The Relationship Between Social Media Marketing, Psychological Distance, Purchase Intention And Customer Loyalty: Case Of Hypermarket Social Media Users In Indonesia

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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 the

Requirements

for the

Degree

of Doctor of

Philosophy

May

20t5

(2)

ACKNOWLEDGEMENTS

I would like to extend my

gratitude

to all those

people

who

helped

and

supported

me in

completing

this

project.To

my

supervisors,

Prof. Dato' Ishak Ismail and

Dr.

Malliga

Marimuthu, and Dr. Yudi Fernando my heartfelt thank you for their continuous support and

guidance throughout

the formulation stage, data collection, and written and oral

presentation phase

of this

project.

Thank you for the

knowledge

and

patience

that were

given during

the

completion

of this

study. They inspired

me to work

more

efficiently

on this

project.

I would like to also

deeply

thank to my examiners, Prof.

Samsinar Bt. Md.

Sidin,

Associate Professor Dr. Mahmod Sabri Haron, Associate ProfessorDr. Nabsiah Abdul Wahid fortheir very valuable

suggestions

and comments.

I am

grateful

for my

loving

children -

Augusto Dagama

Pelawi and Alward Gutama Pelawi for

encouraging

and

being patient throughout

the

completion

of this

Ph.D program.

Many

thanks also to my parents Soewandono &

Junartiningsih

for

supports and love.

Finally, special appreciation

is dedicated to Prof. Dato' Hasnah and my friends in the USM Ph.D room and my friends from Binus

University,

Jakarta, for the constructive

criticisms, suggestion

and encouragement.

(3)

DEDICATION

This thesis is dedicated to the

Almighty

God for his

provision, protection,unending

and

unconditional support

given

to me.He has also

guided

me

during

the

completion

ofthis

project.

To my

family

a million thanks for

being

with me all

along

and to believe in

what I am

doing.

It has been adream comestrue.

(4)

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

14

1.4 Researchobjectives 15

1.5 Scopeofstudy 15

1.6

Significance

ofresearch "' 18

1.7 Contribution 22

1.7.1Contribution totheoretical perspective 22

(5)

1.7.2Managerial

Contributions , 26

1.8 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

50

2.4 Purchase intention 56

2.5 Reviewon

psychological

distance 58

2.6 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 74

Purchase intention and customer loyalty 75

Mediatingeffectof

purchase

intention 76

Moderating

effect

ofpsychological

distance 78

2.7 Chapter summary 80

CI-lA.PTER 3 81

RESEARCH METHODOLOGY 81

3.0 Introduction 81

(6)

3.1 Researchdesign 81

3.2 Unit of

analysis

83

3.3

Population

83

3.4

Sampling

method 86

3.5 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 98

3.10 Goodness of fit analysis 100

3.11 Explanation ofmediating

effect-bootstrapping

method 101

3.12

Explanation

of moderator effect 103

3.13 Structural model 105

3.14 Research model 107

3.15 Summary

ofChapter

J09

CHA.PTER 4 "' "' "' ' 110

DATA ANALYSIS AND FINDING J 10

(7)

4.0 Introduction 110

4.1 Profile

respondents

110

4.2 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

120

4.2.5.1. 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 134

4.5

Summary

136

CHAPTER 5 ' 138

CONCLUSION AND RECOMMENDATION 138

5.0 Introduction" 138

(8)

5.1

Recapitulation

ofthe study 138

5.2 Discussion 142

5.2.1 Is Social Media

Marketing

(SMM) able toinfluence

purchase

intention... 142 5.2.2 Doespurchase intention effect customer

loyalty

143

5.2.3 Does

purchase

intention mediate the

relationship

144

5.2.4 Does

psychological

distance moderate the

relationship

146

5.3 Contribution ofthe study 148

5.3.1

Implication

fortheory 148

5.3.2 Practical

Implication

150

5.4 Researchlimitations 152

5.5

Suggestion

for future research 153

6.0 Conclusion 153

REFERENCES 155

APPENDICES 177

APPENDICSA:

Copy

ofcover letter 177

APPENDICS B: Questionnaire 178

SECTION A:

Demographic

data 178

SECTION B: Assesmentof social media

marketing (SMM)

