Full Papericbmr Inggrid-sabrina

Paper presented at “The 3rd International Conference on Business and Management Research (ICMBR) – The 14th Euro-Asia Conference”, 27-29 Augut 2008, Bali-Indonesia

The Influence of Brand Trust and Satisfaction on Repurchase Intentions: An Empirical Study on the Retailing Firm Inggrid Gouw Sabrina Oktoria Sihombing Universitas Pelita Harapan ABSTRACT For years, retailers have often made it a point to align themselves with the high quality brands they sell. A brand with strong brand equity is a valuable asset to the manufacturer as well as retailers. However, there are very few studies on the effects of the brands sold by a retailer could have on customer evaluations on the retailer. Thus, the objective of this research is to examine the role of consumer trust in and satisfaction with the brand and their relationship to retailer trust and satisfaction, and ultimately retailer repurchase. This paper replicates the model proposed Zboja and Voorhess (2006) relating to the impact of brand trust and satisfaction on repurchase intentions with the retailing firm. There are six hypotheses in this research. First, there is a positive relationship between satisfaction with the brand and trust in the brand. Second, there is a positive relationship between satisfaction in the retailer and trust in the retailer. Third, there is a positive relationship between satisfaction in the brand and satisfaction in the retailer. Fourth, there is a positive relationship between trust in the brand and trust in the retailer. Fifth, there is a positive relationship between satisfaction with the retailer and repurchase intentions with the retailing firm. Finally, there is a positive relationship between trust in the retailer and repurchase intentions with the retailing firm. A self-administered questionnaire was used to collect the data for this study. Translation and back-translation of the indicators in the original study was conducted to obtain a measure consistent with the Indonesian cultural understanding of the indicators used in the questionnaires. Questionnaires were distributed to respondents by the dropoff/pick-up method and a total of 242 completed questionnaires were used in the analysis. The data was then analyzed using structural equation modeling. All research hypotheses were supported, except one, which is the relationship between trusts in the retailer and repurchase intentions with the retailer. This paper also provides the implications for theoretical and managerial and offers directions for future research. Keywords: brand trust, satisfaction, repurchase intentions, retail Introduction With increasing expectations and needs, consumers today are demanding higher quality products, more varieties, better service-scapes, and more attentive and responsive customer service (Muharam 2001). New retail forms continue to emerge to meet new situations and consumer needs, this is backed up by accelerating economic which contributes to the increasing the buying power of consumers (Kotler & Keller 2006), resulting in a growth in the retail sector. Retailers today are always searching for new marketing strategies to attract and hold customers. They attempt to attract customers with unique products, or better services than their competitors offered (Kotler & Keller 2006). For years, retailers have often made it a point to align themselves with the high quality

brands they sell (Zboja & Voorhess 2006). Brands are used by manufacturers to distinguish their products from the competitions. According to Lamb, Hair and McDaniel (2005), a brand with strong brand equity is a valuable asset to the manufacturer. Well-known brands also have value for retailers. When a store does not carry a popular brand, consumers are put off and may switch stores. Therefore, retailers cannot afford to cast off wellknown brands if they want to retain their customers (Quelch & Harding 1996). Previous study conducted by Delgado-Bellester and Munuera-Aleman (2005) had proven that brand trust is important in the development of brand equity. The research findings reveal that brand trust is rooted in the result of past experience with the brand, and it is also positively associated with brand loyalty, which in turn maintains a positive relationship with brand equity. The investigation of brand loyalty continues to be a central issue in the marketing management literature. Research in the broad area of brand loyalty has expanded to include topics such as consumer loyalty to loyalty programs as they impact sales levels for the brand (Yi & Jeon 2003), the effects of consumer affiliation with a brand community on their loyalty to the brand (McAlexander, Schouten & Koenig 2002), and the financial consequences of brand loyalty (Anderson & Mittal, 2000). Other researches have shown there is a positive relationship between satisfaction with brand and repurchase intentions (Esch, Langner, Schmitt & Geus 2006). However, very few researchers have considered the effects that the brands sold by a retailer could have on customer evaluations on the retailer (Zboja & Voorhess 2006; Fullerton 2005). The scarcity of research on this topic resulted in a limited understanding of this spill-over effect from consumer trust and satisfaction in brand to the retailer. Therefore, researcher is interested in doing further research on the impact of brand trust and satisfaction on repurchase intentions with the retailing firm by replicating the research done by Zboja and Voorhess (2006). In an effort to shed new insight into the effects of manufacturers’ brand on customer perceptions of the retailer, this research seeks to examine the role of consumer trust in and satisfaction with the brand and their relationship to retailer trust and satisfaction, and ultimately retailer repurchase intentions using a different research object. This paper is organized into five sections: justifications of the research, a review of the relevant literature and hypotheses, the research method, the discussion of the results, and conclusions of the research. Justifications of the Research This research can be justified on these two grounds as follows: (1) the need for replication in social science research, and (2) potential outcomes for the marketers. The need for replication in social science research. The research model used in this research is a replication of a model that was developed by Zboja and Voorhess (2006). According to Hubbard, Vetter, and Little (1999), the principle of replicability plays an important role in the research process. This is because replication is the key to generalization (Leone & Schultz 1980 cited by Hubbard et al. 1999). In the specific, they noted that much empirical research takes place in marketing, but little is generalizable, and this is why we have little knowledge of marketing phenomena. Furthermore, Durvasula, Andrews, Lysonski and Netermeyer (1993) also suggested that relationship among constructs in research models must be established in cross-cultural context in order to identify what, if any, cross-cultural confounds or limitations may exist with respect to the theory or model’s generalizability. Otherwise, the (unrecognized) presence of these confounds could give rise to misleading inferences. Also, in the original study, Zboja and Voorhess (2006) suggested replicating the research model in other industries or product types to validate their findings. Hence, we attempt to replicate the theoretical framework applied in the United States on an Indonesia retail context with a different product. Potential outcomes for marketers. In practices, researchers hope this research could offer meaningful suggestions to XYZ book store in understanding its role in the spill-over effects from customer perceptions of trust and satisfaction with a brand to repurchase intention, that is by maintaining customer satisfaction and trust in itself as the retailer.

