THE RELATIONSHIP BETWEEN SOCIAL MEDIA
MARKETING, PSYCHOLOGICAL DISTANCE,
PURCHASE INTENTION AND CUSTOMER LOYALTY: CASE OF HYPERMARKET SOCIAL
MEDIA USERS IN INDONESIA
By
RETNO DEW ANTI
Thesis submitted in
Fulfilment
of theRequirements
for the
Degree
of Doctor ofPhilosophy
May
20t5ACKNOWLEDGEMENTS
I would like to extend my
gratitude
to all thosepeople
whohelped
andsupported
me incompleting
thisproject.To
mysupervisors,
Prof. Dato' Ishak Ismail andDr.
Malliga
Marimuthu, and Dr. Yudi Fernando my heartfelt thank you for their continuous support andguidance throughout
the formulation stage, data collection, and written and oralpresentation phase
of thisproject.
Thank you for theknowledge
andpatience
that weregiven during
thecompletion
of thisstudy. They inspired
me to workmore
efficiently
on thisproject.
I would like to alsodeeply
thank to my examiners, Prof.Samsinar Bt. Md.
Sidin,
Associate Professor Dr. Mahmod Sabri Haron, Associate ProfessorDr. Nabsiah Abdul Wahid fortheir very valuablesuggestions
and comments.I am
grateful
for myloving
children -Augusto Dagama
Pelawi and Alward Gutama Pelawi forencouraging
andbeing patient throughout
thecompletion
of thisPh.D program.
Many
thanks also to my parents Soewandono &Junartiningsih
forsupports and love.
Finally, special appreciation
is dedicated to Prof. Dato' Hasnah and my friends in the USM Ph.D room and my friends from BinusUniversity,
Jakarta, for the constructivecriticisms, suggestion
and encouragement.DEDICATION
This thesis is dedicated to the
Almighty
God for hisprovision, protection,unending
andunconditional support
given
to me.He has alsoguided
meduring
thecompletion
ofthisproject.
To myfamily
a million thanks forbeing
with me allalong
and to believe inwhat I am
doing.
It has been adream comestrue.TABLE OF CONTENTS
ACKNOWLEDGEMENT " i
DEDICATION ii
TABLE OF CONTE,NTS iii
LIST OF TABLES IX
LIST OF FIGURES x
LIST OF ABBREVATIONS x'i
ABSTRA.K Xll
A,BSTRA.CT xiv
CHAPTER 1 ...1
INTRODUCTION: 1
1.0 Introduction l
1.1 Scenario of retail trade in Indonesia 1
1.2 Problem statement 6
1.4 Research
question
141.4 Researchobjectives 15
1.5 Scopeofstudy 15
1.6
Significance
ofresearch "' 181.7 Contribution 22
1.7.1Contribution totheoretical perspective 22
1.7.2Managerial
Contributions , 261.8 Keyterm 27
1.9 Organizationofthe remainingchapters , 30
CHAPTER 2 "' 32
LITE'RATURE REVIEW ' ' 32
2.0 Introduction 32
2.1 Customerloyalty 38
2.2 Social MediaMarketing 40
2.3 Review oftherelationship SMM and customer
loyalty
502.4 Purchase intention 56
2.5 Reviewon
psychological
distance 582.6 Theoretical framework and research hypotheses 66
2.6.1 Framework 68
2.6.2 Research hypotheses 72
2.6.2.1
2.6.2.2
2.6.2.3
2.6.2.4
SMM and
purchase
intention 74Purchase intention and customer loyalty 75
Mediatingeffectof
purchase
intention 76Moderating
effectofpsychological
distance 782.7 Chapter summary 80
CI-lA.PTER 3 81
RESEARCH METHODOLOGY 81
3.0 Introduction 81
3.1 Researchdesign 81
3.2 Unit of
analysis
833.3
Population
833.4
Sampling
method 863.5 Samplesize 88
3.6 Research variable 89
3.6.1 Social Media Marketing (SMM) 89
3.6.2 Purchase intention 91
3.6.3 Psychological distance 92
3.6.4 Customerloyalty 93
3.7 Survey instruments 95
3.8 Survey administration 97
3.9
Analysis
method 983.10 Goodness of fit analysis 100
