SENSORY ECONOMICS AND CUSTOMER LOYALTY: THE ROLE OF ATMOSPHERIC CUES AND VALUE-BASED PRICING IN PREMIUM COFFEE CHAINS (HARAPAN INDAH EMPIRICAL STUDY)

Abstract

Indonesia's rapidly expanding coffee retail sector showcases significant growth potential, with international and local chains competing in urban markets. This study examines a flagship outlet of a leading global coffee chain in Harapan Indah (operated under local franchise since 2002), selected for its exceptional social media engagement and market dominance reflecting strong consumer affinity. Focusing on customer loyalty drivers, the research analyzes the partial and simultaneous impacts of product quality, price perception, and store atmosphere using quantitative methodology. Primary data collection utilized digital survey tools distributed to patrons, with subsequent analysis employing: 1) Instrument validity/reliability verification, 2) Standard statistical assumption testing, 3) Multivariate regression modeling, 4) Hypothesis validation techniques, and 5) Variance explanation metrics. Key findings indicate product quality and price perception significantly drive loyalty, while store atmosphere demonstrates insignificant partial influence despite collective variables explaining 68.3% loyalty variance (R²=0.683). This counterintuitive atmospheric impact suggests Indonesian urban consumers prioritize functional value over environmental cues, contradicting global trends. The outcomes provide actionable insights for coffee chains operating in similar emerging markets, emphasizing product excellence and pricing strategy over atmospheric investments.