THE INFLUENCE OF THE MARKETING MIX (PRODUCT, · PDF fileThe Influence of the Marketing Mix (Product, Price, Promotion, Place, Process,... 207 2. LITERATURE REVIEW A. Theoretical The

IJER © Serials Publications12(1), 2015: 205-217

ISSN: 0972-9380

THE INFLUENCE OF THE MARKETING MIX(PRODUCT, PRICE, PROMOTION, PLACE,PROCESS, ENTREPRENEURS AND PHYSICALEVIDENCE) TO CUSTOMER SATISFACTIONAND LOYALTY IN BUYING SHREDDED BEEFIN PALU CITY, INDONESIA

Abstract: Shredded (Abon) beef businesses nowadays is one of the service industries that isgrowing rapidly which began to tune the Indonesian people, especially those living in urbanareas because it fits the lifestyle of the people who are being practical in accordance with thedynamic and fast-paced life activity. Shredded (Abon) beef as one of traditionally processedfood products, generally produced by industrial households (home industry) that are marketedwell around the manufacturer or outside the area. The aim of this research was to examinethe influence of the marketing mix (product, price, promotion, place, process, entrepreneursand physical evidence) against customer satisfaction and loyalty in buying shredded beef.The result show (1) Product Quality (X1) has a positive and significant impact on customersatisfaction (Y1) as well as Consumer Loyalty (Y2). That is, the higher the value of Qualityof Products (X1) then it would affect the higher Consumer Satisfaction (Y1) and ConsumerLoyalty (Y2)., Or vice versa. (2) Relevance of Price (X2) has a positive and significantimpact on customer satisfaction (Y1) and Consumer Loyalty (Y2). The coefficient is positive,indicating the higher the value of Conformity Price (X2) will affect higher on CustomerSatisfaction (Y1) and Consumer Loyalty (Y2). (3) Presence of Promotion (X3) has nosignificant effect on customer satisfaction (Y1) and Consumer Loyalty (Y2) .. That is thelevel of promotion will not affect the existence of the high and low values of CustomerSatisfaction (Y1) and Consumer Loyalty (Y2). (4) Selling Place (X4) has no significanteffect on customer satisfaction (Y1) and Consumer Loyalty (Y2). This means that the intensityof the Place of Sale (X4) will not affect the intensity of the Customer Satisfaction (Y1) andConsumer Loyalty (Y2). and vice versa.Keywords: Marketing Mix, Customer Satisfaction, Loyalty, Shredded Beef

1. INTRODUCTION

Shredded (Abon) beef businesses nowadays is one of the service industries that isgrowing rapidly which began to tune the Indonesian people, especially those living

* University of Brawijaya, Indonesia

206 Marhaeni, Zaenal Fanani, Budi hartono & Bambang Ali Nugroho

in urban areas because it fits the lifestyle of the people who are being practicalin accordance with the dynamic and fast-paced life activity. Shredded (Abon)beef as one of the food products of livestock products with a traditionalprocessing it is quite popular in some Asian countries. Huda, et al. (2012) explainedthat shredded beef is one of processed beef products made traditionally in Asiansocieties.

Shredded (Abon) beef as one of traditionally processed food products, generallyproduced by industrial households (home industry) that are marketed well aroundthe manufacturer or outside the area. Aspects of product marketing of shredded beefin Palu City need attention, because the marketing aspect is as important as theproduction aspect. Attention to marketing, to be viewed from the aspect of consumerbehavior (consumer behavior), due to the success of the production aspect alone doesnot guarantee the success of the business if the manufacturer of abon does not knowwhat the consumers want and the behavior of consumers.

The rise of the increased production of shredded beef processing tracedfrom various empirical studies. One of which led to an increasing demand isbecause consumers are satisfied (this characteristic is called consumer satisfaction),on the other side of this satisfaction, consumers will feel loyal (customerloyalty), thus it can increase the demand for abon. For that we need to examinewhat factors are leading to high customer satisfaction, thus resulting in high customerloyalty.

