Examining the Relationships among Product Quality, Customer Satisfaction and Loyalty in the Bamboo Institute, Dili, Timor-Leste
Keywords:
Product quality, customer satisfaction, customer loyalty, Timor-Leste
Abstract
The objectives of this research are to test and explain the influence of product quality and customer satisfaction on customer loyalty, in addition to customer satisfaction on the relationship between product quality and customer loyalty. A total of 190 valid questionnaires were collected from costumers of Bamboo Institute in Dili, Timor-Leste, and the relationships between 3 variables were tested using SMART-PLS 3.0. The result of the study revealed that product quality and customer satisfaction influence positively and significantly on customer loyalty, and customer satisfaction fully mediate the relationship between product quality and customer loyalty. The result of study confirms that product quality and customer satisfaction are strong antecedent factors for customer loyalty. Therefore, to enhance customer loyalty, it is important to provide the product quality that meets the customer’s satisfaction level.
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References
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Beneke, J. and Zimmerman, N. (2014) ‘Beyond private label panache: The effect of store image and perceived price on brand prestige’, Journal of Consumer Marketing, 31(4), pp. 301–311.
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Cakici, A. C., Akgunduz, Y. and Yildirim, O. (2019) ‘The impact of perceived price justice and satisfaction on loyalty: the mediating effect of revisit intention’, Tourism Review, 74(3), pp. 443–462.
Camarero Izquierdo, C. and Jose Garrido Samaniego, M. (2007) ‘How alternative marketing strategies impact the performance of Spanish museums’, Journal of Management Development, 26(9), pp. 809–831.
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Chandrashekaran, Rotte, T. and Grewal (2007) ‘Satisfaction strength and customer loyalty’, Journal of Marketing Research, pp. 153–163.
Chien, L. H. and Chi, S. Y. (2019) ‘Corporate image as a mediator between service quality and customer satisfaction: difference across categorized exhibitors’, Heliyon, 5(3).
Chiou, J. S. and Shen, C. C. (2006) ‘The effects of satisfaction, opportunism, and asset specificity on consumers’ loyalty intention toward internet portal sites’, International Journal of Service Industry Management, pp. 7–22.
Delcourt, C., Gremler, D.D., Van Riel, A. C., Van Birgelen, M. (2013) ‘Effects of perceived employee emotional competence on customer satisfaction and loyalty: The mediating role of rapport’, Journal of Service Management, 24(1), pp. 5–24.
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Garvin, D. A. (1984) ‘Product quality: An important strategic weapon’, Business Horizons, 27(3), pp. 40–43.
Osman Gök, P. Ersoy, and G. Börühan (2019) ‘The effect of user manual quality on customer satisfaction: the mediating effect of perceived product quality’, Journal of Product and Brand Management. doi: https://doi.org/10.1108/JPBM-10-2018-2054.
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Henseler, J., Ringle, C. M. and Sarstedt, M. (2015) ‘A new criterion for assessing discriminant validity in variance-based structural equation modeling’, Journal of the Academy of Marketing Science, 43(1), pp. 115–135.
Hoe, L. C. and Mansori, S. (2018) ‘The Effects of Product Quality on Customer Satisfaction and Loyalty: Evidence from Malaysian Engineering Industry’, International Journal of Industrial Marketing, p. 20.
Hussain, M. and Ranabhat, P. (2013) ‘Influence of Service and Product Quality on Customer Retention’, Department of Business and Economic Studies, (2), pp. 1–69.
Jannah, M. and H. (2019) ‘The Influence of Product Quality, Service Quality and Price on Customer Satisfaction and Loyalty’, Proceeding of The 3rd International Conference on Accounting, Business & Economics, 1(4), pp. 1491–1498.
John T. Bowen and Shiang‐Lih Chen (2001) ‘The Relationship between Customer Loyalty and Customer Satisfaction.’, International Journal of Contemporary Hospitality Management, 5(13), pp. 213–217.
Khairawati (2020) ‘Research in Business & Social Science Effect of customer loyalty program on customer satisfaction and its impact on customer loyalty’, 9(1), pp. 15–23.
Kotler, P. and Amstrong, G. (2012) Principles of Marketing. 14th edn. New Jersey: Prentice Hall.
