1. Introduction
Since the first industrial revolution in 1760, there have been 4 industrial revolutions. Each revolution has brought improvements in terms of manufacturing and has raised lifestyle standards (Har et al., 2022). Retail is a form of the resource chain that was invented during the Industrial Revolution. Before the Industrial Revolution, lowerclassmen tended to produce most of their needs, from clothing to food and they would barter needs that they could not fulfill themselves (Pilkington, 2020).
The underlying factors that may theoretically influence recent retail trends, such as technological change and e-commerce adoption, experience-oriented consumption demand, as well as traditional economic factors like income and education (Kickert & Talen, 2023). The advent of e-commerce has impacted multiple facets of life, encompassing social habits, cultural norms, and economic dimensions. During the period from 2011 to 2015, the transaction value experienced a substantial rise, coinciding with the peak of technology growth. (Mustajibah & Trilaksana, 2021).
Indonesia is renowned for its abundant natural resources, particularly its diverse range of trees, which have been globally recognized. The country possesses a significant quantity of wild and exportable timber, both in its raw form and as processed goods. The tropical climate of Indonesia provides an ideal environment for the growth and cultivation of these valuable wood resources, leading to a high demand for them in the market. Consequently, many individuals are involved in the acquisition and trade of these trees (Ziraga & Wandebori, 2015).
According to G.W. Allport, the disposition to act, known as attitude, is formed through the assimilation of various specific responses of a comparable nature. However, it exists as a comprehensive neural "set" and, when prompted by a particular stimulus outcome, it leads to behavior that is more influenced by the disposition rather than the activating stimulus. It is crucial to highlight that this definition perceives attitudes as extensive and all-encompassing factors that determine behavior (Allport, 1929). The attitude theory is a product of persuasion which is part of the decision-making process. Persuasion is a crucial activity that involves shaping, strengthening, or altering beliefs, attitudes, or behaviors. It serves as the primary impetus behind human communication and forms the foundation of communication studies. Aristotle posited that rhetoric is the art of discovering all available means of persuasion. Such means encompass appeals grounded in logic, emotion, and persuasive qualities. Research in persuasion studies has demonstrated that a person's disposition towards specific groups, products, or problems can be molded by associating the object of that disposition with pleasant or unpleasant adjectives, smells, and sounds. To effect change in people's conduct, it is necessary to first modify their attitudes(Perloff & Richard, 2017).
In this research, the influence of service quality, promotion, product, and price on brand image and purchase intention in the Indonesian furniture distributor channels will be analyzed to increase the probability of consumers having purchase intentions while visiting a furniture retail store in Indonesia.
2. Literature Review
2.1. State of the Art
This research is inspired by prior research on brand image and purchase intention such as research by Suhud and Willson (2019) which researched predicting a person’s purchase intention (Suhud & Willson, 2019). The latter was by Anggoro and Nurwulandari (2020), who analyzed the effect of brand image on an online travel agent (Anggoro Wilis & Nurwulandari, 2020). Other inspirations of research were on marketing strategies in the furniture industry (Amoah et al., 2015; Barbaritano & Savelli, 2021).
2.2. Service Quality
Improving service quality is a crucial aspect for service providers, particularly banks. As per Kotler (2000), it entails the act of employees working in a company serving consumers in a kind and friendly manner. Parasuraman et al. stated that service quality is a form of attitude that is related to, but not the same as, satisfaction. This attitude results from the comparison of expectations with perceptions of performance. This definition can be extended to the electronic domain, as e-service quality reflects customers' assessments and established perceptions of the excellence and quality of e-services. (Nguyen et al., 2022).
Customers assess service quality by comparing what they want or expect to what they get or perceive they are getting. Parasuraman’s research suggests these expectations cover five areas; tangibles, reliability, responsiveness, assurance, and empathy. The tangibles include the physical facilities equipment and appearance of personnel, Reliability relies on the ability to perform the desired service dependably, accurately, and consistently (Parasuraman et al., 1985). Responsiveness includes the willingness to provide prompt service and help customers. Assurance is employees' knowledge, courtesy, and ability to convey trust confidence, and empathy; the provision of caring, individualized attention to customers.
