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ICEBIT The 4th International Conference On Economics , Business and Information Technology

ISBN. XXX XXX

June 10, 2023 pp. xx-xx

THE IMPACT OF OVERPROMISING CAMPAIGN


TOWARDS CUSTOMER LOYALTY ON LOCAL
SKINCARE PRODUCTS (SKINTIFIC AND
SOMETHINC)

Alya Fadia Novara


Institut Teknologi Bandung
Bandung, Indonesia
(+62) 811559976444
alya_fadia@sbm-itb.ac.id

ABSTRACT
The intense competition of local brand skincare until 2027, led to an overpromising campaign in which the brand did
not deliver on what they claimed. Hence, the purpose of this study is to tell local skincare companies about factors
that influence customer trust, satisfaction, repurchase intention, word of mouth, that lead to customer loyalty, as well
as to suggest some strategic ways to help people forgive the company. This research will be conducted qualitatively
through interviews and quantitatively through an online survey of customers who have experienced local skincare
products, specifically Somethinc and Skintific. According to the interview results, other variables that can influence
customer loyalty include affordability to pay and impulsive buying tendency. The online survey gathered 200
respondents, both genders from Jabodetabek and Bandung. The SmartPLS application was used to analyze the data
using the PLS-SEM approach. According to this study, overpromising ads have a considerable impact on customer
loyalty via customer trust, satisfaction, repurchase intention, and word of mouth. The findings also revealed that the
affordability to pay has a significant impact on the buyer decision-making process. With the findings, this study can
assist local skincare companies in providing better ways to advertise their products.

Keywords : Consumer Trust; Consumer Satisfaction; Repurchase Intention; Word of Mouth.

1. INTRODUCTION accompanied by evidence that can be accountable and


Skincare has been used for many years, even from from an institution credible.
ancient times. During the Tang Dynasty in China,
many people preferred using white skin care such as Somethinc Astaxanthin Cholera serum was promoted
Sungyi Mushroom to lighten the skin. In Indonesia, by influencers and official Instagram with the claim
the skincare industry is expanding and spreading, that it can brighten the under eyes and make the skin
with Avoskin being the first local skincare brand. The look younger. However, it has received mostly
demand for beauty manufacturers is also growing, negative feedback on social media due to its
with PT. Cedefindo's production output increased overpromising campaign. Same with Skintific, a
significantly by 52% and the fact Indonesian people skincare product, was reviewed by a Tiktok user and
preferred to choose local skincare products due to forced her to create before-and-after testimony and
affordable price. The consumer of skin care is not only gave her a minimum of two days. It is classified
limited to females only, but also males, and 71.1% of as an overpromising campaign because it gives false
them are more likely to use branded skin products hope and allows the influencer to lie about their
rather than dermatologists, where it also become the testimony.
reason to the revenue of the skincare market in
Indonesia will continue to increase until 2026, 2. LITERATURE REVIEW
leading to tighter competition as well. Local beauty
brands are competing with foreign and fellow local
brands due to the difficulty of keeping up with new 2.1 Theoretical Framework
marketing strategies and trends. Companies use According to this study, the researcher uses the
overpromising campaigns to deceive customers and framework that can see in Figure 2.1 below, which
make them feel impulsive, using exaggerated words comprises many studies related by Gogoi, B.J.,
and superlative words, such as Mencerahkan Shillong, IIM. (2021), Topaloglu, O., & Fleming, D.
Seketika, Glowing dalam Semalam, tidak ada efek E. (2017), Putri, Viajeng Purnama. (2018), Azemi,
samping, and another superlative words such as most, Y., Ozuem, W., & Howell, K. E. (2020), Ngoma, M.,
number one, top, or words starting with "ter-" or the & Ntale, P. D. (2019). Since this study's main
same meaning, which it can not be used unless purpose is to analyze and prove how the variable of
an overpromising campaign could really influence

