The Impact of Halal Label …… (Freddy Pandapotan Simbolon) 111 THE IMPACT OF HALAL LABEL, PRICE, AND BRAND ON THE PURCHASE DECISION OF BAKSO WAGYU IN KOTA WISATA CIBUBUR Freddy Pandapotan Simbolon Management Department, Bina Nusantara University Jl. K. H. Syahdan No. 9, Palmerah, Jakarta11480, Indonesia freddysimbolon@binus.ac.id ABSTRACT The objective of this research was to examine the impact of halal labels, prices, and brand on the purchase decision to buy Bakso Wagyu in Kota Wisata Cibubur. It used associative research, and data were collected through a field survey from the Bakso Wagyu outlet in Kota Wisata Cibubur. A set of questionnaires was distributed to 96 customers of Bakso Wagyu outlet in Kota Wisata Cibubur. Multiple regression analysis assessed the impact on purchase decisions of three key constructs of the halal label, price, and brand. The analysis method used correlation analysis, multiple regressions, and hypothesis testing. The results show three components, namely halal label, price, and brand, simultaneously have a significant influence on the purchase decision. However, the halal label was a variable. That are has the most dominant impact. This research indicates the results that halal labels are important for imported products that are consumed by Indonesian people who are mostly Muslim. Keywords: purchase decision, halal labels, prices, brands INTRODUCTION Indonesia is a very potential market for the production and distribution of halal products. This is inseparable from the largest number of Muslims in the world (Afroniyati, 2014). In accordance with the 2019 the Institute for Food, Drugs, and Cosmetics Studies of the Indonesian Ulema Council (LPOM MUI), it is reported during the 2014-2018 period the total number of halal products was 591.604 with an average growth of 27,87% and a high growth increase in 2018 of 60,44%. This data shows the high demand for companies to increase the number of halal products to get halal certification from LPOM MUI. Table 1 shows the halal product growth from 2014 to 2018. Table 1 Halal Product Growth from 2014 to 2018 Years Number of Companies Number of Halal Certification Number of Halal Products Growth of Halal Products 2014 10.180 10.322 68.576 6,95% 2015 7.940 8.676 77.256 12,66% 2016 6.564 7.392 114.264 47,90% 2017 7.198 8.157 127.286 11,40% 2018 11.249 17.398 204.222 60,44% Total 43.131 51.945 591.604 27,87% Source: LPOM MUI (2019) As quoted by Ruslan (2017), halal comes from word of halaal in Arabic, which the opponent of it is haram. In Islamic teachings, the word halal means ‘allowed’ or ‘permitted’. Usually, halal words mailto:freddysimbolon@binus.ac.id 112 Journal The WINNERS, Vol. 20 No. 2, September 2019: 111-120 are referred to as foods and beverages that can be consumed according to sharia. At present, awareness for Muslims in the world to consume products with the halal label is very high. Similarly, according to Permana (2019), from 2012 to 2018, a number of 688.615 halal certificates are issued by the Food, Drug, and Cosmetics Study Institute of the Indonesian Ulema Council (LPPOM MUI). In addition, 55.626 companies have labeled halal; however, the number of certified products is still small compared to products that are not halal certified. In relation to halal label of food and beverage products, this research takes the theme of the effect of halal labeling on purchasing decisions for meatballs in the city of Cibubur. In addition to the halal labeling variable, other variables that influence it are examined, namely price and brand. Meatball menu is chosen because the object that is being studied uses Bakso Wagyu imported from Japan to Indonesia, which is a non-Muslim country. Bakso Wagyu is a type of Japanese beef that has a distinctive marble pattern. The name Wagyu itself is taken from the Japanese language ‘wa’, which means Japanese, and ‘gyu’, which means meat. The meat is soft and very delicious to eat, besides that, Bakso Wagyu is very healthy for health because it contains Omega-3 and 6, as well as monounsaturated fatty acids compared to other beef. Bakso Wagyu is sold at a price that is quite expensive because it has many advantages compared to other beef. The halal label is the main focus in this research due to Indonesia as a country with the largest Muslim population in the world, especially for the consumption of halal imported food. There are many companies that do halal label by arranging on product packaging. However, the question is to what extent the company has applied or provided education regarding this matter to the consumers. The problem that arises is that Bakso Wagyu is the meat from Japan, so there is a bad perception from some customers that the meat has not been halal-certified, especially the issue that Wagyu cows are fed with sake; a type of liquor from Japan. The problem that