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The Influence of Brand Reputation and Corporate Entrepreneurship to Customer Loyalty in Citra Kasih Secondary School

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The Influence of Strategy Corporate Communication On

Customer Loyalty

(Study Analysis of Citra Kasih Secondary School)

THESIS

BY

Name: Deswita Erini Manik

NIM : 55213110036

MERCU BUANA UNIVERSITY

MAGISTER OF COMMUNICATION SCIENCE

2015

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TABLE OF CONTENTS

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Table of Contents ...

CHAPTER I INTRODUCTION

1.1 Research Background ... 1.2 Identification and Formulation of the

Problem ... 1.3 Research Purposes ... 1.4 Research Questions ... 1.5. Research Purposes ... CHAPTER II THEORY FRAMEWORK ...

2.1 Literature Review ... 2.2 Framework ……….. 2.3 Theory Hypothesis ... APPENDIX ……….

CHAPTER I

INTRODUCTION

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1.1

Research Background

Citra Kasih Secondary School, a national plus school, started in 2006, in partnership with Anglican Education Board of Singapore. Built with the mission of contributing to the nation’s educational improvement to help cultivate Indonesia’s younger generation. Along with the school mission by providing a conductive learning experience which involve and reinforce character development, life skill training, languages proficiency and entrepreneurship education. Deliver and enrich the National Indonesian Curriculum by incorporating varieties of learning approaches which enable students to become creative and effective learner.

The competition in education industry has been increasing every year. It has been indicated with all the demands from the customers to have an innovative education. Plenty of schools offer the customers with the several school program. In this era of globalisation, a competitive market has made some schools to create innovative and creative strategies and promotions to win with their competitors. All kinds of modern organizations will use variations of marketing communication to promote what they would like to offer to achieve financial and non-financial objectives. Schools that bring along the reputations that impact to the school’s identity in order to explore how the self-image of an organisation impacts the external field. Reputation plays an increasing part in keeping

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organizations honest and forcing them to take ultimate actions, rather than simply making public statements. Both customers and workers are getting into the game.

According to Joachim Klewes and Robert Wreschniok, reputation can be accomplished, added and traded in for trust, legitimisation of a position of power and social recognition, a premium price for goods and services offered, higher customer loyalty, along with a stronger willingness among shareholders to hold on to shares in times of crisis, or a stronger eagerness to spend in the company's stock. Therefore, reputation is one of the most meaningful forms of "capital" of a company.

"Delivering functional and social expectations of the public on the one hand and manage to build a unique identity on the other hand creates trust and this trust builds the informal framework of a company. This framework provides "return in cooperation" and produces reputation capital. A positive reputation will secure a company or organisation long-term competitive advantages. The higher the Reputation Capital, the less the costs for supervising and exercising control."

Citra Kasih Secondary School has established an entrepreneurial curriculum to meet the expectation from the parents who are eager to make their children to join in the entrepreneurship education. The objective of establishing the entrepreneurship education which contributes to a young person’s self-efficacy skills in preparation for future entrepreneurial and/or other employment opportunities, in view of the changing nature of work ina global society.

The results that most parents experience from putting their children to schools who are only focusing to academics make the quality of the students only capable in the area of academics but they are unable to cope with the era of globalisation as they are not prepared critically to operate in today’s economy. It

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has been settled that entrepreneurship education would also assist inaccelerating the rate of business ownership, and that the number of failures would decrease and the corporate’s efficiency would increase if more entrepreneurship education were available.The debate centers itself on whether thinking and acting like an entrepreneur may even affect one’s broader work performance and life perspective.

The popularity of entrepreneurship education has made a new paradigm in an education system. It also brings the new impact on the brand reputation and the corporate entrepreneurship as building the behaviour aspect from the customer to bring up the loyalty. Recent business trends have proven that brands by themselves are the effects of increasing importance. Business leaders and financiers are identifying that a strong brand can in the long run be monetized down the road.

The problems lay on the sustainability of the corporate to manage the reputation of the corporate to be resulted to the customer loyalty. The strongest brands are grown organically and start with a focus on building internal relationships – allowing collaboration to flourish and building passion to drive the organization’s mission and objectives. After establishing such internal buy-in, the potential for building a strong brand is limited only by the degree of external engagement a firm builds into its online presence, marketing and CRM efforts.

By implementing entrepreneurship as one of the useful innovative education, it has been influencing the loyalty Entrepreneurship has been regarded to be vital in the economic growth and development for many kinds of reasons. It is commonly known that entrepreneurship subsidises significantly to the local, national,and global economies. It is also the primary means of raising economic

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development. According to Shane &Venkatarman, entrepreneurship has become a mechanism by which the society changes the technological information into products and service and this needs innovation that does not only technological but also spatial inefficiencies in an economy. It is clearly stated that the study of entrepreneurship has been necessary.

Entrepreneurship, along with the synonym for building new small firms as an appropriate vehicle for entrepreneurial enterprise (Rothwell&Zegveld). Literally, it focuses on the importance of entrepreneurship for and within existing corporations. Entrepreneurship, as the creation of a new organization. It is necessary, however, that entrepreneurship, is a primary source of innovation, that may also involve the development of new visions and business methods for established companies as well as the formation of new organizations (Carnier, 1996).

The entrepreneurship education includes building a variation of skill sets such as leadership (Vesper and McMullen 1988), adaptableness (Timmons &Spinelli, 2009), creativity (Timmons &Spinelli, 2009), persistence (Markham, Baron, &Balkin, 2005) and financial literacy (Timmons &Spinelli, 2009). These skill sets are required in Citra KasihSecondary School as the Corporate Entrepreneurship. Entrepreneurship education has also been found to develop student performance by demonstrating the relevance for learning and engaging them in the learning process as the school has introduced the Entrepreneurial Learning Cycle: Exploring, Planning, Doing. Entrepreneurship education encompasses more applied instructional mechanisms, using both computer and real-life simulation experiences, guest speakers as role models, and completing

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business plan projects. The traditions of primary lecture and rote memorization do not easily fit into an entrepreneurial classroom. Entrepreneurship education encompasses learning how to think and become a life long learner. These methods often run counter to the traditional instructional methods currently found in secondary education; whereas, emphasis is placed on lecturing, memorization and taking a variety of tests.The other means of entrepreneurship teaching comes from the use of applied projects. Applied projects are increasingly being applied based entrepreneurship curriculums. Applied projects teach basic entrepreneurial skills. Projects could simply involve students in the process of creating products and/or services to sell in the marketplace, and actually endeavour to involve them in the commercial process. With these kinds of entrepreneurial activities such as POE (Project of Entrepreneurship), GE (Global Entrepreneurship) which have been being established to improve the innovation of the corporate entrepreneurship. Entrepreneurial skill setswill progressively become much more appreciated during the future. The next generation’s outlookon entrepreneurship activities, based on application of entrepreneurship education, will pointedly influence their role in the world of work. As the label of this branch which adopts the entrepreneurial spirit is Corporate Entrepreneurship.

