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DEVELOPING BRAND IMAGE THROUGH PERFORMANCE OF INTEGRATED MARKETING COMMUNICATIONS AND
RELATIONSHIP MANAGEMENT
TO THE ACHIEVEMENT OF CUSTOMERS EQUITY ON ISLAMIC COMMERCIAL BANKS IN JABODETABEK
Dr. Sri Widyastuti, SE., MM., MSi Bambang Suprayitno, SE, MM
Dra Trisnani Indriati, MSi
Department of Management, Faculty of Economic and Business, University of Pancasila Jl. Raya Universitas Pancasila – Pasar Minggu – Jagakarsa – Jakarta Selatan
Email: [email protected] ABSTRACT
Islamic Commercial Banks are suspected of being unable to achieve a customer retention, which is caused by being unable to offer products in accordance with the purpose of life and unable to create a religious motive. This is the believed as the impact of underdeveloped positive brand image on the sides of the reputation and emotional branding. The performance of integrated marketing communication has not been able to translate the appeal of the message honestly and transparently. The Performance of customer relationship management has not been able to establish intimacy with the customers by silahturrahim. It is assumed that not only human resources doesn’t have influential ability to sell the products, but also the availability of the information technology is still unreliable.
Therefore, this study is aimed to obtain a study on the influence of integrated marketing communications performance and relationship management on the achievement of customer equity in Islamic Commercial Banks in Jabodetabek through brand image. This research is descriptive and verification study and the method of research is explanatory survey method on 218 customers in iB mudharabah savings in Islamic Commercial Bank branches in Jabodetabek. The data gathering employs observation, interviews, and questionnaires. The data processes use frequency distributions, interval score and SEM. The results of research indicate that the customer equity can be achieved by the performance of integrated marketing communications and customer relationship management through developing brand image. It was also found that the performance of integrated marketing communications has stronger influence on the customer equity than performance of customer relationship management does. Therefore, the management of Islamic Commercial Banks needs to improve its ability in relationship management so that the management can use and manage silahturrahim relations, human resources and technology as the strengths to create attraction, and ultimately the bank may become increasingly customer-preferred.
Keywords:
Marketing Communications, Relationship Management, Brand Image, Customers Equity, and Islamic Commercial Banks
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Introduction
The Islamic commercial banks have not reached the target established by the grand-strategy of the sharia-banking market development developed by Indonesia Bank via Sharia Banking Directorate (DPbS) to set the industry growth target. Up to February 2013, the performance of Islamic commercial banks has not achieved the target established by the Indonesian Banking authority as much as 5%.
However, the market share of the Depositor Funds of Islamic commercial banking has increased up to 4.3% in February 2013, from 3.8% (YoY), (BI, 2013).
With the Depositor Funds from the customers, they should earn profit and future retention because of the customers’ loyalty. They depend on the performance of the Islamic commercial banks to provide customer life time value (CLTV) which can satisfy customers as partners through superior product and service offering. Islamic commercial banks are suspected of lacking the ability of not only providing comfort to make the customers to use the Islamic commercial banks for a life-time but also covincing the customers to increase their deposits, let alone, to engage the customers to spread positive news about the Islamic commercial banks. These indicate that Islamic commercial banks do not have excellent customer equity.
It is suspected that the brand image has not been fully developed in customers’ mind. The image and positioning of Islamic commercial banks are more than ordinary banks/beyond banking, with the principles of fairness, honesty, transparency, free from interest, fraud, speculation and other things not in line with the sharia. It is believed that many people are not aware of the status of the brand: a well-known Islamic commercial banks, prideful, extraordinary, and provide happiness. Moreover, it is believed that people are not informed about the Islamic commercial banks from the emotional sides of the banks, i.e., Islamic commercial banks are identical with the implementation of sharing of profit giving the feeling of comfort, free from fraud, trusted interest-free bank, and the equality between the Islamic commercial banks and their customers. It is believed that the spread of information to educate people about Islamic commercial banks has not been conducted totally. Communicating the valuable product and service from Islamic commercial banks through promotion in mass media is presumably lacking.
The success of service marketing really depends on the human resource, since the human resource, in providing the service, connects directly with the customers. The principle of excellent customer service will be responded by long- term trust (istiqomah) in good will (silaturrahim). It is believed that Islamic commercial banks do not implement customers completely, such as in developing closeness between the Islamic commercial banks’ employess and the customers, openness in communication and cooperative (ta’awun) attitude.