3.11 Explanation ofmediating
effect-bootstrapping
method 1013.12
Explanation
of moderator effect 1033.13 Structural model 105
3.14 Research model 107
3.15 Summary
ofChapter
J09CHA.PTER 4 "' "' "' ' 110
DATA ANALYSIS AND FINDING J 10
4.0 Introduction 110
4.1 Profile
respondents
1104.2 Dataanalyses andresult 113
4.2.1.PilotStudy 113
4.2.2.Goodness ofmeasures 116
4.2.3.Measurement model 117
4.2.4.Constructvalidity 118
4.2.5.Intemal consistency
reliability
1204.2.5.1. Cronbach'salpha (CA) 120
4.2.5.2. Composite reliability (CR) 121
4.2.5.3. Convergent validity (CR) 121
4.2.5.4. Discriminantvalidity 122
4.3 Evaluation-criteria for formative construct. 125
4.4Validity assessmentsofthestructural model.. 126
4.4.1 Quality assessmentof the structural model. 129
4.4.2 The hypotheses testingstructural model. 129
4.4.3 Purchase intentionas mediator 131
4.4.4
Moderating
effect ofpsychological distance 1344.5
Summary
136CHAPTER 5 ' 138
CONCLUSION AND RECOMMENDATION 138
5.0 Introduction" 138
5.1
Recapitulation
ofthe study 1385.2 Discussion 142
5.2.1 Is Social Media
Marketing
(SMM) able toinfluencepurchase
intention... 142 5.2.2 Doespurchase intention effect customerloyalty
1435.2.3 Does
purchase
intention mediate therelationship
1445.2.4 Does
psychological
distance moderate therelationship
1465.3 Contribution ofthe study 148
5.3.1
Implication
fortheory 1485.3.2 Practical
Implication
1505.4 Researchlimitations 152
5.5
Suggestion
for future research 1536.0 Conclusion 153
REFERENCES 155
APPENDICES 177
APPENDICSA:
Copy
ofcover letter 177APPENDICS B: Questionnaire 178
SECTION A:
Demographic
data 178SECTION B: Assesmentof social media
marketing (SMM)
180SECTION C: Assessment ofpurchase intention 181
SECTION D: Assessmentof
psychological
distance "0 182SECTION E: Assessmentofcustomer
loyalty
183APPENDICS C: PLS quality crieteriaoverview ) 84
APPENDICS D: Latentvariable correlation 184
APPENDICSE: R square 184
APPENDICS F: Cross
loadings
185APPENDICS G: AVE 186
APPENDICS H: Communality 186
APPENDICS I: Total effect 186
APPENDICS J:
Composite
reliability 186APPENDICS K: Calculation result 187
APPENDICS .L: Outer loadings 188
APPENDICS M: Outer model (weightorloading) 189
APPENDICS N: Path coefficient 190
APPENDICS O: Latent variablescore 190
APPENDICS P: Outerweights 200
APPENDICS
Q:
Measurement model (restandardised) 201APPENDICS R: Measurement model 202
APPENDICS S: Latent variables scores 203
APPENDICS T: Index Value for latent variables 215
APPENDICS U: Manifest variable scores
(used)
216LIST OF TABLES
Table 1.1 Survey
result-Corporate image
awardindustry
ofhypermarket
category Table 1.2 Indonesiaplaced
fourth offacebook user in the worldTable 1.3 Indonesia
placed
fifth oftwitteruserin the world Table 2.1 The ResearchHypothesis
Table 3.1 Selection of
Hypermarkets
from JakartaareasTable 3.2. Measurement items of SMM
Table 3.3 Measurement items for purchase intention
Table 3.4 Measurement items for
psychological
distanceTable 3.5 Measurement items forcustomer
loyalty
Table 4.1
Respondent profile
Table 4.2 The summary ruleof thumb evaluation model measurement
Table 4.3
Loading
Table 4.4 Cronbach's
alpha
Table 4.5
Composite reliability
Table 4.6 AYE
Table 4.7 Discriminant
validity
ofconstructsTable 4.8
Loading
andcrossloading
Table 4.9 Rule ofThumbformative Construct
Table 4.10.
