1  

CHAPTER I

INTRODUCTION

1.1. Background

Nowadays, climate change has been one of the important issue in the world. For almost

two decades, the United Nations has been sponsoring many events such as the United

Framework Convention on climate change and Kyoto Protocol. (Global Warming &

Climate Change, 2012).

Kyoto Protocol is an international agreement which is related to the United Nations

Framework Convention on Climate Change. Its major feature is to set binding targets for

37 industrialized countries and also for the European community to reduce greenhouse

gas emissions. These amount to an average of five per cent against 1990 levels over the

five-year period 2008-2012.

The Kyoto protocol mechanisms

According to the treaty, countries involved in the agreement have to reach the target of a

minimal national measures. In order to meet the target the Kyoto protocol offers 3

market based mechanisms which are:

• Emissions trading – known as “the carbon market"

• Clean development mechanism (CDM)

2  

  

• Joint implementation (JI).

The mechanisms help stimulate green investment and help parties meet their emission

targets in a cost-effective way. (United Nations Framework Convention for Climate

Change, n.d.)

Emissions rose 5.9% in 2010, according to the Global Carbon Project, an international

collaboration of scientists. The increase of rising emissions fear scientists that this

phenomenon will boosting climate change in coming decades. (Global Warming &

Climate Change, 2012).

In this environment conscious era, people nowadays start to save the earth by creating,

producing , and consuming green product. Green product means energy efficient and

environmental friendly product, which means creating and using product able to save

energy directly or indirectly. Usually, products that are made from recycled materials are

more compact, more energy efficient and less wasteful of materials, less packaging

materials, recycling toner cartridges and providing a return location for used batteries are

the example of the Green concept. (Definition of : green , 2010) .

Green products can be found in many forms such as organic food , green home

appliances, electronics, energy sources, and also environmentally friendly vehicle.

Increasing number of consumer who buy environmentally friendly vehicles shows that

there are lots of environmentally conscious consumers.

3  

  

1.2. Hybrid car

Hybrid car is a vehicle that uses a combination of electric motor supported by a an on-

board rechargeable energy storage system (RESS) and conventional engine. The result is

the efficiency of fuel consumption with outstanding performance. Hybrid vehicles

recharge their batteries by capturing kinetic energy through regenerative braking. Some

hybrids use the combustion engine to generate electricity by spinning a generator to

either recharge the battery or directly feed power to an electric motor that drives the

vehicle. This takes place when cruising or in other situations where just light thrust is

needed. (Lio , n.d.).

According to Fenn (2010), there 3 Hybrid Car advantages :

• Good For The Environment

A hybrid car produces 25 to 35% less in CO2 emissions than regular cars,

because it has a second electric battery powered engine, which recharges via the

petrol engine. This is a much more energy efficient engine for town and city

driving, or driving in traffic. Then, when driving at higher speeds, the power of

the petrol engine kicks in. In conclusion Hybrid car has a very low emission, it

would ultimately significantly reduce CO2 emissions.

• Fuel Efficient

Hybrid car able to reduce the amount of petrol that being used, which means less

visit to the gas station. Because the car is able to utilize the battery powered

engine when driving at lower speeds or in traffic (which is often when needless

amounts of petrol is burned), little or no fuel is needed during these driving

conditions. Hybrid car is also designed to specifically to maximize fuel

4  

  

efficiency by using lighter materials on the body and also designed to reduce

coefficient dynamics which means more aerodynamic . In terms of fuel

consumption of 26-28 km per liter was more efficient than double the gasoline

car class. (Radius, 2010).

Table 1.1 : Hybrid Car Emission

Hybrid Car Emissions

(comparison of production hybrids)

Honda Civic Honda Insight Toyota Prius

City MPG 48 57 60

Highway MPG 47 56 51

Emissions 4.1 tons 3.5 tons 3.5 tons

Rating ULEV SULEV II SULEV II

Engine Size 1.3 1 1.5

Source : (Hybrid car information and resources, 2005).