180

SECTION C: Assessment ofpurchase intention 181

SECTION D: Assessmentof

psychological

distance "0 182

SECTION E: Assessmentofcustomer

loyalty

183

APPENDICS C: PLS quality crieteriaoverview ) 84

(9)

APPENDICS D: Latentvariable correlation 184

APPENDICSE: R square 184

APPENDICS F: Cross

loadings

185

APPENDICS G: AVE 186

APPENDICS H: Communality 186

APPENDICS I: Total effect 186

APPENDICS J:

Composite

reliability 186

APPENDICS 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) 201

APPENDICS R: Measurement model 202

APPENDICS S: Latent variables scores 203

APPENDICS T: Index Value for latent variables 215

APPENDICS U: Manifest variable scores

(used)

216

(10)

LIST OF TABLES

Table 1.1 Survey

result-Corporate image

award

industry

of

hypermarket

category Table 1.2 Indonesia

placed

fourth offacebook user in the world

Table 1.3 Indonesia

placed

fifth oftwitteruserin the world Table 2.1 The Research

Hypothesis

Table 3.1 Selection of

Hypermarkets

from Jakartaareas

Table 3.2. Measurement items of SMM

Table 3.3 Measurement items for purchase intention

Table 3.4 Measurement items for

psychological

distance

Table 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

ofconstructs

Table 4.8

Loading

andcross

loading

Table 4.9 Rule ofThumbformative Construct

Table 4.10.

Hypothesis

Result

Table 4.11. Purchase Intention as a Mediator

Table 4.12

Summary

ofresultof

hypothesis testing

l

2 3 74

86 90 92

93 95 III 117 119 120 121 122 123

124 126

130

134

136

(11)

LIST OFFIGURES

Figure

2.1 Research model

by

Kim and Ko

(2010) Figure

2.2 Research model

by

Kim and Ko

(2012) Figure

2.3

Theory

ofTPB

(theory

of

planned behavior) Figure

2.4 framework

Figure

3.1 Baron and

Kenny's mediating

model

Figure

3.2

Moderating

model

Figure

3.3 The research model

Figure

3.4

Theory planned

behavior

Figure

4.1.

Validity

SMM

activity

Figure

4.2 Measurement model R2 the

endogenous

variable

Figure

4.3 Ilustration of

mediating

model

purchase

intention

Figure

4.4 Illustration ofmoderatorvariable

49

50

52

68

102

104

107

108

116

128

132

135

(12)

TABLEOF ABBREVA TIONS

AC :

Average

communalities AVE :

Average

variance extracted

CA : Cronbach's

alpha

CFA :

Confirmatory

factor

analysis

CL :

Cross-loading

CR :

Composite reliability

DTC :

Psychological

distance

GOF : Goodness offit INT : Purchase intention LYT : Customer

loyalty

LV : Latent variable

OLS :

Ordinary

least squares PLS : Partial least square

SEM : Structural

equation modeling

SMM : Social media

marketing

TPB :

Theory

of

planned

behavior

VIF : Variance inflation factor

(13)

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 yang

menggunakan

media sosial

bagi menguruskan hubungan

diantara

pelanggan dengan syarikat

agar

ianya dapat meningkatkan tahap

kesetiaan

pelanggan terhadap

pasaraya. Persoalan inilah yang cuba

dikupas

oleh

kajian.Kajian

ini

menggunakan

Teori Kelakuan yang

Dirancang

yang mana memberi

perhatian kepada

model pemasaran media sosial

dengan

melihat

kepada

keberkesanan penggunaan sosial media dalam

mewujudkan keinginan

untuk membeli serta

kesannya terhadap

kesetiaan

pelanggan. Kajian

ini

menganalisis

data

menggunakan Square

Least

separa

(PLS-Partial

Least

Square).

Data

dikutip daripada

482

responden

yang

meliputi

20

hypermarket

di bawah 4

jenama

yang terbesar di lima kota sekitar Jakarta. Data

dikutip daripada

pengguna yang

mempunyai

akaun Twitter dan

juga

Facebook dan yang

datang

membeli-belah di salah sebuah

daripada empat

pasaraya besar tersebut

(Carrefour, Giant, Hypermart, Lottemart). Dapatan menunjukkan

bahawa pemasaran media sosial

mempunyai pengaruh

yang

positif terhadap keinginan

untuk membuat

pembelian. Tujuan pembeliaan mempunyai

kesan yang

positif terhadap perhubungan

kesetiaan

pelanggan

dan

juga

di

dapati mempunyai

kesan mencelah

terhadap

perhubungan

pemasaran sosial media dan kesetiaan

pelanggan.