Hypothesis
ResultTable 4.11. Purchase Intention as a Mediator
Table 4.12
Summary
ofresultofhypothesis testing
l
2 3 74
86 90 92
93 95 III 117 119 120 121 122 123
124 126
130
134
136
LIST OFFIGURES
Figure
2.1 Research modelby
Kim and Ko(2010) Figure
2.2 Research modelby
Kim and Ko(2012) Figure
2.3Theory
ofTPB(theory
ofplanned behavior) Figure
2.4 frameworkFigure
3.1 Baron andKenny's mediating
modelFigure
3.2Moderating
modelFigure
3.3 The research modelFigure
3.4Theory planned
behaviorFigure
4.1.Validity
SMMactivity
Figure
4.2 Measurement model R2 theendogenous
variableFigure
4.3 Ilustration ofmediating
modelpurchase
intentionFigure
4.4 Illustration ofmoderatorvariable49
50
52
68
102
104
107
108
116
128
132
135
TABLEOF ABBREVA TIONS
AC :
Average
communalities AVE :Average
variance extractedCA : Cronbach's
alpha
CFA :
Confirmatory
factoranalysis
CL :
Cross-loading
CR :
Composite reliability
DTC :
Psychological
distanceGOF : Goodness offit INT : Purchase intention LYT : Customer
loyalty
LV : Latent variable
OLS :
Ordinary
least squares PLS : Partial least squareSEM : Structural
equation modeling
SMM : Social media
marketing
TPB :
Theory
ofplanned
behaviorVIF : Variance inflation factor
HUBUNGAN ANTARA PEMASARAN SOSIAL MEDIA, JARAK PSIKOLOGI, NIAT PEMBELIAN DAN KESETIAAN
PELANGGAN: KEs PENGGUNA PASARAYA SOSIAL MEDIA
DI INDONESIA
ABSTRAK
Kini
terdapat banyak
pasaraya besar yangmenggunakan
media sosialbagi menguruskan hubungan
diantarapelanggan dengan syarikat
agarianya dapat meningkatkan tahap
kesetiaan
pelanggan terhadap
pasaraya. Persoalan inilah yang cubadikupas
olehkajian.Kajian
inimenggunakan
Teori Kelakuan yangDirancang
yang mana memberiperhatian kepada
model pemasaran media sosialdengan
melihatkepada
keberkesanan penggunaan sosial media dalammewujudkan keinginan
untuk membeli sertakesannya terhadap
kesetiaanpelanggan. Kajian
inimenganalisis
datamenggunakan Square
Leastsepara
(PLS-Partial
LeastSquare).
Datadikutip daripada
482responden
yangmeliputi
20
hypermarket
di bawah 4jenama
yang terbesar di lima kota sekitar Jakarta. Datadikutip daripada
pengguna yangmempunyai
akaun Twitter danjuga
Facebook dan yangdatang
membeli-belah di salah sebuahdaripada empat
pasaraya besar tersebut(Carrefour, Giant, Hypermart, Lottemart). Dapatan menunjukkan
bahawa pemasaran media sosialmempunyai pengaruh
yangpositif terhadap keinginan
untuk membuatpembelian. Tujuan pembeliaan mempunyai
kesan yangpositif terhadap perhubungan
kesetiaan
pelanggan
danjuga
didapati mempunyai
kesan mencelahterhadap
perhubungan
pemasaran sosial media dan kesetiaanpelanggan.
Jarakpsikologi juga
didapati mempunyai
kesanpenyederhanaan terhadap perhubungan
pemasaran media sosial dankeinginan
untuk membuatpembeliaan. Pasaraya
adalahdigalakkan
untukmembentuk pengurusan pemasaran sosial media yang
strategik
untuk menarik minatpelanggan
kearahkeinginan
untuk membeli dandengan
inipada
masajangka panjang
akan
meningkatkan
kesetiaanpelanggan.
THE RELATIONSHIP BETWEEN SOCIAL MEDIA
MARKETING, PSYCHOLOGICAL DISTANCE, PURCHASE
INTENTION AND CUSTOMER LOYALTY: CASE OF HYPERMARKET SOCIAL MEDIA USERS IN INDONESIA
ABSTRACT
To date there are many
hypermarkets
that uses social media to manage itsrelationship
between the customers and the company in order to increase the level of customers'
loyalty
towardshypermarket.
This is what this research addresses.Study
usesTheory
ofPlanned Behavior. The
study
also focuses on the social mediamarketing
model where it looks at the effectiveness on the usage of social media indeveloping
the intention topurchase
and theloyalty
among the customers. This data isanalysed using
Partial LeastSquare (PLS).