• Financial Benefits

Because hybrid car is better for the environment and supporting Kyoto Protocol

(if the government of a particular country ratified Kyoto Protocol), the

Government offers a incentive for green cars which means much lower annual

car tax bills, and exemption from congestion charges or low emission zones.

5  

  

Hybrid cars can travel through London's congestion charge zone free of charge.

(Fenn , 2010).

“In the US, the federal government will offer a $2,000 federal tax deduction for

people who buy hybrid vehicles in 2005. These incentives are coming at a time

when hybrid cars are already gaining popularity and acceptance among car

buyers, especially with gas prices hovering around the $2.00 per gallon mark.

More consumers are looking for vehicles that offer more than the 27-mpg

average of gasoline-powered cars.”

(Hybrid Benefits, 2005).

According to Haluzan (2010), Hybrid car also has several disadvantages :

• Price of a hybrid car still expensive because of the high production costs and the

technology applied in hybrid car. Hybrid cars therefore usually cost in range

from $2,000 to $5,000 more than their non-hybrid versions. The high costs of

hybrid cars are usually the results of using very rare materials in their production

(for instance dysprosium used to fabricate many of the advanced electric motors

and battery systems in hybrid propulsion systems, and neodymium used as a

crucial ingredient in high-strength magnets that are found in permanent magnet

electric motors).

• Because of the heavy weight battery, hybrid car is heavier than conventional car,

that makes the handling less comfortable. Hybrid car handling isn't in the same

range as it is with conventional cars.

6  

  

• Difficulties in maintenance because its high technology, hybrid car needs to find

a garage that has the necessary equipment and special mechanic skills .In most

cases you will be forced to make service at the manufacturer which in most cases

can turn out to be very expensive. (Haluzan , 2010)

Hybrid cars come with different model or types and manufactured by well known car

manufacturer such as Toyota, Honda, Nissan, Mercedes and many more. These are the

list of Hybrid car manufacturers list throughout the world including the model and types:

Sedan and Hatchback

Sedan and hatchback model still offer the best gas mileage available, some boasting

mileage as high as 60 miles per gallon on the highway.

SUVs and Vans

Most hybrid SUVs and vans offer between 20 to 30 miles per gallon of gasoline. That

isn't nearly as good as the gas mileage for cars, but if you have a large family and need

the extra space afforded by a SUV.

Trucks

Trucks haven't come onto the scene yet as a major hybrid market, but there are a few

options available that will enable you to get roughly 20 to 25 miles per gallon.

7  

  

Table 1.2 Models, types, and brands of Hybrid car

Brand Sedan / Hatchback SUV Truck

Honda Accord, Civic,

Insight, CR-Z, Fit

Toyota Prius, Camry Highlander, Prius V,

Sienna

Nissan Altima

Lexus LS 600h L, GS 450h,

HS 250h, CT200h

RX 450h

Mercedes Benz S400 BlueHybrid ML 450

Hyundai Sonata

Ford Fusion Escape , C-Max

Infinity M35h

Lincoln MKZ

BMW Active Hybrid 7 X6 Hybrid

KIA Optima Hybrid

Buick Lacrosse eAssist

Fisker Karma

Volkswagen Jetta Touareg

Cadillac Escalade

Chevrolet Tahoe Silverado

Porsche Cayenne S

GMC Yukon Sierra

Source: Williams, (n.d.).

8  

  

Toyota’s hybrid car, Prius has been in the first ranked as among the cleanest vehicles

sold in the United States based on smog forming and toxic emissions, and is currently

available in more than 40 countries and regions. Nearly 2 million people worldwide

drive this environmentally friendly sedan. (Kurniawati , 2010).

According to Brosnan, there is significant growth in hybrid car market in the US. In

2011, 275.333 units of Hybrid car were sold, where in 2010 only 253.179 units sold.

