CC BY
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DOI https://doi.org/10.18551/rjoas.2018-07.28
THE EFFECT OF BRAND IMAGE AND SERVICE QUALITY ON CUSTOMER SATISFACTION AND LOYALTY OF IPHONE USERS IN SURABAYA
Fauzi Abdul Rozaq*, Harsono Soni
Sekolah Tinggi Ilmu Ekonomi Perbanas Surabaya, Indonesia *E-mail: rezza.alkhatib@yahoo.com ORCID: 0000-0002-9457-6865
ABSTRACT
This research aimed to know and learn customer satisfaction and loyalty of iPhone users in Surabaya. The concepts used in this research were brand image and service quality as independent variables and customer satisfaction and customer loyalty as dependent variables. The population of this research was all iPhone users in Surabaya. In addition, the sample used in this research was all users of iPhone type 5, 5s, 6, 6s in Surabaya. There were as many as 240 respondents of iPhone users in Surabaya used as the samples of this research. The data collection technique used was purposive judgment sampling. The data collection used an online questionnaire by sending a link to the respondents. The data were then analyzed by using WarpPLS 6.0. The research findings showed that there was significant and positive correlation among brand image on customer satisfaction, brand image on customer loyalty, service quality on customer satisfaction, service quality on customer loyalty, and customer satisfaction on customer loyalty.
KEY WORDS
Brand image, service quality, customer satisfaction, customer loyalty.
Currently, the development of communication and technology has increased very rapidly. A wide range of products are created to meet the increasingly diverse human needs. One of the main keys in the competition of technology is the company's ability to obtain and manage the information so it can be useful in making decisions in determining the company's strategy (Gans and Stern, 2003). Therefore, a company is required to be more creative in understanding the behavior of society so that the products offered can be accepted by the market. One of the largest communication companies that successfully penetrate the international market is iPhone.
In its development, Apple continues to innovate its products to keep up-to-date and in accordance with the era. Having a comparison, all these devices, from the oldest to the latest, all have experienced specification improvements that will certainly further facilitate the activities of its users.
Table 1 - Data on the Top 5 Vendors, Shipments, Market Share, and Year-Over-Year Changes
in the 1st Quarter of 2015-2016
The Top 5 Smartphone Vendors, Shipments, Market Share, and Year-Over-Year Changes in the 1st Quarter (in millions)
Vendor Samsung 1Q16 Shipment Volumes 81.9 1Q16 Market Share 24.5% 1Q15 Shipment Volumes 82.4 1Q15 Market Share 24.6% Year-Over-Year Change -0.6%
Apple 51.2 15.3% 61.2 18.3% -16.3%
Huawei 27.5 8.2% 17.4 5.2% 58.4%
OPPO 18.5 5.5% 7.3 2.2% 153.2%
Vivo 14.3 4.3% 6.4 1.9% 123.8%
Others 141.5 42.3% 159.8 47.8% -11.4%
Total 334.9 100% 334.4 100% 0.2%
Source: IDC worldwide quarterly mobile phone tracker, April 27, 2016.
According to table 1, sales figures of iPhone decreased by 16 percent. Apple reported that iPhone sales, totaling 51.2 million units in the 1st quarter in 2016, were similar to reports of shipping numbers from IDC. In the same last-year quarter, Apple sold iPhone as much as
61.17 million units. iPhone is the largest supplier for Apple with contribution to revenue reaches up to 68 percent. Revenues earned by this company experienced a very drastic decline with a decline in earnings up to 22.5 percent. It explained that for the first time they experienced a decline in sales since 2007. The decline in profits is also for the first time experienced by Apple Company since 2003. The company considers that the main cause is the strengthening US dollar currency, making global purchasing power decline. Apple is still very strong despite a drop in profits. Its profit in the first quarter of 2016 was recorded at 10.52 billion dollars (IDR 138.4 trillion). The company also has a cash of 233 billion US dollars or equivalent to IDR 3.065 trillion.
