Vol 5 No 1 (2023): Paulus Journal of Accounting (PJA) ANALYSIS OF DIFFERENTIATION STRATEGY, PRICE. AND QUALITY PRODUCTS ON PURCHASE DECISION AT PAPA ONG COFFEEHOUSE Iis Rahmadani, Otto Randa Payangan, Fauziah Umar Universitas Hasanuddin iisrahmadani090199@gmail.com Volume 5 Nomor 1 Desember 2023 e-ISSN 2715-7474 Juni 2021 p-ISSN 2715-9892 Informasi Artikel Tanggal masuk 25 Juli 2023 Tanggal revisi 20 Agustus 2023 Tanggal diterima 02 November 2023 Kata Kunci: Differentation Strategy1, Product Quality2, Price3, Purchasing Decision4 Abstract: This study aims to analyze the effect of differentiation strategy, price, and product quality on purchasing decisions at Papa Ong coffee shop. The research method used is associative with multiple linear regression data analysis techniques. The research sample was taken randomly from consumers who visited the Papa Ong coffee shop. There were 50 respondents. The results of the data analysis showed that the differentiation strategy had a positive and significant influence on consumer purchasing decisions at the Papa Ong coffee shop. In addition, price also has a significant influence on purchasing decisions, where prices that are competitive and in accordance with the value provided by coffee shop products are important factors in influencing consumer purchasing decisions. Furthermore, product quality is also proven to have a significant influence on purchasing decisions, with consumers tending to choose products that have satisfactory quality. This research makes an important contribution to the understanding of the factors that influence consumer purchasing decisions at coffee shops. The practical implication of this research is that the Papa Ong coffee shop needs to pay attention to a unique differentiation strategy, set appropriate prices, and maintain product quality in order to influence consumer purchasing decisions more effectively. INTRODUCTION In today's competitive business environment, entrepreneurs need to find effective strategies to influence consumer purchasing decisions. One strategy that is commonly used is the differentiation strategy, in which companies try to differentiate their products or services from competitors with unique features or certain advantages. In addition, price and product quality are also important factors influencing consumer purchasing decisions. Therefore, this study aims to analyze influence of differentiation strategy, price, and product quality on decisions consumer purchases. The development of coffee shops in Makassar City, like in many cities in Indonesia, has experienced rapid growth in recent years. Coffee shops, which are often also known as "coffee shops" or "spill coffee", are popular places for people to relax, gather, and enjoy coffee drinks. One of the coffee shops, known as the Papa Ong coffee shop, is one of the places where residents visit to relax and gather with family or colleagues. The rise of the coffee shop business in the city of Makassar requires coffee shop business people to carry out various innovations and strategies that are able to maintain their business existence. The Papa Ong coffee shop comes with a different feel and with its own characteristics, the building of the P apa Ong coffee shop designed in the architectural 74 Vol 5 No 1 (2023): Paulus Journal of Accounting (PJA) style of Malaysian and Chinese buildings. The quality of the dishes and the affordable prices at the Papa Ong coffee shop are recognized by many customers, as can be seen from several testimonials from visitors to the Papa Ong shop. Condition market competitive and dynamic will result in every company must always Observe competition in the business environment. A good business strategy and the ability to adapt to market demands, be innovative and develop more effective marketing strategies, are the basic capital gain a competitive advantage in the face of business competition. LITERATURE REVIEW Marketing Management Marketing management is the process of planning, executing, and controlling activities aimed at creating, communicating, and delivering value to customers and building profitable relationships with them. This involves market analysis, determination pricing, product development, promotion, and distribution. Philip Kotler (2016): "Marketing management is the analysis, planning, implementation, and control of programs designed to create, communicate, and deliver value to customers and build profitable relationships