Analysis of Consumer Decision Factors on Purchasing Packaged Cooking Oil at Simpang Limun Market, Medan

1. Introduction

n today’s increasingly competitive and developing business world, companies must fiercely compete to gain profits, given that profit is their primary goal. Given these conditions, companies must have excellent performance in order to be able to win the competition in an increasingly tight market. The company can demonstrate this by producing products that outperform those of its competitors. As a result, the company can sustain its current market share and expand into new markets, thereby enhancing its overall performance [1].

Given the very tight and open business competition conditions, it is necessary to have high innovation power in corporate governance in order to win the competition. Industry players are particularly concerned about competition in their respective industries. Science and technological advancements are accelerating the advancement and development of the industrial world. The palm oil industry is one of Indonesia’s industries that continues to progress. The palm oil industry in Indonesia continues to improve quality in terms of products, production capacity, services, and marketing [2].

This results in a variety of choices for consumers, and they also become more selective in choosing which products are of high quality to use or consume. Producers as creators of goods or services will try to satisfy consumers with a variety of new products with the latest innovations so that consumers continue to use these products.

Indonesia’s economic expansion is significantly influenced by the agricultural sector. Palm oil is one of the most renowned commodities. The area of palm oil plantations in Indonesia has undergone an accelerated expansion. Indonesia’s palm oil plantations are expanding. The area of palm oil plantations increased from 14,456,611 hectares in 2019 to 14,858,300 hectares in 2020. With such a large amount, of course, the processed palm oil in Indonesia is very high and diverse.

The high production of palm oil produces various processed products, such as cooking oil, butter, soap, and shampoo [3,4].

. According to BPS [5], the country’s foreign exchange obtained from exports of palm oil products in 2022 reached 3 billion USD. Therefore, Indonesia has a surplus in crude palm oil (CPO) production. After meeting domestic needs, Indonesia exports the remaining CPO to other countries to boost its foreign exchange reserves. Cooking oil commodities are one of the largest expenditures of the Indonesian people, besides rice, corn, soybeans, shallots, garlic, red chilies, meat, chicken eggs, and sugar. The need for cooking oil increases every year. 10.86 liters per capita per year was the volume of cooking oil consumption in 2019, as reported by BPS [6]. Compared to 2014, when the figure was 9.60 liters per capita per year, this figure is expected to rise. Aside from rice, granulated sugar, wheat flour, red chilies, cayenne pepper, shallots, garlic, beef, chicken meat, chicken eggs, shelled corn, fine salt, soybeans, and fresh fish, the government monitors cooking oil due to the growing demands of families (Ministry of Trade, 2020).

The community consistently requires cooking oil, as it is a fundamental ingredient in most Indonesian dishes. Among the goods the Ministry of Trade looks at is cooking oil. In Indonesia, refined bleached deodorized olein (RBDO), a type of palm cooking oil, is the most widely used cooking oil. Since cooking oil is a basic necessity for most people, it has grown to be a significant sector in Indonesia. With palm oil as the primary raw material, Indonesia has emerged as the global leader in the production of cooking oil, according to the Ministry of Trade (2021). Cooking oil is separated into two categories in Indonesia: packaged and bulk. The Republic of Indonesia Number 11 of 2022’s Minister of Trade distributes bulk cooking oil, which is unbranded palm cooking oil without a label. Cooking oil that is packaged and has a brand name is referred to as palm oil. BPS [7] states that a large amount of people’s consumption expenditures is made up of cooking oil, rice, granulated sugar, wheat flour, red chilies, cayenne pepper, shallots, garlic, meat, chicken, chicken eggs, salt, soybeans, and fish. Furthermore, the need for one of the omega 9 sources also seems to rise annually.

In Indonesia, the consumption pattern of palm cooking oil has undergone significant development. Several factors influence the increase in cooking oil consumption in Indonesia. Firstly, the population in Indonesia increased at a rate of 1.25 percent per year from 2010 to 2020. This population growth increased cooking oil consumption in 2015 by 10.33 liters per capita per year, and in 2020 it increased to 11.58 liters per capita per year, an increase of 1.5 percent per year (Central Statistics Agency, 2021).

Based on these data, it appears that population growth has an effect on increasing cooking oil consumption. The celebration of religious holidays is the second factor. At times like this, the increase in demand for cooking oil can increase by 20% per year because, during celebrations, most Indonesians cook food using cooking oil. Thirdly, there has been a rise in the average income of the population, known as per capita income. In 2021, Indonesia experienced an 8.5% increase in per capita income to IDR 62.2 million (US$ 4.35 thousand) compared to 57.3 million per year in 2020. According to BPS [7], with the increase in per capita income in Indonesia, cooking oil consumption in Indonesia increased from 11.27 liters per capita in 2018 to 11.58 liters per capita in 2020.