Jarak

psikologi juga

di

dapati mempunyai

kesan

penyederhanaan terhadap perhubungan

pemasaran media sosial dan

keinginan

untuk membuat

pembeliaan. Pasaraya

adalah

digalakkan

untuk

(14)

membentuk pengurusan pemasaran sosial media yang

strategik

untuk menarik minat

pelanggan

kearah

keinginan

untuk membeli dan

dengan

ini

pada

masa

jangka panjang

akan

meningkatkan

kesetiaan

pelanggan.

(15)

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 its

relationship

between the customers and the company in order to increase the level of customers'

loyalty

towards

hypermarket.

This is what this research addresses.

Study

uses

Theory

of

Planned Behavior. The

study

also focuses on the social media

marketing

model where it looks at the effectiveness on the usage of social media in

developing

the intention to

purchase

and the

loyalty

among the customers. This data is

analysed using

Partial Least

Square (PLS).

Data was collected from over 482

respondents

from 20

hypermarkets

which is under 4 different

major

areas in cities around the Jakarta

Metropolitan

area. Data was

collected from customers who are twitter and facebook account users from the

shops

at the

identified at the four

hypermarkets.

Findings

indicates that social media has a

positive

influence on the intention to

purchase.

Intention to

purchase

was found to have a

positive

effect on customers'

loyalty

and was

also found to mediate the

relationship

between social media

marketing

and customer

loyalty. Psychological

distance moderates the

relationship

of social media

marketing activity

and

purchase

intention.

Hypermarkets

are

encouraged

to

develop

a

strategic

social media

marketingto

increase customers intention to

purchase

and in the

long

run

will enhance customer

loyalty.

(16)

CHAPTER 1 INTRODUCTION

1.0. Introduction

This

chapter consists

of nine sections. The first section describes the current

scenario

in Indonesia

regarding

the

impact

of Social Media

Marketing

on customer

loyalty.The

second section describes the

problem

statement. The third and fourth

sections outline the research

questions

and

objectives.

The fifth section

explains

the

scope of the

study

which also

provides

an overview of the research

framework.

Section six elaborates the

significance

of the

study,

while section seven

explains

the

contribution

of this

study.

This is followed

by

section

eight

where the

key

terms used in this research

are

explained.

The last

chapter

details the

organization of

the

remaining chapters.

1.1. Scenario of Retail Trade in Indonesia

Retail trade is

important

for the economic

growth of

Indonesia. In

2011,

the

Contribution of the retail sector to

Indonesia's

Gross Domestic Product reached about 110 trillion

rupiahs.

The

biggest

share was contributed

by

the

Hypermarket, (Indonesian

Commercial

Newsletter, 2011).

Table 1.1

Survey result-Corporate Image

Award

Industry

of

Hypermarket Categories

Hypermarket

ell 2012

Category

PT Carrefour Indonesia 3.834 Excellent

PT Hero

Supermarket,Tbk (Giant)

3.495

PT

Hypermart Indonesia,Tbk

3.477

PT Lotte

Shopping

Indonesia 3.426

Industry

3..558 ,

(17)

The

biggest hypennarkets

in Indonesia werebuilt in the areas of Jabodetabek

(Jakarta, Bogor, Depok, Tangerang, Bekasi)

- Carrefour with 42

outlets.following

Giant

with 23

hypermarkets, Hypermart

with 19

outlets,

and Lotte mart with 8 outlets. The four

biggest hypermarkets

have the

capability

to succeed because their Twitter and Facebook official accounts have more than

20,000

followers/fans

(www.carrefour.co.id).

(www.hero.co.id), (www.hypermart.co.id), (www.lottemart.co.id).

