INTERNATIONAL JOURNAL OF SOCIAL SERVICE AND RESEARCH

 

THE EFFECT OF SOCIAL MEDIA MARKETING EFFORT ON CUSTOMER RESPONSE THROUGH BRAND EQUITY IN STARBUCKS STORE

 

Yessica Ayu Febryanta Ginting

Universitas Sumatera Utara, North Sumatera, Indonesia

Email: [email protected]

 

Abstract

This study aims to analyze the effect of Social Media Marketing Efforts on Customer Response, the Effect of Social Media Marketing Efforts on Brand Equity, the Effect of Brand Equity on Customer Response, and the Effect of Social Media Marketing Efforts on Customer Response through Brand Equity in Starbucks Store. Furthermore, this study also aims to analyze the most effective policies that can be implemented by Starbucks management in an effort to implement Social Media Marketing Efforts and increase the level of Brand Equity products and Customer Response at the Starbucks Store. This research was conducted in three Starbucks District 33 Medan store (Hermes, Focal Point and Manhattan). The number of samples of this study amounted to 185 people. The analytical method in this study uses the Structured Equation Model (SEM) with the Smart PLS 3.0 Program. The results of this study found that Social Media Marketing Efforts had a positive and significant effect on Customer Response, Social Media Marketing Efforts had a positive and significant effect on Brand Equity, Brand Equity had a positive and significant effect on Customer Response, and Brand Equity was able to mediate the influence of Social Media Marketing Efforts towards Customer Response. Starbucks management can apply strategies such as: increased brand awareness, import reputation, increased relationship, brand development, and increased purchase intention.

 

Keywords: Brand Equity; Customer Response; Social Media Marketing Efforts

 

Received 16 November 2022, Revised 11 December 2022, Accepted 19 December 2022

 


INTRODUCTION

In the last year, the growth of the food and beverage business grew to 8.67% in 2018 (Tempo.com, 2019). Apart from growing, the food and beverage industry also continues to innovate, especially the beverage industry, as evidenced by the increasing number of new beverage industries, one of which is the beverage industry or businesses that focus on selling drinks made from processed coffee in the form of coffee shop businesses. In addition, based on data from the Ministry of Agriculture in 2017, the total consumption of coffee and processed products is predicted to increase from 2017-2021 with an average growth of 8.22% annually, thus indicating that coffee products can be a mainstay commodity in Indonesia.

Global economic conditions that have occurred in recent years have encouraged companies to know the relationship between the brands of products produced by companies (brand equity) and consumer responses through the application of social media marketing efforts (Bruhn et al., 2012; Kim & Ko, 2012). In addition, based on Kapferer (2009) it was found that consumers will tend to choose a brand based on two main factors, namely: pleasure and pride in using products from that brand. In addition, the level of existence of a brand can occur if the brand is able to create four aspects, namely: brand awareness, brand association, brand loyalty and perceived quality (Aaker, 2014). Research from Kim and Ko (2012) and Godey et al. (2016) found that brand equity is able to mediate the relationship between social media marketing efforts and customer response.

            social media has been able to change the general paradigm of people who still use conventional systems to communicate with other people into a more modern system with a high level of efficiency. Research conducted and posted on the marketingcloud.com website (2019) found that 90% of people decide to make purchases driven by advertisements carried out by companies on social media. Other research results from Buckarma et al. (2017) found that almost 88% of retail, media, IT and travel companies have used various social media platforms as a means of communicating with potential customers, besides that there are as many as 42% of these companies that have used an integrated system of various social media as a tool or media to implement the company's marketing strategy. So that social media has been used as one of the means used to carry out product marketing or what is also commonly referred to as social media marketing efforts.

PT. Sari Coffee Indonesia, or better known as Starbucks Indonesia, is a company engaged in the retail sector, especially in the coffee industry, which uses social media as a means of carrying out marketing activities. Starbucks is a coffee shop from the United States which is the largest coffee shop in the world with more than 28,000 stores in 62 countries and opened its first shop in Indonesia on May 17, 2002 which has spread in 320 different locations in more than 22 cities (www.starbucks.co.id, 2019).

This research was conducted at the Medan City Starbucks outlet in the 33 (thirty three) district of Medan which consists of outlets: Cambridge, Cemara, Hermes, Regale, Focal Point, and Manhattan. The relation to customer response is assessed from the company's sales level, where based on the results of interviews with management it was found that in 2018, outlets were divided into two categories based on sales levels, namely as follows:

 

Table 1

List of Income and Visits at Oulet District 33 Medan in 2018

Low Sales Rate

Proportion

High Sales Rate

Proportion

Hermes

30%

Cambridge

70%

Focal Points

Cemara

 

 

Manhattan

Regale

 

Source: Starbucks Management District 33 Medan (2019)

 

Based on Table 1, information was obtained that there were three outlets classified as having low sales levels, namely: Hermes, Focal Point and Manhattan, while outlets with high sales levels were: Cambridge, Cemara and Regale. In addition, based on interviews with researchers with Starbucks management in Medan City, it was also found that at certain moments such as fasting and during working hours, sales at Starbucks were relatively low. In addition, based on observations from researchers of several Starbucks outlets, sales were relatively low even though sales promotions had been implemented posted on social media Line and Instagram which were the same as other outlets and these outlets were also very close to crowded centers such as: campuses, schools and offices, the level of sales is also relatively less increase significantly. So, based on this it indicates a problem with the policy or marketing strategy set by Starbucks management in the city of Medan, especially for the three outlets with low sales.

Based on interviews with Starbucks district 33 Medan management, information was obtained that the Starbucks Indonesia Instagram Official Account was created in addition to informing every latest information about Starbucks and its products through Photo-sharing and Insta-stories, as well as a medium for every consumer or follower to communicate directly with management. This is reflected in the many comments from followers which were replied to or responded to by management.

The problems found by researchers related to the implementation of social media marketing in district 33 Medan are still centralized and management in each region in Indonesia does not have the authority to implement their own marketing policies at outlets or in their area. Besides that, based on the results of a survey conducted by researchers on several consumers at Starbucks outlets, it was found that not all consumers were interested in the promotional content offered by Starbucks through social media, because most promotions used conditions that not all consumers could afford to fulfill these requirements. such as: having a BCA member card, debit and credit card and having a Starbucks tumbler. Based on the explanation of this background, the researcher formulated the title of this study "The Influence of Social Media Marketing Effort on Customer Response Through Brand Equity at Starbucks Outlets".