In Indonesian society, cooking oil is used at 70%. People in Indonesia now greatly depend on cooking oil. Since 2001, the price of palm cooking oil has increased by approximately 9.05 percent until 2015 [8]. However, Indonesia has experienced a shortage and spike in cooking oil from the end of 2021 to March 2022. This phenomenon has prompted the government to implement three policies aimed at addressing the current issues. First, using cash from palm oil plantations overseen by the Palm Oil Plantation Fund Management Agency, the government subsidizes bottled cooking oil. The second is the Ministry of Trade Regulation Number 1 of 2022, which describes how the Palm Oil Plantation Fund Management Agency’s funding structure will supply basic packaged cooking oil for community needs. Later on, this rule changed to become Permendag Number 3 of 2022. Permendag Number 6 of 2022, which sets the maximum retail price for palm cooking oil, is the third measure. The present problems cannot be solved by these three actions alone. Because cooking oil is used so frequently, it is necessary to examine the choices made while buying it. Customers need to perform this analysis considering how quickly the corporate environment is developing. Only business actors with a competitive advantage can thrive in the highly competitive world of business. These are those who can better grasp the tastes and requirements of their customers, meet those needs, and give satisfaction than their rivals [9]. Cooking oil, the focus of this study, is a staple food with a high level of market demand. Cooking oil producers need to conduct consumer analysis to understand consumers’ attitudes towards their products, particularly when prices and availability are limited. According to Malaihollo [10], one of the determining factors in purchasing decisions is culture, social, personal, and psychological. Understanding these factors is crucial for cooking oil business actors, as it enables them to innovate their products and enhances their competitiveness with other palm oil business actors.

Whether they live in the city or the countryside, Indonesians eat a lot of staple foods, including cooking oil. Its use in food goods extends beyond flavoring; it also enhances their color, scent, and shelf life. Cooking oil prolongs the shelf life of fried foods and enhances their taste and appearance during the cooking process. Cooking oil not only helps with cooking but also supplies essential vitamins that the body needs. A, D, E, and K are among the fat-soluble vitamins found in a variety of cooking oils, and they have extra health advantages. Furthermore, cooking oil has key essential fatty acids like omega-3 and omega-6 that are necessary for healthy bodily function. These fats are important for immune system, brain, and heart health maintenance. With these various benefits, cooking oil is not only a vital component in the household kitchen, but it also contributes to nutritional balance and public health. As a frequently used food ingredient, choosing quality cooking oil that meets nutritional needs is important to support a healthy diet.

The market currently divides cooking oil into two main categories: bulk cooking oil and branded packaged cooking oil. Although both types of oils have similar uses in cooking, consumer preference tends to be higher for packaged cooking oil. Several key factors influence this choice, making packaged cooking oil more appealing than bulk cooking oil. Packaged cooking oil is often considered to be of better quality than bulk cooking oil. The more stringent production process and higher quality standards are two of the main reasons. Packaged cooking oil usually goes through more thorough filtration stages, including a double-filtration process that removes impurities and contaminants. This process not only improves the clarity and taste of the oil but also ensures that the final product is purer and free from unwanted ingredients.

Additionally, due to the more controlled conditions of the packaging process, packaged cooking oil is considered more hygienic. Sealing the oil in bottles or containers prevents environmental contamination, ensuring the product remains clean until its use. This provides consumers with a sense of security regarding the quality and safety of the product they are purchasing. Attractive packaging and clear information on the label also play an important role in attracting consumer attention. Consumers can easily identify the brand, expiration date, and nutritional information, which helps them make better purchasing decisions. With all these advantages, it is no wonder that packaged cooking oil has become a favorite choice among consumers looking for products with higher quality and safety standards.

With an increasing population each year, the demand for cooking oil continues to rise. This population growth directly impacts the need for food consumption, including cooking oil, which is a staple in the daily diet. Economic and social factors often influence changes in consumption patterns, accompanying this increase in demand. As income and education levels increase, there is a shift in consumption preferences. Consumers with higher incomes and better education tend to prefer packaged cooking oil over bulk cooking oil. Packaged cooking oil’s superior quality and hygiene, along with growing awareness of nutrition and a healthy lifestyle, influence this choice. Increasing income allows consumers to access higher-quality and more expensive products, including packaged cooking oil, which is often considered more premium. Meanwhile, higher levels of education contribute to a better understanding of nutritional and health values, as well as the impact of food consumption on long-term health. With better information, consumers are more likely to choose products that support a healthy lifestyle, such as packaged cooking oil, which is considered cleaner and has guaranteed quality.