The

population

in

Jakarta is

9,607,800 (BPS, 2012)

which makes it the most

populous

Facebook account in

the country

(socialbakers.com, 2012). Furthermore,

Indonesia is the fourth

biggest

Facebook

community

in the world with more than

43,978,360

users; mean while it is

also ranked as the fifth country with over 29 million Twitter users. Facebook is the first choice of socialmedias with twitter at second

place.

Therefore the

Hypermarkets 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.

(18)

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 accounts

by

Semiocast

Analysis,

2012.

Many hypermarkets

are now using Social Media

Marketing

to interact with

customers to

help

maintain their

loyalty.

The management of

hypermarkets

needs to

understand the

community

channels

dynamically

and conceive new ways of

organizing

and

executing

channel activities that add values to the customers.

Therefore, using

Social Media

Marketing

to understand customer

loyalty

is needed.

Social Media

Marketing

enables the

hypermarket

to take this process further

by identifying

smaller groups ofcustomers with

homogeneous

needs. Twitter communities and Facebook act as a

catalyst

to

strengthen

the bond between

hypermarkets

and

consumers. 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 customer

relationship

leans to

higher loyalty.

Customers' engagement on Social Media

Marketing

contributes

(19)

to

organizational

success

through

customer

loyalty,

better information

gathering.

Information of

Technology (Williams

&

Sawyer, 2005)

is a

general

term that describes any

technology

that

helps

to

produce, manipulate,

store,

communicate,

and disseminate information

(p.3). Technology, including Twitter,

Facebook and other

websites,in spite

of"customer

engagement"

is

being

viewed in

technological

terms, as one of the

pillars

of which online communication was created

(Luck

and

Lancaster, 2003).

Refers to the

communications in frastructure of the

Internet,

which is based on the IP

protocol.

IP is

part

of the TCP/IP

protocol

suite. It may also refer to voice over IP

(YoIP),

which uses

the Internetto make

telephone

calls. See

VoIP,

IP and TCP/IP. Social media is driven

by

internet

technology.

Social media as the online

community

is a part of the evolution of IT called the internet WEB 2.0

(Sin

et

al, 2012).

This social media is referred to as a

community

to

develop

virtual communications and

relationships

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 and

applications

dedicated to

forum, microblogging,

social

networking,

social

bookmarking,

social

curation,

and wikis are among the different types of social media. It refers to a

group of internet-based

applications

that allow the creation and

exchange

of user­

generated

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 this

opportunity

to almost everyone because it enables

organizations

to conduct businesses in

cyberspace

or connect

people

worldwide without

geographical

limitations.

According

to

(20)

Alavy (2011),

online communities can become

opinion leaders,

influence the

opinion

and decision of entire consumer communities.

Creating

an online

community

on Twiner

and Facebookhas become a proven strategy to create

positive

commercial and emotional

relationships

between

companies

and their actual or

potential

customers

(Romero, 2012).

The

study

is conducted to prove whether the

hypermarket

social media users

would be

loyal

to the stores because of the social network.

According

to Weiss and

Cropanzano (1996),

the affective and the

cognitive

responses, emotional and behavioral responses, and

neuropsychological

responses affect the

purchase

intentions.

Therefore,

users should be

managed

both

cognitively

and

physically (

Bennett et

al., 2003).

This

could become the customers' intention to

purchase

at one of many

hypermarkets

because ofthe

good relationship

on social media. The

positive

emotional

feelings

as a

subjective

mental

feeling

will form a

purchase

intention

(Lin

&

Liang,

20 l

1).

Purchase

intention is the best

predictor

towards customer

loyalty (Peter

&

Olson,

20l

O).

Purchase intention is an

important

matter

today.

The

hypermarket industry

achieved fast

growing

markets with

tight competition. Hypermarkets

in Indonesia are

not

only facing

the local

competitors

but also the new

foreign hypermarkets

from other

countries. On the other

hand,

an increase of customer

mobility

has resulted in them

having

a greater choice as to which

hypermarkets they

wished to

shop. Henceforth, psychological

distance will not be a

problem

to the customers.

Psychological

distance is very

important

to determine the

vibrancy

of

mobility

that affects

purchase

intention. Jakarta is claimed as one the cities with the

highest

income in Indonesia.

Psychological

distance as a

subjective mentality

will become the

(21)

trigger

to create a

good relationship

between the

community

and

purchase

intention.

