EFFECT OF SOCIAL MEDIA MARKETING ON CUSTOMER ENGAGEMENT AND ITS IMPACT ON BRAND LOYALTY IN CARING COLOURS COSMETICS, MARTHA TILAAR ABSTRACT The purpose of this research was to determine the influence of social media marketing against customer engagement and its impact on brand loyalty

EFFECT OF SOCIAL MEDIA MARKETING ON CUSTOMER ENGAGEMENT AND ITS IMPACT ON BRAND LOYALTY IN CARING COLOURS COSMETICS,

MARTHA TILAAR
ABSTRACT

The purpose of this research was to determine the influence of social media marketing against customer engagement and its impact on brand loyalty. Methods applied is a quantitative method by distributing questionnaire to 100 customers. Data analysis was applied path analysis. The results of this study shows that social media marketing has a positive and significant impact on customer engagement, on brand loyalty, and on customer engagement,

and its impact on brand loyalty where customer engagement has a greater influence on brand loyalty than social media marketing.

Keywords: social media marketing, customer engagement, brand loyalty

INTRODUCTION

It is undeniable that the use of social media keeps increasing these days. Almost everyone has a social media account and is always up-to-date with their social media account, according to Statisticbrain.

Facebook is one of the most popular social media, which currently has 1,310,000,000 users with the high use of social media marketers, who also see that social media can be used as a quite effective marketing tool, because social media can also boost engagement with customers, which in turn have an impact on customer loyalty to the brand. This statement is in accordance with the theory of Conceptual Framework of Customer

Engagement (Vivek, et al., 2012) which states that an individual involved can develop a better attitude towards the brand that he associates and will feel more loyal to the brand.

The high level of social media used by the

public, especially in Indonesia, is also the reason why social media became an important tool for improving engagement with customers, which in turn is expected to make customers more loyal to the brand.

According to the official website of the Ministry of

Communications and Information of the Republic, the internet user in Indonesia currently has reached 63 million. There are at least 95% of them who access social media. While Facebook and Twitter are the most widely accessed by the people in Indonesia, Indonesia itself occupies the fourth rank of Facebook users in the world after the USA, Brazil, and India, with about 65 million active Facebook users. Social media is a tool that many marketers use to increase engagement and brand loyalty, as through social media, companies can create two way direct communication flow, fast and interactive communication between the company and its customers.

This was confirmed by Tabroni, where social media invite anyone who is interested in participation by contributing and giving feedback openly and share information in a short time and unlimitedly (Tabroni,

2012). Furthermore, Nicholas Jakson revealed that at least half of Twitter and Facebook users claim that they were more likely to discuss, recommend or purchase the company’s products after they began to

follow and engage with companies in social media.

This statement is supported by research conducted by

Cicek who argued that customer loyalty to a brand is

positively affected when the brand offers a profitable

campaign and relevant contents in social media.

Caring Colours, cosmetics brand under Martha

Tilaar Group (PT Martina Berto), which is the pioneer

of the cosmetics industry in Indonesia, is very aware

of the importance of social media for their brand.

Caring Colours itself is ranked second among other

Martha Tilaar brands which have the most fans of

with 258.587 likes on its Facebook Page and 11.971

followers on its Twitter account.

With numerous fans and followers in each

social media account, Caring Colours should manage

their social media better, as it can be a great potential

to build a meaningful relationship with the fans and

followers, so that they become a loyal customer.

Based on the research, Caring Colours have not been

able to maximize the use of social media to build

relationships with their fans and followers, evident

from the contents that exist on Caring Colours social

media accounts, especially Facebook Page that has

low level of engagement even if the contents have

high reached. Reached is an indicator to see how far

and how many people saw the post. This means that

many people view the contents exist, but does not

engage with the post.

Low level of engagement can also be seen

from the level of Talking About This. Low level of

Talking About This means there aren’t a lot of fans

on Caring Colours Facebook who involved with the

activity. But one of the Caring Colours goal in using

social media as a marketing tool is to make and build

strong relationship with customers, so that later they

would be more loyal to Caring Colours. However, it is

difficult to achieve if the fans do not get involved with

the contents provided by Caring Colours.