LITERATURE REVIEW
Brand Image. According to Schifman and Kanuk (2010), brand image is a pervasive perception, shaped through experience, and is relatively consistent. Therefore, consumer attitudes and actions towards a brand image is one important element that encourages consumers to purchase a product (Faircloth et al., 2001). The better the brand image attached to the product, it will make consumers more interested to buy because consumers assume that a product with a trusted brand gives more sense of security when using it. According to Kotler and Armstrong (2010) the measurement of brand image can be performed based on the following aspects:
• Strength. Strength leads to a variety of physical advantages possessed by related brands that are not found in other brands. The advantage of this brand refers to the physical attributes of the related brand so that it can be regarded as an advantage over other brands. This strength group includes: the physical appearance of the product, the functioning of all facilities of the product, product price, and appearance of supporting facilities of the related product;
• Uniqueness. Meanwhile, uniqueness is the ability to distinguish a brand among other brands. This unique impression comes from the product attribute. Unique impression means that there is a differentiation between one product and other products. This unique group includes service variation and differentiation;
• Favorable. Favorable leads to the brand's ability to be easily remembered by customers. This favorable group includes the ease of the product brand to be spoken, the ability to keep in the customer's mind, and the suitability between the brand impressions in the customer's mind with the desired image of the company on the related brand.
Service Quality. According to Tjiptono (2007), service quality is the level of excellence expected and control over these advantages to meet customer desires. Service quality is influenced by two things: the perceived service and the expected service. If the perceived service is in line with expectations, the quality of service is perceived as good and satisfactory, but when it exceeds customer expectations it becomes the ideal service quality, (Caruana, 2002). Conversely, if the service received is lower than expected, the service quality is perceived poorly. The good and bad implications of the service quality depend on the ability of service providers to meet their customers' expectations consistently (Sureshchandar et al., 2002).
Parasuraman (1988) suggests that there are five key dimensions of quality service that include:
• Tangibles: it includes physical facilities and means of communication;
• Reliability: it is the ability to deliver promptly, accurately and satisfactorily the promised services;
• Responsiveness: it is the desire of the employees to help the customers;
• Assurance: it includes knowledge, ability, courtesy and trustworthiness by customers;
• Empathy: it includes the ease in making a connection, personal attention, and understanding of customer needs.
Customer Satisfaction. Customer satisfaction is the estimate of the results of marketing activities in a competitive business world (Szymanski and Henard, 2001). A company may gain success in marketing by offering the quality of the product or service. According to Sondakh (2014) there are five main factors that need to be considered in relation to customer satisfaction that include:
• Product quality. Customers will be satisfied if the results of their evaluation indicate that the products they use are qualified;
• Service quality. Customers will be satisfied if they obtain good service in line with their expectation;
• Emotional. Customers will feel proud and confidence that others will be amazed when someone uses a branded product and tends to have higher satisfaction. The satisfaction gained is not due to the quality of the product but the social value that makes the customer satisfied with a particular brand;
• Price. Products that have the same quality but set a relatively cheap price will give a higher value to its customers;
• Cost. Customers who do not need to spend additional costs or to waste time to get a product or service tend to be satisfied with the product or service.
Customer Loyalty. Customer loyalty has a considerable influence in marketing. Loyal customers will provide many benefits for the company, (Yang and Peterson, 2004). For instance, by the existence of customer loyalty, it will arise positive word of mouth that will grow the interest of new buyers. Other things related to loyalty will affect the intensity of repurchase, complaining behavior and price sensitivity (Gronholdt et al., 2000). Griffin (2002) explains that loyal customers have the following characteristics:
• Make regular repeat purchases;
• Purchase across product and service lines;
• Recommend the product to others;
• Demonstrate immunity to the full of the competition;
• Design and create loyalty.
Research hypotheses:
• There is a significant effect between brand image and customer satisfaction of iPhone users in Surabaya;
• There is a significant effect between service quality and customer satisfaction of iPhone users in Surabaya;
• There is a significant effect between brand image and customer loyalty of iPhone users in Surabaya;
• There is a significant effect between service quality and customer loyalty of iPhone users in Surabaya;
• There is a significant effect between customer satisfaction and customer loyalty of iPhone users in Surabaya.
Figure 1 - Conceptual Framework
METHODS OF RESEARCH
The population of this research was all iPhone users in Surabaya. The sampling technique used was purposive judgment sampling by determining criteria or certain considerations in determining the sample. Respondents were active iPhone users who had been using the product for more than 6 months and are over 17 years old. A total of 240
respondents have filled out the online questionnaire form. The analysis used in this research included:
Descriptive statistics were used by describing the data collected to generalize the data that had been obtained. In this research, the data analysis technique used is by using the average valued from the class interval through the following formula:
CI = HS - LS (n)C
Where: CI = Class Interval; HS = Highest score (5); LS = Lowest score (1); (n)C = Number of Classes (5).
Furthermore, from the above formula class interval of 0.8 is obtained. The following is an explanation of the average rating criteria of respondents' answers:
Table 2 - Class Interval
INTERVAL RATING SCORE
4,21-5,00 Strongly agree 1
3,41-4,20 Agree 2
2,61-3,40 Neutral 3
1,81-2,60 Disagree 4
1,00-1,80 Strongly disagree 5
Statistical analysis used in this research using WarpPLS 6.0. WarpPLS is used to test validity and reliability, as well as perform hypothesis testing.
