CC BY
8
DOI 10.18551/rjoas.2021-11.07
DO BRAND SATISFACTION, BRAND LOYALTY, AND LUXURY BRAND ATTACHMENT STILL RELEVANT TO ESCALATE CUSTOMER ADVOCACYNOWADAYS? A CASE STUDY ON THE CUSTOMER OF MARKETPLACES SELLING LUXURY BRANDED DAILY ELECTRONIC EQUIPMENT IN THE INDONESIAN MARKET
Suryono Ignatius Agus*, Yacobus Aryono, Brigitta Michelle Yoanna Franscisca
Department of Management, Faculty of Economics and Business, Universitas Pembangunan Nasional "Veteran" Yogyakarta, Yogyakarta, Indonesia *E-mail: [email protected]
ABSTRACT
COVID - 19 pandemic comes up with chaos everywhere, especially in the economy. So much shifting has been occurring; the digital market is one of many things that a company should strive for, an example of shifting amidst the COVID - 19 pandemic. But, there is an interesting point about the digital market as marketplaces in the pandemic. In the middle of the bullish position enjoyed by many marketplaces selling common brands of products, suffering has been felt by some marketplaces selling luxury brands of products caused by the COVID-19 pandemic. Luxury brand marketplace in Indonesia has been experienced a great decline in its market share. This research is an exploration of the common research that examined fashion products. In this research, we tried to examine a different object, daily electronic equipment. This research would like to give a concept of online marketing strategy in marketing 4.0 era, especially for Indonesian marketplace selling luxury brands of products, in their effort to restore their condition after the COVID-19 pandemic impacting their business. Through analyzing the impact of brand satisfaction on customer advocacy and the mediating impact of brand attachment moderated and mediated by brand loyalty, we create an online business strategy concept for marketplaces selling luxury brands of daily electronic equipment. This research examines 219 consumers of luxury brand marketplaces of daily electronic equipment. The sampling technique used in this research is one of the non-probability sampling techniques, a purposive sampling method. The analysis tool used to test the hypotheses is path analysis. The research results show that brand satisfaction is impacting luxury brand attachment; brand satisfaction has a significant positive impact on customer advocacy but luxury brand attachment and brand loyalty have a very little insignificant impact on customer advocacy; brand loyalty doesn't strengthen the impact of luxury brand attachment on customer advocacy; luxury brand attachment and brand loyalty doesn't mediate the impact of brand satisfaction on customer advocacy. The practical implication from this research for marketplaces selling luxury brands of daily electronic equipment is that in the case of the COVID-19 pandemic, they have to reduce the luxury brand communication to reduce expense because the customer who had a buying experience didn't create any customer advocacy.
KEY WORDS
Customer advocacy, luxury brand attachment, loyalty.
The impact of COVID-19 on all economic sectors led to sale decline, especially offline business (except medical, internet, and laptop businesses) but a different story appears on online trading. Marketplaces selling regular quality goods and targeting lower-mid consumers have gained the top position on their market share and their market share has increased around 480% (Natalia, 2020). Unfortunately, similar conditions don't occur in the marketplaces selling luxury-brand products. Based on data taken at the fourth quarter of 2020 and February 2020, COVID-19 led them into a great decline in its visitors and sales that led them into a great decline in their market share position (Iprice, 2021). The marketplaces which don't occupy the top position of the market share will be gone in bankrupt. It had proved by Iprice (2020), in the second quarter of 2020, the number of marketplaces in
Indonesia decreased from 50 marketplaces to 41 marketplaces. The tight competition between the foreign marketplace and local marketplace during the COVID-19 becomes a definite cause. It is also exacerbated by the 4.0 digital marketing era that allows the consumer to switch easier and do not repurchase. The Internet made information-digging easier become one of the causes (Karyono et al, 2020). As stated by Pahlevi (2017), the more e-commerce, the tighter the competition is.
The problems faced by luxury brand marketplaces draw authors' attention to provide a solution from a scientific point of view. Many researches was examining the marketplace targeting on the lower-mid customer but the research examining the marketplaces selling luxury-brand products and targeting on the upper-mid consumer was lack.
