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THE EFFECT OF PROMOTION AND FREE SHIPPING ON SHOPEE FOOD
PURCHASE DECISIONS IN MEDAN
T.ENITA ROSMIKA, AZULAIDIN, ANWAR
Universitas Amir Hamzah ernitarosmika22@gmail. com, azulaidin@gmail. com, mranwar1432@gmail. com
Abstract: This study aims to examine the impact of Shopee Food promotions and free shipping on Medan consumers' purchasing decisions. The authors of this study employed a quantitative research strategy. The study demonstrates that discounts have a positive and significant impact on consumer choices in part to use Shopee Food as a food delivery service in Medan. Discount is the highest and most dominant variable that influences purchasing decisions. Apart from discounts, customers' decisions to use Shopee Food are also influenced in significant and positive ways by the company's free shipping policy. as a food delivery service in Medan. The second most influential factor in purchasing decisions is free shipping, customers' decisions to use Shopee Food services as a Medan food delivery service are strongly influenced by discounts and free shipping. This is because people in Medan think that with discounts and free shipping it will save more money and time to get the food or culinary, they want.
Keywords: Promotion; free shipping; buying decision; Shopee Food
I. INTRODUCTION
Technological developments make it easier for humans to meet all needs. Apart from making it easier for us to communicate, today's technology makes it very easy for us to buy what we need, in this way everything is easy and practical. This practical matter is then able to change people's behavior in meeting all needs. In this case, it is important for consumers to pay attention to online-based companies in fulfilling their needs or desires. It should be the duty of online-based companies to increase innovation that can attract consumers.
Shopping online can provide various conveniences for consumers, including saving energy, costs, and time. Consumers just wait at home without the need to leave the house to shop for their needs and wants. In recent years, people have made it easy for people to buy ready-to-eat food online or commonly known as the culinary business. Because we don't have to leave the house to get the food we want, this is in high demand in the community.
However, the fact that there is currently an online-based company that provides food delivery services is not only one, Shopee, which is known as e-commerce that provides products online, has also opened a Shopee Food program, where Shopee Food provides fast food delivery services. Thus the competition is very tight, so every company needs to show creative ideas to improve product purchasing decisions by using various ways such as bringing up advanced features, discounts (rebates), cashback, free shipping, special prices on certain dates and others. . This is done with the aim that consumers do not think long when making decisions in buying products.
Discounts are one of the pricing strategies that can be used as a means of influencing consumer decisions and are also expected to have a positive impact on the company. Discounts are one of the programs that consumers are quite interested in. The discount or discount, as defined by Basu Swasta and Ibnu Sukotjo (2007), is a price reduction from the original price. One important factor that can influence the company's product demand and supply is product modification. Where product demand and supply can be affected by price changes, so businesses can measure the degree to which price changes affect demand and supply.
Apart from discounts, one of the promotions used by food delivery services such as Shopee Food to influence consumer purchasing decisions is to offer free shipping or free shipping. The Shopee Food service provides this service so that customers who want to shop online don't have to worry about shipping costs. (Tjiptono, 2018; Kotler and Keller, 2016).
The free shipping program means that the seller no longer charges shipping for items purchased online. Promoting online sales and purchases with free shipping is a common practice.This tactic demonstrates that promotions offering free shipping significantly boost business sales. The cost of
shipping can sometimes be more expensive than the purchase price. Buyers only have to pay for the price of the goods they buy because shipping is free. Free shipping offers have the potential to dominate the market because of this.
At present the number of culinary businesses is developing very rapidly, this has made culinary business owners continue to innovate in their business so that they are able to face increasingly fierce competition. The convenience of delivering and serving food to customers is one of the innovations that food industry entrepreneurs must provide; one solution is food delivery services, which are increasingly in demand (Wijaya, 2018;2022 Ferawati). People are choosing this service more and more because they don't have to go to places and wait in lines; instead, they just have to wait at home and the food comes to them.