Corporate entrepreneurship as a field of research and practice is assumed as reviving and invigorating existing companies that brought business development, revenue, progression, profitability improvement and pioneering the development of new products, services and processes into practice (Kuratko et al., Lumpkin &Dess, Miles &Covin, Zahra, Zahra &Covin, Zahra et al).

According to Jennings and Lumpkin, the definition of corporate entrepreneurship is where the new products and new markets are established. To

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make one organisation as entrepreneurial, if the organisation enhances a higher than average number of new products and/or new markets.

Corporate Entrepreneurship has capabilities for promoting and nourishing organizational performance, renewal and corporate affordability. This helps the company to improve new businesses that create profits streams and emerge the innovation within the process of corporate entrepreneurship activities which increase good impacts over time. The challenge for Citra Kasih Secondary School to establish entrepreneurial innovations will intensify global competition and heighten the need for the corporate to become more entrepreneurial in order to survive and prosper.

Fig 1. Research Model

Innovative companies bond their visions to the actualities of the marketplace (Quinn 1985). Parsons (1992) showed that innovative companies indicate an important characteristic of focusing on customer value rather than the technological advance or even clever marketing. Market knowledge is an important driver of innovativeness (Drucker 2002; Hurley and Hult 1998).

Market Scope Risk-Taking Product Type Idea Generation Size Proactiveness Organization’s Entrepreneurial Climate Support For Personal Entrepreneurship

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Sciascia et al. (2006: 33) found that a firm’s market mind-set might be the most significant precursor to corporate entrepreneurship.

Citra Kasih’s ability to improve its entrepreneurial appeal is intensely determined by the compatibility of its management applies with itsentrepreneurial intentions.

1.2. Identification and Formulation of the Problem

The competition that has been happening throughout the education industry, has made the corporates improve the marketing communications by proving that good and strong reputation will enhance the customer loyalty. As a corporate entrepreneurship, implementing entrepreneurship as one of the innovative products in education curriculum can build the brand reputation that goes along with the customer loyalty.

The brand reputation of the corporate has been the mind-set of the customer. The matter that I am going to analyse is about the brand reputation and corporate entrepreneurship to measure the customer loyalty in Citra Kasih Secondary School.

Based on the background problems, the research questions will be about: 1. How is the process to form the brand reputationand corporate

entrepreneurship in increasing consumer loyalty?

2. What are the right formulations from Integrated Marketing Communication that Citra Kasih Secondary School as a corporate entrepreneurship forms the brand reputation?

1.3. Research Purposes

1. To discover the process to form the brand reputation and

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2. To discover the right formulations from Integrated Marketing Communication that Citra Kasih Secondary School as a corporate entrepreneurship forms the brand reputation.

1.4. Benefits and Significance 1.4.1 Academic Significicance

The result of this research is hoped to describe how is the process to form the brand reputation and corporate entrepreneurship in the mind of customers for showing the loyalty. However, this research may enrich the references about the customer loyalty research which will be useful for academic purposes within the field of communication and marketing.

Former research had been done related to the stereotypical research, such as a research held by Aditya ShendiKurniawan (2011) who concluded that brand characteristic, company characteristic and consumer brand characteristic influence significantly and positively to the brand loyalty and results to the consumer loyalty.

It also shows that the customers trust in a brand. The other research held entitled The Effect of Corporate Image in the Formation of Customer Loyalty by Allison E. Hart (2004) indicates the results are generally consistent with the prior study, with corporate image having a significant effect on essential service and customer satisfaction observations. Corporate image was found to have only a slightly significant direct influence on customer loyalty, though the total effects of corporate image (both direct and indirect) on customer loyalty are much more considerable.

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With this research, it is further hoped to gain information to the corporate or organization to evaluate the contributions mentioned based on the surveys or poll to improve or maintain the corporate image and reputation.

CHAPTER II

THEORY FRAMEWORK

2.1. Literature Review A. Theory Description 1. Brand Reputation a. The Definition

Reputation is the estimation of the consistency over time of an attribute of an entity. This estimation is based on the entity's willingness and ability to perform an activity repeatedly in a similar fashion. An attribute is some specific part of the entity --price, quality, marketing skills. The possibility exists of attributes being highly correlated (carryover effect); for example, a firm's price reputation and its quality reputation tend to move in the same direction and both be simultaneously either positive or negative. This is not to say that attribute independence does not exist but high correlations between attributes are certainly possible.

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Reputation is an aggregate composite of all previous transactions over the life of the entity, a historical notion, and requires consistency of an entity's actions over a prolonged time.

Reputation is established by the flow of information from one user to another. Therefore, transactions betweenthe entity and other parties must have occurred in order for a reputation to be established.

Reputation occurs primarily through market signaling. A market signal is a marketing activity that provides information beyond mere form and alerts another firm to its intentions, commitments, or motives. A reputation is established by fulfilling marketing signals. A firm will lose its reputation if it repeatedly fails to fulfill marketing signals. This consequential loss of its reputation prevents the firm from signaling effectively since its signal will then be given little attention by its competitors. A firm, then, has considerable incentive to work hard to establish a credible reputation. Credibility of reputation signals can only be established if sending false signals would be highly unattractive and costly to the signaling firm (such as warranties or guaranties).

