The influence of service quality and brand image toward customer satisfaction that impacts on costumer loyalty: case study onal-azhar coorperative
THE INFLUENCE OF SERVICE QUALITY AND BRAND IMAGE TOWARD CUSTOMER SATISFACTION THAT IMPACTS ON
COSTUMER LOYALTY
(Case Study onAl-Azhar Coorperative)
By : Ali Akbar 1110081100016
MANAGEMENT DEPARTEMENT INTERNATIONAL CLASS PROGRAM THE FACULTY OF ECONOMICS AND BUSINESS SYARIF HIDAYATULLAH STATE ISLAMIC UNIVERSITY
JAKARTA 1436H/ 2014 M
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v PERSONAL INFORMATION Ali Akbar
Number 7, Pesantren Al-Ma’ ur RT RW 4, Kreo Selata , Larangan, 15156, Tangerang (Indonesia)
021-7376230 +6282114813828 29akbaralii@gmail.com
SexMale| Date of birth29 June 92| NationalityIndonesia
Formal Education
Syarif Hidayatullah State Islamic University Jakarta, Faculty of Economics and Business (Management International)
MA Annajah Jakarta SMP Islam Al-Azhar 3 Bintaro SD Islam Al-Azhar 17 Bintaro TK Islam Al-Azhar 17 bBntaro
PERSONAL SKILLS ADDITIONAL INFORMATION 2014-2010 2010-2007 2007-2001 2004-1998 1998-1997
Mother tongue(s) Indonesian Language
Other language(s)
UNDERSTANDING SPEAKING
W R I T I N G
Listening Reading Spoken interaction Spoken production
English Language B1 B1 B2 B1 B
1
Levels: A1/2: Basic user - B1/2: Independent user - C1/2 Proficient user Common European Framework of Reference for Languages Organisational / managerial skills ▪ Organisasi Siswa Intra Sekolah 2008-2009 (President)
Computer skills ▪ Good command of Microsoft Office™ tools ▪ good enough of SPSS Statistical 17.0
▪ Photoshop and PhotoScape as an amateur photographer
Other skills ▪ Goalkeeper in Management International 2010 ▪ Self Defense Arts (Silat)
▪ Good communication to teach with children ▪ Able to work fast and discipline
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vi Publications
Presentations Projects Conferences Seminars Honours and awards Memberships References
▪National Seminar on “The Law of Business Competition : Comparative
Perspective (Islam –Europe)” held by Faculty of Sharia and Law Syarif Hidayatullah State Islamic University Jakarta on April 24, 2014 Mon
▪Global Conference “Empowering Local Wisdom and Youth for the Continuity of
Sustainable Development” held by Budi Luhur University Jakarta on 24 march 2014
▪Students Forum “Mungkinkah Indonesia Merubah Sistem Ekonominya Menjadi Sistem Ekonomi Syariah?” held by STIE BHAKTI PEMBANGUNAN on 16 April 2010
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vii
ABSTRACT
The aim of this research is to analyze the influence of service quality and brand image toward customer satisfaction that impacts on customer loyalty at Al-Azhar Cooperative. Convenience sampling method has been selected to obtain the data requires at this study. The research use 60 respondents and respondent’s entire member and non-member of Al-Azhar Cooperative. Path analysis used as analytical method in this research. The result of this research shows that service quality and brand image have significant influence simultaneously on customer satisfaction. Service quality has significant influence partially on customer satisfaction and brand image has significant influence partially on customer satisfaction. The second structure equation showed that service quality, brand image, and customer satisfaction have significant influence simultaneously on customer loyalty. Service quality has not significant influence on customer loyalty but brand image and customer satisfaction have significant influence on customer loyalty.
Keyword: Service Quality, Brand Image, Customer Satisfaction, Customer Loyalty.
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viii
ABSTRAK
Penelitian ini bertujuan untuk menganalisis pengaruh kualitas service dan citra merek terhadap kepuasan pelanggan dan dampaknya terhadap loyalitas pelanggan di Koperasi Al-Azhar. Convinience Sampling telah dipilih untuk memperoleh data dalam penelitian ini. Penelitian ini menggunakan 60 responden dan keseluruhan responden adalah member dan non-member Koperasi Al-Azhar. Metode yang digunakan adalah path analysis. Hasil penelitian menunjukan bahwa kualitas service dan citra merek berpengaruh secara simultan terhadap kepuasan pelanggan. Kualitas service berpengaruh secara partial terhadap kepuasan pelanggan dan citra merek berpengaruh secara partial terhadap kepuasan pelanggan. Pada persamaan struktur kedua menunjukkan bahwa kualitas service, citra merek dan kepuasan pelanggan berpengaruh secara simultan terhadap loyalitas pelanggan. Kualitas service tidak berpengaruh secara partial terhadap loyalitas pelanggan, tetapi citra merek dan kepuasan pelanggan berpengaruh secara partial terhadap loyalitas pelanggan.
Kata Kunci: Kualitas Service, Citra Merek, Kepuasan Pelanggan, Loyalitas Pelanggan
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ix
FOREWORD
Assalamualaikum Wr. Wb
Alhamdulillahhirobil alamin, I would say thanks to ALLAH SWT for all his gift and favor. Best regards also to prophet Nabi Muhammad SAW for being role model to me. So that I can complete this thesis to attain a Bachelor of Economy Degree in UIN Syarif Hidayatullah Jakarta.
In the process of drafting and preparation of this thesis author realized that thesis is far from perfect, because the perfection just only ALLAH SWT, but with effort, hard work, prayers, and never ending support given by families, friends and faculty supervisor. I say thanks to the people who have helped me in the preparation of thesis :
1. Thank you so much to my mother Hj. Nining Ratna Ningrum and my father H. Abdulloh Sholeh that always give me support and prayers that never stop during this time. Thank you Mama and Papa for always beside me, thanks for reminder me, helping me, caring me, advising me, and teach me how to be patient. Without prayers and support you are, I was nothing in this world. Thanks for everything Ma, Pa, I always Love you.
2. Prof. Dr Abdul Hamid, MS as a Dean of Faculty of Economics and Business of UIN Syarif Hidayatullah Jakarta and as a first supervisor, thank you so much for your recommendation and knowledge during guiding to finish my thesis.
3. Leis Suzanawaty, SE., M.Si as a Vice Dean of Faculty of Economics and Business of UIN Syarif Hidayatullah Jakarta and as a second supervisor, thank you for your recommendation, advice, time, and knowledge during guiding to finish my thesis.
4. Dr. Muniyati Aisyah, Ir.,MM as a Head of Management Studies Program and Titi Dewi Warinda,S.,MSIas a Secretary of Management Studies Program, that always aid me if I have difficulties, teach me something that I do not know, advice me if I make mistake, and very friendly.
5. Ahmad Rodoni, Prof.DR as Academic Lecture that always give me best solutions form beginning of semester.
6. All the Lecturers and Employees of Faculty Economics and Business UINSyarif Hidayatullah Jakarta to teach me all of subject about economy and business.
7. My beloved brothers and sister, Sulthon Qobus, Nabila Abdullah, Ulul Azmi and Abdul Basit thanks to always entertain me, when I was exhausted and
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x replace it with a smile, joke and laughter. Thanks always to be one of supporter of me. Love you deeply.
8. Aldi, Adit, Aisya, Aufa, Andro, Annisa, Beler, Baonk, Erby, Dadut, Tami, Sisca, Futri, Nonon, Mamang, Pampam, Sutand, Tama, Rahim, Rizma, Ghilman as my best friends, thank you for you always beside me, support me, and I never forget every moment for you all. Thanks for every moment you given to me. Thanks to willing to hear all those stories and give support me every time, I will missed every moment we spent together and I will missed you guys. We can achieve our dreams and our friendship will continue forever. You all amazing guys!
9. Adittya Prasetya Irwan, Annisa Gustiarawanti, and Abdiel Sandi thanks for helping me to complete this thesis, thanks for recommendation, time, and teach me. Success for all of you guys.
10. Basis Bank Mini thanks for every moment you given to me guys, I will never forget every joke we have, I will never forget guys. Success for Basis Bank Mini and all of you guys.