Based on A.S. Shimul and Phau (2018), there are some reasons why consumer advocacy is more relevant to the luxury brand. First, stated by Phau and Prendergast (2000), the consumers of luxury-brand products search for information about manufacturer expertise and other customers' experiences when they evaluate the luxury brand. Phau and Prendergast (2000) emphasize at this point, consumer advocacy has important involvement in customer decision-making to buy. Second, as stated by Klein (2016) consumer or customer personality is considered as a more reliable source of information than marketing messages created by the marketing team of a company. Third, based on Schneider (2017) prosperous consumers tend to do brand switching frequently and don't have brand loyalty
A luxury brand, according to Nueno and Quelch (1998), is a product or service which beyond its functionality, emphasizing on social status and image. Luxury brands give more emphasis on someone's image rather than its physical attributes objectively, like the daily-need products. An important reason to have a luxury brand is to show the owner success and social status, self-appreciation, and giving more confidence (KPMG, 2006).
The purpose of this research is to measure the impact of brand satisfaction on customer advocacy through luxury brand attachment moderated and mediated by brand loyalty in luxury brand marketplaces in the Indonesian online market, so a strategic business concept for luxury brand marketplaces can be acquired.
This research also wants to produce a strategic online marketing concept in the 4.0 marketing era, especially for marketplaces in Indonesia selling luxury-brand products which trying to restore their condition after being affected by COVID-19.
LITERATURE REVIEW
Kotler et al (2006) stated that several companies have been established with a business model suited to customers, and customer advocacy has become companies' strategy and competitive advantage. Connectivity, in today's world, allows customers to express their idea which can be heard by others. Customer advocacy can change customers' paradigm to admit that stranger suggestions may be more credible than a suggestion that comes from a celebrity endorser. That's how connectivity creates a great environment to grow up customer advocacy towards a brand (Kotler et al, 2017). Customer advocacy can be seen from two angles, customer angle and company angle. From the customer angle, customer advocacy is a series of acts resulted from taking the customer viewpoint, or, in other words, resulted from the way a company treated their consumers as expected by their consumer.
A lot of research had identified brand loyalty as the main result of a strong brand-consumer relationship (Aksoy et al., 2015; Chaudhuri and Holbrook, 2001; Dick and Basu, 1994). Krishnan (1996) said that brand loyalty is established from developing and strengthening the memory towards a brand in three ways, marketing communication exposure, worth of mouth communication, and direct personal experience. Research by Bodenhausen, Kramer, & Süsser (1994) showed that less happy customers tend to adopt top-down processing. In reverse, a happy customer tends to rely on brand-stereotype information than a sad customer in their decision making. Therefore, a customer with higher affective product-brand loyalty tends to draw a stereotype conclusion and draw an impression about a product or service category.
Based on Zeithaml et al (2017) brand satisfaction is customer evaluation towards a product or service, whether the product or service is satisfied customer needs and hopes or not. The failure to satisfy customers' needs and hopes is resulting in an unsatisfaction toward a product or service. A brand is resulted from customers' emotional post-buying-respond through comparing the perceived brand performance towards expected brand performance (Oliver, 1980). The customer desire to extend their relationship with a satisfying brand result in brand loyalty, positive worth of mouth, and customer advocacy. In addition, the "satisfied" rate of customers who developing strong cognitive and affective bonds towards a brand is when they consider a brand as an integral part of their life (Belaid and Behi, 2011).
There was some research about brand attachment, the impact on premium price, and consumption behavior of those who seek prestige (Vigneron and Jhonson, 2004). A luxury brand is defined as a brand that beyond its functionality and emphasizes the social status and individual image (Nueno and Quelch, 1998). Those reasons show that a luxury brand gives image and non-functional advantage more than the need-goods. Luxury is "emotional bond which connecting customers with luxury brand and developing customers' deep feeling toward luxury brand" (Shimul et al, 2016). The customer need for exclusivity, beauty, happiness, and euphoria gained by a luxury brand is strengthening the emotional bond between a customer and a brand (Kim and Joung, 2006).
