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«The Contribution of Non-Muslim Consumers in Building Islamic Pawn Shop in Indonesia Pongky Arie Wijaya The State Institute of Islamic Studies of ...»

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Rev. Integr. Bus. Econ. Res. Vol 5(1) 19

The Contribution of Non-Muslim Consumers

in Building Islamic Pawn Shop in Indonesia

Pongky Arie Wijaya

The State Institute of Islamic Studies of Mataram,

Indonesia

ABSTRACT

This research is aimed at proving and analyzing the effect of satisfaction with service

toward repurchase intention and word of mouth on Islamic pawn shop consumers in

Indonesia. The sample of this research contains a large number of the customers of Rahn Islamic pawn shop in West Nusa Tenggara, Indonesia. Data were collected through questionnaire distributed to intercept a sample of 220 customers of Rahn Islamic pawn shop. Data were analyzed with descriptive statistics, regression analysis and structural equation modeling. It was found that the satisfaction with service is associated with repurchase intention and word of mouth among Muslim and Non Muslim consumers. Thus, this research contributes to understanding the Islamic pawn shop.

In creating, developing and designing services, Islamic pawn shop paid more attention to the needs of consumers by conducting a lot of marketing strategies. It serves not only the needs of Moslem consumers but also the needs of non-Moslem consumers.

Keywords: Islamic Pawn Shop, Satisfaction with Service, Repurchase Intention, Word of Mouth.

1. Introduction The operational concept of Islamic pawn shop in Indonesia is referred to the modern administrative system that is aligned with Islamic values. Islamic pawn shop operational functions using the principle of efficiency, effectiveness and rationality.

Based on the operations, Islamic Pawn Shop Service Unit is under the management of other business division of PT. Pegadaian, which is separated structurally in management from the conventional business. As other Islamic financial institutions, Islamic pawn shop does not emphasize the provision of the interest of goods being pawned, yet still benefit by imposing the costs of maintaining the pawned goods through the calculation of the value of the goods. Financing activities in the Islamic pawn shop obtained from sources that are free from the elements of Riba. The funds distributed to consumers also come from the equity and the accountable funds from the third party.

The developments of Islamic pawn shop in terms of financial are also Copyright  2016 GMP Press and Printing (http://buscompress.com/journal-home.html) ISSN: 2304-1013 (Online); 2304-1269 (CDROM) Rev. Integr. Bus. Econ. Res. Vol 5(1) 20 followed by continuous improvement in service. The service provided to the consumers by Islamic pawn shop is the best service, expecting that it could create the customer satisfaction. Creating and increasing the customer satisfaction through service aims to create a positive image in the hearts of consumers. Satisfaction is the relationship between expectations and experience. The closer to the expectations, the better satisfactions of the costumers are.

Service is social activities that are aimed at establishing cooperation between the parties in the long term with the principle of mutual benefit. Good service is a service that can meet the desires and needs of consumers and provide added value to consumers. Islamic pawn shop strives to continuously improve service quality, because it can improve the perception of consumers.

According to Parasuraman (1996), the main factor affecting the service is expected services and received services. When consumers receive services similar to those that is expected or even better, then the perception that quality services are good or positive and so if the service is bad, the perception will also be bad. Therefore, the quality of service is affected by the ability of providers to consistently meet customer expectations. Continuous satisfaction of customers then will be followed by a repurchase intention. Repurchase intention is to repeat the motivation of consumers purchasing behavior of the products, one of which is shown by the use of the brand of a product in a sustainable manner (Chang and Wildt, 1994; Petrick, Backman & Bixler, 1999; Woodruff, 1997 cited in Tsai Shu-pei, 2005). Repurchase intention has a considerable effect on the attitudes, behaviors and interests that would lead the customer to how he behaves. Gunarso (2005) defines that interest is something personal and related to the individual's attitude on the object.

In addition to the repurchase intention, good service will make word of mouth.