Kuang Chi, H., Ren Yeh, H. and Ting Yang, Y. (2009) ‘The Impact of Brand Awareness on Consumer Purchase Intention: The Mediating Effect of Perceived Quality and Brand Loyalty’, The Journal of International Management Studies, pp. 135–144.
La, Y. Y. and S. (2004) ‘What Influences the Relationship between Customer Satisfaction and Repurchase Intention? Investigating the Effects of Adjusted Expectations and Customer Loyalty’, Psychology and Marketing, pp. 351–373.
Lien, C. H., Cao, Y. and Zhou, X. (2017) ‘Service quality, satisfaction, stickiness, and usage intentions: An exploratory evaluation in the context of WeChat services’, Computers in Human Behavior, 68, pp. 403–410.
Mahmud, A., Jusoff, K. and Hadijah, S. T. (2013) ‘The effect of service quality and price on satisfaction and Loyalty of Customer of commercial flight service industry’, World Applied Sciences Journal, 23(3), pp. 354–359.
Mahoney, L. M. and Tang, T. (2017) Strategic Social Media ‘From Marketing to Social Change’. United Kingdom: Wiley Blackwell.
McMullan, R. and Gilmore, A. (2002) ‘The conceptual development of customer loyalty measurement: A proposed scale’, Journal of Targeting, Measurement and Analysis for Marketing, pp. 230–243.
Mooradian, T., Matzler, K. and Ring, L. (2014) Strategic Marketing. Fisrt Edit. USA: Palgrave Macmillan.
O’Cass, A. and Heirati, N. (2015) ‘Mastering the complementarity between marketing mix and Customer-Focused capabilities to enhance new product performance’, Journal of Business and Industrial Marketing, 30(1), pp. 60–71.
Omar, M. S., Ariffin, H. F. and Ahmad, R. (2016) ‘Service Quality, Customers’ Satisfaction and the Moderating Effects of Gender: A Study of Arabic Restaurants’, Procedia - Social and Behavioral Sciences, 224(August 2015), pp. 384–392.
Özkan, P., Süer, S., Keser, İ. K., Kocakoç, İ. D. (2019) ‘The effect of service quality and customer satisfaction on customer loyalty: The mediation of perceived value of services, corporate image, and corporate reputation’, International Journal of Bank Marketing. doi: 10.1108/IJBM-03-2019-0096.
Parasuraman, A., Zeithaml, V. A. and Berry, L. L. (1994) ‘Alternative scales for measuring service quality: A comparative assessment based on psychometric and diagnostic criteria’, Journal of Retailing, 70(3), pp. 201–230.
Pedro, E. de M., Alves, H. and Leitão, J. (2018) ‘Does the quality of academic life mediate the satisfaction, loyalty and recommendation of HEI students?’, International Journal of Educational Management, 32(5), pp. 881–900.
Pereira, H. G., Salgueiro, M. de F. and Rita, P. (2016) ‘Online purchase determinants of loyalty: The mediating effect of satisfaction in tourism’, Journal of Retailing and Consumer Services, 30, pp. 279–291.
Porter, M. E. (1980) Competitive strategy: Techniques for analyzing industries and companies, New York. New York: The Free Press.
Razak, I., Nirwanto, N. and Triatmanto, B. (2017) ‘The Impact of Product Quality and Price on Customer Satisfaction with the Mediator of Customer Value Ismail’, Journal of Marketing and Consumer Research, 3(11), pp. 1240–1248.
Rimawan et al (2017) ‘The Influence of Product Quality, Service Quality and Trust on Customer Satisfaction and Its Impact on Customer Loyalty (Case Study PT ABC Tbk)’, International Journal of Scientific & Engineering Research, 8(7), pp. 2330–2336.
Rua (2020) Relatoriu Atividade Instituto Bambu, IP. Tibar-Liquica, Timor-Leste: Instituto Bambu, IP.
Saldanha, E. de S. Rahyuda, I K., Yasa, N. . K. Sukaatmadja, I.P.G. 2018. "The Role of Business Strategy in Mediating the Relationship Between Industrial Competition and Performances : A Study in the Higher Education Industry in Timor-Leste". European Jorunal of Business and Management, 10(8), pp.152–172.