RESEARCH FRAMEWORK
The proposed research framework refers to A.S. Shimul, I. Phau (2018). This research measured the impact on marketplaces selling luxury-branded daily electronic equipment in the Indonesian market.
Figure 1 - Research Framework
METHODS OF RESEARCH
The population and sample of this research were the customers of marketplaces selling luxury-branded daily electronic equipment who had brought in the Indonesian online market. The used sampling technique was one of the non-probability sampling techniques, the purposive sampling method (Sugiyono, 2007), with total respondents of 219. A quantitative analysis was used in this research to test the hypotheses.
RESULTS AND DISCUSSION
The obtained data were processed with SPSS (Ghozali, 2018). H1 hypothesis testing result in a significant positive impact of brand satisfaction on luxury brand attachment (H1 Hypothesis is accepted).
The multiple linear regression equation is LBA = 4,388 + 0,707BS, with an adjusted R square score of 0,330 or 33,0%. This result is in line with A.S. Shimul, I. Phau (2018).These show that the customers of the luxury branded of daily electronic equipment feel very satisfied, so the bond to keep using luxury brands emerge.
H2 and H4 hypothesis tests show that brand satisfaction (H2 Hypothesis) and luxury brand (H4 Hypothesis) have a positive and significant impact on brand loyalty on customers of marketplaces selling luxury-branded daily electronic equipment.
Table 1 - Coefficients Effect of Brand Satisfaction on Luxury Brand Attachment
Coefficients3
Model Unstandardized Coefficients Standardized Coefficients t Sig.
B Std. Error Beta
1 (Constant) 4,388 1,630 2,692 0.008
Brand Satisfaction (BS) 0,707 0,068 0.577 10,402 0.000
a. Dependent Variable: Luxury Brand Attachment (LBA)
Table 2 - Coefficients Effect of Brand Satisfaction Luxury Brand Attachment on Brand Loyalty
Coefficientsa
Model Unstandardized Coefficients Standardized Coefficients T Sig.
B Std. Error Beta
1 (Constant) 2,960 0,786 3,767 0,000
Brand Satisfaction (BS) 0,422 0,039 0,598 10,700 0,000
Luxury Brand Attachment (LBA) 0,123 0,032 0,213 3,811 0,000
a. Dependent Variable: Brand Loyalty (BL Z)
The multiple linear regression equation is BL = 2,960 + 0,422BS + 0,123LBA, with an adjusted R square score of 0.546 or 54.6%. This result is in line with A.S. Shimul, I. Phau (2018). It implies the consumers of luxury branded daily electronic equipment are very satisfied with the brand performance and emerge positive emotions which create a little bond to the luxury brand that emerge loyalty upon the luxury brand.
H3 hypothesis test shows that brand satisfaction has a significant positive impact on customer advocacy (H3 hypothesis is accepted). H5 and H6 hypothesis tests show that Luxury brand attachment (H5 Hypothesis) and brand loyalty (H5 Hypothesis) have an insignificant impact on customer advocacy (H5 and H6 hypotheses are denied).
Table 3 - Coefficients The effect of brand satisfaction, luxury brand attachment and brand loyalty
on customer advocacy
Coefficients8
Model Unstandardized Coefficients Standardized Coefficients t Sig.
B Std. Error Beta
1 (Constant) 3,098 1,523 2,034 0,043
Brand Satisfaction (BS) 0,701 0,092 0,632 7,646 0,000
Luxury Brand Attachment (BSA) -0,059 0,062 -0,066 -0951 0,343
Brand Loyalty (BL) 0,005 0,128 0,003 0,039 0,969
a. Dependent Variable: Customer Advocacy (CA)
The multiple linear regression equation is CA = 3,098 + 0,701 BS - 0,059BSA + 0,005BL, with an adjusted R square score of 0,350 or 35,0%. The H3 Hypothesis testing result is in line with A.S. Shimul, I. Phau (2018). In reverse, the H5 and H6 Hypotheses testing result is not in line with A.S. Shimul, I. Phau (2018).The customers who bought luxury-branded daily electronic equipment feel very satisfied by the brand performance and then emerge the desire to share their experience with both other customers and consumers which creates high customer advocacy upon the luxury brand. On the other hand, luxury brand attachment doesn't encourage customers to share their experience, so there is no customer advocacy created. Similar to luxury brand attachment, brand loyalty also can't encourage the customers to share their experience and so doesn't have an impact on customer advocacyH7 hypothesis testing result shows that brand loyalty doesn't strengthen the impact of luxury brand attachment on customer advocacy (H7 hypothesis is denied).