Psychological

distance consists of emotional

feelings

indifferent

cultures,

habits or individual views that are defined

by Zhang (2013)

as the sum of factors

preventing

or

disturbing

the flow ofinformation to and from the market.

This

study

adds a variable into the

psychological

distance as an

important

matter

In Indonesia's

hypermarket

case.

Horrigan (2008)

Internet and mobile

telecommunication with individuals in distant

physical

location has risen

dramatically

within the last decade. This contribution will

help

to pave the way for researchers to

understand howcustomers are

separated by places

and demands.

People

have had

experiences

from their

community

and then

couple

them with

their emotions to influence their

purchase

intention. Purchase intention involves

behavioral control such as

psychological

distance. With a shorten

distance,

customers

feel more

loyal

to a business

entity.

The aim of the

study

is to

investigate

the effect of Social media

marketing

activitiesoncustomer

loyalty

with

purchase

intentions as a

mediating

variable and

psychological

distance as a

moderating

variable in the context of

hypennarkets

in

Indonesia.

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 of

hypermarket.

Therefore

this research

investigate

hoe social media

play

role to increase

purchase

intention and

customer

loyalty.

Retail trade is

important

for the economic

growth

of Indonesia. In

(22)

2011,

the contribution of retail sector to Indonesia's Gross Domestic Product reached about 110 trillion

rupiahs.

The

biggest

share came from the

Hypermarket (Indonesian

Commercial

Newsletter, 2011).

Studies in Indonesia

by

Tambunan et al.

(2004)

assessed the

competition

in

retail industries with

regards

to 3

hypermarkets- Carrefour, Hero,

and Hypermart. The evidence showed that customers of modem retail increased 48% per year

(Tambunan

et

aI., 2004). Although

there is an increase in customers of

Hypermarkets, nevertheless, competition

amongst the

hypermarkets

is very intense. With the advent ofsocial

media,

customers are mobile and do not stay

long

in one

hypermarket.

The

Hypermarket industry

in Indonesia is

facing

stiff

competition

not

only competitors

but also from new

foreign hypermarkets

from other countries.

The increased

mobility

of customers has resulted in them

having

a greater choice as to which

hypermarkets they

wished to

shop. Henceforth, psychological

distance will not be a

problem

to the customers. This

study

has included

psychological

distance as a moderator which is a new contribution of the

study. Psychological

distance

is the

cognitive thinking

of whether

distance,

a different class level of

shoppers

and the

time the

hypermarket

is

opened

would be a hindrance to customers who

shop

at a

particular hypermarket. Thus,

this variable is seen to be an

important

variable to be

studied.

It can be seen that

hypermarkets using

social media as a

marketing

tool tends to

perform

better than those that do not. Social media

marketing

in this

study

is seen as a

catalyst

to boost the

purchase

intention ofcustomers of

hypermarkets which,

in turn, will have an

impact

on customer

loyalty.

(23)

Practitioners and academics have

argued

that an essential strategy for success and survival in

today's

market

place

is the maintenance ofcustomer

loyalty (Pan,

et

ai, 2012; Alrubaiee, 2010; Vessel, 2009). Loyalty

is defined as those customers who hold a

favorable attitude towards an

organization by recommending

the

organization

to other

consumers and exhibit

repurchase

behavior

(Sivarack, 2011).

Some researchers have

argued

that

loyalty

involves a

willingness

ofcustomers

in the interest of

maintaining

their

relationships

with retailers

(Martin, 2009).

In other

words,

customer engagement is seen to be crucial in the

relationship

to increase

customer

loyalty. Loyalty

is the

objective

of

long-term

customer engagement

(Behravan

and

Rahman, 2012).

Customer engagement describes how

deep

the connection between

customers and the company.

Engaging

customers with the company

practically

means

creating

customer

loyalty (Behravan

and

Rahman, 2012).

On the other

hand, polygamous loyalty

should

not be

ignored (Uncles

et

aI, 2003;

Vesel &

Zabkar, 2009)

so Reichheld

(2002)

indicated

in past research that customer

loyalty

cannot be earned in isolation. Lovelock and Wirtz

(2011)

insisted that

building

customer

loyalty

is difficult. Five decades of scientific

marketing

has resulted in a situation when crucial

concept

such as behavioral

loyalty

gets defined in terms of elusive consumer emotions and on the

(not unreasonable) assumption

that consumers will continue to act

irrationally

from time to time

(Taylor

et

al.,2004).

