The Role of Product Warranty in Building Customer Loyalty: A Case Study of The Indonesian Tire Industry
DOI:
https://doi.org/10.37385/ceej.v6i4.8911Keywords:
Product Warranty, Customer Loyalty, Brand Trust, Customer Satisfaction, Brand Image, Signaling Theory, PLS-SEM, Indonesia, Automotive TiresAbstract
This study explores the strategic role of product warranty in fostering customer loyalty within the Indonesian automotive tire industry. Drawing on signaling theory, the research investigates both the direct and mediated effects of product warranty on loyalty through brand trust, customer satisfaction, and brand image. A quantitative approach was employed using Partial Least Squares Structural Equation Modeling (PLS-SEM), with data collected from 323 respondents who had purchased tires from major global brands. The results confirm that product warranty has significant positive effects on all three mediators, which in turn strongly influence customer loyalty. Mediation analysis reveals that customer satisfaction and brand image are the most influential pathways. These findings highlight that warranties function not only as functional assurances but also as symbolic signals that shape post-purchase evaluations and brand commitment. The study contributes to the marketing literature by extending signaling theory in the context of high-involvement purchases in emerging markets. It offers practical insights for companies to leverage warranty programs as strategic assets that enhance trust, satisfaction, and long-term loyalty.
References
Ambarwati, D., Sudarmiatin, & Astuti, I. Y. (2023). Factors influencing brand loyalty: The mediating effect of brand satisfaction and trust. Polish Journal of Management Studies, 27(2), 136–150. https://doi.org/10.17512/pjms.2023.27.2.09
Arshad, A., & Haroon, H. (2023). The impact of perceived warranty on consumer trust and buying behavior in consumer electronics. International Journal of Business and Management Sciences, 13(2), 119–134. https://doi.org/10.47260/ijbms/132006
Bianchi, C., & Andrews, L. (2020). Consumer engagement with retail firms through social media: An empirical study in Chile. International Journal of Retail & Distribution Management, 48(9), 979–998. https://doi.org/10.1108/IJRDM-09-2019-0302
Boulding, W., & Kirmani, A. (1993). A consumer-side experimental examination of signaling theory: Do consumers perceive warranties as signals of quality? Journal of Consumer Research, 20(1), 111–123. https://doi.org/10.1086/209336
Cuong, D. T. (2020). The impact of customer satisfaction and brand image on brand loyalty in the banking sector of Vietnam. International Journal of Services, Economics and Management, 11(1), 66–84. https://doi.org/10.1504/IJSEM.2020.104640
De Oliveira Santini, F., et al. (2023). Customer loyalty in the banking sector: A meta-analytic study. International Journal of Bank Marketing, 42(7), 1155–1178. https://doi.org/10.1108/IJBM-08-2023-0484
Geyskens, I., & Dekimpe, M. G. (2023). Customer satisfaction, loyalty behaviors, and firm financial performance: A meta-analysis. Journal of Marketing, 87(3), 56–82. https://doi.org/10.1007/s11002-023-09671-w
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A primer on partial least squares structural equation modeling (PLS-SEM) (3rd ed.). SAGE Publications.
Hsieh, M.-H., Pan, S.-L., & Setiono, R. (2022). Product-, corporate-, and country-image dimensions and purchase behavior. Journal of the Academy of Marketing Science, 50(1), 51–68. https://doi.org/10.1007/s11747-021-00788-9
Javanshir, R., & Kim, Y. W. (2024). Building trust in sustainable brands: Revisiting perceived value and communication strategies. Journal of Business Research, 152, 112–124. https://doi.org/10.1016/j.jbusres.2024.01.005
Keller, K. L. (2023). Customer-based brand equity: Insights from a practitioner and academic perspective. Journal of Brand Strategy, 12(1), 7–21. https://doi.org/10.4324/keller2023.jbs
Khan, A., Fatima, T., & Malik, R. (2023). Unveiling the warranty's power in building customer loyalty: A case of battery manufacturers in Pakistan. Review of Economics and Development Studies, 9(2), 111–131. https://doi.org/10.47646/reads.v9i2.487
Kimura, M., et al. (2024). Fifteen years of research on customer loyalty formation. Service Science, 16(1), 56–73. https://doi.org/10.1177/19389655241276506
Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). Pearson Education.
