Research Article PresentationBRAND IMAGE CUSTOMER SATISFACTION AND LOYALTY

RESEARCH TOPIC

The Impact of Brand Image Towards Loyalty with Satisfaction as A Mediator in McDonald’s

Fransisca Andreani, Tan Lucy Taniaji and Ruth Natalia Made Puspitasari Faculty of Economics, Petra Christian University Jl. Siwalankerto 121-131 Surabaya 60263 Indonesia .

ABSTRACT

The object of this paper to examine the impact of McDonalds Brand image towards customer loyalty and customer satisfaction.

The result shows that three hypotheses are accepted which means there is a positive impact of strength of brand association towards customer loyalty.

INTRODUCTION

McDonalds is one of the biggest fast food restaurant in the world.

In Indonesia McDonald is able to win the competition from its rival Burger King and made Burger king close its restaurant in (2002).

McDonalds uses different strategies to maintain its brand image.

One strategy its uses to utilizing its operations, managing policies as well as Human resource to supports its long term goal.

McDonalds also uses competitive strategy which includes cost, price , delivery speed, reliability, copying with changing demand, flexibility and new product changing demand.

INTRODUCTION

Research was done by Kim & Kim in (2004) to find out Brand equity of Restaurants in Korea.

They Distributed 394 Questioners using 7 fast food brands like McDonalds, Burger King, Hardees, Jakobe, KFC, Lotteria and Popeyes.

Results of the research showed that McDonalds got the highest brand equity

2005 study about selecting fast food restaurants in Surabaya by distributing 12.000 questionnaires the study revealed that the rank of the most awaited restaurants were McDonalds followed by KFC.

LITERATURE REVIEW

Brand image can be measured from the physical appearance of a product or a service.

This psychical appearance can lead to the high-low perception in the customers mind. (Martinez, 2002).

Grewal & Levy (2010) state that brand associations reflect the mental links that customers make between a brand and its key product attributes, such as a logo, slogan or famous personality associations reflect the mental links that customers make between a brand and its key product attributes, such as a logo, slogan or famous personality.

LITERATURE REVIEW

Earls, Ogilvy & Mather (2004) also say that strong brand image can make customers loyal. But whenever customers’ needs change and the brand cannot respond these changing needs.

According to Steel (2004), customers will tend to switch another brand (in Miller & Muir, 2004) Building a positive brand image can influence repeat purchase because a strong brand image can lead to customer loyalty.

Schultz (2005) states that customers who are loyal to certain brand will recommend it to other people and not easily influenced by competitors to make purchases

Conceptual Frame work & Hypothesis

Brand Image

Brand Association

Favourability• Ease of brand to say• Logo M referring to McDonald’s• McDonald’s image as fast food resturant

Uniqueness• Special package offered (breakfast menu)• Big mac as a special menu

Strength• Attractive product packaging• Burger variations• Ice cream variations• Affordable price

Customer Satisfaction• McDonald’s products match with its brand image• Customers are satisfied with Mcdonald’s brand• Customers are satisfied with McDonald’s service

Customer Loyalty• Repurchase• Recommend• Not easily influenced by aanother brand

HYPOTHESES

Thus the hypotheses can be formed are as follows:

H1: There is an influence of favourability of brand association on customer loyalty.

H2: There is an influence of strength of brand association on customer loyalty.

H3: There is an influence of uniqueness of brand association on customer loyalty.

H4: There is an influence of favourability of brand association on customer satisfaction.

H5: There is an influence of strength of brand association on customer satisfaction.

H6: There is an influence of uniqueness of brand association on customer satisfaction.

H7: There is an influence of customer satisfaction on customer loyalty.

RESEARCH METHODOLOGY

This research is a causal quantitative to draw conclusions by using hypotheses testing.

The primary data in this research are data collected from questionnaires

The secondary data are taken from literature, journal, magazine, articles, and internet.

Data Collecting Procedures and Methods. Library Research & Field Research.

RESEARCH METHODOLOGY

There are three kinds of operational variables used in this method.

The independent variables are favorable of brand association, strength of brand association, and uniqueness of brand association. While the dependent variable is customer loyalty, and customer satisfaction is as a mediating variable.

RESEARCH METHODOLOGY

Data Analysis Techniques Validity and Reliability Testing. Descriptive Data Analysis Top Two Boxes and Bottom Two Boxes Analysis Partial Least Square (PLS)

Partial Least Square (PLS)

Favourability -> Satisfaction

0.202 -0.03 0.262 0.765 0.44463246

Not Significant

Strength -> Satisfaction 0.421 0.43 0.088 3.366 0.00082137

Significant

Uniqueness -> Satisfaction

0.062 0.048 0.138 0.159 0.87373308

Not Significant

Favourability -> Loyalty 0.176 0.003 0.23 0.772 0.44047915

Not Significant

Strength -> Loyalty 0.289 0.306 0.086 4.807 0.0000020

Significant

Uniqueness -> Loyalty 0.02 -0.007 0.125 0.45 0.65290547

Not Significant

Satisfaction -> Loyalty 0.389 0.393 0.085 4.57 0.000006 Significant

Original Sample

Estimate

Mean Of

Subsamples Std. Deviation T-Statistic P -value Significance

H Statement t-statistic P value Remarks

H1 There is a positive influence favourability of brand association with customer loyalty.

0.765 0.44463246 Rejected

H2 There is a positive influence strength of brand association with customer loyalty.

3.366 0.00082137

Accepted

H3 There is a positive influence uniqueness of brand association with customer loyalty.

0.159 0.87373308 Rejected

H4 There is a positive influence favourability of brand association with customer satisfaction.

0.772 0.44047915 Rejected

H5 There is a positive influence strength of brand association with customer satisfaction.

4.807 0.0000020 Accepted

H6 There is positive influence uniqueness of brand association with customer satisfaction.

0.45 0.65290547 Rejected

H7 There is positive influence customer satisfaction with customer loyalty.

4.57 0.000006 Accepted

HYPOTHESES TESTING

CONCLUSION

Among 7 hypotheses, only three of them are accepted. They are H2 (There is a positive influence strength of brand

association with customer loyalty). H5(There is a positive influence strength of brand

association with customer satisfaction. H7(There is positive influence customer satisfaction with

customer loyalty).

RECOMMENDATIONS

McDonald’s should pay more attention to customers’ perceived value as they would like to get affordable price.

From the research, the majority of customers are young people aged 17-25 years. It is advisable to add more product variations, like salads and healthy sandwich to attract older people who become aware of consuming healthy food.

REFERENCES

Cannon, J.P., Perreault, W.D. & McCarthy, E.J. 2008. Basic Marketing A Global Managerial Approach. Singapore: McGraw-Hill.

Grewal, D. & Levy. M. 2010. Marketing. Second Edition. New York: McGraw-Hill.

Jacob., C. & Nicholas, J. 2009. Operation Management for Competitive Advantage. Tenth Edition. New York: McGraw-HillHatane, S. 2006. Respon Lingkungan Berbelanja Sebagai Stimulus Pembelian Tidak Terencana pada Toko Serba Ada (Toserba) (Studi Kasus Carefour Surabaya). Jurnal Manajemen dan Kewirausahaan, 7(2): 152-170

REFERENCE

Hatane, S. 2011. Metode Analisis Kuantitatif Multi-variate Dengan PLS. Paper was presented at the meeting of Universitas Pelita Harapan, Surabaya, February.

Keller, K. L. 2003. Strategic Brand Management: Building Measuring, and Imagine Brand Equity. New Jersey: Upper Saddle River

????