Data was collected from over 482respondents
from 20hypermarkets
which is under 4 different
major
areas in cities around the JakartaMetropolitan
area. Data wascollected from customers who are twitter and facebook account users from the
shops
at theidentified at the four
hypermarkets.
Findings
indicates that social media has apositive
influence on the intention topurchase.
Intention to
purchase
was found to have apositive
effect on customers'loyalty
and wasalso found to mediate the
relationship
between social mediamarketing
and customerloyalty. Psychological
distance moderates therelationship
of social mediamarketing activity
andpurchase
intention.Hypermarkets
areencouraged
todevelop
astrategic
social media
marketingto
increase customers intention topurchase
and in thelong
runwill enhance customer
loyalty.
CHAPTER 1 INTRODUCTION
1.0. Introduction
This
chapter consists
of nine sections. The first section describes the currentscenario
in Indonesiaregarding
theimpact
of Social MediaMarketing
on customerloyalty.The
second section describes theproblem
statement. The third and fourthsections outline the research
questions
andobjectives.
The fifth sectionexplains
thescope of the
study
which alsoprovides
an overview of the researchframework.
Section six elaborates thesignificance
of thestudy,
while section sevenexplains
thecontribution
of thisstudy.
This is followedby
sectioneight
where thekey
terms used in this researchare
explained.
The lastchapter
details theorganization of
theremaining chapters.
1.1. Scenario of Retail Trade in Indonesia
Retail trade is
important
for the economicgrowth of
Indonesia. In2011,
theContribution of the retail sector to
Indonesia's
Gross Domestic Product reached about 110 trillionrupiahs.
Thebiggest
share was contributedby
theHypermarket, (Indonesian
Commercial
Newsletter, 2011).
Table 1.1
Survey result-Corporate Image
AwardIndustry
ofHypermarket Categories
Hypermarket
ell 2012Category
PT Carrefour Indonesia 3.834 Excellent
PT Hero
Supermarket,Tbk (Giant)
3.495PT
Hypermart Indonesia,Tbk
3.477PT Lotte
Shopping
Indonesia 3.426Industry
3..558 ,The
biggest hypennarkets
in Indonesia werebuilt in the areas of Jabodetabek(Jakarta, Bogor, Depok, Tangerang, Bekasi)
- Carrefour with 42outlets.following
Giantwith 23
hypermarkets, Hypermart
with 19outlets,
and Lotte mart with 8 outlets. The fourbiggest hypermarkets
have thecapability
to succeed because their Twitter and Facebook official accounts have more than20,000
followers/fans(www.carrefour.co.id).
(www.hero.co.id), (www.hypermart.co.id), (www.lottemart.co.id).
Thepopulation
inJakarta is
9,607,800 (BPS, 2012)
which makes it the mostpopulous
Facebook account inthe country
(socialbakers.com, 2012). Furthermore,
Indonesia is the fourthbiggest
community
in the world with more than43,978,360
users; mean while it isalso ranked as the fifth country with over 29 million Twitter users. Facebook is the first choice of socialmedias with twitter at second
place.
Therefore theHypermarkets opened
an access to
only
Facebook and twitter. The table below shows this progress.Table 1.2 Indonesia
placed
fourth level of Facebook user in the world.ll'l.!U._�_._ _. �
.:le • •••1�5�9640
NotPicture4: Hana Konc.MAld.iYu. Palestine.Sinal pore.!D!WAn
[10
LargestCOU�1. unnec Stales 2. Brazil 3. India 4. moonesta 5. MexiCo 6. Turkey 7. UnitedKingdom 8. Philippines 9. France 10. Germany
News about Faceboo'k
• _ _
;ilOFastest.��PastWeeil
155.549.640 1. Brazil 3.67 % 1.680.500 53.052.660 2. lnelia 2_82% 1.402.580 51,204,280 3. MexiCo
43.97B.360 4. Vietnam 36.249.280 5. ThaiLand 30.765.240 6. Philippines 30.433.220 7. Argentina 28.563.860 8. Egypt 24.197,400 g Qatar 23.789.360 10. South Afrlca
1.82% 648.860 10.01 % 548.580 3.37% 504.600 1.12% 317.400 1.42% 271.040 1.92% 217.720 3668% 177.680 3.54% 175.840
22July 2012110:30_00am
Source: List ofCountries on Facebook from
beritateknologi.com,
2012.Table 1.3 Indonesia
placed
fifth level of twitter user in the world.Top 20countries in terms of Twitteraccounts
, • J, '.