There is 8,51% growth. Consumer in the United States are offered with 33 hybrid

models, particularly from the overseas manufacturers of hybrids. Most of Hybrid car

sold in the United States are from overseas hybrid car manufacturer which control over

80% of the US Hybrid market share. Toyota Prius is the market leader in US hybrid car

market. Toyota Prius was recorded sold for 43.220 units out of 76.267 units of total

hybrid car sales number in the US. Nowadays US manufacturers have work to do to in

order to make an impact on that overseas dominance. (Brosnan, 2012).

According to Mick (2010), in this category of “greener-cars”, Toyota’s Prius model is

reported to be the market leader. In 2009-2010, it was the best-selling car in Japan.

Sales number of the Toyota Prius keep growing despite well-publicised quality and

safety problems (Mitchell & Linebaugh , 2010).

9  

  

Table 1.3 Toyota Prius Sales worldwide

Toyota Prius Sales (based on TMC data) (Unit = 1,000 vehicles)

Year ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09

Jan.-

Sep.

’10

Cum. Total

Japan 0.3 17.7 15.2 12.5 11.0 6.7 17.0 59.8 43.7 48.6 58.3 73.1 208.9 254.2 826.9

North America - - - 5.8 16.0 20.3 24.9 55.9 109.9 109.0 183.8 163.3 144.3 105.9 939.1

Europe - - - 0.7 2.3 0.8 0.9 8.1 18.8 22.8 32.2 41.5 42.6 35.5 206.1

Other - - - 0.01 0.2 0.2 0.4 1.9 2.9 5.3 7.0 7.7 8.4 5.8 39.7

Total 0.3 17.7 15.2 19.0 29.5 28.1 43.2 125.7 175.2 185.6 281.3 285.7 404.2 401.3 2,011.8

Source: Worldwide 'Prius' Sales Top 2-million Mark. (2010).

1.3. Hybrid car in Indonesia

Based from previous research conducted by PT Toyota Astra Motor, actually Indonesian

consumers have a big interest in owning hybrid car. The problem is when the consumer

know the price, usually consumer will reluctant to continuing to own a hybrid car.

(Mobil hybrid butuh insentif pajak, 2009). Also there is another reason why Indonesian

consumer still reluctant to buy hybrid car. Consumers cars in Indonesia are still unsure

of the reliability of Toyota's hybrid engine technology, particularly as it passes through a

puddle of water that is often encountered on the streets of Jakarta during rainy season.

(Muzlie, 2012).

10  

  

Toyota Astra Motor (TAM), Toyota brand sole agent in Indonesia. Never tired to

socialize hybrid engine technology, though its sales number in Indonesia is very small.

Forms of hybrid car socialization: one of Toyota's Hybrid Technology Workshop

Introduction to journalists that took place in Bridgstone Proving Ground, Karawang.

Besides introducing the hybrid engine technology, Toyota also perform simulations to

cross a puddle of water. This simulation aims to convince consumers that hybrid cars

will not cause the passengers inside the cabin gets electric shock due to shorting.

(Muzlie, 2012).

In terms of delivering green product information, Toyota Astra Motor as the sole agent

of Toyota vehicles put many knowledge advertorial on newspaper and magazine about

hybrid vehicle such as the advantages like excellent fuel efficiency and lower emission,

also Atkinson cycle that used by Toyota hybrid engine which called Hybrid Synergy

Drive.

The first hybrid car launched in Indonesia was Toyota Prius which attracted public

attention in 2009. In that year Prius sold more than 19 units. The price at that time

reached IDR 585 million. Price has now risen to about IDR 600 million.

With a 1,800 cc engine, the public thought, the price is overpriced. The Prius is very

expensive because of the tax component is still high. PT Toyota-Astra Motor said the

amount of taxes to 50 percent affect the selling price of Toyota Prius.

