Abstract

This paper attempts to investigate the effect of ethical sales behavior on customer loyalty in the context of sales representatives of Procter & Gamble (P&G) at Metro Cash & Carry (MCC) supermarkets toward customers. The result of this study is expected to be applicable in fast-moving-consumer-good (FMCG) industry. The applied model in this paper includes four concepts of ethical sales behavior, customer trust, customer commitment, and customer loyalty. Questionnaires were used to collect data through phone survey. Cronbach alpha, Exploratory Factor Analysis, Confirmatory Factory Analysis, and Structural Equation Modeling were used to analyze data collected from 203 customers who are retailers or traders buying P&G products at MCC system. In addition, multiple group analyses regarding gender and purchasing power were also performed. Furthermore, qualitative interviews were also conducted with five (5) customers purchasing P&G products to understand customer response with unethical sales behavior. The results show that there is only indirect impact of ethical sales behavior on customer loyalty through customer trust and customer commitment as mediating variables. Customer commitment has direct effect on customer loyalty, but customer trust only influences customer loyalty through customer commitment. No difference in gender or purchasing power is found regarding the impact of ethical sales behavior on customer loyalty.

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