6 __
• _.._bo_O'.(I,·20'2
• D'.(I'·2'1117_0141-2011
_._,.., , us.
,.
,-
• U.K.
�-
7 ",-"", , e..
e_
'o
Il ...
l? ec-
t� "WI.:ru.a.
,... R.uI....
t50��
16 __
n ..._...
18 FrtnCJIII 19 a-...,.
20 R"Y
Source:
Top
20 countries in terms of Twitter accountsby
SemiocastAnalysis,
2012.Many hypermarkets
are now using Social MediaMarketing
to interact withcustomers to
help
maintain theirloyalty.
The management ofhypermarkets
needs tounderstand the
community
channelsdynamically
and conceive new ways oforganizing
and
executing
channel activities that add values to the customers.Therefore, using
Social Media
Marketing
to understand customerloyalty
is needed.Social Media
Marketing
enables thehypermarket
to take this process furtherby identifying
smaller groups ofcustomers withhomogeneous
needs. Twitter communities and Facebook act as acatalyst
tostrengthen
the bond betweenhypermarkets
andconsumers. Indonesia's
huge
numbers ofusers contribute in new ways to run a business and have made a considerable progress.Ahadmotlaghi
and Pawar(2012),
have stated that success customerrelationship
leans to
higher loyalty.
Customers' engagement on Social MediaMarketing
contributesto
organizational
successthrough
customerloyalty,
better informationgathering.
Information of
Technology (Williams
&Sawyer, 2005)
is ageneral
term that describes anytechnology
thathelps
toproduce, manipulate,
store,communicate,
and disseminate information(p.3). Technology, including Twitter,
Facebook and otherwebsites,in spite
of"customer
engagement"
isbeing
viewed intechnological
terms, as one of thepillars
of which online communication was created
(Luck
andLancaster, 2003).
Refers to thecommunications in frastructure of the
Internet,
which is based on the IPprotocol.
IP ispart
of the TCP/IPprotocol
suite. It may also refer to voice over IP(YoIP),
which usesthe Internetto make
telephone
calls. SeeVoIP,
IP and TCP/IP. Social media is drivenby
internet
technology.
Social media as the onlinecommunity
is a part of the evolution of IT called the internet WEB 2.0(Sin
etal, 2012).
This social media is referred to as acommunity
todevelop
virtual communications andrelationships
between the members.This process will occurwith the
availability
ofthe internet.Social media is the collective of online communications channels dedicated to
community-based input, interaction, content-sharing
and collaboration. Websites andapplications
dedicated toforum, microblogging,
socialnetworking,
socialbookmarking,
social
curation,
and wikis are among the different types of social media. It refers to agroup of internet-based
applications
that allow the creation andexchange
of usergenerated
content.A computer network IS a system that connects
computers
via communication media so that data can be transmitted among them. The internet has created thisopportunity
to almost everyone because it enablesorganizations
to conduct businesses incyberspace
or connectpeople
worldwide withoutgeographical
limitations.According
toAlavy (2011),
online communities can becomeopinion leaders,
influence theopinion
and decision of entire consumer communities.
Creating
an onlinecommunity
on Twinerand Facebookhas become a proven strategy to create
positive
commercial and emotionalrelationships
betweencompanies
and their actual orpotential
customers(Romero, 2012).
The
study
is conducted to prove whether thehypermarket
social media userswould be
loyal
to the stores because of the social network.According
to Weiss andCropanzano (1996),
the affective and thecognitive
responses, emotional and behavioral responses, andneuropsychological
responses affect thepurchase
intentions.Therefore,
users should be
managed
bothcognitively
andphysically (
Bennett etal., 2003).
Thiscould become the customers' intention to
purchase
at one of manyhypermarkets
because ofthe
good relationship
on social media. Thepositive
emotionalfeelings
as asubjective
mentalfeeling
will form apurchase
intention(Lin
&Liang,
20 l1).
Purchaseintention is the best
predictor
towards customerloyalty (Peter
&Olson,
20lO).
Purchase intention is an
important
mattertoday.