As a record, in 2010, the figure reached 11 units, and 2011 yesterday became only 9

units. Other car manufacturer, Honda, actually has a line-up Civic hybrid which was

introduced in 2006. Gaikindo recorded only 2 units of Honda Civic Hybrid were sold in

 

  

2

t

F

A

u

e

I

w

d

2009. But af

supported by

the price of

Figure 1.1To

As a country

units which

efficiency. T

In other cou

would like to

developmen

0

2

4

6

8

10

12

14

16

18

20

fter it disapp

y high tax po

a hybrid car

oyota Prius s

y that ranked

shows the p

This shows th

untries hybrid

o lower tax r

nts will certa

2009

Toyot

pear without

olicies from

r soar. (Kusw

sales record.

Source

d 8th in car sa

opularity of

he low awar

d car is even

rates for env

inly grow ra

2010

ta Prius s

a trace. It se

the Indones

waraharja, 20

.

: (Kuswarah

ales on Asia

f hybrid still

reness of env

n given incen

vironmental

apidly in Ind

2011

sales rec

eemsToyota

ian governm

012).

harja, 2012)

a the number

low despite

vironmental

ntive. Howev

friendly veh

donesia. Prev

cord in I

and Honda d

ment that aut

.

r of Prius sol

its global po

issue. (Kurn

ver, if only t

hicles, hybrid

viously, at th

ndonesi

Toyota PIndonesia

desire was n

omatically m

ld are only a

opularity and

niawati , 20

the governm

d market

he IIMS 200

ia

rius sales recoa

11 

not

makes

few

d fuel

10)

ent

09,

rd in 

12  

  

Finance Minister Sri Mulyani was mentioned the incentives for environmentally friendly

cars being studied by government. (Akib, 2010).

Unfortunately, until now Indonesian government did not follow other countries to

support incentives on hybrid car. As a matter of fact, Indonesia include in one of the

leading countries that fight against global warming. Instead of giving tax reduction on

hybrid cars which is friendly to the environment, or popularly known as green cars, the

Government of Indonesia even double the taxes for hybrid cars. The reason given was

the car that bears the two engines, internal combustion engines that use fuel oil and

electric motor that uses electrical power from the battery. That is the reason why price of

hybrid cars in Indonesia is very expensive. There were three brands of hybrid cars

circulating in Indonesia, namely the Honda Civic Hybrid, Toyota Prius, and Lexus LS

600h. (Kompas , 2010).

Different from year 2009 when hybrid car first came to Indonesia, nowadays Indonesian

people start to pay more attention on environmental issues. The newest Toyota’s Hybrid

vehicle is Toyota Camry Hybrid attract Indonesian consumer. According to Johnny

Darmawan as the President Director of PT Toyota Astra Motor, from total sales number

of New Toyota Camry which is 935 units, 25% came from the hybrid model.

(Kurniawan, 2012).

The latest statement from the Indonesian government that related to hybrid car, stated

that; Indonesian Government will provide incentives for hybrid cars if manufacturers are

able to assemble hybrid cars in the country or in the form of Completely Knocked Down

(CKD). (Hertanto, 2012).

13  

  

Ministry of Finance will distinguish between the policy of incentive for hybrid cars

between completely built up (CBU) and completely knocked down hybrid car (CKD). If

the car manufacturers decided to import hybrid cars (CBU), later sales tax on luxury

goods (luxury sales tax) will be higher than hybrid car that produced in the country

(CKD). (Hida, 2012)

Minister of Industry MS Hidayat said that Toyota requested the convenience to the

market penetration of hybrid cars in Indonesia such as the reduction of value added tax

and luxury goods (luxury sales tax) and import duties to make the price of hybrid cars

become more affordable.

If sales number of hybrid cars reaching the projected target, Toyota will consider

assemble hybrid cars which specifically designed for Indonesian consumer. (Syubhan,

2012). Honda also declared their willingness to assemble hybrid car in the form of

Completely Knocked Down version when the time is right. (Ikhsan, 2012).

But all of those government statements above still a draft for further development into a

clear policy. President Susilo Bambang Yudhoyonoand his Ministers still discussing this

issue together with hybrid car manufacturer. Untill this day, there still no certainty of

policy that regulate to supporting environmental friendly vehicle.