Culinary business actors with a market place through an online media service provider applicator offer free shipping. Although this policy benefits buyers and sellers who open stalls in the market place, it does not mean that it is given away for free. (Amalia & Wibowo, 2019). As in the shope food application, discounts and free shipping programs can be claimed if the buyer has met the minimum shopping limit of 40 thousand rupiah, so that both business actors and the online platform do not suffer losses.
Based on the background above, the authors are interested in a study titled "The Effect of Promotions and Free Shipping on Purchasing Decisions for Shopee Food in Medan" based on this background.The city of Medan was chosen because the author realizes that this city is a metropolitan city where of course many people use food delivery services such as Shopee Food.
II. REVIEW OF LITERATURE
2.1 Marketing strategy
Kotler and Armstrong (2008) state that a marketing strategy is a marketing logic by which business units hope to accomplish their marketing goals. That is why it is important to create value and build strong relationships with customers. In the book marketing strategy management by Nana H (2015), the role of marketing strategy is to solve every problem of determining a company so that it is very much needed in the business world, provided that the strategy is carried out in all ways that are lawful or honest. Broadly speaking, the concept in marketing has 3 (three) core types, namely needs, wants, and the ability to buy the product it wants.
2.2 Sales promotion
Sales promotion For researchers, sales promotion is a tactic applied by companies to increase sales of a company. So, promotion is the communication of product information to the public by advertising it attractively. The purpose of promotion according to Rangkuti (2010) is to seek profit by modifying consumer behaviour, informing information about company promotions, persuading, and informing directly or indirectly. the point is, sales promotion is the voice of the company to create a relationship with the community in order to foster a sense of interest in buying. Sales promotions can be in the form of coupons, vouchers, discounts and so on.
There are several factors that must be considered by the company, namely determining and selecting sales promotions based on objectives, the amount of incentives, the promotion period, the total existing sales budget, competition and market conditions. It can be concluded that considering these factors, companies must first evaluate the nature of the market, available funds, product characteristics, and promotional media so they can read the market correctly. (Thamrin, 2018)
2.3 Free Shipping
The definition of free shipping according to Lamb (2009) is free shipping, meaning that goods that have been purchased online, the seller no longer adds shipping costs. One way to promote online transactions is to offer free shipping. This tactic demonstrates that promotions offering free shipping significantly boost business sales. The cost of shipping can sometimes be more expensive than the purchase price. Buyers only have to pay for the price of the goods they buy because shipping is free. Free shipping offers have the potential to dominate the market because of this.
2.4 Purchase Decision
A process known as the purchasing decision involves the consumer identifying the issue, seeking information about a specific product or brand, and evaluating how effectively each of these alternatives can address the issue before making a purchase decision. Andy Tjiptono in Katrin et al. (2016).
In addition, Amrullah argues in Prasetyo & Purbawati (2017) that decision making is the process of evaluating and selecting one option that is thought to be the most profitable from a number of alternatives that are in line with the interests of particular interests.
On the basis of the preceding definition, it is possible to draw the conclusion that the purchase decision is the most effective decision-making process undertaken by the consumer, in which he selects one of several alternative options. Navigation is a singular action that is straightforwardly associated with acquiring and utilizing the merchandise advertised.
III. RESEARCH METHODS
The authors of this study employed a quantitative research strategy, which can also be interpreted as a strategy that aims to test theories, construct facts, and test predetermined hypotheses, Sugyono (2008). The participated in the study is Shopee Food customers in Medan. The sampling method makes use of the incidental sampling technique, which is a method of sampling in which anyone who meets the criteria in particular has used online media services, like Shopee food in the Medan, to buy things they need every day, especially food. The duration of collecting the questionnaire are two weeks, there are 50 respondents were selected for the sample. While a questionnaire was used as a data collection technique and a survey was used as a research instrument, The Google Form application feature is used to distribute the questionnaire online. The distribution uses a questionnaire link which is then distributed through several social media applications including WhatsApp, Instagram, and other social media.