11. Senior and Junior of International Program 2008, 2009, 2011, and 2012 that I have missed the moment when we were spent together and all the memories ever undertaken when it became a class mate.
12. My friend in International Accounting 2010 and Regular Management 2010, I will never forget all the moment when we spent together.
Finally, the author expect for any critics and suggestion that could improve the content of this thesis, the author hopes to that the thought provoking contributions can give benefit to the reader, hopefully this thesis could be worthwhile for all of us. Amin
Wassalamualaikum Wr. Wb
Jakarta, 4 November 2014
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xi
LIST OF CONTAINS
COVER
ACCEPTANCE LETTER ... i
CERTIFICATION OF THESIS EXAM SHEET ... ii
CERTIFICATIONOF COMPREHENSIVE EXAM SHEET ... iii
STATEMENT OF AUTHENTICITY SCIENTIFIC WORK ... iv
CURICULUM VITAE ... v
ABSTRAC ... vii
ABSTRAK ... viii
FOREWORD ... ix
CONTENT ... xi
LIST OF TABLE ... xv
LIST OF FIGURE ... xviii
CHAPTER I INTRODUCTION A. Background ... 1
B. Problem Formulation ... 5
C. Purpose of Research ... 5
D. Benefits of Research ... 6
CHAPTER II LITERATURE REVIEW A. Theoretical Basis 1. Marketing ... 7
a. Understanding of Marketing ... 7
b. Definition of Marketing Management ... 8
2. Service Quality ... 9
a. Definition of Service Quality ... 9
b. Dimension of Service Quality ... 11
3. Brand Image ... 12
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xii
b. Measurement of Brand Image ... 14
c. Building Brand Image ... 15
4. Customer Satisfaction ... 15
a. Definition of Customer Satisfaction ... 15
b. Factor of Customer Satisfaction ... 17
c. Method of Measuring Customer Satisfaction... 18
5. Customer Loyalty ... 20
a. Definition of Customer Loyalty ... 21
b. Characteristic of Customer Loyalty ... 22
B. Previous Research ... 23
C. Conceptual Framework ... 27
D. Hypothesis ... 28
CHAPTER III RESEARCH METHODOLOGY A. Scope of Research ... 32
B. Determine Sample Method ... 32
1. Population ... 32
2. Sample Technique ... 33
C. Data of Collection Methods ... 34
1. Types of Data ... 34
a. Primary Data ... 34
b. Secondary Data ... 35
D. Data Analysis Method ... 36
1. Descriptive Analysis ... 36
2. Validity Test ... 36
3. Reliability ... 37
4. Path Analysis ... 37
5. The Coefficient of Correlation Test ... 39
6. The Coefficient of Determination ... 40
7. Simultaneous Test ... 40
8. Partial Test ... 41
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xiii CHAPTER IV RESULT AND ANALYSIS
A. General Overview Research Object ... 45
1. History of Al-Azhar Cooperative ... 45
2. Organizational Structure of Al-Azhar Cooperative ... 46
3. Legal Entity of Al-Azhar Cooperative ... 46
4. Product and Business Units of Al-Azhar Cooperative ... 47
B. Analysis and Discussion ... 48
1. General Description and Respondent Data ... 48
2. Validity Test ... 51
3. Reliability Test ... 54
C. Descriptive Analysis ... 57
1. Service Quality ... 57
2. Brand Image ... 61
3. Customer Satisfaction ... 64
4. Customer Loyalty ... .67
D. Analysis Result ... 72
1. Path Analysis ... 72
a. Testing Relationship Between Sub Variable... 72
2. Hypothesis Test ... 76
a. Coefficient of Determination (R2) ... 76
3. Simultaneously Test ( F Test ) ... 78
a. Simultaneously Test of Substructure I ... 78
b. Simultaneously Test of Substructure II ... 79
4. Partial Test ... 81
a. Partial Test of Substructure I... 81
b. Partial Test of Substructure II ... 84
E. Path Analysis Diagram ... 88
F. Influence Calculation ... 88
1. Influence Calculation Substructure I ... 88
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xiv CHAPTER V CONCLUSION AND SUGESTION
A. Conclusions ... 92
B. Suggestion ... 93
REFERENCES ... 96
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xv LIST OF TABLE
Number Description Page
1.1 Data Member ... 4
3.1 Likert Scale of Five Levels ... 35
3.2 The Level of Coefficient Correlation... 39
3.2 Operational Variable ... 42
4.1 Respondent Gender ... 48
4.2 Respondent Age ... 48
4.3 Respondent Occupation ... 49
4.4 Respondent Income per Month ... 50
4.5 Validity Test : Service Quality (X1) ... 51
4.6 Validity Test : Brand Image (X2) ... 52
4.7 Validity Test : Customer Satisfaction (Y1) ... 52
4.8 Validity Test : Customer Loyalty (Y2) ... 53
4.9 Reliability Test : Service Quality (X1) ... 54
4.10 Reliability Test : Brand Image (X1) ... 54
4.11 Reliability Test : Customer Satisfaction (Y1) ... 55
4.12 Reliability Test : Customer Loyalty (Y2) ... 55
4.13 Employee of Al-Azhar Cooperative always maintain the cleanliness of room ... 56
4.14 Employee of Al-Azhar Cooperative look clean and attractive ... 57
4.15 Employee of Al-Azhar Cooperative provide service in accordance with time promised ... 57
4.16 Employee of Al-Azhar Cooperative resolve problems quickly when there is the problem ... 58
4.17 Employee of Al-Azhar Cooperative willing to help me when I had difficulties in choose the product ... 58
4.18 Employee of Al-Azhar Cooperative polite in answering my question ... 59
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xvi 4.19 Employee of Al-Azhar Cooperative understand customer
needs that are needed by the customer ... 59
4.20 The price offered by Al-Azhar Cooperative quite affordable ... 60
4.21 The quality product of Al-Azhar Cooperative is not doubted ... 61
4.22 Brand of Al-Azhar Cooperative has an attractive design then other brands ... 61
4.23 Al-Azhar Cooperative has a lot of variety products ... 62
4.24 Brand of Al-Azhar Cooperative is easy to pronounce ... 62
4.25 Al-Azhar Cooperative brand is easy to remember ... 63
4.26 Al-Azhar Cooperative is a cooperative which receive the customer complaint ... 63
4.27 Al-Azhar Cooperative is a cooperative which provide good information about something that is needed by the customer ... 64
4.28 The customer of Al-Azhar Cooperative is a loyal customer ... 64
4.29 Al-Azhar Cooperativealways give more attention to customer ... 65
4.30 Al-Azhar Cooperative customers feel safe and comfortable to cooperative ... 65
4.31 Al-Azhar Cooperative is a cooperative which always give suggestion and complaint of their customer ... 66
4.32 Al-Azhar Cooperative is better than other cooperative ... 67
4.33 Al-Azhar Cooperative has a good product quality ... 67
4.34 I feel confidence with Al-Azhar Cooperative ... 68
4.35 I prefer Al-Azhar Cooperative than the other products ... 68
4.36 I really like Al-Azhar Cooperative ... 69
4.37 I intend to keep buying of Al-Azhar Cooperative product ... 69
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xvii 4.39 I will recommend Al-Azhar Cooperative to family and
friend ... 70
4.40 Correlation Coefficient Substructure I ... 71
4.41 Testing Relationship between variable Substructure I ... 72
4.42 Correlation Coefficient Substructure II ... 73
4.43 Testing Relationship between variable Substructure II ... 74
4.44 Coefficient Determination of Substructure I ... 75
4.45 Coefficient Determination of Substructure II ... 76
4.46 Analysis of Variant (ANOVA) of Substructure I ... 77
4.47 Analysis of Variant (ANOVA) of Substructure II ... 78
4.48 Result Partial Test Substructure I ... 80
4.49 Partial Test The Influence of Service Quality and Brand Image to Customer Satisfaction ... 82
4.50 Result Partial Test Substructure II ... 83
4.51 Partial Test The Influence of Service Quality, Brand Image, and Customer Satisfaction to Customer Loyalty ... 86
4.52 Direct and Indirect influence of Service Quality (X1) to Customer Satisfaction (Y1) ... 87
4.53 Direct and Indirect influence of Brand Image (X2) to Customer Satisfaction (Y1) ... 88
4.54 Direct and Indirect influence of Brand Image (X2) to Customer Loyalty (Y2) ... 89
4.55 Direct and Indirect influence of Customer Satisfaction (Y1) to Customer Loyalty (Y2) ... 90
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xviii LIST OF FIGURE
Number Description Page
Figure 2.1 Conceptual Framework ... 27 Figure 3.1 Path Analysis ... 38 Figure 4.1 Analysis Path Diagram ... 87
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1 CHAPTER I
INTRODUCTION
A. Research Background
As one of institutional cooperative which have a purpose for increase the human welfare, the cooperative has focused to the importance of people in low economy. In this thing, mutual becomes the first foundation for get all purpose. According to Kartasapoetra et al (1991:1) cooperative is mutual institution which have moved in economic sector. They are generally composed based on low economy and equal rights which have obligation to do some efforts for fulfill needs and wants of its members.