Literature Review and Hypotheses Satisfaction Customer satisfaction and dissatisfaction are the consumer’s judgments regarding a firm’s success or failure in meeting expectations (Oliver 1980). Met expectations result in customer satisfaction; unmet expectations result in customer dissatisfaction. In his other writings, Oliver (1997) defined satisfaction as the summary of psychological state resulting when the emotion surrounding disconfirmed expectations is coupled with prior feelings about the consumer experience. In general, satisfaction has been conceptualized in terms of whether the product or service meets customer needs and expectations (Zeithaml & Bitner 2000). Focusing on the retail industry, satisfaction with brand or brand satisfaction is defined as a cognitive evaluation of whether or not the exchange relationship with the brand is rewarding (Esch et al. 2006). Furthermore, Bloemer and de Ruyter (1998) defined satisfaction with the retailer as the outcome of the subjective evaluation that the chosen alternative (the store) meets or exceeds expectations. Trust Over the years scholars have studied trust from several disciplinary perspectives-anthropology, economics, psychology, sociology, and political science, to name only a few. As we can expect with such a diversity of scholarship, not only do different scholars address the same problem from different approaches and with different methods, but they have expressed inevitable differences of opinion over the fundamental nature of the joint problem (Bhattacharya, Devinney, & Pillutla 1998). The emergence of relationship marketing as a dominant focus of both marketing theorists and practitioners suggests that trust is the main factor on which a relationship is based (Delgado-Ballester & Munuera-Aleman 2005). Fukuyama (1995) defines trust as the expectation that arises within a community of regular, honest, and cooperative behavior, based on commonly shared norms, on the part of members of that community. In relating with brand, trust in a brand is defined as the willingness of the average consumer to reply on the ability of the brand to perform its stated function (Chaudhuri & Holbrook 2001). In relating with retailer, Bloemer and Odekerken-Schroder (2002) defined trust in the retailer as a consumer’s confident belief in a retailer’s honesty towards the consumer. Relationship between satisfaction and trust In the marketing literature, several studies have highlighted the relationship between satisfaction and trust. Several studies (eg., Chiou 2004; Hart & Johnson 1999) show trust as mediating the satisfaction-loyalty relationship. Geysken, Steenkamp, and Kumar (1999) found satisfaction to be an antecedent of trust. Similar results have been found in retail settings (Bloemer & Oderkerken-Schroeder 2002), in the context of brand trust (Delgado-Ballester & Munuera-Aleman 2001), as well as proposed in services by Singh and Sirdeshmukh (2000). The expectation is that the satisfaction-trust relationship found in previous studies will hold for both brands and retailers in the present study. Therefore, the following hypotheses are proposed: H1: Satisfaction with the brand has a positive relationship with trust in the brand. H2: Satisfaction with the retailer has a positive relationship with trust in the retailing firm. Relationship between brand and retail variables The contemporary brand literature acknowledges the importance of retailers in brand management (Keller & Lehmann 2003). Strong brands create ‘trade leverage’ for manufacturers when dealing with retailers (Glynn 2007). Many manufacturer marketing strategies require the cooperation of the retailer for their implementation (Ghosh, Chakaborty, & Ghosh 1995). Biong (1993) and Schellhase, Hardock, and Ohlwein (1999) found that the supplier merchandise attributes in retailer buying affect retailer satisfaction, trust and loyalty. Glynn and Brodie (2004) confirmed the broad direction of these findings by showing that brand had three benefits for retailers. These benefits are manufacturer brand support, consumer brand equity and customer expectations strongly influenced relationship outcomes such as retailer satisfaction, trust, commitment and performance of the brand. Studies have also found that positive feelings toward retail salespeople are “transferred” into similar feelings toward the retailer and/or manufacturer (Beatty, Mayer, Coleman, Reynolds, & Lee 1996; Goff, Boles, Bellenger, & Stojack 1997). Retailers can and have leveraged the brands they carry in much the same manner, perhaps benefiting from spill-over effects at work among consumers (Zboja & Voorhess