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Based on the description mentioned above, this research is aimed to study the performance of integrated marketing communications, customer relationship management, and brand image to the achievement of customers equity on Islamic commercial banks in Jabodetabek (Jakarta and its neighbouring cities: Bogor, Depok, Tangerang, and Bekasi); the effect of integrated marketing communication and customer service management on the development of the brand image of Islamic commercial bank in Jabodetabek; the effect of integrated marketing communication and customer relationship management on the achievement of customers’ equity; and the effect of integrated marketing communication performance and customer relationship management performance on customer equity of Islamic commercial bank via brand image.
Literature Riview
Kotler & Keller (2012:500) stated that “marketing communication mix consists of advertising, sales promotion, event and experience, public relation and publicity, direct marketing, interactive marketing, word-of-mouth marketing, personal selling”. Clow and Back (2012:24): “Integrated Marketing Communication (IMC) may be defined as the coordination and integration of all marketing communications tools, avenues, and sources in a company into a seamless program designed to maximize the impact on customers and other stakeholders”.
Designing a marketing communication program for service is different from the one for goods. Service is a process and intangible, while goods is tangible.
Lovelock, Wirtz, (2011: 190-191): “ Some companies have created metaphors that are tangible is nature to help communicate the benefits of their service offerings and to emphasize key points of difference relativeto competing alternatives”.
Dunkan, T. 2008, Dunkan, T. & Moriarty, S., 1998 stated in Mike, (2002), explained in their research, that communication strategy conducted throught advertising has a larger audience reach but at a high cost.
Haque, (2010), studied the success and failures of Islamic banks in different countries and analyzed advertisement to provide the guidance enabling a fitter and more effective Islamic advertisement and promotion campaign.
Mendez, (2009), in his research described the anthropology, mainly ethnography, understanding in an integrated marketing mix. Jacinta, et al, 2011, asserted that an integrated markering mix can be employed effectively in the social marketing context. Haron, et. al, (2006) explained the effectiveness of Islamic bank marketing strategy in Malaysia.
Every communication strategy conducted by Islamic bank are alligned with the stages of hierarchy of effect model. For example, at the beginning of the Islamic bank/product development, the communication strategy was more focused on the increase of awareness. When the awareness is quite high, Islamic bank need to communicate all the benefits so the customers have the knowledge of the
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Islamic banking product. During the next stage, Islamic bank need to make a communication strategy that creates interest of the customer about the product of the banks. After the customers are interested, the Islamic bank may progress further by creating a communication program with the aim of transforming customers into the ones with high-preference toward the Islamic banking service.
Cravens & Piercy, (2013:104): “Customer Relationship Management (CRM) is a cross-functional core business process concerned with achieving improved stakeholders value through the development of effective relationships with key customers and customer segments. Ali Hasan, (2010: 184):”The true business of every company is to make customers, keep customer and maximize customer profitability”. Rootman, (2008:52) asserted there are three variables affecting the effectiveness of CRM strategy in banks: knowledgeability, the attitude of the employees, and two-way communication. Krasnikov, et al, (2009), who studied the implementation of CRM in the banking industry in America found out that it has important role in developing marketing asset toward a better performance. Hui-I, et al, (2012), stated that the implementation CRM in banking needs crucial stages, for example, integrating the communicationd device to satisfy customers’ needs, treating customers as individuals, and create impressive customers relationship and leave a lasting impression. Keshvari,(2012) did some research in the financial institution in Iran. He found out that channel spread (internet, for example), update bank data, excellent service, internationa customers satisfaction, increase of cash flow management, and transaction safety affects positively on the customers’ satisfaction.
According to Kotler & Keller (2012): ” a brand is thus a product or service whose dimentions differentiate it in some way from other product or services designed to satisfy the same need” A brand mau provide great benefit for the producers, as well as the customers. A brand can provide a certain level where a satisfied customer can choose a product easily, so that brand has an added value for the customer. Paul (2011:144) main challenge to achieve brand loyalty and lifetimr relationships with consumers, because only when these are achieved will the brand last and grow in value. Brand are at their most powerful when they determine business direction and bind themselves to consumers through emosional associations. Ahmad, et al, (2011), in his research stated that the understanding of the moslem customers perspective in choosing their banks may provide useful information for the bank senior manager. It helps them to allocate resources and to design exciting and promising products which can satisfy the customers better.
Omar, (2010) studied the role of powerful brand management in Islamic banking in India. He found out that marketing relationship can be conducted through performance, integrated customer satisfaction and and brand loyalty as a
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part of management. Hu, (2012), observed that brand equity, risk perception, customers loyalty has a significant and positive relationship to the customers engagement. Nguyen, (2010), did some research on the customers of financial service in Canada. Personal relatioship is regarded as an imporant element determining the success of service process, personal contact performance, to attract target groups and establish company’s name. The reseach conducted by Chen, et al, (2010), confirmend that brand image has a direct and positive influence on brand equity on the whole, Finne, et al, (2009).