The authors of this study used the Multiple Linear Regression technique to find out how price and service quality affected consumers' choices to use Shopee Food as a food delivery service in Medan. with the following regression equation:
Y = a + b1X1 + b2X2 + e
Information:
Y = Purchase Decision
X1 = Discount X2 = Free shipping
a = Constant
b1, b2 = Regression coefficient
e = Standard Error
3.1 ttest
The purpose of the T-test is to find out how price and the quality of the service influence consumers' decisions to use Shopee Food as a food delivery service. The t-count and t-table values are compared in this test with a level of significance below 0.05.
3.2 F. Test
The hypothesis test in this study will see the effect of the independent variables on the dependent variable together, with the F test. The purpose of simultaneous testing is to determine how price and service quality influence whether or not customers choose to use Shopee Food as a food delivery service. The F-count and F-table are compared in this test, with a significance level =0.05.
3.3 Correlation and Determination Coefficient Test (R2)
1) Correlation Coefficient Test
A test called the correlation coefficient test is used to determine how closely the independent variable (X) and the dependent variable (Y), also known as r, are related to one another.
2) Test the Determination Coefficient
The coefficient of determination test is used to determine the percentage of R square that the independent variable has on the dependent variable.
IV. RESULTS AND DISCUSSION
4.1 Research result a. Instrument Test
A research instrument variable is considered reliable during data reliability testing if its Cronbach Alpha value is > 0.60.
Table 1. Reliability Test Results Variable_Cronbach Alpha_Reliability Standard_Description_
Discount (X1) 0.840 0.60 Reliable
Free Shipping (X2) 0.842 0.60 Reliable
Buying Decision (Y) 0.737 0.60 Reliable
Source: Processed data (2022)
The results of the reliability test are presented in table 1 and show that every variable has a Cronbach Alpha value greater than 0.60. So, It's possible to conclude that the question items from the questionnaire variable discount, free shipping and purchasing decisions are declared reliable, which means that the questionnaire is declared suitable to be used as a measuring tool.
b. Regression with Multiple Lines
In order to determine whether discounts effect (X1) and free shipping (X2) on consumer decisions (Y) to use Shopee Food as a food delivery service. The following table displays the outcomes of data processing with the SPSS program for Windows version 20.0:
Table 2. Test Results from Multiple Linear Analysis Model Unstandardized Coefficient Standardized Coefficient
_B_Std. Errors_Beta
Constanta 3.678 .631
Discount(X1) .600 .042 .803
Free Shipping (X2) .086 .030 .161
Source: Processed data (2022)
In processing the data from the outcomes of multiple linear regression tests. The equation for multiple linear regression can be obtained in the following manner:
Y = 3.678 + 0.600 X1 +0.086 X2 + e
(1) The constant / a is 3.678 (positive) which means that if there are no discount and free shipping variables, then the buyer decision to use Shopee Food as a food delivery service is 3.678.
(2) b1 of 0.600 (positive), This indicates that the discount variable influences consumer choices positively and significantly to use Shopee Food as a food delivery service in Medan. Thus, if the discount variable is increased, the buyer decision to use Shopee Food as a food delivery service in Medan will increase by 0.600 assuming other variables remain.
(3) b2 is 0.086 (positive), This indicates that purchasing decisions are significantly influenced by the free shipping variable or in other words if the free shipping variable is increased, the buyer decision to use Shopee Food as a food delivery service in Medan will increase by 0.086 assuming other variables remain constant. From the beta coefficient, It is evident that the discount variable influences
consumer choices the most to use Shopee Food as a food delivery service in Medan (by 0.600) compared to other variables.
