THE INFLUENCE OF PRICE, PRODUCT QUALITY, SERVICE QUALITY ON CUSTOMER SATISFACTION AND CUSTOMER LOYALTY OF DCK SURABAYA

Abstract

The higher the number of exported furniture from China, the more difficult it is for the furniture SMEs (Small and Medium Enterprises) in Indonesia to compete in global market. The marketing performance is one of the obstacles SME entrepreneurs should deal with in the competition. This study is aimed to examine and analyze some variables that influence marketing performance, such as price, product quality, service quality, customer satisfaction, and customer loyalty. Each variable is formed by several indicators, on of which is price consisting of flexibility, customization, differentiation, and promotion. Product quality is formed by defect, durability, matchness, and consistency. Service quality is formed by tangible, reliability, assurance, responsiveness, and empathy. Customer satisfaction is formed by complaint, referral, and repurchase likelihood. Customer loyalty, on the other hand, is formed by brand loyalty, customer retention, and demand growth. This study uses random sampling method. The samples were taken from population consisting of all customers that have been served by DCK. The samples number were taken by Slovin formula. Primary data was collected through direct interview to obtain the respondents’ perceptions on every question given in questionnaire. Instrument validation test of this research uses construct validity; the research is considered valid if the correlation coefficient is positive and higher than 0,50. Reliability test is done using construct reliability; the research is called reliable if it has construct reliability which is higher than 0,70. The analysis technique used to analyze the research data is structural equation modeling with partial least square approach. Statistical program applied in the data analysis is smartPLS. The main conclusion obtained from this study is that non-significance of relationship from price and product quality to customer loyalty. Other main conclusion is the negative but significance relationship from service quality and customer satisfaction to customer loyalty.