As one of institutional economic, cooperative has to practice the principles of economic in order to live sustainable. The cooperative has to work economically, efficient in business, and good management because those things can increase the economy global and human welfare, especially for their members.
According to data Sekretariat Kabinet Replublik Indonesia, the growth of cooperatives has increase 4,5% from 2009 until 2013. In 2009 the total numbers of cooperative around 170.411 units, while on June 2013 the number of cooperatives has increase to 200.808 units.
From the data above, it shows that the total number of cooperative always growth every year, even it could decrease if the cooperative could not survive. In order to avoid that thing, the cooperative can use the concept of marketing such as service quality, brand image, customer satisfaction, and customer
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2 loyalty. These thing becomes main discussion that will be described in this research.
Marketing becomes important thing for success in all organizations and business, because in order to fulfill needs and wants the customer, every single organization or company have to understand planning, distributing, and promoting goods and services. Marketing as the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. (Belch and Belch, 2009:8).
The cooperative or company that run a system of effective and efficient marketing will get more revenue.One of the element marketing that can be used is service quality, brand image, customer satisfaction, and customer loyalty.
Service is the one important thing in selling the product. Cooperative never stop give a good service to the customer, because service determine the quality and professionalism some organization in order to get more benefit. Good service can give more profit to company. In the other side bad services can give disaster to company. To get a good service, cooperative has to understand about service quality.
In other side, cooperative never stop make revenue, while other cooperative always try to increase their performance trough service quality. It can be dangerous if the cooperative always think how to get revenue as much as they can, but they are forgot how to organize the good service quality. The
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3 good service quality will create a good brand image, if the cooperative provides good services.
Brand image is one of elements marketing. Consumers think that brand as an important part of the product and image of company. Good brand will create an additional value to some product. Brand image is the picture of value or benefit received by the consumer, not only the physical picture but the benefit or value of the product, because quality of the product can influence the consumer's decision for buy the product. (lovelock, 2005:380)
After the cooperative provides good service quality, consumers will feel the level of satisfaction. That thing refers to the customer satisfaction. From customer satisfaction can show how far the cooperative provides excellent service, consumer will feel satisfied or not satisfied after what they consume. Is it equals with their expectation or below from their expectation.
Satisfaction is a person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations. Therefore, satisfaction is closely related to consumers expectations. (Sondoh., et al:2007).
In the other hand, satisfaction also can make the customer more loyal to the product, because they already used the product and the result equal with their expectation and based on their experience. This thing refers to customer loyalty. The one of characteristic customer loyalty was doing re-purchase to same company.
In this research, the object is Azhar Cooperative. As we know that Al-Azhar Cooperative has many member and consumer. Al-Al-Azhar Cooperative
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4 has a good reputation among another cooperative, because they always provide service quality to keep their brand image always good andconsumer will feel the satisfaction, so they will be loyal.
In fact, a few years ago started from 2009-2012 Al-Azhar Cooperative had increased number of members. But in recent years, especially in 2013 Al-Azhar Cooperative had decreased number of members. This is what happens to Al-Azhar Cooperative which was founded from 1969 until now that had decreased number of members in 2013. Here is the number data cooperative members of Al-Azhar until the end of 2013 :
Tabel 1.1 Data Member
No Member 2009 2010 2011 2012 2013
M F T M F T M F T M F T M F T
1 New Member - - 1.498 - - 1.565 - - 1578 - - 1.644 - - 1.613
2 Old Member 11 5 16 13 7 20 50 34 84 58 53 111 12 4 16
3 Death Member 2 1 3 1 1 2 1 1 2 3 - 3 1 3 3
4 Backward Member - - 10 - - - 11 7 9 9 12 16 28
5 Retired Member 2 1 3 4 1 5 3 2 5 2 4 4 - - 4
Total per 31
December 1.511 1.578 1.644 1.730 1.696
Source : Laporan Pertanggungjawaban Pengurus dan Pengawas Koperasi Al-Azhar masa bakti 2009-2013
Research needed to know what factor that influence decreasing number of members. The variety of consumers in order to fulfill their daily needs and wants could be affected from several factors. It can be from consumer or from cooperative.
From the background above, the author took some of several variables relating the background research to investigate the service quality and brand image as exogenous variables (X), customer satisfaction and customer loyalty
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5 as a endogenous variable (Y). Based on these descriptions, the author makes a research with title.
“THE INFLUENCE OF SERVICE QUALITY AND BRAND IMAGE TOWARD CUSTOMER SATISFACTION THAT IMPACTS
ON COSTUMER LOYALTY” (Case Study of Al-Azhar Coorperative).
B. Problem Formulation
Based on the background described above, so the formulation of the problem that will be explained in this research are :
1. Does service quality have influence customer satisfaction partially? 2. Does brand image have influence customer satisfaction partially?
3. Do service quality and brand image have influence customer satisfaction simultaneously?
4. Does service quality have influence customer loyalty partially? 5. Does brand image have influence the customer loyalty partially? 6. Does customer satisfaction have influence customer loyalty partially? 7. Do service quality, brand image, and customer satisfaction influence
customer loyalty simultaneously?
C. Purpose of Research
Every research have a purpose. The purpose of this research are :
1. To analyze the influence of service quality on customer satisfaction partially.
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6 3. To analyze the influence of service quality and brand image on customer
satisfaction simultaneously.
4. To analyze the influence of service quality on customer loyalty partially. 5. To analyze the influence of brand image on customer loyalty partially. 6. To analyze the influence of customer satisfaction on customer loyalty
partially.
7. To analyze the influence of service quality, brand image, and customer satisfaction on customer loyalty simultaneously.
D. Benefit of Reaserch
Given this research, the researcher hope that the results of this research has benefits for all parties, while the benefits include :
1. For Author
To get more knowledge and experience in conducting research, train the ability that have been learned in lecture or class into scientific forms and compare between the theory obtained by the fact that happen in the field. 2. For Al-Azhar Cooperative
Thorough this research, Al-Azhar cooperative will see the dominant factors among service quality, brand image, customer satisfaction and customer loyalty. Therefore, based on these factors can help the cooperative to develop become better and repair the performance.
3. For Readers
The readers may use this research as the material for comparing the factors that influence among service quality, brand image, customer satisfaction and customer loyalty. So, the information can be used in future research and development.
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7 CHAPTER II
LITERATURE REVIEW
A. Theoretical Basis 1. Marketing
a. Understanding of Marketing
Marketing is one of important activities that had been done by organization or company to involve their business and keep a life. Some people think that marketing is only selling and advertising the product. Actually in business, marketing was a main element for make a planning and distributing the ideas so the people can know and buy the product from its company.
Definition of marketing has a lot of explanation from several expert. Every expert has own opinion and outlook, but all of them have a similar understanding between each other. Here are some definition of marketing that author quotes from several expert :
According to Peter and Donnelly (2009:1) marketing as an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
According to Belch and Belch (2009:8) marketing is the process of planning and executing the concept, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
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8 According to Kotler and Keller (2009:5) marketing is a societal process by which individuals and groups obtain what they needs and wants through creating, offering, and freely exchanging products and services of value with others.
From the definition above marketing that have been explained by the expert, author can make a conclusion that marketing is a process that do by individual and group to fulfill their needs and wants with profitable ways.
b. Definition of Marketing Management
Marketing management is divided from two words namely management and marketing. Basically management consists of design and implementation plan. In making some plan, need the ability to create strategy and plan. Plan is needed for distribute the ideas that have been designed in order to get benefit from sales result.
