Consumer perceived value , satisfaction and loyalty on agriculture brand ( Persepsi , kepuasan dan kesetiaan pengguna terhadap jenama produk pertanian )

Researchers and managers today are focusing on customer loyalty, perceived value and satisfaction, yet little is known regarding these relationships in the agriculture food sector. This study was to examine the relationship among customer value, satisfaction and loyalty in the agriculture food sector, and to identify the relevant dimensions of consumer perceived value in the respective context. The study was carried out using the e-mail survey technique involving 305 respondents. The results showed that there was a strong relationship in customer value towards a brand and loyalty. Brand economic values seem to be more important than emotional and social values in determining customer satisfaction. The other important finding of this study was the impact of satisfaction to customers’ intention to become loyal. The more customers are satisfied with a brand, the more loyal they become, and there is a tendency to repurchase the brand. Economic value of a product is important in determining the customer loyalty to a certain brand. Introduction Agriculture product is a multibillion dollar global business. Agriculture trade is very important to every nation as it supplies foods to consumers. Every day, companies offer different products to consumers. To a consumer, products and services offered in the markets are perceived to be homogenous. Markets are saturated with the same product line. For example, it was reported that in Malaysia, there are more than 180 brands of sauce offered in the market (Anon. 2008). The product features, ingredients, contents and taste are relatively the same. The only one element that can differentiate a product from other companies is its brand. Therefore, branding has become a crucial element of business strategy. In the consumer marketing community, customer loyalty has long been regarded as an important goal (Reichheld and Schefter 2000). Both marketing academics and professionals have attempted to uncover the most prominent antecedents of customer loyalty. Research in the areas of customer value suggests that superior value maybe an effective predictor of strong customer loyalty, repeat business, and switching behaviour (Anderson and Narus 1998; Grisaffe and Kumar 1998). Given that consumers’ needs and value propositions vary across different types of products and services (Lim et al. 2006), the current study focused on the agriculture food context to understand the loyalty issue. text rohzan.indd 79 4/26/11 8:28 AM 80 Consumer loyalty on agriculture brand The main objective of the study was to examine the relationship among customer value, satisfaction and loyalty in the agriculture food sector. The second objective was to identify relevant dimensions of consumer perceived value in the context. Previous studies tended to examine perceived value in terms of monetary tradeoffs only (McDougall and Levesque 2000; Chen 2003) i.e. ‘what you get for what you pay’. However, consumers tend to assess perceived value not only by monetary tradeoffs but also by other psychological benefits (e.g. enjoyment, fun, and social approval) as well (Holbrook 1986; Sweeney and Soutar 2001). Recognizing the importance of a multidimensional approach to perceived value, efforts were directed to identify the relevant dimensions of perceived value in consumers’ experience in the agriculture food sector. Customer loyalty Customer loyalty is one major driver of success in business (Reichheld and Schefter 2000). However, in the present business environment, improving consumer loyalty to a brand is very challenging. At the same time, past researches revealed that defining and measuring brand loyalty is extremely difficult (Yang and Peterson 2004). Many researchers have viewed customer loyalty as a specific desire to continue a relationship (Czepiel and Gilmore 1987). It is the consumer decision to repurchase a brand continually. The consumer perceives that the brand offers the right product features, image or quality at the right price. Loyal customers often will, over time, bring in substantial revenues and demand less time and attention from the firms they patronize. As a result, customer loyalty can be a major source of sustained growth and profit and a strong asset (Anderson and Mittal 2000). The challenge of a brand is how it can portray a good image, economical value and social value to consumers. At present, a brand needs more than an identity; it needs a personality that can differentiate it from other brands. A personality brand can be symbolized by its feature, colour and design or can be associated with its strong company. In other words, people can easily identify a brand by its logo, colour or company. With this identity, consumer can easily remember a brand and loyal to it; especially when there are many product lines offered in the markets. Satisfaction Marketing literature consistently identifies customer satisfaction