Reputation improves when objects are uncertain about one another's options or reasons and where they deal witheach other

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repetitively in related situations or where past dealing with other firms are recognisable.

Users must often effort to surmise missing information via the signals given, by taking the initiating firm's actions as indicative of its future behavior. Companies, therefore, often use reputation and reliability as ameans of forecasting the actions of competitors. Consumers use reputation as a means of inferring quality of the product. Reputation, though, is an imperfect attribute since there is always a time lag effect (Shapiro, 1983). Reputation is always most timely just after the latest transaction; the attitude toward the next transaction is dependent on the prior attitude and its accuracy decays with the time between transactions. The critical factor in the reputation lag is the time frame concerned with the speed (and costs) of learning (information flows). The concept of reputation depends on a user's initial beliefs and its observation of a firm's past behavior. By providing accurate information, a company can enhance its reputation but at the cost of forgoing the immediate gain that could be made by duping users; the company, therefore, takes short-term losses to build reputation and secure larger long-term gains. Reputation causes quite different behavior from what would otherwise occur in its absence. If a firm were to establish a believable reputation as a tough competitor, this could lead potential entrants to anticipate that theincumbent firm will

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behave aggressively if they were to enter the industry. The threat of predation will beeffective in preventing entry only if participants find the threat credible. A firm, therefore, can profit greatly bymaintaining or acquiring a reputation for durability (Scherer, 1980). A firm also could, by forcefulbehaviour in one market, influence competitive actions in another, different market. Scherer (1980) said, "fear of absurdor frankly rapacious action, rather than the expectations of sensible pricing responses, may be what encouragesthe potential new applicant from entering on a large scale".

A firm's recent reputation moves other firms' predictions of its recentbehavior and their actions. The firm must,then, also take into account its own reputation in order to get ahead better its competitors' likely responses.

A firm must therefore think the long-term consequences of its recentchoice on its future reputation as thetemptation to cheat (that is, not fulfill its signals) always exists. A "closet" defector has to maintain its reputationas a reliable firm while waiting for achance large enough to "milk" its reputation for short-term gains.

These gains must be suitably large to handle the expectedfailure in its reputation as a result of itsfalse. This strategy of "milking" its own reputation to make a killing has its dangers.

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Reputation is a precious product. Its value is directly proportional to its instability (Kreps and Wilson, 1982). Once eroded it takesprecious time to rebuild. A firm would want to use this strategy only if the potential rewards were significantlyhigher than the costs involved in its loss of reputation -- the potential costs essential in upgrading its reputation.

Credibility is the reliability of an entity's purposes at a specific moment in time. That is, credibility is whethera company can be relied on to do what it says it will do. Credibility is time sensitive: the entity's observedcredibility today can vary immensely from its observed credibility by the same firm on a previous or future date.

Credibility is based on a firm's intention; the entity's actions will either approve or disapprove the other firm'sbeliefs in the entity's symptoms. Credibility happens when one can surely use past actions to foretell futurebehavior.

Any signal will be assessed by the receiver by, among other factors, the credibility of the basis. The higher thecredibility, the more convincing the source. Credibility must be before the message or action to have anysignificant effects (Sobel, 1985). To attain credibility for high quality, a company must first improve areputation for creating and bringing quality products. To attain

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credibility a competitor must first improve areputation (Bell, 1984) and it usually takes many periods before a reputation can be reputable. Credibility istherefore dependent on reputation as well as the just prior transaction. Credibility impacts reputation onlythrough the endingresult: promised quality must be carried to construct a positive reputation (Fitzgerald,1988).The value of items produced in precedingperiods serves as a signal of quality of the goods that are to be produced in the recentera.

Once a reputation is established, the firm has sufficientencouragement to keep that reputation. A firm that miscarries tofollow-through loses its credibility; to regain credibility, it must again pay the price the high costs of reputation building.

Credibility would be missing if the firm were to offer unconfirmed statements. Loss ofthat credibility would mean less clients would be payable and therefore less profits.

Reputation building is associated with the steadiness of the results. A transaction can be either positive ornegative, for in either case continued consistency rises both credibility and reputation. A firm can have abad reputation but be totally credible. Note the different effects: continuedpositive transactions lead to a positive reputation and a high stateof credibility while repeated negative

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transactions resulted to a negative reputation but credibility remains high.

To summarize, credibility is the trustworthiness of the recent intention; reputation is a historical notion based on thesum of the past behaviors. Both credibility and reputation are active in nature; both are disposed to change overtime and are a function of time. Reputation and credibility are conditions; reputation building and credibilityformation are processes. The credibility of a firm rises if its actions agree with its statements and itscredibility declines if its actions and statements are varying. Note that positive and negative are allqualified; a competing firm may view a drop in price as a negative while consumers may see it positively.

The importance of a firm's overall reputation is easily seen in its association with a firm's takings: as a firm'sreputation rises, so does its sales (Shapiro, 1982). A firm with a good overall reputation owns a preciousadvantage -- "goodwill": brand names, corporate logos and customer loyalty. However, a reputation is easily broken. It caneasily be lost and once lost takes much time and struggle to re-establish. It takes from seven to ten times the struggle tobring back a reputation once lost. That is, the negative effect of a single mixed signal is seven to ten times(negatively) the impact of a signal achieved.The more credible the message source, the more likely it will impact the receptor. The better a

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company'sreputation, the higher its chances are of getting a good first hearing for a new product and of getting earlyimplementation of that product. The source outcomeimpact varies by the character and capability of the receptor.

The strength of a company's overall reputation corrodes with the passage of time. A goodreputation lets a company to get its salesman's foot in the door but has smaller effects in the final buyingresult.

Where and how a message is brought is of key significance in its interpretation. Messages brought beforeindustry audiences or financial analysts have higher credibility because both groups have improved personalrelationships based on reliance and are rapid to punish if ever deceived.

Brand reputation refers to how a particular brand is perceived by others. A favourable brand reputation means the consumers trust the company, and feel good about purchasing the goods or service.