exists in the customers’ minds is whether Bakso Wagyu is halal to be consumed by the Indonesian Muslim community. In relation to this condition, the importance of halal certification for the sale of Bakso Wagyu is an important concern for consumer purchase decisions. The second problem is the price. Bakso Wagyu has been very popular for steak and is one of the most expensive steak dishes. Likewise, Bakso Wagyu, which is processed into Bakso Wagyu dishes, is, of course, priced at quite expensive, which is Rp38.000,- per serving, while ordinary meatballs with beef are priced at Rp17.000,-. A large price difference will certainly impact consumer purchase decision to buy Bakso Wagyu. The third problem is the brand. Bakso Wagyu is a new brand that is packaged as a premium class. The price given is quite expensive because it uses Bakso Wagyu’s quality to guarantee the best meatball taste. In addition, a business space that is comfortable and seems exclusive. The new brand by selling Bakso Wagyu is also a challenge that can impact the consumer purchase decision. Based on the phenomenon mentioned, the existence of Bakso Wagyu becomes interesting to study. First, because the meatballs used Bakso Wagyu are imported from Japan, which is mostly non- Muslim so that the meat may be doubtful. Second, Bakso Wagyu is known as meat with a fairly expensive price, and thirdly, related to a new brand with the name of Bakso Wagyu will be a challenge to consumer purchasing decisions. So the formulation of the problem of this research is how the impact of halal labeling, price, and brand on consumer purchasing decisions of Bakso Wagyu in Kota Wisata Cibubur. To determine the research model, a retail study of three researches is conducted. Bulan and Rizal (2016) have discussed the effect of halal labeling on sausage purchase decisions in Kuala Simpang, Aceh Tamiang regency. The sampling method uses an accident sampling method with a total sample of 96 people, and the analysis method uses a simple regression analysis. This research provides results that halal labeling contributes 33,5% in sausage purchasing decisions in the area, while the remaining 66,5% is influenced by other variables. Other research is conducted by Widyaningrum (2018) that has researched the effect of halal labels, brand associations, advertisements, and celebrity endorsers on purchasing decisions. The survey The Impact of Halal Label …… (Freddy Pandapotan Simbolon) 113 is conducted on Wardah cosmetics consumers in Malang, concluding that there are positive and significant influences among researched variables. The research uses a survey method for Wardah cosmetic users in Malang City, with probability sampling methods as many as 57 respondents, and the data analysis method is used to prove the hypothesis using General Structured Strengthened Component Analysis (GSCA). The results of the research indicate that the purchasing decision that can be explained by the model is 72,5%, and the rest (27,5%) can be explained by other variables. These results provide an indication that Muslim consumers tend to choose products that are declared halal compared to products that have not been declared halal by authorized institutions, no exception in terms of purchasing cosmetics. Cosmetics is one purchase that emphasizes the involvement of feelings (emotional), so that sometimes a figure or idol (celebrity), who becomes the brand ambassador in a cosmetic ad can stimulate purchases. The relationship of halal labels to advertising, celebrity endorsers, brand associations, and purchasing decisions is how marketers create products that are halal and certified so that Muslim consumers feel protected to consume them. Subsequent research is conducted by Alfian and Marpaung (2017), namely research on the analysis of the effect of halal, brand, and price labels on purchasing decisions in Medan. Research is done by taking samples of Muslim consumers in the Medan Petisah sub-district, and analysis methods use multiple regression that results in that around 65,1% of the halal label variables, brand image, and price influences Muslim consumer purchasing decisions in Medan, while 34,9% is explained by other factors. From the three researches mentioned, it can be concluded that all three use the same analysis method, namely regression, with the same three independent variables, namely halal label, brand, and price, but the difference between the three researches is the results obtained. The research conducted by Bulan and Rizal (2016), who only uses one halal labeling variable, contributes only 33,5% to purchasing decisions, but the other two researches are using more than one independent variable that contributes 72,5% and 65,1 %. So, it can be concluded that a halal labeling variable contributes quite a large amount of 33,5% to purchasing decisions. It means that