Word of mouth is defined as the promotion from a story of one to another. Word of mouth is also carried out by Islamic pawn shop, besides the cost is relatively low, according to Herr et.al (1991), word of mouth has a greater impact than written information. Word of mouth can attract attention, hold people to not being away and to improve accessibility, thereby it may increase the consumer ratings.

Word of mouth occurs when consumers talk to others about their opinions about the brands, products, certain services to others. If a customer expressed his opinion about the goodness of the product, this is called a positive word of mouth.

Conversely, if the customer tells about badness of the product vices, this is called a negative word of mouth.

Word of mouth is a promotional activity that is difficult to control by marketers, but it provides tremendous impact on the product or brand of the company Copyright  2016 GMP Press and Printing (http://buscompress.com/journal-home.html) ISSN: 2304-1013 (Online); 2304-1269 (CDROM) Rev. Integr. Bus. Econ. Res. Vol 5(1) 21 (Yosefina, 2008). Marketers have no control on what the consumer will tell others about the products he consumes. However, the company may direct, encourage, and facilitate the conversation from the mouth to meet customer satisfaction through innovative products and high quality so as to create positive word of mouth.





Consumers of Islamic pawn shop also vary. Based on religion they may be distinguished into Muslim and non-Muslim consumers. This means that Islamic economic principles applied to the Islamic finance industry, one of which is the sharia mortgage, can also be accepted by consumers whose background is Non-Muslim.

Based on these descriptions, the research problems to answer are; (a) is there any effect of satisfaction with service on the repurchase intention in service of Rahn Islamic pawn shop in Indonesia ?; and (b) Is there any effect of satisfaction with service on positive word of mouth on the service Rahn Islamic pawn shop in Indonesia?

2. Theoretical Framework and Hypothesis

2.1. Islamic pawn shop The term pawn in Islamic is known as Rahn. Rahn, according to Imam Ibn Qudamah is defined as objects used as the warrant of a debt that meets the price that should be paid if the debtor is not able to pay of the person indebted. Simply defined, Rahn is to hold the treasure of one belonging to the borrower as collateral for loans he received.

In positive law, pawn is chattels obtained from an indebted person, which are submitted by someone who owes or by any other person on behalf of him and that gives authority to the indebted (Ansori, 2006).

2.2. Satisfaction with service Kotler et al., 2006, defines satisfaction as the feeling of being happy or upset of someone who comes from the comparison between the performance of the product and expectations. If the performance is under the expectation, the consumers will feel disappointed. Conversely, if the performance is above expectations, then the consumer will feel satisfied. Thus, the customer satisfaction is affected by the consumer expectations and company performance.

There are several methods that can be used to measure and monitor the

customer satisfaction (Tjiptono and Chandra, 2005). They are:

1. The system of complaints and suggestions. The Company prepares the opportunity and convenient and easy access for consumers to submit suggestions, criticisms, opinions, and complaints.

2. Ghost shopping (mystery shopping). Ghost shopper acts as a potential consumer of product companies and competitors. They were asked to interact with staff and Copyright  2016 GMP Press and Printing (http://buscompress.com/journal-home.html) ISSN: 2304-1013 (Online); 2304-1269 (CDROM) Rev. Integr. Bus. Econ. Res. Vol 5(1) 22 service providers to use their services.

3. Lost customer analysis. Companies may contact consumers who have stopped buying the products or who have moved to competitors product to obtained data of why they did so in order that the company take further policy for improvements.

4. Survey on consumers satisfaction. Through the survey, the company will obtain responses and feedback directly from customers and also give a positive impression that the company is paying attention to its customers.

2.3.Repurchase intention Repurchase intention or repurchase interest is the behavior of consumers who respond positively to what has been given by a company and would like to make a return visit or taking back the company's products. Repurchase intention is supported by the presence of past behavior that may directly affect the interests of customer to buy

again in the future. The current proposed research hypothesis is as follows:

Hypothesis 1 (H1) There is the effect of satisfaction with service on the repurchase intention in the service of Rahn Islamic pawn shop in Indonesia.

