the effect of brand trust and brand image on brand equity with ...

THE EFFECT OF BRAND TRUST AND BRAND IMAGE

ON BRAND EQUITY WITH BRAND LOYALTY AS AN

INTERVENING VARIABLE ON LE MINERALE

Submitted as a Partial Fulfillment of the Requirement for Obtaining a Bachelor

of Management at the Faculty of Economics and Business

By:

AHMAD ZAKI MUBARROK M

B104173004

MANAGEMENT DOUBLE DEGREE

FACULTY ECONOMIC AND BUSINESS OF

UNIVERSITY OF MUHAMMADIYAH SURAKARTA

2022

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THE EFFECT OF BRAND TRUST AND BRAND IMAGE

ON BRAND EQUITY WITH BRAND LOYALTY AS AN

INTERVENING VARIABLE ON LE MINERALE

Abstrak

Penelitian ini bertujuan untuk mengetahui sejauh mana merek (brand) Le minerale

dapat mempengaruhi segala ketertarikan konsumen terhadap merek Le minerale.

Merek merupakan ujung tombak perusahaan, walaupun harus didukung pula oleh

kualitas produk dan kualitas manajemen tetapi merek adalah cerminan dari keseluruhan

kualitas didalam perusahaan tersebut. Selama ini umumnya pemilihan kriteria brand

masih pada tataran teknis. Beberapa kriteria tersebut yaitu: pertama memorability atau

mudah diingat, kedua memiliki arti yang menyenangkan, menarik, credible, sugestif,

kaya imajinasi; ketiga protectability atau dilindungi undang-undang. Penelitian ini

menggunakan metode kuantitatif. Data dikumpulkan dengan teknik kuesioner .Teknik

pengambilan sampel menggunakan purposive sampling. Responden untuk penelitian

ini adalah konsumen Le minerale dengan jumlah responden sebanyak 151 orang.

Metode kuantitatif dengan menggunakan Structural Equation Modeling (SEM) dengan

software SmartPLS 3.0. Hasil analisis data menunjukkan bahwa Brand Image

berpengaruh positif dan signifikan terhadap Brand Equity, selanjutnya Brand Trust

berpengaruh positif dan signifikan terhadap Brand Loyalty.

Kata kunci: Brand Image, Brand Trust, Brand Loyalty, dan Brand Equity

Abstract

This research aims to find out the extent to which the Le Minere brand (brand) can

influence all consumer interest in the Le Minere brand. Brands are the cutting edge of

the company; although they must be supported by the product quality and management

quality, the brand is a reflection of the overall quality of the company's deep. During

this time, generally, the selection of brand criteria is still at a technical level. Some of

these criteria are: first memorability or easy to remember, second has a pleasant,

interesting, credible, suggestive, rich imagination meaning; third protectability or

protected by law.This research uses quantitative methods. Data is collected by

technique questionnaire. The sampling technique uses purposive sampling.

Respondents for this study were Le Minerale consumers with 151 respondents.

Quantitative method using Structural Equation Modeling (SEM) with SmartPLS 3.0

software. The results of the data analysis show that Brand Image has a positive and

significant effect on Brand Equity, henceforth Brand Trust has a positive and

significant effect on Brand Loyalty.

Keyword: Brand Image, Brand Trust, Brand Loyalty, and Brand Equity

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1. INTRODUCTION

In the last ten years the potential market in Indonesia is still wide open, making

entrepreneurs, companies and investors compete to get great advantage in the

Indonesian market. Brands can provide great benefits for producers as well as

consumers. Brands are also able to add value to consumers. The image and belief in

the product that causes consumers to want to be associated and pleasant, so that

consumers do not hesitate to pay expensive to get a product with a certain brand.

Consumers pay higher for a product because of the attachment of a brand which is a

guarantee of the consistency of certain qualities and values that are believed to be

believed in it, without a brand, consumers feel less secure from bad possibilities beyond

expectations (Sundjoto and Hadi, 2012).

Brand image is a consumer belief in the goods to be purchased. Brand image is

the perception and trust that customers hold on specific products (Rubio et al., 2013).

Most people buy products because of a good image in society, so they will be closer to

the consumer choice. Therefore, a good brand image should be introduced to

consumers constantly to form congenital memories (Lau & Phau, 2007). Brand

impressions appearing in consumer memory are increasing along with increasing

numbers of consumers to feel the brand (Rubio et al., 2013). Also, when brand

associations are closely linked, the image of the seal formed will also be stronger (Lau

& Phau, 2007).