Furthermore, the increasingly popular healthy lifestyle trend encourages consumers to look for products that meet not only nutritional needs but also higher health standards. Packaged cooking oil, with a more hygienic filtering and packaging process, is a more suitable choice for consumers who care about health and food hygiene. Therefore, changes in people’s income and education play an important role in directing consumption preferences towards higher-quality products and supporting a healthy lifestyle. The increasing demand for packaged cooking oil reflects a greater awareness of the importance of health and quality in choosing everyday consumer products.

2. Method

This research is quantitative, i.e., data obtained in the form of numbers and analyzed using statistical methods. We can interpret quantitative research methods as positivist-based research techniques applied to specific populations or samples. Researchers use quantitative research to test theories, present facts, describe statistics, and demonstrate the relationship between variables. In order to investigate the relationship between variables and test hypotheses, this study employs an explanatory research design [11]. By establishing causal linkages and assessing the degree of influence between variables, explanatory research aims to find the underlying cause of one or more issues by testing hypotheses regarding the relationship between variables that are formulated using econometric models. Additionally, according to Sekaran [11], the purpose of a causal study is to clarify how variable X influences variable Y. All shoppers at Pasar Simpang Limun in Medan who purchased packaged cooking oil were included in this study. For this investigation, 96 respondents were chosen as a sample from this group. Non-probability sampling is the method used for sampling, meaning that not every member of the population has an equal chance of being included in the sample. We used a questionnaire to get primary data straight from the source. We designed this questionnaire using a Likert measurement scale, following Sugiyono’s [12] method. We use the Likert scale to gauge respondents’ reactions to the statements in the questionnaire. Data analysis is the process of interpreting data that has been collected. If the collected data is not analyzed, it will become meaningless, dead, and just noise. This data analysis serves to give meaning and significance to the values that depend on the data. Reviewing, organizing, analyzing, and validating data is the process of giving a phenomenon social, scholarly, and scientific significance [13]. Multiple linear regression analysis, which looks at how independent variables affect dependent variables, was used in this study to analyze data. To ascertain if the data is linear or non-linear, we then plot the data using the statistical software package Statistical Product and Service Solutions (SPSS) Version 21.

3. Findings and Interpretations

The analysis’s findings indicate that, at 90.63% of all purchasers, women make up the bulk of packaged cooking oil consumers. This suggests that women are more likely to purchase this product, potentially due to their traditional roles and household management responsibilities. In terms of age, the majority of buyers of packaged cooking oil are individuals aged over 40 years, accounting for 67.71% of the total buyers. In contrast, only 6.25% of buyers are under 20 years of age. This suggests that this product is more popular among older age groups, possibly due to the greater need for cooking and daily consumption in this age group. In addition, the majority of buyers of packaged cooking oil are housewives, accounting for 62.50% of the total buyers. In contrast, only 4.17% of buyers are unemployed. These data reflect that housewife, as the main managers of household needs, may be the main consumers of this product. Their involvement in purchasing essential household items, including packaged cooking oil, indicates their dominant needs and shopping habits in this category.

According to the analysis’s findings, social factors positively influence customer purchasing decisions, as evidenced by their positive regression coefficient value of 0.061. This influence suggests that alterations in social elements, including customs, money, social class, and culture, will have an impact on consumers’ choices to use bottled cooking oil. Put otherwise, a rise in these social factors will result in more people making purchases. The affirmative impact of this investigation validates the significance of social variables in shaping consumer behavior. Consumers are more likely to make purchases, especially packaged cooking oil goods, as culture, habits, and income rise. This underlines the importance of considering social factors in product marketing and sales strategies.

The cultural factor’s t-count value, as determined by the t-test, was 2.254, exceeding the t-table’s value of 2.021. This number suggests that cultural influences have a big impact on what people decide to buy. Furthermore, this conclusion is further supported by the derived significance value of 0.040, which is less than 0.05. As a result, we reject the null hypothesis (H0) and accept the alternative hypothesis (H1), which suggests that the cultural variable has a large and partially beneficial impact on consumers’ decisions to buy packaged cooking oil. This positive effect shows that culture has a real impact on influencing consumer choices, so changes in cultural elements can affect consumers’ tendency to choose certain packaged cooking oils.