the importance of halal labeling in consumer purchasing decisions. Likewise, Wibowo and Mandusari (2018) have researched Muslim communities in Pekalongan in deciding on food purchases. Halal labeling is very instrumental in increasing sales of a product to attract the purchasing power of Muslim consumers. According to them, the purchase decision can function as a measure of the extent of sales of products that have been determined halal with products that have no clarity between halal and haram. Halal marketing is one of the preferences of consumers to decide to buy a product because through the halal concept; consumers can gain trust in products that are hygienic, quality, and safe (Ambali & Bakar, 2014). Another research is conducted by Ashmawy (2015) that has said halal marketing is an important part, not only for Muslim consumers but also for non- Muslims in understanding the buying behavior of Muslim consumers. In addition, according to Mohezar, Zailani, and Zainuddin (2016), the halalness of a product has helped consumers in making product selection decisions. Likewise, Khan and Azam (2016) have researched that labeling halal is one aspect of the product selector that will be purchased by consumers. So based on this, halal labeling of a product is one factor in making consumer purchasing decisions. Consumer behavior is buying behavior from end consumers, both individuals, groups, and organizations that buy goods and services for the purpose of consumption or personal use (Kotler & Armstrong, 2014). In addition, according to Rafiz, Arifin, and Hidayat (2016), purchasing decisions is one of the activities carried out by each person in each time and place to buy something according to their choice. In deciding this purchase, it is considered as an action taken after an evaluation of all available alternatives has driven the desire to buy. Rafiz, Arifin, and Hidayat (2016) have said that purchasing decisions are a selection of two or more choices. Complex decision-making processes often involve several decisions and choices between two or more alternative actions. So, based on the opinions of various sources, it can be concluded that purchasing decisions are made after the evaluation of various 114 Journal The WINNERS, Vol. 20 No. 2, September 2019: 111-120 choices and considerations, where an integration process occurs. It combines knowledge to evaluate two or more alternative behaviors, so it is decided to choose one of them. The results of this integration process are choices that are presented cognitively as desires to behave. According to Bulan and Rizal (2016), the understanding of halal according to the Ministry of Religion contained in the Decree of the Minister of Religion of the Republic of Indonesia Number 518 of 2001, concerning inspection and determination of halal food is not contrary to Islamic law. The importance of halal certification, as revealed by Afroniyati (2014), halal certification is a policy that has its history and arises as a solution to major issues in the field of religion as well as economic problems. Chairman of the Indonesian Ulema Council, Hasan Basri, has said that halal certification in Indonesia is motivated by the research of Tri Sutrisno, a lecturer at Universitas Brawijaya, along with several students related to food in several supermarkets. From the results of these researches, it is found several components of food ingredients containing pig elements. When the results of this research are raised and announced to the public, the community becomes an uproar. The issue becomes increasingly developed in various other types of food beyond the results of the research. Other literature revealed by Afroniyati (2014), basically Indonesia, already has several regulations that can help protect Muslims from illicit products. Like Law No. 7 of 1996 is concerning Food, Law No. 8 of 1999 is concerning Consumer Protection, and Decree of the Minister of Religion No. 519 of 2001 concerning the Implementing Agency for Halal Food Inspection. In addition, there is also a Charter of Cooperation between the Ministry of Health, the Ministry of Religion, and the MUI concerning the Implementation of the Inclusion of Halal Labels on Food in 1996 (in the form of halal writing in Arabic letters). However, until now, the government has not given sanctions to companies for non-compliance with halal certification; this is because it has not been regulated in civil or criminal terms. Halal certification shows the protection of the interests of Muslims that lead to formal law. Protection in formal law shows that the legal content created by religion has been reduced and is less strong in regulating more real relationships in the life of the state. Bulan and Rizal (2016), in their research, has stated that halal labeling is not a concern of consumers because they lack understanding