2006). If retailers can create a connection in the minds of consumers with the popular brands they carry, they can likely benefit from these powerful brands as well. Based on these findings, the following hypotheses are proposed: H3: Satisfaction with the brand has a positive relationship with satisfaction with the retailing firm. H4: Trust in the brand has a positive relationship with trust in the retailing firm. Repurchase Intentions Hellier, Geursen, Carr and Richard (2003) define repurchase intentions as the individual’s judgment about buying again a designated service from the same company, taking into accounts his or her current situation and likely circumstances. Repurchase intentions, along with loyalty, willingness to pay a price premium, word-of-mouth, and complaining represent the five behavioral intentions described by Zeithaml, Berry, and Parasuraman (1996). Oliver (1997) operationalized action loyalty as repeat usage. Furthermore, Delgado Ballester and Munuera-Aleman (2001) and Macintosh and Lockshin (1997) use repurchase intentions as an element of loyalty in brand and store contexts respectively. Based on the overall satisfaction theory, previous studies noted that overall satisfaction completely mediates the relationship between transaction-specific satisfaction and repurchase intentions (Parasuraman, Zeithaml, & Berry 1994). Transaction-specific satisfaction is directly integrated into the consumer’s global evaluation or overall satisfaction with the retailer and it is this global evaluation that influences repurchase intentions (Anderson, Fornell, & Lehmann 1994; Oliver 1997; Parasuraman et al. 1994). It is believed that overall satisfaction, as opposed to transaction-specific satisfaction, will influence repurchase intentions since overall satisfaction is more closely related to a general attitude, which is likely to predict future behavior (Anderson et al. 1994). Another model hypothesizes that the relationship between transaction-specific satisfaction and repurchase intentions is moderated by overall satisfaction. The moderating influence indicates that when overall satisfaction is high, the relationship between transaction-specific satisfaction and repurchase intentions is weaker. In this instance, regardless of whether a consumer is dissatisfied with a particular service experience, they will return to the retailer due to the high level of overall satisfaction based on previous experiences (Bitner & Hubbert 1994; Bolton 1998). The word “loyalty” captures long-term relationship elements that satisfaction measurement can mess, providing a more complete picture of customer’s feelings. Loyalty traditionally has been defined in terms of its consequences: repurchase intent, actual repurchase, complaint behavior, positive word-of-mouth, and share of total purchases (Hart & Johnson 1999). In addition, they noted that loyal customers are those who have been consistently been satisfied over time. Therefore, it is safe to say that satisfaction is the antecedent of loyalty or repeat purchase intentions. Relationship between satisfaction and repurchase intentions Satisfaction has been hypothesized in literature to have a direct influence on repurchase intentions (Mittal & Kamakura 2001). A direct positive relationship between customer satisfaction and repurchase intention is supported by a wide variety of product and service studies (Fullerton 2005; Hellier et al. 2003; Yi & La 2004). These studies establish that overall customer satisfaction with a retailer is strongly associated with the behavioral intention to return to the same retailer. Hence, the following hypothesis is proposed: H5: Satisfaction with the retailing firm has a positive relationship with repurchase intentions with the retailing firm. Relationship between Trust and Repurchase Intentions While customer satisfaction is a major factor, it is only one of the many variables that can have an impact upon customer repurchase intentions (Liljandar & Strandvik 1998; Mittal & Lassar 1998; Sharma & Patterson 2000). There has also been numerous studies involving trust and loyalty or repeat purchase intentions (Ribbink, van Riel, Liljander, & Streukens 2004; Sirdeshmukh, Singh, & Sabol 2002; Chow & Holden 2002). Thus, the last hypothesis is proposed: H6: Trust in the retailing firm has a positive relationship with repurchase intentions with the retailing firm. Figure 1. Original Model