Brand and reputation is the short hand answer. Prospective customers want valuable information from the corporate’s reputation. Strong brand reputation elicits strong opinions. Why’s that? this kind of way will boost the corporate by emphasizing intangible assets that build consumer satisfaction. It’s a good way

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to treat the most loyal customer. The key to improve the value of the brand is to think holistically. The corporate leaders are wished to paint a vision of the future, and focus on consistent communication and marketing.

As Liza Flaiz, a Pharmaceutical Executive once commented that most of the customers can change a monologue about a brand into a conversation. to promote a brand isn’t complex enough but defending a brand in the competitive world is a challenge.

Chad Callaghan, the Vice President of Enterprise Loss Prevention Marriott International when he joined Marriott and charged with protecting the interests of over 150,000 employees, guests, property owners & share-holders at hotels, golf courses, convention, centres, timeshares & restaurants. he said that the visibility of a corporate’s brand will manage to improve the brand and reputation. to have a proactive program that meets the expectations of consumers. where the corporate has a strong profile and the consistency of thinking outside the box.

Brand reputation is built over time and should be proceeded by a global 360°mapping of the stakeholders’ influences. it should also be proceeded by careful identification of strengths and weaknesses and an objective analysis based on facts and scientific research rather than on hunches, assumptions and feelings.

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The success in measuring and managing the reputation of a corporate depends on the commitment of the executive team, the understanding of the aims and objectives of the measurement process and appreciation of the influence of reputation on the future of the corporate. It also highlights the role of communication in managing reputation and the importance of communicating clearly the organisation message and story.

Reputation is the measurement of the consistency over time of an attribute of an entity. An attribute is some specific part of the entity-price, quality, marketing skills. Corporates, therefore often use reputation as a mean of predicting the actions of competitors. Consumers use reputation as a means of inferring quality of the product.

A corporate with a good overall reputation has a valuable asset which is called “goodwill” such as brand names, corporate logos and customer loyalty. The strength of a company’s overall reputation erodes with the passage of time.

Reputation In The positive support , effort required Cooperation where the employees produce images of employees and managerial Corporation . When a company CAN communicate brand was shown to the public and the public CAN give Good response against these brands so as to produce the company's value (Company’s value ) . Sustainable development

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The company's reputation is ' collective representations ' series of images and the resulting perception of many different opinions about the company . To build and maintain good corporate reputation , need to deal with a number of stakeholders who may all have different opinions or views of the company , but collectively contribute to the overall reputation of the company .

Reputation was obtained from the history track record . You can not build a reputation on what you 're going to do . Although reputation is an intangible concept , universal research shows that a good reputation is proven to increase the value of the company and provide a sustainable competitive advantage . A business can achieve goals more easily if it has a good reputation among stakeholders , especially the key stakeholders such as the largest customer , opinion leaders in the business community , suppliers and current and potential employees .If your organization is respected by key customers , they would prefer to deal with you in front of others .The two main sources are the company's reputation and experience of information - one's past dealings with the organisation.

When an organisation that searches create positive reputations amongst its several stakeholder groups, it must understand the dimensions on which stakeholders value reputation. These contain, but are not restricted to, the organisation’s enactment, its products and services, its citizenship activities, service, innovation, the workplace, governance and ethics. The organisation constructs its identity though itsconsidered choices and corporate expression. Afterwards, it must

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improve a strong corporate brand, through its corporate manifestation and effect of brand image.

Reputation is one of the primary contributors to perceived quality. Having a good reputation also ensures that high quality corporates will be larger and have more customers will depart from high quality corporates in the long run and more will arrive because of word-of-mouth activity from other customers (Rogerson, 1983).

If the organization is more fussing on search strategies and competencies of competition, reputation will become victims of the crisis if there is 'any behavior management' (management misconduct), such as 'crisis confrontation' (Confrontation crisis) to face the forces of social activism. Conversely, if the reputation is complex nurtured carefully, crises or sectors can be avoided, because reputation is essentially 'non-physical assets of the company are very valuable that affect the value and long-term corporate profits ... which is easily destroyed'.

As you form your reputation, you make strong positive or negative hopes in the minds of people showing to you.

All companies must have established with the specific mission to be able to bring in a certain vision. To realize this vision through its mission, the company needs a strategy for mobilizing and directing resources. Vision, mission and strategy of the company and then transferred to the targets and initiatives to be able to produce a plan of action or action plans.

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According to Robert Barner, in his journal, Brand Management, he mentioned four actions to manage the brand that is resulted to the corporate’s reputation:

1. Action 1: Make a starting point assessment. Help leaders comprehend how their leadership brands are seen byothers. We all tend to payattention to our positive qualities while disregarding or excusing those that work against us. When drilling leaders, I question them to give me three words that their boss, co-workers and direct reports would use to explain their best qualities. Then I ask for words used to explain their greatest weaknesses. Often, the second list reflects the first. For example, the leader who superiorities herself on being results-driven and hardhitting might also confess that others view her as being argumentative. To accomplish a starting point assessment, coordinators can supplement their feedback by imploring feedback from co-workers who deliver different perspectives on how a leader's brand is viewed. Multi-rater feedback surveys are useful tools for evaluating brands. Also, leaders can determine much about how they come across to others by listening or watching themselves on tape.

2. Action 2: Link brand qualities to exact behaviors. Coordinators often provide principals with unclear and confusingresponse. Statements such as "Other people have told me that they see you as being a good team player" don't give the listener with much valuablel information. Help leaders understand how brand

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attributes such as good team player are related to exact behaviors. For example, a leader who islabeled by others as being too aggressive tends to become overly perilous during disagreements. When applied to another person, this same label might mean that the person in question is far too pushy and directive when negotiating solutions with herpeers. The more targeted the feedback, the more valuable it is for development. In most cases, a few keyleadership behaviors are so dominant, repetitive, and visible to others that they tend to shape how others see them.

3. Action 3: Describe brand migration. Leaders need to acquire how to effectively adjust their brands as they move from one position to another. The behaviors and communication outlines that work in one setting don't necessarily work in another. In presentations, for example, leaders with technical backgrounds in IT, research, or engineering tend to provide complete and widespread explanations to others within their functions. An 80-slide PowerPoint doesn't work well when presenting to an executive team. Presenters need to deliver a tight, fittingpresentation, and translate tech-speak to broader, strategic concerns. A presenter is also judged on the ability to respond briefly and assuredly to questions and issues that might be asked.

