Analysis of Models for Increasing Consumer Loyalty of Beauty MSMEs Through Brand Equity Management, Service Quality, and Customer Bonding

. In an era of increasingly massive disruption, beauty MSMEs need to be able to optimize the resources they have. In the beauty industry, business competition is very tight, so consumer loyalty is very important to maintain a business to survive in a competitive market. The purpose of this study was to analyze the effect of brand equity, service quality, and customer bonding on consumer loyalty. This study used a sample size of 170 consisting of MSME beauty actors. Data analysis techniques using the SEM method with Partial Least Squares Modeling (PLS-SEM). The structural Equation Model (SEM) approach based on Partial Least Square is used for hypothesis testing. The results of the data analysis confirm brand equity, service quality, and customer bonding have a positive and significant effect on consumer loyalty. The implications of this research conclude that it is very important for beauty MSMEs to measure and evaluate the level of brand equity, service quality, and customer bonding regularly. MSME owners can use consumer surveys, online reviews, and data analysis to understand the extent to which these aspects influence consumer loyalty. This data can be used to make necessary changes and improvements. and data analysis to understand the extent to which these aspects influence consumer loyalty. This data can be used to make necessary changes and improvements. and data analysis to understand the extent to which these aspects influence consumer loyalty. This data can be used to make necessary changes and improvements.


BACKGROUND
Beauty MSMEs are a business that is growing rapidly in Indonesia.Along with increasing consumer interest in beauty and personal care products, many beauty SMEs are competing to win the hearts of their customers (Primary & Yulianthini, 2022;Nanan et al., 2015).However, amid increasingly fierce competition, many beauty SMEs are facing problems in maintaining the loyalty of their customers.The substance of this research problem is in the brand equity aspect, namely that beauty MSMEs often have limited marketing budgets to build their brands, so they often have difficulty promoting their brands widely.Apart from that, some beauty MSMEs do not understand how to build a brand effectively, so this can make it difficult for them to create a strong brand and attract consumer attention.Then another aspect that is also important to note in maintaining customer loyalty is the aspect of service quality (Robustin, 2022;Wang, 2014).The second research problem in this research is that quite a few beauty MSMEs may not be able to meet consumer demand quickly and precisely.This can lead to consumer dissatisfaction and have an impact on consumer trust in the brand.
Apart from aspects of brand equity and service quality, establishing bonds with customers and strengthening the brand through managing customer bonds is also very crucial to maintaining consumer loyalty (Shammout, 2020;Kotler & Keller, 2016).The problem for further research is that the majority of beauty SMEs may not provide sufficient personal interaction with their customers, such as asking for needs or providing appropriate suggestions.This can make customers feel devalued and less connected to the brand.In addition, some beauty SMEs may not utilize technology to build bonds with customers, such as sending emails or text messages to provide special offers or ask their opinion on products.This can make customers feel less connected to the brand.
Customer loyalty is an important factor in the beauty business because it can influence income and business growth.Overall, research on consumer loyalty to beauty SMEs shows that factors such as service quality, brand image, customer engagement, and customer trust are important factors in building consumer loyalty (Irwansyah et al., 2021).The state of the art of this research is a model of increasing consumer loyalty through management of brand equity, service quality, and customer bonding.In addition, researchers added additional indicators to the customer bonding variable in the form of community bonding to strengthen the variable measurement model.The researcher also added an indicator to the brand equity variable in the form of brand association to strengthen the brand equity measurement model.
Researchers realize that indicators of community bonding and brand association are important for beauty SMEs because they can help build long-term relationships with customers and the surrounding community, as well as increase consumer loyalty and public trust in the business.Furthermore, the novelty of this researcher with previous research lies in the data analysis model using the Structural Equation Model-Partial Least Square approach, which previous research used a linear regression data analysis model with SPSS software and analyzed in stages.Thus the formulation of the problem of this study is to analyze the effect of brand equity, service quality, and customer bonding on consumer loyalty MSMEs Beauty in Pematang Siantar City.

