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Customer Satisfaction and Loyalty Intention through Brand Image Benefit in the
Context of Malaysian Cosmetic Products

Article · June 2018

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 International Journal of Organization & Business Execellence, Vol.3, Issue. 1, 2018
ISSN 2504-8589

Customer Satisfaction and Loyalty Intention through Brand Image Benefit in

the Context of Malaysian Cosmetic Products

Sri Sarah Maznah Mohd Salleh

School of Business Innovation and Technopreneurship
Universiti Malaysia Perlis
srisarah@unimap.edu.my

Muhammad Fareed
School of Business Management
Universiti Utara Malaysia
m.fareed@uum.edu.my

Azrina Mustafa
School of Business Innovation and Technopreneurship
Universiti Malaysia Perlis
azrina29@gmail.com

Hood Laeeq
Othman Yeop Abdullah Graduate School of Business
Universiti Utara Malaysia
hood.laeeq@hotmail.com

Abstract:

Sustaining customers has been one of the organisation’s vital challenge. Various strategies are
implemented with the intention to ensure this imperative aim through emphasizing on customer
satisfaction and loyalty intention. It is believed that these are the dominant factors in the current
competitive market. Consequently, a profound understanding concerning the impact of the brand
image towards customer’s perception which leads to their satisfaction is needed. For that reason,
the impact of the brand image based on customer satisfaction and customer loyalty are studied
through a quantitative approach. The findings have advocated that a better brand image may
positively enhance customer satisfaction and their loyalty intention. Findings of the study will
benefit the academicians and practitioners theoretically and practically by providing direction
and suggestions in improving their customers’ satisfaction through brand image intention
benefits, for enhanced loyalty intention.

Keywords: Customer satisfaction; loyalty intention; brand image benefit

INTRODUCTION

It has been proposed that companies that focus on identifying customer loyalty will be more
profitable, their long-term customer retention will be high, they can reduce marketing costs and
increase competitive advantage (Wel, Alam & Nor, 2011). Therefore, it is very important for
companies to understand the process of developing customer loyalty in today's competitive

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environment. Many studies have been conducted in order to understand the critical factors that
determine customer loyalty. One of the most important factors that contribute to the formation of
customer loyalty is customer satisfaction. Consumer satisfaction has been widely accepted as an
important issue for many marketing managers. It is commonly used as a benchmark of a
company’s success (Bennett & Rundle-Thiele, 2004). In addition, measures customer
satisfaction enables the company to reap the benefits (Evans & Lindsay, 2008). According to
Evans and Lindsay (2008), these benefits help the company to (a) meet the customer's perception
of how business is done in meeting customers' needs and identify the causes of discontent and
failed expectations and drivers in heaven, (b) to compare the performance the company
compared with competitors to support planning and strategic initiatives that better, (c) find areas
for improvement in the design and delivery of products and services as well as a place for
training and coaching of employees (d) trends track to determine whether these changes actually
cause in improvement (p. 180). Furthermore, it is generally believed that a satisfied customer is
more likely to make repeat purchases and ready to spread a positive message by word of mouth
(Bennett & Rundle-Thiele, 2004).

A number of researchers have highlighted several important issues pertaining to the increased
interest in brand image in marketing (Barich & Kotler, 1991; Bennett & Rundle-Thiele, 2004;
Dobni & Zinkhan, 1990; Graeff, 1996; Nandan, 2005; Sasmita & Mohd Suki, 2015; Zhang,
2015). Understanding the underlying concept and structure of brand image is crucial since it
plays a significant role in influencing customer satisfaction and customer loyalty (Kandampully
& Suhartanto, 2000). Sondoh, Omar, Wahid, Ismail and Harun (2007) stated that in Malaysia,
MATRADE (Malaysian External Trade Development Corporation) in highlighting the
importance of brand image to the SMEs commented:

As products and services are so easily replicable in today's environment the biggest challenge
for companies to compete in the market place is how to differentiate their products from the
competitors. All other things being equal, the only feature that will help consumers identify and
differentiate the product in the market is the brand. Product quality and price are no longer
product differentiators. A strong brand image is the only asset a company can develop that
cannot be copied. Companies must thus make serious commitment to investing in developing a
brand strategy for their products and services”.
(http://www.matrade.gov.my/exportsupport/bpg.htm).