While, according to Sari and Widowati (2014) brand trust is consumer

willingness to believe in the brand at all costs because there is hope in their minds that

the brand will give positive results to the consumer and will lead to their loyalty.

Consumer trust in the brand is essential for companies to be able to build good relations

with the consumer and maintain consumer trust. In order for consumers to repurchase

products from companies, companies must properly introduce their products to build

brand trust in the consumer.

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Brand loyalty is a very important concept in marketing strategy. The existence

of consumers who are loyal to the brand is very necessary for the company to survive.

Loyalty can be interpreted as a commitment initiative to make repeated purchases of

products or services that become their preferences consistently. Consumers will remain

loyal even though there are external influences from the industry, such as various

variations of marketing strategies that can lead to brand switching behaviour. Brand

loyalty indicates the existence of a bond between the customer and a particular brand,

and this is often marked by repeat purchases from customers. A strong relationship

between a customer and a brand maintains not only future business relationships but

also enhances other beneficial values such as initiatives to recommend and contribute

to the company's positive reputation (Kotler & Keller, 2016).

Brand equity add value given to the products and services (Rubio et al., 2013).

Rangkuti (2014), suggested that the concept of brand equity consists of brand

awareness, perceived quality, brand association, and brand loyalty. While the purchase

decision is the stage where consumers form an intention to buy the most preferred

product, where the consumer's decision to modify, delay, or avoid is strongly

influenced by the perceived purchase risk (Kotler & Keller, 2016).

Based on Nofriyanti, (2017) The results show that there is a significant

influence between brand trust on brand equity, brand image on brand equity, brand

trust on brand loyalty, brand image on brand loyalty, and brand loyalty on brand equity.

and research is strengthened again by Andrologi, (2014) where brand image and brand

awareness are significant to brand loyalty, then brand loyalty is accepted as a media

intervention in mediating Brand Image and Brand Awareness towards Brand Equity.

This is different from the research of Fitriani & Achmad, (2014) which showed that

brand loyalty had no effect on brand image on brand loyalty, and brand loyalty on brand

equity and this was also supported by research by Mujani, (2020) showing that brand

equity had no effect on loyalty. consumer. brand loyalty has an influence on consumer

loyalty.

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To achieve this goal, what must be achieved is an image, consumer-brand trust,

brand loyalty and brand equity which is expected to influence consumer decisions to

buy products from the brand in question. Loyalty is a measure of the likelihood that

customers will switch to other brands. Because consumers have trusted the brand so

that the brand has an image in the eyes of consumers, which ensures that customers do

not switch to other brands because customers have found equity in the product, even if

competitors charge a lower price. Lower or of better quality.

The benefits that come when customers have strong loyalty are cost savings

because retaining existing customers is much cheaper than new customers. Loyalty

customers also get a dominant space or place in the store because retailers see brands

with high loyalty, so customers will always look for high loyalty. Every company must

strive to produce the product that consumers want with a good image and packaging.

Thus, any company must be able to understand consumer behaviour, especially those

who want practicality to use something they need, because the company's survival as

an organization that seeks to meet the needs and desires of the consumer, can develop

appropriate strategies and programs to harness existing opportunities and excel the

consumer.

Consumer trust in brands is another important factor that can build loyalty

(Aydin et al, 2015). Trust involves a person's willingness to behave in a certain way

because he believes that his partner in the transaction will give him what he expects.

This shows that if one party trusts the other party, it is possible to form positive

behavior and good intentions. Brand trust is the brand's ability to be trusted brand

reliability, which is based on band trust in recent studies has been recognized as a key

variable in long-term relationships with customers, which in turn positively affects

brand loyalty (Tan et al, 2011), Brand trust leads to higher levels of loyalty as trust

creates exchange relationships that are highly valued).

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2. METHOD

2.1 Research design and variables

This study uses a quantitative approach method. Quantitative research is a research

method based on the philosophy of positivism, used to examine a particular population

or sample, collecting data using statistical data research instruments with the aim of

testing the applied hypothesis. This type of research is a causal study that explains

cause-and-effect relationships (Sugiyono, 2016). The variable used by the researcher

in this study is the independent variable, intervening variable, and dependent variable.

The independent variable is Brand Trust (X1) and Brand Image (X2), the intervening

variable is Brand Loyalty (Z), and the dependent variable is Brand Equity (Y).