Consumers’ behavior study is a study about a way of an individual, a group andan organization in selecting, buying, using and disposing goods, services, ideas, orexperiences to satisfy the needs and desires of consumers. Consumer buying behavioris influenced by cultural factors, social, personal and psychological factors in additionto the marketing mix. Location of originality (and differences) with the previousresearch, this study combines the concept of the behavior of producers (marketingmix) as well as consumer behavior (behavior of society), and to compare the level ofsatisfaction and loyalty of both rural and urban consumers. Previous studies onlyconsider the behavior of only manufacturer to customer satisfaction and customerloyalty. In fact other than the manufacturer’s behavior (external factor of the consumer),there are also worth considering the behavior of producers (as the internal factors ofthe consumer). In addition, the location of the originality of this study also considersother than customer satisfaction, customer loyalty too. Because of the empiricalphenomena in the field with customers who are satisfied, then the consumer willsalways making purchases continuously and will notify the processed product to acolleague or family (word of mouth).

The purpose of this research was to examine the influence of the marketing mix(product, price, promotion, place, process, entrepreneurs and physical evidence)against customer satisfaction and loyalty in buying shredded beef.

The Influence of the Marketing Mix (Product, Price, Promotion, Place, Process,... 207

2. LITERATURE REVIEW

A. Theoretical

The basic principle of a marketing activity is to run properly the marketing activitiesand guided, Kotler (2005) explained that the main principle of marketing is how wecan understand the wants and needs (needs and wants) of consumers. Needs is a stateof consumer dissatisfaction felt that something is lacking, while the desire (wants) is astrong desire to satisfy specific to human needs. From the picture then the needs havealways been inherited in humans since long time ago, while the desire to be a meansto satisfy those needs. What happens is that people do not need too much but wish bythe society is very much.

According to Sumarwan (2004) attitudes (attitudes) of a consumer is an importantfactor, that influences consumer decision making. The concept of consumer attitudesare influenced by the concept of trust by the consumer and consumer behavior.According to Peter and Olson (2005) defined attitude as the overall evaluation of aperson in a concept. According to Schiffman et al. (2007) attitude is the expression ofinner feelings of someone that reflects whether a person is in good condition or notthat inclined to multiple objects. According to Engel et al. (1990) attitude shows whatconsumers likes and dislikes.

Engel, et al. (1995) explained that there are four main factors that affect everyconsumer purchase decision-making process, namely: (1) the influence of theenvironment, consisting of cultural, social class, family and situation. As the primarybasis of consumer behavior is to understand the environmental influences that shapeor constrain individual consumers in making purchasing decisions. Consumers livingin a complex environment, in which the behavior of consumer purchasing decisionsare influenced by four factors mentioned above. (2) Differences and the influence ofindividuals, consisting of motivation and engagement, knowledge, attitude,personality, lifestyle, and demographics. Individual differences are internal factors(interpersonal) that move and affect behavior. These five factors will expand influenceconsumer behavior in the purchase decision process. (3) The psychological process,consisting of information processing, learning, changes in attitudes and behavior. Allthree of these factors add to the main interest of the consumer research as factors thatinfluence the behavior of consumers in making purchasing decisions. (4) Marketingstrategy, that includes seven P (7P): product, price, promotion, place, people, physicalevidence, and process. The marketing strategy will be presented in detail in the nextsection.

The primary responsibility of each businessman leads to a maximum achievementnamely customer satisfaction (Kotler, 2005). Satisfied customers felt that he/she getsthe value from a supplier, manufacturer or service provider. This value can be derivedfrom the product, price, service, and taste as an emotional nature. If the customer saysthat the value of it is a quality product then customer satisfaction occurs when


customers get a quality product. If consumers say the value is the price then customersatisfaction would be achieved if the employer provides the most competitive price.

Satisfied customers feel that they get value from the supplier, manufacturer, orservice provider. This value can be derived from the product, price, service, and asense as something that is emotional. If the customer says that the value is the productquality, satisfaction occurs when customers get a quality product. If the customersays it is comfort or convenience value, satisfaction occurs when obtaining servicesreally comfortable. If the customer says the value is a reasonable price, the customerwill be satisfied if the employer provides the most competitive price (competitive).Customer satisfaction will lead to customer loyalty. There are six principles of loyaltypresented by Frederick F. Reicheld (2003). 1. Preach what you practice (doing what itdoes). To gain customer loyalty is not enough just to have a good value then it shouldbe explained to them and emphasize on customers, employees, vendors andshareholders. 2. Play to win-win. If you want to build loyalty, not only you have tolose a competitor, competitors also have to win, it means that in an effort to achieveloyalty, then the competitor if possible could also win. 3. Bepicky . In the companywith high loyalty, members are rights and responsibilities. Explaining the differencebetween loyalty and positions. 4. Keep it simple. By complex, the need of a small teamto facilitate responsibility and accountability. They also need a few simple rules toguide decision making. 5. Reward the right result. Keep your best part for loyaltycustomers, and save your best chance for a worker and partner loyalty. 6. Listen hard,talk stright. Visit the center, internet room and wherever customers will be back.