Trust in the Brand

H4 +

Trust in the Retailer

H6 +

H1

+

Satisfaction with the Brand

H2 H3 +

+

Satisfaction with the Retailer

Reseller Repurchase Intentions

+ H5

Source: Zboja and Voorhess (2006, 382) Research Method Sample. Because we cannot identify the brand and retailer, we will call them brand “ABC” and retailer “XYZ”. ABC is a top manufacturer of electronic and XYZ is a well-known retailer carrying brand ABC. The study used undergraduate students at a large private university in West Java. This research applied judgment sampling, that is, respondents of this research should ever buy brand ABC in retailer XYZ. A total of 283 students participated. Of the 283 questionnaires, 23 were unusable either because respondents had insufficient experience with brand ABC (less than 2 months) or because their answers were incomplete. The sample size played role in the data analysis of structural equation modeling. According to Hair, Black, Babin, Anderson, and Tatham (2006), sample sizes in the range of 150 to 400 respondents are suggested when using SEM. Researcher also determined the size sample to use by using the size that others have used for similar studies in the past (Churchill & Brown 2004). Research Instrument. Where possible, established scales were used (Sekaran 2006). Therefore, all research variables were measured using multi-item scales adapted from prior studies. As the indicators used in this questionnaire were adopted from previous studies done in English, a back translation process was done to ascertain the accuracy of translation between the Indonesian and the original English version. Back translation is the technique most commonly used to check the accuracy of translation in survey research (Douglas & Craig 2007). There are three advantages in using back translation. First, according to Douglas and Craig (2007), back translation helps to test for accuracy of the translation. Second, they further stated that it helps identify problems and egregious errors in translation. Finally, back translation can improve the reliability and validity of research in different languages. Table 1 show the conceptual and operational definition of each variable in the study where each indicator represents a question in the questionnaire. Table 1. Research Variables and Indicators Variable Conceptual Definition Satisfaction with A cognitive evaluation of Brand whether or not the exchange relationship with the brand is rewarding (Esch et al. 2006).

Operational Definition/Indicators

1. I am satisfied with my decision to 2. 3.

Trust in Brand

Satisfaction with

The willingness of the average consumer to reply on the ability of the brand to perform its stated function (Chaudhuri & Holbrook 2001)

1.

The outcome of the subjective

1.

2. 3.

buy ABC calculator. My choice to buy ABC calculator was a wise one. I think that I did the right thing when I bought ABC calculator. ABC is a brand name that meets my expectations. ABC is a brand name that never disappoints me. ABC brand name guarantees satisfaction I am satisfied with my decision to

Scale Interval (1-5)

Source Zboja and Voorhess (2006)

Interval (1-5)

DelgadoBallester (2004)

Interval

Zboja and

Retailer

evaluation that the chosen alternative (the store) meets or exceeds expectations (Bloemer & de Ruyter 1998).

visit XYZ book store.

(1-5)

Voorhess (2006)

Interval (1-5)

Zboja and Voorhess (2006)

Interval (1-5)

Holloway, Wang and Parish (2005); Julander (2003)

2. My choice to visit XYZ book store 3.

was a wise one. I think that I did the right thing when I visited XYZ book store. XYZ book store is not competent. XYZ book store is unresponsive.

Trust in Retailer

A consumer’s confident belief in a retailer’s honesty towards the consumer (Bloemer & Odekerken-Schroder 2002)

1. 2.

Reseller Repurchase Intentions

Individual’s judgment about buying again a designated service from the same company, taking into account his or her current situation and likely circumstances (Hellier et al. 2003)

1. I would purchase ABC calculator in XYZ bookstore again.

2. Next time I shall need ABC calculator, I will buy it from XYZ book store.

Pretesting. To ensure that questionnaire items were clearly articulated, a pretest was conducted. The purpose of the pretesting was to improve the questionnaire by identifying and eliminating potential problems before using it in the actual study (Malhotra 2004). This study used two methods in evaluating reliability. The first is Cronbach’s alpha and the other is corrected item-total correlation. A minimum value of 0.7 for Cronbach’s alpha was used as suggested by Hair et al. (2006) and items that exhibited corrected item-total correlations below 0.5 were eliminated (Hair et al. 2006). As a result 11 indicators were deleted. Table 2 shows the item purification table. Table 2. Pretest Item Purification Construct Satisfaction with brand Trust in brand Satisfaction with retailer Trust in retailer Reseller Repurchase Intentions Total indicators