Dwinada [14] found that consumers are increasingly likely to purchase packaged cooking oil due to cultural shifts. In this context, culture has encouraged people to choose more practical, quality, and branded products, indicating a growing preference for products that offer convenience and a certain image. This cultural shift may reflect changes in consumer lifestyles and perceptions of quality and brands, where more practical and reliable products are more valued.

Cultural factors are one of the main factors in purchasing decisions, especially since consumers now have wider access to a variety of alternative product choices. Consumers not only consider price and function but also how a product fits their cultural values and lifestyle. With a variety of alternative choices, consumers can choose the product that best suits their needs and abilities, but they should still consider important cultural aspects in their decision-making. This demonstrates that manufacturers must understand the cultural dynamics of the market in order to meet consumer expectations and increase the appeal of their products.

The analysis’s findings demonstrate that social factors have a regression coefficient value of -0.230, indicating a negative impact of social factors on customer purchasing decisions. This means that if social influences such as family, friends, or consumer roles and status increase, the decision to buy packaged cooking oil tends to decrease. Social influences, which encourage consumers to choose alternatives more in line with their social group’s norms or expectations, may cause this negative impact. For example, recommendations from friends or family who are more supportive of other products can make consumers hesitate to buy certain packaged cooking oils, even though the product may be in accordance with their individual preferences. This shows that social factors can act as obstacles in the purchasing decision process, depending on the dynamics and values that apply in the consumer’s social environment.

The t-count value for social factors is 2.293, which is higher than the t-table of 2.021 according to the t-test. Furthermore, the obtained significance value is 0.045, indicating a value below 0.05. The findings indicate that social factors have a major impact on customers’ decisions to buy packaged cooking oil, rejecting the null hypothesis (H0) and accepting the alternative hypothesis (H1). Social influences, such as those from friends, family, and the environment, are significant when it comes to consumers’ decisions to buy bottled cooking oil.

These findings are consistent with earlier research by Santoso and Purwanti [15], which discovered that social influence whether from friends, family, or the surrounding community can play a role in influencing consumers’ decisions to select and purchase bottled cooking oil. However, even though this social influence exists, consumers tend to make purchasing decisions independently. These decisions are often based on practical needs and financial capabilities, rather than pressure or recommendations from their social environment.

Consumers recognize packaged cooking oil as a fundamental necessity in their daily lives. Therefore, they are more likely to choose products based on their habits, needs, and personal preferences, as well as their financial capabilities. The packaged cooking oil products chosen are typically known and trusted by consumers based on their personal experience using the product. This shows that while social factors can influence purchasing decisions, other factors, such as individual needs and previous experiences with a particular product, are often more dominant in determining consumers’ final choices.

Furthermore, consumers’ tendency to decide for themselves which packaged cooking oil product to buy shows that brand loyalty and trust in product quality play an important role in purchasing decisions. Although they may seek advice from family or friends, consumers ultimately make decisions based on their desire to fulfill their daily needs with products they have personally tested and trusted. This emphasizes the importance for manufacturers to continue to maintain quality and consumer trust in their products so that they remain the main choice amidst various social influences.

According to the analysis’s findings, personal aspects positively influence consumers’ purchase decisions, as seen by their positive regression coefficient value of 0.501. This implies that the decision of the consumer to purchase packaged cooking oil will increase if personal factors like age, lifestyle, and consumer purchasing power for such products increase. This beneficial effect implies that a person’s lifestyle and financial preferences, among other personal characteristics, are significant determinants of their decision-making. Customers with busier schedules might be more inclined to select products that are more useful and simpler to use, whereas elderly consumers might be more inclined to stick with known companies. In addition, increased purchasing power allows consumers to choose higher-quality products or more premium brands, which in turn increases their decision to buy certain packaged cooking oils.

The t-count value for personal factors was 2.399, which is higher than the t-table of 2.021 according to the t-test. Moreover, the significance value was less than 0.05 at 0.018. According to the results, which support the alternative hypothesis (H1) and refute the null hypothesis (H0), personal factors may have some bearing on consumers’ decisions to buy packaged cooking oil. A person’s decision to buy bottled cooking oil is greatly influenced by personal characteristics, including age, lifestyle, and spending ability.

These findings are consistent with earlier research by Marbun [16], which discovered that individual aspects have a major impact since customers take age, lifestyle, and spending power into account when making selections. Consumer preferences can be influenced by age; older consumers may have different shopping patterns or be more brand loyal than younger consumers. Conversely, lifestyle can influence the kind of product selected. For instance, buyers with hectic schedules could favor useful and simple-to-use products. Another factor that matters is purchasing power, since people who have more of it may be more inclined to select luxury goods or upscale brands.

