Brand loyalty and the moderating role of involvement: a strategic alliance perspective in indonesia airline industry

Anggun Pratama,Rizal Edy Halim

doi:10.24912/jm.v22i1.309

Abstract

This research topic is about the membership of Garuda Indonesia (the biggest airline in Indonesia) into SkyTeam airlines alliance. This study aims to examine the influence of strategic airline alliance on the brand loyalty of Garuda Indonesia’s passengers in Indonesia. This research will examinethe relationship between strategic airline alliance, brand equity, brand preference and brand loyalty with a moderation effect of involvement on the relationship between strategic airline alliance and brand equity, and the relationship between brand preferences and brand loyalty. In particular, for both low and high involvement passengers, the effect of global airline alliances on brand equity, and brand preference on brand loyalty will be also examined by using structural equation model and multi-group method analysis. Data for this research were collected from Garuda Indonesia consumers, specifically those who have flown with Garuda Indonesia. They were then analyzed using Structural Equation Modelingand multi-group analysis method. The result on total sample of this research showed that all independent variables have significant effect to all dependent variables. However, in multi-group analysis, for both low and high-involved passengers, brand equity did not affect brand loyalty. Meanwhile, in other multi group analyses, all groups showed an effect on the relationship.

Highlights

International strategic alliances have occurred in a broad spectrum of industries including the automobile, commercial aircraft, electronics equipment, steel, and telecommunication industries (The Economist, 11 September 1993)
This study focuses on the effect of brand equity constructs and brand preference on attitudinal loyalty.It is concluded that brand preference is the major actor that significantly affects brand loyalty, followed by satisfaction, affect and perceived quality
Descriptive research was conducted to fulfill the objective in analyzing the effect of Garuda Indonesia membership into SkyTeam strategic airlines alliance, which is described by variables of brand equity, brand preference and customer brand loyalty

Summary

Introduction

International strategic alliances have occurred in a broad spectrum of industries including the automobile, commercial aircraft, electronics equipment, steel, and telecommunication industries (The Economist, 11 September 1993). As operating in the commercial airline industry becomes increasingly more challenging, more airlines have sought to join one of the three existing global strategic alliance networks; one- world, Star Alliance, and SkyTeam (Tugores-García, 2012). These networks provide their members with a rich international route portfolio that would be difficult to be reached through organic growth at a marginal cost. These strategic alliances, along with a portfolio of coordinated synergies, have already impacted on the operations of the airlines worldwide. Being part of a multilateral alliance allows airlines to access markets and resources otherwise not attainable due to current geographical and regulatory constraints (Gudmundsson and Lechner, 2006)

Objectives

Methods

Results

Conclusion