Social Media is a term to describe the type

of media that is based on online conversation and

interaction between people. Social media also appears

in many different forms, including Internet forums,

social blogs, microblogging, pictures, and video. It

also includes technologies such as e-mail, picturesharing, blogs, wall-postings, and music-sharing

(Strauss & Frost, 2012). Social Media itself has five

characteristics, namely: Participation, Openness,

Convers ation, Community, Connectedness (Mayfield,

2008).

Customer Engagement is a psychological

process that formed the underlying mechanism model

of customer loyalty from new customers of the brand,

as well as the mechanism by which the customer

loyalty can be maintained for repeat purchases of a

brand (Bowden, 2009). Customer Engagement itself

can be formed through seven stages: Connection,

Interaction, Satisfaction, Retention, Commitment,

Advocacy, and Engagement (Sashi, 2012).

Brand Loyalty can be interpreted as a consistent

consumer preference to make purchases on the same

brand on a specific product or a specific service

category (Schiffman and Kanuk, 2004). Additionally,

Brand loyalty is a measure of the customer relationship

to a brand (Durianto, et.al., 2004). Brand Loyalty

itself is divided into five stages, namely: Switcher,

Habitual Buyer, Satisfied Buyer, Liking The Brand

and Committed Buyer (Durianto, et.al., 2004). Based

on the theories above, the authors create a theoretical

framework as seen in Figure 1.

There several purposes within this research.

Firstly, to analyze the influence of social media

marketing to customer engagement on Caring Colors

Martha Tilaar. Second, to analyze the influence of

social media marketing to brand loyalty on Caring

Colors Martha Tilaar. Third, to analyze the influence
of customer engagement to brand loyalty on Caring

Colors Martha Tilaar. The final purpose is to analyze

the influence of social media marketing and customer

engagement simultaneously to brand loyalty on Caring

Colors Martha Tilaar.

METHODS

In this study, the type of research is descriptive

and associative. The time range (time horizon) to

retrieve the data in this study using a cross sectional

method, which means the data is collected at a specific

period of time. Operational variables in this study

are the independent variable, which is social media

marketing as X, the intervening variable, which is

customer engagement as Y, and the dependent variable,

which is brand loyalty as Z.

The data used by researchers is qualitative data.

The source of the data obtained is the primary data

and secondary data. Data collection techniques are

conducted by interviewing directly Caring Colours

brand manager and PT Martina Bertosocial media

officer, and by distributing questionnaires to the

respondents in the form of questions corresponding

research topics and distributed to Caring Colours

fans in Facebook Page. The scale of measurement

using Likert scale. The literature review by collecting

secondary data and theories.

The sampling technique used is probability

sampling. Sampling method used was simple random

sampling, where the researcher in selecting the sample

to provide equal opportunities to all members of

the population to be designated as members of the

sample. Based on the results of the formula by Slovin

(Kriyantono, 2012), the number of samples taken in

this research is 100 respondents, because the sample

size is adequate for the path analysis.

After the data collection, the analysis begins

with testing the validity and reliability, followed by

a test of normality; then the data is processed using

descriptive analysis techniques and associative, simple

correlation analysis and path analysis. Data processing

was performed using the computer program SPSS

version 21.0.

Correlation test is used to determine whether

the relationship between variables is strong or not.

According to Riduwan and Kuncoro (2008), if the

analysis showed a fairly close relationship, then it will

proceed to the regression analysis as a forecasting tool

that is very useful for planning as shown in Table 1.

Table 1 Interpretation of Correlation Coefficient

of r Value

Coefficient Interval Characteristics of Relationship

0.80 – 1.000 Very Strong

0.60 – 0.799 Strong

0.40 – 0.599 Quite Strong

0.20 – 0.399 Weak

0.00 – 0.199 Very Weak

Source: Riduwan and Kuncoro (2008)

According to Riduwan and Kuncoro (2008),

path analysis is a technique to analyze direct effect,

indirect effect (an effect that occurs between the

independent variable on the dependent variable

through intermediaries), and the total effect of

exogenous variables (independent variables) against

endogenous variables (dependent variables) as seen in

Table 2.

Table 2 Categories of Variable Influence

in Path Analysis

Path Coefficient Influence

0.05 – 0.09 Weak

0.10 – 0.29 Medium

> 0.30 Strong

Source: Riduwan and Sunarto (2007)

All the results of the questionnaire that was

distributed to respondents will be processed using

SPSS to analyze the relationship and influence of social

media marketing variables on customer engagement

and its impact on brand loyalty. The result then will

be used to evaluate social media marketing to build

customer engagement and strengthen brand loyalty.