B. Previous Study

Research by Tserveni et al. 2007) concluded that the desire of consumers to buy chickenmeat is largely determined by taste, appearance, name of manufacturer and price.Consumers who have a different flavor to the chicken meat with new products thatwill affect the frequency of consumer purchase. Research on the factors that influenceconsumer behavior, Sudiyarto (2009) explained that it can be done based on the theoriesthat include cultural, social environment, individual, consumer psychology andmarketing strategy that refer to the model of Engel et al. (1995). Research about theattitude of consumer confidence in agribusiness products can be made throughconsumer ratings of the attributes of the product, where the product attributes attachedto the agribusiness products include price, flavor, size, color/appearance of the product,the condition of freshness/fresh, aroma, texture and nutritional value.

Lehota et al. (2010) stated that the factor of the purchasing habits of food productsin retail stores, store types, time spent, strategy and spending patterns, information,product, price and quality, the role of service in the store. Social factors, consumerpsychology and characteristics of shops selling food products are very important.Considered by marketers to increase sales turnover. Anita et al. 2010) said that theever-changing needs of consumers. Although the value of beef is determined by


consumer demand, but consumers should get additional value and satisfaction whenbuying and eating beef that are sold. Consumers strongly believe the beef productsthat are produced locally, free of disease, and a delicious flavor that will influencepurchasing decisions, satisfaction and thus the growth of the beef industry. Utami(2004) in a study of consumer behavior towards ethnic food products namely Malangmeatballs and Kediri tofu, by analyzing the attitudes, social norms and perceptions ofconsumers, as well as the intention, action and satisfaction of the purchase of themeatballs and tofu. This study concludes that consumers like Malang meatballs thanother snack foods and like Kediri tofu than other tofu from elsewhere, where consumerswho love the unique flavor and live in cities tend to opt tofu of Kediri, while consumerswho are young and enjoys something fresh tend to choose Malang meatballs.

3. ANALYSIS RESULT

A. Method of Data Collection and Method of Analysis

The Research was using primary data and secondary data. Primary data collectionwas done by using a survey in the field by getting clear and detailed informationabout a particular thing with a guide questionnaire and in-depth interviews. Theprimary data obtained directly from the entrepreneur of shredded beef and consumerto determine the factors that influence consumer behavior in; the purchase of theshredded beef (abon). Secondary data is data obtained from other parties that areavailable generally in the form of literature data, or documentation published as ofBPS, Office concerned. Data collection will be done by observation, recording andinterview.

B. Analysis Result of Structural Equation Modeling (SEM)

There are nine variables in this study, namely the quality of Products (X1), Conformityof Price (X2), Presence of Promotion (X3), Selling Place (X4), Manufacturing Process(X5), Quality of Business Actor (X6), Physical Evidence (X7), Customer Satisfaction(Y1) and Consumer Loyalty (Y2). The tool of this analysis is use Structural EquationModeling.

C. Measuring Model

The following table presents the average results and the loading factor of each indicatorin each study variable.

Terms of instrument passed the test of validity is if the correlation value is greaterthan 0.3, while the requirement to pass the test instrument is reliable if the Cronbachalpha values above 0.6. From Table 1 shows that the entire item of five variables,namely Product Quality (X1), Conformity of Price (X2), Presence of Promotion (X3),Selling Place (X4), Manufacturing Process (X5), Quality of Business Actor (X6), PhysicalEvidence (X7), customer satisfaction (Y1) and Consumer Loyalty (Y2) has a correlation


Table 1Test Result of Research Instruments, Average of Score and Loading Factor.