Thehypermarket industry
achieved fast
growing
markets withtight competition. Hypermarkets
in Indonesia arenot
only facing
the localcompetitors
but also the newforeign hypermarkets
from othercountries. On the other
hand,
an increase of customermobility
has resulted in themhaving
a greater choice as to whichhypermarkets they
wished toshop. Henceforth, psychological
distance will not be aproblem
to the customers.Psychological
distance is veryimportant
to determine thevibrancy
ofmobility
that affects
purchase
intention. Jakarta is claimed as one the cities with thehighest
income in Indonesia.
Psychological
distance as asubjective mentality
will become thetrigger
to create agood relationship
between thecommunity
andpurchase
intention.Psychological
distance consists of emotionalfeelings
indifferentcultures,
habits or individual views that are definedby Zhang (2013)
as the sum of factorspreventing
ordisturbing
the flow ofinformation to and from the market.This
study
adds a variable into thepsychological
distance as animportant
matterIn Indonesia's
hypermarket
case.Horrigan (2008)
Internet and mobiletelecommunication with individuals in distant
physical
location has risendramatically
within the last decade. This contribution will
help
to pave the way for researchers tounderstand howcustomers are
separated by places
and demands.People
have hadexperiences
from theircommunity
and thencouple
them withtheir emotions to influence their
purchase
intention. Purchase intention involvesbehavioral control such as
psychological
distance. With a shortendistance,
customersfeel more
loyal
to a businessentity.
The aim of the
study
is toinvestigate
the effect of Social mediamarketing
activitiesoncustomer
loyalty
withpurchase
intentions as amediating
variable andpsychological
distance as amoderating
variable in the context ofhypennarkets
inIndonesia.
1.2.
Problem Statement
Theuse of social media is
increasing
in various business sector as a tool to attract& retain customers. This is still under
study
in the context ofhypermarket.
Thereforethis research
investigate
hoe social mediaplay
role to increasepurchase
intention andcustomer
loyalty.
Retail trade isimportant
for the economicgrowth
of Indonesia. In2011,
the contribution of retail sector to Indonesia's Gross Domestic Product reached about 110 trillionrupiahs.
Thebiggest
share came from theHypermarket (Indonesian
Commercial
Newsletter, 2011).
Studies in Indonesia
by
Tambunan et al.(2004)
assessed thecompetition
inretail industries with
regards
to 3hypermarkets- Carrefour, Hero,
and Hypermart. The evidence showed that customers of modem retail increased 48% per year(Tambunan
etaI., 2004). Although
there is an increase in customers ofHypermarkets, nevertheless, competition
amongst thehypermarkets
is very intense. With the advent ofsocialmedia,
customers are mobile and do not stay
long
in onehypermarket.
TheHypermarket industry
in Indonesia isfacing
stiffcompetition
notonly competitors
but also from newforeign hypermarkets
from other countries.The increased
mobility
of customers has resulted in themhaving
a greater choice as to whichhypermarkets they
wished toshop. Henceforth, psychological
distance will not be a
problem
to the customers. Thisstudy
has includedpsychological
distance as a moderator which is a new contribution of the
study. Psychological
distanceis the
cognitive thinking
of whetherdistance,
a different class level ofshoppers
and thetime the
hypermarket
isopened
would be a hindrance to customers whoshop
at aparticular hypermarket. Thus,
this variable is seen to be animportant
variable to bestudied.
It can be seen that
hypermarkets using
social media as amarketing
tool tends toperform
better than those that do not. Social mediamarketing
in thisstudy
is seen as acatalyst
to boost thepurchase
intention ofcustomers ofhypermarkets which,
in turn, will have animpact
on customerloyalty.
Practitioners and academics have
argued
that an essential strategy for success and survival intoday's
marketplace
is the maintenance ofcustomerloyalty (Pan,
etai, 2012; Alrubaiee, 2010; Vessel, 2009). Loyalty
is defined as those customers who hold afavorable attitude towards an
organization by recommending
theorganization
to otherconsumers and exhibit
repurchase
behavior(Sivarack, 2011).
Some researchers have
argued
thatloyalty
involves awillingness
ofcustomersin the interest of
maintaining
theirrelationships
with retailers(Martin, 2009).
In otherwords,
customer engagement is seen to be crucial in therelationship
to increasecustomer
loyalty. Loyalty
is theobjective
oflong-term
customer engagement(Behravan
and
Rahman, 2012).
Customer engagement describes howdeep
the connection betweencustomers and the company.
Engaging
customers with the companypractically
meanscreating
customerloyalty (Behravan
andRahman, 2012).