Human performance plays a major role in customers' perceptions of service quality. In a service system, it is important to understand the prevalence of human action in the system. Humans dominate the system, both on the customer as well as the company end of the transaction. The outcome of this endeavor resulted in the discovery of an additional set of five determinants that influence service quality, namely attentiveness/helpfulness, care, commitment, functionality, and integrity (Johnston, 1995).
H1: Service Quality has a positive and significant influence on brand image.
H2: Service Quality has a positive and significant influence on purchase intention.
2.3. Promotion
Promotional strategies are utilized to disseminate information to consumers concerning product offerings. Promotion plays a pivotal role in determining the profitability and market success of a product and is one of the fundamental "Four Ps" of the marketing mix. The promotional mix comprises several tools including advertising, direct marketing, sales promotion, public relations and publicity, personal selling, and sponsorship. Typically, the promotion process involves a one-sided communication with the customer; however, in certain forms of promotion and service delivery, it is possible to achieve two-way communication. The role of promotion aims to augment sales, maintain, or enlarge market share, establish, or amplify brand recognition, create a favorable environment for future sales, inform and educate the market, create a competitive edge over rivals' products or market positions, and improve promotion efficiency. (Rowley, 1998).
Sales promotion, a crucial component of marketing initiatives, comprises a range of incentive mechanisms, typically of a transient nature, that are tailored to encourage consumer or trade purchases of products. While advertising provides a rationale for purchasing, sales promotion provides a stimulus. Sales promotion encompasses a variety of tools, including those for consumer promotion, trade promotion, and business and sales force promotion (Kotler & Keller, 2002).
H3: Promotion has a positive and significant influence on brand image.
H4: Promotion has a positive and significant influence on purchase intention.
2.4. Product
A marketer's interpretation of a product is characterized by a comprehensible and definitive description of a material entity, a service, a concept, an individual, or a location that possesses both tangible and intangible characteristics (Varley, 2006).
The act of selecting a specific product or service from a wide range of options in the market is known as product choice. This process entails the evaluation of various factors, including but not limited to quality, price, features, brand reputation, personal preferences, and individual needs. The objective is to identify products that most effectively cater to consumer demands and provide optimal value. (Schiffman & Wisenblit, 2019).
H5: Product has a positive and significant influence on brand image.
H6: Product has a positive and significant influence on purchase intention.
2.5. Price
Pricing decisions are made based on price- and cross-price elasticity effects. Price is the amount of money customers must pay to obtain the product (Kotler & Armstrong, 2016). It can also be said that price is the determination of the value of a product in the minds of consumers. The price of a product can be considered relative due to its reliance on the reference point and the perceived value that is derived from the non-reference product (Rahman et al., 2019). Kotler and Armstrong also stated that retail stores implement customer value-based pricing by using buyers’ perception of value, which means that marketers will have to consider price along with other marketing mix variables when setting a marketing program. This factor influences a retailer’s brand image and purchase intention.
H7: Price has a positive and significant influence on brand image.
H8: Price has a positive and significant influence on purchase intention.
2.6. Brand Image
The perception of a brand in the minds of consumers, encompassing their thoughts, feelings, and expectations towards the brand, is commonly known as the brand image (American Marketing Association, 2017). Additionally, brand image can be defined as the perceptions consumers associate with a particular brand (Keller, 1993). It is widely acknowledged that brand image significantly influences consumers' product purchase decisions (Zeithaml, 1988).
Corporate image and corporate reputation are fundamental concepts that underpin a company's brand. These concepts are critical in positioning a company in the minds of its key stakeholders. The entire notion of a corporate brand can be viewed as a closely linked concept to that of a company's image. (Balmer & Greyser, 2003).