Corresponding to the issues above, it is very important for any business to determine the strength
of relationship between brand image benefit, customer satisfaction and loyalty intention from the
customers’ perception and to identify the new marketing strategy for the marketing professionals
for advertising/promoting cosmetic products in Malaysia. The study will enable the future
researchers to gather the views of customers in purchasing cosmetic products with respect to
what they expect and what has made them remain loyal or satisfied to the product.

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Theoretical Perspective

Loyalty Intention

It is important to take into consideration that the entire brand loyalty phenomenon can’t be
assessed if the attitudinal loyalty is not extended over the action behavior. In relation to loyalty,
the relationship between attitude and behavior approach was found to be weak (East, Gendall,
Harmond, & Wendy, 2005). For example, Hennig-Thurau and Khee (1997) suggest that those
studies that used actual behavior results showed a weak associations or negative relationships
with satisfaction. Taking this into consideration, the authors will adopt the attitudinal approach
as suggested by Bennett and Rundle-Thiele (2004) in conceptualizing the subject matter.
Bennett and Rundle-Thiele (2004) debated that attitudinal loyalty measures should be suitable to
predict future brand loyalty under these circumstances: (i) where the market is not stable, (ii)
where there is a propensity towards sole brands, and (iii) where there is a high involvement and
high perceived risk.

According to Wel et al. (2011), brand loyalty is defined as better kept relationship in long-term
for specific products or services and also include some level of commitment towards quality
brands that function both positive attitudes and purchase repeatedly. It is believed that loyal
customers may also be due to the high switching barriers related to the economic and
psychological factors that make it costly or difficult for the customer to change. Moreover,
Malik, Ghafoor, Hafiz, Riaz, Hassan, Mustafa and Shahbaz (2013) stated that only loyal
customers buy with confidence based on previous experiences without judging brand. In other
words, customers can faithfully because of the satisfaction with the brand and thus wants to
continue the relationship with the brand. Loyalty intention plays important role to spread
information of the product. While, characteristic of loyal customer is preference and consistency
to purchase a product or service (Sasmita & Suki, 2015).

Brand trust becomes more important experience to brand loyalty (Akbar and Parvez; 2009).
Furthermore, the most important brand is trust towards brand loyalty and it creates a trade
association with a large value (Kussik; 2007 cited in Nazir, Ali & Jamil, 2016). Bondesson
(2012) confirmed that a variety of methods can be used to measure loyalty. He also noted that the
aid is intended to compliment the purchase and brand loyalty can be measured. He then
experimented that brand equity has two types of brand strength which mostly concentrated.
Brand loyalty is one of those who empirically captured through actions such as proposal,
partiality, and customer intention of purchasing. The second factor is the willingness of
customers to pay a certain price for a certain product. Another study described brand loyalty has
the ability to affect the optimism in the benefits of the product (Fouladivanda, Pashandi, Hooman
& Khanmohammadi, 2013).

To sum up, the issues of loyalty mainly concerned on how loyalty is operationalized. It is very
important to understand how we should measure loyalty. Although there are three approaches
that can be used to measure loyalty (ie, behavior, attitude, and approach the composite), most
researchers had to measure attitudes in terms of intention to repurchase and intention to
recommend as an indicator of loyalty (Chiou, Droge & Hanvani Chi, 2002; Kandampully &
Suhartanto, 2000; Lau & Lee, 1999; Sivadas & Baker-Prewitt, 2000).

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Brand Image Benefit

According to Hsieh, Pan, and Setiono (2004), "a popular brand image allow consumers to
identify the needs that the brand satisfies to distinguish the brand from its competitors, and it
will increase the probability consumers will purchase the brand" (p. 252). In addition, some
previous researchers construct assumption that a favorable product will lead to loyalty (e.g.
Kandampully & Suhartanto, 2000; Koo, 2003; Nguyen & LeBlanc, 1998), brand equity
(Faircloth, Capella & Alford, 2001), and buying behavior (Hsieh et al., 2004). Several ways have
been taken to conceptualized and operationalized brand image (Faircloth et al., 2001). It has been
measured based on characteristics (Kandampully & Suhartanto, 2000; Koo, 2003), brand
benefits/ values (Hsieh et al., 2004) or using brand image scale (Faircloth et al., 2001). Based on
the above definition measuring image could help the marketers to identify their strength and
weaknesses also consumers’ opinion based on their products and services.

