Unlocking Customer Loyalty in Indonesian Local Coffee Shops: An In-depth Analysis of The Influential Factors
DOI:
https://doi.org/10.18196/mb.v15i2.22441Keywords:
Coffee Shop, Customer Satisfaction, Customer Loyalty, Value Co-creation, IPMAAbstract
Research aims: The purpose of this study is to investigate and assess the impact of various factors on customer loyalty within Indonesian local coffee shops. Specifically, the research aims to explore how value co-creation, product quality, store ambiance, and service quality influence consumer satisfaction. Additionally, the study will examine the relationships among switching costs, customer loyalty, and trust, as well as the mechanisms by which switching costs and trust affect loyalty through the mediating role of satisfaction. Through this comprehensive analysis, the study seeks to provide insights into the dynamics of customer loyalty in the coffee shop industry.
Design/Methodology/Approach: In this study, the main quantitative research method was cross-sectional surveys. The hypotheses were assessed using SEM-PLS and Smart PLS.
Research findings: The research findings provide valuable insights related to the factors that influence consumer loyalty in the local coffee shop industry in Indonesia, emphasizing the importance of customer satisfaction, switching costs, trust, and the role of mediating factors in fostering long-term loyalty among customers
Theoretical Contribution/Originality: The theoretical contribution and originality of the study lie in its exploration of value co-creation, mediating factors, empirical analysis techniques, localized context, and practical implications within the context of consumer loyalty in local coffee shops in Indonesia. These aspects contribute to advancing knowledge in the field of consumer behavior and loyalty within the coffee shop industry.
Practitioners/Policy Implications: By implementing these practical implications, practitioners and policymakers in the coffee shop industry can enhance customer satisfaction, build loyalty, and create a competitive advantage in the market. These recommendations aim to improve customer experiences, strengthen relationships, and drive business growth in the local coffee shop sector in Indonesia.
Research Limitations/Implications: The research model may have limitations in capturing the full complexity of customer loyalty dynamics. Including additional variables or exploring different theoretical frameworks could provide a more comprehensive understanding of the factors influencing loyalty.
References
Agyapong, G. K. (2011). The Effect of Service Quality on Customer Satisfaction in the Utility Industry – A Case of Vodafone (Ghana). International Journal of Business and Management, 6(5), 203–210. https://doi.org/10.5539/ijbm.v6n5p203
Akdogan, S., Kaplan, M., Ozgener, S., & Coskun, A. (2012). The Effects Of Consumer Ethnocentrism and Consumer Animosity On The Re-Purchase Intent: The Moderating Role Of Consumer Loyalty. Emerging Markets Journal, 2(1).
Ali, W., Danni, Y., Latif, B., Kouser, R., & Baqader, S. (2021). Corporate social responsibility and customer loyalty in food chains—mediating role of customer satisfaction and corporate reputation. Sustainability (Switzerland), 13(16), 10–12. https://doi.org/10.3390/su13168681
Althuwaini, S. (2022). The Effect of Social Media Activities on Brand Loyalty for Banks: The Role of Brand Trust. Administrative Sciences, 12(4). https://doi.org/10.3390/admsci12040148
Anam, M. S., Nadila, D. L., Anindita, T. A., & Rosia, R. (2020). Pengaruh Kualitas Produk, Harga dan Brand Image terhadap Keputusan Pembelian Produk Hand and Body Lotion Merek Citra. Jesya (Jurnal Ekonomi & Ekonomi Syariah), 4(1), 120–136. https://doi.org/10.36778/jesya.v4i1.277
Assaker, G., O’Connor, P., & El-Haddad, R. (2020). Examining an integrated model of green image, perceived quality, satisfaction, trust, and loyalty in upscale hotels. Journal of Hospitality Marketing and Management, 29(8), 934–955. https://doi.org/10.1080/19368623.2020.1751371
Assiouras, I., Skourtis, G., Giannopoulos, A., Buhalis, D., & Koniordos, M. (2019). Value co-creation and customer citizenship behavior. Annals of Tourism Research, 78(May), 102742. https://doi.org/10.1016/j.annals.2019.102742
Azzahra, M. D., & Hidayat, A. M. (2023). Pengaruh Member Card dan Kepuasan Pelanggan Terhadap Loyalitas Produk Coffee Shop X di Indonesia. YUME: Journal of Management, 6(1), 352. https://doi.org/10.37531/yum.v6i1.3670
Berman, B., & Evans, J. (2004). Retail Management: A Strategic Approach (9th ed.). Prentice Hall.