Variable Indicator Correlation Alpha Cronbach Mean Loading

Quality of Products (X1) X1.1 0.790 0.690 3.47 0.638X1.2 0.772 3.33 0.645X1.3 0.797 3.51 0.678

Conformity of Price (X2) X2.1 0.815 0.694 3.49 0.720X2.2 0.782 3.37 0.637X2.3 0.766 3.37 0.620

Presence of Promotion (X3) X3.1 0.725 0.690 3.44 0.625X3.2 0.706 3.47 0.580X3.3 0.695 3.34 0.545X3.4 0.753 3.50 0.645

Selling Place (X4) X4.1 0.869 0.693 3.34 0.739X4.2 0.880 3.45 0.716

Manufacturing Process (X5) X5.1 0.807 0.692 3.36 0.770X5.2 0.773 3.49 0.590X5.3 0.781 3.37 0.613

Quality of Business Actor (X6) X6.1 0.806 0.696 3.49 0.690X6.2 0.787 3.53 0.670X6.3 0.774 3.49 0.618

Physical Evidence (X7) X7.1 0.767 0.690 3.44 0.727X7.2 0.695 3.31 0.571X7.3 0.697 3.38 0.527X7.4 0.721 3.31 0.577

Customer Satisfaction (Y1) Y1.1 0.737 0.695 3.54 0.638Y1.2 0.742 3.45 0.645Y1.3 0.679 3.47 0.678Y1.4 0.731 3.52 0.720

Consumer Loyalty (Y2) Y2.1 0.659 0.690 3.54 0.637Y2.2 0.671 3.37 0.620Y2.3 0.715 3.49 0.625Y2.4 0.610 3.53 0.580Y2.5 0.684 3.46 0.545

value greater than 0.3, thus the whole question item is valid . Of the reliability testresults showed that the Cronbach alpha values for the ninth consecutive variables isgreater than 0.6 thus the instrument for the ninth variable is declared to be reliable.Thus, the instrument has passed the test thus the data is valid and reliable using theinstrument can be used for data analysis.

D. Assumption Test of SEM

An assumption that must be met prior to SEM analysis is the assumption of normality,the absence of outliers, and linearity. Multivariate normality assumption was tested


with the help of software AMOS 6. Normality test results obtained critical ratio valueof -1360 to the critical value of Zcount for a 5% amounted to 1.96. Since the absolutevalue of CR for multivariate amounted to 1.360 <1.96 then the multivariate normalityassumption is met. To test whether there is an outlier; it can be seen with mahalanobisdistance (MD). Mahalanobis distance is evaluated using a value of 215,149. Mahalanobisdistance to the most distant point of observation is the respondent to 22 with thevalue of Md = 59,262. When compared with the value of 215,149 then the Md pointvalues for -145 <215,149, it was concluded that all points of observation is not anoutlier. Tests conducted by the linearity assumption of Curve Fit method. Linearitytest results showed a significant linear model because the value of Sig <0.05 thereforeconcluded that the assumption of linearity has been fulfilled.

E. Goodness of Fit

Results of the examination of goodness of fit overall model, was in accordance withthe analysis result of SEM, in order to determine whether the hypothetical model issupported by empirical data, given in Table 2 as such:

Table 2Examination Result of Goodness of Fit Overall Model

Criteria Cut-of value Model Results Explanation

Chi Square Small 818.985 Marginal

p-value � 0.05 0.006

CMIN/DF � 2.00 1.139 Good

GFI � 0.90 0.838 Marginal

AGFI � 0.90 0.816 Marginal

TLI � 0.95 0.935 Marginal

CFI � 0.95 0.939 Marginal

RMSEA � 0.08 0.026 Good

Examination Result of Goodness of Fit Overall in accordance with the Table 2shows that the whole criteria show a good model. According to Arbuckle and Wothke,in Solimun (2009), the best criteria used as the indication of a good model is the ChiSquare value/DF which is less than 2, and RMSEA which is less than 0.08. In thisresearch, the value of CMN/DF and RMSEA has fulfilled the cut off. Due to theconcerned matter, the SEM model in this research is appropriate and good to be used,thus it could be done an interpretation in order for a further discussion.

