Factors Affecting Customer Loyalty on Starbucks Malaysia using Binary Logistics and Probit Model

Abstract

Coffee culture is growing in popularity among Malaysians. Starbucks was up against a lot of competition in Malaysia because of the growing number of coffee brands and cafes. Hence, this study aims to identify the significant variables towards customer loyalty at Starbucks Malaysia. Secondary data were used in this study and it consist of 113 respondents in Malaysia with various independent variables. The R software was used to analyse the data. Binary logistics regression and probit model were applied for analyzing the data. In overall, there was 79.60% of respondents remain loyal to Starbucks. This study revealed that there were 8 significant variables in binary logistic models and 3 significant variables in probit model that affect customer loyalty. Lastly, this study indicated that binary logistic model performed better than probit model as its Akaike Information Criteria (AIC) value is lower and higher percent of accuracy. This study can aid the management team of Starbucks to explore more information on these variables to increase customer loyalty.