The Influence ofMarketingMix Strategy on Consumer Decision to Saving in Islamic Bank. Study: PT. Bank Syari’ah Mandiri in Pariaman City

Hafiz, Alsatori (2013) The Influence ofMarketingMix Strategy on Consumer Decision to Saving in Islamic Bank. Study: PT. Bank Syari’ah Mandiri in Pariaman City. Diploma thesis, Universitas Andalas.

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Abstract

Islamic banking functioning as financial intermediary institution conducts financial transactions that are similar to those in conventional banking. Funds collected by Islamic banking from those having capital in excess are further channeled to those having capital in shortage, so that economic development process can be realized. One main actor in the development of Islamic banking is Islamic Development Bank (IDB), which supervises the organization of Daar-al-Maal al- Islami (Islamic House of Funds) or DMI. Besides, International Association of Islamic Banks (IAIB) has been established as a technical advisory institution for Islamic banking in August 1977 (Erol and of El-Bdour, 1989). The first attempt to establish local Islamic bank was done at the end of 1950 in rural area in Pakistan, where the burden of interest is omitted. Later, followed by Moslems in Malaysia, who tried to establish an interest-free bank in the middle of 1940-ies. In India, Jamaat-EIslami Hind started the practice of free interest loan in 1968. While in Egypt, the first Islamic bank named Nasser Social Bank was founded in September 1971 (Erol and El-Bdour, 1989), in Iran, the Islamic banking system was started in 1979, by the nationalization of commercial banks (Yousefi et al, 1995). 9 In the Indonesian banking sector plays an important role in supporting healthy economic growth, banks have a function as an intermediary institution that receives funds from the public and then funnel back to the community in order to play optimally in stimulating the real sector in Indonesia. Compared with conventional banking, Islamic banking during the past 10 years shows that the performances is quite good and contribute to the development of the banking industry in Indonesia. This performance is more pronounced when the crisis of economic in Indonesia, when many conventional banks collapsed. Islamic Banking relative can survive even show progress. Islamic banks own operations marked by the establishment of Bank Muamalat Indonesia in 1992 as the first Syariah-compliant commercial bank, Bank Muamalat's presence directly increase the participation of Muslims to be Syari’ah and helped develop the economies of small communities. Accordance with the Islamic Syariah system, Bank Muamalat was able to pass through the economic crisis and received the title as one of the healthiest banks in Indonesia, this proves that the Islamic economic system is able to respond to the results of economic problems being faced in Indonesia. (Sudarsono in Dimaz, 2011) According to Bank Indonesia (BI) in the article about West Sumatra Regional Studies First Quarter – 2013 with research and subtitle The development of Islamic Banks explain that Performance of Islamic banks in Sumatra although still positive growth began to slow. This can be seen with the growth of Islamic commercial bank assets in West Sumatra where the position of the first quarter of 2013 amounted to Rp. 3.9 trillion, with growth reaching 22.8% (yoy), slightly lower than the previous 10 quarter which grew by 35.9% (yoy). Slowing rising asset accumulation in the first quarter 2013 in line with a slowdown in growth financing. Rivai (2007) in his research about Identifikasi Faktor Penentu Keputusan Konsumen dalam Memilih Jasa Perbankan: Bank Syari’ah Vs Bank Konvensional, said that West Sumatra as one of the provinces in Indonesia, which is dominated by Minangkabau tribe, is unique to the behavior of consuming a product. Structure and perception of people in West Sumatra have been established with majority religious community is very possible that the presence of the various perceptions that influence people's behavior in choosing a bank. However, the religious factor or perception based only on religious grounds does not necessarily affect people's behavior towards the decision to use a type of banking services. Besides the aspects of non-economical allegedly also can affect the interaction of the banking world. By understanding the preferences of the public against the banks, then the banks (syari’ah or conventional) had a strong judgment to design strategies and policies that are more market driven. If we compare between conventional banks and Islamic banks, the share or market share of deposits in 2004 that has been tilled by Islamic banks in West Sumatra is relatively small (3.36%) compared to conventional banks. If further attention, until May 2006 the percentage share of deposits tends to decrease. This needs to be a concern institutions, both Islamic banks and Bank Indonesia itself, because if this phenomenon is not anticipated, it is possible share of Islamic banks in West Sumatra will be smaller. 11 Although religion is one of factor considered by consumers to be willing to be customers of Islamic banks, there are many reasons and other factors that can influence the consumer for consideration would be the Islamic bank customers. One of them is derived from marketing strategies undertaken by Islamic banks through the marketing mix strategy. Where in the policy includes product, price, promotion, place and distribution channel, so the customers of the marketing mix can be influenced to want to deal with Islamic banks with a customer of Islamic banks. Assessed the marketing mix can affect consumers' consideration for would be customers of Islamic banks (Firman, 2010). Marketing mix is being defined as a set of controllable tactical marketing tools which the company can use to create the reaction it wants in the target market (Kotler, 2008). This set of tools is commonly referred to as the 4P: Product, Price, Promotion and Place (Balachandran & Gensch, 1974 ; Kotler, 2008). If companies are not able to combine the marketing mix, as implication a real future, it will have an impact on the existence of the banking company itself. Customers and prospective customers no longer trust to save money on our company and will switch to a more reliable company. In today's era of free trade and globalization, every companies and all kind of business in every countries around the world must can to accept every competition and new competitors in the business. In this case, how the marketing mix strategies undertaken by each Islamic bank in the world where Islamic banking is now very competitive, in conveying the intent of their marketing strategy to be accepted and 12 understood by