Number of Initial Items 5 5 5 6 6 27

Number of Final Items 5 3 3 3 2 16

The items were also assessed for convergent, discriminant, and nomological validity testing as they are the three most widely accepted forms of validity (Hair et al. 2006). Discriminant validity was evaluated using a cut-off point for Pearson correlation of no more than 0.75 (Sekaran 2003), while convergent validity was assessed using exploratory factor analysis (EFA) and confirmatory factor analysis (CFA). A cut-off point of 0.50 for factor loadings and a critical ratio of 1.96 were used as suggested by Hair et al. (2006). Data analysis. To test research hypotheses, structural equation modeling (SEM) analysis was applied in this research. This method was used because it is able to simultaneously examine a series of interrelated dependence relationships among the measured variables and latent constructs as well as between several latent constructs (Hair et al. 2006). This study used the two-step approach suggested by Anderson and Gerbing (1988) whereby the measurement model was first examined to confirm convergent and discriminant validity, followed by the simultaneous estimation of the measurement and structural models. According to Garson (2008) there is no point in proceeding to the structural model until one is satisfied the measurement model is valid. Competing Model. One of the advantages of SEM is that it has a strategy in comparing alternative models to assess relative model fit (Garson 2008). Competing models strategy is a modeling strategy that compares the proposed model with a number of alternative models in an attempt to demonstrate that no better-fitting

model exists. This approach is particularly relevant in structural equation modeling because a model can be shown only to have acceptable fit, but acceptable fit alone does not guarantee that another model will not fit better or equally well (Hair et al. 2006). The proposed model is as shown in Figure 1. Two competing models were developed for testing. The first competing model suggests that satisfaction with the brand does not only influence trust in brand and satisfaction with the retailer, but also trust in the retailer (Figure 2). The second competing model suggests that satisfaction with brand and trust in brand are also predictors of repurchase intentions (Figure 3) Figure 2. Competing model 1 (compmod1) Trust in the Brand

Trust in the Retailer Reseller Repurchase Intentions

Satisfaction with the Brand

Satisfaction with the Retailer

Figure 3. Competing model 2 (compmod2)

Trust in the Brand

Trust in the Retailer Reseller Repurchase Intentions

Satisfaction with the Brand

Satisfaction with the Retailer

Actual Survey In this research, a questionnaire was administered to a total sample of 283 respondents. After eliminating incomplete questionnaires, 260 questionnaires were used in the analysis, resulting in a response rate of 91.87%. The instrument was assessed for reliability and validity. The results showed that all Cronbach’s alpha were over 0.7. Items that did not achieve corrected item-total correlations of 0.5 were eliminated. Table 3 shows the item purification table in the actual study. Table 3. Actual Study Item Purification Construct Number of Initial Items Satisfaction with brand 5 Trust in brand 3 Satisfaction with retailer 3 Trust in retailer 3 Reseller Repurchase Intentions 2 Total indicators 16

Number of Final Items 3 3 3 2 2 13

Table 4 shows the variable correlation ranged from 0.025 to 0.599, which are below 0.75, showing discriminant validity. However, although all correlations were positive, as predicted by supporting theories, not all correlation coefficients were significant; therefore nomological validity was not established. Table 4. Correlation among Variables Satisfaction Trust in Satisfaction With brand brand with retailer Satisfaction 1 with brand Trust in 0.599** 1 Brand Satisfaction 0.198** 0.116 1 With retailer Trust in 0.025 0.100 0.149* Retailer Reseller 0.217** 0.173** 0.390** Repurchase Intentions * Correlation is significant at the 0.05 level (2-tailed) ** Correlation is significant at the 0.01 level (2-taied)

Trust in retailer

Reseller Repurchase Intentions

1 0.046

1

Table 5 shows the Exploratory Factor Analysis. The result showed that convergent validity had been established as the indicators of the same construct converge in one component and satisfy the minimum factor loading of 0.50 as suggested by Hair et al. (2006). Table 5. Actual Study Exploratory Factor Analysis Rotated Component Matrix (a) Component 1 2 3 Satisfaction with Brand 1 0.807 Satisfaction with Brand 2 0.844 Satisfaction with Brand 3 0.739 Trust in Brand 1 0.747 Trust in Brand 2 0.847 Trust in Brand 3 0.810 Satisfaction with Retailer 1 0.873 Satisfaction with Retailer 2 0.915 Satisfaction with Retailer 3 0.893 Trust in Retailer 2 Trust in Retailer 3 Reseller Repurchase Intentions 1 Reseller Repurchase Intentions 2 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a Rotation converged in 6 iterations.