 

METHOD

A.  Types of research

The data approach used in this study is a quantitative data approach (Quantitative Research) using research methods with surveys (Creswell & Poth, 2016). In addition, this research also uses observation methods as an observation method as a way for researchers to determine the suitability of survey results with problems that occur at research locations.

B.  Population and Research Sample

The population in this study were all Starbucks District 33 Medan customers (Hermes, Focal Point and Manhattan). The sample is part of the population taken in certain ways that represent the population. This research was conducted using a non-probability sampling method (non-random sampling) using a purposive sampling technique, where the sample was selected based on its characteristics. The proportion or distribution of the number of research samples is as follows:

 

Table 2

Research Sample

No

Starbucks store name

Number of Samples

1

Starbucks Focal Point

63

2

Manhattan Starbucks

63

3

Starbucks Hermes

59

Amount

185

Source: Results Processed by Researchers (2019)

 

C.  Types and Data Collection Techniques

In this study, there were two types of data collected, namely primary data and secondary data. Primary data is a data source that directly provides data to data collectors (Sugiyono, 2018). In this study, the primary data source was obtained from the results of a questionnaire that will be distributed to Starbucks customers in Medan City. The questionnaire distributed consisted of 37 closed statements representing the three variables studied.

The method used in distributing the questionnaires in this study was a self-administered survey. This study also uses secondary data, which is primary data that has been further processed and presented both by primary data collectors and other parties, for example in the form of tables or diagrams. Secondary data is used by researchers to provide additional descriptions, complete descriptions, or for further processing. This secondary data was obtained through a literature study, namely by reading, studying, citing from the literature related to the problem being researched, company documents and archives and documentation of the research location.

 

 

 

D.  Validity and Reliability Test

1.  Validity test

Validity testing was carried out at the same three outlets in this study, namely: Hermes, Focal Point and Manhattan with a total of 30 respondents outside the study sample. The value requirements for each of these instruments can be seen in Table 3.

 

Table 3

The Size of the Validity of the Research Instrument

Validity Instrument

Value Terms

Kaiser-Meyer-Olkin Measure of Sampling Adequacy (KMO MSA)

Statistical measurement that describes the proportion of variation in variables that are general variables, namely variations caused by factors in the study

≥ 0.50

Source: Malhotra (2010)

            The following are the results of validity testing using Kaiser-Meyer-Olkin Measure of Sampling Adequacy:

 

Table 4

Results of Testing the Validity of Research Instruments

Score Kaiser-Meyer-Olkin Measure of Sampling Adequacy (KMO MSA)

Number

Social Media Marketing Efforts

Brand Equity

Customer Response

1

0.809

0.716

0.711

Source: SPSS Processed Results (2019)

            As for value, Anti Image from each instrument the statements of the three variables in this study are as follows:

 

Table 5

Results of Anti-Image Value of Research Instruments

Anti-Image value

Number

Social Media Marketing Efforts

Brand

Equity

Customer Response

1

0.848

0.516

0.684

2

0.723

0.528

0.834

3

0.831

0.688

0.644

4

0.726

0.773

0.799

5

0.929

0.618

0.696

6

0.871

0.707

0.651

7

0.846

0.754

0.757

Anti-Image value

Number

Social Media Marketing Efforts

Brand

Equity

Customer Response

8

0.799

0.885

0.549

9

0.800

0.623

0.546

10

0.907

0.793

0.766

11

0.744

0.763

0.733

12

0.816

0.772

 

 

13

0.870

 

14

0.746

Source: SPSS Processed Results (2019)

           

Based on the results of testing the Kaiser-Meyer-Olkin Measure of Sampling Adequacy values ​​and the Anti-Image values ​​of all the statement instruments of the three research variables, it was obtained that the Kaiser-Meyer-Olkin Measure of Sampling Adequacy and Anti-Image values ​​were > 0.5. So that all statement instruments in this study were declared valid.

 

2.  Reliability Test

Reliability testing was carried out at the same three outlets in this study, namely: Hermes, Focal Point and Manhattan with a total of 30 respondents outside the study sample. The following are the results of testing the reliability of the statement instrument in this study:

 

Table 6

Research Instrument Reliability Test Results

Score Cronbach Alpha

Number

Social Media Marketing Efforts

Brand Equity

Customer Response

1

0.948

0.866

0.866

Source: SPSS Processed Results (2019)

 

Based on the reliability test of the statement instrument above, it was found that the Cronbach alpha value was > 0.6. so that it can be concluded that all statements are declared reproducible or meet the assumptions of reliability.

 

 

E.   Data analysis method

Data analysis was carried out to ensure that the data obtained was as needed. The analysis of this research was carried out using the statistical application program SPSS (Statistical Package for The Social Science) version 21 to test the validity and reliability of the questionnaire and Smart-PLS version 3.0 to analyze the research data.

1.  Descriptive Analysis

Descriptive analysis serves to describe or give an overview of the object under study through sample or population data as it is, without conducting analysis and making general conclusions (Sugiyono, 2013). In this study, descriptive analysis will be obtained from processing the results of the questionnaires that have been distributed to respondents.

2.    Path Analysis

In this study, path analysis was used to determine the direct and indirect effects of Social Media Marketing Effort (variable X) and on Brand Equity (variable Y) and its impact on Customer Response (variable Z). Malhotra (2010) describes the path analysis steps to be used in this study, as follows:

a)   Develop a causality relationship model between variables which in this case is called a path diagram.

Figure 1. Path Diagram Study

 

b)   Conversion of path diagrams into structural equations

1)   Y = Pix +ɛ1

Information:

Y = Brand Equity

Pyx = Path coefficient for the direct effect of X on Y

ɛ1 = Path coefficient for the influence of other variables outside the ε1 model on Y

2)   Z = Pzx + Pzy +ɛ2

Information:

Z = Customer Response

Pzx = Path coefficient for the direct effect of X on Z

P zy = Path coefficient for the direct effect of Y on Z

ɛ2 = Path coefficient for the influence of other variables outside the ε2 model on Z

c)   Check path analysis assumptions

1)  The relationship between variables in the model is linear and adaptive

2)  All errors (residuals) are assumed to be uncorrelated with the others

3)  Observed variables measured without error (valid & reliable)

4)  The model is only in the form of recursive or unidirectional causal flow

5)  The variables are measured by an interval scale

d)  Calculates the path coefficient through the coefficient of determination

e)   Model Testing

The hypothesis test carried out is as follows:

1)  Test the significance of the effect of each independent variable on the intervening variable.