Saldanha, E. de S. Rahyuda, I K., Yasa, N. . K. Sukaatmadja, I.P.G. 2019. "Industrial Competition, Hybrid Strategy and Industrial Performance- Study in Higher Education Industry in Timor-Leste". Journal of Engineering and Science, 14(8), pp.2456–2464.
Sangpikul, A. (2018) ‘The effects of travel experience dimensions on tourist satisfaction and destination loyalty: the case of an island destination’, International Journal of Culture, Tourism, and Hospitality Research, 12(1), pp. 106–123.
SERVE (2019) ‘Relatoriu Sobre Kompania Servisu iha Area Karpintaria’, pp. 1–27.
Sriyalatha, K. and Appuhamilage, M. (2019) ‘The impact of loyalty on the student satisfaction in higher education A structural equation modeling analysis’. doi: 10.1108/HEED-01-2019-0003.
Subrahmanyam, A. (2017) ‘Relationship between service quality, satisfaction, motivation and loyalty: A multi-dimensional perspective’, Quality Assurance in Education, 25(2), pp. 171–188.
Suhendar & Ruswati (2019) ‘Effect of Product Quality , Perception of Price and Satisfaction To Customer Loyalty ( Study on Agroindustrial Company in Indonesia )’, International Journal of Economics, Commerce and Management, pp. 23–33.
Veloutsou, C. (2015) ‘Brand evaluation, satisfaction and trust as predictors of brand loyalty: the mediator-moderator effect of brand relationships’, Journal of Consumer Marketing, 32(6), pp. 405–421.
Wantara, P. and Tambrin, M. (2019) ‘The Effect of Price and Product Quality Towards Customer Satisfaction and Customer Loyalty on Madura Batik’, International Tourism and Hospitality Journal (ITHJ), pp. 1–9.
Whalley, A. (2010) Strategic Marketing. Bookboon.com.
Zameer, H., Tara, A., Kausar, U., and Mohsin, A (2015) ‘Impact of service quality, corporate image and customer satisfaction towards customers’ perceived value’, International Journal of Bank Marketing, 33(4), p.
Zeithaml, B. and P. (1996) ‘The Behavioral consequences of Service Quality’, The Behavioral consequences of stroke, pp. 31–46.
Zietsman, M. L., Mostert, P. and Svensson, G. (2019) ‘Perceived price and service quality as mediators between price fairness and perceived value in business banking relationships: A micro-enterprise perspective’, International Journal of Bank Marketing, 37(1), pp. 2–19.
Albayrak, T. (2015) ‘Importance Performance Competitor Analysis (IPCA): A study of hospitality companies’, International Journal of Hospitality Management, 48, pp. 135–142.
Angelova, B. (2011) ‘Measuring Customer Satisfaction with Service Quality Using American Customer Satisfaction Model (ACSI Model)’, International Journal of Academic Research in Business and Social Sciences, 1(3), pp. 2222–6990.
Annamdevula, S. and Bellamkonda, R. S. (2016) ‘The effects of service quality on student loyalty: the mediating role of student satisfaction’, Journal of Modelling in Management, 11(2), pp. 446–462.
Asnawi, N., Sukoco, B. M. and Fanani, M. A. (2019) ‘The role of service quality within Indonesian customers satisfaction and loyalty and its impact on Islamic banks’, Journal of Islamic Marketing. doi: 10.1108/JIMA-03-2017-0033.
Barney, J. (1991) ‘Firm Resources and Sustained Competitive Advantage’, Journal of Management, pp. 99–120.
Beneke, J. Flynn, R. Greig, T. Mukaiwa, Melissa (2013) ‘The influence of perceived product quality, relative price and risk on customer value and willingness to buy: A study of private label merchandise’, Journal of Product and Brand Management, 22(3), pp. 218–228.
Beneke, J. and Zimmerman, N. (2014) ‘Beyond private label panache: The effect of store image and perceived price on brand prestige’, Journal of Consumer Marketing, 31(4), pp. 301–311.
Berry, L. L., Parasuraman, A. and Zeithaml, V. A. (1988) ‘SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality’, Journal of retailing, pp. 12–40.
