Predicting Purchase Intention and Customer Segmentation for Kopi Kenangan: An Ordinal Logistic Regression and Cluster Analysis in Tier 3 Cities

Abstract

As Kopi Kenangan, the first Indonesian food and beverage startup-unicorn, seeks to expand from its saturated Tier 1 cities into Tier 3 cities, understanding the factors influencing purchase intention is crucial. This research aims to identify and analyse the key factors and to uncover and profile distinct market segments. Data was collected through questionnaires and the analysis employs ordinal logistic regression and hierarchical clustering. The analysis reveals that higher socioeconomic status (SES), price promotion, and being a Gen Z individual significantly impact purchase intentions. Notably, corporate social responsibility (CSR) also plays a significant role, which is particularly interesting in the context of Tier 3 cities. This heightened CSR awareness might be attributed to the higher educational background. Additionally, Kopi Kenangan’s commitment to using locally sourced materials from Java might contribute to this relationship. Cluster analysis identified seven customer segments. The segment indifferent to CSR includes individuals who are unemployed and from lower SES backgrounds, possibly due to immediate financial concerns. The brand-agnostic cluster, which has a high proportion of Gen Z respondents, tends to show less loyalty to specific brands. Based on these findings, marketing strategies for Kopi Kenangan should highlight the brand's commitment to local sourcing, particularly in cities with high CSR awareness, while offering budget-friendly options to cater to price-sensitive groups.