Global brands are defined from the perspective of the consumers as a trusted brand to market and
recognized in several countries, in turn, the local brands produced in the country to market a
particular country and usually only offered in a particular area (Akram, Merunka & Akram,
2011). It is recognized that local brands are preferred when consumers can identify with others in
their communities as local brands often well placed to understand the needs and culture other
than that, the global brand has been seen as a higher quality in the developed countries and build
(Bhardwaj, Kumar & Kim, 2010).

In this dynamic era, where competition and technological progress is very important,
organizations are consistently bringing products and services to them. The competition is to
create convenience for customers because they have different alternatives and their selection to
choose products that become wider (Ballantyne, Warren & Nobbs, 2006). On the other hand,
many researchers have suggested that expressive images can forge more customers’ loyalty
(Bennett & Rundle-Thiele, 2004; Nandan, 2005). A study by Chitty Ward and Chua (2007)
proved that in the hospitality industry a major role in predicting brand image was customer
satisfaction. Furthermore, brand image is a tool that can positively enunciate modify consumer
purchasing behavior and it also plays an important role in improving the performance of any
business (Malik et al., 2013).

Customer Satisfaction

Szymanski and Henard (2001) from previous research said that customer satisfaction is generally
focus on the effect of expectations, disconfirmation expectations, performance, impact, and
equity. Ramiz, Qasim, Rizwan, Aslam and Khurshid (2014) defined consumer satisfaction as a
value after use of the product or service in terms of positive or neutral attitude or negatively to
products or services resulting from the favorable correspondence between expectations and
experience with the firm or its products and services. One of the main reasons that customer
satisfaction has been in the limelight of academic and management equal satisfaction is an
important role to play in building consumer loyalty where satisfaction was found to be an
important after the purchase is often associated with a favorable word-of-mouth and customer
loyalty (Olsen & Johnson 2010).

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In addition, customer satisfaction is the founder of the brand loyalty it is an assessment of the
brand for all the key factors on Brand loyalty execute judgments consumer repeat purchases can
thus be concluded that loyalty is influenced by satisfaction and budget repurchase intentions for
the product is predicted by satisfaction in the meantime, consumer satisfaction not only rational
but also emotional. When customers are happy and satisfied with the products, consumer are
less likely to shift to other products, therefore, they would like to influence others to buy the
same products as well (Ramiz et al., 2014).

On the contrary, some studies see sights that customer satisfaction plays an effective work
between customers and organizations to improve and sustain long-term profitable relationship
(Haq & Amin, 2009). Subsequently, customer leads satisfaction towards long-term profitable
relationship with the brand, it also gives value to the brand and extending affirmative word of
mouth marketing to build a good brand reputation (Hanif, 2010). Previous studies showed that
customer loyalty can be enhanced through customer satisfaction, trust and reputation of the
company. Customer satisfaction can also be achieved by providing premium quality products
that help them to build customer loyalty and improve the overall reputation of the organization
(Nazir et al., 2016). Customer loyalty really need to explain that the priority customers to pull
out one brand over another brand (Chirico & Presti; 2008 cited in Nazir et al., 2016).

H1 CUSTOMER H4
SATISFACTION
BRAND IMAGE BENEFIT
H3

H2 LOYALTY
INTENTION

H1: There is a significant relationship between brand image benefit and customer satisfaction.
H2: There is a significant relationship between brand image benefit and customer loyalty
intention.
H3: There is a significant relationship between customer satisfaction and loyalty intention.
H4: Customers’ satisfaction mediates the relationship between brand image benefits and loyalty
intention.

METHODOLOGY

This section discusses the methodology of the research. It will give an overview on the method
used by researchers in conducting the research. The main purpose of the research is to study the
effect of brand image benefit towards customer satisfaction and loyalty intention. So the
cosmetic product was chosen to collect the data by distributing the survey questionnaire.
According to Mugenda and Mugenda (2003) survey is a form of analysis where studies are done
on institutions and from the study, data generalizations and inferences are drawn. Survey method
allows for generalization of findings but it is also descriptive in nature which suites the purpose
of this study. Based on the research framework, survey questionnaire was adapted from (Sondoh

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et al, 2007). Simple random sampling (SRS) was applied in this study. The purpose of the SRS is
because it is most appropriate when the entire population from which the sample was taken is
homogeneous. By studying the samples and features, researchers can make the simplification of
the elements in the population. In this study we have collected 198 responses from cosmetic
products’ users in Malaysia.