with them." Peter Drucker (1954): "Marketing management is the business of creating and keeping customers." Differentiation Strategy Michael Porter (1985): "The differentiation strategy is to create uniqueness in the products or services produced by the company, thereby differentiating it from competitors and providing added value to customers." Kotler and Armstrong (2016): "A differentiation strategy is a company's attempt to create and promote uniqueness in their product or service that target customers perceive as valuable." the aim of this strategy is to create a higher perceived value in the eyes of customers socan build competitive advantage and increase market share (Halik et al., 2023). Buying decision Engel, Blackwell, and Miniard (1995): "Purchasing decisions are processes by which consumers recognize a need or want, seek information about relevant products or services, evaluate available alternatives, and make a decision to buy or not to buy." Schiffman and Kanuk (2010): “Purchasing decisions are the result of interactions between individual needs, preferences, and decision-making processes in a complex marketing environment.” Purchase decisions are influenced by factors such as price, product quality, personal preferences, available information, and environmental factors Product quality Garvin (1987): "Product quality is a set of characteristics that affect the ability of a product to meet customer expectations or needs. ". Zeithaml, Parasuraman, and Berry (1990): "Product quality is customers' perception of the degree to which a product meets or exceeds their expectations regarding the features, performance, and benefits offered." Product quality includes features, reliability, durability, performance, design, and customer satisfaction with the product. Good product quality can increase consumer confidence, customer satisfaction, and the company's brand image. 75 Vol 5 No 1 (2023): Paulus Journal of Accounting (PJA) Price Kotler and Armstrong (2016): "Price is the amount of money a customer has to pay to obtain a product or service." Monroe (1990): "Price is the financial sacrifice made by consumers in exchange for obtaining value from a product or service." Price is an important element in marketing, which can affectperceptions of consumer value, market demand, and company profitability . Conceptual framework Differentiation Strategy implemented by Papa Ong Coffee Shop will increase the possibility of customers to choose and buy their products. Likewise, competitive prices or attractive discount offers can influence customer purchasing decisions at Papa Ong Coffee Shop.Good product quality and meeting customer expectations can improve purchasing decisions at Papa Ong Coffee Shop. The description of the conceptual framework of this study is: Strategi Diferensiasi (X1) Harga (X2) Keputusan Pembelian (Y) KualitasProduk (X3) HYPOTHESIS H1 is suspected that the differentiation strategy has a significant positive effect on purchasing decisions at the Papa Ong coffee shop. H2 is suspected that price has a significant positive effect on purchasing decisions at the Papa Ong coffee shop. H3 is suspected that product quality has a significant positive effect on purchasing decisions at the Papa Ong coffee shop. H4 is suspected that the differentiation strategy , price and product quality have a significant positive effect simultaneously on purchasing decisions at the Papa Ong coffee shop. RESEARCH METHODS Location and Research Design The research design is descriptive quantitative. The research location was carried out at the Papa Ong coffee shop in Makassar city . Population and Sample 76 Vol 5 No 1 (2023): Paulus Journal of Accounting (PJA) The research population is all visitors who come to Papa Ong's shop, considering the number of population is uncertain, the researcher determines the sample using the Lemeshow formula, where the result of the calculation is 100. Thus the sample used is 100 respondents. Method of collecting data Data collection uses questionnaires or questionnaires distributed to all respondents. the questionnaireused is a closed questionnaire that has provided the answers, so thatrespondents just have to choose (Arikunto. 2006: 151). This study uses a scaleLikertasmeasurementvariable. Data analysis method The data of this study were analyzedwithusing path analysis ( path analysis ).