Budiman, S., & Dananjoyo, R. (2021). The Effect of Cafe Atmosphere on Purchase Decision: Empirical Evidence from Generation Z in Indonesia. Journal of Asian Finance, Economics and Business, 8(4), 483–490. https://doi.org/10.13106/jafeb.2021.vol8.no4.0483
Buonincontri, P., Morvillo, A., Okumus, F., & van Niekerk, M. (2017). Managing the experience co-creation process in tourism destinations: Empirical findings from Naples. Tourism Management, 62, 264– 277. https://doi.org/10.1016/j.tourman.2017.04.014
Business Wire. (2011). How Loyal Are Coffee Drinkers? Not Very, Says Customers DNA Benchmark Study. https://www.businesswire.com/news/home/20110414006778/en/How-Loyal-are-Coffee-%20Drinkers-Not-Very-Says-CustomersDNA-Benchmark-Study
Cardoso, A., Gabriel, M., Figueiredo, J., Oliveira, I., Rêgo, R., Silva, R., Oliveira, M., & Meirinhos, G. (2022). Trust and Loyalty in Building the Brand Relationship with the Customer: Empirical Analysis in a Retail Chain in Northern Brazil. Journal of Open Innovation: Technology, Market, and Complexity, 8(3). https://doi.org/10.3390/joitmc8030109
Chan, K. W., Kin, C., Yim, B., & Lam, S. S. K. (2010). Is Customer Participation in Value Creation a Double- Edged Sword? Evidence from Professional Financial Services Across Cultures. 74(May), 48–64.
Chen, S. C. (2012). The customer satisfaction-loyalty relation in an interactive e-service setting: The mediators. Journal of Retailing and Consumer Services, 19(2), 202–210. https://doi.org/10.1016/j.jretconser.2012.01.001
Chuah, S. H. W., Marimuthu, M., Kandampully, J., & Bilgihan, A. (2017). What drives Gen Y loyalty? Understanding the mediated moderating roles of switching costs and alternative attractiveness in the value-satisfaction-loyalty chain. Journal of Retailing and Consumer Services, 36(July 2016), 124– 136. https://doi.org/10.1016/j.jretconser.2017.01.010
Dam, S. M., & Dam, T. C. (2021). Relationships between Service Quality, Brand Image, Customer Satisfaction, and Customer Loyalty. Journal of Asian Finance, Economics and Business, 8(3), 585– 593.
Dawi, N. M., Jusoh, A., Streimikis, J., & Mardani, A. (2018). The influence of service quality on customer satisfaction and customer behavioral intentions by moderating role of switching barriers in satellite pay TV market. Economics and Sociology, 11(4), 198–218. https://doi.org/10.14254/2071-789X.2018/11-4/13
Effendy, F. H. (2019). Effect of Quality Service, Price and Store Atmosphere on Customer Satisfaction (Study on Cangkir Coffee Shop in Surabaya). Ekspektra: Jurnal Bisnis dan Manajemen, 3, 123–148. https://doi.org/10.25139/ekt.v3i2.2033
Erlina, E., & Hermawan, D. (2021). Marketing Mix on Customer Loyalty at Coffee Shop in Bandung. Aptisi Transactions on Management (ATM), 5(1), 89–96. https://doi.org/10.33050/atm.v5i1.1488
Febrianto, F. (2019). Pengaruh Harga, Kualitas Produk, dan Pelayanan Terhadap Keputusan Pembelian Produk Fashionmelalui Media Sosial di Yogyakarta. 3, 3–4.
