Assalamu'alaikum (^_^)
Hi guys. Today, I would love to share with you an article on brand loyalty. This is the first article that I've published when I'm pursuing my study in University Malaysia Perlis (UniMAP). However, as you noticed, I'm still lacking in the writing skills. Yup. I believed this is part of the learning process. Since this is my first paper produced, I'm aware that there's still room for improvement. This research combined two different fields of study; customer relationship management and customer psychology.
Abstract:
The increasing importance of technology in our daily lives has led companies to implement the latest technology on their products before marketing them to their customers. In this era of technology, fuel-efficient vehicles have attracted a great deal attention with a rapidly increasing customer base in the automotive industry. Automobile companies use this as a means of increasing customers’ level of loyalty, due to the anxiety about the system installed in their cars. The purpose of this study is to investigate the indirect effects of brand service quality and brand value towards brand loyalty moderated by technology anxiety. Since moderator variables are rarely tested in the context of PLS model, this investigation will analyze the data by utilizing Partial Least Square (PLS) in measuring the moderating effect of technology anxiety in brand loyalty relationships. The results illustrate that technology anxiety, one of the factors of Car Technology Acceptance Model (CTAM), moderates the relationship between brand service quality, brand value, and brand loyalty.
Introduction:
Nowadays, technology is part of daily life. People look forward to products that offer advanced technological systems which can improve their way of doing things (i.e. during driving). The rapid growth of technology systems adopted in the automotive industry has forced automakers to embed high technology systems into their manufactured cars in order to gain competitive advantages which could increase anxiety level among the automotive consumers (i.e. driver). In the context of this investigation, customers’ feeling (i.e. anxiety) toward the technology installed in their car shall be an important point to understand the intention of the customers to repeat their purchase when purchasing a car. However, Osswald et al. (2012) noted that there is high anxiety level in the public towards technologically advanced cars, which is considered as poor customer behaviour.
Besides, as the population in industrialized countries like North America, Europe, and Japan grows slowly, customer loss can be disastrous to companies. This is due to a smaller number of available new customers to replace those who leave (Blackwell et al., 2012). In the context of this study, a slow growing population in a developing country like Malaysia, has caused automotive companies difficulties in gaining new customers (MIDA, 2012). Therefore, retaining their existing customers is the best way to increase their market share and profitability. In line with the above, Malaysia, a previously overlooked country due to its financial turmoil and political instability, started to gain more and more international attention. The previous Prime Minister Tun Dr Mahathir Mohamed pledged to gradually eliminate tariffs on finished vehicles as part of an agreement signed by Japan and Malaysia in order to gain economic benefits from the trade liberalization between the two countries (Ministry of Foreign Affairs [MOFA] of Japan, 2003).
Tight competition in the business environment has urged companies to take action in building close relationships with their customers and encourage a long-term relationship. Due to this phenomenon, establishing and maintaining brand loyalty is not be easily achieved by companies as the services offered to customers were unsatisfactory and the delivery slow, despite the product quality (Es, 2012). In addition, companies are being forced to embedded excellent value into their products and service as individuals today are able to switch brand easily due to the variety brands present in the market (Koller et al., 2011). Thus, companies need to understand the determinants of brand loyalty among existing and potential customers.
This topic is expected to become a priority in brand building, especially in fast-growing and emerging markets (Meyer, 2014). It is well accepted by scholars and practitioners in the marketing field that it is at least five times more cost efficient to retain the existing customers compared to attracting new customers (Oladele & Akeke, 2012). Brand loyalty is however, a much used and abused term. Although it is widely utilised, many scholars investigate different antecedents of brand loyalty, resulting in a lack of consistency in findings of the investigation (e.g. Thompson et al., 2010; Es, 2012; Sugiati et al., 2013; Kassim et al., 2014). The frequent assumption is that a satisfied customer is the reason for customer to repeat a purchase from the same supplier (Alex & Thomas, 2011; Chinomona & Sandada, 2013; Goel, 2014). However, many other factors could influence customers to repeat the purchase. Therefore, this investigation aims to bridge the research gap by exploring and examining key factors that influence brand loyalty, as well as the effect of technology anxiety on the relationship between brand service quality and brand value towards brand loyalty.
Literature Review:
Since 1950s, marketing researchers have conducted several research in the context of branding (Bastos & Levy, 2012) due to the importance of increasing sales (Li & Green, 2011). Historically, brand loyalty was explained only in terms of customer behavior (i.e. repeat purchase) and since 1969, Day launched a two dimensional concept which includes attitudinal and behavioural (Sivarajah & Sritharan, 2014). However, due to insufficient findings regarding the two dimensions of customer loyalty, researchers in the marketing field added another dimension known as composite (Kaur & Soch, 2013; Tabaku & Kushi, 2013). Therefore, the three dimensions (i.e. attitudinal, behavioral and composite) are necessary to understand and measure the level of brand loyalty (Chuah et al., 2014).