or lacked information about food products that have included halal labels. For this reason, the government still needs to provide information about this halal label to the mainly Muslim community. Alfian and Marpaung (2017) have explained the meaning of price is the amount of money charged on a product or the sum of the consumer’s exchange value for the benefits of having or using the product. Thus the definition of prices, when viewed from the marketing side, is adjusted to how much the benefits that felt by consumers. The price of a product becomes more expensive if it provides great benefits for consumers. When examined from an economic perspective, prices are determined by the producer and consumer side. According to Fatoni (2014) in Alfian and Marpaung (2017) has stated that prices and product competencies are formed to fulfill the goals of two parties, namely producers and consumers. Manufacturers perceive as the value of goods that are able to provide the benefits above the cost of production (or other purposes such as profits). Consumers view prices as the value of goods that capable of providing benefits for meeting their needs and desires (e.g., savings, prestige, payment terms, and so on). According to Alfian and Marpaung (2017), prices can also show the quality of the brand of a product, where consumers assume that expensive prices usually have good quality. If the company does not set the price right, then this will be fatal in the future. Prices will always be associated with product quality; if the price set is not in accordance with the quality, it will affect the decision of consumers to buy. It can be concluded that at a certain price level, if the benefits perceived by consumers increase, the value will increase as well so that consumers’ decisions to make purchases of these products will increase. Similarly, Yoon et al. (2014) have said that the price of a product will be of high value if it is supported by promotions that have an impact on increasing consumer interest in buying. The research conducted by Adyanto and Santosa (2018) also proves that the price aspect is one aspect that has a significant effect on purchasing decisions. The Impact of Halal Label …… (Freddy Pandapotan Simbolon) 115 Related to the brand, according to Kotler and Armstrong (2014), a brand is a name, term, symbol, design, or a combination of one part that identifies a product or service from one seller or group of sellers, and distinguishes it from competitors. In addition, the brand will help consumers identify products that can provide benefits to them. This means that the brand is an asset owned by the company as a sign of the business or product or also the services that the company has to make it easily recognizable by the customer and also as a differentiator with the products or services of other companies. Othman, Shaarani, and Bahron (2016) have said that a famous and trusted brand is an invaluable asset. Brands develop into the largest source of assets and are important factors in the company’s marketing activities. The most unique expertise of professional marketers is their ability to create, maintain and protect, and enhance brands. The brand that attracts consumers’ attention is by making the product look unique and easy to remember, making it easier for consumers to make choices. Moreover, brands that create strength, uniqueness, and preferences in consumers’ minds will lead to loyalty to the brand. In addition, Othman, Shaarani, and Bahron (2016) have revealed that customers tend to choose brands that are well known because they feel safe with something known and think the brand is likely to be reliable and the quality can be accounted for. Thus the brand is thought to influence purchasing decisions. The better the brand image for consumers, the greater the decision to purchase food products with the brand. Likewise, in the opinion of Graeff (1996), such rapid market development encourages consumers to pay more attention to the brand image than the physical characteristics of a product in deciding a purchase. The brand is one aspect that has an influence on consumer purchasing decisions. This is as conveyed by Sinaga and Pramanda (2018) that consumer purchasing decisions are influenced by the brand of an item, so the rise and fall of consumer decisions to buy goods are strongly influenced by the brand attached to the product. The research objective can be formulated as; (1) there is the impact of the halal label on purchase decision at Bakso Wagyu in Kota Wisata Cibubur. (2) There is the impact of price on purchase decisions at Bakso Wagyu in Kota Wisata Cibubur. (3) There is the impact of brand on purchase decisions at Bakso Wagyu in Kota Wisata Cibubur. (4) There is the impact of the halal label, price, and brand on the consumer purchase decision to Bakso Wagyu. Figure 1 shows the three key constructs of the halal label, price, and brand, which are hypothesized to influence consumer purchase decisions. Figure 1 The Research Framework Halal Label (X1): 1) Bakso Wagyu is halal guaranteed. 