Jurnal Administrasi Bisnis Volume 8, Nomor 1, Maret 2019, pp. 1-8 P-ISSN: 2252-3294 E-ISSN: 2548-4923 Comparing The Loyalty Of Two Mini Markets’ Customers: The Role Of Store Image and Satisfaction Usep Suhud1,* & Mahasta Patricia Divyna2 1Faculty of Economics, Universitas Negeri Jakarta, Jakarta, Indonesia 2London School of Public Relations (LSPR), Jakarta, Indonesia *Email: [email protected] Abstract Indomaret and Alfamart are two franchise-local-mini markets in Indonesia. Side by side, they invade dwelling areas within cities: where there is an Indomaret store, there will be Alfamart, but with a lack of differentiation among them. This study aims to assess and compare the impact of store image on customer satisfaction and loyalty between two franchise-retail stores in Jakarta, Indonesia: Indomaret and Alfamart. There were 200 participants involved those who were regularly visiting one or both mini markets. Different cases showed different results. In the case of Indomaret, store image had a significant impact on customer satisfaction and loyalty, and satisfaction had a significant effect on customer loyalty. In the case of Alfamart, store image had a significant impact on satisfaction. In addition, satisfaction had a significant impact on loyalty, whereas store image had an insignificant effect on loyalty. Recommendations for management and future study are discussed. Keywords: mini market; customer satisfaction; customer loyalty; store image; the Heywood case Introduction store loyalty among customers of these two mini markets. Impact of image and Local and international brands of satisfaction on loyalty have been examined franchise-mini markets invaded Indonesian by prior studies at different setting including consumers lately, including Indomaret, restaurants, resorts, and stores (Bloemer & Alfamart, Alfamidi, Ceria Mart, Lawson Ruyter, 1998; Faullant, Matzler, & Füller, Station, Circle K, and Seven Eleven. 2008). However, there is a lack of study Indomaret and Alfamart are the most employing these three variables to compare expansive convenience stores in Indonesia. two mini markets. Where there is Indomaret store, there will be Alfamart store at its side. Side by side they This study aims to examine the impact exist in every neighbourhood in urban places, of store image on satisfaction and loyalty attracting customers with almost same towards two mini markets – Indomaret and products, similar services, and promotional Alfamart. Further, results of these two stores activities. Thus, when there are two stores are compared. lying side by side while there is no specific uniqueness between them, to which store the Store image is defined as “the complex customers to be loyal? of a consumer’s perceptions of a store on different (salient) attributes” (Bloemer & Prior studies showed that variables that Ruyter, 1998). Existing studies showed a could affect customer loyalty. They included significant effect of store image on customer hedonic and utilitarian shopping motives, satisfaction, loyalty, sales, customer delight, time pressure stress, store image, expectation, perceived value, and perceived quality in-store characteristics, economic drivers, (Bloemer & Ruyter, 1998; Hameed, 2013; private labels loyalty, product quality, Ryu, Han, & Kim, 2008; Sachdeva & Goel, corporate image, product price, and 2015). In this current study, store image is satisfaction (do Vale, Matos, & Caiado, connected to satisfaction and loyalty. 2016; Ha & Lee, 2016; Kongarchapatara & Shannon, 2016; Suki, 2017). In this current Furthermore, satisfaction can influence study, the authors select store image and attitude, recommendation, loyalty, and customer satisfaction as the predictors of repurchase (Balabanis, Reynolds, & | 1 2 | Jurnal Administrasi Bisnis, Volume 8, Nomor 1, Maret 2019 Simintiras, 2006; Sivadas & Baker-Prewitt, advertising spending, store image, perceived 2000). In this study satisfaction is linked to quality, and customer satisfaction to predict loyalty. Customer loyalty refers to repeatedly brand loyalty. Two of 12 hypotheses they purchase behaviour. Loyalty of customers tested and showed significance were, store can be divided into two models image and customer satisfaction had a Kandampully, Zhang, and Bilgihan (2015, p. significant impact on brand loyalty. 