RESULTS AND FINDINGS

Table 1 shows the profile of respondents who were involved in this study. The respondents
comprised of 57 (28.8%) males and 141 (71.2%) females. The majority of the respondents age
was in between 18-24 years old (65.2%), while the rest was 25-30 years old (22.2%), 31-35 years
old (7.1%), 36-40 years old (3.0%) and 41 years old and above (2.5%). In addition, most of the
respondents were Malays (65.2%) followed by Chinese (19.7%), Indians (11.6%) and others
(3.5%). Besides that, single consumers were the majority with 81.3% while married consumers
were only 18.7%. In terms of educational level, employees with Degree qualification were the
most with 61.6% followed by Secondary School level with 14.6%, Diploma level with 11.6%,
Master level 6.6% and others level with 5.6%. The majority of consumers are using cosmetic
product Garnier (22.2%), followed by Safi and others (15.7%), Silkygirl and L’oreal (13.6%),
Maybelline (13.1%) and Revlon (6.1%).

Table 1
Profile of respondents
Profile Description Frequency Percentage (%)
18-24 years old 129 65.2
25-30 years old 44 22.2
Age 31-35 years old 14 7.1
36-40 years old 6 3.0
41 years old and 5 2.5
above
Gender Male 57 28.8
Female 141 71.2
Marital Status Single 161 81.3
Married 37 18.7
Malay 129 65.2
Race Chinese 39 19.7
Indian 23 11.6
Other 7 3.5
Secondary School 29 14.6
Education Diploma 23 11.6
Bachelor 122 61.6
Master 13 6.6
Others 11 5.6
SilkyGirl 27 13.6
Maybelline 26 13.1
Garnier 44 22.2

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Cosmetic Product L’oreal 27 13.6

Safi 31 15.7
Revlon 12 6.1
Others 31 15.7

Convergent Validity

Hair et al., (2013) pointed out those items that were indicators of a particular construct shall
share a high percentage of variance in common is called convergent validity. In addition, Hair et
al., (2013) stated that there are various techniques to measure the convergent validity among
items, for instance factor loadings, average variance extracted (AVE) and composite reliability
(CR) as the value of loadings for all items must exceed 0.50. The AVE in present study is in the
range of 0.537 and 0.814. On the other hand, Tseng and Tsai (2011) discovered that the CR is
being a sign of the extent to which the latent variables can be explained by the variables. The
range of CR in this study is from 0.575 to 0.895, which was more than the cut off value 0.60
(Bagozzi& Yi, 1988). Consequently, this study confirmed the existence of convergent validity.
Table 2 summarizes the results of the measurement model exhibit that all the constructs are
validated.

Table 2
Results of Measurement Model
Model Construct Items Loading AVE CR
Experiential Benefit IVA1 0.845 0.801 0.895
(Independent Variable A) IVA2 0.882
IVA3 0.889
IVA4 0.876
Symbolic Benefit IVB1 0.743 0.648 0.805
(Independent Variable B) IBV2 0.890
IVB3 0.847
Social Benefit IVC1 0.945 0.645 0.803
(Independent Variable C) IVC2 0.955
Functional Benefit IVD1 0.902 0.801 0.895
(Independent Variable D) IVD2 0.900
IVD3 0.907
Appearance Enhances IVE1 0.883 0.814 0.902
(Independent Variable E) IVE2 0.898
IVE3 0.908
Customer Satisfaction M1 0.870 0.537 0.733
(Mediator) M2 0.885
M3 0.850
M4 0.879
M5 0.891
Loyalty Intention DV2 0.875 0.697 0.775
(Dependent Variable) DV3 0.893

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DV4 0.859
Note. DV1 were deleted because of low loadings

Discriminant Validity

Hair et al., (2013) specified that the degree to which a construct is exactly different from other
constructs is named discriminant validity. In addition, it is pointed out by inventible low
correlation between the measures of interest and other measures that are theoretically not
measuring the same variable (Heeler & Ray, 1972). Fornell and Larcker (1981) described the
technique to address discriminant validity as the square root of each construct’s AVE is
compared against its correlations. As shown in Table 3, the calculated square root of AVE for
each constructs was more than the inter correlations of the particular construct which guarantees
adequate discriminant validity.