Marketers can get involved in online communities In two ways:

they

can

participate

in

existing

web communities or

they

can set up their own

(Kotler

&

Amstrong, 2013; 539). Participation

and

engagement

is the

part

of social media

(24)

characteristics

(Mayfield, 2008).

This

study

triesto

gather

focused on engagement which these traits underlie

peoples conceptions

of ideal partners in intimate

relationships (Aaker

et

al., 2004)

and trust. Kotler &

Amstrong (2013)

said that most

companies

are

still

experimenting

with how to use them

effectively

and results are hard to measure.

Such online networks are

largely

user controlled therefore

investigation

of the Social

Media

Marketing

is

timely

and needed.

Many hypermarkets

in Indonesia

provide

the

technology

to

respond

social

network on Facebook and Twitter communities. This

approach

is called Social Media

Marketing

with its characteristics based on interactions

through

the internet between

customers and

hypermarket

administrators. Interactive communication between

customers and

hypermarketscan provide

a two way communication and form communities called

hypermarket

followers/members. These communities can be used for customerengagement which

ultimately

leads to consumerempowerment. Consumers

can communicate with

hypermarkets

or other consumers about

products,

brands or

stores at any

time,

not

just

at the end of the

purchase

sequence. Khalifa & Shen

(2005)

stated that

good

interaction among customers can

happen

when

they

are more well­

informed.

Trustworthy

customer facilitates more

purchase

intention.

Hennig-

Thuaru et al.

(2012)

have

argued

of the effects of social media on

purchase

intention and lifetime values. The

desirability

or

undesirability

ofa

particular

issue or behavior

depends

on the

subjective

norm

(Kazemi

et

al, 2013).

The

Subjective

norm is the

perception

related to

opinions

ofa

society

about

doing

or not

doing

the behavior

by

an individual

(Taylor

and

(25)

Todd, 1995;

Kazemi et

al., 2013).

This

study investigates

the

relationship

between

Social Media

Marketing

as

subjective

norm and

purchase

intention.

The

uniqueness

of social media

provides

a social connection

through

the internet which allowsliberal communication and interaction among customers to

hypermarkets, hypermarkets

to customers and to each other.

(Kaplan

and

Haenlein,

20l

O)

Social

media refers to a group of internet-based

applications

that allow the creation and

exchange

of

user-generated

content. Internet

technology provided

a social media that will be easy to use as well as have usefulness. Internet

technologies provide buyers

with

an easier access to information about

products

&

suppliers,

thus

bolstering buyer bargaining

power

(Porter, 2001;

Barrutia &

Echebarria, 2005).

In the context of social

media

through

the

internet,

users may assess the sites based on how easy it is to use and how effective it is in

helping

them

accomplish

their social media related needs

(Rauniar

et

al., 2014).

If customer engagement is

high, people

may

experience strongly

affective

response intentions. The social media represents an ideal tool for Social Media

Marketing

as consumers

freely

disseminate the

experience

that can be considered

by people

to

purchase

intention. The

importance

of social media becomes more definite while Swift

(2001)

stated that an

enterprise approach

can influence customer behavior

through meaningful

communications. Laroche

(2013)

stated that social media has

positive

effects on

loyalty.

From an academic

perspective,

as

long

as the behavioral is

voluntarily

controlled

by

the

individual,

it can

accurately explain

the factors

influencing technology adoption

(Laukkanen

&

Cruz, 2009).

The construct

perceived

control of behavior as the

(26)

individual's

perception

about the ease or

difficulty

of

doing

behavior. This also

indicates the individual's

perception

about

opportunities

in

doing

that

particular

behavior

(Ajzen,

1991

).lntention

was linked to the actual

purchase

behavior

(Leng

et

al., 2012).

Social Media

Marketing

can

significantly help

the information flow within the

organization

as well as

improve

its

relationships

with customers

especial1y

enhance

customers' retention and

loyalty (A

I

izera, 2012).