In this case, definition of marketing management also have different explanation from several expert, but all of them have a similar understanding between each other. Here are some definition of marketing management that author quotes from several expert :
According to Peter and Donnelly (2009:15) marketing management is the process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges with target groups that satisfy customer and organizational objectives.
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9 According to Kotler and Keller (2009:5) marketing management is the art and science of choosing target markets and getting, keeping, and growing customer through creating, delivering, and communicating superior customer value.
From the definition above marketing management that have been explained by the expert, author can make a conclusion that marketing management is a concept or art were designed to attract buyers for buy a product or service.
2. Service Quality
a. Definition of Service Quality
Service quality is one of important factors in order to achieve competitive advantage. Service has variety meaning and traditionally difficult to describe. Even more difficult were the fact how to create and send the service to customer often hard to understand. Some expert also define in different ways, here are the definition of Lovelock and Wright (2005:5) :
1) Service is an act or performance that had offered by one party to the other party. Although the process might be related to the physical product, the performance is essentially intangible and usually the result does not have ownership to factor of production. 2) Services are economic activities that create and deliver benefits to
customers at a particular time and place, as the result of actions that bring about desire changes in themselves or to its service recipient.
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10 According Lovelock and Wirtz (2005:9) services are economic activities that have offered by one party to another party, most commonly employing time-defined performances to bring about desired result in recipients themselves or in object or other assets for which purchasers have responsibility.
According to Kotler et al (2009:139) quality is the totality of features and characteristics of a product or services that bear on its ability to satisfy stated or implied needs.
According to Lovelock and Wright (2005:96) service quality is long term evaluation customers to deliver some service through a company. Service quality can be determined with comparing the perception of consumer for services which clearly they had received or get from the a real service what they were expecting or desired to the service attribute some company.
According to Santouridis and Trivellas (2010) service quality is usually understood as a measure of how well the level of the delivered services matches customer’s expectations.
Service is the most important element to know customer satisfaction in consuming the product or service. Customers will compare what they were expecting for accepted with what their truly received during the post-purchase step of the process buying service. They had decided whether satisfied or dissatisfied with delivering the service and results, they also make judgment about the quality service.
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11 If the service that received and perceived suitable with expectation, so the service quality has a good perception and satisfied. If the services received beyond the consumer expectations, so the service quality has a very good perception and good quality. Whereas, if the services received is lower than expected, then service quality has a bad perception.
From the definition above service quality that have been explained by expert, the author can make conclusion that service quality is any kind of activity that performed by company in order to fulfill consumer expectations. In this case, service defined as a service that deliver by owner such as easier, speed, relationship and politeness which shown through attitude and character in delivering service for customer satisfaction.
b. Dimension of Service Quality
The cooperative or company can stay ahead and compete because they give a service with high quality, consistent, and continuous. Every company have to maintain service quality that had given, even make some improvement so the expectation from consumer could be fulfilled.
To provide good service quality to customer, we have to know the thing that customer expect from service quality that we had provided. In this case, there are five dimension service quality based on Lovelock and Wright (2007:407) as follows :
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12 1) Tangibles
The appearance of physical facilities, equipment, personnel, and communication materials.
2) Reliability
Ability to perform the promised service dependably and accurately. 3) Responsiveness
Willingness to help customers and provide prompt service. 4) Assurance
Credibility, security, competence, and courtesy. 5) Empathy
Access, communication, and understanding customer.
3. Brand Image
a. Definition of Brand Image
One of the most important part of some product is brand image, brand can be some additional value to the product whether tangible and intangible product. Image is the way public actually perceives them (Kotler et al.,2009:279). Every company that have move in goods or services sector try to increase their strong image in market to get more revenue. In this case, company will try to introduce their product especially in excellence which is another company does not have a same product. The existence of brand is not merely to show the name from some product, but more than that, brand shows the additional value of product in various dimensions that make differentiation its product from other products.
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13 Brand was an important attributes from some product. Moreover, brand was an identity to differentiate company’s product with another product. In this case, definition of brand image has different explanation from several expert, but all of them have a similar understanding between each other. Here are some definition of brand image that author quotes from several expert :
According to Kotler et al (2009:296) brand is a name, term, sign, symbol, or design, or some combination of these elements, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors. The different components of a brand names, logos, symbols, package, designs, and so on are brand elements.
According to Petter and Donnelly (2009:85) brand is a name, term, design, symbol, or any other feature that identifies one seller’s good or services as distinct from those of other sellers.
According to Keller (2008:2) brand is a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those competition.
According to Keller (2008:51) brand image is consumer’s perception about the brand, as reflected by brand association held in consumer memory.
From the definition above brand image that have been explained by expert, the author can make conclusion that brand image is the identity of company in order to make the customer know the
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14 differentiation between another company.
b. Measurement of Brand Image
According to Keller (2008:56) defined the measurement of brand image can conducted based on the aspects of a brand, namely :
1) Strengthens
The more deeply a person thinks about product information and relates it to existing brand knowledge, the stronger result brand associations will be. The strength in this case are the advantages owned by a physical brand which not found from another brand. The advantages of this brand refers to the physical attributes, so commonly as the advantages compared to the other brand. What is included in group strength namely; physical product, quality product, function of product facilities, price product, and the appearance of supporting facilities to its products.
2) Uniqueness
Uniqueness is the ability to differentiate a brand among other brands. This impression arises from the unique attributes product, be a unique impression means there is differentiation between one product to other products. What is included in uniqueness group namely; the variation service that usually given a product, the variation of product, and physical appearance of product.
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15 3) Favorable
Favorable refers to the ability of the brand to be easily remember by consumers. What is included in this category namely; brand easy to say, the ability of brand to be remembered by consumers, or the suitability between the impression of brand in mind of consumer with brand image company above its brand.
c. Building Brand Image
According to Joe (2004:20) establishment of brand image in consumer perspective are not happen in a relatively short time, but in the long term, and not takes many years. Establishment of brand image are influenced by:
1) The quality of product that produce. 2) Services provided.
3) The company's reputation. 4) The company’s policy.
5) Marketing activities of the company itself.
4. Customer Satisfaction
a. Definition of Customer Satisfaction
Everyone knows what satisfaction is, until asked to give a definition. Then seems nobody knows. In less technical terms we interpret this definition to mean that satisfaction is the customer’s evaluation of a product or service in terms of whether that product or
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16 service has met the customer’s needs and expectations. Failure to meet needs and expectations is assumed to result in dissatisfaction with the product or service. (Zeithaml., et al 2006:110)
Customers have experience different levels of satisfaction or dissatisfaction after they consume product or service which was suitable with their expectation. Because satisfaction is the emotional condition, reaction after bought something could be anger, dissatisfaction, aggravation, neutrality, excitement, or enjoyment. (Lovelock and Wirght, 2005:102).
Customer satisfaction can be achieved only with giving high quality service to the consumer. Good service and quality had been judged by consumers directly from employee as a person who serve a service or also called producer services. Because it takes some effort to improve service quality system that had given to fulfill the desire and increasing customer satisfaction. So, service quality was the first thing to measure improvement customer loyalty to become something important that we have to be considered by company in order to achieve customer satisfaction.
According to Kotler et al (2009:136) satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a products perceived performance (out-come) in relation to his or her expectations. If the performance falls short of expectations, the customer is satisfied. If the performance exceeds expectations, the customer is highly satisfied or delighted.
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17 Service quality has a close relationship with customer satisfaction. Quality gives a push to consumers for establish a strong relationship with the company. In the long term, this relationship enable companies to understand consumer expectations and needs carefully. Thus, companies can increasing customer satisfaction and at the end its satisfaction can create loyalty or customer loyalty.