Brand Equity and Consumer Loyalty
Brand equity is the added value or value associated with the brand of a product or service (Ramdani, 2022;Kusuma et al., 2020).Brand equity is a valuable asset for a beauty business, including beauty salons (Yuniawati, 2022).This is because brand equity can help build consumer loyalty, influence purchasing decisions, and improve brand image and reputation (Gong et al., 2020;Sudarso et al., 2019).In addition, brand equity is very important for beauty SMEs because it can affect business success in the long term (Vijayakumar, 2018).A strong brand with high equity can help businesses differentiate themselves from competitors (Gong et al., 2020), as well as increase customer loyalty (Princess, et al., 2021;Tamara & Putra, 2021).Research results (Ayesh et al., 2021;Sudirman et al., 2021), revealed that brand equity contributes significantly to consumer loyalty.Therefore, based on several previous research results, we can develop the first hypothesis (H1; see Fig. 1): H1: Brand equity influences consumer loyalty.

Service Quality and Consumer Loyalty
Service quality can be defined as the level of conformity between customer expectations and the performance provided by the service provider (Tjiptono & Chandra, 2011;Robustin, 2022).Service quality is very important in the beauty business, including beauty MSMEs (Yuniawati, 2022), because it can affect customer satisfaction and business success (Na-nan et al., 2015).Good service quality can help improve the business reputation of beauty SMEs (Pratiwi & Suparna, 2018).In addition, good service quality can increase customer satisfaction in beauty SMEs (Piri, 2013).When customers are happy with the service provided, they are more likely to return and recommend the business to others (Lai, 2015).The results of previous studies indicate that service quality has a significant influence on consumer loyalty (Vepha San et al., 2022;Abdullah et al., 2022).Therefore, based on some of the results of previous studies led to the development of the second hypothesis (H2; see Fig. 1): H2: Service quality affects consumer loyalty.

Customer Bonding and Consumer Loyalty
Customer bonding is a very important concept in the beauty business, including beauty MSMEs (Shammout, 2020;Irwansyah et al., 2021).This concept refers to the interaction between customers and businesses, which can help build a strong long-term relationship between the two (Balci et al., 2019).In the context of beauty MSMEs, customer bonding can help strengthen customer loyalty and build a positive image that can bring profits to the business (Prihatinta et al., 2023).When customers feel engaged with a business and feel valued, they are more likely to become repeat customers (Gustini et al., 2022;Rezeki et al., 2021).The study (Hermawan & Junaidi, 2022;Oktaviani et al., 2021;Kereh et al., 2023), shows empirical evidence that customer bonding has a significant influence on consumer loyalty and supports creative economic activities.Therefore, based on some of the results of previous studies led to the development of the third hypothesis (H3; see Fig.

RESEARCH METHODS
This study used a library and field research design with a quantitative approach.The research was conducted from June 2023 to August 2023.The location selection was adjusted to the number of beauty MSMEs in the city of Pematang Siantar.According to (Hair, 2014), if the population size is unknown then the number of samples can be determined from 5-10 times the number of indicators used in a single construct.This study used 17 indicators from 4 variable dimensions so that the number of research samples obtained was 17 x 10 = 170 samples.Data collection in this study used the observation method by observing directly in the field and documentation derived from secondary data in the form of documents and structured interviews using a questionnaire instrument.Data analysis techniques using the SEM method with Partial Least Squares Modeling (PLS-SEM).Each hypothesis proposed in this study will be tested using SmartPLS Version 3.0 software.The structural Equation Model (SEM) approach based on Partial Least Square is used for hypothesis testing (Ghozali, 2014).

RESULTS AND DISCUSSIONS
This research used 170 respondents as samples with different respondent characteristics.For the gender category, a sample of 75 men (44.12%) and 95 women (55.88%) were obtained.For the age range of respondents, the majority who filled in were aged 30-39 years with a total of 55 people (32.35%) and then followed by those aged 40-49 years with a total of 53 people (31.17%).For educational level, the majority had high school education with a total of 120 people (70.59%).Furthermore, for Types of Beauty MSMEs, the majority came from Fashion with a total of 60 people (35.29%) (for more details, see Table 1).