Kotler & Keller (2012:41): “ customer equity is a complementary concept to brand equity that reflects the sum of lifetime values of all customers for a brand”. Karat, Zeithaml, dan Lemon, 2001 dalam Hyun, 2009, stated that the long-term value of a company depends on the value of the value of the relationship beween company and its customers, i.e., customer equity. Customer equity is the present net value of the future profit from all of the customers (Geoffrey N. C. Bick, 2009). Customer Life Time Value (CLTV is defined as the future revenue from acquisition, retention, expansion projection and related cost (Gupta, Lehmann dan Stuart 2004 in Bick, 2009).
CRM implementation has a positve impact on profit eficiency. Jarratt, et al, (2009) explained in his research that the infrastructure relationship of CRM management contributes positively to the customer’s attraction, satisfactin and retention (customer’s performance). CRM implementation has a positive relationship with the customers’ satisfaction (Hui-I, 2012). e-CRM has a positive relationship with the customers’ retention (Khaligh, et al, (2012). The customers equity in Islam is reflected in a cooperation (ta’awun), an ethical foundation in Islamic trading/business (muamalah) M. Syakir Sula, (2006:20). In Islam, helping each other is an obligation of every moslem. This notion is not merely conducted in a small scope. To make sure that this cooperation is always for the goodness and devotion to Allah, it needs a system that follow Islammic syaria. Islam as a complete way of life has laid the foundation for trading / business.
By refering to the problem formulation, objective and research paradigm, a premise can be obtained which is implicitly shown in the idea framework that creates hypothesis below:
1) The performance of the integrated marketing communication created can build attractiveness, customer relationship management performance resulted can create a close relationship with the customers and can build positive brand image as well as superior customer equity.
2) The performance of integrated marketing communication and customer relationship management affect the development of Sharia Commercial Bank brand image in Jabodetabek.
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3) The performance of integrated marketing communication and customer relationship management influence the achievement of customer equity in Sharia Commercial Bank in Jabodetabek.
4) The performance of integrated marketing communication and customer relationship management has impact on the achievement of customer equity in Sharia Commercial Bank in Jabodetabek through the brand image.
Research Methodology
This descriptive and verificative research was conducted by collecting data on the field. Therefore, the methods used are descriptive survey and explanatory survey.
Analysis unit in this research is 218 bank customers of iB mudharabah saving accounts in the Sharia Commercial Bank branches in Jabodetabek. Data collection was from observation, interview, and questionnaires. This research assumes that the number of mudharabah iB saving accounts owned by the customer is 1 (one) account and the percentage of the account of the deposit fund of Sharia Commercial Bank in Jabodetabek. The objects of this research are 6 Sharia Commercial Banks of 11 Sharia Commercial Banks, so the samples that are needed to be observed are 218 samples. Based on the research instrument validity test, all of the results are valid and research instrument reability test result in this research is reliable because Cronbach Alpha is more than 0,6.
Result and Discussion
The result of descriptive hypothesis test is that Sharia Commercial Bank in Jabodetabek is unable to create attractive integrated marketing communication performance, unable to make a close relation in customer relationship management performance, and unable to build positive brand image and superior customer equity. The result of verified hipothesis test uses statistics testing that described in a framework of the flow and connections among variables in which the relation is shown as structural equation model.
The performance of integrated marketing communication positively influences the brand image built, means the performance of integrated marketing communication can improve the success of Sharia Commercial Banks more in building the brand image. Therefore, partially the variable of the performance of integrated marketing communication influences market brand image, but the customer relationship management performance of the Sharia Commercial Bank does not significantly influence the brand image built by the Sharia Commercial Bank. The variety of brand image building explained by the variable of integrated marketing communication performance and the variable of customer relationship management performance R2= 0,93, this means 93% of the changes in brand image building of Sharia Commercial Bank in Jabodetabek is positively influenced by the changes in the performance of integrated marketing
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communication and customer relationship management, while the rest of 7% is influenced by other factors not included in this research.
Therefore, the performance of integrated marketing communication and the variable of customer relationship management has partially positive but weak influence in achieving excellent customer equity which means that the performance of integrated marketing communication and the variable of customer relation management has weak influence in improving the success of Sharia Commercial Bank in reaching the customer equity. Then, simultaneous influence, the amount of customer equity achievement variety explained by the variable of performance of integrated marketing communication and the variable of customer relationship management is R2= 23%. This means 23% of changes that happens in the customer equity of Sharia Commercial Bank in Jabodetabek is influenced by the changes in the performance of integrated marketing communication and customer relationship management, while 77% is caused by the other factors not included in this research.
The achievement of the brand equity explained by the variabel of integrated marketing communication and the variable of customer relationship managmenet through brand image is R2 = 0.95.This means that 95% of changes happened in the Sharia Commercial Bank in Jabodetabek is affected by the changes in integrated marketing communication and customer relationship managmenet through brand image. The other 5% is due to other variables not included in the research.