In order to get customer satisfaction, companies can give an excellent service quality. Because that things can fulfill the consumer needs and expectations. Satisfaction is the fulfill response of customer about the service and product. It is also a finding about the product and service feature or the product and services itself; satisfaction is conceptualized as an overall, customer attitude towards a service provider. Thakur and Singh (2012)
From the definition above customer satisfaction that have been explained by expert, the author can make conclusion that customer satisfaction is the expectation based on what customer perceives. b. Factor of Customer Satisfaction
According to Rangkuti (2003:30) customer satisfaction defined as the response of consumer to mismatch between previous importance level and the actual performance after used. The factors that affect customer satisfaction as follows :
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18 1) Customer value, namely :
a) Accept customer complaint. b) Responses customer complaint. c) Have many types of services.
d) Give a good information to customer. 2) Customer Response, namely :
a) Keep loyal for a long time.
b) Buy more when company introduce new product and renew existing product.
c) Talk a good thing about the company product.
d) Give a little attention to brand and advertising competitor. e) Offering the service or product ideas to company.
3) Customer perception, namely :
a) Customer feel satisfied with process and services provided. b) Customers feel safe and comfortable when have a deal to
company.
c) Give a advice to customer complaint either through the suggestion box or e-mail.
c. Method of Measuring Customer Satisfaction
Kotler and Amstrong (2003:148) discuss several methods to measure customer satisfaction, which are :
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19 1) Complaint and Suggestion system
Each customer oriented service organization should provide the widest opportunity to its customers to submit suggestion, criticism, opinions, and their complaints. Information obtained through this method can provide new ideas and input are valuable to the company making it possible to react quickly and respond in overcome the problems that arise.
2) Customer satisfaction survey
Like in this research, company can do a survey to measure customer satisfaction using such as questioner or by phone calls to a random sample of their customers. Through the survey, companies will get responses and feedback directly from customers and give a positive sign that companies pay attention to them. Customer satisfaction survey is divided into four categories, which are :
a) Directly report satisfaction
The respondents are being asked directly with question in order to know if they are very satisfied, satisfied, neutral, dissatisfied, or very dissatisfied. This survey is to used to collect the customer opinion and needs which can give the result called the customer satisfaction index. This customer satisfaction index’s the standard of company needs to maintain.
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20 b) Derived dissatisfaction
The question that being asked included two aspect, how high is the customer expectation in the certain attribute, and how high is the performance that customer’s feel of this attribute.
c) Problem analysis
The respondents are being asked to describe two things; the problem which related with the company offer and suggestion for improvement.
d) Importance performance analysis
The respondents are asked to rate the services according to the customer importance and company performance in each attributes.
e) Ghost shopping
This method use a person to pose as potential buyer to report their findings on strong and weakness points when experience buying the company’s and competitor’s product. Ghost shoppers also can observe how the company and its competitors in serving customer demands, answering customer question, and solve any problems or customer complaints.
f) Lost customer analysis
The company contact customers who have stopped buying or switched to another supplier to learn why this condition
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21 happened and in order to understand and take the police to further improve or refine.
g) Some caution in measuring customer satisfaction
The company must make a well-structured questionnaire; otherwise the customer would face a huge questionnaire. The company must also be able to recognize that two customers can report being highly satisfied for two reasons. One person maybe easily satisfied most of the time, and the other one might be hard to please but was pleased on this occasion.
5. Customer Loyalty
a. Definition of Customer Loyalty
Customer loyalty is the purpose form organization or company to have a strong relationship with members, that thing can involve the trust between company and customer, because the customer has been loyal to its product and they will not move to other product or brand, at the end the company can get more revenue.
According to Manish (2001) customer loyalty is winning the confidence of the customer in favor of an organization such that the relationship becomes a win and win solution for both the organization as well as the customer. Customer loyalty is not only the customer incorporated to company. Customer loyalty is something more of what an enterprise must get from the customer. Different with the purpose, the
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22 customer is not only build loyalty to company, but the company has to maintain its loyalty to the customer.
According to Lovelock and Wright (2005:133) loyalty is customer decision to voluntarily always became a member with a particular company in long term periods.
From the definition above customer loyalty that have been explained by expert, the author can make conclusion that customer loyalty is some relationship between company and customer to create trustiness, because the customer feel satisfied with its product.
b. Characteristic of Customer Loyalty
Customers who are loyal is an important asset for the company, it can be seen from their characteristics, according to Griffin (2010:130) the characteristic of customer loyalty such as :
1) Recommending the products or services to other. 2) Buy the product line or services.
3) Shows the immunity from attraction similar product of competitors. 4) Making a purchase regularly
In order to be a loyal customer, customer has to pass several steps. According to Lovelock and Wirtz (2004:352) there are four steps to measure customer loyalty. The steps are as follows :
a) Cognitive Loyalty
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23 service is become determine factor. Consumers become loyal in a cognitive sense, it can be perceiving from brand attribute information that one brand is better than other and the product has a good quality (Tjokroaminoto and Kunto, 2014). This means, information held by a consumer confidence must point to a brand is considered to be superior over the competition.
b) Affective Loyalty
In this step of loyalty, the position has a strong influence, either in behavior or the component that have influence to satisfaction. This condition is difficult to be eliminated, because the loyalty has been planted in customer mind not as awareness or expectation. Affective loyalty indicates the preferences and liking the brand/stores/services.
c) Conative Loyalty
This step has contain the high purchase intention such as keep buy some product. The desire to do re-purchase or be a loyal are the action can be anticipated but not realized.
d) Action Loyalty
Action or behavioral loyalty is the stage where behavioral intentions get converted into actions. Behavioral loyalty has been considered as repeat purchases frequency or proportion of purchase and possible to recommend.
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24 B. Previous Research
This previous research on this topic has been contacted by :
1. Ilias Santouridis and Panagiotis Trivellas (2010) in their study entitled
“Investigating the impact of service quality and customer satisfaction on customer loyalty in mobile telephony in Greece”. The purpose of this research is to investigate crucial factors that lead to customer loyalty in the mobile telephony sector in Greece, namely service quality and customer satisfaction. Furthermore, the mediation effect of customer satisfaction on the service quality and customer loyalty relationship is also to be examined. Field research was conducted. The questionnaire was formed by a synthesis of existing constructs in relevant literature. The main research target sample consisted of residential non-business mobile phone users in Greece. Reliability tests and statistical analyses were performed to both confirm scale validity and reliability and answer the research questions. The dimension of service quality has significant influence to customer satisfaction, and also has significant influence to customer loyalty. The mediation role of customer satisfaction to service quality and customer loyalty relationship has been confirmed. For a more holistic investigation approach of customer loyalty, a future study could examine other antecedents such as trust, inertia and attractiveness of alternatives. Moreover, the investigation of the mediation role of switching costs on the link between satisfaction and loyalty could enhance the research model. It is of great importance for mobile operators in a
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25 mature market such as that of Greece, to understand what the drivers of customer loyalty are. The present study produced useful findings, which can be utilized by mobile telephony provider managers, in their effort to develop and implement successful customer loyalty strategies.
2. Satendra Thakur and DR. A. P Singh (2012) in their study entitled“Brand image, Customer Satisfaction,andLoyalty Intention: Study in the Contextof Cosmetic ProductAmong the people of Central India”. This research article is examine the relationship between brand image, customer satisfaction and loyalty intention in the context of cosmetic product of selected company brand among the peoples of central India, five benefit of brand image have been discussed namely social, functional, symbolic, experiential and appearance enhance. Information has been obtained from 150 male as well as female customers who always used the cosmetic product of selected brand for the proposed research work. Result has shown that three brand image benefit namely functional, social and appearance enhance have positively and significantly related to customer satisfaction and loyalty intention and two benefit namely experiential and symbolic have no significant impact on customer satisfaction and loyalty intention on the other hand result indicate that there is a positive relationship between customer satisfaction and loyalty intention. The results imply that marketing manager should focus on the brand image to win the customer satisfaction in order to make the customer loyal about their product and service.
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26 3. Dwi Aryani and Febrina Rosinta (2010) in their study entitled “The Influence of Service Quality toward Customer satisfaction in shipping
Customer Loyalty on PT. Human Resource Development”. This research articleis examine the relationship among service quality, customer satisfaction, and customer loyalty. The research is quantitative with use non-probability purposive sampling technique. The instrument of the research uses questionnaires which were analyzed with Structural Equation Modeling. The result of the research shows that the five dimensions such as physical evidence, empathy, reliability, quickness, and guaranty positively affect the service quality. The other results show that customer’s satisfaction is a preceding factor of customer’s loyalty. The direct effect of service quality on customer’s loyalty does not sustain the research, since the researcher did not find any significant direct relation between service quality and customer’s loyalty.
