Proceedings of the International Conference on E-Business, Marketing and Branding

(IC17Hong Kong Conference) ISBN: 978-1-943579-97-6

Hong Kong-SAR. 20-22, January 2017. Paper ID: HKM708

The Effects Of Service Quality and Brand Image toward Consumer

Loyalty
(Study at consumers of smartphone OPPO in Bandung, Indonesia)

Ir. Thomas Budhyawan Yudhya, S.E., M.M.,

Faculty of Economics,
Universitas Padjadjaran, Bandung, Indonesia.
E-mail: Thomas.budhyawan.yudhya@gmail.com
___________________________________________________________________________
Abstract
With increasing competition in the business world, gaining the loyalty of consumers is very
important, because of loyal customers can benefit the company. Loyalty can make consumers
use the product again, and will recommended it to others. Consumer loyalty can only be felt
after the consumer using the services or products offered by the company, and then the
consumer will be able to give a response about whether the product or service is appropriate
or not to be expected by the consumer. Consumer loyalty is itself a deeply held commitment to
purchase or support returning a product or service like in the future despite the influence of
circumstances and marketing efforts could potentially cause customers to switch. To gain
customer loyalty, companies can apply for service quality in accordance with the expectations
of consumers in order to create a positive brand image in the minds of consumers, so that the
brand can be more trusted and able to increase customer loyalty. Because the brand image is
a set of beliefs, ideas and impressions of a person to a particular brand. With a positive brand
image will make consumers become increasingly believe in the products so as to create
loyalty. Quality of service is a benchmark in determining how well the level of services
provided able to match the customer's expectations. Quality of service is not done
wholeheartedly will be felt as a formality and routine just for consumers. The purpose of this
study was to examine the relationship between service quality and brand image to consumer
loyalty. By giving questionnaires to consumers of smartphone OPPO in Bandung, can be seen
the influence of service quality and brand image on consumer loyalty. Tests conducted by
LISREL 8.7 using Structural Equation Model (SEM).
___________________________________________________________________________
Key Words: Keywords: Service Quality, Brand Image, And Customer Loyalty

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 Proceedings of the International Conference on E-Business, Marketing and Branding
(IC17Hong Kong Conference) ISBN: 978-1-943579-97-6
Hong Kong-SAR. 20-22, January 2017. Paper ID: HKM708

1. Introduction
As we all know that service quality is a benchmark in determining how well the level of
services provided able to match the expectations of customers (Lewis and Booms, 2005: 29).
Therefore, when consumers were satisfied with the services provided will create loyalty and
can make consumers use the product again, even be happy to recommend it to others. As the
research results obtained by Dean (2007: 169), in the communications industry in Australia,
that by providing consistent service and focus on customer needs and provide added value to
the consumer, it will create loyalty to the company.
In research conducted in industry provider in China, Wang (2004: 335) to get the result that
the quality of service has positive influence on the creation of customer loyalty. So even with
Ivanauskiene research (2014: 118), which get the result that the quality of service has a
positive influence on loyalty in the retail industry in Lithuania. This is also evidenced by
Huang (2014: 12), which gets the same results in a study of visitors one hypermarket in
Bangkok. Research conducted by Amiruddin (2013: 38) in the aviation industry in Malaysia
also reinforce that service quality has a positive relationship to consumer loyalty. But not all
studies suggest that there is a positive influence between service quality and customer loyalty,
it is found in a study conducted by Chao (2015: 64) in the karaoke industry in Taiwan stating
that the quality of service that is not done wholeheartedly will be felt as a formality and
routines just for consumers.
By providing good quality services and meet the expectations of consumers it will also
create a positive brand image in the minds of consumers, so that the brand can be more
trusted and able to increase customer loyalty. Because the brand image is a set of beliefs,
ideas and impressions of a person to a particular brand (Kotler & Keller, 2009: 292).
With a positive brand image will make consumers become increasingly believe in the
products so as to create loyalty, as research conducted by Chen (2010: 315) in the electronics
industry in Taiwan and showed that, if a product has a positive brand image in the public's
mind then consumers will be loyal because they believe in the product.
It is also found in a study conducted by Agyei (2014: 306) in the communications industry
in Kenya saying that the brand image positive effect on customer loyalty. Similarly, the study
Chang (2014: 24) in the automotive industry in Taiwan found that the brand image plays an
important role in shaping consumer loyalty. This statement is supported by Ishaq (2014: 95)
in research in the field of food in Pakistan stating that the brand image is a major factor in
creating customer loyalty.
The same thing also expressed by Chao (2015: 64) based on research that has been done in
the karaoke industry in Taiwan, showed that the quality of service and brand image closely in
shaping consumer loyalty. Similar results were obtained in studies conducted by Hashmi