RESULTS AND DISCUSSION
Brand Image Variable. Based on the findings of responses obtained on brand image variable, it could be explained that iPhone users had a positive response to the brand image indicator. It was proven from the existing 9 indicators in which only 3 indicators were considered neutral while other indicators provide the agreed response as described in the following table.
Table 3 - Respondents' Response against Brand Image Variable
No Question Items Responses Mean Category
1 2 3 4 5
1 BI1 13 18 50 112 47 3.67 Agree
2 BI2 9 17 39 115 60 3.83 Agree
3 BI3 16 55 94 53 22 3.04 Neutral
4 BI4 13 15 38 114 60 3.80 Agree
5 BI5 16 22 91 84 27 3.35 Neutral
6 BI6 16 36 88 68 32 3.26 Neutral
7 BI7 10 21 51 92 66 3.76 Agree
8 BI8 13 13 44 93 77 3.86 Agree
9 BI9 19 14 39 97 71 3.77 Agree
The average of brand image 3.59 Agree
Service Quality Variable. Based on the findings of responses obtained on service quality variable, it could be explained that iPhone users had a positive response to the indicator of service quality.
Table 4 - Respondents' Response against Service Quality Variable
No Question Items Responses Mean Category
1 2 3 4 5
1 SQ1 13 18 91 83 35 3.45 Agree
2 SQ2 13 21 82 97 27 3.43 Agree
3 SQ3 23 21 93 80 23 3.24 Neutral
4 SQ4 16 23 69 100 32 3.45 Agree
5 SQ5 13 17 61 101 48 3.64 Agree
The average of service quality 3.44 Agree
It was proven by the 5 indicators that there was only 1 indicator considered neutral while other indicators provide the agreed response as described in table 4.
Customer Satisfaction Variable. Based on the findings of responses obtained on customer satisfaction variables, it can be explained that iPhone users had a positive response to customer satisfaction indicators. It was proven by the 5 indicators that there was only 1 indicator was considered neutral while other indicators provide the agreed response as described in the following table.
Table 5 - Respondents' Response against Customer Satisfaction Variable
No Question Items Responses Mean Category
1 2 3 4 5
1 CS1 15 15 35 120 55 3.77 Agree
2 CS2 13 21 68 97 41 3.55 Agree
3 CS3 11 18 72 78 61 3.66 Agree
4 CS4 24 60 98 43 15 2.85 Neutral
5 CS5 15 19 51 113 42 3.61 Agree
The average of customer satisfaction 3.49 Agree
Customer Loyalty Variable. Based on the findings of responses obtained on customer loyalty variables, it could be explained that iPhone users had a positive response to the indicator of customer loyalty. It was proven by the 5 indicators that there was only 1 indicator was considered neutral while other indicators provide the agreed response as described in the following table.
Table 6 - Respondents' Response against Customer Loyalty Variable
No Question Items Responses Mean Category
1 2 3 4 5
1 CL1 15 29 53 92 51 3.56 Agree
2 CL2 17 26 71 76 50 3.48 Agree
3 CL3 8 35 68 87 42 3.5 Agree
4 CL4 16 37 88 61 38 3.28 Neutral
5 CL5 16 25 79 70 50 3.47 Agree
The average of customer satisfaction 3.46 Agree
Validity Test. In this research, the validity test used Pearson correlation test; an item is considered to be valid if it has a correlation significance p-value < 0.05. Validity test was performed on each indicator that will describe the validity of each variable.
Table 7 - Pearson Correlation of Brand Image
Variables Indicators Validity
Significance Cut Off Description
BI1 0.000 0.05 Valid
BI2 0.000 0.05 Valid
BI3 0.000 0.05 Valid
BI4 0.000 0.05 Valid
Brand Image BI5 0.000 0.05 Valid
BI6 0.000 0.05 Valid
BI7 0.000 0.05 Valid
BI8 0.000 0.05 Valid
BI9 0.000 0.05 Valid
Table 8 - Pearson Correlation of Service Quality
Variables Indicators Validity
Significance Cut Off Description
Service Quality SQ1 0.000 0.05 Valid
SQ2 0.000 0.05 Valid
SQ3 0.000 0.05 Valid
SQ4 0.000 0.05 Valid
SQ5 0.000 0.05 Valid
Table 9 - Pearson Correlation of Customer Satisfaction
Variable Indicators Validity
Significance Cut Off Description
Customer Satisfaction CS1 0.000 0.05 Valid
CS2 0.000 0.05 Valid
CS3 0.000 0.05 Valid
CS4 0.000 0.05 Valid
CS5 0.000 0.05 Valid
Table 10 - Pearson Correlation of Customer Loyalty
Variable Indicators Validity
Significance Cut Off Description
Customer Loyalty CL1 0.000 0.05 Valid
CL2 0.000 0.05 Valid
CL3 0.000 0.05 Valid
CL4 0.000 0.05 Valid
CL5 0.000 0.05 Valid
Reliability Test. The reliability test of this research used Cronbach's alpha value, with the considerations that it is said to be reliably if it has an alpha coefficient value > 0.70.