Outer Model Measurement
The SmartPLS version 3.2.9program was used to process the data from the study questionnaire following the processing criteria.The validity and reliability tests were run to measure the outer model.Convergent validity tests will be decided if the loading factor is more significant than 0.7 and the AVE value is 0.5 (Hair, 2014).The value of Cronbach's alpha and composite reliability (CR), which has a value higher than 0.7, is an indicator of the model reliability test, (Hair, 2014).The measurement of the outer model, which is shown in Figure 2 and Table 2 will be explained as follows.The value of each loading factor on the indicators of brand equity, service quality, customer bonding, and consumer loyalty was above 0.7 and 0.5 for the average variance extracted (AVE) values in the validity test shown in Table 2 above.Additionally, each variable's value for Cronbach's alpha value and composite reliability was above 0.7, demonstrating the high reliability levels of all research variables.These positive results can be utilized to indicate that the condition of the connection between the variables was also positive, allowing for the execution of additional tests.

Inner Model Measurement
SmartPLS 3.2.9 was used to bootstrap research data to measure the inner model.Bootstrapping produced two outcomes, the first of which was the study's R-square and the importance of the two associated variables.The R-square value demonstrates how well exogenous factors may create endogenous variables.There are three categories of R-square values, according to Ghozali (2014), if the value is 0.19, the relationship between exogenous variables and endogenous variables is weak; if it is 0.33, the relationship is moderate; and if it is 0.67, the relationship is strong.The association between endogenous and exogenous variables is influential, according to Sarwono (2016), if the R-square value is more than 0.67.According to the calculated R-square value for the Consumer Loyalty endogenous variable, which ranges from 0.33-0.67(see Table 3), the capacity of exogenous variables to explain endogenous variables is generally moderate.A significance test was also conducted to establish the association between the exogenous and endogenous variables to demonstrate the hypothesis testing.The p-value reveals the essential criteria.If the p-value between the exogenous and endogenous variables is less than 0.05 with a significance level of 5%, it indicates that the exogenous variable has a significant impact on the endogenous variable; On the other hand, if the value is more significant than 0.05, it indicates that the exogenous variable has no significant impact on the endogenous building variable.According to the findings of the data processing shown in Table 4, the relationship between brand equity and consumer loyalty has produced positive and significant results with a p-value of 0.000, which is less than 0.05.A p-value of 0.000, which is less than 0.05, further demonstrates customer bonding's favorable and substantial effects on consumer loyalty.Similar results were reached for the impact of service quality on consumer loyalty, with a p-value of 0.000, which is less than 0.05, indicating that the relationship is positive and significant.Overall, it was determined that all three of the hypotheses that were constructed to examine the direct relationship between variables were accepted.