as a key antecedent to loyalty and repurchase (Seiders et al. 2005). For some firms, satisfaction is the only feasible goal for which they should strive; thus, satisfaction remains a worthy pursuit among the consumer marketing community (Oliver 1999). Satisfaction refers to the consumer’s fulfilment response, the degree to which the level of fulfilment is pleasant or unpleasant (Oliver 1997). According to both marketing theory and practical experience, firms should improve their performance by satisfying customers, so as to obtain and sustain advantage in the intensely competitive business environment (Aydin and Ozer 2005). This is because the main output of customer satisfaction is customer loyalty, and firms with a bigger share of loyal customers profit from increasing repurchase rates, greater crossbuying potential, higher price-willingness, positive recommendation behaviour and lower switching tendency (Bruhn and Grund 2000). Customer satisfaction goes beyond a simple theoretical construct. It is an emotional response and always associated with personal experience when the consumer uses the products or services. Customer satisfaction is also a very subjective and non-quantitative issue. It is a gap between consumer expectations and perceived performance of the product or services offered by a brand. Two different customers may perceive differently on a same product. Fulfiling customer satisfaction is very important to every company. Past research text rohzan.indd 80 4/26/11 8:28 AM 81 Rozhan Abu Dardak and Farzana Quoquab Habib revealed that a very satisfied customer is six times more likely to be loyal and repurchase the product, than the customer who is just loyal (Caciopo 2009). Past research also found that a satisfied customer will tell five other potential customers, while the unsatisfied customer will tell nine other customers. These findings indicate the important of satisfying customers and the effect of unsatisfied customers to a brand and business. Customer perceived value Different authors have given different dimensions of perceived value. Perceived value has its root in equity theory, which considers the ratio of the consumer’s outcome/input to that of the service provider’s outcome/input (Oliver and DeSarbo 1988). It refers to customer evaluation on overall benefits and costs from the products or services offered by different companies. It is often viewed as a customer’s overall assessment of what is received and what is given (Zeithaml 1988). It takes into account all perceived monetary and non-monetary costs and benefits (Lim et al. 2006). In the current study, perceived value has been considered as the multidimensional constructs, in which it includes the monetary and non-monetary benefits. According to Sweeney and Soutar (2001), perceived value can be classified into economic, emotional and social value. Economic value Economic value is considered as the most possible way to measure value of products or services offered by a company. Economic value is related to perceived economic benefits received in comparison to a monetary cost of the service (Lee et al. 2002). Economists assume that customers are the best judge to measure the economic value, because they are the users who get benefits from the products or services offered. Many researchers found a significant role of consumers’ perceived monetary value in satisfaction and future decisions (McDougall and Levesque 2000; Chen 2003). Emotional value In today environment, people are looking not only at quality products or services, they also need products that has positive, memorable experiences. Emotional value is acquired when a product/service arouses feelings or affective states (Sheth et al. 1991; Sweeney and Soutar 2001). This emotional value is expected to incorporate consumers’ affective responses to service stimuli in a cognitive-oriented means-end model (Lim et al. 2006). Emotions like enjoyment and fun seeking have been reported as customers’ motives to use mobile services (Leung and Wei 2000). In addition, in a retailing context, Sweeney and Soutar (2001) found that emotional value is the strongest predictor of consumers’ purchase intention in a particular store. Social value Social value relates to social approval and the enhancement of self-image among other individuals (Bearden and Netemeyer 1999). Several researches reveal the importance of social reputation in the form of esteem (Sheth et al. 1991; Bhat et al. 1998; Sweeney and Soutar 2001). Sweeney and Soutar (2001) define social value as the utility derived from the product’s ability to enhance social self-concept. Thus, social value derives mostly from product or service use shared with others (Sheth et al. 1991). Gratification theories also talk about fashion, status and sociability that relate to similar aspects as social value (Leung and Wei 2000) indicating that use of particular product or services may be a way to express personality, status and image in a public context (Pura 2005). Perceived value and loyalty According to Sirdeshmukh e