“ Path analysis orpath analysis is used to analyze the pattern of relationships between variables” (Saniand Maharani, 2013: 74). This model aims to determine the direct effector indirectly a setindependent variables ( exogenous ) to variables( endogenous) RESEARCH RESULT Validity Test Results The validity test that has been carried out in this study is shown in the table below : Table of Research Variable Validity NO Statement r count r table Ket 1 2 3 4 5 6 7 8 1 2 3 4 5 6 1 2 3 4 5 6 7 X1.1 X1.2 X1.3 X1.4 X1.5 X1.6 X1.7 X1.8 X2.1 X2.2 X2.3 X2.4 X2.5 X2.6 X 3 .1 X 3 .2 X 3 .3 X 3 .4 X 3 .5 X 3 .6 X 3 .7 .738 .433 .631 .874 .874 .658 .606 .808 .7 53 .6 05 .6 83 . 616 .6 56 . 768 . 631 .6 87 . 552 .5 18 . 538 . 517 . 718 77 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Vol 5 No 1 (2023): Paulus Journal of Accounting (PJA) 8 9 10 1 2 3 4 5 6 7 8 9 10 X 3 .8 X 3 .9 X 3 .10 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 . 594 . 567 .6 05 .617 .786 .576 .656 .617 .786 .565 .765 .678 .556 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 .195 Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid Valid The results of the variable validity test for all of the variables in this study show that the value of r count is greater than r table . Thus the questionnaire used by all variables is declared valid. Reliability Test Results An instrument is said to be reliable (solid) if it has a Cronbach Alpha of more than 0.70 ( ImamGhozali, 2016:48). The results of the reliability test of this study can be seen in the following table: Reliability Test Results Variable Cronbach Alpha Differentiation Strategy Price Product quality Buying decision 0.772 0.845 0.703 0.767 N of Items 8 6 10 10 Source: Statistical data processing The results of the reliability test showed that the Cronbach Alpha value of the three variables was more than 0.70, so it could be concluded that the three variables in this study were reliable. Classical Assumption Test Results Normality Test Results In this study, testing for normality of the data used the Kolmogorov-Smirnov test (Kolmogorov-Smirnov Test) by looking at the significance of the resulting residuals and the normal probability plot graphical approach. Detect normality by looking at the spread of data (points) on the diagonal axis of the graph. The results of the data normality test from the residuals are obtained as follows: Normality Test Results One-Sample Kolmogorov-Smirnov Test 78 Vol 5 No 1 (2023): Paulus Journal of Accounting (PJA) N Normal Parameters a,b Most Extreme Differences Means std. Deviation absolute Positive Negative Unstandardized Residuals 50 .0000000 .72403454 Test Statistics asymp. Sig. (2-tailed) a. Test distribution is Normal. b. Calculated from data. c . Lilliefors Significance Correction. d. This is a lower bound of the true significance. 089 089 -.087 089 .200 c,d Based on the results of the normality test above, it shows that the significance value is above 0.05 , which is 0.200. This means that the residual data is normally distributed. This can also be explained by the results of graphical analysis, namely the Normal Probability plot chart as follows: Figure 1. PP Plot Normality Test Results Where in the PP Plot graph it can be seen that the distribution of data spreads and follows the diagonal line, so it is concluded that the data is normally distributed . Multicollinearity Test A good regression model is with no occurrencecorrelation or free from multicollinear symptoms. Basis for decision making to know whether there is or 79 Vol 5 No 1 (2023): Paulus Journal of Accounting (PJA) notmulticollinearityonregression Model,is : a. IfmarkVIF>10ortolerance<0.10,socanstatedhappensymptommulticollinearity. b. IfmarkVIF<10ortolerance>0 ,10socanstatednot occursymptommulticollinearity. Followingthis is the resulttestMulticollinearity using SPSS 25 : Test ResultsMulticollinearity Coefficients a Collinearity Statistics tolerance VIF Model 1 (Constant) Differentiation strategy Price Product quality a. Dependent Variable: Purchase Decision Source:Statistical data processing, 2022 .972 .995 .967 1,229 1.205 1,304 multicollinearity test result table shows the tolerance value of the differentiation strategy variable 0.972 > 0.10, price 0.995 > 0.10 and product quality 0.967 > 0.10, 0.567 > 0.10. While the value of VIFonvariabledifferentiation strategyas big1. 