Liu, Y., & Yang, R. (2022). The influence of after-sales service and product quality on brand trust and brand loyalty. Journal of Retailing and Consumer Services, 66, 102913. https://doi.org/10.1016/j.jretconser.2021.102913
Mittal, B., Lassar, W., & Rosen, D. (2023). Linking customer satisfaction and loyalty: A meta-analysis. Journal of Consumer Behaviour, 22(1), 53–72. https://doi.org/10.1002/cb.2060
Nadarajah, D., & Wah, C. K. (2024). Customer satisfaction model and its impact on customer loyalty. Economic Annals-XXI, 204(7–8), 27–32. https://doi.org/10.21003/ea.V204 04
Nguyen, H., & Pham, L. (2024). The impact of service innovation on customer satisfaction and loyalty. Future Business Journal, 10(1), 45–60. https://doi.org/10.1186/s43093 024 00354 0
Nugraha, A., Suhartanto, D., & Sjahroeddin, F. (2024). The impact of service recovery on customer satisfaction and loyalty in automotive service context. Journal of Retailing and Consumer Services, 76, 103456. https://doi.org/10.1016/j.jretconser.2023.103456
Oliver, R. L. (1999). Whence consumer loyalty? Journal of Marketing, 63(Special Issue), 33–44. https://doi.org/10.2307/1252099
Ogunleye, O., & Adeyemi, S. (2024). Assessing the effectiveness of a product warranty in a health care setting. Journal of Health Marketing Studies. https://doi.org/10.1016/j.healthmark.2024.101235
Ogunleye, O., & Adeyemi, S. (2024). The role of corporate social responsibility on customer loyalty: Mediating effect of brand trust. Sustainability, 16(22), 9681. https://doi.org/10.3390/su16229681
Parvez, S., & Alam, S. (2023). Retailers’ view on customer loyalty: A social resource theory perspective. Journal of Retailing and Consumer Services, 74, 102801. https://doi.org/10.1016/j.jretconser.2023.102801
Power, I. A., & Odiri, V. I. O. (2023). After sales services as determinant of customers’ patronage of satellite products and services. British Journal of Management and Marketing Studies, 6(4), 1–21. https://doi.org/10.52589/BJMMS-BEYSHDAL
Punyatoya, P. (2019). Effects of cognitive and emotional trust on customer loyalty: The moderating role of customer expertise. Journal of Retailing and Consumer Services, 50, 482–495. https://doi.org/10.1016/j.jretconser.2019.06.015
Rather, R. A. (2021). Customer experience and engagement in tourism destinations: The experiential marketing perspective. Journal of Travel & Tourism Marketing, 38(2), 189–202. https://doi.org/10.1080/10548408.2021.1889784
Ryu, K., Lee, H. R., & Kim, W. G. (2020). The influence of the quality of the physical environment, food, and service on restaurant image, customer perceived value, customer satisfaction, and behavioral intentions. International Journal of Contemporary Hospitality Management, 32(2), 1075–1093. https://doi.org/10.1108/IJCHM-10-2019-0853
Wang, Y., & Feng, H. (2021). How perceived value and customer satisfaction lead to brand loyalty: A study of the mobile phone market. Journal of Retailing and Consumer Services, 61, 102549. https://doi.org/10.1016/j.jretconser.2020.102549
Wu, W.-Y., & Wang, Y.-C. (2023). Impact of CSR and service quality on brand image and customer loyalty. International Journal of Bank Marketing, 41(4), 722–741. https://doi.org/10.1108/IJBM-08-2022-0345
Zhang, C., Li, L., & Li, W. (2023). Warranty as a marketing tool: Its role in competitive strategy. Marketing Science Review, 45(1), 15–32. https://doi.org/10.1016/j.mksc.2023.01.006
Template