2)  Test the significance of the effect of the intervening variable on the dependent variable. The hypothesis will be accepted or rejected when:

                  i.     t count > t table then the hypothesis is accepted

                 ii.     t count ≤ t table then the hypothesis is rejected

 

RESULTS AND DISCUSSION

A.  Descriptive Analysis of Research Respondents' Answers

Descriptive analysis serves to see an overview of the results of research on Social Media Marketing Effort, Brand Equity and Customer Response. With a sample of 185 people. To see the answers and provide conclusions about the answers to the questionnaire, a descriptive test was carried out using the frequency and percentage distribution approach.

1.  Descriptive Analysis of Social Media Marketing Efforts

The general description of Social Media Marketing Efforts at the three Starbucks District 33 Medan outlets (Hermes, Focal Point and Manhattan) has five dimensions, namely Entertainment, Interaction, Trendiness, Customazation, and WOM. Based on the results of data processing sourced from respondents, an overview of Social Media Marketing Efforts was obtained at three Starbucks District 33 Medan outlets (Hermes, Focal Point and Manhattan) as follows:


 

Table 7

Description of Social Media Marketing Efforts

Social Media Marketing Effort Variable Dimensions

Answer

Actual Score

Ideal Score

Percentage

5

4

3

2

1

Entertainment

555

1184

324

68

6

1582

2775

57.0%

interactions

445

1148

420

60

9

2082

2775

75.0%

trendy

660

1248

228

58

6

2200

2775

79.3%

Customization

110

788

342

58

8

1306

1850

70.6%

WOM

505

1264

306

30

6

2141

2775

77.2%

9311

12950

71.90%

Source: Primary Data, Processed by Statistics (2019)

 


Based on Table 7 regarding the description of Social Media Marketing Efforts, information is obtained that the percentage level of Social Media Marketing Efforts is relatively high, namely 70.84%. This indicates that the implementation of the Social Media Marketing Efforts policy has been accepted by customers at three Starbucks outlets (Hermes, Focal Point and Manhattan). products sold at three Starbucks outlets (Hermes, Focal Point and Manhattan). These results are also consistent with the results of interviews with three PIC Stores Hermes, Focal Point and Manhattan, where Social Media Marketing Efforts were able to increase the level of customer visits at Starbucks outlets. These results are also supported by the findings from Kim and Ko (2012) which found that Social Media Marketing Efforts can change customer perceptions of the level of prestige of the products offered by companies to their customers.

          The dimension with the highest percentage level is dimension trendy which reached 79.3%, where the indicator that made the biggest contribution was the Starbucks Indonesia Social Media indicator presenting the latest product promos. The high dimension of trendiness, especially the indicator for presenting the latest product promotions, is a manifestation or realization of promotional actions carried out by Starbucks Indonesia Management to quickly inform and offer the latest products and this has received a positive response from customers through purchasing actions at Hermes outlets, Focal Points and Manhattan.

The dimension that is in second place is the word of mouth dimension which reaches a percentage of 77.2% where the indicator that gives the biggest contribution is the indicator related to re-sharing information about products or promotions from Starbucks Indonesia. Based on the results of interviews between researchers and research respondents, it was found that around 60% of respondents re-shared product or promotion information either by private chat or direct messages to colleagues or colleagues, to publishing information using features available on social media such as features insta-stories on Starbucks social media. The actions taken by these respondents are a manifestation of the pride of customers in knowing the latest information from Starbucks Indonesia and sharing or sharing it with others.

The dimension that is in the third rank is dimension interactions which reached a percentage of 75%. The indicator that made the biggest contribution was the indicator that respondents could share information on Starbucks Indonesia Official social media. Based on the results of the researcher's direct observation of Starbucks Indonesia Official social media, information was obtained that each follower can directly interact with other followers and can also interact directly with the Starbucks Indonesia Official social media admin. The interactions that occur show that Starbucks Indonesia Official social media has been able to become a forum for communication related to products, promotions and other aspects, as well as with the interaction it will make it easier for Starbucks Indonesia management to find out the response of customers or followers to new products launched by management and promotions implemented by management. Based on these results, Starbucks Indonesia Management has been able to create communication patterns between customers and Starbucks products, customers with Starbucks customers and customers with the Starbucks Indonesia Official social media admin (Gallaugher & Ransbotham, 2010; Kaplan & Haenlein, 2010).

The dimensions that are ranked fourth are dimensions customization, where this dimension has a percentage level of 70.6%. The indicators that make the biggest contribution to this dimension are indicators related to the availability of customer care on Starbucks Indonesia Official social media which can make it easier for customers or followers to get information. The results of researchers' observations of Starbucks Indonesia Official social media obtained information that customer care is available either directly through social media or through a hotline provided by Starbucks Indonesia management.

The dimension with the lowest percentage level is the dimension entertainment with a percentage of 57%, the indicator with the lowest contribution rate is an indicator related to social media content, Starbucks Indonesia Official displays content about customer response and the display of Starbucks Indonesia Official social media is attractive to followers. Based on these findings, it can be concluded that the management of Starbucks Indonesia still has to create content that is more attractive to customers or followers. Where according to the findings of (Kaye, 2007; Muntinga et al., 2011; Park et al., 2009) who found that innovative and creative content will stimulate every follower or customer to take action from buying to make recommendations to others.

As one of the pioneers who use social media as a marketing platform, Starbucks Indonesia must pay close attention to every aspect of the Social Media Marketing Efforts where based on the results of the answers from the respondents listed in the distribution of answers, it can be concluded that there are still shortcomings in Starbucks Management, especially the Marketing section in creating content. which attracts followers or customers to visit outlets, buy products and inform others about products, promos and services obtained at Starbucks outlets, especially at Hermes outlets, Focal Point and Manhattan.