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repurchase intention, customer trust, and negative The researcher used non-probability sampling, which
word of mouth. Turns out, the theory makes a non-probability sampling is defined as a sampling
correlation between all of them that is supported by technique in which the researcher selects samples
the data and theory from the journal. The objective is based on the subjective judgment of the researcher
also the same, they all explain the influence and the rather than random selection. It is a less stringent
importance of trust, satisfaction, and the way to method. This sampling method depends heavily on
please customers. Although one of them talks about the expertise of the researchers (Fleetwood, 2013). It
perceived CSR, it is also explaining the influence of is carried out by observation, and researchers use it
CSR on the before-after result. After they have widely for qualitative research. Inside of non-
already implemented CSR, they gain more customer probability sampling, the researcher made it specific
trust and satisfaction, which in turn creates brand to use purposive sampling, the selection follows some
loyalty. Therefore, the researcher also wants to use judgment or arbitrary ideas of the researchers looking
those relationships of variables as the base of data for a kind of representative sample (Steinmetz, 2016).
collection for this study and the research framework The reason that using this technique is due to limited
is designed using the hypothesis mentioned below. the target for the informant since the researcher only
focused on people who used local skincare products
such as Skintific and Somethinc. The respondent's
age will be focused on Generation Z in the range of
12-24 years old, and starting from 12 years old is
based on the study from Serene (2021) and
Figure 2.1 Theoretical Framework
dermatologist, where they all stated and agreed that it
Source : Gogoi, B.J., Shillong, IIM. (2021), Topaloglu, O.,
& Fleming, D. E. (2017), Putri, Viajeng Purnama. (2018), is the age appropriateness or the minimum age of
Azemi, Y., Ozuem, W., & Howell, K. E. (2020), Ngoma, M., using skincare products.
& Ntale, P. D. (2019).
3.3 Data Analysis on Qualitative
3. RESEARCH METHODOLOGY Research
In qualitative research, coding is the way to analyze
3.1 Research Approach the interview result or in other words, Coding is a
qualitative data analysis strategy in which some
The approach for this study will use a mixed method, aspect of the data is assigned a descriptive label that
which is a combination of qualitative method and allows the researcher to identify related content
quantitative research methods. The following is a across the data. It is whether you decide to code or
data collection from both quantitative and qualitative whether to code your data should be driven by your
research: methodology (Deterding & Waters, 2021). Based on
the grounded theory, the steps of qualitative coding
start with open coding, axial coding, and the last is
3.2 Data collection selective coding (Corbin & Strauss, 1990).
3.2.1 Population and Sample
The informants for this interview regarding using 3.3.1 Open Coding
qualitative methods are people who have already According to Corbin and Straus (1990), Open coding
bought and used local skincare for a minimum of one is a common first step in qualitative research analysis
day, the products are Skintific and Somethinc. The and is frequently used as the first coding pass in
informant's age will be focused on Generation Z in Grounded Theory. At this point, the researcher
the range of 12-24 years old, with the target place should have begun collecting qualitative data, such as
will be in the Bandung and Jabodetabek area because interview transcriptions. With open coding, also
skincare is already being used by many people in that divide your data into discrete parts and label them
area. The other reason is that it must be specified for with "codes." As the name implies, open coding is
people who already bought and use those skincare intended to expose the data to new theoretical
products since they are the ones who provide detailed possibilities as the researcher engages with its
information about their experience with using those qualitative data. The goal is to compare and contrast
local skincare products. While for the number of similar events in the researcher’s data on a
interviewees, the researcher will take 12 people, since continuous basis.
Guest et al. (2006) discovered that inhomogeneous
studies with purposeful samplings, such as many 3.3.2 Axial Coding
qualitative studies, 12 interviews should be enough to While Axial coding is the second step of coding in
achieve data saturation. Differences with quantitative grounded theory, following open coding. In contrast,
methods, the minimum sample size used is 200 to open coding, which divides the data into discrete
samples based on the general rule from Kevin Lyons parts, axial coding begins to connect codes. Where
(2019) the sample sizes of 200 to 300 respondents the researcher organizes the codes in open coding
provide an acceptable margin of error and fall before with axial coding. In qualitative research, the
the point of diminishing returns. researcher reads the codes and then underlying data
to divide into some group categories. A category
3.2.2 Sampling Technique could be created based on an existing code, or a new,