Table 11 - Cronbach's Alpha of Research Variables
Variables Cronbach's alpha Cut Off Description
Brand Image 0.891 0.07 Reliable
Service Quality 0.888 0.07 Reliable
Customer Satisfaction 0.776 0.07 Reliable
Customer Loyalty 0.880 0.07 Reliable
RJ=0.49
Figure 2 - Hypothesis Testing
Based on Figure 2 above, it can be explained that the hypothesis testing is as the following:
Hypothesis 1. The hypothesis of this research, brand image, has a significant and positive effect on customer satisfaction. The hypothesis is accepted with p-value < 0.05.
Hypothesis 2. The hypothesis of this research, service quality, has a significant and positive effect on customer satisfaction. The hypothesis is accepted with p-value < 0.05.
Hypothesis 3. The hypothesis of this research, brand image, has a significant and positive effect on customer loyalty. The hypothesis is accepted with p-value < 0.05.
Hypothesis 4. The hypothesis of this research, service quality, has a significant and positive effect on customer loyalty. The hypothesis is accepted with p-value < 0.05.
Hypothesis 5. The hypothesis of this research, customer satisfaction, has a significant and positive effect on customer loyalty. The hypothesis is accepted with p-value < 0.05.
DISCUSSION OF RESULTS
The Effect of Brand Image on Customer Satisfaction. Based on the descriptive research findings, the average respondents of this research agree to the questionnaire statements of brand image on customer satisfaction. It means that iPhone users are satisfied with the brand image owned by iPhone to its customers in Surabaya. Brand image has a close correlation to satisfaction. It can be explained because satisfaction can be formed from the company image. Respondents of this research were dominated by the age of 17-25 years old in which this age is the final adolescence. For the age groups, brand image is one of the factors affecting the purchase decision of the product. A good brand image of the product will result in its own pride in using the gadgets. In contrast to the age of 36-45 that belongs to the final adult period that becomes minority of respondents who were not too dependent on a brand or a certain pride but they depended on the ease of use and a more affordable price. Overall, the average respondent gave a positive value about the brand image owned by the iPhone in Surabaya.
The Effect of Service Quality on Customer Satisfaction. Based on the descriptive research findings, the average respondents of this research agree to the questionnaire statements of service quality on customer satisfaction. It means that iPhone users are satisfied with the service given by iPhone to its customers in Surabaya. Service quality has a close correlation to satisfaction. It can be explained because satisfaction is the impact of the services provided by the company. A person is satisfied if the service received is equal or greater than the customer's expectation. Similarly, when the services obtained are lesser than expectations, the customer can be dissatisfied. In this research, the service quality was affected by the respondents' occupations. Respondents were diminished by students in which students are the most sensitive responders to technological progress. The next is self-employed and state-owned/ private employee in which in their scope of work, technology becomes an important and supporting aspect. Thus, the quality of good service becomes sensitive to the field of work. In addition, iPhone is able to provide services that fit the respondents' needs. Thus, the average of the respondents gave a positive value about the service quality provided by iPhone users in Surabaya.
The Effect of Brand Image on Customer Loyalty. Based on the descriptive research findings, the average respondents of this research agree to the questionnaire statements of brand image on customer loyalty. It means that iPhone is considered to have a good brand image by iPhone users in Surabaya so it creates a loyal feeling from its customers. Brand image can directly affect customer loyalty. It can be explained because loyalty is formed from a good image owned by iPhone. Such a good iPhone image may result in significant customer loyalty. Someone feels loyal if the product has more pride than other similar products. The effect of the brand image on customer loyalty can also be explained by the age of the customer. The majority of customers were at the age of 17-25 years old in which this age is the most sensitive age to technological developments compared to other age groups. Thus, it can be explained that the average respondents provide a positive value of brand image in which it positively has impact on iPhone user loyalty in Surabaya.