Meanwhile, based on the results of the researcher's interview with the 3 (three) PIC Hermes, Focal Point and Manhattan outlets. Information was obtained that one Starbucks outlet at one location was a competitor of Starbucks outlets at another location. Whereas each region or district does not have the authority to carry out Social Media Marketing Efforts activities that are different and in accordance with the needs of each outlet, especially at outlets with relatively lower levels of visits and sales such as: Hermes, Focal Point, and Manhattan due to the implementation policy Social Media Marketing Efforts are centralized and concurrent.

Starbucks management must carry out effective and proportionate Social Media Marketing Efforts activities that can help increase sales from each Starbucks outlet, especially Hermes, Focal Point and Manhattan outlets. Where based on the findings of Kelly et.al (2010) the results obtained were that implementation of Social media marketing efforts will assist companies in creating closer communication patterns with consumers and create opportunities to gain a wider market share.

2.  Brand Equity Descriptive Analysis

The general description of Brand Equity at the three Starbucks District 33 Medan outlets (Hermes, Focal Point and Manhattan) has four dimensions, namely brand awareness, perceived quality, brand associations, and brand loyalty. Based on the results of data processing sourced from respondents, the Brand Equity description at the three Starbucks District 33 Medan outlets (Hermes, Focal Point and Manhattan) is obtained as follows:


 

Table 8

Description of Brand Equity

Brand Equity Variable Dimensions

Answer

Actual Score

Ideal Score

Percentage

5

4

3

2

1

Brand Awareness

605

1272

285

30

6

2198

2775

79.2%

Perceived Quality

965

1632

381

20

2

3000

3700

81.1%

Brand Association

1330

672

123

10

4

2139

2775

77.1%

Brand Loyalty

325

876

213

18

6

1438

1850

77.7%

Total

8775

11100

79.05%

Source: Primary Data, Processed by Statistics (2019)

 


   Based on Table 8 regarding the description of brand equity variables at Starbucks outlets (Hermes, Focal Point and Manhattan) information is obtained that the dimension with the highest percentage level is the dimension of perceived quality with a percentage level of 81.1%. The indicators that make the biggest contribution are indicators related to the services provided by baristas or partners who work at Starbucks Hermes, Focal Point and Manhattan outlets to customers. Besides that, respondents also gave a positive response to the quality of products (food and beverages) sold and the products sold met the expectations of customers or research respondents. These results indicate that the barista or partner has been able to provide excellent service to all customers and provide convenience for customers to do activities and buy every product at Hermes, Focal Point and Manhattan outlets, which is in line with Starbucks Indonesia's tagline, namely "your third place between home and work” or in Indonesian, namely “a third place besides home and workplace/ office”.

The dimensions that are in the second rank are dimensions. Brand Awareness with a percentage rate of 79.2%. The indicators that make the biggest contribution are indicators related to the sensitivity of customers or respondents to Starbucks products. In addition, based on interviews with several regular customers or research respondents, information was obtained that the products sold at Starbucks outlets have very significant differences from other products that make it easier for customers to identify or recognize Starbucks products, which include: the quality of food and beverages is maintained, product variations are not found in competitors' places and the taste of food and drinks that are much different from food or drinks sold in other coffee shops, packaging that displays the Starbucks logo and specifically for merchandise that is not sold in other coffee shops.

Some argue that Starbucks products have become "generic" products (food and beverages) at a premium price with the best quality. Besides that, based on direct observations of researchers, it was found that there had been a transformation carried out by Starbucks International Management, especially Starbucks Indonesia, where previously Stabucks focused on selling processed coffee products but in recent years have been selling various processed drinks or commonly called frapuchino. This result is also the realization of the change in the Starbucks logo which removes the word coffee from the Starbucks logo. Meanwhile, based on direct observations made by researchers at Hermes, Focal Point and Manhattan outlets, it was found that 60% of purchases made by customers were purchases for processed drinks other than coffee. So with these results it can be concluded that Starbucks Indonesia has been able to carry out a good transformation, but Starbucks Indonesia also still has to maintain its identity as a coffee shop and customers who really like Starbucks processed coffee drinks. Based on these findings, it can be concluded that customers or respondents tend to buy Starbucks products because they are safe and comfortable with every product offered (Godey et al., 2016).

The third ranked dimension is the brand loyalty dimension with a percentage level of 77.7%. The indicator that gives the highest contribution is the indicator related to the desire to find the nearest Starbucks outlet. Based on the results of direct observations and interviews with the PIC of Starbucks Hermes, Focal Point and Manhattan outlets, it was found that there were differences between these outlets related to the proportion of numbers, where the number of regular customers at Manhattan outlets was less than that of Focal Point and Hermes outlets. This can happen due to the location of the Manhattan outlet which is relatively far away and access to the Manhattan outlet which is still considered difficult. Another result found by researchers is that the reason for the majority of regular customers deciding to buy Starbucks products at Hermes and Focal Point outlets is location and easy access and proximity to the barista. Meanwhile, based on interviews with several respondents and customers, information was obtained that the main reason they were loyal to Starbucks was the quality of Starbucks products and the global brand. These results are in line with the opinion of Aaker (2014) which states that customer loyalty to a brand will be created if the company is able to provide maximum satisfaction to all of its customers.

The fourth dimension is brand association with a percentage level of 77.1%. The indicators that make the biggest contribution are indicators related to the atmosphere of the store that provides comfort. The results of direct observation of Hermes, Focal Point and Manhattan outlets showed that all of these outlets had the same theme starting from: store outline, product display, and lighting, in which this was to create the same comfort felt by customers for every outlet they visited.