The multiple linear regression equation is CA = 1,498 + 0,400LBA+ 0,985Bl-0,020LBA*BL, with an adjusted R square score of 0,177 or 17,7%. The H7 Hypothesis testing result is in line with A.S. Shimul, I. Phau (2018). The customers who bought luxury-
branded daily electronic equipment have loyalty to the luxury brand they bought, but doesn't encourage them to share their experience, and so doesn't strengthen the relation between luxury brand attachment and customer advocacy.
Table 4 - Results of Analysis of the Effect of Luxury Brand Attachment on customer advocacy
mediated by Brand Loyalty
Coefficients3
Model Unstandardized Coefficients Standardized Coefficients t Sig.
B Std. Error Beta
1 (Constant) 1,498 6,052 0,248 0.805
Brand Loyality (BL) 0,400 0,303 0.442 1,319 0.189
Brand Loyality 0,985 0,399 0,628 2,470 0,014
Luxury Brand Attachment (LBA)*Brand Loyality (BL) -0,020 0,019 -0,540 1,062 0,289
a. Dependent Variable: Customer Advocacy (CA)
H8 hypothesis testing result shows that brand satisfaction has a negative but insignificant impact on customer advocacy which is mediated by brand loyalty (H8 hypothesis is denied).
The equations are shown by equation (1) and equation (2):
BL = a + P2BS + el (1)
CA = a + P2BS + P6BL + e2 (2)
Linear Regression Testing Result for Equation (1):
Table 5a - Coefficients Effect of Brand Satisfaction and Brand Loyalty on Customer Advocacy
Coefficients8
Model Unstandardized Coefficients Standardized Coefficients t Sig.
B Std. Error Beta
1 (Constant) 2,944 1,514 1,945 0,053
Brand Satisfaction (BS) 0,674 0,087 0,608 7,724 0,000
Brand Loyalty (BL) -0,026 -0,124 -0,016 -0,206 0,837
a. Dependent Variable: Customer Advocacy (CA)
The SPSS output depict that the unstandardized beta score for customer satisfaction (ECS) is 0.509 and significant at 0.000. The resulted standard error score is 0.033. Those results mean that brand satisfaction has a direct impact and significant impact on brand loyalty.
Linear Regression Testing Result for Equation (2):
Table 5b - Coefficients Effect of Brand Satisfaction and Brand Loyalty on Customer Advocacy
Coefficients®
Model Unstandardized Coefficients Standardized Coefficients t Sig.
B Std. Error Beta
1 (Constant) 2,944 1,514 1,945 0,053
Brand Satisfaction (BS) 0,674 0,087 0,608 7,724 0,000
Brand Loyalty (BL) -0,026 -0,124 -0,016 -0,206 0,837
a. Dependent Variable: Customer Advocacy (CA)
In Table 5b, for brand loyalty, gained an unstandardized beta value of 0.674 with sig. value of 0.000 (smaller than 0.05 or significance requirement obtained). The resulted standard error score is 0.087. The second regression equation analysis resulting brand loyalty' (BT) unstandardized beta of -0.026, sig. of 0.837 (much away greater than 0.05). The resulted standard error is -0.124 for consumer trust.