4. Endang Tjajaningsih (2013) in her study entitled “The Influence of Brand and Promotion to Customer Satisfaction that Impact Customer Loyalty
(Study Case on the Member of Carrefour Semarang)”. This research article is examine the relationship image, promotion, customer satisfaction, and customer loyalty. This research aims to develop and test empirical model of development customer loyalty on the basis of image and promotion. The research was conducted at Customer of Carrefour Supermarket in Semarang. The empirical test model was used regression
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27 analysis by using some software, such as: SPSS 16.0 and Microsoft Excel version 2007. The sample size of the study was 100 Customer of Carrefour Supermarket in Semarang. The results showed that image affect positively towards customer satisfaction and promotion affect positively towards customer satisfaction. Image, promotion, and customer satisfaction affect positively towards customer loyalty. Furthermore, mediating effect of customer satisfaction apply to image effects on customer loyalty. Customer satisfaction serves as a mediating variable between the variable image on customer loyalty. Mediating effect of customer satisfaction apply for promotion effect on customer loyalty. Customer satisfaction serves as a mediating variable between promotional variables on customer loyalty. C. Conceptual Framework
According to Sugiyono (2009:89) defines that the conceptual framework is a synthesis about relationship between variables which compiled from a variety of theories that have been described, next analyzed critically and systematically, so that creating the synthesis about the relationship between variable that studied.
In this conceptual framework, there are two variable exogenous such as service quality and brand image. Two variable endogenous such as customer satisfaction and customer loyalty. The purpose of this research is toanalyze the influence of service quality and brand image toward consumer satisfaction that impacts on customer loyalty at Al-Azhar Cooperative. Here for the picture of conceptual framework.
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28 Figure 2.1
Conceptual Framework
ρX1 ɛ1 ɛ2
ρX1Y1
RX1X2 ρY1Y2
ρX2Y1
ρX2Y2
D. Hypothesis
Hypothesis is an unproven statement or proposition about factor or phenomenon that is interest to the researcher. The hypothesis can also be stated as a possible answer to the researcher question. A useful hypothesis is a predictable statement that may include a prediction explanation. (Malhotra, 2009:78).
According to Sugiyono (2009:93) hypothesis is a temporary answer to the research formulation problems. The author has generated seven hypotheses associated with the model. These hypotheses focus on the relationship among service quality, brand image, customer satisfaction, and customer loyalty. The seven hypotheses are as follows :
Service Quality (X1)
Costumer Loyalty
(Y2) Costumer
Satisfaction (Y1)
Brand Image (X2)
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29 1. The Relationship Service Quality and Customer Satisfaction
According to Aryani and Rosinta (2010) in order to analyze how service quality can effect customer satisfaction, we need five dimensions of service quality such as tangible, reliability, responsive, assurance, and empathy. The instrument of service quality can be directly influence customer satisfaction, the definition of satisfaction refers to a person’s approval or disappointment when their personal opinion of services received with their original service expectations (Liao and Hseih, 2010). Thus, the hypothesis can be drawn as follows :
H0 = Service quality doesn’t have influence on customer satisfaction H1 = Service quality has influence on customer satisfaction
2. The Relationship Brand Image and Customer Satisfaction
According to Tjokroaminoto and Kunto (2014) suggest that the concept of brand image is the idea to get the customer satisfaction. Brand is powerful factor that effects customer satisfaction. Brand becomes the most important factor to get the relationship between company and customer. The concept is based on three factor such as strength of brand association, uniqueness of association, and favorability of association.
H0 = Brand image doesn’t have influence on customer satisfaction H1 = Brand image has influence customer satisfaction
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30 3. The relationship Service Quality and Brand Image toward Customer
Satisfaction
According to Kotler et al (2009:136) satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a products perceived performance (out-come) in relation to his or her expectations. The expectation is come from services. Services are economic activities offered by one party to another, service customer expect to obtain the value from access to labor, professional skills, facilities, networks, systems, and equipment (Lovelock et al., 2005:9). Meanwhile brand image is supporting element for know how far service quality and customer satisfaction, because brand is the activity in marketing program. Thus, the hypothesis can be drawn as follows :
H0 = Service quality and brand image don’t have influence on customer satisfaction
H1 = Service quality and brand image have influence on customer satisfaction
4. The Relationship Service Quality and Customer Loyalty
Service quality can be directly influence customer loyalty, the concept of service quality determine how consumer loyal to product or service. It can be seen when the consumer doing repurchase and willingness to recommend the company’s product to another (Griffin, 2012:31). Thus, the hypothesis can be drawn as follows :
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31 H0 = Service quality doesn’t have influence on customer loyalty H1 = Service quality has influence on customer loyalty
5. The Relationship Brand Image and Customer Loyalty
The possible outcomes of developing brand image can create greater loyalty by three major ways; through the initial choice of brand elements making up the brand, through marketing activities and the design of marketing program, and through leverage of secondary association (Keller, 2008:638). Thus, the hypothesis can be drawn as follows :
H0 = Brand image doesn’t have influence on customer loyalty H1 = Brand image has influence on customer loyalty
6. The Relationship Customer Satisfaction and Customer Loyalty
The relationship between customer satisfaction and customer loyalty has been explained in a number of ways. According to Lee et al (2007) customer satisfaction is viewed as a function of perceived performance and expectations and consumer behavioral studies show that customers who are only just satisfied still find it easy to switch over when a better offer comes along. According to Lewis and Newman (2001) satisfaction is an element to fulfills the need of the customers to product. The unsatisfied customers will spread their negative impression to other consumers. Consequently, it will create customer dissatisfaction which decrease customer loyalty. This implies that customer satisfaction and customer loyalty are highly related (Hoq et al.,2010).Thus, the hypothesis can be drawn as follows :
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32 H0 = Customer satisfaction doesn’t have influence on customer loyalty
H1 = Customer satisfaction has influence on customer loyalty 7. The Relationship Service Quality, Brand Image, and Customer
Satisfaction toward Customer Loyalty
According to Liao and Hseih (2011) service quality, brand image, and customer satisfaction have direct relation to customer loyalty. Service quality might be dominant factor especially tangible, reliability, responsive, empathy, and assurance. In addition, if the company wants to maintain to customer loyalty, it needs to focus on the strength brand, customer’s expectation, and actual performance. Thus, the hypothesis can be drawn as follows :
H0 = Service quality, brand image, and customer satisfaction don’t have influence on customer loyalty
H1 = Service quality, brand image, and customer satisfaction don’t have influence on customer loyalty
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33 CHAPTER III
RESEARCH METHODOLOGY A. Scope of Research
This study aims to test hypothesis about variable service quality, brand image, customer satisfaction, and customer loyalty of Al-Azhar Cooperative. Scope of research for this studies are as follows:
1. The focus of the author in this study is the influence of variables service quality and brand image towards customer satisfaction that impacts on customer loyalty.
2. The location and the object to be examined are member and non-member Al-Azhar Cooperative that located in Jl. Sisingamangaraja Komplek Masjid Agung Al-Azhar, Kebayoran Baru, South Jakarta, Telephone : 021-72788801 & 021-7253324 period February – August 2014.
3. In this study consisted used two variables are exogenous variables and endogenous variable. Exogenous variable in this research is service quality given symbol (X1) and brand image given symbol (X2). Endogenous variable in this research is customer satisfaction given symbol (Y1) and customer loyalty given the symbol (Y2).
B. Determine of Sample Method 1. Population
The population in this study is the member and non-member Al-Azhar Cooperative, here the researcher does not restrict the respondent from gender and age. Population is area generalization consist of objects and
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34 subjects that have certain quality and characteristic designed by author for learned and at the next pulled the conclusion. (Sugiyono, 2009:115)
According to Malhotra(2004:314)population is the aggregate of all the elements that share common set of characteristic and that comprise the universe for the purpose of the marketing research problem.
2. Sample Technique
According to Sugiyono (2009:116) sample is a part of total number and characteristic that owned by its population. According to Malhotra (2004:314) sample is a subgroup of the elements of the population selected for participation in the study. Element is the object about which or from which the information is desired (Malhotra, 2004:315).