 

3.  Customer Response Descriptive Analysis

The general description of Customer Response at the three Starbucks District 33 Medan outlets (Hermes, Focal Point and Manhattan) has three dimensions, namely: brand preference, pay premium price and customer loyalty. Based on the results of data processing sourced from respondents, the Customer Response description at the three Starbucks District 33 Medan outlets (Hermes, Focal Point and Manhattan) is obtained as follows:


 

Table 9

Description of Customer Response

Dimensions of Customer Response Variables

Answer

Actual Score

Ideal Score

Percentage

5

4

3

2

1

Brand Preferences

540

820

138

38

4

2158

2775

77.8%

Pay Premium Prices

480

820

138

38

4

1480

1850

80.0%

Customer Loyalty

1125

2556

567

82

16

4346

5550

78.3%

Total

7984

10175

78.47%

Source: Primary Data, Processed by Statistics (2019)

 


Based on Table 9 regarding the description of the customer response variable, the result is that the dimension with the highest percentage level is pay premium price with a percentage level of 80%. The indicators that make the biggest contribution are indicators related to actions that continue to buy Starbucks products even though the price rises. These results indicate a high level of loyalty from customers or research respondents to Starbucks Indonesia and its products. The results of interviews with regular customers show that the majority of regular customers do not mind if there is an increase, provided that the quality of service and products must also be improved. As for the researcher's interview with three Hermes PICs, Focal Point and Manhattan received information that there had been a price increase in mid-2019 of around 5% but this increase did not significantly affect the level of visits at the three outlets. These results are in line with the statements in the research Seo and Park (2018) and Godey et al. (2016)  that customers who continue to buy products when product prices are rising are customers who have a high level of confidence in products and brands.

       Dimensions with the second rank are dimensions customer loyalty with a percentage rate of 78.3%. The indicators that make the biggest contribution are indicators related to buying Starbucks products regularly and recommending them to others. Based on the results of interviews with customers and respondents, information was obtained that there were several customers who routinely or even bought Starbucks products almost every day to support (become a mood booster) their daily activities. In addition, researchers also found that many communities regularly visit Hermes, Focal Point and Manhattan outlets. These results further demonstrate the high level of loyalty held by customers which can have a positive impact on increasing visits and sales at Hermes, Focal Point and Manhattan outlets. These results are in harmony with statements in research Seo and Park (2018) and Godey et al. (2016) that the level of customer loyalty to a product is motivated by experience in using products from certain brands.

       The dimensions that are ranked third are dimensions brand preferences with a percentage of 77.8%. The indicators that give the highest contribution are indicators related to making Starbucks products the first choice. These results further emphasize that the loyalty level of Starbucks customers is quite high and will have a positive impact on the level of visits at Hermes, Focal Point and Manhattan. These results are consistent with the findings of Truong et al. (2010), namely: Brand Preferences usually can be assessed from the level of customer interest in a brand and the customer's ability to recognize product specifications from brand of choice.

B.  Partial Least Square (PLS) Model Scheme

In this study, hypothesis testing used the Partial Least Square (PLS) analysis technique with the smartPLS 3.0 program. The following is a schematic model of the PLS program being tested:

hasil fix 1.png

Figure 2 Outer Model

Source: Processed Results of Smart PLS 3.0 (2019)

 

hasil fix 2.png

Figure 3. Inner Model

Source: Processed Results of Smart PLS 3.0 (2019)

 

C.  Outer Model Evaluation

1.  Convergent Validity

Testing convergent validity using the value of outer loading or loading factor. An indicator is declared to meet convergent validity in the good category if the outer loading value is > 0.7. The following is the outer loading value of each indicator on the research variables:     

 

 

Table 10

Convergent Validity Test Results with Outer Loading

Variable

Indicator

Outer Loading

Social Media Marketing Effort (X)

x1.1

0.678

x1.2

0.799

x1.3

0.877

x1.4

0.834

x1.5

0.780

x1.6

0.829

x1.7

0.865

x1.8

0.868

x1.9

0.872

x1.10

0.848

x1.11

0.779

x1.12

0.740

x1.13

0.855

x1.14

0867

Brand Equity (Y)

y1.1

0.760

y1.2

0.909

y1.3

0.781

y1.4

0.772

y1.5

0.629

y1.6

0.707

y1.7

0.605

y1.8

0.644

y1.9

0811

y1.10

0.820

y1.11

0.729

y1.12

0.576

Customer Response (Z)

z1.1

0.765

z1.2

0.735

z1.3

0.689

z1.4

0.703

z1.5

0.808

z1.6

0.670

z1.7

0.661

z1.8

0.703

z1.9

0.745

z1.10

0.696

z1.11

0.686

Source: Processed Results of Smart PLS 3.0 (2019)

 

Based on the data presented in Table 10 above, it is known that each of the research variable indicators has an outer loading value of > 0.7. However, it seems that there are still a number of indicators that have an outer loading value <0.7. According to Chin, as quoted by (Ghazali & Latan, 2015), an outer loading value between 0.5 – 0.6 is considered sufficient to meet the requirements of convergent validity. The data above shows that there are no variable indicators whose outer loading values ​​are below 0.5, so that all indicators are declared feasible or valid for research use and can be used for further analysis.

 

2.    Discriminant Validity

In this section, the results of the discriminant validity test will be described. The discriminant validity test uses the cross-loading value. An indicator is declared to meet discriminant validity if the indicator's cross loading value on the variable is the largest compared to other variables. The following is the cross-loading value for each indicator:

 

Table 11

Testing Discriminant Validity with Cross Loading

 

Brand Equity

Customer Response

Social Media Marketing Efforts

Y1.1

0.760

0.438

0.310

Y1.10

0.820

0.521

0.440

Y1.11

0.729

0.336

0.221

Y1.12

0.576

0.602

0.587

Y1.2

0.909

0.573

0.405

Y1.3

0.781

0.381

0.258

Y1.4

0.772

0.426

0.305

Y1.5

0.629

0.428

0.320

Y1.6

0.707

0.493

0.344

Y1.7

0.605

0.515

0.377

 

Brand Equity

Customer Response

Social Media Marketing Efforts

Y1.8

0.644

0.497

0.308

Y1.9

0.811

0.471

0.312

Z1.1

0.495

0.765

0.561

Z1.10

0.379

0.696

0.384

Z1.11

0.385

0.686

0.395

Z1.2

0.435

0.735

0.609

Z1.3

0.542

0.689

0.553

Z1.4

0.555

0.703

0.509

Z1.5

0.623

0.808

0.644

Z1.6

0.387

0.670

0.418

Z1.7

0.426

0.661

0.415

Z1.8

0.430

0.703

0.479

Z1.9

0.528

0.745

0.715

x1.1

0.244

0.405

0.678

x1.10

0.483

0.645

0.848

x1.11

0.327

0.524

0.779

x1.12

0.299

0.459

0.740

x1.13

0.403

0.660

0.855

x1.14

0.458

0.719

0.867

x1.2

0.410

0.576

0.799

x1.3

0.482

0.674

0.877

x1.4

0.407

0.560

0.834

x1.5

0.358

0.533

0.780

x1.6

0.475

0.614

0.829

x1.7

0.463

0.660

0.865

x1.8

0.477

0.694

0.868

x1.9

0.413

0.695

0.872

Source: Processed Results of Smart PLS 3.0 (2019)

