Simultaneous Test (F-test)
Similar to t-test hypothesis, to do the F-test hypothesis with the dependent variable (decision) if Fcount ≥ Ftable or
Sig. value is less than alpha value 0.05, H0 will be rejected and H1 will be accepted.
Table 10: ANOVAa

From the table above, Sig. value is 0.000 which is less than alpha value 0.05, hence H0 will be rejected and
H1 will be accepted, which means the independent variables are able to explain the variation of the dependent
variables, which also means the price, advertisement, and product simultaneously influence the purchasing
decision of Indomie instant noodle.

4. Conclusion
According to the research that has been done above, it can be concluded:
1. Simultaneously, price, advertisement, and product have significant influence on the purchasing decision of
Indomie instant noodle
2. Partially, price variable doesn’t have significant influence on the purchasing decision of Indomie instant
noodle
3. Partially, advertisement variable has significant influence on the purchasing decision of Indomie instant
noodle
4. Partially, product variable has significant influence on the purchasing decision of Indomie instant noodle
5. Coefficient Determination (R2) shows the capability of price, advertisement, and product (independent
variables) to explain the variation that happened on the purchasing decision at 0.205 or 20.5%, while the

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Vol.12, No.6, 2021

remaining 79.5% explained by the other variables that are not stated in this research.

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