In an increasingly innovative and aggressive business environment, fierce competition exists between firms. One of the key factors of the success of firms is how the customers perceive the quality of service that is offered to them (Auka et al., 2013), as it determines their level of satisfaction (Ivanauskienė & Volungėnaitė, 2014). Therefore, it is important for firms to focus not only on improving the quality of their products to create an intention to purchase, but also to improve the quality of their services. In the past, little effort has been spent in maintaining a relationship with customers after they purchased goods in the retail business even though the brand service quality was found to encourage customers to do repeat purchase and remain loyal to the brand (Auka et al., 2013). Brand service quality is defined as the positive attitudes of customers towards a brand (Chinomona et al., 2013). Offering high quality service is not the only way to increase the level of brand loyalty among customers, as anxiety towards technological tools installed in cars also plays a vital role in influencing buyers’ brand loyalty.
In the business world of today, every company tries to grab the attention of their potential customers by embedding high value into their products. Brand value is an important element in gaining the competitive advantage (Sugiati et al., 2013). It could be defined as what customers think of the brand, including the gap between the price that the customers are willing to pay and the benefit gained from the products offered by the firms (Thaichon et al., 2013). Customers who view a product or service as having more value than their expectations will encourage them to do repeat purchase with the same company (Alex & Thomas, 2011; Goel, 2014) and it can be measured by examining whether this brand is offering a reasonable and fair price as well as giving a good value for the money spent in purchasing the product instead of the competitors (Auka et al., 2013). Focusing on brand value helps firms to maintain a longer relationship with customers as it builds trust towards the products’ brand (Hanzaee & Andervazh, 2012) that will finally lead to brand loyalty (Geçti & Zengin, 2013).
This study aims to add to this scant body of knowledge by including the variable technology anxiety when testing the level of brand loyalty among automotive consumers. Similar to other industries, the use of electronic components in the automotive industry has rapidly increased as multiple aspects of driving a modern automobile is controlled by advanced technological electronics such as acceleration, braking, security, and navigation (Osswald et al., 2012). Additionally, with the latest technology, auto manufacturers currently produce numerous fuel-efficient cars believed to be able to protect the environment, in response to reports that transportation is responsible for about 20 percent of the global greenhouse gas emissions released into the air (Benthem & Reynaert, 2015). Furthermore, technology can be used as one of the preventive tools in providing greater safety and avoiding theft (Laguador et al., 2013). Therefore, consumers prefer to purchase a safer car which includes additional safety features such as airbags, antilock brake systems, and anti-theft alarm systems.
More recently, researchers demonstrated the benefits of technology in the automotive industry, especially in providing safety in terms of information, safety environment and driving tasks assistance (Osswald et al., 2012). The message here is clear: A lower anxiety of technology increases trust towards a brand, while high anxiety reduces trust towards the brand. Once the customers place their trust in a brand, they intend to remain loyal to the brand. In relation to customer behaviour in technology-related industries, it is recognized that the relationship between the infrastructure of technology and customer intention is moderated by technology anxiety (Yang & Forney, 2013). Therefore, technology anxiety is believed to play a role in strengthening brand loyalty relationships.
In previous studies, researchers employed Technology Acceptance Model (TAM) and Car Technology Acceptance Model (CTAM) in order to measure the level of anxiety among users towards technology (e.g. Osswald et al., 2012; Gelbrich & Sattler, 2014). CTAM is an extension of Unified Theory of Acceptance and Use of Technology (UTAUT). The theory of UTAUT was primarily developed to explain and predict users’ acceptance towards technology from the context of the organization. Since the UTAUT model has only been used to measure anxiety in context of computers (Yang & Forney, 2013) and not from the context of other technological system such as technology usage in car (Osswald et al., 2012), CTAM has been introduced by Venkatesh et al. (2012) to further improve the explanatory power of the model. Hence, to predict technology anxiety in the context of customers regarding the technology system installed in the cars, this investigation intends to revisit the predicting factors postulated by CTAM by introducing brand service quality and brand value to measure and analyze the technology anxiety among drivers.
Conceptual Framework and Hypothesis Development:
In line with the literature review and the purpose of this investigation, a proposed framework was constructed to investigate the indirect effect of brand service quality and brand value towards brand loyalty, with the moderating role of technology anxiety. The proposed model is depicted in... [cont.]
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