RESULTS AND DISCUSSIONS

The following tables are the profile of

respondents. Table 4 is the profile of respondents based

on gender, Table 5 is the profile of respondents based

on age, Table 6 is the profile of respondents based on

education, Table 7 is the profile of respondents based

on occupation and finally, Table 8 is the profile of

respondents based on income per month.

Table 3 Profile of Respondents by Gender

Gender Total Percentage

Female 100 100%

Male 0 0%

Table 4 Profile of Respondents by Age

Age Total Percentage

< 21 Years 13 13%

21 – 31 Years 63 63%

31 – 40 Years 23 23%

> 40Years 1 1%

Table 5 Profile of Respondents by Education

Education Total Percentage

Senior High 55 55%

University 45 45%

Table 6 Profile of Respondents by Occupation

Occupation Total Percentage

Students 10 10%

University Students 18 18%

Employee 45 45%86 Binus Business Review, Vol. 7 No. 1, May 2016, 83-87

Entrepreneur 22 22%

Others 5 5%

Table 7 Profile of Respondents by Income per Month

Income Total Percentage

<Rp 1.000.000 36 36%

Rp 1.000.000 – Rp 3.000.000 47 47%

Rp 3.000.000 – Rp 5.000.000 17 17%

>Rp 5.000.000 0 0%

Validity and reliability in this study use a

confidence level of 95%, where df = n-2. The value

of n in this study is 100, so the value of df is 98. By

doing so,ttable value = 1.6606. Furthermore, by using

the formula of r

table, the value of rtable= 0.1654.

Base Decision Making for Validity Test: (1) If

r

count ≥ 0.1654, then the question item is valid. (2) If

r

count< 0.1654, then the question item is not valid. Base

Decision Making for Reliability Test: (1) If Cronbach

Alpha ≥ 0.1654, then the data is reliable. (2) If

Chronbach Alpha < 0.1654, then the data is unreliable.

Tabel 8 Validity Test

of Social Media Marketing Variable

Question Item rcount Sign rtable Description

1 0,366 > 0,1654 Valid

2 0,252 > 0,1654 Valid

3 0,252 > 0,1654 Valid

4 0,377 > 0,1654 Valid

5 0,339 > 0,1654 Valid

6 0,353 > 0,1654 Valid

7 0,529 > 0,1654 Valid

8 0,540 > 0,1654 Valid

9 0,187 > 0,1654 Valid

10 0,221 > 0,1654 Valid

Cronbach Alpha is 0.679 > 0.1654, then all

statements in the variable Social Media Marketing are

reliable.

Table 9 Validity Test

of Customer Engagement Variable

Question Item rcount Sign rtable Description

11 0,329 > 0,1654 Valid

12 0,345 > 0,1654 Valid

13 0,461 > 0,1654 Valid

14 0,429 > 0,1654 Valid

15 0,279 > 0,1654 Valid

16 0,532 > 0,1654 Valid

Cronbach Alpha is 0.664 > 0.1654, then all

statements in the variable Customer Engagement are

reliable.

Table 10 Validity Test of Brand Loyalty Variable

Question Item rcount Sign rtable Description

17 0,178 > 0,1654 Valid

18 0,454 > 0,1654 Valid

19 0,333 > 0,1654 Valid

20 0,558 > 0,1654 Valid

21 0,460 > 0,1654 Valid

22 0,383 > 0,1654 Valid

Cronbach Alpha is 0.663 > 0.1654, then all

statements in the variable Brand Loyalty are reliable.

Normality test is done to determine whether the data

were normally distributed or not. Data has a normal

distribution if the Sig. Kolmogorov-Smirnov is greater

than 0.05. Data is not normal if the Sig. KolmogorovSmirnov is less than 0.05.

Table 11 Normality Test Result

Variable

Sig.

KolmogorovSmirnov

Description

Social Media Marketing (X) 0,200 Normal Distribution

Customer Engagement (Y) 0,200 Normal Distribution

Brand loyalty (Z) 0,200 Normal Distribution

Basic Decision Making: If Sig > 0,05, not

significant. If Sig < 0,05, significant.