The sample technique will be used is convenience sampling. According to Malhotra (2004:321) convenience sampling is a nonprobability sampling technique that attempts to obtain a sample of convenient elements. Because, non probability sampling relies on the personal judgment of the researcher rather than chance to select the sample elements. The researcher can arbitrarily or consciously decide what elements to include the sample (Malhotra 2004:320)
The researcher takes 60 samples respondent, because accordingto Sugiyono (2010:74) guidelines to determining sample are as follows : a. Sample size should be between 30-500 elements.
b. If the sample is broken down further into sub-sample (Male/Female, Elementary/Junior/High School, etc.) must be a minimum number of sub until 30.
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35 c. In the multivariate research (multiple linear regressions) the sample sizeshould be several times larger (10 times) than the number of variables tobe analyzed.
d. A simple experiment for research, with strict controls, sample sizebetween 10-20 elements.
C. Data Collection Methods 1. Types of Data
According to Kenneth and Jane (2004:8) data is streams of raw facts representing events occurring in organization or the physical environment before they have been organized and arranged into a form that people can understand and use. The types of data used in this research are as follows : a. Primary Data
According to Malhotra (2004:37) primary data is data originated by the researcher for the specific purpose of addressing the research problem. Primary data isthe data obtained directly from the object under study by research or field research. Primary data is data sources which is directly gives the data for researcher (Sugiyono, 2009:193).
Primary data was collected through questioner methods. According to Malhotra (2004:280) questioner is a structured techniques for data collection that consist of a series of questions, written or verbal, that a respondent answers. Questioner method is technique data collections that had been done with give a set of questions or written statement to the respondent to be answered (Sugiyono, 2009:199). The data will be processed using SPSS 17 for windows.
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36 This study used alikert scale that is consist of five level. Likert scaleis widely used a rating scale that requires the respondents to indicate agreement and disagreement with each of a series statement about the stimulus objects. Typically, each scale item has five response categories, ranging from “strongly disagree” to “strongly agree” (Maholtra, 2004:258).
Likert scale is to measure attitude, opinion, and perceptions of individuals or groups social phenomena (Riduwan and Engkos, 2008:20). Likert scale of five levels to express the attitude or the respondent’s answer are as follows:
Table 3.1
Likert Scale of Five Levels (Malhotra, 2004:258)
No Range Weight
1 Strongly Agree (SA) 5
2 Agree (A) 4
3 Neutral (N) 3
4 Disagree (D) 2
5 Strongly Disagree (SD) 1
b. Secondary Data
According to Malhotra (2004:37) data is collected for some purpose other than the problem at hand. Secondary data is source indirectly give the data for researcher (Sugiyono, 2009:193). In the development of this study research, technique of taking secondary data will be used are :
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37 1) Library Study, done for collecting the data with information through reference books, journals, and other information which suitable according to this study.
2) Notes of Al-Azhar Cooperative such as history company, organization structure, total of employee, total member, and product.
D. Data Analysis Methods 1. Descriptive Analysis
According to Istijanto (2009) descriptive study was conducted where the research is done to provide wider exposure which has a purpose to change the raw data become easy to comprehended in the form of short time. The descriptive analysis used to explain general description about the respondent. This way is done by distributing the 60 questioners to respondent and then processed with statistical methods using SPPS 17 and Microsoft Excel.
2. Validity Test
According to Malhotra (2004:269) validity of a scale may be defined as the extent to which differences in observed scale scores reflect true differences among objects on the characteristic being measured, rather than systematic or random error.
According to Ghozali (2005:45) the validity of this research is used to measure the legality of a questionnaire. Test validity used to measure the legal valid or un-valid of a questionnaire. In order to determine whether an items that are to be used or not, usually done on the significance
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38 correlation coefficients test on minimum correlation 0.30, means that an item is considered valid if the total score is greater that 0.30 (Priyatno, 2010:90)
3. Reliability
According to Malhotra (2004:267) reliability refers to extent which has a scale produces consistent results if repeated measurements are made on the characteristic.
According to Sugiyono (2009:456) reliability is often defined as the consistency and stability of data findings. From a positivistic perspective, reliability typically is considered to be synonymous with consistency of data produced by observation made by different researcher at different times.
Reliability test conducted by researcher is to measure the consistency of the questions that include in the questionnaire on the variables. According to Malhotra (2004:268) a questionnaire is considered reliable when cronbach's alpha test reached 0.6 or more. Cronbach’s alpha is the average of all possible split half coefficients resulting from different ways of splitting the scale items (Malhotra, 2004:268).
4. Path Analysis
According to Riduwan and Engkos (2008:2) path analysis model was used to analyze the patterns of relationships between variables with the aim to find out directly or indirectly influence the set of independent variables (exogenous) against the dependent variable (endogenous). There are some
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39 benefits using path analysis based on Riduwan and Engkos (2008:2) are as follows :
a. Description of the phenomenon studied or researched the problem. b. The prediction variable (Y) based on the value of the variable (X) and
predictions with path analysis is qualitative.
c. Determination of the determinant factor variable (X) where the dominant influence of the related variables (Y), can be used to search for the mechanism (line) the influence of the free variable (X) against variables bound (Y).
d. Use model theory test trimming good test reliability and test new concepts of development. Application of method of trimming is used to correct a structural path analysis model by way of removing the exogenous variables the coefficient of the coaster is not significant.
Figure 3.1 Path Analysis
ρX1Y2 ɛ1 ɛ2
ρX1Y1
RX1X2 ρY1Y2
ρX2Y1
ρX2Y2
Source: Primary data Processed 2014
Service Quality (X1)
Customer Loyalty
(Y2) Customer
Satisfaction (Y1)
Brand Image (X2)
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40 Y1 = ρx1y1X1 + ρx2y1X2 + ρy1ɛ1y1
Y2 = ρx1y2X1 + ρx2y2X2 +ρy1y2Y1 + ρɛ1ɛ2
Description : (a) X1 = Service Quality (b) X2 = Brand Image
(c) Y1 = Customer Satisfaction (d) Y2 = Customer Loyalty (e) ɛ1 = Error 1
(f) ɛ2 = Error 2 5. The Coefficient of Correlation
According to Sarwono (2007:22) correlation of coefficient is used to see how strong relationship and direction between one or more variable. Coefficient of correlation can be shown by the number of pearson correlation. Pearson correlation ranged from zero until one. If pearson correlation is close to the number one, it means the relationship is getting strong. Otherwise, if pearson correlation is close to zero then the relationship is getting weak.
Table 3.2
The Level of Coefficient Correlation (Sarwono,2007:108)
Internal Coefficient Level of Relationship
0.0 - 0.25 Very Weak
>0.25 – 0.5 Weak
>0.5 – 0.75 Strong
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41 6. The Coefficient of Determination (
According to Ghozali(2006:202) the coefficient of determination ( essentially measure how far the ability of models to explain variation in the dependent variable. The value determination of coefficient is between zero and one. The small means that the ability of independent variables in explaining variations in the dependent variable is very limited. Basic weaknesses use the coefficient of determination is based on the number of independent variables entered into the model. Each additional one independent variable, then R2would increase, no matter whether these variables affect the dependent variable is not. Therefore, in this research used is the R square that have been adapted or adjusted R2 as adjusted for the variables used in this research. Adjusted R2 value can rise or fail if an independent variable added into the model.
7. Simultaneous Test (F test)
According to Sarwono (2007:29) Ftest is used to see the influence exogenous variable to endogenous variable simultaneously. According to Sarwono (2007:30) the criteria for testing the significant level is 5% or 0.05. Step to examine the hypothesis with Ftest are as follow (Sarwono, 2007:17) :
a. Calculate Ftestby SPSS
b. Calculate the Ftable with the criteria significant level is 0.05 c. Determine the criteria of hypothesis test as follows :
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42 exogenous variable has significant influence to endogenous variable simultaneously
2) If Ftest < Ftable , H0 is accepted and H1 is rejected, it means exogenous variable doesn’t have significant influence to endogenous variable simultaneously.