Brunner, S. and O. (2008) ‘Satisfaction, image and loyalty: New versus experienced customers’, European Journal of Marketing, pp. 1095–1105.
Cakici, A. C., Akgunduz, Y. and Yildirim, O. (2019) ‘The impact of perceived price justice and satisfaction on loyalty: the mediating effect of revisit intention’, Tourism Review, 74(3), pp. 443–462.
Camarero Izquierdo, C. and Jose Garrido Samaniego, M. (2007) ‘How alternative marketing strategies impact the performance of Spanish museums’, Journal of Management Development, 26(9), pp. 809–831.
Carpenter, J. M. (2008) ‘Consumer shopping value, satisfaction and loyalty in discount retailing’, Journal of Retailing and Consumer Services, pp. 358–363.
Chandrashekaran, Rotte, T. and Grewal (2007) ‘Satisfaction strength and customer loyalty’, Journal of Marketing Research, pp. 153–163.
Chien, L. H. and Chi, S. Y. (2019) ‘Corporate image as a mediator between service quality and customer satisfaction: difference across categorized exhibitors’, Heliyon, 5(3).
Chiou, J. S. and Shen, C. C. (2006) ‘The effects of satisfaction, opportunism, and asset specificity on consumers’ loyalty intention toward internet portal sites’, International Journal of Service Industry Management, pp. 7–22.
Delcourt, C., Gremler, D.D., Van Riel, A. C., Van Birgelen, M. (2013) ‘Effects of perceived employee emotional competence on customer satisfaction and loyalty: The mediating role of rapport’, Journal of Service Management, 24(1), pp. 5–24.
Devaraj, S., Matta, K. F. and Conlon, E. (2001) ‘Product and service quality: The antecedents of customer loyalty in the automotive industry’, Production and Operations Management, 10(4), pp. 424–439.
Djumarno, Anjani, S. and Djamaluddin, S. (2018) ‘Effect of Product Quality and Price on Customer Loyalty through Customer Satisfaction’, International Journal of Business and Management Invention (IJBMI) ISSN, pp. 13–20.
Farooq, M. S., Salam, M., Favolle, A., Jaafar, N., Ayupp, K (2018) ‘Impact of service quality on customer satisfaction in Malaysia airlines : A PLS-SEM approach’, Journal of Air Transport Management. Elsevier Ltd, 67(September), pp. 169–180.
Forker, L. B., Vickery, S. K. and Droge, C. L. M. (1996) ‘The contribution of quality to business performance’, International Journal of Operations and Production Management, 16(8), pp. 44–62.
Fuentes-Blasco, M., Moliner-Velázquez, B. and Gil-Saura, I. (2017) ‘Analyzing heterogeneity on the value, satisfaction, word-of-mouth relationship in retailing’, Management Decision, 55(7), pp. 1558–1577.
Garvin, D. A. (1984) ‘Product quality: An important strategic weapon’, Business Horizons, 27(3), pp. 40–43.
Osman Gök, P. Ersoy, and G. Börühan (2019) ‘The effect of user manual quality on customer satisfaction: the mediating effect of perceived product quality’, Journal of Product and Brand Management. doi: https://doi.org/10.1108/JPBM-10-2018-2054.
Hair, J. Hollingsworth, C. L., Randolph, A. B., and Chong, A. Y. L. 2017. "An Updated and Expanded Assessment of PLS- SEM in Information Systems Research". Industrial Management and Data Systems, 117(3), pp.442–458.
Hair, J.F. Sarstedt, M., Hopkins, L., and Kuppelwieser, V.G. 2014. Partial Least Squares Structural Equation Modeling (PLS-SEM)". European Business Review, 26(2), pp.106– 121.
Hair, J.F. Hair, J. F., Hult, G.T.M., Ringle, C. M. and Sarstedt, M. 2014. "Partial Least Squares Structural Equation Modeling (PLS-SEM)". London: SAGE Publication LTD.
Henseler, J., Ringle, C. M. and Sarstedt, M. (2015) ‘A new criterion for assessing discriminant validity in variance-based structural equation modeling’, Journal of the Academy of Marketing Science, 43(1), pp. 115–135.
