Which is More Influential in Online Purchasing Decisions: Price or
Trust?
Dita Amanah
1,2
, Ratih Hurriyati
1
,Vanessa Gaffar
1
, Lili Adi Wibowo
1
, Dedy Ansari Harahap
1,3
, Fauzia
Agustini
2
, Yuni Dearma Saragih
2
1
Universitas Pendidikan Indonesia, Jl. Dr. Setiabudhi No. 229, Bandung, Indonesia
2
Universitas Negeri Medan, Medan, Indonesia
3
Universitas Islam Sumatera Utara, Medan, Indonesia
Keywords: Price, Trust, Online Purchase Decision, College Student.
Abstract: This paper is about the effect of price and trust in online purchase decisions of students of Faculty of
Economics, Universitas Negeri Medan. The sample is one hundred and sixty two respondents. Data
collected by questionnaires using Likert scale and statistically analyzed by multiple regression analysis. The
results showed that the price and trust simultaneously significantly influence the purchase decision. Partially
price and trust influencing on purchase decisions. It can be concluded that online purchase decision effected
by price and trust positive and significantly on the students of Faculty of Economics, Universitas Negeri
Medan. Therefore, online marketers should concern on those two variables (price and trust) in determining
the factors that influencing purchase decision. The implication of this study is the formation of appropriate
strategies by online entrepreneurs so that students are more interested in shopping online.
1 INTRODUCTION
1.1 Research Background
The rapid development of information technology
including the internet has brought great impact in
various aspects, no exception for the development of
the business world and marketing. High human
mobility requires the business world is able to
provide services and goods quickly according to
consumer demand. To overcome these problems,
now emerging transactions using the internet media
to connect producers and consumers. The trend of
online shopping is in great demand because the
online shopping decision process is not as
complicated as offline shopping decisions. Shopping
online is easy and cost saving compared to the
traditional shopping.
The phenomenon of the evolution of online
shopping trend is now strengthened by the survey
conducted by Nielsen. Nielsen found that more than
85% of the internet users have made purchases
online. In Indonesia, half of online shoppers use
Facebook (50%) and other social networks (49.2%)
to buy items like fashion, electronics, books to home
appliances.
Nowadays purchasing decisions are important
variables for marketers. The purchase decision is the
consumer's understanding of the wants and needs of
a product. Purchasing decisions are made by setting
purchasing objectives, assessing from existing
sources, identifying alternatives, deciding on
purchases and ultimately post-purchase behavior
(Swastha and Irawan, 2008). According to Mujiyana
et al. (2012), the process of online shopping
decisions is the search for information, comparing
existing alternatives and decision making whether to
buy the goods or not. At the information search
stage, consumers will look for references about the
online store through the opinions of others who
already use the product.
One of the factors that influence and become an
attraction for consumers to decide the purchase of
products is price. Price greatly influences online
consumer purchasing decisions (Ristania and
Justianto, 2013).Availability of price information in
an online store is very helpful for consumers to
know and compare it to another online stores.
798
Amanah, D., Hurriyati, R., Gaffar, V., Wibowo, L., Harahap, D., Agustini, F. and Saragih, Y.
Which is More Influential in Online Purchasing Decisions: Price or Trust?.
In Proceedings of the 1st International Conference on Islamic Economics, Business, and Philanthropy (ICIEBP 2017) - Transforming Islamic Economy and Societies, pages 798-803
ISBN: 978-989-758-315-5
Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved

In addition to price, trust also greatly influences
online purchasing decisions. Trust is a key factor in
online consumer purchasing decisions (Wardani and
Saino, 2013). The success of a marketer in
influencing consumers to make purchasing decisions
is strongly influenced by efforts to foster consumer
confidence. Consumer confidence is an invaluable
asset for a marketer because it is the basis in the
relationship between producer and consumer. Based
on the previous description, then the purpose of this
article is to identify the effect of price and trust on
online purchase decision of student in Faculty of
Economics, Universitas Negeri Medan.
1.2 Research Purposes
 Identifying the effect of price and trust to
online purchase decision for college students
in Universitas Negeri Medan;
 Specifies the most influentialfactors on online
purchase decision for college students in
Universitas Negeri Medan.
1.3 Research Contributions
Online entrepreneurs can take advantage these
results to evaluate the business strategy and create a
strategy that is more appropriate to current condition
of online consumers.
2 LITERATURE REVIEW
2.1 Online Purchase Decision
2.1.1 Meaning of Online Purchase Decision
Online purchasing decisions are likely to give
consumers the potential to produce better quality
decisions compared to conventional purchases
(Peterson and Merino, 2003; Darley et al., 2010;
Horrigan, 2008). Häubl and Murray (2005); Häubl
and Trifts (2000) found that easy searching through
online purchases has resulted in better consumer
decisions. Online purchases provide consumers with
a wide selection of information about products and
prices that are easy to find online (Butler and
Peppard, 1998). Shopping online gives customers
more satisfaction as it is easy and time saving.