4. Action 4: Classify showcase opportunities. Some situations allow leaders to display their brand strengths. Actual brand advisors help leaders seek such showcase opportunities. For a coordinator,

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this might mean proposing to lead a cross-functional team that is undertaking a difficult process improvement effort. For a leader with skills in compromise and conflict management, it might mean helping to resolve a clash with a major client. Such situations allow people to see these leaders at their best, and to show where those leaders can deliver supplementary worth in the future.Managers who see their roles as performance managers and technical advisors, may overlook thegrowing role they can play as brand advisors. By giving leaders with brand coaching, coordinators help principals to strengthen their reputations and improve more effectively.

2. Corporate Entrepreneurship

a. The Definition

According to Hornsby et al. (1999), Corporate Entrepreneurship is a concept that has developed more and more significance in the global economy. The need to follow Corporate Entrepreneurship has arisen from a variety of demanding problems including: technological changes, innovations, and improvements in the marketplace (Miller and Friesen 1982).

As one of the appreciated corporate imperceptible assets, corporate reputation has received extraordinary attention from both academics and business community. However, a piece of successful experience in

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corporate reputation management in one country or area could hardly been replicated in another place due to its culture and environment-dependent characteristic, thus good corporate reputation is of great importance in corporate essential competence. Corporate behaviors and corporate social responsibilities has been always the main point of corporate reputation.

Then how can a good valuable corporate build successful new businesses on an ongoing basis? There are exactly two scopes under the straight control of management that constantly distinguished how companies approach corporate entrepreneurship. The first is organizational proprietorship: Will the primary proprietorship for the formation of new businesses be focused in a selected group, or will it be subtle across the organization? The second issupplyexpert. Together the two dimensions producea basic with four basic models of corporate entrepreneurship: the opportunist, the enabler, the advocate and the producer.

In the opportunist model, the company has no considered approach to corporate entrepreneurship, and new businesses are made mainly from the common efforts of a few project champs.

Enabler companies, carrysubsidy and senior executive attention to potential projects.

In the advocate model, the company intensely evangelizes for corporate entrepreneurship, but business units deliver the primemoney. Each of the four models has a not similar aim, function and set of

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challenges. Whichever model is chosen,the critical thing to remember is that corporate entrepreneurship needs to be fostered and coped as a strategic, measured act.

Trust is avital part of corporate reputation (Davis Young, 1997) and is also an important requirement for the formation of customer loyalty. Empirical researches have indicated that good corporate reputation could reinforce customers’ trust in corporate and product and finally promote customer repurchase (NhaNguyen/Gaston Leblanc, 2001). Though the positive impact of corporate reputation on customer loyalty has been commonly accepted, the functional mechanism and mutual interaction between them have not been deeply studied. How to take advantage of this valuable intangible asset to strengthen customer loyalty needs further empirical research.

In 2002, Schwaiger (Manfred Schwaiger, 2004) put forward a new measurement and explanation model of corporate reputation by considering corporate reputation as a combination of affecting component and cognitive component.Mindful efforts to fill entrepreneurial practices within corporations are intendedto improve the capability of the firm to yield or obtain new products or services and achieve the innovation process.

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Corporate Entrepreneurship has been recognized as a potentiallypractical means for encouraging and supporting corporate effectiveness (Covin and Miles 1999). Miller (1983), Guthand Ginsberg (1990), and Lumpkin and Dess (1996) have stated that corporate entrepreneurship can be used to increase competitive positioning and changecorporations, markets, and industries as opportunities for value-creating innovation are developed and broken. Corporate Entrepreneurship activities have been found to improve a company's success by promoting product and process innovations (Burgelman 1983, 1991).

Van de Ven (1988) uses the term ‘management of innovation’ to explain Corporate Entrepreneurship phenomena. A first step in describing Corporate Entrepreneurship is to decide the dimensions of individual entrepreneurship that translate to Corporate Entrepreneurship. Miller (1983) stated that there was a frequent need for innovation, constructive risk-taking, and pursuit of newopportunities. Similarly, Covin and Slevin (1991) suggest Corporate Entrepreneurship is based on product innovation, risk-taking tendency, and reactiveness. The experimental evidence is captivating that these Corporate Entrepreneurship activities can expand organizational growth and viability (Kuratko et al. 1990; Lumpkin and Dess 1996) and that their impact may rise over time (Zahra and Covin 1995).

The internal entrepreneurship that organisations depend on for their development is intensely necessary by factors of innovation, risk tendency,

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competitive energy, reactiveness, and autonomy, in line with Alpkan et al. (2010) and Ireland et al. (2009)

In the early stages, all innovations are defined by uncertainty. If no uncertainty exists, then an organization is simply not innovating. Moreover, corporate entrepreneurs are not just creating a new product or service but changing the way a company develops, builds, markets and supports its offerings. As such, newbusiness creation will often compel a company to incorporate capabilities and knowledge from the outside. In fact, an effective corporate entrepreneurship program can enhance a company’s ability to absorb external knowledge and opportunities, the essence of “open innovation.”Obviously, this kind of capability can hardly be built overnight,and corporate entrepreneurship will always be arough-and-tumble process with few guarantees. But playing it safe is hardly the answer for those companies looking to grow organically.

3. Customer Loyalty

a. The Definition

Customer loyalty or customer retention. It is the key objective of customer relationship management and describes the loyalty which is built between a customer and corporates, persons, products or even brands. The individual market segments should be targeted in terms of developing customer loyalty.

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b. The Importance

Satisfaction is an overall customer approach or behavior towards a service provider, or an emotional response towards the difference between what customers expect and what they get, regarding the accomplishment of some desire, need or goal (Hansemark, &Albinsson, 2004; Kotler, 2000; Hoyer, &MacInnis, 2001). Customer loyalty, on the other hand, is the result of an organization’s producing a benefit for customers so that they will continue andincreasingly repeat business with the organization (Anderson, & Jacobsen, 2000). It is in fact a deeply heldassurance of customers to prefer products or services of a particular organization in future despite situational constraints or marketing influences to cause the switching behavior. Moreover true customer loyalty is created when customers become advocate of an organization without any incentive (Oliver, 1997).