c. Correlation and Determination Coefficient (R2)
Table 3. Test results for the determination coefficient
Model R R Square Adjusted R Square Std. Error of The Estimate
1 .876a .768 .762 0.568
Source: Processed Data (2022)
In table 3 The correlation coefficient (r) came out at 0.876, this demonstrates that discounts and free shipping for using Shopee Food as a food delivery service in Medan have a fairly strong influence, namely 87.6%. The coefficient of determination, also known as R square (r2), returned a value of 0.768, indicating that 76.7 % of consumer choices to use Shopee Food as a food delivery service in Medan are influenced by discounts and free shipping, the remaining 0.232 or 23.2% is influenced by other variables that were not part of this study.
d. T-Test Results (Partial)
The t statistic (t-test) is used to determine whether the proposed hypothesis is accepted or rejected.Ho is accepted and Ha is rejected if t count < t table, indicating that there is no significant effect. On the other hand, if t count >t table, H0 is accepted and Ha is accepted, indicating that there is a significant effect. If the level of significance is less than 0.05, then Ha is accepted and H0 is rejected. It is known that ttable with a significance level (a) = 5% so that a ttable value of 1.662 is obtained.
Table 4. T test outcomes
Variable
T Count
T Table
ügL
Discount (X1 ) Free Shipping (X2)
13.697 2.772
1.642 1.642
0.000 0.000
Source: Processed Data (2022)
The results can be seen in Table 4, which T test on the discount variable (X1) have a tcount of 13.697 while the ttable value is 1.642. Thus the tcount (13.697) > ttable (1.642) with a significant level of 0.000 <0.05. This demonstrates that discounts significantly influence buyer decisions of Shopee Food as a food delivery service in Medan.
While the results of the free shipping variable (X2) have a tcount value of 2,772 while the ttable value is 1,642. Thus, the value of tcount (2.772) > ttable (1.642) with a significant level of 0.007 <0.05. This shows that free shipping has a significant effect on Shopee Food's consumer decisions as a food delivery service in Medan.
e. Count F test
Table 5. F. Test Outcomes
Model Sum of Squares Df Mean Square F Sig.
Regression 64.702 2 23.350 62.495 .000
Residual 23.294 43 .516
Total 87.996 45
Source: Processed Data (2022)
It is evident from the F value test results that the significant value is 0.000 <0.05. Thus, based on the hypothesis (H1) proposed in the study, Discount Variables (X1), The Purchase Decision variable (Y) is significantly impacted simultaneously by Free Shipping Promotions (X2).
4.2 DISCUSSION
Based on the finding of this research, discounts significantly influence consumers' purchasing decisions because can make them interest, it can influence consumers' decisions to use Shopee Food as a food delivery service in Medan. In addition, the free shipping promo also affects purchasing decisions because the free shipping promo is because buying food through food delivery saves more money, time and does not need to make purchases offline. This research is in line with previous study was done by Kapriani and Ibrahim (2022).
Additionally, discounts had a positive impact on purchasing decisions, according to the findings of the study, this proves that if the discount increases, the purchase decision will increase, and the discounts provided by Shopee Food are greater than offline purchases, where Shopee Food often holds discounts at a minimum spend 40 thousand rupiah, you will get a discount of 60%. Therefore, the role of discounts greatly influences consumers to purchase online. This statement is in line with Assauri's theory, (2018) and Yaterno's research (2021)
From the aftereffects of the review it was likewise observed that there was an impact free shipping promos on purchasing decisions, thus consumers thought that Free Shipping Promotion saved more costs and time so that consumers did not need to spend additional money on shipping costs until they reached the consumers. Because Shopee Food has provided free shipping to buyers. This statement is in line with Maulana and Asra's research (2019).
V. CONCLUSION
It is possible to draw the conclusion, based on the findings of research and discussion, that partial discounts have a positive and significant impact on consumer decisions to use Shopee Food as a food delivery service in Medan. Discount is the highest and most dominant variable that influences purchasing decisions. In addition to discounts, Free Shipping also partially are also influenced in significant and positive on consumer decisions to use Shopee Food as a food delivery service in Medan. The second most influential factor in purchasing decisions is free shipping. Customers' decisions to use Shopee Food as a food delivery service in Medan are significantly influenced by discounts and free shipping simultaneously.
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