F. Hypothesis TEsting

In this structural model, it tested fifteen hypothesized relationships between variables(direct effect). The following is the complete results of the testing relationships betweenvariables of the study as follows:


Table 3Structural Model SEM Results: Direct Effect

Relationships Between Variables Coefficient Std P-value Explanation

Quality of Products (X1) � Customer Satisfaction (Y1) 0.324 0.001 SignificantConformity of Price (X2) � Customer Satisfaction (Y1) 0.284 0.004 SignificantPresence of Promotion (X3) � Customer Satisfaction (Y1) 0.051 0.570 Not significantSelling Place (X4) � Customer Satisfaction (Y1) 0.109 0.232 Not significantManufacturing Process (X5) � Customer Satisfaction (Y1) 0.312 0.002 SignificantQuality of Business Actor (X6) � Customer Satisfaction (Y1) 0.293 0.004 SignificantPhysical Evidence (X7) � Customer Satisfaction (Y1) 0.243 0.012 SignificantQuality Of Products (X1) � Consumer Loyalty (Y2) 0.331 0.011 SignificantConformity of Price (X2) � Consumer Loyalty (Y2) 0.316 0.010 SignificantPresence of Promotion (X3) � Consumer Loyalty (Y2) 0.076 0.350 Not significantSelling Place (X4) � Consumer Loyalty (Y2) 0.076 0.369 Not significantManufacturing Process (X5) � Consumer Loyalty (Y2) -0.068 0.555 Not significantQuality of Business Actor (X6) � Consumer Loyalty (Y2) 0.011 0.922 Not significantPhysical Evidence (X7) � Consumer Loyalty (Y2) -0.015 0.881 Not significantCustomer Satisfaction (Y1) � Consumer Loyalty (Y2) 0.480 0.069 Significant

Graphically, it is presented as follows:

Figure 1: Model of Structural of SEM Result


The red line shows the relationship was not significant

In addition to the direct effect of the test, on the SEM it is also known for theindirect effect. The indirect effect is the result of multiplying two (2) direct influences.Revealed a significant indirect effect if both direct influence that shapes it is significant.Here are presented the results of the indirect effect:

Table 4Structural Model of SEM Results: Indirect Influence

Indirect Coefficient Direct Influence Coefficient P Value ExplanationInfluence Indirect

Influence

X1 � Y1 � Y2 X1 � Y1 = 0.324* Y1 � Y2 = 0.480* 0.156 0.013 SignificantX2 � Y1 � Y2 X2 � Y1 = 0.284* Y1 � Y2 = 0.480* 0.136 0.027 SignificantX3 � Y1 � Y2 X3 � Y1 = 0.051ns Y1 � Y2 = 0.480* 0.024 0.324 Not SignificantX4 � Y1 � Y2 X4 � Y1 = 0.109ns Y1 � Y2 = 0.480* 0.052 0.221 Not SignificantX5 � Y1 � Y2 X5 � Y1 = 0.312* Y1 � Y2 = 0.480* 0.150 0.017 SignificantX6 � Y1 � Y2 X6 � Y1 = 0.293* Y1 � Y2 = 0.480* 0.141 0.020 SignificantX7 � Y1 � Y2 X7 � Y1 = 0.243* Y1 � Y2 = 0.480* 0.117 0.022 Significant

* significant, ns not significant

Based on the analysis, Quality of Products (X1) which is measured by threeindicators of suitability of the product (X1.1), Conformity of Technology (X1.2),Variations of Other Product Sales (X1.3) has significant impact on customer satisfaction(Y1) with coefficient of 0,324. And impact directly or indirectly on Consumer Loyalty(Y2) with a coefficient of direct influence of 0,331 and the coefficient indirect influenceof 0156.