Many of us have heard of the latest trend for businesses to become highly customer-centric, that is to put the customer at the centre of our business in terms of our strategies, actions and processes. For most of us, old truths still hold good story, such as it is easier and more gainful to sell to existing customers than to find new ones. In practice, organizations are increasingly setting themselves approaches and plans to measure and assure customer retention or customer loyalty, and charging their staff to be more customer-focused and service-oriented. Customer satisfaction holds important importance in corporate sector because without satisfied

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and loyal customers, you don't have a business. A single unsatisfied customer can send away more business from your organization than 10 highly satisfied customers. The more you focus on customer satisfaction and retention, the more long-term business you will get. It’s worth to focus on customer satisfaction strategies; no matter how large or small your organization is as a well known fact is that referrals only come from customers who are “advocates”.This attitude is a significant factor, which influences customer intention to engage in positive or negative behavior decisions. Therefore, satisfaction is a required qualification for building long term customer relationships and likely to improve loyalty (Anthanassopoulos, Gounaris, &Sathakopoulos, 2001; Selnes, 1993; Bloemer, &Ruyter, 1998).

Evans and Lindsay (1996) stated that companies with satisfied customers have a good chance to change them into loyal customers who buy from those firms over an extended time period. Today’s exceedingly competitive and vibrant corporate environment compels the financial institutions to have satisfied customers and retain them in order to stay alive and race with other market players successfully. However, Bowen and Chen (2001) said that having satisfied customers is not enough, there has to be more and more satisfied customers. This is because customer satisfaction must lead to customer loyalty. Establishing customer loyalty is not a choice any longer with businesses. It is in fact the only way of building viable competitive advantage. Establishing loyalty

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with key customers has become a vital marketing objective shared by key players in all industries catering to business customers. Sivadas and Baker-Prewitt (2000) examined that there is an increasing acknowledgement that the ultimate objective of customer satisfaction measurement should be customer loyalty. Fornell (1992) found that high customer satisfaction will result in increased loyalty for the firm and that customers will be less disposed tooffers from competition. This view was also shared by Anton (1996) who stated that satisfaction is positively connected with repurchase intentions, likelihood of recommending a product or service, loyalty and profitability. Loyal customers would purchase from the firm over an extended time (Evans, & Lindsay, 1996).

No doubt customer satisfaction should be the primary objective of an organization to enhance customer loyalty but a business that focuses exclusively on customer satisfaction runs the risk of becoming an undifferentiated brand whose customers believe only that it meets the minimum performance criteria for the category. Long-term customer retention in competitive markets requires the supplier to go beyond mere basic satisfaction and to look for ways of building ties of loyalty that will help ward off competitor outbreak (Clarke, 2001). Sivadas and Baker-Prewitt (2000) also stated that it is not simply enough to please a customer. According to Reichheld (1996), 60 to 80 percent of customers who failing to competitors’ brands said that they were either satisfied or very satisfied with the product or service they left. Therefore, in order to assure

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customers’ retention, Bowen and Chen (2001) were of the view that customers must to be extremely satisfied. As far as organizations are concerned, they want their customers to be loyal to them and customer satisfaction does not fully guarantee this. Customer satisfaction is in fact not necessarily anassurance of loyalty.

Customer retention or customer loyalty is a function of other factors other than customer satisfaction. These include a wider variety of product choices, greater suitability, better prices, and enhanced profits (Storbacka et al., 1994).

Most of the time corporates have been using the slogans such as “Our focus is customer satisfaction”, or “The customer is a king” “Customer is our reason for being in business.” etc.According to Boselie, et al., (2002) satisfaction is a positive, affecting state that results from the consideration of a working relationship between parties. Customer satisfaction is defined by Oliver’s (1997) as the consumer’s fulfilment response. It is a judgment/assessment that a product or service feature, or the product or service itself, provides a pleasurable level of consumption related fulfillment. In other words, it is the thorough level of satisfaction with a service/product experience. Bitner and Zeithaml (2003) lectured that satisfaction is the customers’ evaluation of a product or service in terms of whether that product or service has met their desires and expectations.

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c. The Expected Attitudes and Behaviours from a Loyal Customer

When it comes to costumer loyalty, there is a significant progress for the corporate to gain the brand reputation and the corporate’s brand value.

For example, some of the important attitudes and behaviors expected of a loyal customer include:

→ Likelihood to recommend company products and services to others. (to give word-of-mouth)

→ Likelihood to continue buying the company products and services, at minimum, at the same level.

→ Likelihood of buying other products and services the company offer. → Be certain of company products and services are superior to competitors. → Not actively pursuing alternative service providers.

→ Providing the company with prospects to correct problems and not using these as a basis for compromising the relationship.

2.2. Framework

Corporate reputation is the result of an aggregation process which incorporates diverse information used by the consumer to form a perception of the reputation management. This kind of dimension manifested by the consumer’s

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attitudes and beliefs which rely on past actions of the corporate or previous experiences with the corporate.

From the side of the marketing, the impact of corporate reputation on customer behaviour is well recognized in spite of the lack of empirical evidence. Plenty of authors who held research conclude that a good corporate reputation helps to improve the corporate’s sales and its market share (Shapiro, 1982), and to build and keep a loyal relationship with customers (Andreassen and Lindestad, 1998).

Since the exact relationship between reputation and corporate entrepreneurship as the innovative product, both are the results of the establishment of the customer loyalty.

This analysis takes into consideration the conceptualization of corporate reputation as a level of aggregation carried out by means of the following model:

CRL=β₀Reputation+β₁Corporate Entrepreneurship+β₂Interaction It is where CRL is the customer retention or customer loyalty used as an assessment of customer loyalty toward the service corporate. Reputation is the customer’s perceptions of the reputation of the service corporate, Corporate Entrepreneurship is the innovative product of the corporate and Interaction is the interaction between reputation and corporate entrepreneurship.