On the otherhand, polygamous loyalty
shouldnot be
ignored (Uncles
etaI, 2003;
Vesel &Zabkar, 2009)
so Reichheld(2002)
indicatedin past research that customer
loyalty
cannot be earned in isolation. Lovelock and Wirtz(2011)
insisted thatbuilding
customerloyalty
is difficult. Five decades of scientificmarketing
has resulted in a situation when crucialconcept
such as behavioralloyalty
gets defined in terms of elusive consumer emotions and on the
(not unreasonable) assumption
that consumers will continue to actirrationally
from time to time(Taylor
etal.,2004).
Marketers can get involved in online communities In two ways:
they
canparticipate
inexisting
web communities orthey
can set up their own(Kotler
&Amstrong, 2013; 539). Participation
andengagement
is thepart
of social mediacharacteristics
(Mayfield, 2008).
Thisstudy
triestogather
focused on engagement which these traits underliepeoples conceptions
of ideal partners in intimaterelationships (Aaker
etal., 2004)
and trust. Kotler &Amstrong (2013)
said that mostcompanies
arestill
experimenting
with how to use themeffectively
and results are hard to measure.Such online networks are
largely
user controlled thereforeinvestigation
of the SocialMedia
Marketing
istimely
and needed.Many hypermarkets
in Indonesiaprovide
thetechnology
torespond
socialnetwork on Facebook and Twitter communities. This
approach
is called Social MediaMarketing
with its characteristics based on interactionsthrough
the internet betweencustomers and
hypermarket
administrators. Interactive communication betweencustomers and
hypermarketscan provide
a two way communication and form communities calledhypermarket
followers/members. These communities can be used for customerengagement whichultimately
leads to consumerempowerment. Consumerscan communicate with
hypermarkets
or other consumers aboutproducts,
brands orstores at any
time,
notjust
at the end of thepurchase
sequence. Khalifa & Shen(2005)
stated thatgood
interaction among customers canhappen
whenthey
are more wellinformed.
Trustworthy
customer facilitates morepurchase
intention.Hennig-
Thuaru et al.(2012)
haveargued
of the effects of social media onpurchase
intention and lifetime values. Thedesirability
orundesirability
ofaparticular
issue or behaviordepends
on thesubjective
norm(Kazemi
etal, 2013).
TheSubjective
norm is theperception
related toopinions
ofasociety
aboutdoing
or notdoing
the behaviorby
an individual(Taylor
andTodd, 1995;
Kazemi etal., 2013).
Thisstudy investigates
therelationship
betweenSocial Media
Marketing
assubjective
norm andpurchase
intention.The
uniqueness
of social mediaprovides
a social connectionthrough
the internet which allowsliberal communication and interaction among customers tohypermarkets, hypermarkets
to customers and to each other.(Kaplan
andHaenlein,
20lO)
Socialmedia refers to a group of internet-based
applications
that allow the creation andexchange
ofuser-generated
content. Internettechnology provided
a social media that will be easy to use as well as have usefulness. Internettechnologies provide buyers
withan easier access to information about
products
&suppliers,
thusbolstering buyer bargaining
power(Porter, 2001;
Barrutia &Echebarria, 2005).
In the context of socialmedia
through
theinternet,
users may assess the sites based on how easy it is to use and how effective it is inhelping
themaccomplish
their social media related needs(Rauniar
et
al., 2014).
If customer engagement is
high, people
mayexperience strongly
affectiveresponse intentions. The social media represents an ideal tool for Social Media
Marketing
as consumersfreely
disseminate theexperience
that can be consideredby people
topurchase
intention. Theimportance
of social media becomes more definite while Swift(2001)
stated that anenterprise approach
can influence customer behaviorthrough meaningful
communications. Laroche(2013)
stated that social media haspositive
effects onloyalty.
From an academic
perspective,
aslong
as the behavioral isvoluntarily
controlledby
theindividual,
it canaccurately explain
the factorsinfluencing technology adoption
(Laukkanen
&Cruz, 2009).
The constructperceived
control of behavior as theindividual's
perception
about the ease ordifficulty
ofdoing
behavior. This alsoindicates the individual's
perception
aboutopportunities
indoing
thatparticular
behavior
(Ajzen,
1991).lntention
was linked to the actualpurchase
behavior(Leng
etal., 2012).