Frempong, J., Chai, J., & Ampaw, E. M. (2018). Effects of waste management customer online value co- creation on sanitation attitude and advocacy: A customer-enterprise Dyadic perspective. Sustainability (Switzerland), 10(7). https://doi.org/10.3390/su10072557
Hadi, N. U., Aslam, N., & Gulzar, A. (2019). Sustainable service quality and customer loyalty: The role of customer satisfaction and switching costs in the Pakistan cellphone industry. Sustainability (Switzerland), 11(8). https://doi.org/10.3390/su11082408
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203
Hair, J., Hult, G., Ringle, C., & Sartstedt, M. (2014). A Primer on Partial Least Squares Structural Equation Modeling. In Long Range Planning (Vol. 46, Issues 1–2). https://doi.org/10.1016/j.lrp.2013.01.002
Haron, R., Abdul Subar, N., & Ibrahim, K. (2020). Service quality of Islamic banks: satisfaction, loyalty and the mediating role of trust. Islamic Economic Studies, 28(1), 3–23. https://doi.org/10.1108/ies-12-2019-0041
Henseler, J., Ringle, C. M., & Sarstedt, M. (2012). Using partial least squares path modeling in advertising research: Basic concepts and recent issues. Handbook of Research on International Advertising, November, 252–276. https://doi.org/10.4337/9781781001042.00023
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/s11747-014-0403-8
Iglesias, O., Ind, N., & Alfaro, M. (2013). The organic view of the brand: A brand value co-creation model. Journal of Brand Management, 20(8), 670–688. https://doi.org/10.1057/bm.2013.8
Jahanshahi, A., Gashti, M. A., Mirdamadi, S., Nawaser, K., & Khaksar, S. M. S. (2011). Study the Effects of Customer Service and Product Quality on Customer Satisfaction and Loyalty. International Journal of Humanities and Social Science, 1(June), 253–260.
Jöreskog, K. G. (1970). A General Method For Estimating A Linear Structural Equation System. ETS Research Bulletin Series, 1970(2).. https://doi.org/10.1002/j.2333-8504.1970.tb00783.x
Kadarusman. (2019). Peran Mediasi Trust dan Switching Cost Pada Pengaruh Antaraservice Quality dan Repurchase Likelihood. Jurnal Riset Manajemen dan Bisnis, 4(March).
Kalhor, R., Khosravizadeh, O., Kiaei, M. Z., Shahsavari, S., & Badrlo, M. (2021). Role of service quality, trust and loyalty in building patient-based brand equity: Modeling for public hospitals. International Journal of Healthcare Management, 14(4), 1389–1396. https://doi.org/10.1080/20479700.2020.1762053
Kim, M. K., Park, M. C., Park, J. H., Kim, J., & Kim, E. (2018). The role of multidimensional switching barriers on the cognitive and affective satisfaction-loyalty link in mobile communication services: Coupling in moderating effects. Computers in Human Behavior, 87, 212–223. https://doi.org/10.1016/j.chb.2018.05.024
Kim, M. K., Wong, S. F., Chang, Y., & Park, J. H. (2016). Determinants of customer loyalty in the Korean smartphone market: Moderating effects of usage characteristics. Telematics and Informatics, 33(4), 936–949. https://doi.org/10.1016/j.tele.2016.02.006
Kim, Y. J., Park, J. S., & Jeon, H. M. (2021). Experiential value, satisfaction, brand love, and brand loyalty toward robot barista coffee shop: The moderating effect of generation. Sustainability (Switzerland), 13(21). https://doi.org/10.3390/su132112029
Koo, B., Yu, J., & Han, H. (2020). The role of loyalty programs in boosting hotel guest loyalty: Impact of switching barriers. International Journal of Hospitality Management, 84(October 2018), 102328. https://doi.org/10.1016/j.ijhm.2019.102328
Kotler, P., & Armstrong, G. M. (2012). Principles of Marketing. Pearson Prentice Hall.
Kumar, V., Pozza, I. D., & Ganesh, J. (2013). Revisiting the satisfaction-loyalty relationship: Empirical generalizations and directions for future research. Journal of Retailing, 89(3), 246–262. https://doi.org/10.1016/j.jretai.2013.02.001
Kwon, A. M., & Namkung, Y. (2022). The Impact of the Perceived Values of Social Network Services (SNSs) on Brand Attitude and Value-Co-Creation Behavior in the Coffee Industry. Sustainability (Switzerland), 14(9). https://doi.org/10.3390/su14095425
Li, F., Lu, H., Hou, M., Cui, K., & Darbandi, M. (2021). Customer satisfaction with bank services: The role of cloud services, security, e-learning and service quality. Technology in Society, 64(December 2020), 101487. https://doi.org/10.1016/j.techsoc.2020.101487
Liu, S., Li, G., Liu, N., & Hongwei, W. (2021). The Impact of Patient Satisfaction on Patient Loyalty with the Mediating Effect of Patient Trust. Inquiry (United States), 58. https://doi.org/10.1177/00469580211007221
Mardikawati, W., & Farida, N. (2013). Loyalitas Pelanggan, Melalui Kepuasan Pelanggan Pada Pelanggan Bus Efisiensi (Studi PO Efisiensi Jurusan Yogyakarta-Cilacap). Jurnal Administrasi Bisnis, 2(1), 64–75.