2.4.Positive word of mouth Kotler and Armstrong (2008) defined the word of mouth as a personal communication about the product between the buyers and the surrounding people. Word of mouth is any informal communication that is directed to other customers regarding the possession, the use, or the characteristics of certain products and the sales. Word of mouth communication refers to an exchange of thoughts, ideas or comments between two or more people where they are not a source of marketing. Word of mouth cannot be invented or created.

Herr et al. (1991) stated that the positive word of mouth communication has been recognized as a valuable effort to promote the company's products and services.

Since it is non-commercial communication, word of mouth is viewed as a promotional effort with scepticism by the company. While Kumar et al., (2002) stated that the most valuable customer is not those that buy most, but the most active customer word of mouth that are able to bring other customers to use the services of

the company. The current proposed research hypothesis is as follows:

Hypothesis 2 (H2) There is the effect of satisfaction with service on the positive word of mouth in the service of Rahn Islamic pawn shop in Indonesia?

2.5.Sub religious culture Sub-culture is a certain group of people in a society that have the same cultural significance for affective and cognitive responses (emotional reactions, beliefs, values and goals), behavior (customs, rituals and writing, norms of behavior), and the Copyright  2016 GMP Press and Printing (http://buscompress.com/journal-home.html) ISSN: 2304-1013 (Online); 2304-1269 (CDROM) Rev. Integr. Bus. Econ. Res. Vol 5(1) 23

–  –  –

3. Research Method This study is aimed at measuring the effect of satisfaction with service on the repurchase intention and positive word of mouth in the service of Rahn Islamic pawn shop in West Nusa Tenggara, Indonesia. The research employed the analytical descriptive research method. This research is an explanatory study that explores and explains the causal relationships between variables through hypothesis testing.

The population of this research were all consumer of products Rahn Islamic pawn shop in West Nusa Tenggara, Indonesia, who have been customer for at least one year. The total population of customers Rahn products in Islamic pawn shop in Copyright  2016 GMP Press and Printing (http://buscompress.com/journal-home.html) ISSN: 2304-1013 (Online); 2304-1269 (CDROM) Rev. Integr. Bus. Econ. Res. Vol 5(1) 24 West Nusa Tenggara, Indonesia, is infinite so that the number of samples can be determined up to 220 consumers. The variables of this research was satisfaction with service (X1), repurchase intention (Y1) and positive word of mouth (Y2).

3.1. Research instrument 3.1.1. Satisfaction with service Variable of satisfaction with service (X1) is a measure that reflects the structure, processes and customer care such as: a) officers showed a pleasant performance, b) officers use the technology, c) officers fulfil the promise, d) the officers convincingly answer the questions, e) services with a positive response, f) the officers can handle the complaints, g) officers direct the customers to the service according to the needs, h) officers greet the customer during the service, i) officers should be polite, j) officers attentively listen to the customers, k) officers communicate in an easily understood language, l) officers expressed empathy on the complaints, m) officers provide clear information, n) officers document the complaints, o) officers should be consistent in providing the services, p) solutions of the officers should solve the problems encountered.

3.1.2. Repurchase intention Variable of repurchase intention (Y1) is a condition in which the consumer has a positive attitude on the brand and is committed to the brand and intends to continue purchasing in the future: a) back again to the Islamic pawn shop, b) repurchase the products of Islamic pawn shop, c) remain comfortable with Islamic pawn shop, d) visit more frequently to the Islamic pawn shop.

3.1.3. Positive word of mouth Variable of positive word of mouth (Y2) is a personal communication about the product between the buyer and the surrounding people (Brown et al, 2005; Allen, 2001): a) happy to share the experience with others, b) pleased to recommend others to use the products, c) intensifying the word of mouth in communication, d) convincing others to make a purchase.

The sample were selected through technique of probability sampling with systemic random sampling technique in which every consumer of Rahn have equal opportunity to be selected as sample. The data were collected door to door in the home of consumer of Rahn. The analysis employed to answer the hypothesis is Structural Equation Modelling or SEM using AMOS program version 18 and SPSS program version 16.

4. Data Analysis and Discussion



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