H9: Brand Image has a positive and significant effect on Purchase Intention
2.7. Purchase Intention
The concept of purchase intention involves the process of decision-making that explores the underlying motives that drive consumers to choose a particular brand. Purchase intention is an occurrence whereby consumers tend to purchase specific products under specific circumstances. This phenomenon is closely linked to consumer behavior, perceptions, and attitudes, and plays a significant role in facilitating access to and evaluation of certain products. Ghosh (1990) posits that purchase intention serves as a valuable predictor of the buying process. Furthermore, the purchasing process is influenced by both internal and external factors (Mirabi et al., 2015).
The measurement of purchase intention can serve as a means for evaluating the acceptance of novel distribution channels. In turn, this analysis can aid managers in determining the need for further refinement of the concept, as well as identifying the appropriate consumer segments and geographic markets to be targeted via these channels. To accurately anticipate consumer behavior, it is imperative to possess knowledge regarding their attitudes, judgments, and internal factors that ultimately give rise to purchase intentions. (Peña-García et al., 2020).
2.8. Research Framework
Figure 1: Research Framework
3. Research Methods and Materials
3.1. Research Population
The subject of this research is the target market for furniture retailers in Indonesia. The subject of this research also must have initial experience with transactions as a consumer in an Indonesian furniture retailer. This population will be taken from the Instagram followers of a furniture retailer community in Indonesia as of 31 July 2023, having 837.5 thousand followers. With Slovin’s formula and the error margin of 5%, the population will be 400 respondents.
3.2. Research Approach
This research uses a quantitative approach, involving the process of collecting, analyzing, interpreting, and writing research results. Collect and analyze data, present results, make interpretations and write research in a manner consistent with surveys or experimental studies (Creswell, 2009).
3.3. Survey Method
A survey will collect data for this research. The survey process includes problem formation, hypothesis development, research design, sample design and selection, questionnaire development, data collection, data analysis, reporting and dissemination, and application of information (Lavrakas, 2008).
In the survey questionnaire, there will be two-part filter questions with the first part consisting of their name, age, occupation, marital status, and monthly salary. The second part of the filter questions will be regarding their last experience and frequency of experience with an Indonesian furniture retailer. The main questions will be about service quality, promotion, product, price, brand image, and purchase intention. A 4-point Likert Scale was used to reflect how strongly they agree or disagree with the statements; with 1 = strongly disagreeing and 4 = strongly agreeing.
Table 1: Variables and Dimensions
3.4. Research Type
This research uses the explanative research method, which identifies the sources of social behavior, beliefs, conditions, and events; it documents causes, tests theory, and provides reasons. Cross-sectional research explains the time horizon of an explanative research, which is at a single point in time. This method is mainly used in social research.
In survey research, individuals must respond to questions in writing or during interviews and record their answers. The circumstances are not manipulated, but numerous questions are asked to many individuals in a brief period. The responses are then summarized using percentages, tables, or graphs. Survey techniques can be utilized for descriptive or explanatory research. Surveys provide insight into the thoughts or reports of many individuals. Survey research is extensively employed in various academic and applied research fields (Neuman, 2014).
3.5. Data Collection Techniques
In conducting this research, researchers will collect 2 types of data to be studied, namely primary data in the form of a questionnaire using Google Forms and distributing it to demographics. The research location will be conducted in the city of Jakarta. The secondary data is supporting data used as a support to complement primary data, Data collection techniques include documentation, book references, and literature reviews.
3.6. Data Analysis Technique
The simple random sample is the easiest random sample to understand, and the sample is used to model other random samples. In simple random sampling, an accurate sampling frame is developed by selecting elements from the sampling frame according to a mathematical random procedure, and then finding the correct elements to include in the sample
3.7. Data Validation
The reliability of measurement instruments can be evaluated by measuring internal consistency (Cronbach's alpha) and test-retest reliability. The validity of measurement instruments can be assessed by examining content validity, construct validity, and criterion validity. Data entry and cleaning methods can be used to minimize errors. Lastly, inconsistencies, outliers, and missing values can be identified and corrected through reviewing and data cleaning.