4

5

0.910 0.914 0.913 0.906

Table 6 shows the result of the initial running of data in SEM using 260 respondents. Although the CR of all the indicators was above 1.96, indicating significant paths, the result showed the presence of a Heywood case. According to Hair et al. (2006) a Heywood case is a factor solution that produces an error variance estimate of less than 0, resulting in an illogical solution. The standardized regression weights of trust in

retailer 2  trust in retailer is 1.174. Researcher used the strategy suggested by Garson (2008) to drop outliers from the data. This resulted in a reduction of the number of actual sample from 260 to 242. Table 7 shows the CFA of the reduced sample size of 242 respondents. Table 6. Confirmatory Factor Analysis _______________________________________________________________________________________________ Path Standarized CR Absolute Fit Regression Weight Satisfaction with brand 1← Satisfaction with brand 0.649 GFI = 0.945 Satisfaction with brand 2← Satisfaction with brand 0.841 10.589 AGFI = 0.909 Satisfaction with brand 3← Satisfaction with brand 0.831 10.537 CMIN/DF = 1.847 Trust in brand 1 ← Trust in brand 0.731 CFI = 0.972 Trust in brand 2 ← Trust in brand 0.707 10.484 NFI = 0.941 Trust in brand 3 ← Trust in brand 0.870 11.920 TLI = 0.960 Satisfaction with retailer 1 ← Satisfaction with retailer 0.809 RMSEA = 0.057 Satisfaction with retailer 2 ← Satisfaction with retailer 0.896 16.514 Satisfaction with retailer 3 ← Satisfaction with retailer 0.895 16.501 Trust in retailer 2 ← Trust in retailer 1.174 Trust in retailer 3 ← Trust in retailer 0.580 2.110 Reseller repurchase intentions 1 ← Reseller repurchase intentions 0.873 Reseller repurchase intentions 2 ← Reseller repurchase intentions 0.882 9.395 Source: Data Analysis of 260 Respondents Table 7. Confirmatory Factor Analysis _______________________________________________________________________________________________ Path Standarized CR Absolute Fit Regression Weight Satisfaction with brand 1← Satisfaction with brand 0.639 GFI = 0.939 Satisfaction with brand 2← Satisfaction with brand 0.844 10.035 AGFI = 0.899 Satisfaction with brand 3← Satisfaction with brand 0.834 9.994 CMIN/DF = 1.850 Trust in brand 1 ← Trust in brand 0.728 CFI = 0.968 Trust in brand 2 ← Trust in brand 0.691 9.745 NFI = 0.933 Trust in brand 3 ← Trust in brand 0.857 11.133 TLI = 0.954 Satisfaction with retailer 1 ← Satisfaction with retailer 0.801 RMSEA = 0.059 Satisfaction with retailer 2 ← Satisfaction with retailer 0.899 15.414 Satisfaction with retailer 3 ← Satisfaction with retailer 0.877 15.154 Trust in retailer 2 ← Trust in retailer 0.763 Trust in retailer 3 ← Trust in retailer 0.762 5.268 Reseller repurchase intentions 1 ← Reseller repurchase intentions 0.851 Reseller repurchase intentions 2 ← Reseller repurchase intentions 0.898 7.741 Source: Data Analysis of 242 Respondents Table 8 shows the comparison of the three models on the goodness-of-fit measures. Based on the competing model results, competing model 2 was the best fitting model among the three models tested. It had the same TLI as the original model while performing best for the rest of the indices. However, although competing model 2 proved to be the best fitting model, the original model was still used for this study as this study is a replication of Zboja and Voorhess’ (2006) model. On the other hand, competing model 1 and 2 could be used for future research.