2.2 Data and data sources

The data used in this study is primary data, where data is obtained through

questionnaires. Primary data using data sources received directly from informants

(Sugiyono, 2016). Primary data is data collected from the object of research and gained

from respondents' answers through questionnaires. In this study, the research

questionnaire distribution is done online or through Google form.

2.3 Sampling design

The method of data collection in this study was distributed by using a Google form

questionnaire. This study provides a questionnaire directly to the Le minerale

consumers. According to Siyoto, S. & Sodik., (2015) the questionnaire is a method of

sampling from a population that enables analysis of the attitudes, beliefs, behaviors,

and characteristics of several people in the organization who can be affected by the

existing system. a questionnaire is a method of sampling from a population that enables

analysis of the attitudes, beliefs, behaviors, and characteristics of several people in the

organization who can be affected by the existing system.

Respondents respond to the questionnaire by determining the level of approval

on a statement item from the questionnaire by choosing one of the available scales.

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2.4 Data analysis methods

This study uses the Structural Equation Modeling (SEM) technique. This research uses

SEM (Structural Equation Modeling) PLS (Partial Least Square) technique with

mediating effect using SmartPLS software. This analytical technique is a combination

of two methodological disciplines, namely the econometric perspective, which focuses

on predictions, and psychometrics which can describe the concept of a model with

latent variables (variables that cannot be measured directly) but measured through its

indicators (manifest variables). SEM essentially offers the ability to perform path

analysis with latent variables (Ghozali, 2014)

3. RESULT AND DISCUSSION

3.1 Outer model analysis

The outer model analysis is carried out to ensure that the measurement used is feasible

to be used as a measurement (valid and reliable).The analysis of this model specifies

the relationship between latent variables and their indicators. Analysis of this model

uses validity tests (convergent validity and discriminant validity) and reliability tests

(Cronbach's Alpha and Composite Reliability).

Figure 1. Outer Model

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3.2 Inner model analysis

3.2.1 Coefficient Determination (R2)

The coefficient of determination value (R2) is expected between 0 and 1. The value of

R square below 0.33 – 0.19 is declared to have a weak value, then 0.33 – 0.67 has a

moderate/medium value, while the value of 0.67 and above has a strong value. The

following are the coefficients of determination (R2) values from this study:

Table 1. R Square (R2)

R Square Explanation

Brand Loyalty (Z) 0.616 Moderate/Medium

Brand Equity (Y) 0.562 Moderate/Medium

Based on the table above, R square is used to see the magnitude of the effect of

the brand trust and brand image variables on brand loyalty with a value of 0.616, and

then it can be stated to have a medium/moderate. Then R square is used to see the

magnitude of the effect of the brand trust variable, brand image variable, and the brand

image variable on the brand equity variable with a value of 0.562, so it can be stated to

have a medium/moderate value.

3.2.2 The goodness of Fit (GoF)

The goodness of fit assessment refers to the Q-Square value. Q-Square is used to

measure how well the conversion value is generated by the model as well as the

estimate of its parameter. The value of Q-square > 0 indicates the model has predictive

relevance. The Q-Square quantity is 0 < Q2 < 1.

The Q square calculation shows a value of 0.831 or 83.1%, which meets the Q

square range with a range of 0 < Q2< 1.This means that the diversity of models shown

by independent variables in describing dependent variables is 83.1% and the remaining

16.9% is still influenced by other factors. In other words, calculations indicate that the

research model has predictive relevance.

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3.3 Hypothesis testing

3.3.1 Direct effect

The criteria for this analysis is to look at the path coefficients that show the original

sample values are positive or negative. Then if the probability/significance value (P-

Value) < 0.05 (5%), then it is significant. If the P-Values > 0.05 (5%), then it is rejected.

Table 2. Direct Effect

Hypothesis Original

Sample P-Value Conclusion

Brand Image → Brand

Equity 0.414 0.000

Positive,

Significant

Brand Image → Brand

Loyalty 0.102 0.413

Positive,

Insignificant

Brand Loyalty → Brand

Equity 0.181 0.082

Positive,

Insignificant

Brand Trust → Brand

Equity 0.216 0.148

Positive,

Insignificant

Brand Trust → Brand

Loyalty 0.699 0.000

Positive,

Significant

Based on the table above, the original sample value and P-value directly

influence variables. The analysis results show the influence of Brand Image on Brand

equity with an original sample value of 0.414 and a P value of 0.000> 0.05, which is

stated to have a positive and significant influence. Then H1: Brand Image has a

significant impact on Brand Equity is accepted. In contrast, H0: Brand Image has no

significant effect on Brand Equity is rejected.

