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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
MODENAS has produced 23 models of scooters and motorcycles for the sale in local
market. MODENAS‘s product has also penetrated overseas market such as Indonesia,
Brunei, Singapore, Iran and Greece. In September 2007, MODENAS has achieved its
1,000,000 units production and had since trying to gear up to increase the local and
overseas sales volume.
Nevertheless, MODENAS has lost its top ranking position to its competitors when its
biggest market share of 43% in the year 2000 has shrinking to only 11% in 2009. The
continuous declining in MODENAS sales is possibly causes by the aggressive effort
taken by MODENAS‘s competitor to introduce new competitive models with excellent
marketing strategy. MODENAS‘s close competitors namely Honda and Yamaha have
been in the Malaysian market for more than 30 years and received favorable brand
acceptance and loyalty by the customer.
Since the product brand creates an image and become the basic motive for the
consumers‘ choice of a particular product, it is essential for MODENAS to determine
how serious of its product quality perception and brand loyalty which could lead to the
impairment of the sales volume. Apart from that, there is also a need to find out of any
relationship, link or effect exist between the product quality and the brand loyalty to the
motorcycle industry in Malaysia.
This outcome has created the interest to study the possibility of the effect in the
Malaysian market environment especially to Malaysia‘s national brand
motorcycle/scooter, MODENAS. The objective of the study is to determine the
relationship between the product quality and the brand loyalty and its influence to the
customer re-purchase buying behavior of similar brand in their future purchase.
1.1 Relationship between Product Quality and Brand Loyalty
A good quality product creates customer delight. In turn, delighted customers remain
loyal and talk favorably to others about the company and its product. Studies show big
differences in the loyalty of customers who are less satisfied, somewhat satisfied and
completely satisfied. Even a slight drop from complete satisfaction can create an
enormous drop in loyalty (Kotler and Armstrong, 2010).
Several researches have been done and it was noted that there are positive relationship
between performance quality and customer satisfaction. However the correlation differs
between one product and services to another. According to a research constructed by
Croanin and Taylor (1992) who examined for businesses, found strong correlation
between satisfaction and loyalty for fast food and dry cleaning. However it was also
noted that relationship between satisfaction and loyalty is to be dependent on the
characteristics of the focal products and services itself.
It was also discovered that brand reputation do have a strong effect on loyalty. The effect
of customer satisfaction on loyalty appears to be contingent and it was suggested that
satisfaction will only have a direct effect on loyalty when customers are able to evaluate
product quality through their experience with the product and services itself.
COPY RIGHT © 2011 Institute of Interdisciplinary Business Research 137
JANUARY 2011
VOL 2, NO 9