The effect of patronage buying motives on small business profitability: evidence from Indonesia

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This study aims to find and analyze the profitability level of Fried Onion Small Business in Palu City, influenced by Patronage Buying Motives (PBM), which consist of company reputation, location of sales, selling price and guarantee to profitability. The population of this study was 52. Population was chosen based on small business that still survives in fried onion business as a local business. The sample taken by purposive sampling was 35. Data collection was carried out by distributing questionnaires to the managers of fried onion small businesses. The analytical tool used is multiple linear analysis. The results shows that F test of PBM had a significant influence on profitability at 0,822 or 82.2%. This means a very strong influence of the value of PBM. T-test shows that corporate reputation is of significant value of 0,286, location of sales – 0,426, and selling price has a significant value of the 0.235 influence on profitability, except guarantees that do not affect profitability because the value of 0.151 is less than the t table value of 2.0395. The impact of this study implies that small food businesses do not really need a guarantee like electronic products, because reputation and quality have become their guarantee.

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    • Table 1. Variable indicators
    • Table 2. Multiple linear regression calculation results
    • Conceptualization
      Chalarce Totanan
    • Formal Analysis
      Chalarce Totanan, Rahayu Indriasari
    • Resources
      Chalarce Totanan, Nina Yusnita Yamin
    • Supervision
      Chalarce Totanan
    • Writing – review & editing
      Chalarce Totanan, Nina Yusnita Yamin
    • Data curation
      Arung Gihna Mayapada, Nina Yusnita Yamin, Ni Made Suwitri Parwati
    • Investigation
      Arung Gihna Mayapada, Ni Made Suwitri Parwati
    • Project administration
      Arung Gihna Mayapada, Ni Made Suwitri Parwati
    • Software
      Arung Gihna Mayapada
    • Writing – original draft
      Arung Gihna Mayapada, Ni Made Suwitri Parwati
    • Funding acquisition
      Nina Yusnita Yamin
    • Methodology
      Nina Yusnita Yamin, Rahayu Indriasari
    • Validation
      Ni Made Suwitri Parwati, Rahayu Indriasari
    • Visualization
      Rahayu Indriasari