Discussions
The results of the research developed through the first hypothesis (H1) show that brand equity has a positive and significant effect on consumer loyalty.These results prove that brand equity creates a higher level of trust among consumers in products or services from beauty SMEs.When consumers trust a brand, they tend to feel more comfortable and confident in continuing to buy products or use the services offered by these MSMEs.Brand equity is often associated with better quality perceptions.If beauty SMEs have built a positive reputation for their products or services, consumers will tend to feel that they are getting better value with every purchase, which in turn increases loyalty (Basoeky et al., 2021).Brand equity also creates a positive experience for consumers.Well-recognized brands are more likely to provide satisfying experiences, including good customer service, quality products, and pleasant shopping experiences.All of these factors can affect consumer loyalty.In addition, good brand equity can affect the reputation of beauty MSMEs in the consumer community.When consumers are satisfied with a product or service, they are more likely to provide positive recommendations to their friends, family, and colleagues.This can result in customer growth through word-of-mouth (Suryani et al., 2021).
The results of the research developed through the second hypothesis (H2) show that service quality has a positive and significant effect on consumer loyalty.Good service creates a sense of trust among consumers.When consumers feel that beauty SMEs are reliable and provide services that meet or even exceed their expectations, they are more likely to remain loyal to the business.Consumers will feel satisfied if they receive high-quality services from beauty MSMEs.These satisfying experiences create a strong positive impression in consumers' minds, which can increase their loyalty.In the competitive beauty market, high-quality service can be a significant differentiator.If beauty SMEs can provide a better experience than their competitors, consumers will tend to choose them repeatedly (Marpaung et al., 2021).Good service can help build a positive reputation for beauty MSMEs.Consumers who are satisfied with the service will tend to give positive reviews and recommend the business to others.This can have a positive impact on business growth and increase consumer loyalty.Good service can also create an emotional attachment with consumers.When consumers feel well-treated and valued, they are more likely to develop an emotional bond with a business and remain loyal (Sudirman et al., 2020).
The results of the research developed through the third hypothesis show that customer bonding has a positive and significant effect on consumer loyalty.These results prove that customer bonding creates an emotional attachment between consumers and businesses.When consumers feel that they have a closer relationship with beauty MSMEs, they tend to feel more emotionally connected and more loyal.Relationships built through customer bonding are usually more sustainable (Sinaga et al., 2020).Consumers who feel emotionally connected to beauty MSMEs will tend to consider remaining loyal in the long term, even if there are other competitors.Customer bonding can increase the level of consumer satisfaction.When consumers feel a deep connection with a business, they tend to be more satisfied with the products or services they receive, which can strengthen loyalty (Sherly et al., 2020).Furthermore, customer bonding often involves consumers actively engaging in interactions with the business, such as participating in loyalty programs, providing feedback, or interacting with the brand on social media.This creates deeper bonds and increases consumer engagement.Through customer bonding, beauty MSMEs can show consumers that they are valued and important.This can be done through warm personal interactions, responsive to consumer needs, and recognition of consumer loyalty.

CONCLUSIONS AND RECOMMENDATIONS
The results of this research conclude that brand equity has a positive and significant influence on consumer loyalty in beauty MSMEs because it creates recognized quality, positive experiences, brand identification, good reputation, emotional attachment, brand consistency, and positive recommendations.All these factors together contribute to maintaining and increasing consumer loyalty.Then, good brand equity management will create a satisfying experience, build trust, help differentiate from competitors, build a positive reputation, create emotional attachment, and provide good quality products and services.All these factors together contribute to maintaining and increasing consumer loyalty in the beauty business.This research also concludes that customer bonding has a positive and significant effect on consumer loyalty in beauty MSMEs because it can create emotional attachment, increase satisfaction, build long-term loyalty, promote positive recommendations, actively involve consumers, increase resistance to competitors, and respond positively to change.All these factors together contribute to strengthening consumer loyalty in the MSME beauty business.
The practical implications of this research state that beauty MSME owners need to understand the importance of building strong brand equity.This includes identifying brand elements that are unique and attractive to consumers, such as brand values, brand story, and brand image.MSME owners must invest in developing and strengthening their brands to positively influence consumer perceptions and loyalty.Service quality is a key aspect in maintaining and increasing consumer loyalty.MSME owners must ensure that the products and services they offer are of consistent quality and meet or exceed consumer expectations.This can include staff training, the use of high-quality materials, and attention to detail.Customer bonding must be the main focus in marketing and business development strategies.Beauty MSME owners can create emotional attachments with consumers through personal interactions, responsiveness to consumer needs, and appreciation for customer loyalty.A well-designed loyalty program can also help strengthen customer bonds.Social media can be an effective tool for building and maintaining customer bonds.Beauty MSME owners must be active in communicating with consumers via social media platforms, responding to questions or input, and sharing relevant and interesting content.This research has suggestions to be used as a reference for research and reference for decision-making for parties who have a relationship with improving the performance of the beauty MSME business.First, conducting case studies on several different beauty SMEs can provide deep insight into how brand equity, service quality, and customer bonding affect consumer loyalty in different contexts.Comparative analysis between MSMEs with various characteristics can also help identify the key factors that influence loyalty.Second, combining qualitative and quantitative research methods can provide a more comprehensive understanding of how brand equity, service quality, and customer bonding impact consumer loyalty.Then the last one, Future research can develop more complex measurements and models to understand deeper levels of loyalty, including high, low, and medium levels of loyalty.This can help MSME owners identify different customer segments and design strategies accordingly.

Figure
Figure 1.Research Framework