The Empirical Model on The Relationship among Price, Service Quality and Customer Purchasing Decision: The Case of the Dili Tais Market in Timor-Leste.

Agostinha Silva,Agustinus Nahak Seran,Estanislau De Sousa Saldanha,Helio Brites Da Silva

doi:10.51703/bm.v3i2.51

Agostinha Silva, Agustinus Nahak Seran + Show 2 more

Open Access

https://doi.org/10.51703/bm.v3i2.51

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Abstract

Price, service quality and purchasing decisions are played important roles in tourism market management. Therefore, many empirical studies have been carried out to enhance customer purchasing decisions through price and service quality. Nonetheless, there is a limited number of studies in emerging tourism destinations and marketing. This study aims to analyse the influence of price and service quality on customers’ purchasing decisions. This research was carried out at the Tais Market, Kolmera, Dili. Data was collected by using questionnaires distributed to 395 respondents using accidental sampling technique, and hypotheses were tested using SMART-PLS 3.0. The results showed that both price and service quality have significant impacts on customers’ purchasing decisions. This study enriches the empirical studies on price, service quality and customers’ purchasing decisions, particularly in emerging tourism destinations and markets. This study implies that to enhance customers’ purchasing decisions, the Tais Market needs to offer products at a reasonable and fair price as well to keep improving the tangible and intangible services.

Highlights

Customer’s purchasing decision is an important factor to determine market share and to increase company’s profit
Price refers to the quantity of money that is used to purchase a product or service (Zietsman et al, 2019), price is one of the main indicators for customers’ purchasing decisions (Hati et al, 2021)
Items of price and costumer purchasing decision were adopted from Marcal et al (2020), while service quality adopted from Flores et al (2020)

Summary

Introduction

Customer’s purchasing decision is an important factor to determine market share and to increase company’s profit. Customer’s purchasing decisions are influenced by the quality of the products, services, price and product value by costumers. If companies offer better prices, products and services quality will enhance customer satisfaction (Kaswengi & Lambey-Checchin, 2019; Philip & Keller, 2016) and purchasing decision (Anderson et al, 2000; Jung & Yoon, 2012; Maslowska et al, 2017; von Helversen et al, 2018). Determining product price should consider product quality and quantity in order to meet customer satisfaction, which in turn leads to enhance corporate’s profitability. Price has great impacts on costumer purchasing decision This has been confirmed by numerous empirical studies (Carvalho et al, 2020; Djatmiko & Pradana, 2016). Studies shows that lower price does not correlate to the increasing costumer purchasing decision (Son & Jin, 2019)

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