Moreover, the success of online business is because
of one stop shopping service (Yu and Wu, 2007).
Online purchases behavior is different from
traditional purchases. There is a different
understanding in studying consumer behavior in
shopping electronically (Dennis et al., 2009). Online
purchasing decisions are more complex than
traditional purchases. Consumers do not follow
standard procedures thereby leading to more
unstructured online purchasing decisions. The
consumer selection behavior in buying over the
internet is more dynamic and the election is
interrelated. Marketers are instrumental in shaping
consumer purchase decisions. Consumers assess the
behavior of marketers in each purchase and will be
the basis for the decision for future purchases
(Bucklin and Lattin, 2002). Online consumer
purchasing decisions have been calculated and
analyzed in Sam and Chatwin (2015) study. They
found a new model of online consumer style
inventory in e-commerce environments. Sproles and
Kendall (1986) states some of the elements that
marketers and consumers need to pay attention in e-
commerce activities that is secrets and consumer
safety (Leggatt, 2012), easy-to-use websites (Boyd,
2007), social networking sites (Ramsey, 2010),
customer testimony (Siwicki, 2009). Smith and
Rupp (2003) also suggests several factors that can
affect consumers in making online purchases that is
marketing efforts, socio-cultural, psychological, the
consumer’s self, behavior after decision and
experience.
2.1.2 Factors Influencing Online Purchasing
Decision
Yoon (2002) states that the trust and satisfaction of
the website is a factor that affects the intention of
consumers buying online. Xu-ming and Chong-rui
(2013) also added that product name, brand, price,
quality and quantity of information influence the
consumer's final decision to buy online. In addition,
(Punj, 2010) states that the quality of consumer
interaction with computer technology greatly affects
the quality of online buying decisions. The better the
consumer knowledge about a particular online store,
the better the quality of online purchase decision.
2.1.3 Indicators of Consumer Purchase
Decision
Indicators of online purchasing decisions according
to (Karimi, 2013) are emotional motives, rational
motives and social factors.
2.2 Price
2.2.1 Meaning of Price
Which is More Influential in Online Purchasing Decisions: Price or Trust?
799

Price is the amount of money needed to get a
combination of goods and services (Swastha, 2002).
Price is a monetary unit or other measure (including
other goods and services) exchanged in order to get
the right of ownership or use of a good or service.
Price is a component that directly affects the
company's profits (Tjiptono, 2005). Price is the only
marketing element that produces revenue; the others
produce costs. Pricing decisions have become more
challenging in a changing economic and
technological environment. Companies usually set a
pricing structure that reflects variations in
geographical demand and costs, marketsegment
requirements, purchase timing, order levels, and
other factors. Several price-adaptation strategies are
available: (1) geographical pricing, (2) price and
other factors. Several price-adaptation strategies are
available: (1) geographical pricing, (2) price
discounts and allowances, (3) promotional pricing,
and (4) discriminatory pricing. Companies must
anticipate competitor price changes and prepare
contingent responses, including maintainingor
changing price or quality (Kotler and Keller, 2016).
Price is one of the important attributes evaluated by
consumers so that companies need to really
understand the role in influencing consumer
attitudes. Price as an attribute can be interpreted as a
concept of diversity that has different meanings for
each consumer, based on consumer characteristics,
situation and product (Mowen and Minor, 2000).
In service businesses, price is referred to in many
ways. Hospitals refer to charges; consultants,
lawyers, physicians, and accountants to fees; airlines
to fares; hotels to rates; and colleges and
universities to tuition. Price is often perceived by
consumers as a possible indicator of the quality of
the service. Price influences perceptions of the
quality of services. Pricing of services goes beyond
the traditional tasks of setting the selling price.
When customers buy a service, they also consider
nonmonetary costs, such as the mental and physical
efforts required to consume the service. Service
marketers must try to minimize the effort required to
purchase and use the service (Kerin and Hartley,
2017).
2.2.2 Factors Affecting Consumer
Sensitivity On Price
Purnama (2001) states there are several factors that
affect customer satisfaction with to the price, that is
unique-value effect, subsitusi-awaerness effect,
total-expansiture effect, final benefits-effect, shared-
cost effect, price-quality effect, inventory effect.
2.2.3 Indicators of Price
Indicators of price are affordability, price conformity
with product quality, price competitiveness, price
conformity with benefits (Stanton, 2008).
