Dependent variable defines as a outcome variable that is measured to see whether the treatment or manipulation of the independent variable had an effect. The dependent variable is the purchase decision on life insurance.
Independent variables represent the treatments or conditions that the researcher controls to test their effects on the outcome. The independent variables in this research are the service quality, brand. social influence, advertising and demographic factors.
According to Sekaran (2003) A hypothesis can be defined as a logically conjectured relationship between two or more variable expressed of a testable statement According to the research framework above, there are five hypotheses are formulated to test the relationship between independent variables and dependent variable.
The five hypothesis uses in this study are as follow:
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Services are intangible, they cannot be reworked or returned and, more important, the customer trusts the service provide by the agent and expect receive a good service. (Jay Kandampully and Liam Butler, 2001).The service quality play an important role in consumer purchase decision-making.
The order of hypothesis use in the service quality analysis is as follow:
H1 The service quality provides by the insurance agent has a significant relationship with the purchase decision.
Brand names attract consumers to purchase the brand and bring about repeat purchasing behaviour and reduce price related switching behaviours (Cadogan and Foster, 2000)
The order of hypothesis use in the brand analysis is as follow:
H2 The brand of the life insurance has a significant relationship with the purchase decision.
Social can define as "the whole people who live together on the same land and who collaborate to obtain their basic needs, community" (TDK 1992, p. 1484).The demand for life insurance in a country may be affected by the unique culture of the country to the extent that it affects the population's risk aversion (Douglas and Wildavski, 1982). Influence involves actions by family members that make a difference during the decision process (Beatty and Talpade, 1994).
The order of hypothesis use in the social influence analysis is as follow:
H3 The social influence has a significant relationship with the purchase decision.
The additional information in consumer purchase decision has implication for advertsing.( Gîrboveanu Sorina-Raula, Craciun Liviu and Meghisan Georgeta-Madalina,2008)
The order of hypothesis use in the advertising is as follow:
H4 The advertising has a significant relationship with the purchase decision.
According to Amit Shrivastava and Bhuwan Shrivastava (2007) demographical factor is the factor which has the greatest effect in the purchase decision of the product and especially if that product is life insurance product.
The order of hypothesis use in the advertising is as follow:
H5 The demographic has a significant relationship with the purchase decision
Population and Sampling
A population is a group of potential participants to whom you want to generalize the result of study. According to Saunders (2000), sampling techniques provide a range of methods that enable a researcher to reduce the amount of data, which is needed to collect, by considering only data from a sub-group rather than all possible cases or elements. There are two types of sampling techniques which are probability or representative sampling and non probability or judgmental sampling The population in this research consists of the all Generation Y consumer who purchase life insurance which is between 18 to 30 years old.
According to Malhotra (2009), the probability sampling is where the elements are selected randomly, the probability of selecting the participants is determined by chance. Non probability sampling is where the likelihood of selecting any one number from the population is not known. A sample is a subset of a population. The sample selection is based on the convenience sampling, which is the non probability sampling. Convenience sampling involves obtaining a sample of elements based on the convenience of the researcher.
Data Collection Method
Data collection methods include interviews, questionnaires and observation. For this research, questionnaire is apply in this study.
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A questionnaire is a formalized set of question for obtaining information from respondents. The questionnaires are distributed to a selected group; face to face interview is chosen in the questionnaire design. The questionnaires is divide into 2 section, the first parts is to collect the customer demographic data. The first part of the questionnaires consist of the age, gender,races, marital status, education level,income level and the current job position.
Questionnaire can divide into open-ended question which is the respondent reply in his or her own words and closed-ended question which requires the respondent to make a selection from a list of question are using in questionnaire design.
The second part of the questionnaire is the closed ended question, the respondent are require to make a selection from the list of question, there are 5 point scale question which have a ranging from strongly disagree to strongly agree.
Data Measurement Scale
The data measurement scale includes four basic measurement which is, ordinal scale, nominal scale, interval scale, and ratio scale. The design of the questionnaire is focus on two type measurement which is the Nominal and Ordinal. Nominal scale is a scale to identify objects, individuals, events or group, determinate of equality or inequality and are most commonly using in the research. Nominal scales are used in the questions which are in the demographic information section such as female or male, buyer or non buyer. Ordinal scales besides identification which provides information about the relative amount of some characteristic possessed by an event or object, and to determine of the greater or lesser. For each question, respondents will asked to circle the response which best described their level of agreement. Besides that, all items were measured using a 5-point Likert-type scale (ranging from 1, 2, 3, 4, 5; Strongly Disagree to Strongly Agree).
Reliability is when a test measures the same thing more than once and results in the same outcome. It is a concept but it is also a practical measure of how consistent and stable a measurement instrument or a test might be. There are four types of reliability, Firstly, is the Test-retest which is a measure of stability. Secondly, the Parallel Forms which is a measure of equivalence. Thirdly, the Parallel forms which is measure of agreement.Lastly, the Internal Consistency which is a measure of how consistently each item measure the same underlying construct.
Validity define as the quality of a test doing what it is designed to do.Validity refers to the result of a test and not to test itself. Besides that, the validity of the results of a test must be interpreted within the context in which the test occurs. There are four type of Validity, each of which is use to establish the trustworthiness of results from a test or an assessment tool.
Firstly, the most simple type of validity which is the content validity. Content Validity is the extent to which a test represents the universe of items from which it is drawn, it is useful when evaluating the usefulness of achievement test. Secondly, the Criterion validity is concerned with how well a test either estimates present performance.Thirdly, the predictive validity which is to determine how well it predict future performance. Forthly, the Construct Validity is the context to which the results of a test are related to an underlying psychological construct.
Source of Data
According to Sekaran (2000) data can be collected in a variety of ways, in different settings and from different sources.
Primary data refer to information obtained firsthand by the researcher on the variables of interest for the specific purpose of the study (Sekaran 2003). The primary data consist of the interview or survey and using the questionnaires.
The secondary data in this study consists of earlier study or journal which was be done by other researchers, industry analyses offered by the media, newspaper articles, books, and relevant materials found both in library and the Internet (Sekaran, 2000). These data are mainly used to support the research idea in the literature review. In this research, the journals act as the most important source of secondary data.
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Data are tested for the valid and reliability in the core choice model in several different ways. The data are tested for the relative advantages, compatibility, and complexity and so on.
The hypothesized relationships were tested using the multiple regression analysis of SPSS 16.0 for Windows. The SPSS 16.0 is a system which includes t-test, one-way ANOVA, cross tabulations, chi-square, and correlation analysis was conducted to identify differences among user groups. Besides that, SPSS can generate useful tables and graphs such as pie charts, bar charts and so on for better decision-making. With SPSS, it is easy to understand the variable among the effect of the purchase decision. The system will changed all reported independent and dependent variable to numeric codes.
The correlation coefficient r is a measure of the linear relationship between two attributes or columns of data.
Cross Tabulation represent a simple-to-understand, yet powerful, analytical tool. For example the cross tabulation may determine the percentage of factor influence the customer purchase decision on life insurance.