Table 8. Comparison of Goodness-of-fit Measure for the Original Model and Competing Models

Goodness-of-fit index

Cut-off value

Original Model

RMSEA GFI AGFI NFI TLI CMIN/DF CFI PNFI

≤0.10 ≥0,90 ≥0,90 ≥0,90 ≥0.95 ≤2,00 ≥0,90 Lower values indicate better fit Lower values indicate better fit Lower values indicate better fit

PGFI AIC

0.059 0.936 0.901 0.931 0.957 1.797 0.968 0.704

Competing Model 1 0.059 0.936 0.900 0.931 0.955 1.828 0.967 0.692

Competing Model 2 0.057 0.938 0.902 0.933 0.957 1.789 0.969 0.682

0.607

0.597

0.588

170.019

172.019

169.967

Result of the hypotheses testing in this study is shown in table 9. Based in the result, out of the six hypotheses proposed in the study, five hypotheses are supported, indicated by a CR more than 1.96. Table 9. Relationship between Structural, Standardized Regression Weight and Measurement Model Critical Ratio Hypothesis Path Standardized CR Analysis of Regression Hypothesis Weights H1 Trust in brand ← 0.706 7.358 Supported Satisfaction with brand H2 Trust in retailer ← 0.338 4.037 Supported Satisfaction with retailer H3 Satisfaction with retailer ← 0.253 3.367 Supported Satisfation with brand H4 Trust in retailer ← 0.199 2.446 Supported Trust in brand H5 Reseller Repurchase Intentions ← 0.347 4.175 Supported Satisfaction with retailer H6 Reseller Repurchase Intentions ← 0.090 1.070 Not Trust in retailer Supported Source: Data Analysis of 242 Respondents Hypothesis 1 proposed that there is a positive relationship between satisfaction with the brand and trust in the brand. The result of the actual study showed that hypothesis 1 is supported (CR = 7.358). Hypothesis 2 proposed there is a positive relationship between satisfaction in the retailer and trust in the retailer. The result of the actual study showed that hypothesis 2 is supported (CR = 4.037). Hypothesis 3 proposed that there is a positive relationship between satisfaction in the brand and satisfaction with the retailer. The result of the actual study showed that hypothesis 3 is supported (CR = 3.367). Hypothesis 4 proposed that there is a positive relationship between trust in the brand and trust in the retailer. The result of the actual study showed that hypothesis 4 is supported (CR = 2.446). Hypothesis 5 proposed that there is a positive relationship between satisfactions with the retailer and repurchases intentions with the retailing firm. The result of the actual study showed that hypothesis 5 is supported (CR = 4.175). Finally, hypothesis 6 proposed that there is positive relationship between trusts in the retailer and repurchases intentions with the retailing firm. The result of the actual study showed that hypothesis 6 is not supported (CR=1.070).

Discussion

This research attempted to examine the role of consumer trust and satisfaction with the brand and their relationship to retailer trust and satisfaction, and ultimately to retailer repurchase intention. The test results showed the rejection of one proposed hypotheses (that is, there is positive relationship between trusts in the retailer and repurchases intentions with the retailing firm). Researcher tried to further examination of studies related with trust and satisfaction. Singh and Sirdeshmukh (2000) distinguished trust before initiation of an exchange (pretrust) from trust after an exchange (posttrust). On the basis of social exchange theory, they proposed that consumers’ pretrust will have a direct influence on their postpurchase satisfaction. In other words, if a consumer does not trust the retailer based on past experience, he or she will probably be dissatisfied with that retailer. Chaudhuri and Holbrook (2001) also provided another rationale for the relationship from trust to satisfaction. They found that consumers in long-term relationships with retailers experience three primary types of benefits: confidence, social, and special treatments. Among the three benefits, the confidence benefit, which is very similar to trust, was the most important to consumers. Confidence benefits include a sense of reduced anxiety, faith in the retailer, reduced perceptions of anxiety and risk, and knowing what to expect. When consumers feel these benefits related to trust, their overall satisfaction is enhanced overt the long term. Therefore, from these studies, researcher concluded that trust in the retailer may not be directly related to reseller repurchase intentions, but is mediated by satisfaction with the retailer. Further studies should be done to examine this relationship. Theoretical and Managerial Implications There are several theoretical implications of this research. As a replication of a study done by Zboja and Voorhess (2006), this study strengthened the findings of the original researchers of the nature of the relationship between brand trust and satisfaction and retailer repurchase intentions. Zboja and Voorhess (2006) findings suggested that while brand trust and satisfaction do have an impact on retailer repurchase intentions, that impact is mediated through retailer trust and satisfaction. In this research, the data suggested that the impact of brand trust and satisfaction on retailer repurchase intentions is mediated only through retailer satisfaction, not retailer trust. Second, researcher’s attempt to replicate the theoretical framework applied in the United States on an Indonesian retail context with a different product type contributes to cross-cultural strengthening of the findings in the original study. Durvasula et al. (1993, 626) suggested that relationships among constructs in research models must be established in a cross-cultural context in order to identify what cross-cultural confounds or limitations may exist with respect to the theory or model's generalizability. Besides theoretical implications, there were also key managerial implications of this study. The results of this study have strong managerial implications for both brand and retail managers. The findings showed that the relationship between brand trust and satisfaction and repurchase intentions is mediated by satisfaction in the retailer. Thus, the results provide new insight for developing individual strategies for retailers and manufacturers and for forming cooperative strategies with benefits for both brand and retail managers. Retailers should not only concentrate on maintaining a range of strong brands in the store, but also deliver services so as to keep customers satisfied and prevent them from fleeing to other stores. Brand managers on the other hand, should maintain good relationships with retailers as manufacturer does not have a direct link to customers. The result of the study revealed that there are positive relationships between satisfaction and trust variables. According to Hess and Story (2005, 321), it is necessary for customers to be satisfied in an overall sense with the brand and retailer to trust them. Brand managers could start by conducting a customer satisfaction survey in the store so as to get of its current product offering through retailers, schools and universities. This survey would serve as an input on how manufactured products are performing in comparison to other products in the market. Concerns of end users could then be identified and solved through the development of future products. As for retail managers, interactive interviews could be conducted in the store to improve customer satisfaction and gain their trust. As a manufacturer, it is of utmost important for brand managers to maintain a good relationship with retailers as it is not directly connected to the end customer. Although the current study only examined the relationship between customer satisfaction in the brand and customer satisfaction with the retailer, keeping retailers satisfied is one aspect manufacturers cannot miss. One way is to be involved in the marketing strategy of these retailers. Both the brand and retail managers should discuss their marketing plans for the next year. By maintaining a good relationship with the retailer, brand managers shorten the link between the brand and the end customer.