14  

  

Indonesian consumer usually considers a few things before buying a car such as:

• Purpose and reason

Indonesian consumer usually think twice what is the purpose or reason in

purchasing car, whether it is for family transport (Functional), gaining self image

(lifestyle), or for hobby. Majority of Indonesian usually purchase Multi Purpose

Vehicle (MPV) like Toyota Avanza or Innova because of collectivist culture that

prioritized family needs rather than individualistic needs.

• Brand

Brand is the most important aspects for Indonesian consumer. Most of

Indonesian consumer loyal to particular brand. For example: Toyota Kijang, this

car is a legend for Indonesian consumer. Generation to generation trust this

model to fulfill their transportation needs. As a result Toyota become the

strongest passenger car brand in Indonesia. Not only for Kijang family models

but for all Toyota’s line up models, whenever Toyota launch a car, Indonesian

consumer believe if that car have a good quality under Toyota’s brand image.

• Spare parts affordability and availability

Spare parts also become the main concern for Indonesian consumer in

purchasing a car, Indonesian consumer usually trust Japanese brand because of

affordability and for those who live in remote area also concern the availability

of the spareparts.

15  

  

• Resale value

Indonesian consumers prefer high resale value car rather than perceived quality.

For example Toyota Avanza, this car has excellent resale value, moreover in

special occasions like Lebaran where usually demand of car was high, price for

the second car could be higher than price of the new unit.

• After Sales service

Indonesian consumer also concern with authorized dealer location. The more the

brand have its after sales network, Indonesian consumer will prefer that

particular brand and model.

Adapted from (Tribun Jogja, 2012).

16  

  

Table 1.4 List of Top 10 best selling passenger car in Indonesia (March 2012)

Rank Model Units sold

1 Toyota Avanza 17.364

2. Toyota Kijang Innova 6.518

3. Daihatsu Xenia 5.445

4. Nissan Grand Livina 3.648

5. Toyota Rush 3.284

6. Honda Jazz 2.354

7. Daihatsu Terios 2.184

8. Suzuki APV 1.389

9. Toyota Fortuner 1.385

10. Honda Freed 1.379

Source : 10 Mobil penumpang terlaris di bulan Maret (2012)

From this table , it is clear that Hybrid car is not popular among Indonesian consumer

.All of the top 10 best selling are classified into below IDR 485 Million . In fact price of

a hybrid car in Indonesia (Toyota Prius 3rd Generation for an example) reach IDR 605

Million (source : Toyota price list for Jakarta ) as a matter of fact with IDR 600 million

Indonesian consumer also can get BMW 3 series or Mercedes Benz C class, compare to

price of the same product in United States which is only start from US$ 24.000 or IDR

216 Million for the basic model : Prius Two (source : Toyota price list for United States

) . It seems price in Indonesia increase almost 200% compare to United States . As a

17  

  

matter of fact , based from the table also concluding that buying power of Indonesian

consumer in buying car is around IDR 150 million – IDR 300 million (source : Autocar

Indonesia Magazine , February, 2012) which means if the price of a hybrid car similar

like in the United States , there is a chance for Hybrid car to become the best selling car

in Indonesia .

In addition, Indonesian people indicate have high consumerism in terms of purchasing

car. According to Pandu Bestari, Chief of tax office in West Java region said, With 5

million Rupiah salary per month, It is common for Indonesian tax employee to purchase

a car for example; Honda Jazz which worth approximately 200 million rupiah. With that

high standard salary, tax employee able to buy Honda Jazz with credit system for 3 years

tenor. Especially if husband and wife working in taxation, combined income can reach

11-12 million rupiah. For information, 5 million Rupiah salary per month is the

minimum salary for the freshmen and fresh graduate or similar with the lowest class in

tax employee hierarchy. (Susanto, 2010).

It appears that Indonesian consumer have high motivation to buy a car, there is high

possibility for hybrid car to become popular among Indonesian consumer because with

low salary people have enough buying power to buy 200 million rupiah car.