Hoe, L. C. and Mansori, S. (2018) ‘The Effects of Product Quality on Customer Satisfaction and Loyalty: Evidence from Malaysian Engineering Industry’, International Journal of Industrial Marketing, p. 20.
Hussain, M. and Ranabhat, P. (2013) ‘Influence of Service and Product Quality on Customer Retention’, Department of Business and Economic Studies, (2), pp. 1–69.
Jannah, M. and H. (2019) ‘The Influence of Product Quality, Service Quality and Price on Customer Satisfaction and Loyalty’, Proceeding of The 3rd International Conference on Accounting, Business & Economics, 1(4), pp. 1491–1498.
John T. Bowen and Shiang‐Lih Chen (2001) ‘The Relationship between Customer Loyalty and Customer Satisfaction.’, International Journal of Contemporary Hospitality Management, 5(13), pp. 213–217.
Khairawati (2020) ‘Research in Business & Social Science Effect of customer loyalty program on customer satisfaction and its impact on customer loyalty’, 9(1), pp. 15–23.
Kotler, P. and Amstrong, G. (2012) Principles of Marketing. 14th edn. New Jersey: Prentice Hall.
Kuang Chi, H., Ren Yeh, H. and Ting Yang, Y. (2009) ‘The Impact of Brand Awareness on Consumer Purchase Intention: The Mediating Effect of Perceived Quality and Brand Loyalty’, The Journal of International Management Studies, pp. 135–144.
La, Y. Y. and S. (2004) ‘What Influences the Relationship between Customer Satisfaction and Repurchase Intention? Investigating the Effects of Adjusted Expectations and Customer Loyalty’, Psychology and Marketing, pp. 351–373.
Lien, C. H., Cao, Y. and Zhou, X. (2017) ‘Service quality, satisfaction, stickiness, and usage intentions: An exploratory evaluation in the context of WeChat services’, Computers in Human Behavior, 68, pp. 403–410.
Mahmud, A., Jusoff, K. and Hadijah, S. T. (2013) ‘The effect of service quality and price on satisfaction and Loyalty of Customer of commercial flight service industry’, World Applied Sciences Journal, 23(3), pp. 354–359.
Mahoney, L. M. and Tang, T. (2017) Strategic Social Media ‘From Marketing to Social Change’. United Kingdom: Wiley Blackwell.
McMullan, R. and Gilmore, A. (2002) ‘The conceptual development of customer loyalty measurement: A proposed scale’, Journal of Targeting, Measurement and Analysis for Marketing, pp. 230–243.
Mooradian, T., Matzler, K. and Ring, L. (2014) Strategic Marketing. Fisrt Edit. USA: Palgrave Macmillan.
O’Cass, A. and Heirati, N. (2015) ‘Mastering the complementarity between marketing mix and Customer-Focused capabilities to enhance new product performance’, Journal of Business and Industrial Marketing, 30(1), pp. 60–71.
Omar, M. S., Ariffin, H. F. and Ahmad, R. (2016) ‘Service Quality, Customers’ Satisfaction and the Moderating Effects of Gender: A Study of Arabic Restaurants’, Procedia - Social and Behavioral Sciences, 224(August 2015), pp. 384–392.
Özkan, P., Süer, S., Keser, İ. K., Kocakoç, İ. D. (2019) ‘The effect of service quality and customer satisfaction on customer loyalty: The mediation of perceived value of services, corporate image, and corporate reputation’, International Journal of Bank Marketing. doi: 10.1108/IJBM-03-2019-0096.
Parasuraman, A., Zeithaml, V. A. and Berry, L. L. (1994) ‘Alternative scales for measuring service quality: A comparative assessment based on psychometric and diagnostic criteria’, Journal of Retailing, 70(3), pp. 201–230.
Pedro, E. de M., Alves, H. and Leitão, J. (2018) ‘Does the quality of academic life mediate the satisfaction, loyalty and recommendation of HEI students?’, International Journal of Educational Management, 32(5), pp. 881–900.
Pereira, H. G., Salgueiro, M. de F. and Rita, P. (2016) ‘Online purchase determinants of loyalty: The mediating effect of satisfaction in tourism’, Journal of Retailing and Consumer Services, 30, pp. 279–291.
