Abstract
Coffee shops are today's businesses with good and competitive prospects in providing customer satisfaction and building customer loyalty. This study aims to analyze the relationship between service quality and product quality on customer satisfaction and loyalty, the relationship between customer satisfaction and customer loyalty, and the relationship between product and service quality and customer loyalty mediated by customer satisfaction. The study was conducted using quantitative methods, sampling a questionnaire to 100 customers of Coffee Shop. The study was conducted in August 2021. Meanwhile, to analyze the relationship between variables, using partial least squares (PLS). Based on the study results, it can be concluded that service quality directly affects customers, especially customer satisfaction. Product quality also affects customer satisfaction and loyalty and vice versa. However, service quality did not directly affect customer loyalty. Meanwhile, mediation through customer satisfaction and product quality indirectly affects customer loyalty.
Highlights
In Indonesia, coffee production and sales play an important role
Our findings show that service quality has no direct effect on customer satisfaction, while product quality has a significant direct effect on customer satisfaction
The purpose of this study was to determine the correlation of service quality and product quality to customer satisfaction and loyalty, the correlation of customer satisfaction to customer loyalty, and the correlation of product and service quality to customer loyalty mediated by customer satisfaction
Summary
In Indonesia, coffee production and sales play an important role. Indonesia is a producer and exporter of world coffee, where Indonesian coffee can penetrate abroad, such as civet coffee and Mandailing coffee. In 2016, world coffee production touched 9.2 million tons, and Indonesia could produce 689.000 tons of coffee beans (Zarwinda & Sartika, 2018). Coffee plays a role as a source of foreign exchange which occupies the fourth position after palm oil, rubber, and cocoa. In 2012, of Indonesia's total annual coffee bean production, 70 percent was exported, mainly to Japan, South Africa, Europe, and the United States. It was the elderly who used to consume coffee, but recently coffee consumption has changed and led to people's lifestyles, especially among modern young people. Many coffee enthusiasts indicate this among young people and the spread of various coffee shops that offer various types of coffee
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