FACTORS INFLUENCING BRAND LOYALTY OF CIGARETTE PRODUCTS: A CASE STUDY OF CHEAP CIGARETTE PRODUCTS

Abstract

Cigarette products, both kretek and filter types, are widely consumed by the Indonesian people. There are 70 million active smokers. Cigarettes are a source of foreign exchange for the country, state revenue from cigarette excise taxes reached IDR 183.2 trillion in August 2024. This study intends to analyze the brand loyalty of smokers, namely the factors that drive loyalty to a brand or the influence of switching to another brand. The research method used is mixed methods because it will examine two aspects, namely quantitative and qualitative aspects. Brand loyalty is personal/individual because it concerns taste, prestige and so on. One of the dominant factors is the increase in cigarette prices from 2022 to the present. The increase was due to a 10% increase in excise rates. The results of the study show that most smokers who are not loyal switch to cheap cigarettes. They consider purchasing cigarette products not from taste or prestige but from an economic perspective. This disloyalty is caused, mainly, by the decreasing purchasing power of the community. Therefore, considerations for increasing cigarette excise rates need to be studied in depth and holistically.