The analysis results show the influence of Brand Image on Brand Loyalty with

an original sample value of 0.102 and a P value of 0.413> 0.05, which is stated to have

a positive and significant influence. Then H3: Brand Image has a significant impact on

Brand Loyalty is rejected. In contrast, H0: Brand Image has no significant effect on

Brand Loyalty accepted.

The analysis results show the influence of brand loyalty on brand equity with

an original sample value of 0.181 and a P value of 0.082> 0.05, which is stated to have

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a positive and significant influence. Then H5: Brand loyalty has a significant impact

on brand equity is rejected. In contrast, H0: brand loyalty has no significant effect on

brand equity accepted.

The analysis results show the influence of brand trust on brand equity with an

original sample value of 0.216 and a P value of 0.148> 0.05, which is stated to have a

positive and not significant effect. Then H2: Brand trust has a significant impact on

brand equity is rejected, while H0: Brand trust has no significant effect on brand equity

accepted.

The analysis results show the influence of brand trust on brand loyalty with an

original sample value of 0.699 and a P value of 0.000> 0.05, which is stated to have a

positive and significant influence. Then H4: Brand trust has a significant impact on

brand loyalty is accepted. In contrast, H0: brand trust has no significant effect on brand

loyalty rejected.

3.3.2 Indirect effect

The criteria for this analysis is to look at the path coefficients that show the original

sample values are positive or negative. Then if the probability/significance value (P-

Value) < 0.05 (5%), then it is significant. If the P-Values > 0.05 (5%), then it is not

significant.

Table 3. Indirect Effect

Hypothesis Original

Sample P-Value Conclusion

Brand Trust → Brand

Loyalty → Brand Equity 0.162 0.113

Positive,

Insignificant

Brand Image →Brand

Loyalty → Brand Equity 0.018 0.521

Negative,

Insignificant

Based on the table above, the analysis of the indirect effect of Brand trust on

Brand equity through Brand loyalty shows the original sample value of 0.162 and P

values of 0.113 > 0.05, which are declared to have a positive and insignificant effect.

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Then H7: Brand Trust has a significant effect on Brand equity mediated by Brand

loyalty is rejected, while H0: Brand trust has no significant effect on Brand equity

mediated by brand loyalty is accepted.

The analysis of the indirect effect of Brand image through brand equity shows

the original sample value of 0.018 and P values of 0.521 > 0.05, which is stated to have

a negative and insignificant effect. Then H6: Brand image has an insignificant effect

on brand equity mediated by brand loyalty is rejected, while H0: brand image has no

significant effect on brand equity mediated by brand loyalty is accepted.

3.4 Research Discussion

The first hypothesis test result shows that the original sample value is 0.414, statistical

t value is 3.799 > t table 1.96 with significance obtained by 0.000 < 0.05 Brand trust

has a positive effect on brand equity. This means that the more trust placed by the

consumer is the image of the equity of the product, and the lower the trust given by the

consumer is the image of an inferior product and does not lead to loyalty. The result

coincides with the opinion of Alhaddad, (2014) that brand image has a greater influence

on brand equity than brand loyalty. Build their image by focusing on the source of a

brand image such as the perceived qualities, mark consciousness, brand associations,

and brand attitudes because of its role to enhance and build their image. This study is

supported by the theory of Garbarino and Johnson (1999), Morgan and hunt (1994) that

brand equity is a market-based asset, thus establishing and maintaining trust is a key

feature of any long-term success in a company. Short-term relationships.

The second hypothesis test result shows that brand image has a positive, not

significant effect on brand loyalty. The hypothesis test shows that the original sample

value is 0.102, the t statistics value is 0.819 < t table, and P values of 0.413 > 0.05 are

declared to have a positive and insignificant effect. The results of the study prove that

increasing brand image does not have a major effect on increasing customer brand

loyalty to always buy and support the results of mineral water. Contrary to the

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expectations of researchers that brand image can affect loyalty because the brand image

is a consumer's perception of a brand as a reflection of consumer loyalty.

Testing the third hypothesis shows that brand loyalty has a positive, not

significant, effect on brand equity. The hypothesis test shows the original sample value

is 0.181, and the statistical t value is 1.745 > t table 1.96, and P values of 0.082 > 0.05

are declared to have a positive and insignificant effect. When customer loyalty to a

product is high, then equity is no longer a measure or is no longer a person's concern.