Brand and retail managers could also organize events, such as a free seminar, together to educate the mass about its products and related knowledge about the functions. Through these events, In the long run, this would benefit the brand as more people would be familiar with the functions and benefits of the product and develop a preference for it to other brands in the market. This in turn would secure loyal customers for the brand and retailer. Moreover, organizing a free workshop serves as an act of social responsibility and would improve the image and reputations of both the brand and the retailer. In addition to providing services to keep customers satisfied, retail managers should maintain a strong brand strategy where not only they are aware of which brands to carry, but also how customers’ perceive these brands. The effectiveness of this brand strategy should be evaluated every few months to maintain a strong selection of brands and keep customers from fleeing to other retailers. To encourage purchase, retailers could offer a cashback or a coupon discount for large purchases. Installment programs could also be offered to facilitate payment of expensive items such as electronics. Product bundling could also be done to encourage purchase of complimentary items. Renovations of retail stores could be been done to create a more comfortable place to shop. Conclusions and Limitations This study was undertaken to shed new insight into the effects of manufacturers’ brand on customer perceptions of the retailer. It examined the role of consumer trust in and satisfaction with the brand and their relationship to retailer trust and satisfaction, and ultimately retailer repurchase intentions. The results of this study confirm the presence of positive relationships between brand trust and satisfaction toward repurchase intentions, mediated by satisfaction with the retailer. The only unsupported hypothesis was the hypothesis which proposed there is a positive relationship between trusts in the retailer and repurchases intentions with the retailing firm. This insignificant link from trust in retailer and repurchase intentions indicates the need for further research on these two variables. There are several limitations to this study. First, this study used non-probability sampling. One of the major disadvantages of non-probability sampling is that the findings from the study of the sample cannot be confidently generalized to the population. Therefore, the results of this study only represented the samples collected and not the population. Second, the unit of analysis in this research was undergraduates of a private university in West Java. This may potentially limit the applicability of research findings in other settings or populations. Third, this research was restricted to the examination of one brand and one retailer. Thus, results cannot be generalized for all relationships between brands and retailers. Directions for Future Research Future research could attempt to investigate using different products to validate the findings of this study. Researcher may opt to apply the model to a different brand-retailer combination or even attempt to apply it in the service industry. The use of non-probability design sampling in this study limits the generalization of the findings. Therefore, future research could attempt to change the design sampling to that of a probability design sampling so as to be able to generalize the findings of future studies. Future research may also be done using the competing model 2 which proved to be a better fitting model than the original model in this study. Moreover, an experimental research could be done instead of the questionnaire method used in the current study. Furthermore, cross-cultural research may also be done to validate the findings of this study. Finally, units of analysis may be changed to more general respondents such as undergraduates from several universities or even companies.

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