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High Relative

Attitude

Low

Low High Fig2. Loyalty Conditions

It is stated that true loyalty only happens when strong positive relative attitudes are associated with high levels of repeated patronage. Spurious loyalty occurs when the customer perceives little difference between alternatives but buys one brand more repeatedly than others.

2.3. Theory Hypothesis

Based on the theoretical description, frame of mind, and the results of relevant research above, it can be hypothesized that the research has been formulated, as follows:

1. There is a positive and significant influence between the brand reputation and customer loyalty.

2. There is a positive and significant influence between the corporate entrepreneurship and customer loyalty.

Latent Loyalty

Spurious Loyalty (Inertia) No Loyalty

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3. There is a thorough positive and significant between the brand reputation, corporate entrepreneurship and customer loyalty.

CHAPTER III

RESEARCH METHODOLOGY

This study uses quantitative method to communication perspective. Along with the communication limitations in describing THE INFLUENCE OF BRAND REPUTATION AND CORPORATE ENTREPRENEURSHIP TO CUSTOMER LOYALTY IN CITRA KASIH SECONDARY SCHOOL. Communication is a critical success factor since communication has the ability to change attitudes and behavior.

Here the researchers used a research object that can provide the complete information according to the problems studied. The object of research is considered to have experienced and undergo a process of relationships and communication with each other. The selection of objects by purposive sampling the researcher did, or intentional sampling by identifying himself above considerations have been thought of before.

By using a quantitative approach because it is based on the calculation of numbers , for which data are tangible numbers (scores or grades , rank , frequency), which is analyzed using statistics to answer the question or hypothesis penelititan specific and to predict that a particular variable affects another variable . A quantitative approach also aims to discover how many characteristics that exist in the population , has the characteristics as contained in the sample .

3.1. Object of Research / Academic Assessment

Location of the research conducted in the Citra Kasih Secondary School Junior, Jakarta.The length of the research conducted over three months. The reason for choosing this location, because the researcher working at the school as an English teacher and would like to contribute exploration and observation about THE INFLUENCE OF

BRAND REPUTATION AND CORPORATE ENTREPRENEURSHIP TO CUSTOMER LOYALTY IN CITRA KASIH SECONDARY SCHOOL.

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Researcher is in the position of the object of study, researcher observed as well as gather information from respondents in a way directly involved in the phenomena experienced by respondents.

3.2. Research Paradigm

According to the research motivations and literature review,our research purpose is through make a survey on the customers of our case studycompany, researching why the people chose Citra Kasih Secondary School as their chosen school for their children and what elements made them feel satisfaction and dissatisfaction, thereby, how toimprove customer loyalty under tool scale and finally building along lasting customer relationships. Based on our research purpose, we adapted thequantitative method as our research method with the positivist paradigm and descriptive research.

Paradigm Research aims to facilitate research goals have been set. Sugiyono explained that : research paradigm is the mindset that shows the relationship between the variables to be studied that reflects the type and amount of the formulation of the problem that needs to be answered through research , theory is used to formulate hypotheses , the type and number of hypotheses and statistical analysis techniques to be used .The paradigm is the basic concept underlying reasoning and research and linking variables studied .

Positivist paradigm that will be used in this research by using descriptive research. We randomly extracted amount of the consumers and made the questionnaire survey, through analysed the response rate to make an objective and realistic evaluation to the CKSS’ products and service. We focus on the facts andresults, because the data is more persuasive and exact than interview, it is the foundation and most important primary stuff of our research.

3.3. Research Methods

In the present study, a positivistic approach has been used as it relies mainly on quantitative data, using relatively large samples and is concerned with hypotheses testing, structured research design and objective method using cross-sectional design.

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Literature on research methods discuss two methods to arrive atconclusions in research. These methods for scientific way of logical reasoning are deductive and inductive methods. Deduction begins with an expected pattern that is tested against observations, whereas induction begins with observations and seeks to find a pattern within them (Babbie, 2009). The steps that are followed in deductive approach are (Babbie, 2009)

Specify the topic 

Specify the range of phenomena your theory addresses. 

Identify and specify your major concepts and variables 

Find out what is known (propositions) about the relationships among those variables. 

Reason logically from those propositions to the specific topic you are examining 

On the other hand in inductive method, the researcher begins with various observations and measures and continues by finding patterns and regularities, formulating tentative hypothesis that can be observed. Finally the Research researcher may develop some general conclusions and theories. Theseconclusions and theories are subject to further confirmation based onsubsequent evidence.

3.4. Population and Samples

The population is overall symptom / unit to be observed . The study population is a population that has been determined in accordance with the selection of research problems and research results are concluded . The population in this study the entire costumer who choose imagery Love High School in West Jakarta .

The sample is part of the population to be observed . In general we can not conduct research to all members of a population due to too much . What you can do is to take representatives of a population is then examined .Therefore , the sample should be viewed as an estimate of the population and not the population itself . The number of samples of the underlying research , based on the idea that the amount of a good sample of the minimum is 100 ( Santoso and Tjiptono 2001, p 71 ) .

In this study , researchers determined the total sample of 100 people costumer Image Love Secondary School both men and women who have devoted enroll their children in the image of Love Secondary School .

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Theoretical study Concept: 1. Brand Reputation 2. Corporate Entrepreneurship 3. Customer Loyalty Empirical Study

1.Research from Ismawanti (2008)

2.Research fromHidayati (tt)

3.Research fromAryani and Rosinta (2010)

4.Research fromMunandar (tt) 5.Research fromDiab (2009)

Hypothesis

Statistics Validation Conclusion

Data was collected by questionnaire survey which consists of three sections. The first section was questions about customers’ experience with ISPs; the questions in the second section focused on respondents’ opinions on service and their futuredecision with the current ISP; and the last one were demographic questions. Basically, the questionnaire contained statements that could be answered through ranking and open-ended questions as well. Respondents were asked some fundamental questions about their experiences with ISP and which companies were their current ISPs. In the second section, a seven-point Likert scale ranging from “Strongly disagree” (1) to “Strongly agree” (7) was used to measure respondents’ perceptions about their current ISP’s service quality and intention to stay with or leave for another one. The questionnaire was made in English at first and translated into Bahasa because the respondents were all Indonesian.