Masturoh, L. M. (2020). The effect between Customer Satisfaction, Switching Cost, and Customer Esprerience of Trust to Customer Loyalty, Customer Commitment as a Mediation (Case Study: Customers on Online Shop Tokopedia, Malang City). South East Asia Journal of Contemporary Business, Economics and Law, 21(5), 151–162.
Nauvan, M. A., Aziz, F., Hidayat, A. M., & Artadita, S. (2022). Pengaruh E-Service Quality dan Customer Satisfaction Terhadap Customer Loyalty Dengan Switching Cost Sebagai Variabel Intervening (Studi Kasus Pada Pengguna New Livin ’ By Mandiri). 9(4), 2176–2183.
Opata, C. N., Xiao, W., Nusenu, A. A., Tetteh, S., & Asante Boadi, E. (2021). The impact of value co-creation on satisfaction and loyalty: the moderating effect of price fairness (empirical study of automobile customers in Ghana). Total Quality Management and Business Excellence, 32(11–12), 1167–1181. https://doi.org/10.1080/14783363.2019.1684189
Portal Informasi Indonesia. (2023). Produksi Kopi Indonesia 2017-2023. https://indonesia.go.id/mediapublik/detail/2042
Purwadi, P., Devitasari, B., & Caisar Darma, D. (2020). Store Atmosphere, SERVQUAL and Consumer Loyalty. SEISENSE Journal of Management, 3(4), 21–30. https://doi.org/10.33215/sjom.v3i4.385
Putro, S., Semuel, H., & Brahmana, R. (2014). Pengaruh Kualitas Layanan dan Kualitas Produk Terhadap Kepuasan Pelanggan dan Loyalitas Konsumen Restoran Happy Garden Surabaya. Jurnal Manajemen Pemasaran, 2(1), 1–9.
Ranaweera, C., & Prabhu, J. (2003). The influence of satisfaction, trust and switching barriers on customer retention in a continuous purchasing setting. International Journal of Service Industry Management, 14(3–4), 374–395. https://doi.org/10.1108/09564230310489231
Ranjan, K. R., & Read, S. (2014). Value co-creation: concept and measurement. Journal of the Academy of Marketing Science, 44(3), 290–315. https://doi.org/10.1007/s11747-014-0397-2
Rayuwati, R., Yustisar, M., Gemasih, H., & Eliyin, E. (2022). The Influence of Price, Store Atmosphere and Food Product Quality on Buying Interest at Tootor Coffee Takengon. International Journal of Science, Technology & Management, 3(4), 1129–1143. https://doi.org/10.46729/ijstm.v3i4.580
Riyanti, A., & Chandra Lesmana, A. (2021). Co-Creation Pada Tingkat Kunjungan Kedai Kopi di Bandung. Tourism Scientific Journal, 6(2), 263–280. https://doi.org/10.32659/tsj.v6i2.132
Ruan, H., Qiu, L., Chen, J., Liu, S., & Ma, Z. (2022). Government Trust, Environmental Pollution Perception, and Environmental Governance Satisfaction. International Journal of Environmental Research and Public Health, 19(16). https://doi.org/10.3390/ijerph19169929
Santika, D., Suharyono, & Fanani, D. (2017). Pengaruh Store Atmosphere dan Kualitas Produk terhadap Kepuasan Pelanggan (Survei pada pelanggan Cafe OTW Food Street Malang). Jurnal Administrasi Bisnis (JAB), 52(1), 100–105.
Saputri, G. G. (2022). The Influence Of Store Atmosphere, Service Quality, and Product Quality Toward Customer Loyalty With Satisfaction As A Mediating Variable (Study on Cold ?N Brew Coffee Shop). Undergraduate Thesis. Universitas Muhammadiyah Surakarta.