In addition to age, lifestyle, and purchasing power, personality factors also include aspects such as occupation and income, all of which can influence purchasing decisions. For example, individuals with better jobs or higher incomes may have different shopping habits, tending to choose higher-quality products or more familiar brands. Differences in age, occupation, and income certainly affect how individuals make purchasing decisions, so it is important for manufacturers to understand these personal factors when designing their marketing strategies. Manufacturers can better match consumer demands and preferences and boost their appeal in the marketplace by recognizing these aspects and customizing their products and marketing techniques.

The analysis’s findings demonstrate that psychological variables have a positive regression coefficient value of 0.372, indicating a favorable influence on consumers’ purchase decisions. This implies that consumers’ decisions to purchase bottled cooking oil would rise in tandem with psychological factors including need motivation, beliefs, and evaluations of the products. This beneficial influence indicates that psychological aspects are important when making decisions. Motivation can influence how important packaged cooking oil products are to consumers, while beliefs about the quality or benefits of a product can influence the decision to choose one. A positive assessment of a product can also strengthen consumers’ desire to buy, because consumers tend to choose products that they consider to provide value or benefits that match their expectations.

The psychological component has a t-count value of 2.591, which is higher than the t-table of 2.021, according to the t-test. Moreover, the significance value was less than 0.05 at 0.015. The findings indicate that the alternative hypothesis (H1) is accepted and the null hypothesis (H0) is rejected, suggesting that psychological factors are important in influencing consumers’ decisions to buy bottled cooking oil. In other words, psychological factors have a significant impact on consumer decisions to purchase packaged cooking oil.

Consumers can explain this positive influence by gaining motivation, understanding, knowledge, and confidence in the available packaged cooking oil products. Motivation for needs, understanding of benefits, and positive assessments of product quality influence consumer decisions to choose and purchase packaged cooking oil. When consumers feel confident in the benefits and quality of a product, they are more motivated to make a purchase. Consumers’ knowledge about the product strengthens this belief, enhancing their confidence in their purchasing decisions.

These results are in line with Kotler’s theory [17], which states that the process of action and learning influences a person’s beliefs and attitudes. These beliefs and attitudes, in turn, influence purchasing behavior. Consumers who have a positive attitude towards a product or brand tend to have a stronger desire to choose and purchase it. This suggests that psychological aspects such as motivation and beliefs play a key role in purchasing decisions, where consumers who feel positive about the benefits and quality of a product are more likely to purchase it.

Thus, packaged cooking oil manufacturers should consider these psychological factors in their marketing strategies. Building positive beliefs through effective promotions, educating consumers about the product’s benefits, and ensuring consistent quality can help attract consumer interest and encourage them to make purchases. In this way, manufacturers can leverage psychological influences to increase the appeal of their products in the market and better meet consumer needs and expectations.

4. Conclusion and Recommendations

The study’s findings and the debate that followed support the notion that cultural, social, psychological, and personal factors have a big impact on people’s decisions about what bottled cooking oil to buy. Cultural influences have a strong and beneficial influence, suggesting that customers’ purchase decisions are influenced by their cultural traditions and values. Additionally, social factors have a favorable and significant influence, suggesting that social environments, friends, and family play a role in influencing consumer decisions. Additionally, a person’s age, lifestyle, and spending ability all have a positive and significant impact on the decisions they make about what to buy. Psychological factors also have a positive and significant impact, with motivation, beliefs, and product assessments influencing purchasing decisions.

Simultaneously, the four independent variables culture, social, personal, and psychological, have a positive and significant influence on purchasing decisions for packaged cooking oil, indicating that the combination of these factors as a whole influences consumer decisions in choosing products. The normality test, heteroscedasticity test, and multicollinearity test, which are part of the classical assumption test, also show that this research model meets the statistical requirements. This means that the analysis results are valid and reliable.

The analysis of the research results suggests several recommendations: First, we advise packaged cooking oil producers to maintain the factors that primarily influence purchasing decisions, while simultaneously developing other factors to expand the market reach of their products. Second, we expect the government to support the development of cooking oil businesses and marketing that adhere to standards, ensuring the content and safety of the oil circulating in the market. Third, we advise further researchers to explore additional variables that influence packaged cooking oil purchasing decisions and broaden the scope of the studied market to gain more comprehensive insights.