3.4. Concept Definition and Concept Operationalization

Here is shown framework of this study :

Framework Research

The framework of this research derived from the concept that the brand reputation as the corporate entrepreneurship, customer satisfaction and customer loyalty is related to each

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Brand Reputation

Corporate Entrepreneurship

IMC

Customer Satisfaction Customer Loyalty

other. Theoretically, the process can provide guidance in this study, where the quality of service affects loyalty, directly or indirectly affect loyalty through customer satisfaction. Customer satisfaction is a construct that stands alone and is influenced by the quality of service (Oliver, 1980). The brand reputation can also directly affect customer loyalty (Zeithaml et al., 1996) and influence customer loyalty indirectly through satisfaction (Caruana, 2002).

Hypothesis

Based on the above framework, the research hypothesis formulated models and formulation of research hypotheses as follows:

H2 H1 H3H5 H4 H6 A Model of Hypothesis

1. There is a positive and significant influence between the brand reputation and customer loyalty.

2. There is a positive and significant influence between the corporate entrepreneurship and customer loyalty.

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3. There is a thorough positive and significant between the brand reputation, corporate entrepreneurship and customer loyalty.

3.5. The Validity and Reliability

According toNotoatmodjo before the questionnaire is used in the research,needs to be tested its own validity. The validity test will be conducted on 10 people who have similar characteristics to the sample. Then it will be tested the correlation between the score of each question with a total score of the questionnaire.

APPENDIX

Martin, Richard(200). Gregory: Build brand value to boost revenues,

reputation; 22, 8/9; ProQuest pg. 48

Flaiz, Lisa (March 2008). Watch that Reputation; ProQuest pg. 98

Zhang, Yang (July, 2009) A Study of Corporate Reputation’s Influence on Customer Loyalty Basedon PLS-SEM Model; ProQuest

Sebora C, Terrence &Theerapatvong, Titikorn (2009). Corporate entrepreneurship: a test of external and internal influences on managers’ idea generation, risk taking, and reactiveness; ProQuest pg. 2

Farhati, Reshma& Khan, Mustafa Bilal (2011). Importance of Brand Personality to Customer Loyalty: A Conceptual Study; Proquestpg 3

Jacobsen, Daniel & Olsson, Magnus (2004) The Creation of Customer Loyalty; ProQuest, pg 6

Barringeri, R Bruce &Bluedorn, C Allen (1999). The Relationship Between Corporate Entrepreneurship and Strategic Management, pg 12

Gustavsson, Sara (2005). Costumer Loyalty; ProQuest, pg 43

Ganiyu, Ajao Rahim (2012). Is Customer Satisfaction an Indicator of Customer Loyalty?’ Proquest, pg 10

Zhouni, Lin &Shiying Yan(2011). Customer Loyalty of Amazon --how to build a long lasting relationship?’ Proquest, pg 26

Donnely, Martina (2009). Building Customer Loyalty; Proquest, pg 49

Yaya. Petnji (2012). Customers’ Loyalty and Its Antecedents and Perception; Proquest, pg 120

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Harper, Stephen C;Glew, David J;Rowe, Jonathan D (2008). Corpreneurship: creating your future, Proquest, pg 12

Wolcott, Robert C; Lippitz, Michael J. MIT Sloan Management Review (Fall 2007).The Four Models of Corporate Entrepreneurship, Proquest, pg 90

Covin, Jeffrey G; Miles, Morgan P. Entrepreneurship Theory and Practice (Spring 1999).Corporate entrepreneurship and the pursuit of competitive advantage, Proquest

Thornberry, Neal E. The Journal of Management Development (2003).Corporate entrepreneurship and the pursuit of competitive advantage, Proquest

Bhardwaj, B R; Sushil; Momaya, K. The Journal of Management Development (2011).Drivers and enablers of corporate entrepreneurship, Proquest Zahra, Shaker A; Nielsen, Anders P; Bogner, William C. Entrepreneurship

Theory and Practice (Spring 1999).Corporate entrepreneurship, knowledge, and competence development, Proquest, pg 54

Guth, William D; Ginsberg, Ari. Strategic Management Journal (1986-1998) (Summer 1990).GUEST EDITORS' INTRODUCTION: CORPORATE ENTREPRENEURSHIP, Proquest

Gwynne, Peter. Research Technology Management (Mar/Apr 2008).More Schools Teaching Entrepreneurship, Proquest, pg 10

Rizan, Mohamad; Warokka, Ari; Listyawati, Dewi. Journal of Marketing Research & Case Studies (2014). Relationship Marketing and Customer Loyalty: Do Customer Satisfaction and Customer Trust Really Serve as Intervening Variables?,Proquest, pg 27

Schriver, Steve. American Demographics (Sep 1997).Customer loyalty: Going, going...,Proquest

Anonymous. The International Journal of Bank Marketing (1994).Managing customer loyalty, Proquest

Pokorny, Gene. Electric Perspectives (May/Jun 1995).Building brand equity and customer loyalty, Proquest

Selnes, Fred. European Journal of Marketing (1993).An examination of the effect of product performance on brand reputation, satisfaction and loyalty, Proquest, pg 186

Herbig, Paul; Milewicz, John. The Journal of Consumer Marketing (1995).The relationship of reputation and credibility to brand success, Proquest

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Goldberg, Keith. Advertising Age (Feb 9, 2009).HOW YOU CAN STAY IN CONTROL OF YOUR BRAND'S REPUTATION, Proquest, pg 41

Gove, Allen. Pharmaceutical Executive (Jul 2014).Brand Reputation, Proquest, pg 56

Oehlert, Priscilla, CIC, CRM, ARM. Rough Notes (Sep 2014).REPUTATION AND BRAND PROTECTION, Proquest, pg 23

Gotsi, Manto; Wilson, Alan. Management Decision (2001).Corporate reputation management: "living the brand", Proquest, pg 74

Alison Rankins Frost; Cooke, Chris. Communication World (Feb/Mar 1999).Brand vs. reputation, Proquest

Schiller, Kurt. Information Today (Nov 2010).Getting a Grip on Reputation, Proquest

References

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