Sarstedt, M., Hair, J. F., Cheah, J. H., Becker, J. M., & Ringle, C. M. (2019). How to specify, estimate, and validate higher-order constructs in PLS-SEM. Australasian Marketing Journal, 27(3), 197–211. https://doi.org/10.1016/j.ausmj.2019.05.003
Saulina, A. R., & Syah, T. Y. R. (2018). How Service Quality Influence of Satisfaction and Trust Towards Consumer Loyalty in Starbucks Coffee Indonesia. Iarjset, 5(10), 11–19. https://doi.org/10.17148/iarjset.2018.5102
Situmeang, R. R., Tanzil, W., Tandratama, V., & Putra, S. A. (2020). The Effect of Product Quality, Distribution Channels and Service Quality on Customer Satisfaction Spotlights. Enrichment: Journal of Management, 10(2), 44-49. https://enrichment.iocspublisher.org/index.php/enrichment/article/view/20
Statista. (2023). Indonesia: Coffee Consumption Total. https://www.statista.com/statistics/314982/indonesia-total-coffee-consumption/
Tamam, A., Rachma, N., & Priyono, A. (2019). Analisis Pengaruh Custumer Satisfaction dan Trust in Brand Terhadap Custumer Retention Melalui Switching Cost Sebagai Variabel Intervening (Studi Kasus Pengguna Kartu Telkomsel Di Desa Gersik Putih Kecamatan Gapura Kabupaten Sumenep). E-JRM: Elektronik Jurnal Riset Manajemen, 8(14). https://jim.unisma.ac.id/index.php/jrm/article/view/4429
Tanudjaja, I., & Kow, G. Y. (2018). Exploring Bibliometric Mapping in NUS using BibExcel and VOSviewer. IFLA WLIC Kuala Lumpur, 1–9. http://library.ifla.org/2190/1/163-tanudjaja-en.pdf
Tenenhaus, M., Vinzi, V. E., Chatelin, Y. M., & Lauro, C. (2005). PLS path modeling. Computational Statistics and Data Analysis, 48(1), 159–205. https://doi.org/10.1016/j.csda.2004.03.005
Udayana, I. B. N., Cahya, A. D., & Kristiani, F. A. (2022). Pengaruh Customer Experience dan Service Quality Terhadap Loyalitas Pelanggan Dengan Kepuasan Pelanggan Sebagai Variabel Intervening (Studi pada The Praja Coffee & Resto). Scientific Journal of Reflection: Economic, Accounting, Management and Business, 5(1), 173–179. https://doi.org/10.37481/sjr.v5i1.449
Uzir, M. U. H., Al Halbusi, H., Thurasamy, R., Thiam Hock, R. L., Aljaberi, M. A., Hasan, N., & Hamid, M. (2021). The effects of service quality, perceived value and trust in home delivery service personnel on customer satisfaction: Evidence from a developing country. Journal of Retailing and Consumer Services, 63(August), 102721. https://doi.org/10.1016/j.jretconser.2021.102721
Vargo, S. L., & Lusch, R. F. (2016). Institutions and axioms: an extension and update of service-dominant logic. Journal of the Academy of Marketing Science, 44(1), 5–23. https://doi.org/10.1007/s11747- 015-0456-3
Waluya, A. I., Iqbal, M. A., & Indradewa, R. (2019). How product quality, brand image, and customer satisfaction affect the purchase decisions of Indonesian automotive customers. International Journal of Services, Economics and Management, 10(2), 177–193. https://doi.org/10.1504/IJSEM.2019.100944
Widodo, T., & Octaviany, V. (2020). The Role of Switching Cost in Increasing The Effect Of Service Quality to Customer Loyalty. The 8th International Seminar and Conference on Learning Organisation, 262– 272.
Yang, A. J. F., Huang, Y. C., & Chen, Y. J. (2017). The importance of customer participation for high-contact services: evidence from a real estate agency. Total Quality Management & Business Excellence, 30(7-8), 831–847. https://doi.org/10.1080/14783363.2017.1341814
Yen, C. H., Teng, H. Y., & Tzeng, J. C. (2020). Innovativeness and customer value co-creation behaviors: Mediating role of customer engagement. International Journal of Hospitality Management, 88(April), 102514. https://doi.org/10.1016/j.ijhm.2020.102514
Zeithaml, A. V. (1988). Persepsi Konsumen Nilai Sarana-Akhir: Kualitas, Sintesis Model dan Bukti. Jurnal Asosiasi Pemasaran Amerika, 52(3), 2–22.
Zeren, D., & Kara, A. (2021). Effects of brand heritage on intentions to buy of airline services: The mediating roles of brand trust and brand loyalty. Sustainability (Switzerland), 13(1), 1–15. https://doi.org/10.3390/su13010303
Downloads
Published
How to Cite
Issue
Section
License
License
You are free to:
- Share — copy and redistribute the material in any medium or format
- Adapt — remix, transform, and build upon the material for any purpose, even commercially.
Under the following terms:
- Attribution — You must give appropriate credit, provide a link to the license, and indicate the changes made. This should be done in any reasonable manner, but not in any way that suggests the licensor endorses you or your usage.
- ShareAlike — When you remix, transform, or build upon the material, the contributions must be distributed under the same license as the original.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