4. Results and Discussion
Structural model (PLS-SEM) analyses were used for this study. PLS structural modeling is suitable for an exploratory study, such as this study, because the approach can uncover predictive causal relationships between variables. The data is processed using the second-order analysis, which specifies the relationship of each variable with its indicators.
Table 2: Construct Reliability and Validity
Source: Data Processing Results
Table 3: Outer Loadings
Table 4: Path Coefficients
Figure 2: Path Coefficients
Table 5: Specific Indirect Effects
Table 6: Hypothesis Test Results
The objective of this research was to understand the relationships and the impact between service quality, promotion, product, and price on brand image and purchase intention.
H1: Service quality has a positive and significant influence on brand image; based on the results of the survey, the estimated parameter between service quality and brand image is positive but insignificant with T=0.862 and P value =0.389, namely T must be >2 and P must have a significance level of <0.05 (5%), hypothesis 1 (H1) is rejected. A previous study by Soltani M. (2016) on service quality on brand image in chain stores yielded the same result (Soltani et al., 2016). A furniture retail store relies heavily on its products compared to its services. Service is not often needed after purchase despite it being provided, thus service quality does not significantly influence the brand image.
H2: Service quality has a positive and significant influence on purchase intention; the estimated parameter between service quality and purchase intention shows a positive and significant result. With T=2.814 and P value =0.005, namely, T must be >2 and P must have a significance level of <0.05 (5%). This result is supported by the research done previously by Maslim H and Pasaribu L. (2021), which also discussed the relationship between service quality and purchase intention (Maslim & Pasaribu, 2021). Aresponsive, informative, and welcoming employee in the store can encourage customers’ purchase intentions in furniture retailers.
Service quality, when influenced by Brand Image, does not have a significant impact on Purchase Intention. P must have a significance level of <0.05 (5%) and meanwhile P=0.408. As discussed in the outcomes of H1 and H2, service quality only has a significant influence on purchase intention. brand image will not have a significant influence as a mediating variable.
H3: Promotion has a positive and significant influence on brand image. Promotion and brand image show a positive and significant result with T=3.354 and P value =0.000, namely, T must be >2 and P must have a significance level of <0.05 (5%). The findings support a previous study about the relationship between promotion and brand image (Agmeka et al., 2019; Maharani et al., 2020; Rahman et al., 2019). Retail stores that offer promotions create a separate image compared to storesthat do not, regardless of the other variables that are offered by the retailer.
H4: Promotion has a positive and significant influence on purchase intention. Promotion and purchase intention yield a positive and significant result with T=2.639 and P value =0.008, namely, T must be >2 and P must have a significance level of <0.05 (5%). The result is in line with a previous study by Bimaruci et al. (2020) with the same hypothesis. It is said in this study that promotion influences and has a relationship with purchase intentions. The better the promotional activities by the company, the more customers will have purchase intentions (Bimaruci et al., 2020).
Promotion when brand image acts as a mediating variable towards purchase intention, becomes less significant compared to promotion on purchase intention. Value of P=0.092 when P must have a significance level of <0.05 (5%). This shows that promotion does not require brand image as a mediating variable to have a significant influence on purchase intention.
H5: Product has a positive and significant influence on brand image. The product shows a positive and significant influence on brand image with T=3.354 and P value =0.001, namely, T must be >2 and P must have a significance level of <0.05 (5%). This result is in line with a previous study done by Wijayanti (2023), when a product is of quality and fulfills the consumers’ needs, a good brand image will be established (Wijayanti & MH Nainggolan, 2023).
H6: Product has a positive and significant influence on purchase intention. Product has a positive and significant influence on purchase intention result with T=3.836 and P value =0.000, namely, T must be >2 and P must have a significance level of <0.05 (5%). This supports the research done previously by Steven et al. with the same hypothesis (Steven et al., 2021). The indicators of a product such as quality, design, packaging, and store image determine a customer’s purchase intention as it is directly related to the customer’s needs.