Porter, M. E. (1980) Competitive strategy: Techniques for analyzing industries and companies, New York. New York: The Free Press.
Razak, I., Nirwanto, N. and Triatmanto, B. (2017) ‘The Impact of Product Quality and Price on Customer Satisfaction with the Mediator of Customer Value Ismail’, Journal of Marketing and Consumer Research, 3(11), pp. 1240–1248.
Rimawan et al (2017) ‘The Influence of Product Quality, Service Quality and Trust on Customer Satisfaction and Its Impact on Customer Loyalty (Case Study PT ABC Tbk)’, International Journal of Scientific & Engineering Research, 8(7), pp. 2330–2336.
Rua (2020) Relatoriu Atividade Instituto Bambu, IP. Tibar-Liquica, Timor-Leste: Instituto Bambu, IP.
Saldanha, E. de S. Rahyuda, I K., Yasa, N. . K. Sukaatmadja, I.P.G. 2018. "The Role of Business Strategy in Mediating the Relationship Between Industrial Competition and Performances : A Study in the Higher Education Industry in Timor-Leste". European Jorunal of Business and Management, 10(8), pp.152–172.
Saldanha, E. de S. Rahyuda, I K., Yasa, N. . K. Sukaatmadja, I.P.G. 2019. "Industrial Competition, Hybrid Strategy and Industrial Performance- Study in Higher Education Industry in Timor-Leste". Journal of Engineering and Science, 14(8), pp.2456–2464.
Sangpikul, A. (2018) ‘The effects of travel experience dimensions on tourist satisfaction and destination loyalty: the case of an island destination’, International Journal of Culture, Tourism, and Hospitality Research, 12(1), pp. 106–123.
SERVE (2019) ‘Relatoriu Sobre Kompania Servisu iha Area Karpintaria’, pp. 1–27.
Sriyalatha, K. and Appuhamilage, M. (2019) ‘The impact of loyalty on the student satisfaction in higher education A structural equation modeling analysis’. doi: 10.1108/HEED-01-2019-0003.
Subrahmanyam, A. (2017) ‘Relationship between service quality, satisfaction, motivation and loyalty: A multi-dimensional perspective’, Quality Assurance in Education, 25(2), pp. 171–188.
Suhendar & Ruswati (2019) ‘Effect of Product Quality , Perception of Price and Satisfaction To Customer Loyalty ( Study on Agroindustrial Company in Indonesia )’, International Journal of Economics, Commerce and Management, pp. 23–33.
Veloutsou, C. (2015) ‘Brand evaluation, satisfaction and trust as predictors of brand loyalty: the mediator-moderator effect of brand relationships’, Journal of Consumer Marketing, 32(6), pp. 405–421.
Wantara, P. and Tambrin, M. (2019) ‘The Effect of Price and Product Quality Towards Customer Satisfaction and Customer Loyalty on Madura Batik’, International Tourism and Hospitality Journal (ITHJ), pp. 1–9.
Whalley, A. (2010) Strategic Marketing. Bookboon.com.
Zameer, H., Tara, A., Kausar, U., and Mohsin, A (2015) ‘Impact of service quality, corporate image and customer satisfaction towards customers’ perceived value’, International Journal of Bank Marketing, 33(4), p.
Zeithaml, B. and P. (1996) ‘The Behavioral consequences of Service Quality’, The Behavioral consequences of stroke, pp. 31–46.
Zietsman, M. L., Mostert, P. and Svensson, G. (2019) ‘Perceived price and service quality as mediators between price fairness and perceived value in business banking relationships: A micro-enterprise perspective’, International Journal of Bank Marketing, 37(1), pp. 2–19.
Published
2020-09-30
How to Cite
Rua, S., Saldanha, E. and Amaral, A. (2020) “Examining the Relationships among Product Quality, Customer Satisfaction and Loyalty in the Bamboo Institute, Dili, Timor-Leste”, Timor Leste Journal of Business and Management, 2(2), pp. 33-44. doi: 10.51703/bm.v2i2.28.
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Articles
Copyright (c) 2020 Timor Leste Journal of Business and Management
This work is licensed under a Creative Commons Attribution 4.0 International License.