The results of this study are inversely proportional to the researchers' expectations; in

another study, according to J Juliana (2019), brand loyalty pays more attention to

consumers. Second, give customers more than they expect. Lastly, build a long-term

relationship with customers by creating a loyalty program so that the effect can develop

their brand equity. So that brand loyalty affects brand equity.

Testing the fourth hypothesis shows that brand trust has a positive, not

significant effect on brand equity. The hypothesis test shows the original sample value

is 0.216, and the statistical t value is 1.450 > t table 1.96, and P values of 0.148 > 0.05

are declared to have a positive and insignificant effect.The results of this study are

inversely proportional to the researchers' expectations that brand trust is the brand's

ability to be trusted, which is based on consumer confidence that the product can fulfill

the promised value and good brand intentions based on consumer confidence that the

brand can prioritize the interests of consumers to form loyalty to consumers. This

research is also inversely proportional to the theoretical concept and the results of

Bastian, (2014) research, in which the brand trust variable affects brand loyalty.

Consumers may have expectations that the trust given reflects better equity stating that

brand equity is a relational market based asset, then building and maintaining trust is a

key characteristic of the success of any long-term relationship.

The fifth hypothesis test result shows that the original sample value is 0.699,

statistical t value is 5.867> t table 1.96 with significance obtained by 0.000<0.05. This

indicates that the first hypothesis is accepted. There is a positive and significant

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influence among brand trust of brand loyalty. There is a positive and significant effect

of brand trust on brand loyalty. In this case, it is also in line with Tan et al., (2011)

where brand trust is a key variable in long-term customer relationships, positively

affecting brand loyalty. Brand trust leads to higher levels of loyalty because trust

creates a highly valued exchange relationship.

Testing the sixth hypothesis shows that the original sample value is 0.126, the

statistical t value is 1.589> t table 1.96 with significance obtained by 0.113 <0.05. This

indicates that the sixth hypothesis is rejected. This study contradicts the opinion of

Nofriyanti, (2017)which shows that brand trust has a positive effect on brand equity.

This means that the more trust given by consumers is a picture of product equity.

Conversely, the lower the trust given by consumers is a picture of product equity that

lacks quality and does not lead to loyalty. The results of this study are in line with the

opinion of Sutisna, (2005) which states the relationship of trust and belief in providing

trust in a product. Consumers may have expectations that the trust given reflects better

equity.

The seventh hypothesis test result shows that the original sample value is 0.018,

statistical t value is 0.642< t table 1.96 with significance obtained by 0.521 >0.05. This

indicates that the seventh hypothesis is rejected. There is a positive and insignificant

influence between the brand image on brand equity mediated by brand loyalty.This

study contradicts the opinion of (Hossien Emari, 2012)that a positive brand image will

be beneficial for the creation of consumer loyalty, trust in brands and products, and the

willingness of consumers to seek these products/services if they need them. The results

of the study state that brand image partially has a significant effect on brand loyalty.

The results of this study are also supported by the theory put forward by Hossien Emari,

(2012) which states that a different and unique brand image is the most important thing

because products are increasingly complex and the market is getting fuller, so

consumers will increase depending on image brand rather than actual brand attributes

to make purchasing decisions.

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A customer who is very loyal to a brand will not easily switch his purchase to

another brand, no matter what happens with that brand, when customer loyalty to a

brand increases, the vulnerability of that customer group from threats and attacks by

competing brands can be reduced. Brand loyalty is the heart of brand equity. If brand

loyalty increases, the vulnerability of customer groups from competitor attacks can be

reduced.

4. CONCLUSSION

4.1 Implication of Study

Based on analysis already done, the research can be summed up as follows:

1. Brand image has a significant influence on brand equity.

2. Brand image has not significant influence on brand loyalty.

3. Brand loyalty and brand trust have no significant influence on brand equity.

4. Brand trust has a significant influence on brand loyalty.

5. Brand trust and brand image have no significant influence on brand equity mediated

by brand loyalty.

4.2 Suggestion

Some Suggestions are needed for the future and for the evaluation:

1. The study has variables studied the only brand image, brand trust, brand loyalty,

brand equity, so it is recommended to study with other variables. This is because

some variables are insignificant, and some have to be traced.

2. Future researchers are expected to obtain research data from more accurate and

realistic respondents who fit the criteria.

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