THE IMPACT OF SOCIAL MEDIA MARKETING ON PURCHASE INTENTION AND BRAND LOYALTY IN THE E-COMMERCE INDUS

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International Journal of Mechanical and Production Engineering Research and Development (IJMPERD) ISSN (P): 2249–6890; ISSN (E): 2249–8001 Vol. 10, Issue 3, Jun 2020, 2865-2878 © TJPR Pvt. Ltd.

THE IMPACT OF SOCIAL MEDIA MARKETING ON PURCHASE INTENTION AND BRAND LOYALTY IN THE E-COMMERCE INDUSTRY DEWI, CHERLIA BRIGHTOKTA & NOVELIA REFINDA Business Creation Program, Management Department, BINUS Business School Undergraduate Program, Bina Nusantara University, Jakarta, Indonesia ABSTRACT The e-commerce industry is one of the leading industries in Indonesia. With the growth of social media users every year, marketers see this opportunity as a way to market their products or services with the aim of increasing consumer purchase intention, which in turn makes consumers loyal to the brand. The purpose of this study is to determine the effect of social media marketing on purchase intention and brand loyalty in the e-commerce industry. The data were collected by distributing a questionnaire to 407 customers with purposive sampling. Research method used is PLS-SEM where the data were processed using SmartPLS ver. 3.3.2. The results of this study has shown that social media marketing has a positive and significant effect on purchase intention and brand loyalty in the e-commerce industry. Hence, it is highly suggested that e-commerce industry must increase their social media marketing to boost up their consumers’ purchase intention and

KEYWORDS: Social Media Marketing, Purchase Intention & Brand Loyalty

Received: Jun 06, 2020; Accepted: Jun 26, 2020; Published: Jul 09, 2020; Paper Id.: IJMPERDJUN2020271 1. INTRODUCTION In the modern era, the use of the Internet has shown a rapid growth in Indonesia. Increasing number of Internet usage in Indonesia has grown until it reaches a stage which its growth outperforms the population growth in Indonesia. In 2018, the growth of internet users is 10.12% meanwhile the population growth of Indonesia is 0.63%. One of the biggest impacts of the Internet development is Internet has become an important business platform. As the result, the Internet has grown e-commerce to an exponential rate. According to a survey by Google & Temasek (2018), it is stated that Indonesia has the largest e-commerce industry in Southeast Asia with a market size of USD 12 billion in 2018 and s expected to be worth USD 53 billion in 2022. E-commerce has great potential to boost up Indonesian economy. To help the success of e-commerce, every firm has to know an effective marketing strategy. Social media marketing has become a marketing strategy that has been used in the past decade. With the rapid growth of social media every year, marketers see this opportunity as an effective strategy for marketing. In Indonesia, there are 150 million social media users, 56% of the total population. The average Indonesian people spend time using the internet for 8 hours 36 minutes per day, where 3 hours 26 minutes are used mainly for social media. Based on the data above, Indonesia provides a valid platform in social media marketing research. With the popularity of social media marketing, various studies have been conducted to understand its effects. Based on the previous research by Laksamana (2018), it was stated that social media marketing has an

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brand loyalty towards the brand


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