The total estimation result obtained based on the research model can be seen in Picture 1. The result shows that brand image works as mediating variable (intervening). Baron and Kenny stated that complete mediation happens if independent variable does not influence dependent variable anymore after having mediation variable so that the direct impact is zero (0) relative. Partial mediation happens if independent variable does not influence dependent variable anymore after having mediation variable so that the direct impact is zero (0) relative. Then a deeper analysis is conducted by analyzing direct and indirect impact between integrated marketing communication performance and customer relationship management performance in achieving customer equity of Sharia Commercial Bank through the brand image.
Indirect impact of the variable of integrated marketing communication performance to customer equity through brand image is (0,93 x 0,75 x 100) = 69,75% and the indirect impact of customer relation management performance to customer equity through brand image is (0,03 x 0,75 x 100) = 2,25%. This result shows that brand image is a mediating partial variable because the variable of integrated marketing communication performance and the variable of customer relationship management performance simultaneously causes more influence in
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achieving customer equity of Sharia Commercial Bank Jabodetabek through the brand image. The brand image variable is also as a partial intervening variable. It is due to the influence between integrated marketing communication variable to customer equity and an influence between customer relation management variable to the achievement of Sharia Commercial Bank customer equity.
This result informs that integrated marketing communication performance and customer relationship management performance have attractiveness and are able to build a close relation with the customers so it will be able to motivate the superior customer equity achievement if it is able to build a good brand image.
This result is in line with the opinion of Aaker (1996:16). This is also supported by Kotler and Keller (2012:265) which said the brand equity will be higher as a result of the higher dimensions of the company brand image; those dimensions are the awareness of company image (company recognition), loyality/recognizition of the company image (company reputation), quality impression (affinity), brand associations (domain), other assets such as legal right, stamp seal, distribution mechanism and many others.
If the benefit sides of Sharia Commercial Bank have been fulfilled, the brand image of Sharia Banking will be better and it may strengthen the distinctiveness of Sharia banking to the customers. The reputation of Sharia Commercial Bank brand is formed in conjunction with functional benefits given.
It is line with Kotler and Keller (2012:264) who state brand can give a lot of benefits to the producers and customers, brand can be in one certain stage where the satisfied customer can easily choose the product so that brand can provide added value for the customer. A good reputation for Sharia Commercial Bank will give more value to the customers. In Summary, based on the score description of custumers perception, the new brand image is not a not good enough, not fully recognized from the point of view of the brand reputation or brand emotional of Sharia Commercial Bank in Jabodetabek.
Therefore, the power of customer equity that is gaining acknowledgement from the customers who feel comfortable using the Sharia Commercial Bank, holding a good manner, gaining their purposes of life/falah, can be obtained if Sharia Commercial Bank conducts the promotion that educates customers, gives trustworthy service, hold the policy of products and service. By implementing customer relation through a good-will close relation, credible human resources, and expertise in information technology. The brand reputation and emotional power of Sharia Commercial Bank may create a famous brand reputation that pleases its customers, reflects principals of justice, transparency in managing the customers’ fund, trusted as a non-interest bank and conducts in the principal of equality.
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Conclusion and Advice
The performance of customer relationship management of Sharia Commercial Bank has not been able to create a close relation with the customers because is has not created a relationship commitment based on good will/silahturahim. The performance of integrated marketing communication in Sharia Commercial Bank has not been able to create attractiveness for the customers. Sharia Commercial Bank has not been able to build positive brand image of the brand reputation and brand emotion. Customer equity of the Sharia Commercial Bank have not been superior because, have not been able to offer products that according to the purpose of life/ falah and not been able to create a religious motive, so it has not reached the customer retention. The performance of integrated marketing communication and customer relationship management in Sharia Commercial Bank has simultaneously influenced the positive brand image development of the Sharia Commercial Bank in Jabodetabek. Based on structural relation, it is found that brand image development is strongly dominated by the performance of integrated marketing communication. Customer equity can be achieved by the performance of integrated marketing communication and relationship management through positive brand image development where integrated marketing communication performance strongly influences and dominates more than customer relationship management performance.
Acknowledgements
Prof. Dr. Hj. Dwi Kartini, SE., Spec., Lic, Dr. Hj. Yevis Marty Oesman, SE.,MS, Bapak Yunizar, SE.,MSc., Ph.D, Prof. Dr. H. Sucherly, SE.,MS, Dr. Hj. Imas Soemaryani, SE., MS, Dr. Arief Helmi, SE., MS, Prof. Dr. H. Yuyus Suryana Sudarma, SE.,MS.
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