 

Based on the data presented in Table 11 above, it can be seen that each indicator on the research variable has the largest cross loading value on the variable it forms compared to the cross loading value on other variables. Based on the results obtained, it can be stated that the indicators used in this study have good discriminant validity in compiling their respective variables. In addition to observing the cross loading value, discriminant validity can also be known through other methods, namely by looking at the average variant extracted (AVE) value for each indicator, it is required that the value must be > 0.5 for a good model

 

Table 12

Average Variant Extracted (AVE) Test

Variable

AVE

Social Media Marketing Efforts

0.677

BrandEquity

0.540

Customer Response

0.512

Source: Processed Results of Smart PLS 3.0 (2019)

 

Based on the data presented in Table 12 above, it is known that the AVE value of the Social Media Marketing Efforts, Brand Equity and Customer Response variables is > 0.5. Thus, it can be stated that each variable has good discriminant validity.

3.  Composite Reliability

Composite Reliabilityis the part that is used to test the value of the reliability of indicators on a variable. A variable can be declared to meet composite reliability if it has a composite reliability value of > 0.6 (Ghazali & Latan, 2015). The following is the composite reliability value of each variable used in this study:

 

 

 

 

 

Table 13

Composite Reliability Testing

Variable

Composite Reliability

Social Media Marketing Efforts

0967

Brand Equity

0.933

Customer Response

0.920

Source: Processed Results of Smart PLS 3.0 (2019)

 

       Based on the data presented in Table 12 above, it can be seen that the composite reliability value of all research variables is > 0.6. These results indicate that each variable meets composite reliability so that it can be concluded that all variables have a high level of reliability.

 

4.  Cronbach Alpha

The reliability test with the composite reliability above can be strengthened by using the Cronbach alpha value. A variable can be declared reliable or meets cronbach alpha if it has a cronbach alpha value > 0.7 (Ghazali & Latan, 2015). The following is the Cronbach alpha value of each variable:

 

Table 13

Cronbach Alpha Testing

Variable

Cronbach Alpha

Social Media Marketing Efforts

0.963

Brand Equity

0921

Customer Response

0.905

Source: Processed Results of Smart PLS 3.0 (2019)

 

Based on the data presented above in Table 13, it can be seen that the Cronbach alpha value of each research variable is > 0.7. Thus, these results can indicate that each research variable has met the requirements for the Cronbach alpha value, so it can be concluded that all variables have a high level of reliability.

 

 

 

D.  Evaluation of Inner Model

In this study the evaluation of the inner model will be explained regarding the results of the path coefficient test, goodness of fit test and hypothesis testing.

1.  Test Path Coefficient   

Based on the inner model image in Figure 2 it can be explained that the largest path coefficient value is indicated by the influence of the Social Media Marketing Efforts variable on Customer Response of 9,231, then in the second rank is the effect of Social Media Marketing Efforts on Brand Equity of 7,522 and in the third rank is the influence of Brand Equity to Customer Response of 6,722.

These results indicate that the overall in this model haspath coefficient with a positive number. This shows that the greater the value of the path coefficient on an independent variable on the dependent variable, the stronger the influence between the independent variables on the dependent variable.

 

2.  Goodness of Fit Test

Based on the data processing that has been done using the smartPLS 3.0 program, the R-Square value is obtained as follows:

 

Table 14

R-Square value

Variable

R-Square

Brand Equity

0.254

Customer Response

0.669

Source: Processed Results of Smart PLS 3.0 (2019)

 

Based on the data presented in Table 14 above, it can be seen that the R-Square value for the Brand Equity variable is 0.254. The acquisition of this value explains that the percentage of Brand Equity competence can be explained by Social Media Marketing Efforts of 25.4%. Then for the R-Square value obtained by the Customer Response variable of 0.669. This value explains that Customer Response can be explained by Social Media Marketing Efforts and Brand Equity of 66.9%.

The goodness of fit assessment is known from the Q-Square value. The Q-Square value has the same meaning as the coefficient of determination (R-Square) in the regression analysis, where the higher the Q-Square, the better or more fit the model can be with the data. The results of calculating the Q-Square value are as follows:

Q-Square =       1-[(1-R21) x (1-R22)]

   =      1[(1-0.254) x (1-0.669)]

   =      1 – (0.746 x 0.331)

   =      1-0.25

   =      0.75

Based on the calculation results above, a Q-Square value of 0.75 is obtained. This shows the magnitude of the diversity of the research data that can be explained by the research model is 75%. While the remaining 25% is explained by other factors that are outside this research model. Thus, from these results, this research model can be stated to have good goodness of fit.

 

E.   Hypothesis testing

Based on the data processing that has been done, the results can be used to answer the hypothesis in this study. Hypothesis testing in this study was carried out by looking at the T-Statistics values ​​and P-Values. The research hypothesis can be declared accepted if the P-Values ​​<0.05. The following Table.


 

Table 15

Research Hypothesis Testing

hypothesis

Influence

T-Startistics

P-Values

Results

H1

Social Media Marketing Efforts à Customer Response

9,231

0.000

Accepted

H2

Social Media Marketing Efforts à Brand Equity

7,522

0.000

Accepted

H3

Brand Equity à Customer Response

6,722

0.000

Accepted

H4

Social Media Marketing Efforts à Brand Equity à Customer Response

5,288

0.000

Accepted

Source: Processed Results of Smart PLS 3.0 (2019)

 


Based on the data presented in Table 15, it can be seen that of the three hypotheses proposed in this study, all are acceptable because each effect shown has a P-Values ​​<0.05. So that it can be stated that the independent variable to the dependent has a significant influence and the hypothesis on the intervening model can also be accepted.