Social Media
Marketing
cansignificantly help
the information flow within theorganization
as well asimprove
itsrelationships
with customersespecial1y
enhancecustomers' retention and
loyalty (A
Iizera, 2012).
Thisstudy
has been used toexplain
how customers' behavior toward the
hypermarkets
is influencedby
social mediamarketing.
Thisstudy
intends to examine how theparticipation
in the selectedemerging
social media
provided by
thehypermarkets
could influence the behavior ofshoppers.
The behavior ofthe consumers is measured the intention to
purchase
and theirloyalty.
Thus,
thisstudy
examines therelationships
between social mediamarketing, purchase
intention and customer
loyalty. Although
social media isexpected
to influence customerbehavior and decision
making
there are other factors such aspsychological
distancewhich would influence their decision.
Therefore, psychological
distance is examined asa moderator between the
relationship
of social mediamarketing
andpurchase
intention.Based on past research
(Brewer, 2007), geographical
distance such as the distance in kilometers between the two closestmajor
port cities found that thediscrepancy lay
onthe
corresponding psychological
distance.Subjective
mental distance isgenerally
referred to the
psychological
distance(Zhang, 2013;
Dow &Larimo, 2009). Subjective
mental distance in this context is
perceived by
behavioral control that influencesintentions and
performs
agiven
behavior.Understanding
thepsychological
distance will foresee consumer behavior in thecontext ofhypermarket.
Purchase intentions
largely depend
on the customer'svisiting habits, particularly
in relation to the
learning
cost involved indeveloping knowledge
of a new store andtravel cost
(Desmet, 2012).
Therelationship
betweengeography
andcommunity
hasbeen
long
studied andargued (Hampton
&Wellman, 2003).
Thesubjective
norm onsocial
community
would be toperform purchase
intentions. The greater thepsychological
distance asperceived
control the stronger the social media should be toperform
the customer intentions.The
theory
ofplanned
behavior isdeveloped
toexplain
this research. This socialpsychological theory
withregard
toperceptions
ofperformance control,
attempts topredict involuntary
behaviors(Kazemi
etal., 2013).
Theimpacts
of threefactors;
suchas
attitude, subjective
norm andperceived
behavioral control with thetendency
tobehave are also
explained.
Theperceived
control of behavior is the individual'sperception
about ease ordifficulty
ofdoing
behavior and indicates the individual'sperceptions
aboutrequired skills,
resources, andopportunities
indoing
the behavior(Ajzen, 1991).
This isimportant
whenexamining
thepsychological
distancemoderating
role on
relationships
between the Social MediaMarketing
andpurchase
intentions.According
to thetheory
ofplanned behavior,
the behavior is determinedby
theintention to use. The intention to use is determined
by
an attitude toward abehavior, subjective
norm andperceived
behavioral control(Kazemi
etaI., 2013).
Forinstance, purchase
intentions involve behavioral control such aspsychological
distance that canmake some consumers become more
loyal.
Customerloyalty
and socialbonding
aresynergistic effects,
whereinloyalty
wassuggested
as ameaning
commitment(Ogba
&Tan, 2009; Ndubisi, 2004).
Commitment is one of theimportant
variables forunderstanding
thestrength
ofmarketing relationships.
It is also useful formeasuring
thelikelihood of customer
loyalty
as well as forpredicting
futurepurchase frequency (Ndubisi, 2004). Loyalty
is adeeply
held commitment tore-buy
orre-patronize
apreferred product
or service in the futuredespite
situational influences andmarketing
efforts which have
potential
to causeswitching
behavior(Oliver, 1999; Ndubisi, 2004).
Customer
loyalty
gets defined in terms of elusive consumer emotions thatconsumers will continue to act
irrationally
from time to time(Taylor,
Geluch &Goodwin, 2004).
Forloyal buyers, companies
must invest inrelationship building (Ndubisi, 2004).
Therelationship
is adynamic
process ofmanaging
a customercompany
relationship
that customers choose to continuethrough
beneficial commercialexchange (Bergeron, 2002). (Chen
&Ching, 2007)
Therelationship improves
thebusiness'
ability
to build theirloyalty.
This
study
focuses on Social MediaMarketing through purchase
intentions tocustomer
loyalty
withpsychological
distance as a moderator. Theseinvestigations
areexpected
toprovide
invaluableinsights
intopsychological
distances as a moderatorvariable.