consumers or customers willing to opt for dealing with syari’ah bank through the advantages possessed Islamic banks. As such, it will always be associated with the behavior of consumers in the decision-making process in choosing the Islamic banks. What are things that considered, what are things that actually attract the attention of consumers in choosing Islamic banks when seen from the side of the marketing mix strategy of Islamic banks are accepted by consumers. Based explanation above, companies also can influencing consumers in choosing banking services especially on Islamic banking services in West Sumatera. Companies must can give and provide the best products or services and also the best job performance of employees in produce the product or serve the consumers. Companies are required to find and build a management system that is able to retain its customers in a professional manner. Two important things to consider in conducting the company's main customer retention is firstly due to the high cost of acquiring new customers in a climate of such tight competition, the second is the level of company’s ability of profitability proportional to the growth of the relationship between companies and customers permanently (Hurriyati in Irwinda, 2011). Jones and Sanser in Hurriyati (2005) who studied the preparation of a variety of application opportunities in the era of globalization believe that in the era of free trade are not protected at all, the foundation of the company to remain able to survive are the loyal customers. For that reason, the company is required to foster a competitive advantage through attempt creative, innovative, and efficient, so that the 13 choice of many customers who in turn are expected to be faithful loyal and believe in the company. In such conditions, we can see how the attitudes of consumers facing with many choices, all of which demanded a decision to consume the product or not. Of course, consumer attitudes are influenced by many factors in consideration. As far as attitude problems can be attributed to psychological factors and demographic, any company or organization concerned will be able to improve efficiency to achieve the best prospects. In response, of course, especially the banking business will make every effort to influence consumer behavior to become partners and best customers. The banks are also required to be observant predict micro and macro economic development in order to determine the results to be obtained not only optimize revenue based on customer service but a business based on service to prospective customers. In business of banking, Islamic bank or we also know with syari’ah bank also must do every strategy to get consumers because condition of Indonesian’s banking today, development of Islamic bank is very good. This is evident with the emergence of Islamic banks or Dual Banking System, for examples Bank BNI Syari’ah, Bank Bukopin Syari’ah, Bank Danamon Syari’ah, Bank Republik Indonesia Syari’ah and International Syari’ah Bank (Koperasi Syari’ah, 2011). Indonesia Islamic Banking system began in 1992 with the implementation of Law no. 7/1992 which allows the bank to run its business operations with a profit-sharing system. In the same year was born the first Islamic bank in Indonesia, Bank Muamalat Indonesia (BMI) and until 14 1998, practically undeveloped Islamic banks. Only after its launch Dual Banking System through Law no. 10/1998, Islamic banking began to squirm up. In the 5 years since its Dual Banking System, the perpetrators of Islamic banks increased to 10 banks with details of the two banks is an independent entity (BMI and Bank Syari’ah Mandiri) and the other is a unit or Syari’ah division of conventional banks. Islamic Bank is a bank conducting business based on Islamic or Syari’ah principles in their activities providing services in payment traffic. Condition likes this make every Islamic bank must give the best product or services and service quality to consumers in order to directly it can help a company to get many consumers and to increase the profit. Islamic bank also focus to marketing mix as one of strategy to achieve the purpose of a company. Bank Syari’ah Mandiri is one of Islamic bank in Indonesia and also existed in Pariaman City. Generally, according to the Decree of Senior Deputy Governor of Bank Indonesia No. 1/1/KEP.DGS/ 1999 Bank Syari’ah Mandiri has established in Indonesia and Bank Syari’ah Mandiri has officially been in operation since 25 Rajab 1420 H or November 1, 1999. And for Pariaman City, Bank Syari’ah Mandiri is one new comer in Islamic bank and business of banking. Bank Syari’ah Mandiri entering in banking business in Pariaman City at 2009. There are some of the major problems faced by Islamic banking are consumers who blame their banking services for dissatisfaction with their Islamic bank’s products and price or interest rate on banking services. These problems are a consequence of the lack of understanding about and planning of the marketing mix, 15 namely “the four Ps’: product, price, place and promotion and subsequently, how each “P” influences customer decision-making. The concept of 4Ps is an input component of the customer decision-making model. This model operates on the premise that external influences serve as a valuable source of information about particular products, thus influencing customers’ product-related values, attitudes and behaviors (Schiffman, 2007). In view of this, it is, therefore, crucial for Islamic banking to improve their marketing mix in order to attract customers as well as fulfill their needs and meet their expectations. Therefore, PT. Bank Syari’ah Mandiri in Pariaman city required to predict how consumers will respond to marketing strategies was implemented. In order to achieve the desired goals, the role of promotion also helped determine the success of the company's products. The development strategy should be built on the basis of continuity between product differentiation, distribution channels or strategic place to serve customers, processes and physical evidence that supports each other. Because of that, the authors strongly believe that the 4Ps, namely product, price, place and promotion are important factors that influence consumer decision to saving in Islamic bank. Based on description explained above, the phenomenon of Islamic bank in banking business in West Sumatera, especially Islamic bank in Pariaman City becoming interested itself to researcher. Therefore, this study wanted to raise the issue in a research thesis entitled: THE INFLUENCE OF MARKETING MIX STRATEGY ON CONSUMER DECISION TO SAVING IN ISLAMIC BANK (STUDY: PT. BANK SYARI’AHMANDIRI IN PARIAMAN CITY).

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