Conformity of Price (X2) as measured by three indicators: Conformity of with aquality price (X2.1), Conformity of Price with a Facility (X2.2), Conformity of Pricewith a Benefits (X2.3) has significant impact on customer satisfaction (Y1) with acoefficient of 0.284. And impact directly or indirectly on Consumer Loyalty (Y2) withdirect influence coefficient for 0,316 and indirect influence coefficient of 0.136. Theresults are consistent with the research conducted by Dita Amanah (2010), Suwarniand Septina (2011). In research conducted by Dita Amanah entitled “Effect of Priceand Quality Products towards Customer Satisfaction in Majestyk Bakery & Cake ShopBranch HM Yamin of Medan“. This study aims to identify and explains the effect ofprice and product quality to customer satisfaction in Majestyk Branch Bakery & CakeShop HM Yamin of Medan. The population in this study is all of the consumers ofMajestyk Branch of Bakery & Cake Shops HM Yamin for one week, amounting to 500people and 83 people were sampled in this study; by using variable of price, productquality and customers satisfaction. Data collection techniques used in this study wasa questionnaire and observation. The hypothesis of this study indicates that there is isan influence between price and product quality to customer satisfaction in Majestyk


& Cake Shop Branch of HM Yamin of Medan. While the effect of the price of conformityto customer loyalty shown by research conducted by Suwarni and Septina entitled “Effectof Product Quality and Price on Loyalty through Customer Satisfaction”. The subject ofthis study was students of the Faculty of Economics who use IM3 as their phone cards.The sample was 100 consumers of IM3 using random sampling techniques. This studywas using the product quality, price, customer satisfaction, and loyalty as researchvariables. The results are: (1) there is a significant effect of the product quality andsatisfaction, (2) the price is significantly influenced by satisfaction, (3) loyalty is significanteffecting the quality of products (4) there was no significant relationship between priceand loyalty, (5) satisfaction influenced by loyalty significantly.

The presence of Promotion (X3) as measured by four indicators of the presence ofClarity of Information Regarding Promotion (X3.1), Media of Promotion (X3.2),Frequency of Promotion (X3.3), Presence of Sales Bonus (X3.4) showed that the thereis the presence of Bonus sales (X3.4) no significant influence on customer satisfaction(Y1). And do not affect directly or indirectly on Consumer Loyalty (Y2). The resultsare consistent with research conducted by Endang Tjahjaningsih entitled “Effect ofImagery and Customer Satisfaction Promotion and Its Impact on Customer Loyalty(Studies in Carrefour Supermarket Customers in Semarang)”. This study aims todevelop and test an empirical model of customer loyalty on the basis of imagedevelopment and promotion. Empirical test of the model used is regression analysisby using some software, such as SPSS version 16.0 and Microsoft Excel 2007. Variablesused were image, promotion, customer satisfaction, and customer loyalty, in this studythe sample size is 100 customers Carrefour Supermarket in Semarang. The resultsshowed that: 1) The image is a positive effect on customer satisfaction, and thepromotion is a positive effect on customer satisfaction. 2) The image, promotion, andcustomer satisfaction has positive influence on customer loyalty.

Selling Place (X4) as measured by two indicators: Affordability of Location (X4.1)and Strategic Position (X4.2) showed that the presence of Sales Bonus (X3.4) has nosignificant influence on customer satisfaction (Y1); and does not affect directly orindirectly on Consumer Loyalty (Y2). The results are consistent with researchconducted by Ade L. and Eka S., entitled “Effects of Marketing Mix Services onCustomer Satisfaction and Loyalty in Pt. Pegadaian (Persero) Branch Mengwi, Badung,Bali“. This research was conducted in order to know the effect of marketing mixconsisting of product, price, promotion, place, people, physical evidence, and processesto customer satisfaction and loyalty to the PT. Pegadaian Branch Mengwi, Badung,Bali. 100 customers were sampled in the study by distributing questionnaires as datacollection techniques. Path analysis is used as a technique of analysis in the research.The variables used in this study were product, price, promotion, place, people, physicalevidence, process, satisfaction and loyalty. The discovery gives the result that there isno significant effect of the marketing mix consisting of product, price, promotion,place, people, physical evidence, and process simultaneously and partially on customersatisfaction and loyalty to PT. Pegadaian Branch Mengwi, Badung.