229α = 0.05, then it can be saidthatNothere isinfluencebetweenvariablefreetovariablebound. The results of the T test processed in SPSS 22 are as follows: T Test Results Coefficients a Standardize Unstandardized d Coefficients Coefficients B std. Error Betas -.157 .745 .329 .064 .277 t -.210 5.101 Sig. .834 .000 .371 .397 7,420 6,823 .000 .000 Model 1 (Constant) Differentiation strategy Price .442 .060 Product quality .389 057 a. Dependent Variable: Purchase Decision Source: SPSS Statistical Data Processing, 2022 The results of the T test based on the coefficient table above can be explained as follows: The coefficient table above shows that the significance value of the three research variables is 0.00 <0.05, while the beta coefficient is positive, thus proving that the differentiation strategy has a significant positive effect on purchasing decisions, as well as the price and product quality variables which have a significant positive effect on purchasing decisions. The beta coefficient of the differentiation strategy variable is 0.277, which means that if the differentiation strategy increases by one unit, the purchase decision increases by 0.277. Likewise with the price variable, where the beta coefficient value is 0.371, which means, if the price increases by one unit, then the purchase decision will increase by 0.371, then the product quality variable the beta coefficient value is 0.397, meaning if the product quality increases by one unit, then the purchase decision will increase by 0.397 assuming the other independent variables are of a fixed value. Determination Coefficient Test Results 2 Coo efficient Determination (R ) can be used to measure howbigabilityvariableindependentexplainvariabledependent. The results of the differentiation strategy variable determination test, price and product quality on purchasing decisions can be 82 Vol 5 No 1 (2023): Paulus Journal of Accounting (PJA) seen in the following model summary table: Summary models Adjusted R std. Error of the Model R R Square Square Estimate a 1 .945 .894 .891 .74962 a. Predictors: (Constant), Product Quality, Price, Differentiation Strategy Based on the Summary model table above, it can be seen that the value of R (correlation coefficient) is equal to0, 894 or 89.4 % . This shows that the purchase decision variable can be explainedbyvariableindependentnamely the variable strategy of differentiation, price and product quality of 89.4 %. While the remaining 10.6 % is explained by other factors outsidethis research. DISCUSSION Effect of Differentiation Strategy on Purchasing Decisions Based on the results of the T test , it shows that the Differentiation Strategy has a sig value (0.00 <0.05) so it is concluded that the Differentiation Strategy has a significant effect on Purchase Decisions. The results of this study are in line with Lepa, et al (2018), Maabuat, et al (2021) and Purwati, et al (2018) which show that the differentiation strategy influences purchasing decisions because the products offered are different, the character and purchasing power of consumers are also different. The effect of price on purchasing decisions The results of the T test prove that the price significance value is 0.00 <0.05, so it is proven that price has a significant positive effect on purchasing decisions at Papa Ong's shop. The results of this study are supported by research conducted by Gunarsih, Kalangi and Tamengke (2021), Putranto and Qiyanto (2020) which state that price influences purchasing decisions. However, these results contradict research conducted by Maknunah and Apriliyaningsih (2020) which states that price has no effect on purchasing decisions. Effect of product quality on purchasing decisions Effect of Product Quality on Purchasing Decisions Based on the results of the t-test, product quality has a sig value (0.000 <0.05 ) so it can be concluded that product quality has a significant effect on purchasing decisions. The results of this study are in line with research conducted by Setyani (2020) which proves that product quality has a significant effect on purchasing decisions. CONCLUSION The results of the data analysis show that the differentiation strategy has a positive and significant influence on consumer purchasing decisions at the Papa Ong coffee shop. In addition, price also has a significant influence on purchasing decisions, where prices that are 83 Vol 5 No 1 (2023): Paulus Journal of Accounting (PJA) competitive and in accordance with the value provided by coffee shop products are important factors in influencing consumer purchasing decisions. 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