 

F.   Discussion

1.  The Effect of Social Media Marketing Efforts on Customer Response

Based on the results of testing the research hypothesis, the results show that the P-Values ​​that form the effect of Social Media Marketing Efforts on Customer Response is 0.000 and the t-statistics value is positive, so it is stated that Social Media Marketing Efforts have a positive and significant influence on Customer Response at Starbucks Hermes, Focal Point and Manhattan outlets. These results are in line with the results of research conducted by (Godey et al., 2016; Kim & Ko, 2012; Seo & Park, 2018) who found that the Social Media Marketing Efforts variable is able to increase the level of Customer Response owned by customers so that they can help the company to expand its market share.

The facts found by researchers at three Starbucks outlets namely: Hermes, Focal Point and Manhattan are quite in accordance with the results of the hypothesis test that Social Media Marketing Efforts plays a role in increasing Customer Response in a number of ways including: (1) an increase in the number of visits when Social Media Marketing Efforts are carried out at promotional activities, especially at Manhattan outlets, and (2) the implementation of Social Media Marketing Efforts is carried out according to a predetermined promotion and product introduction schedule by management besides that it is also adjusted to other promotional schedules such as promotions from Telkomsel providers.

Other facts found by researchers based on direct observations and interviews with respondents and PIC Starbucks Hermes, Focal Point and Manhattan outlets found deficiencies in the implementation of Social Media Marketing Efforts, namely: (1) outlets with relatively low number of visits were not given special authority to be able to implementing Social Media Marketing Efforts specifically for these outlets, (2) the number of increased visits when Social Media Marketing Efforts were carried out was still relatively lower than when promotions were carried out using Telkomsel providers, and (3) the majority of respondents or customers stated that there was a change in promotion (plus the number of requirements ) which is carried out on social media which makes respondents or customers less interested in the promotions being offered­-shareson Starbucks Indonesia Official social media.

The results of these facts make it clear that the implementation of Social Media Marketing Efforts is relatively good and appropriate and able to increase the level of visits, but significant improvements are still needed, especially in creating promotional content that is attractive and in accordance with the wishes of customers. As found by Godey et al. (2016) apart from increasing customer confidence and prestige towards a brand and product, choosing interesting content will help companies to increase the number of sales and enlarge market reach.

2.  The Effect of Social Media Marketing Efforts on Brand Equity

The results of the path coefficient test based on the T-Statistics value show that the influence of Social Media Marketing Efforts on brand equity has the second strongest level of significance, which is equal to 7,522. These results are consistent with the results of research found by (Godey et al., 2016; Kim & Ko, 2012) who found that Social Media Marketing Efforts are an important factor that can increase the level of brand equity in premium fashion products.

These results are in accordance with the facts in the field that were found by researchers through direct observation and interviews with respondents and PICs of Starbucks Hermes, Focal Point and Manhattan outlets, which were found as follows: (1) many respondents or customers post purchasing activities and other activities at a Starbucks store. Where this shows the pride of customers and respondents for Starbucks products and brands, (2) the content displayed on official Starbucks Indonesia social media, especially those related to product introduction, service systems and Susana in each outlet, received a positive response from followers, (3) the appearance of Starbucks Indonesia Official social media which gives an exclusive and premium impression gives the same impression to every customer or respondent, and (4) the majority of customers know about new products other than processed coffee through social media.

This result is also in line with the findings of Seo and Park (2018) who found that implementing Social Media Marketing Efforts will increase the level of brand awareness and brand image of a company. Besides that, based on the results of research from Jain and Kumar (2017) found that the implementation of Social Media Marketing Efforts by Starbucks management not only aims to increase the number of sales but also to create an intimate atmosphere with each follower or customer so that Starbucks brands and products can become the first choice of customers.

3.  The Effect of Brand Equity on Customer Response

The results of the path coefficient test based on the T-Statistics value show that the effect of brand equity on customer response has the third strongest level of significance, namely 6,722. These results are in accordance with the results of research found by (Godey et al., 2016; Seo & Park, 2018) who found that brand equity represented by brand awareness and brand image can increase the level of customer loyalty and is able to encourage customers to take post-purchase actions that make customers as one of the company's marketing agents.

The facts related to the effect of brand equity on customer response were found by researchers through interviews and direct observation of respondents and PICs of Starbucks Hermes, Focal Point and Manhattan outlets, which were found as follows: (1) the majority of customers decide to buy Starbucks products because they really believe in quality, (2) the majority of customers are satisfied with the quality of service provided by partners or baristas at Starbucks Hermes, Focal Point and Manhattan outlets, and (3) there are around 30-35% of customers who visit Hermes and Focal Point outlets are regular customers.

The results of testing the hypothesis and the facts above show that the level of brand equity owned by Starbucks is good enough and is able to encourage increased customer response, especially for regular customers. This result is also in line with the findings obtained by Jain and Kumar (2017) who found that the Starbucks brand is synonymous with the best quality and excellent service which has a direct impact on the level of customer confidence in the Starbucks brand and products.

4.  The Effect of Social Media Marketing Efforts on Customer Response Through Brand Equity

The results of testing the hypothesis and the indirect effect show a positive T-statistics value (5,288) with a P-Values ​​of 0.000. These results indicate that Social Media Marketing Efforts is able to influence customer response through brand equity. These results are consistent with the results of research from (Godey et al., 2016; Seo & Park, 2018) who found that brand equity acts as an intervening variable in the influence of Social Media Marketing Efforts on customer response.

Through the results of this research it is also increasingly clear that the Management of Starbucks Indonesia has made social media the main marketing platform where by using social media, management aims to create a positive impression on customers of Starbucks products and brands and also to increase the number of visits at each Starbucks outlet, especially outlets. with relatively low levels of visits such as Hermes, Focal Point and Manhattan. Besides that, the level of brand equity will also be a determining factor in increasing the number of visits, especially in increasing the number of regular customers, where Starbucks management must also strive to create a positive impression of the brand and products from each customer. The difficulty faced is that there is a stigma that Starbucks products and brands are very premium, which for some circles it becomes a barrier to visiting and buying Starbucks products. So that Management must also be able to create strategies to gain a larger market share without having to lose the characteristics of Starbucks Indonesia itself.