The Effect of Service Quality on Customer Loyalty. Based on the descriptive research findings, the average respondents of this research agree to the questionnaire statements of service quality on customer loyalty. It means that the iPhone is considered to have provided good service for iPhone users in Surabaya so that it results in loyal feelings from its customers. Service quality can directly and significantly affect customer loyalty. It can be explained because loyalty is the impact of the services provided by iPhone itself. The services provided properly and appropriately can lead to customer loyalty. A person feels loyal if the service they perceived continuously is good and satisfies their needs. The effect
of service quality on customer loyalty can be explained also because the dominant respondents of this research were more to female than male respondents. Although there was not much different, women are more considering the effect of product quality to be purchased than the men do. Women are also more sensitive to the sophistication and certain features of iPhone so that women will be more loyal to iPhone. Overall, the average respondents provide a positive value to the services quality that has a positive effect on iPhone user loyalty in Surabaya.
The Effect of Customer Satisfaction on Customer Loyalty. Based on the descriptive research findings, the average respondents of this research agree to the questionnaire statements of customer satisfaction on customer loyalty. It means that iPhone users will be loyal because the customer is satisfied with the services provided by iPhone for its customers in Surabaya. The service quality has a close correlation to satisfaction. It can be explained because satisfaction is the effect of the services provided by the company. A person is satisfied if the service they receive is equal or greater than their expectation. Customer loyalty is very important for company in which it maintains the continuity of their business and the continuity of their business activities. Moreover, the loyal customers will expand their "loyalty" to other products made by the same manufacturer and ultimately they are consumers who are loyal to a particular manufacturer or company forever. Similarly, when the service obtained is lesser than customer's expectation, they will be not satisfied. Customer satisfaction and loyalty can also be explained by respondents' occupation. In addition to students, respondents with the occupation as entrepreneurs and employees of stated owned/ private also have a considerable amount. For these occupations, the satisfaction derived from iPhone arises because of the ability of iPhone to meet their needs, especially in meeting the needs of technology in carrying out their work. Therefore, obtaining satisfaction will lead to loyalty for the customer. Overall, the average respondents gave a positive value about the service quality provided by the company for iPhone users in Surabaya.
CONCLUSION AND SUGGESTIONS
Based on the results of hypothesis analysis and testing conducted in this research, the following conclusion can be drawn:
• Brand image has a significant and positive effect on customer satisfaction of iPhone users in Surabaya. Thus, it can be explained that creating a good brand image will increase iPhone customer satisfaction in Surabaya;
• Service quality has a significant and positive effect on customer satisfaction of iPhone users in Surabaya. Thus, it can be explained that in the presence of good service quality will increase customer satisfaction of iPhone users in Surabaya;
• Brand image has a significant and positive effect on customer loyalty of iPhone users in Surabaya. Thus, it can be explained that creating a good brand image will increase iPhone customer loyalty in Surabaya;
• Service quality has a significant and positive effect on customer loyalty of iPhone users in Surabaya. Thus, it can be explained that in the presence of good service quality will increase customer loyalty iPhone in Surabaya;
• Customer satisfaction has a significant and positive effect on customer loyalty on iPhone users in Surabaya. Thus, it can be explained that creating customer satisfaction will generate loyalty to iPhone users in Surabaya.
This research has been conducted according to the guidelines of scientific research, but this research cannot be separated from the limitations that include:
• This research was conducted using an online questionnaire so that sometimes the answers or responses given by the respondents are difficult to be controlled to determine whether or not the response obtained according to the real situation;
• At the time of conducting this research, there was a launching of new phone type which then affected the target of the respondents in which the respondents with the latest phone type cannot be the respondent of this research.
Based on the research findings that have been obtained, there are several suggestions
as the following:
1. For iPhone, based on the research findings there are several suggestions that can be used for future improvement, among others:
• Brand image can be improved by providing better service so that the product can be compared better with other competitors, creating more varied products and creating more affordable price so as to expand the segment on the market;
• The service quality provided by the iPhone can be improved by performing fast services to its customers because the speed of service will increase customer satisfaction at the time of purchasing the product;
• Customer satisfaction can be improved by creating a product with an affordable price so that the iPhone products are more easily afforded by its customers;
• Better loyalty to iPhone users can be performed by increasing the interest of customers towards the iPhone products so that customers are not interested to move to other brands.
2. For further research, it is expected to be able to use more variables including dependent, independent and intervening variables so that it can contribute more references about the variables affecting customer satisfaction and loyalty. In addition, it might conduct the research on different companies that can be compared.
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