The Impact of Product Quality, Service Quality, and Price on Customer Satisfaction and Loyalty: Evidence from Rumah Loer Merdeka Palembang
DOI:
https://doi.org/10.55606/ijemr.v5i2.783Keywords:
Customer Loyalty Formation, Expectation Disconfirmation Theory, Perceived Value, Service Marketing, Structural Equation ModelingAbstract
Indonesia’s rapidly expanding coffee shop industry has intensified market competition, prompting businesses to better understand the factors that shape satisfaction and loyalty. This study examines how product quality, service quality, and price perception influence satisfaction and, ultimately, loyalty within a specialty coffee shop in Palembang, Indonesia. It also evaluates the mediating role of satisfaction in transmitting the effects of these antecedents to loyalty outcomes. Using a quantitative explanatory design, data were collected from 100 customers through purposive sampling and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4. The findings indicate that product quality and perceived price fairness significantly enhance satisfaction, whereas service quality does not demonstrate a statistically significant effect in this context. Satisfaction strongly predicts loyalty and mediates the relationships between product quality and loyalty as well as between price and loyalty. However, it does not mediate the link between service quality and loyalty. These results suggest that loyalty formation in this coffee shop setting is primarily driven by consistent product performance and price–value alignment rather than interpersonal service interaction. By providing empirical evidence from a secondary Indonesian city, this study clarifies the relative dominance of satisfaction drivers in a specialty coffee shop context. Practically, the findings emphasize the importance of maintaining product consistency and aligning pricing strategies with customer value expectations to strengthen long-term loyalty.
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