2) Bakso Wagyu meets halal standard. 3) Meat processed is in accordance with the halal standardization. 4) Halal logo are printed on the restaurant board Price (X2): 1) Price of Bakso Wagyu in accordance with the taste. 2) Price of Bakso Wagyu is in accordance with the quality of service. 3) More competitive than other close competitors. 4) The price does not disappoint me Brand (X3): 1) The image of quality taste. 2) A sense of trust. 3) Easy to remember. 4) The attraction for buyer loyaty Purchase Decision (Y): 1) Compared to other meatballs, Bakso Wagyu is my favorite choice. 2) I choose Bakso Wagyu because they guaranteed halal. 3) I choose Bakso Wagyu because of trusted brand. 4) I choose Bakso Wagyu because the price matches the taste quality H1 H2 H3 H4 116 Journal The WINNERS, Vol. 20 No. 2, September 2019: 111-120 The alternate hypothesis which is a statement expressing a relationship between two variables or indicating differences between groups can be described: H1: There is the impact of halal label to consumer purchase decision at Bakso Wagyu outlet in Kota Wisata Cibubur. H2: There is the impact of price to consumer purchase decision at Bakso Wagyu outlet in Kota Wisata Cibubur. H3: There is the impact of brand to consumer purchase decision at Bakso Wagyu outlet in Kota Wisata Cibubur. H4: There is the impact of halal label, price, and brand to consumer purchase decision at Bakso Wagyu outlet in Kota Wisata Cibubur. METHODS The type of research is associative research. Based on the purpose and nature, this research is classified as explanatory research. Rafiz, Arifin, and Hidayat (2016) have said that explanatory research is a study that explains the causal relationship between two variables, namely independent variables that affected the dependent variable. According to the level of expansion, that is how the variables studied would explain the objects studied through the collected data that could be classified into associative research. Sources of data use primary data, namely data obtained by getting directly from respondents who came for meals by using a questionnaire through a field survey at Bakso Wagyu in Kota Wisata Cibubur. The data collection period is two weeks in the second and third week in June 2019. The method of collecting data uses a closed questionnaire that provides answers using five Likert scales, starting with a scale of 1 means strongly disagree to scale 5, which states strongly agree. The sampling technique uses the Accident Sampling method, which according to Amalina and Khasanah (2015), it explains the accident sampling is the selection of samples based on coincidence, i.e., anyone who accidentally meets with the researcher and is seen by the person to be suitable as a respondent would be used as a research sample. Respondents involved in this phase are culinary consumer volunteers at Bakso Wagyu outlet in Kota Wisata Cibubur. Therefore, the formula for the sampling unit is: n = (Za/2) 2 pq / e2 n = The number of samples Z = A large normal standard value depending on a = 0,05, so it is obtained Z=1,96 Q = 1-p, which p uses a value of 0,05 e = A deviation tolerated at 0,1 A 95% confidence interval around the population estimate of change is about +/-2 standard errors around the estimate calculated from the sample. If the 95% confidence interval excludes zero, then it can be described the difference as ‘statistically significant’ at the 5% level (i.e., there is a less than 5% chance that the difference is due to sampling error alone). All tests of statistical significance of change are made at the 5% level. Then the calculation is obtained: n = (1,96)2 (0,5) (0,5) / (0,1)2 n = 96 respondens. Furthermore, the data analysis methods are using correlation test analysis, multiple regression, and hypothesis testing by using the t-test with the program SPSS 22 for the statistical analysis. The multiple regression equations to be tested are: The Impact of Halal Label …… (Freddy Pandapotan Simbolon) 117 Y = a + b1X1 + b2X2 + b3X3 + e Y = Purchase decision X1 = Halal label variable X2 = Price variable X3 = Brand variable e = Random error RESULTS AND DISCUSSIONS Correlation is used to test relationships between quantitative variables. The study of how variables are correlated is called correlation analysis. Correlation analysis for each independent variable on the purchase decision variable, is stated in Table 2. Table 2 Correlation Analisys No Variable Value of Correlation with Purchase Decision Significance Level 1 Halal Label (X1) 0,612 0,001 2 Price (X2) 0,575 0,001 3 Brand (X3) 0,464 0,001 4 Correlation of Overall Variables (R) 