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more abstract category could be created that but still positively influence customer satisfaction.
encompasses a number of different codes. The netnography and reliability test showed that
many customers felt more impulsive while buying
3.3.3 Selective Coding Skintific products and due to those impulsiveness,
Last but not least is selective coding which is the last customers and the interviewee stated that they did not
step of coding in grounded theory, and its goal is to really blame the product, sometimes they blame
define a new theory or modify an existing theory themselves instead. Therefore, overpromising did not
based on research. Ideally, the researcher should be really affect the customer satisfaction, but still
able to express the researcher’s theory in a few words aligned.
or sentences, and it should be stated clearly in the
research report. H2 : Overpromising has a positive influence on
Customer Trust
Hypothesis 2 assumed that overpromising has a
3.4 Data Analysis on Quantitative positive influence on customer trust. Where in the
Research Skintific and Somethinc product proved that
overpromising has a positive influence on customer
The data collected from the respondent in this study trust. Based on the T-Statistic are above 1.96 and P-
will be analyzed using descriptive statistics and PLS- Values below 0.05. In Skintific product, the T-Values
SEM Analysis. Where descriptive analysis, described was 27.472 and for Somethinc product’s T-Values is
by Best and Kahn (1998), is a form of data analysis 44.278. It is related with the study from Templar
that measures the sample-based generalization of a (2005) that over-promising has an impact on
research result, which limits to a specific group of customer trust since overpromising could lead to a
individuals and also no assumption and resemblance lack of trust in the customer and even the firm itself
to those beyond the group can be inferred. While for since it is quite similar to the word under-delivering
PLS-SEM Analysis, PLS-SEM calculates how well in which they can not entirely give what they want to
the model explains the target constructs of interest by offer. The other proof is from netnography and
estimating the relationships between the latent interview result, where the interviewee experiencing
variables (i.e., their strengths). The main reasons for overpromising, they tend to not trusting the product
using PLS-SEMs are their ability to estimate very anymore, and some of them are stereotyping the
complex models and their lax data requirements product, if the product was not trustable at the first
(Wold, 1982). impression, they would not even try the other product
of those brand. It is might due to the fact that
The researcher also uses the five-point Likert scale to Skintific and Somethinc are skin care product, where
assess the impact of overpromising campaigns the product were really impactful to customer’s face
towards customer trust, customer satisfaction, or skin, thus the impact would be more visible and
repurchase intention, and negative word of mouth. stopped using the product immediately.
For any research variable, data will be displayed and
analyzed in the form of graphs, histograms, or pie H3 : Customer Trust has a positive influence on
charts. A five-point Likert scale is used to assess Customer Satisfaction
respondent’s level of agreeability. This knowledge Hypothesis 3 assumed that customer trust has a
will be presented by the researcher using descriptive positive influence on customer satisfaction. In the
analysis. A Likert scale is a psychometric scale with Skintific product, it can be concluded that customer
numerous categories in which respondents can trust has a positive influence on customer
express their ideas, attitudes, or feelings about an satisfaction, which is supported by T-values that are
issue, as stated by Nemoto T & Beglar D (2014). The below 1.96 and P-values that are under 0.05.
validity of the interpretations formed from the data However, for Somethinc product, the T-value in this
provided by Likert-scale questionnaires may be hypothesis is lower than 1.96 and the P-value also
formed by a variety of techniques, and data can be above or greater 0.05, thus this hypothesis is rejected.
acquired reasonably quickly from a large number of However, the path coefficient or the original sample
respondents. is still positive (0.144). The reason that customer trust
can significantly influence customer satisfaction is
4. DATA ANALYSIS also supported by the netnography and interview
result, where the trust already exists in the first place,
H1 : Overpromising has a positive influence on but the product is overpromising, the level of
Customer Satisfaction satisfaction would be much lower than expected since
Hypothesis 1 assumed that overpromising had a they have the trust in the first place. The interview
positive influence on customer satisfaction on both result also stated that whenever they feel more trust
Somethinc and Skintific Product. However, based on and satisfied with the product, it is when their product
the T-statistic and P-values result on Somethinc was fulfilled and exceeded their expectation.
product where the T-statistic is above 1.96 and P-
values is below 0.05, it means that in Somethinc H4 : Customer Trust has a positive influence on
product, the overpromising has a positive influence Repurchase Intention
on customer satisfaction. However, in the Skintific Hypothesis 4 assumed that customer trust had a
product, the T-statistic is below 1.96 and P-values is positive influence on repurchase intention. However,
above 0.05 where overpromising did not significantly Skintific's T-value was lower than 1.96 and the P-
value was greater than 0.05, so this hypothesis was