H7: Price has a positive and significant influence on brand image. The estimated parameter between price and brand image shows a positive and significant result with T=3.831and P value =0.000, T must be >2 and P must have a significance level of <0.05 (5%), it can be said that hypothesis 7 (H7) is accepted. As mentioned by Pitaloka et al. (2023), customers receive an impression of a product through its price, especially if the quality of the product is aligned with its price (Pitaloka et al., 2023).
H8: Price has a positive and significant influence on purchase intention. The relationship between price and purchase intention shows a positive but insignificant with T=0.646 and P value =0.518, T must be >2 and P must have a significance level of <0.05 (5%), which means that hypothesis 8 (H8) is rejected. This result is parallel to research done in a different retail industry previously with the same variables (Li et al., 2021). The reason that price does not influence purchase intention is due to the customers’ perception of the significance of the product. If a product is not needed by the customer, the price does not spark purchase intention.
When brand image mediates between price and purchase intention, the influence becomes significant with P=0.005 when P must have a significance level of <0.05 (5%). This is correlated to the results of H7 and H9, where price has a significant effect on brand image, and where brand image has a significant effect on purchase intention.
H9: Brand image has a positive and significant influence on purchase intention. The estimated parameter between brand image and purchase intention shows a positive and significant result with T=3.594 and P value =0.000, T must be >2 and P must have a significance level of <0.05 (5%). According to the results of the study done by Rosanti et al. (2021), the better the brand image, the more likely the customer will have purchase intentions. On the contrary, the worse the brand image, the lower the chance of purchase intentions (Rosanti et al., 2021).
5. Conclusions
This research was done to analyze the influence of service quality, promotion, product, and price on brand image and purchase intention in the Indonesian furniture distribution channels. It is shown that in the furniture industry, service quality and brand image greatly influence purchase intention. Furniture is a long-term use product that is used often by the user. Having responsive and kind customer service, punctual and skilled technicians, warranty, and security to handling products are part of the key service quality indicators that determine purchase intention. Service quality does not significantly influence brand image in the furniture retail industry as other variables in the industry can make up for it.
For brand image, a more well-known brand with a good reputation greatly influences purchase intention as well. A furniture business will not have a good reputation if its products wear out easily, unethically sources its materials, or if its price does not translate to its product quality. Promotions influence brand image and purchase intention in terms of discounts, coupons, and membership privileges as customers are constantly interested in the best deals. The interpersonal approach in promotions also influences purchase intentions.
In conclusion, some variables can only influence either brand image or purchase intention, and some variables influence both brand image and purchase intention in Indonesia’s furniture industry.
6. Research Implications and Suggestions
To increase the purchase intentions of customers in Indonesia’s furniture industry, retailers must attend to their service quality, promotion strategy, products, and overall brand image. Price does not directly influence purchase intention, but since it influences brand image, and brand image influences purchase intention, price can be used to build an image of the retailer itself. This research has identified certain marketing factors that can be used in Indonesian furniture retailers. Although service quality does not influence brand image, it is still a factor that significantly influences purchase intention. This shows that a furniture retailer with good service is sought by customers in Indonesia.
The variables that influence both brand image purchase intention; promotion and product have indicators can help aid in raising probabilities in purchase intentions, that may lead to purchase decisions. Products have multiple indicators that can be attended to, such as their quality, packaging to attract potential customers, product design for its functionality and a store with an efficient floor plan. Promotion tactics such as sales promotion in stores or online, advertising, direct marketing, public relations, and social media content can help build a better brand image. A furniture retailer that has a good marketing tactic and quality products will have a higher probability of consumers with purchase intentions than those that do not pay attention to those variables.
This study has its limitations, as there is yet plenty of research regarding what influences purchase intentions in Indonesia’s furniture retail industry. For future studies, field research can be done to further understand the behavior of customers in the process of purchasing furniture after the survey questionnaire. More variables can be added to further study the variables that influence brand image and purchase intention.
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