Based on the analysis, Making Process (X5) were measured in three indicators ofHours of Service (X5.1), Ease of Payment (X5.2), Post Warranty Service (X5.3) hassignificant impact on customer satisfaction (Y1) with coefficients by 0,312. However,no direct influence but indirect effect on Consumer Loyalty (Y2) with a coefficient of0.150 and an indirect influence. The results are consistent with research conducted byAnonymous with the title “The Relationship between Physical Evidence, People,Process, and Satisfaction, With Loyalty”. This study examines three additional aspectsof the marketing mix namely physical evidence, people and process. These threecomponents are then associated with satisfaction, and connected with loyalty. Researchvariables used in this study were physical evidence, people, process, satisfaction, andloyalties. The research sample was using 80 patients in a hospital in Bandung. Byusing the technique of path analysis, the results showed that the physical evidenceand the process were a significant predictor for the formation of satisfaction, andthrough these three variables are significant predictors of satisfaction for loyalty.

Based on the analysis, Quality of Business Executors (X6) are measured by threeindicators of Hospitality Services (X6.1), Neatness Services (X6.2), and Ease of givingan explanation for the product (X6.3) has significant impact on Customer Satisfaction(Y1) with a coefficient of 0.293. However, no direct influence but indirect effect onConsumer Loyalty (Y2) with a coefficient of indirect influence of 0,141. The results areconsistent with research conducted by Woro M. and F. Naili (2013) titled “The Effectof Customer Value and Quality of Service on Customer Loyalty, Customer Satisfactionthrough Customer Bus on Efficiency (PO Study of Efficiency of Programs Yogyakarta-Cilacap)”. This study aimed to determine the effect of customer value and servicequality on customer loyalty through customer satisfaction for Bus Efficiency. Thelocation of this research was in Ambarketawang Gamping Yogyakarta. The populationis the entire passenger of bus efficiency. Samples were passengers of the efficiencybus who use the bus efficiency for more than 3 times in the last three months, thesampling technique used was purposive sampling. Variables used were service quality,customer satisfaction, and customer loyalty. Analysis of the data was using StructuralEquation Modeling (SEM) which previously tested for validity and reliability. Theconclusion of this study is (1) a positive effect on quality of service towards customersatisfaction; (2) Quality of service is a positive effect on customer loyalty throughcustomer satisfaction.

Physical evidence (X7) were measured in four indicators namely Design and Layout(X7.1), Coolness of the Room (X7.2), Facility of Parking Lot (X7.3), Other SupportingFacility (X7.4) has significant impact on Customer Satisfaction (Y1) with a coefficientof 0,243. However, no direct influence but indirect effect on Consumer Loyalty (Y2)with a coefficient of indirect influence of 0,117. The results are consistent with theresearch conducted by Siti Fatona (2010) with the title “Quality of Service That AffectsLoyalty and Its Relevance to Satisfaction” which was published in the journal entitled“Journal of Management Dynamics”. This study aimed to determine the effect of servicequality on customer loyalty through satisfaction as a mediator variable in Bank of


BPR-BKK Karangmalang Sragen. Customers are the main focus of the satisfaction ofthe perceived service quality. Consumer satisfaction is dominant and decisive factorin maintaining the company. The results showed that the reliability, responsiveness,assurance, empathy and tangibles are positively affecting satisfaction and there is asimultaneous effect of reliability, responsiveness, assurance, empathy and tangibleson customer loyalty indirectly through satisfaction.

5. CONCLUSIONS AND SUGGESTIONS

Based on the results and discussion, we concluded as follows: (1) Product Quality(X1) has a positive and significant impact on customer satisfaction (Y1) as well asConsumer Loyalty (Y2). That is, the higher the value of Quality of Products (X1) thenit would affect the higher Consumer Satisfaction (Y1) and Consumer Loyalty (Y2)., Orvice versa. (2) Relevance of Price (X2) has a positive and significant impact on customersatisfaction (Y1) and Consumer Loyalty (Y2). The coefficient is positive, indicating thehigher the value of Conformity Price (X2) will affect higher on Customer Satisfaction(Y1) and Consumer Loyalty (Y2). (3) Presence of Promotion (X3) has no significanteffect on customer satisfaction (Y1) and Consumer Loyalty (Y2). That is the level ofpromotion will not affect the existence of the high and low values of CustomerSatisfaction (Y1) and Consumer Loyalty (Y2). (4) Selling Place (X4) has no significanteffect on customer satisfaction (Y1) and Consumer Loyalty (Y2) .. This means that theintensity of the Place of Sale (X4) will not affect the intensity of the Customer Satisfaction(Y1) and Consumer Loyalty (Y2) and vice versa.

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