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 Proceedings of the International Conference on E-Business, Marketing and Branding
(IC17Hong Kong Conference) ISBN: 978-1-943579-97-6
Hong Kong-SAR. 20-22, January 2017. Paper ID: HKM708
(2014: 362) in the electronics industry in Pakistan, where the quality of service and brand
image positively affects customer loyalty.
Likewise stated by Malik (2011: 634) in research in the field of hospitality in Pakistan, that
the quality of service that meets consumer expectations will create a positive brand image so
as to further increase consumer loyalty. From some of the results of the research that has been
described above it can be concluded that in general the quality of service brand image has a
positive relationship in the form of consumer loyalty. But it has never been any research done
in the field of smartphones in Indonesia, so this is what makes researchers are interested in
examining whether there is a positive relationship between the quality of service, brand image
and customer loyalty if done on the smartphone industry in Indonesia, especially in Bandung.
2. Literature Review
According to research conducted by the Dean (2007: 169), if the quality of the services
provided by the company better than expected consumer it will create customer loyalty to the
company. In another study also found the same thing, that the quality of services provided
with excellent will give a positive impression and make customers more loyal (Ivanauskiene
2014: 118; Huang, 2014: 12; Amiruddin, 2013: 38). Therefore, the quality of services
provided to consumers is a matter that needs to be considered by the company so as to
increase consumer loyalty to a product.
Based on the results of research conducted by Almendros (2014: 21), argued that good
quality services are often the benchmark in creating a positive brand image for a company.
This statement is also supported by the results of other studies which state that first interaction
when customers receive the quality of service will determine how the brand image is formed
in the minds of consumers (Huei 2015: 22; Hashmi 2014: 362; Benazira 2012: 9; Malik 2011:
634 ). From various studies that have been done, it can be concluded that the quality of
services provided to consumers will determine how the brand image formed in the minds of
consumers.
Research conducted by Lee (2014: 1253), states that a good brand image positively affect
the level of consumer loyalty to a company. Likewise expressed by the results of other
studies, if a positive brand image has been embedded in the minds of consumers, will have a
very big role in shaping consumer loyalty (Agyei, 2014: 306; Chang, 2014: 24; Ishaq, 2014:
95; Kavosh 2014: 1536; Chao 2015: 65).
From various studies that have been done, it can be concluded that the brand image is
formed in the minds of consumers will determine the level of customer loyalty to a company.
3. Methodology
3.1 Research Questions

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 Proceedings of the International Conference on E-Business, Marketing and Branding
(IC17Hong Kong Conference) ISBN: 978-1-943579-97-6
Hong Kong-SAR. 20-22, January 2017. Paper ID: HKM708
From the results of previous research conducted by Dean (2007: 169), stated that by
providing consistent service by focusing on customer needs and provide added value to the
consumer, it will create loyalty to the company. Research conducted by Wang (2004: 337)
also mentions that the service quality is one of the factors that influence large enough to
customer satisfaction that will result in the creation of loyalty itself. Similar results were also
found in other studies, that the quality of services provided with excellent will give a positive
impression and make customers more loyal (Ivanauskiene, 2014: 118).
Based on the description above, the research hypothesis is defined as follows:
H1: Quality of service has positive effect on customer loyalty.
By providing quality services that exceed consumer expectations will create a positive
brand image is also in the minds of consumers. Consumers who are satisfied with the services
provided, is by itself will provide good value to the product. As the results of Almendros
(2014: 22), which states that a good service is more influential in creating a positive brand
image than the media campaign conducted by the company. This statement is in line with the
results of research conducted by Huei (2015: 22) who get the result that the quality of service
is an influential factor in the creation of a positive brand image in the minds of consumers and
further strengthened by the results of research conducted by Benazira (2012: 9) that the first
interaction when customers receive the quality of service will determine how the brand image
formed in the minds of consumers.
Based on the description above, the research hypothesis is defined as follows:
H2: The quality of service has positive influence on brand image.
In addition to the quality of the services becomes an important factor in the creation of
consumer loyalty, brand image also has a significant role in shaping the loyalty effect. This is
indicated by a previous study conducted by Chen (2010: 315), where the results obtained
when a product has a positive brand image in the minds of the public, consumers will be loyal
because they believe in the product. Added also by Lee (2014: 1253), that the brand image is
one of the influential factors in the creation of a strong consumer loyalty. Kavosh (2014:
1536) also claim that if a positive brand image has been embedded in the minds of consumers,
will have a very big role in shaping consumer loyalty.
Based on the description above, the research hypothesis is defined as follows:
H3: Brand image has positive effect on customer loyalty.
H4: Quality of service has positive effect on customer loyalty through brand image.
3.2 Modeling
According to Kotler and Keller (2009: 54), there are two main factors that affect the
quality of services, namely Expected service and Perceived service. So if the company wants
to create loyalty to its customers then have to consistently provide quality services better than
the expectations of consumers. Therefore it would be nice if the company is able to

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 Proceedings of the International Conference on E-Business, Marketing and Branding
(IC17Hong Kong Conference) ISBN: 978-1-943579-97-6
Hong Kong-SAR. 20-22, January 2017. Paper ID: HKM708
understand the characteristics of consumers and can provide a service that is far above the
expectations of consumers to be able to create loyalty.
Although the quality of service has an important role in creating consumer loyalty, but the
brand image of a product itself is also important. Because consumers will become loyal to a
product if the product has a good quality and benefit to consumers. Therefore, the company
should also be able to continue to innovate so that the products are produced to meet the
needs of consumers and have reliable quality and not easily damaged.
With a positive brand image that consumers will feel loyal to that product and
recommending it to potential prospects. As the research results obtained by Almendros (2014:
21), where the study found the influence of service quality and brand image so that the two
factors is an important factor in determining the level of consumer loyalty to a product. The
model used for the analysis is as follows:

3.3 Data
According Hair, Black, Babin, and Anderson (2006: 27), the sample size of the nicest is 10
times the number of variables in the questionnaire used, as the number of variables to be
tested in the amount of 26 variables. However Sekaran (2009: 263), states that the sample size
is expected no more than 500 respondents. Thus, the sample size used in this study is as much
as 260 respondents.
In this study, data obtained directly from the source, the data obtained from participants
through questionnaires filled out by respondents directly. This study used primary data of the
consumer smartphone Oppo in Bandung.
4. Results and Discussion
Service Quality has a path coefficient of 0, 48 with 5, 15 statistic t values> 1.96. Thus, the
significance test obtain significant results, wherein H1 accepted which means there is
significant influence between Service Quality on Customer Loyalty. In his research, Dean
(2007: 169) also found that the influence of variables on Customer Loyalty Service Quality.
Likewise with Wang (2004: 337) who get the same result that the Service Quality positive
effect on the creation of Customer Loyalty. Ivanauskiene (2014: 118), also stated that the

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 Proceedings of the International Conference on E-Business, Marketing and Branding
(IC17Hong Kong Conference) ISBN: 978-1-943579-97-6
Hong Kong-SAR. 20-22, January 2017. Paper ID: HKM708
quality of service rendered with excellent will give a positive impression and make customers
more loyal.
Service Quality has a path coefficient of 0, 36 with 5,08 statistic t values> 1.96. Thus, the
significance test obtain significant results, where H2 is accepted, which means there is
significant influence between Service Quality on the Brand Image. The results also obtained
by Almendros (2014: 22), where the study found the influence of variables Service Quality on
the Brand Image. The statement was supported by Huei (2015: 22) that the research also get
the result that quality of service is an influential factor in the creation of a positive brand
image in the minds of consumers. Benazira (2012: 9) also concluded that the first interaction
when customers receive the quality of service will determine how the brand image formed in
the minds of consumers.
Brand image has path coefficient value of t statistic 0, 23 with 2.87> 1.96. Thus, the
significance test obtain significant results, wherein H3 is received, which means there is
significant influence between Brand Image on Customer Loyalty. Where the results of Chen
(2010: 315), cites the influence of variables Brand Image on Customer Loyalty. Added also
by Lee (2014: 1253), that the brand image is one of the influential factors in the creation of a
strong consumer loyalty. Results of other studies also noted that if a positive brand image has
been embedded in the minds of consumers, will have a very big role in shaping consumer
loyalty (Kavosh, 2014: 1536).
Based on the research that has been conducted, showed that applying the Service Quality
in accordance with the expectations of consumers is the first step in creating loyalty. So the
company OPPO should be able to implement the SOP (Standard Operating Procedures) for
each employee on duty at the outlet OPPO smartphone with the aim that every employee can
provide services that meet consumer expectations.
With the fulfillment of satisfactory service for consumers is by itself will create a positive
brand image and able to strengthen loyalty to the company OPPO. One of the characteristics
of loyal customers that is immune to offer other products, so the OPPO can maintain its
smartphone sales and ongoing basis to create innovative products. Because if consumers
already have a high level of loyalty, they will continue to buy new products produced by the
company.
5. Conclusions and Recommendations
The Results from respondents that the Service Quality and Brand Image simultaneously is
a factor that can affect customer loyalty. Variable Service Quality and Brand Image used in
this study have an influence on Customer Loyalty by 36%, while the rest of 64% influenced
by other factors. Another factor that can affect customer loyalty among Brand Trust (Soong,
2011: 63), Customer Satisfaction (Kiyani, 2012: 142), and Promotion (Lee, 2014: 1254).

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 Proceedings of the International Conference on E-Business, Marketing and Branding
(IC17Hong Kong Conference) ISBN: 978-1-943579-97-6
Hong Kong-SAR. 20-22, January 2017. Paper ID: HKM708
Companies’ smartphone is expected to provide satisfactory service to consumers so that
they can create satisfaction with the company. Because satisfied customers will give a
positive recommendation to others who can then become new customers. As can provide
services swiftly so that it takes a long time and also for post-sales services must be considered
a willingness spare smartphones so consumers do not have to wait for quite a long time when
the damage occurred on their smartphones.
Build Brand Image is the next thing that must be considered by the company. With the
positive brand image in the minds of consumers, it can increase consumer loyalty on the firm.
Loyal customers can provide many benefits for the company, including the decline in the cost
of the promotion, are not sensitive to the price given the company and continue to make
repeat purchases. To maintain and enhance the brand image, smartphone companies must
continue to produce innovative products and has a strong material so that consumers have a
positive brand image to the company.
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