The Model of Customers Loyalty of Bimoli Cooking Oil on the Household at the Regency and the City of Bogor

Abstract

Customer satisfaction and customer loyalty are one of the main core of business activities that should prioritized by every company. In the short term, customer satisfaction and customer loyalty will affect the company revenue and profit, but in the long-term will positively affect the brand equity. Partial least square (PLS) model of customer satisfaction and loyalty, established based on the American Customer Satisfaction Index (ACSI) Model and the European Customer Satisfaction Index (ECSI) Model. The aims of this research are: 1) to analyze the causality relationship between latent variables forming customer satisfaction; 2) to analyze affect of overall customer satisfaction to customer loyalty; 3) to identify SES frequency distribution based on total cost of household routine consumption per month; 4) to analyze the role of SES as a variable that directly influence the customer satisfaction and customer loyalty; 5) to analyze the categorical variables that related to both customer satisfaction and customer loyalty; and 6) to form the best PLS Model to form the customer satisfaction and customer loyalty. Nonprobability sampling method used in this research, and 385 household selected as respondent by judgmental sampling technique. The results shows, the latent variables sorted from the strongest to the weakness causality relationships, for overall customer satisfaction are consists of perceived quality, perceived value, image, and customer expectation. The overall customer satisfaction, significantly form customer loyalty, with the coefficient of R square is 0.533. It can interpret as many as 53.3% the variance scores of customer loyalty explained by the overall customer satisfaction. The new frequency distribution was formulated from three categorical SES are SES A (>Rp.1.720.000), SES B (Rp.1.310.001 – Rp.1.720.000), and SES C (Rp.900.000 – Rp.1.310000). SES that significantly formed by the customer profession (job), did not affect significantly to form customer satisfaction and customer loyalty. There were no significance association between the categorical variables (gender and formal education) with customer satisfaction and loyalty. The best model consists of the entire reflective manifest variables, except on the formative manifest variables of SES. From three formative indicators (consume, job and education) only indicator job that significantly forming the SES variable, so the others deleted from the PLS model.