380) The first model is “the progression of loyalty and the customer’s attachment to or Store image attributes were used by relationship with the firm”. The second Theodoridis and Chatzipanagiotou (2009) to model is “the antecedents and consequences predict the Greece customer satisfaction of of loyalty, according to prior empirical supermarkets visitors. The attributes included research”. personnel, pricing, atmosphere, products, in store convenience, and merchandising. They Retailers create various loyalty found that only personnel, pricing, products, programs to keep their customers being loyal, and in store convenience that significantly for example, shopping partner program, gift affected satisfaction. redemption, insurance coverage, member’s day, magazine, rebate, gift, voucher, and Kumowal, Lapian, and Tumiwa (2016) special price (Zakaria et al., 2014). Customer tested the influence of store image on loyalty can be affected by various factors customer satisfaction and customer loyalty. including trust, commitment, satisfaction, Involving 100 a supermarket’s visitors, they value equity, brand equity, and relationship found that store image significantly equity (Gamboa & Gonçalves, 2014; Zhang, influenced customer satisfaction and loyalty. van Doorn, & Leeflang, 2014). Further, Beneke, Adams, Demetriou, and Solomons (2011) studied loyalty of Theoretical framework customers of a super market chain in Cape Town. They documented that store image had A Malaysian study was conducted by a significant impact on trust and satisfaction. Suki (2017) exploring the effect of product Furthermore, trust significantly affected quality, store image, corporate image, and satisfaction while satisfaction significantly product price on satisfaction and store affected loyalty. In contrast, according to loyalty. By using structural equation model them, store image and trust insignificantly for data analysis, they found that customer affected loyalty. satisfaction was significantly affected by product quality, store image, corporate Ene and Özkaya (2014) investigated image, and product price. Besides, they also brand loyalty of retail food and garment in found that customer loyalty was significantly Turkey, by employing retail corporate image affected by product quality and customer and satisfaction as predictor variables. In satisfaction. These scholars documented that their study, store corporate image included there was an insignificant effect of store layout, prestige, service quality, products, in- image, corporate image, and product price on store promotion, support services, and loyalty. equipment. These scholars found that retail corporate image significantly affected Ryu et al. (2008) investigated visit customer satisfaction. Additionally, customer intention of restaurants visitors. They linked satisfaction significantly affected customer restaurant image on perceived value, royalty. satisfaction, and behavioural intention. Also, linking perceived value to customer Based on the studies discussed above, satisfaction and behavioural intention. therefore, the authors formulate the following Besides, they linked customer satisfaction to hypotheses. behavioural intention. They found that all the links were significant. In other words, H1 – Store image will significantly affect restaurant image had a significant impact on customer satisfaction customer satisfaction. Furthermore, a study conducted by Hameed (2013) included Comparing The Loyalty Of Two Mini Markets’ Customers: The Role Of … | 3 H2 – Store image will significantly affect Collins-Dodd and Lindley (2003) and Hsu, customer loyalty Huang, and Swanson (2010). Customer satisfaction and customer loyalty were H3 – Customer satisfaction will significantly measured using indicators adapted from Ene affect customer loyalty and Özkaya (2014). A five-point Likert’s scale was employed for each variable. This study is addressed to measure the theoretical framework as illustrated in the Data analysis Figure 1. This illustration is developed based on the literature discussed above. In the There were four steps of data analyses model, store image is linked to customer conducted for this study. As a part of loyalty and customer satisfaction, and validation, the authors ran an exploratory customer satisfaction is linked to customer factor analysis (EFA). Besides, this method loyalty. also was addressed to look at any possibility for obtaining dimensions of each variable tested. Only constructs with factor loadings of 0.4 and greater were kept for further analyses (Hair Jr., Black, Babin, Anderson, & Tatham, 2006). Further, a reliability test was conducted. Constructs with a Cronbach’s alpha score of 0.7 and greater are considered reliable (Hair Jr. et al., 2006). However, for hypotheses testing purpose, the authors still included constructs with a Cronbach’s alpha lower than 0.7 (Suhud, 2013). The next step was Figure 1. The Theoretical Framework conducting confirmatory factor analysis (CFA). By doing this, the authors could retain indicators that had higher validity among others (Holmes-Smith, 2010). Methods The last step was conducting structural Sample and data collection equation model (SEM). This technique was dedicated for testing