18  

  

1.4. Problem statement

Based on the phenomena above and research from:

Oliver, J. D., & Lee, S.-H. (2010). Hybrid car purchase intentions: a cross-cultural

analysis. Journal of consumer marketing , 27(2), 96-103

Based from previous research by Oliver and Lee (2010) identified that:

• In the US shows if there is a connection between seeking green product

information and the consumer's intentions to purchase a hybrid car.

• Consumer perception that having a hybrid car reflects positively on their self-

image will be positively related to consumers' intentions to purchase a hybrid

car. In conclusion, there is stronger relationship between self-image and hybrid

car purchase intentions than between green information seeking and hybrid

car purchase intentions.

• Relationships between perceived social value and the intentions to purchase

a hybrid car will depend on the culture in the respondent's home country. Social

value would have a positive effect on consumers in Korea, who are likely to have

a more collectivist culture, but a negative effect on consumers in the USA, who

might feel peer influence threatens their freedoms based on their individualist

culture.

• Stronger relationship between the social value associated with the purchase of

a hybrid car and the intentions to purchase a hybrid car in the Korean. Social

value appears to play a greater role in purchase intentions in the more collectivist

19  

  

culture, but it does not appear to turn off the consumers in the more individualist

culture.

• Strong relationship between social value associated with owning a hybrid car and

intentions to own a hybrid car.

Choy, D., & Prizzia, R. (2010). Consumer behaviour andenvironmental quality in

Hawaii. Management of Environmental Quality: An International Journal , 21 (3), 290-

298.

Founds that:

Regardless of age and gender, respondents agreed that they would purchase a hybrid car

if the cost was the same as a traditional gas fueled car. There were significant

correlations between agreement to purchase a hybrid car and agreement to support

legislation that provides tax credits to consumers who purchased a hybrid car and other

environmentally safe products, tax credits to companies that produce environmentally

safe products, and penalties for government agencies, private organizations, and

individuals who pollute the environment.

Based on the two journals above, the author would like to conduct a study about hybrid

car in Indonesia.

20  

  

For this research, the obvious question is: Why are there so few hybrid cars in Jakarta,

given that vehicle emissions here account for 70 percent of total pollution in Indonesia.

Is Indonesian consumer have enough green product information and have a willingness

to purchase it? Does perception on self image and social value affecting Indonesian

consumer to purchase a hybrid car? Is price of a hybrid car become the biggest

consideration in terms of purchase decision?

According to Achmad Rizal, the demand of Toyota Prius in Indonesia is very little, it is

said to be a pricey car. For a comparison take a look at the price of a Toyota Prius in

Japan or the United States, a Prius costs about Rp 300 million ($32,400), but in

Indonesia the price tag is nearly double.

Since 2006, Achmad Rizal stated that , Toyota along with the Indonesian Automotive

Industries Association (Gaikindo) has pleaded with the central government to give

special incentives in the form of tax reductions to hybrid-vehicle buyers. If hybrids such

as the Prius become more affordable, industry officials reckon, it could reduce gasoline

consumption and vehicle emissions in Indonesian cities, Jakarta the largest among them,

but until now the government has not been moved by the logic. According to Evy

Suhartantyo, spokesman for the Directorate General of Customs, The government agree

the environment argument, but has not reach agreement on hybrid car tax incentive. Evy

did concede that the government is at least considering reducing taxes on imported

hybrid vehicles, but will keep them firmly in place for other luxury cars. (Kurniawati ,

2010).

21  

  

1.5. Research Questions

R.Q.1 : Does Indonesian consumer seeking green product information that related to

intentions in purchasing hybrid car?

R.Q.2 : Does Indonesian Consumer perceptions that purchasing a hybrid car reflects

positively on one’s self image are positively related to one’s intentions to purchase a

hybrid car?

R.Q.3 : Does Indonesian Consumer perceived social value associated with owning

hybrid car is positively related to intentions to purchase a hybrid car in collectivist

culture?

R.Q.4 : Is price of a hybrid car affect Indonesian consumer to purchase hybrid cars ?