Figure 2 - Path Analysis Model for Equation (1) and (2)
Figure 2 shows brand loyalty as a mediator in the model from both equation (1) and (2). The impact of brand loyalty as mediation variable can be tested with the following sobel test calculation:
Sp2p6 = Vp62 Sp22 + p22 Sp62 + Sp22 Sp62 = 0,0624
After we get the Sp2p6, the t statistic can be calculated through following formula:
t = -0,212
Sp 2p6
Because the t value of 0.212 is smaller than the t table of 0.05 significance level, 1.96, it can be concluded that the 8H Hypothesis is rejected or there is no mediation impact. Those all results is affirming A.S. Shimul & I. Phau (2008)' research. The consumers who bought the luxury-branded daily electronic equipment were fully satisfied by the brand performance that led to the desire to share their experience that create customer advocacy. On the other hand, loyalty to the luxury brand doesn't mediate the indirect impact of brand satisfaction on customer advocacy. This result gives a concept that in building the marketing communication, luxury brand have to emphasize the brand performance to create customer advocacy. Whether this phenomenon is only caused by the COVID-19 pandemic or not, further research should be conducted to determine it.
The hypothesis testing rejects H9 Hypothesis, which means that brand satisfaction gives an insignificant negative impact on customer advocacy mediated by luxury brand loyalty. Equations (3) and (4) are the equations tested.
LBA = a + P1BS + el (1)
CA = a + P3BS + P5LBA + e2 (2)
Linear Regression Testing Result for Equation (3):
Table 6a - Coefficients Effect of Brand Satisfaction on Luxury Brand Attachment
Coefficients3
Model Unstandardized Coefficients Standardized Coefficients t Sig.
B Std. Error Beta
1 (Constant) 4,388 1,630 2,692 0,008
Brand Satisfaction (BS) 0,707 0,068 0,577 10,402 0,000
a. Dependent Variable: Luxury Brand Attachment (LBA)
The unstandardized beta of brand satisfaction of 0.707, sig. of 0.000, and standard error of 0.068 are shown in table 6a. Those results got a meaning of brand satisfaction having a direct impact on luxury brand attachment.
The analysis of The equation (4) results in unstandardized beta of brand satisfaction (BS) of 0.703, the significance of 0.000 (smaller than 0.05), and a standard error of 0.074
For luxury brand attachment, -0.056 of unstandardized beta value, the significance of 0.331 (greater than 0.05), and a standard error of 0.060 is obtained.
Linear Regression Testing Result for Equation (4):
Table 6b - Coefficients Effect of Brand Satisfaction and Luxury Brand Attachment on Customer
Advocacy
Coefficients3
Unstandardized Coefficients Standardized Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 3,112 1,472 2,115 0,036
Brand Satisfaction (BS) 0,703 0,074 0,634 9,508 0,000
Luxury Brand Attachment (LBA) -0,059 0,060 -0,065 -0,975 0,331
a. Dependent Variable: Customer Advocacy (CA)
Figure 3 - Path Analysis Model for Equation (3) and (4)
The diagram showed by figure 3 is showing luxury brand attachment as a mediating variable. Using Sobel test we analyzed the mediating impact of brand loyalty through following calculation.
Sp1p5 = Vp52 Spl2 + pi2 Sp52 + Spl2 Sp52 = 0,1303
After Sp1p5 was gained, the t statistic of luxury brand attachment was counted through following formula.
t = Ilp1 = _0,3201
Splp 5
The t statistic of -3201 which is smaller than the t table of 0.05 significance level, which is 1.96, is showing us that H9 Hypothesis can't be accepted. There is no mediating impact of luxury brand attachment on the model shown in Figure 3.The consumers who bought the luxury-branded daily electronic equipment were fully satisfied by the brand performance that led to the desire to share their experience that create customer advocacy. On the other hand, luxury brand attachment doesn't mediate the indirect impact of brand satisfaction on customer advocacy. This result gives a concept that in building the marketing communication, luxury brand have to emphasize the brand performance to create customer advocacy. Whether this phenomenon is only caused by the COVID-19 pandemic or not, further research should be conducted to determine it.
CONCLUSION
A unique condition occurred in marketplaces selling luxury-branded daily electronic equipment in the Indonesian market. In the middle of the COVID-19 pandemic, the marketing communication of the luxury brands of daily electronic equipment could not encourage customer advocacy. In this case, the luxury brand of daily electronic equipment should reduce their marketing communication for saving to survive. They have to emphasize their marketing communication on the brand performance.
For future research, we suggest the researcher who has an interest in this field examine the post-COVID-19 pandemic condition.
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