2.3 Trust
2.3.1 Meaning of Trust
(Kotler, 2005) argued that belief is a person’s
description about the image of the certain object or
idea that is a favorable or not and long lasting in a
person. Trust is the one-party belief in the reliability,
durability, and integrity of others in the relationship
and the belief that the actions are in the best interest
and will produce positive results for the trustworthy
(Peppers and Rogers, 2011). Trust is the expectation
that the person holds that the other person’s
statement is reliable (Morgan and Hunt, 1994). Trust
should be a fundamental component of a marketing
strategy to create a good customer relationship.
Companies must be able to create an impression for
customers that the company is reliable and
trustworthy. Thus will create a loyal customer.
2.3.2 Factors Affecting Trust
(Kidane and Sharma, 2016) suggests the three
factors affecting consumer trust that is experienced,
quality of work, intelligence.
2.3.3 Indicators of Trust
Al-Nasser et al. (2014) found the three indicators of
consumer trust that is integrity, credibility,
competence.
3 METHODOLOGY
This study was held at Faculty of Economics,
Universitas Negeri Medan. This study involved 162
college students who had made an online purchase
with purposive sampling as a sampling technique.
Data were collected through interviews and
questionnaires. Validity and reliability test is
performed to test the feasibility of research
instrument. Multiple linear regression analysis is a
data analysis technique that has been used in this
research. Hypothesis testing is implemented by
using t and F test. The coefficient of determination
(R2) test is also carried to find out the strength of the
contribution of independent variables (price and
ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy
800

trust) to the dependent variable (online purchase
decision).
4 RESULTS AND DISCUSSIONS
4.1 Results
 The regression equation Y = 9.568 + 0.325X
1
+ 0.503 X
2
explained that if the price (X
1
) and
trust (X
2
) does not exist or zero, means the
purchase decision (Y) is 9.568. The 0.325X
1
means that any increase in price will affect
purchase decision of 0.325 with the
assumption of other factors constant. The
0.503X
2
means that every increase of one unit
of trust will affect purchase decision of 0.503
with the assumption that other factors are
constant;
 The result of t test of price is 6,275, means
that price has a positive and significant effect
on purchasing decisions;
 The result of t test of trust is 9.725, means that
trust has a positive and significant effect on
purchasing decisions;
 The result of F test is 70.606, means that
simultaneously price and trust positive and
significant effect on purchasing decisions;
 The coefficient determination (R2) is 0.470,
means 47% independent variables (price and
trust) are able to explain dependent variable
(online purchase decision) on university
students. While the rest of 53% explained by
others outside this study.
4.2 Discussions
The results indicate that the price and trust positively
and significantly influenced the online purchase
decision. These results support the research of
Faryabi et al. (2012) which has proven that price
discounts have a positive effect on store image and
subsequently store image positively affects
consumers' intentions of online shopping. They say
that online marketers need to build effective
marketing plans and improve the promotional price
approach to establish a positive store image, as it
will attract more consumers to shop and further
increase store sales. Consumers have a more positive
perception of products that are marked promoted
than those not. These will create the value in
consumer’s mind and that influence purchasing
decisions. Price promotion will notify consumers the
price before and after promotion. Price promotion is
an important marketing tool that marketers consider
in online business as it is one of the factors that can
influence consumer purchasing decisions (Hsu and
Liu, 1998; Oliver, 2003). This statement is in
accordance with the opinion of (Park and Lennon,
2009). They found that students at the Midwestern
University in USA would consider price reduction
and brands in online apparel purchasing.
According to Zendehdel et al. (2011), consumer
intention in buying online is influenced by consumer
trust. This is confirmed by Gefen et al. (2012).
Consumer purchases are caused by consumer trust in
online stores that are influenced by consumer
acceptance of internet technology, benefits and easy
to use. Another supporting study is (Verhagen et al.,
2006). The online purchase behavior is influenced
by consumer trust to the seller, as well trust to
middleman, intermediary risk and seller risk.
5 CONCLUSIONS
5.1 Implications
 Online entrepreneurs may improve their
business strategy through the results of this
study;
 Online entrepreneurs should pay more
attention to the price of products and
consumer trust in order to make consumers
more interested to buy online.
5.2 Limitations
This study only limits on price and trust in exploring
online purchase decision, a short study period, the
number of respondents considered inadequate.
5.3 Recommendations
 Online entrepreneurs should set affordable
product prices for consumers and offer unique
and varied products;
 The next study is expected to include other
variables such as promotion, product diversity,
delivery system and so on in order to get
better results and more useful for knowledge
in the field of marketing, especially online
purchasing decisions;
 Using more precise method of research,
increasing the number of respondents and also
Which is More Influential in Online Purchasing Decisions: Price or Trust?
801

extending the study period to get maximum
results.
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