R.Q.5: Is there any gender differences between male and female in terms of Hybrid car

purchase intention among Indonesian consumer?

1.6. Scope of study

 

This research will study about factors that affecting of Indonesian consumer to purchase

a hybrid car. The survey of this research will be distributed to 120 respondents in

Jakarta. The data collection of this research will be conducted with direct survey which

is using online based questionnaire. The reason of this research only take respondent

from Jakarta region is because all of hybrid car sales were made in Jakarta region only .

The eligible respondents is for those who have high income level, using private car as

their daily transportation, and also concern about environmental issue.

22  

  

1.7. Aims & Benefits

The objectives that the author aims to conclude by doing this research are as follow:

1. To develop and test the model about factors that affects Hybrid car purchase

intention among Indonesian consumer

2. To examine which factors from all the variables that really affects purchase

intentions of a hybrid car among Indonesian consumer

3. To identify the differences between male and female in terms of Hybrid car

purchase intention.

The benefits that the author tries to provide by doing this research are as follow:

1. For Indonesian government, will be able to help them in making decision

whether to decrease the tax on environmental friendly vehicle or not .

2. For car manufacturer, will be able to help them in making decision whether to

promote and sell hybrid car in their line up or not. For long terms , it also can

help them making decision to assemble the vehicle in Complete Knocked Down

(CKD) method or using Complete Build Up .

3. It is also beneficial for the academic purposes to provide knowledge enrichment

about Hybrid car purchase intention among Indonesian consumer

23  

  

1.8. Structure

CHAPTER 1

INTRODUCTION

1.1 Background

This section should have inductive reasoning of the problem, that is starting from

general context of the problem, for example current setting of industry, market

demand, technology and so on, and ending with the identification of the problem.

The exposition should put the problem into context, so it makes sense to seek

solution for the problem.

1.2 Scope

Having put the problem into its context, the solution is assumed to exist if all the

constraints are satisfied and the assumptions related to the solution are right.

This section defines the scope of the problem and all of the assumptions and

constraints of the problem. Scope is the conceptual boundary where the problem

lies or is relevant, assumptions are propositions or conditions which must be

right in order that the solution is valid, constraints are limitation or conditions

that must be satisfied in order that the problem can be solved.

24  

  

1.3 Aims and Benefits

A research or project is meaningless if the effort is for the sake of formality. The

research or project is initiated, organized, performed and accomplished because it

wishes to achieve sets of objectives or aims. By achieving the aims, the result of the

research or the completed project will bring benefits to the people involved in the

effort, especially or related community, generally.

This section defines the aims or objectives of seeking a solution for the problem. It

also clarifies the benefits of having the solution of the problem. The benefits should

be sufficiently valuable to justify the effort of seeking the solution.

1.4 Structures

This section contains the general description of the coverage of each chapter.

CHAPTER 2

THEORITICAL FOUNDATION

This chapter covers theoretical foundation and frameworks which will be used or

support the design of solution for the problem

Theoretical Foundation

In this section, the relevant theories is summarized and presented comprehensively

and in accordance with the problem. The theories which support the solution of the

problem can be referenced from the latest research in the field or from textbook and

other references.

25  

  

Theoretical Frameworks

Based on the presented theory in the above section, a coherent model or formula

which shows the relationships between variables should be formulated to seek for

the solution. This model or formula should clarify how the design of solution may be

constructed.

CHAPTER 3

RESEARCH METHODOLOGY

This chapter aims at understanding the problem and is critical to demonstrate the

scholar or academic works that a student is supposed to be able to accomplish, as it

discuss the analytical frameworks of thinking of the author.

CHAPTER 4: RESULTS AND ANALYSIS

This chapter contains the result and analysis of gathered data, which processed using

SPSS 17.0 with multiple regression and Independent Sample T-test analysis.

CHAPTER 5

CONCLUSION AND RECOMMENDATION

This section contains the general conclusion of the results of the reseach. It

summarizes the most important findings, and explains what the findings mean to the

objective of the research.