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rejected and the path coefficient was negative. greater 0.05, so this hypothesis was rejected.
Somethinc's T-value was lower than 1.96 and the P- However, the path coefficient or the original sample
value was also above or greater 0.05, so the original was positive (0.022), which means that the
sample was also negative. However, according to repurchase intention is not significant but still
Gefen (2002) and Trisnawati et al. (2012), the level positively influences customer loyalty. Research by
of consumer trust when the consumer feels safe with Hirschman (1970) stated that Customer Loyalty is an
the service or product, the seller is transparent, and attitudinal tendency and the behavioural tendency of
respects the consumer's privacy, has a significantly favouring one brand over other brands. Repurchase
positive effect on repurchase intention. However, not intention refers to the probability or chance of using
all customers or consumers feel safe with the service, the previous service provider again in the future.
so they did not have or align with repurchase Oliver (1997) defined Customer Loyalty as a deep
intention, especially in Somethinc product where commitment which merely gets influenced by any
many people claimed or stated that their formula was situational behavior caused by several marketing
not consistent and too-focused in advertising rather efforts of different brands, it shows re-buy intent or
than improving their formula. re-patronize the same preferred product or service
consistently and repeatedly in future. It is also proved
H5 : Customer Satisfaction has a positive influence with netnography and study result, where customer
on Repurchase Intention loyalty was seen or proved if customers do
Hypothesis 5 assumed that customer satisfaction had repurchase intention and give recommendation to
a positive influence on repurchase intention. Both their friends that will invite the potential customer to
Skintific and Somethinc products had the same
conclusion, with T-Values above 1.96 and P-Values H8 : Word of Mouth has a positive influence on
under 0.05. Elitan (1999) stated that no complaints, Customer Loyalty
feelings of pleasure in the whole product, service Hypothesis 8 assumes that word of mouth has a
conformity with expectations, and customer positive influence on customer loyalty in Skintific
expectations that are exceeded were indicators of and Somethinc products, which is proven by T-values
consumer satisfaction. Previous research, Julianto that are above 1.96, 20.406 for Skintific and 7.393 for
(2010), showed that the greater the customer Somethinc, and P-values that are under 0.05.
satisfaction, the greater the repurchase intention of According to Faullant et al. (2008), customer loyalty
consumers. Netnography and interview results is a long-term relationship between customers and the
showed that skincare results were visible and company that supports increased sales with no
impactful for the consumer, and that if they already promotional investment. Positive WOM is a powerful
have a skincare that is suitable with their skin type marketing tool for creating customer loyalty, as it can
and face condition, they rarely try new products. promote new and repeat purchases and increase
customer loyalty. People who spread positive word of
H6 : Customer Satisfaction has a positive influence mouth to others about particular goods or services
on Word of Mouth tend to exercise some loyalty in their consumption
Hypothesis 6 assumes that customer satisfaction has a patterns. Additionally, positive word of mouth can be
positive influence on word of mouth, which is proven beneficial for the company, as it can give
by T-values that are above 1.96 and P-values that are recommendations to their friends and relatives, give
under 0.05. It can be concluded that customer good reviews on their comment section, and post in
satisfaction had a positive influence towards word of social media that can invite many potential audiences
mouth on Skintific Product and Somethinc Product. and customers.
According to Chen and Tsai (2004), customer
satisfaction can aid in the development of long-term H9 : Affordability to Pay has a positive influence on
relationships and the acquisition of positive brand Repurchase Intention
support. Customer satisfaction has a direct and Hypothesis 9 suggests that affordability to pay has a
positive impact on customer loyalty, the maintenance positive influence on repurchase intention. For the
of profitability, and the creation of positive WOM. It Skintific product, the T-value is lower than 1.96 and
can also influence consumer attitudes through word the P-value is above or greater 0.05, but the path
of mouth about the product or service they use. This coefficient or the original sample is positive (0.152).
is related to the result of a hypothesis where customer For Somethinc, it can be concluded that the
satisfaction indeed influences the word of mouth, affordability to pay has a positive influence on
either positive or negative. It might be due to the fact repurchase intention. Affordability is about
their use exceeded their expectation and feel satisfied consumers’ purchasing power of a product, where it
with the overall product, especially in netnography can be defined as a certain amount of pay for the
and interview results, the people who really satisfied product or service. For inexpensive, repeat purchase
with the product tend to share their feeling or their products like paper towels, candy, and the like,
experience to relatives and even to strangers. affordability concerns are not important in
determining purchase.
H7 : Repurchase Intention has a positive influence
on Customer Loyalty However, if the income is really low, even the
Hypothesis 7 assumed that repurchase intention had a inexpensive things can not be repurchased anymore.
positive influence on customer loyalty. However, for Therefore, the role of affordability concerns in
the Skintific brand, the T-value in this hypothesis was predicting purchase is more important for products
lower than 1.96 and the P-value was also above or that are perceived more as expensive by consumers.

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For purchase to take place, a person has to intend to For academicians, it is recommended to use the SPSS
buy the product and have the ability to buy it. and SmartPLS for more detailed and valid
information that obtained.
H10 : Customer Trust has a positive influence on
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