5.  Strategy Analysis

Before carrying out the strategy analysis for the Management of Starbucks Indonesia, especially the Management of Starbucks District 33 Medan, the researchers identified aspects that could be used as references for implementing strategy analysis. The reference for identifying aspects in this study is in accordance with research from Nurmanisa et al. (2016), namely: Value Proportion, Customer Segment, Channels, and customer relationships. The explanation of the findings from these aspects is as follows.

a)   Value Proposition built and offered by Starbucks to customers

Starbucks has succeeded in delivering a value proposition well, so that customers can experience a value proposition that is different and unique from other coffee outlets. However, not all value propositions can be successful. There are 10 elements of the Starbucks value proposition derived from interviews with PIC Starbucks Hermes, Focal Point and Manhattan in this study. The 10 value proposition elements contained in Starbucks coffee products and services are new characteristics, performance, customization, getting the job done, design, brand/status, price, cost reduction, risk reduction, ability to access and convenience and usability. The results of the interviews show that, there are only eight elements of the Starbucks value proposition that are expressed as satisfied by consumers. Starbucks should improve in-store facilities. So that all value propositions can be conveyed to customers properly.

b)   Customer Segments in Starbucks District 33 Medan

Customer segment in Starbucks Management is aiming for the right target, starting from a geographical perspective, namely Starbucks has one goal, namely we want consumers to feel "Our stores are a neighborhood gathering place for meeting friends and family". This has influenced the choice of location for Starbucks to segment customers based on the type of community. Starting from a community of office people, college kids, apartment dwellers and premium malls. The demographic aspect is market segmentation which is divided into several groups based on variables such as age, gender, occupation, income, education, religion, race, nationality, and social class. Psychographic aspects of customers are divided into several groups based on lifestyle, personality and values. The Starbucks segment is one that is happy with well-known brands and premium prices. Starbucks customer are urban upper middle class consumers, working adults, young executives who have a habit of spending their time in coffee shops. And the behavioral aspects of market segmentation are behavioral, namely customers will be divided into several groups based on knowledge, ethics, benefits or responses to these products. All aspects are calculated very carefully and carefully. If market segmentation is in accordance with mature planning, then the results will also appear to have a major influence on the company's performance which is always increasing. Starbucks has a global customer market, so no special adjustments are needed in selecting market segments. Starbucks performs customer segmentation based on the type of premium community. By choosing the right market segmentation, it will influence the formation of a value proposition, namely treating our partners with respect & dignity.

c)   Channels in Starbucks District 33 Medan

Starbucks District 33 has direct channels or directly through outlets selling products owned by Starbucks. Channels used by Starbucks in reaching the right customers. Evidenced by interviews conducted by researchers with customers or respondents where the majority of customers feel satisfied while in the outlet. Besides that, the aim is to distribute a value proposition, which can provide a different atmosphere from other coffee outlets. So as to generate customer satisfaction and form a value proposition, namely the Starbucks experience that can be felt by every customer

d)   Customer Relationship in Starbucks District 33 Medan

According to the three PICs of Starbucks Hermes, Focal Point and Manhattan outlets, as many as 60% of customers at these outlets use Starbucks cards. Automatically by having a Starbucks card account, the company can provide periodic emails and notifications to customers. Starbucks also always tries to give its best by providing warranty services. If the order is not as expected, both in terms of product, service and facilities, Starbucks will replace the product or give a free voucher. In order to create good customer and company relationships, Starbucks has social media accounts and blogs for the Starbucks coffee customer community to share experiences and ideas. Then partners (the term for baristas who work at Starbucks) must be able to create effective communication with customers and with other partners, so that every customer who comes to Starbucks can feel the atmosphere of a third home, which is called the third place. after their own homes and offices, and the above will form a value proposition where the third destination belongs to Starbucks.

Based on this identification, the researchers formulated an analysis related to the Starbucks Management strategy for the Implementation of Social Media Marketing Efforts, increasing Brand Equity which has an impact on increasing customer response. The theory used to provide strategic suggestions that can be implemented by Starbucks Indonesia Management, especially in district 33 Medan (Hermes, Focal Point and Manhattan) is the theory of Aaker (2014) which includes: increased brand awareness, improved reputation, increased relationship, brand development, and increase purchase intention.

 

CONCLUSION

Based on testing the first hypothesis of the study, it was found that the Social Media Marketing Efforts variable had a positive and significant influence on the Customer Response variable. These results are also supported by findings indicating that there is an increase in the number of visits when Social Media Marketing Efforts are carried out at promotional activities, especially at Manhattan outlets and the implementation of Social Media Marketing Efforts is carried out according to the promotion and product introduction schedule set by management, besides that it is also adjusted to other promotional schedules such as promotions from Telkomsel providers.

Based on testing the second hypothesis, the results show that the Social Media Marketing Efforts variable has a positive and significant effect on the Brand Equity variable, where these results are also supported by findings indicating that many respondents post purchasing activities and other activities at Starbucks outlets. Where this shows the pride of respondents towards Starbucks products and brands, the content displayed on Starbucks Indonesia Official social media is also related to product introduction, service systems and the atmosphere at each outlet which gets a positive response from followers and Starbucks Indonesia Official social media display which giving an exclusive and premium impression gives the same impression to every customer or respondent.

Based on the third hypothesis testing, the results show that the brand equity variable has a positive and significant influence on customer response. These results are supported by findings showing that the majority of customers decide to buy Starbucks products because they are very confident in their quality, the majority of customers are satisfied with the quality of service provided by partners or baristas at Starbucks Hermes, Focal Point and Manhattan outlets, and there are around 30-35% customers who visit Hermes and Focal Point outlets are regular customers.

Based on the fourth hypothesis testing, the results show that the Social Media Marketing Efforts variable can affect the Customer Response variable through the Brand Equity variable in a positive and significant way. Based on the identification of Starbucks Management in District 33 Medan (Hermes Store, Manhattan and Focal Point) it was found that the Value Proportion, Customer Segment, Channels, and Customer Relationships were still quite good and in accordance with the provisions set by the Management of Starbucks Indonesia. The analysis and evaluation of the strategy implemented using a series of analyzes, namely: increased brand awareness, improved reputation, increased relationship, brand development, and increase purchase intention.

 

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