Table 12 Characteristics

of Bivariate Relationship of X, Y, and Z

Relationship

Between Sig Correlation Characteristics of Relationship

X with Y 0,000 0,587 Quite Strong, Direct, and

Significant

Y with Z 0,000 0,597 Quite Strong, Direct, and

Significant

X with Z 0,000 0,464 Quite Strong, Direct, and

Significant

Figure 2 Empirical Causal Relationship

of Variable X and Variable Y toward Variable Z

Sub-Structure 1: (1) Variable Social Media

Marketing (X) contributes significantly to the variable

Customer Engagement (Y) on Caring Colors Martha

Tilaar. (2) Customer Engagement (Y) on Caring

Colors Martha Tilaar is influenced by Social Media

Marketing (X) as much as 34.4% and the remaining

65.6% is influenced by other variables outside of this

study.

Sub-Structure 2: (1) Variable Social Media

Marketing (X) and variable Customer Engagement

(Y) had a significant contribution to variable Brand

Loyalty (Z) simultaneously on Caring Colors Martha

Tilaar. (2) Brand Loyalty (Z) is influenced by Social

Media Marketing (X) and Customer Engagement (Y)

simultaneously by 38.5%, and the remaining 61.5%

is influenced by other variables outside of this study.

There are several implications based on the

research result. First, Social Media Marketing has a

positive contribution to the Customer EngagementEffect of Social......(Brian Garda Muchardie, et. al.) 87

on Caring Colors Martha Tilaar Facebook Page with

strong influence. Social Media Marketing also has a

quite strong relationship with Customer Engagement.

This means more effective and efficient Social Media

Marketing imposed by the Caring Colors Martha

Tilaar, level of Customer Engagement on Caring

Colours Facebook Page will also be higher.

Second, Social Media Marketing has a

positive contribution to Brand Loyalty on Caring

Colors Martha Tilaar to the nature of the influence of

‘medium’. Social Media Marketing also has a quite

strong relationship with Brand Loyalty. But based on

results of the Sub-Structure, it is seen that the influence

of variables (X) to a variable (Z) is indirectly through

(Y) is smaller than the variable (X) to a variable (Z)

directly without going through the variable (Y) this

may due to a low emotional ties that exist on Caring

Colours Facebook Page, so marketing activities using

social media doesn’t have effective impact.

Finally, Customer Engagement has a positive

contribution to Brand Loyalty on Facebook Page of

Caring Colors Martha Tilaar with the nature of the

influence of ‘strong’. Customer Engagement also

has a quite strong relationship with Brand Loyalty.

This means more effective and efficient Customer

Engagement that exist on the Facebook Page of Caring

Colours, the Brand Loyalty on Caring Colors Martha

Tilaar will also be higher.

CONCLUSIONS

There are several conclusions that can be

obtained: (1) Variable Social Media Marketing

has a strong and significant influence on Customer

Engagement. (2) Social Media Marketing has a

moderate and significant influence on Brand Loyalty.

(3) Customer Engagement has a strong and significant

influence on Brand Loyalty. (4) There is a significant

effect of the variable Social Media Marketing to Brand

Loyalty through Customer Engagement.

Some suggestions which can be produced

from this research: Caring Colours Martha Tilaar

should focus on the activities that can improve the

interactions on Facebook Page of Caring Colours,

either the interaction between the fans and the brand

or between the fans themselves by always replying to

questions or comments on Facebook Page of Caring

Colours. Caring Colours should also be able to reply

to any questions or comments quickly, so fans do not

feel ignored by Caring Colours. Another thing Caring

Colours can do to boost the existing interaction on

their Faceb ook Page is to create content that involves

interaction with fans. Caring Colours should use

other media to be able to build relationships with

their customers so that they become loyal. Because

from the overall results of the sub-structure, it can be

seen that building relationships through marketing

activities by using social media will only lower the

loyalty of the customers brand that became fans of

Caring Colours on Facebook. Thus, if Caring Colours

continue to use Facebook to build relationships with

their customers, then the result will not be effective at

all. Analyze and develop other factors that may affect

the level of customer engagement and brand loyalty

on Caring Colors Martha Tilaar. This is because social

media marketing affects customer engagement only

as much as 34.4%, so there are still 65.6% of other

factors that affect customer engagement. Other than

social media marketing and customer engagement

which affects brand loyalty by 38.5% to 61.5%, there

are still other factors that influence brand loyalty. Still

the presence of other factors affecting brand loyalty

means that other studies may be analyzing the matter

further again.

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