Determinants of Customer Loyalty: Evidence from Indonesian Retail Market
Suresh Kumar
Citation : Suresh Kumar, Determinants of Customer Loyalty: Evidence from Indonesian Retail Market International Journal of Managerial Studies and Research 2018 , 6(3) : 17-24
Retail industries are one of the largest employed workers in Indonesia accounted for 26 million workers. The fierce competition among modern retailers in Indonesia forces some of the retailers had to close down their business, as the result, it would lead to mass unemployment in Indonesia. The objective of this research is to determine the customer loyalty factors in retail industries in Indonesia as one of the strategies to stay in the competition. Based on the literature review it was found that Brand Image, Satisfaction, and Reputation play a significant role in determining loyalty. Hence, this research is aimed to analyze the relationship among Brand Image, Satisfaction, Reputation and Loyalty. Hero supermarket was chosen as the case looking at the previous prediction it would go defeating its competitors in 2012 whereas in 2015 it had to close down some of its stores and even sold one of its business units. Furthermore, Hero declined to second place based on the Brand Image Award. The relationship among brand image, satisfaction, reputation, and loyalty was analyzed by applying quantitative research approach with 270 respondents with the criteria those who have bought at least once at Hero in the West Jakarta and Structural Equation Modelling was used to test the hypothesis. The results showed that Brand Image influences satisfaction and reputation but not loyalty, whereas reputation does not influence loyalty but satisfaction does.