Table 3
Discriminant Validity

Brand Image Customer Loyalty Customer

Benefit Intention Satisfaction
Brand Image Benefit 0.771
Customer Loyalty 0.706 0.87
Intention
Customer Satisfaction 0.733 0.737 0.875
Note. Diagonal elements (in bold) are the square root of the AVE, off-diagonal elements are the
correlation among constructs

Reliability Analysis

Reliability is a measure of to which extent a set of indicators of a latent construct is internally

consistent in their measurement as the composite reliability fulfills the same task as Cronbach‟s
Alpha (Hair et al., 2013). Furthermore, Barroso et al., (2010) supported that the composite
reliability is more preferable than Cronbach‟s alpha since it isn‟t powered by existing items in
each scale and uses item loadings extracted from the actual model. The closer composite
reliability to 1, the higher the internal consistency reliability is (Sekaran&Bougie, 2013). Hair et
al., (2013) indicated that a minimum acceptable of composite reliability value is between .60 and
.69, those in the range .70 is acceptable and above .80 is good. All the composite reliability
values were above cut off value 0.60 (Bagozzi& Yi, 1988), ranging 0.903 to 0.956. Therefore, it
can be confirmed the measurements were reliable.

Assessment of Structural Model

Customer loyalty intention had an R2 value of 0.575, which indicated that 57.7% of the variance
in customer loyalty intention could be explained by the brand image benefit and customer
satisfaction. The results from bootstrapping showed that all four hypotheses were significant at p
value < 0.05. By taking marketing effectiveness on cosmetic products as a main goal, the

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findings of the current study showed impressive support in explaining brand image benefit have
a positive relationship between loyalty intentions and customer satisfaction. The results between
brand image benefit and loyalty intentions (B = 0.27, Sig = p < 0.05) have demonstrated positive
relationship. The results between brand image benefit and customer satisfaction (B = 0.16, Sig
= p < 0.05) also showed positive but weak association similar like customer satisfaction to
loyalty intention (B = 0.12, Sig = p < .05). Lastly, customers’ satisfaction mediates the
relationship between brand image benefits and loyalty intention (B = 0.19, Sig = 0 < .05).

CONCLUSION

As a conclusion, this study has shown relative importance of the relationship between brand
image benefit, customer satisfaction and loyalty intentions. Brand image benefit maintains a
strong image for marketers to create an effective marketing strategy for the purpose of creating
customer satisfaction to create a loyal customer base. It is very important to understand that the
brand image dimension perceive from customers' point of view and whether these brand image
dimensions are parallel to their perceptions, expectations, needs and goals. On the other hand,
brand image benefit is related to the expectations and perceptions of customers, so it can help the
marketing managers to develop marketing strategies on the basis of customers’ perception and
product interests. According to satisfaction and loyalty, this is very important for companies to
measure customers' satisfaction to evaluate the performance of the product or image of the
product/service and whether their customers are willing to recommend their product brands to
other consumers and have the intention to buy their products/services in the future.

Limitation of the Study

Some of the limitations in the current study can be useful for future researchers. Even though the
present study has investigated several crucial issues, there are several major limitations in this
study. One of the limitations is that it was not possible for the researchers to get large numbers of
consumers using cosmetic products in Malaysia. Consequently, this study also emphasized on
many brands of cosmetic products’ users. Each brand may have the benefit of a different image
or brand meaning and brand attitude. It is suggested for future researches, it would be better to
focus on not more than three brands to have detailed understanding on brand image benefit of
specific brands. In addition, future studies may consider examining one type of cosmetic product
category, for example, lipstick or foundation. By focusing on one type of cosmetic products may
perhaps truly reveal the brand attributes and benefits of that particular brand.

Recommendation

This study intends to help Malaysian cosmetic companies in a way they should align their
strategies to work on their brand image benefit to get the higher customer satisfaction which can
help them to get loyalty intention of their consumers. Finally to become a successful brand,
marketing manager needs to be more focused on developing the brand image, customer
satisfaction and customer loyalty, all of these determining factors should be under the
development strategy of branding.

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