This

study

has been used to

explain

how customers' behavior toward the

hypermarkets

is influenced

by

social media

marketing.

This

study

intends to examine how the

participation

in the selected

emerging

social media

provided by

the

hypermarkets

could influence the behavior of

shoppers.

The behavior ofthe consumers is measured the intention to

purchase

and their

loyalty.

Thus,

this

study

examines the

relationships

between social media

marketing, purchase

intention and customer

loyalty. Although

social media is

expected

to influence customer

behavior and decision

making

there are other factors such as

psychological

distance

which would influence their decision.

Therefore, psychological

distance is examined as

a moderator between the

relationship

of social media

marketing

and

purchase

intention.

Based on past research

(Brewer, 2007), geographical

distance such as the distance in kilometers between the two closest

major

port cities found that the

discrepancy lay

on

the

corresponding psychological

distance.

Subjective

mental distance is

generally

referred to the

psychological

distance

(Zhang, 2013;

Dow &

Larimo, 2009). Subjective

mental distance in this context is

perceived by

behavioral control that influences

intentions and

performs

a

given

behavior.

Understanding

the

psychological

distance will foresee consumer behavior in thecontext of

hypermarket.

(27)

Purchase intentions

largely depend

on the customer's

visiting habits, particularly

in relation to the

learning

cost involved in

developing knowledge

of a new store and

travel cost

(Desmet, 2012).

The

relationship

between

geography

and

community

has

been

long

studied and

argued (Hampton

&

Wellman, 2003).

The

subjective

norm on

social

community

would be to

perform purchase

intentions. The greater the

psychological

distance as

perceived

control the stronger the social media should be to

perform

the customer intentions.

The

theory

of

planned

behavior is

developed

to

explain

this research. This social­

psychological theory

with

regard

to

perceptions

of

performance control,

attempts to

predict involuntary

behaviors

(Kazemi

et

al., 2013).

The

impacts

of three

factors;

such

as

attitude, subjective

norm and

perceived

behavioral control with the

tendency

to

behave are also

explained.

The

perceived

control of behavior is the individual's

perception

about ease or

difficulty

of

doing

behavior and indicates the individual's

perceptions

about

required skills,

resources, and

opportunities

in

doing

the behavior

(Ajzen, 1991).

This is

important

when

examining

the

psychological

distance

moderating

role on

relationships

between the Social Media

Marketing

and

purchase

intentions.

According

to the

theory

of

planned behavior,

the behavior is determined

by

the

intention to use. The intention to use is determined

by

an attitude toward a

behavior, subjective

norm and

perceived

behavioral control

(Kazemi

et

aI., 2013).

For

instance, purchase

intentions involve behavioral control such as

psychological

distance that can

make some consumers become more

loyal.

Customer

loyalty

and social

bonding

are

synergistic effects,

wherein

loyalty

was

suggested

as a

meaning

commitment

(Ogba

&

Tan, 2009; Ndubisi, 2004).

Commitment is one of the

important

variables for

(28)

understanding

the

strength

of

marketing relationships.

It is also useful for

measuring

the

likelihood of customer

loyalty

as well as for

predicting

future

purchase frequency (Ndubisi, 2004). Loyalty

is a

deeply

held commitment to

re-buy

or

re-patronize

a

preferred product

or service in the future

despite

situational influences and

marketing

efforts which have

potential

to cause

switching

behavior

(Oliver, 1999; Ndubisi, 2004).

Customer

loyalty

gets defined in terms of elusive consumer emotions that

consumers will continue to act

irrationally

from time to time

(Taylor,

Geluch &

Goodwin, 2004).

For

loyal buyers, companies

must invest in

relationship building (Ndubisi, 2004).

The

relationship

is a

dynamic

process of

managing

a customer­

company

relationship

that customers choose to continue

through

beneficial commercial

exchange (Bergeron, 2002). (Chen

&

Ching, 2007)

The

relationship improves

the

business'

ability

to build their

loyalty.

This

study

focuses on Social Media

Marketing through purchase

intentions to

customer

loyalty

with

psychological

distance as a moderator. These

investigations

are

expected

to

provide

invaluable

insights

into

psychological

distances as a moderator

variable.

Figure

Updating...

References

Related subjects :
Outline : Scope of Study