8. Partial test(Ttest)
According to Sarwono (2007:31) Ttest is used to see how big influence the exogenous variable to endogenous variable partially. Step to examine the hypothesis with Ttest are as follow (Sarwono, 2007:32) :
a. Determine the hypotheses :
H0 : Exogenous variable doesn’t have influence endogenous variable H1 : Exogenous variable has influence endogenous variable
b. Calculate the number of Ttest by SPSS
c. Calculate the number of Ttable with the criteria significant level 0.05 and degree of freedom (df) = n – k (number of respondent – exogenous variable)
d. Determine the criteria of hypothesis test as follows :
1) If Ttest > Ttable , H0 is rejected and H1 is accepted, it means exogenous variable has significant influence to endogenous variable partially.
2) If Ttest < Ttable, H0 is accepted and H1 is rejected, it means exogenous variable doesn’t have significant influence to endogenous variable partially.
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43 E. Operational Variable
According to Sugiyono (2009:58) research operational are everything that shaped whatever things which determined by researcher to learn and get the information about those things, next make a conclusion. Here are the table of operational variable :
Table 3.2 Operational Variable
No. Variable Sub Variable Indicator Scale
1. Service Quality (X1) Lovelock and Wright
(2007:407)
1) Tangibles Cleanliness of the
physical facilities
Neatness of employee performance
Likert
2) Reliability Give the service accurately 3) Responsiveness Provide prompt
service
Willingness to help consumers
4) Assurance The politeness of
employee
5) Empathy Understand the
customerneeds 2. Brand Image
(X2) Keller (2008:56)
1) Strengthens Price product
Quality product
Likert
2) Uniqueness The differentiation a brand among other brand
The variation of product
3) Favorable Brand easy to say
Brand easy to remember
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44
No. Variable Sub Variable Indicator Scale
3. Customer Satisfaction
(Y1) Rangkuti (2003:30)
1) Customer Value Accept customer complaint
Give a good information to customer
Likert
2) Customer Responses
Keep loyal for a long time
Give more attention 3) Customer
perception
Customer feel safe and comfortable when have a deal with company
Give an advice and complaint to customer
4. Customer Loyalty (Y2) Lovelock and
Wirtz (2004:352)
1) Cognitive Loyalty
Al-Azhar Coperative is better than other cooperative
Al-Azhar Cooperative has good quality
The confidence of customer to the Al-Azhar Cooperative
Likert
2) Affective Loyalty
Consumer preference
Consumer liking 3) Conative Loyalty High purchase
intention
4) Action Loyalty Repeat purchase frequency
Recommend to other
(1)
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(2)
116
B.
Reliability Data (All Variable)
Case Processing Summary
N %
Cases Valid 60 100.0
Excludeda 0 .0
Total 60 100.0
a. Listwise deletion based on all variables in the procedure.
Reliability Statistics
Cronbach's
Alpha N of Items
.697 7
Reliability Statistics
Cronbach's
Alpha N of Items
.872 6
Reliability Statistics
Cronbach's
Alpha N of Items
.780 6
Reliability Statistics
Cronbach's
Alpha N of Items
(3)
117
Item-Total Statistics
Scale Mean if Item Deleted
Scale Variance if Item Deleted
Corrected Item-Total Correlation
Squared Multiple Correlation
Cronbach's Alpha if Item
Deleted
P1 96.4333 144.318 .791 . .949
P2 96.3167 150.118 .535 . .951
P3 96.2500 152.733 .427 . .952
P4 96.4333 151.063 .391 . .953
P5 96.2667 145.826 .719 . .949
P6 96.2500 148.191 .659 . .950
P7 96.0833 151.806 .435 . .952
P8 96.3667 144.236 .809 . .948
P9 96.2667 145.826 .719 . .949
P10 96.0833 151.806 .435 . .952
P11 96.4000 143.600 .839 . .948
P12 96.3833 143.901 .854 . .948
P13 96.3000 145.061 .729 . .949
P14 96.4167 143.434 .819 . .948
P15 96.2667 145.826 .719 . .949
P16 96.0167 152.593 .447 . .952
P17 96.4000 143.837 .799 . .949
P18 96.3167 150.118 .535 . .951
P19 96.2500 152.733 .427 . .952
P20 96.2667 145.826 .719 . .949
P21 96.1333 149.745 .482 . .952
P22 96.4667 145.270 .732 . .949
P23 96.4667 153.134 .339 . .953
P24 96.3333 152.056 .406 . .952
P25 96.5333 146.728 .669 . .950
P26 96.3333 144.836 .710 . .950
(4)
118
Substructure I
Correlation Coefficient Substructure I
Correlations
ServiceQuality BrandImage
CustomerSatis faction
CustomerLoyal ty
ServiceQuality Pearson Correlation 1 .835** .897** .643**
Sig. (1-tailed) .000 .000 .000
N 60 60 60 60
BrandImage Pearson Correlation .835** 1 .957** .800**
Sig. (1-tailed) .000 .000 .000
N 60 60 60 60
CustomerSatisfaction Pearson Correlation .897** .957** 1 .761**
Sig. (1-tailed) .000 .000 .000
N 60 60 60 60
CustomerLoyalty Pearson Correlation .643** .800** .761** 1
Sig. (1-tailed) .000 .000 .000
N 60 60 60 60
**. Correlation is significant at the 0.01 level (1-tailed).
Coefficient determination of Substructure I
Model SummarybModel R R Square Adjusted R Square Std. Error of the
Estimate Durbin-Watson
1 .973a .947 .945 .64795 1.952
a. Predictors: (Constant), BrandImage, ServiceQuality
Analysis of Variant (ANOVA) of Structure I
ANOVAa
Model Sum of Squares Df Mean Square F Sig.
1 Regression 424.919 2 212.460 506.056 .000a
Residual 23.931 57 .420
Total 448.850 59
a. Predictors: (Constant), BrandImage, ServiceQuality b. Dependent Variable: CustomerSatisfaction
(5)
119
Result Partial test Structure I
Coefficientsa
Model
Unstandardized Coefficients
Standardized Coefficients
T Sig.
Correlations
B Std. Error Beta Zero-order Partial Part
1 (Constant) 1.298 .837 1.551 .126
ServiceQuality .320 .055 .323 5.811 .000 .897 .610 .178 BrandImage .566 .046 .687 12.341 .000 .957 .853 .377 a. Dependent Variable: CustomerSatisfaction
Subtructure II
Correlation Coefficient structure II
Correlations
ServiceQuali ty
BrandIm age
CustomerSati sfaction
CustomerLoy alty
ServiceQuality
Pearson Correlation 1 .835** .897** .643**
Sig. (1-tailed) .000 .000 .000
N 60 60 60 60
BrandImage
Pearson Correlation .835** 1 .957** .800**
Sig. (1-tailed) .000 .000 .000
N 60 60 60 60
CustomerSatisfaction
Pearson Correlation .897** .957** 1 .761**
Sig. (1-tailed) .000 .000 .000
N 60 60 60 60
CustomerLoyalty
Pearson Correlation .643** .800** .761** 1
Sig. (1-tailed) .000 .000 .000
N 60 60 60 60
**. Correlation is significant at the 0.01 level (1-tailed).
Coefficient determination of structure II
Model Summaryb
Model R R Square Adjusted R
Square
Std. Error of the
Estimate Durbin-Watson
1 .801a .642 .623 2.15041 1.918
a. Predictors: (Constant), CustomerSatisfaction, ServiceQuality, BrandImage b. Dependent Variable: CustomerLoyalty
(6)
120
Analysis of Variant (ANOVA) of Structure II
ANOVAb
Model Sum of Squares Df Mean Square F Sig.
1 Regression 463.974 3 154.658 33.445 .000a
Residual 258.959 56 4.624
Total 722.933 59
a. Predictors: (Constant), CustomerSatisfaction, ServiceQuality, BrandImage b. Dependent Variable: CustomerLoyalty
Result Partial test Structure II
Coefficientsa
Model
Unstandardized Coefficients
Standardized Coefficients
T Sig.
Correlations
B Std. Error Beta Zero-order Partial Part
1 (Constant) 12.850 2.835 4.533 .000
ServiceQuality -.135- .231 -.107- -.583- .562 .643 -.078- -.047-
BrandImage .855 .292 .817 2.932 .005 .800 .365 .235
CustomerSatisfa ction
.095 .440 .075 .216 .830 .761 .029 .017