0,745 0,001 5 R Square 0,555 0,001 Source: SPSS version 22 It is shown that the halal label variable (X1) has the highest correlation coefficient of 0,612 with a significance level of 0,001; it means that there is a strong significance between the halal label and purchase decision. While the price variable (X2) has a correlation coefficient of 0,575 with a significance level of 0,001, that means there is a significant correlation between price and purchase decision. Similarly, for brand variables (X3), it has a correlation coefficient of 0,464 with a significance level of 0,001, which means there is a strong significance between the brand and the purchase decision. Overall, the three independent variables have a correlation coefficient (R) of 0,745 with a significance level of 0,001, which means that overall, the three variables studied significantly correlate strongly with the purchase decision. So that, the value of R-Square (R2) for the three independent variables on purchase decisions is 0,555, which means that the three research variables contributed 55,5% in consumer purchasing decisions in the purchase of Bakso Wagyu in Kota Wisata Cibubur. The remaining 44,5% is influenced by other variables that are not examined in this research. Based on the results of multiple regression analysis using SPSS processing, the results are shown in Table 3. Table 3 Regression Analysis No Variable Beta Coefficient Value Significance Level 1 Constanta 0,132 - 2 Halal Label (X1) 0,377 0,000 3 Price (X2) 0,346 0,000 4 Brand (X3) 0,252 0,003 5 Fhit 38,261 0,000 Source: SPSS version 22 Analysis 118 Journal The WINNERS, Vol. 20 No. 2, September 2019: 111-120 The regression equation decision on purchasing Bakso Wagyu in Kota Wisaya Cibubur can be seen as follow: Y = 0,132 + 0,377X1 + 0,346X2 + 0,252 X3 The multiple regression equation explains that the halal label variable (X1) is a variable with the largest beta coefficient value that is equal to 0,377 and with a significance level of 0,000. This value implies that the halal label is the dominant variable that influences consumers in the decision to buy Bakso Wagyu. Other variables that have a significant effect are price with a beta coefficient value of 0,346 and a brand variable with a beta coefficient of 0,252. To test the hypothesis, the F calculation results are used with a coefficient of 38,261 and a significance level of 0,000 (smaller than the specified significance level of 0,01). This result gives the meaning to reject the null hypothesis, which means that halal label, price, and brand impact simultaneously to the consumer purchase decision. Bakso Wagyu is in accordance with the halal standardization. The results of this research are supported by earlier researches, such as Khan and Azam (2016) that labeling halal is one aspect of the product selector that will be purchased by consumers. Ambali and Bakar (2014) have pointed out that halal marketing is the guarantee for consumers to decide to buy a product because through the halal guarantee, consumers can gain trust in products that are hygienic, quality, and safe. The second variable that has a significant impact on purchasing decisions is the price. The price of Bakso Wagyu is in accordance with the taste and more competitive than other competitors’ meatballs. According to Alfian and Marpaung (2017), prices can also show the quality of the brand of a product, where consumers assume that expensive prices usually have good quality. The latter variable is a brand that has a significant impact on purchasing decisions. From the foregoing, it is clear that Bakso Wagyu’s brand is the variable that can explain significantly consumer’s purchase behavior based on the image of quality taste, a sense of trust, easy to remember, and the attraction of buyer loyalty that make the consumers prefer Wagyu Bakso in Kota Wisata Cibubur. Hence, they have a positive image of Bakso Wagyu in their minds. The results of this research are supported by earlier research, such as Othman, Shaarani, and Bahron (2016) have revealed that customers tend to choose brands that are well known because they feel safe with something known and think the brand is likely to be reliable and the quality that can be accounted for. CONCLUSIONS The research findings show that (1) there is the impact of the halal label on purchase decisions at Bakso Wagyu in Kota Wisata Cibubur. (2) there is the impact of price on purchase decisions at Bakso Wagyu in Kota Wisata Cibubur. (3) there is the impact of brand on purchase decisions at Bakso Wagyu in Kota Wisata Cibubur. (4) there is the impact of the halal label, price, and brand on the consumer purchase decision to Bakso Wagyu. This research has shown a change in consumer buying behavior in switching from non-halal label to the halal label. 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