Research Paper
Year: 2019 | Month: June | Volume: 6 | Issue: 6 | Pages: 150-162
Analysis of the Effect of Service Quality and Price on Customer Loyalty in PT. Orindo Alam Ayu (Oriflame Branch Medan) With Satisfaction as an Intervening Variable
Joseph Ermano Lase1, Ir. Nazaruddin2, Dr. Isfenti Sadalia2
1Postgraduate Students Master of Management University of North Sumatera, Indonesia
2Postgraduate Lecturer Master of Management University of North Sumatera, Indonesia
Corresponding Author: Joseph Ermano Lase
ABSTRACT
Customer loyalty has an important role in maintaining the survival of an increasingly competitive company so that maintaining customers means improving financial performance and maintaining the survival of the company. Many factors influence The customer loyalty such as service quality and price. High service quality will result in a high customer satisfaction and increase in customer loyalty. Price also has an important role in customer loyalty, the cheaper the price of a product it will increase customer loyalty.
The present study is a quantitative one with a correlation method that aimed to find out the relationship between two or more variables. The variables associated in this study include the variables of service quality and prices on customer loyalty (Y) with satisfaction as an intervening variable. The population of the study included all the customers of PT. Orindo Alam Ayu (Oriflame Branch Medan) during the study period of 2018 as of 2196 customers. The sampling method used a Slovin formula that there were 96 samples. The method of data collection uses questionnaires and the collected data were analyzed by using a multiple linear regression
The result of the study shown that service quality partially had a significant influence on customer loyalty. In other words, the better is the quality of service, the higher is customer loyalty. Price has a partial effect on on customer loyalty. In other words, the more affordable is the price of the product, the higher is the customer loyalty. The Service quality and price simultaneously have a significant influence on customer loyalty. Customer satisfaction has been shown to positively moderate the influence of service quality on customer loyalty. Customer satisfaction has been shown to positively moderate the effect of prices on customer loyalty. Customer satisfaction has been shown to positively moderate the influence of price service quality on customer loyalty. To the leadership of PT. Orindo Alam Ayu, it is recommended to further improve the study of the price of oriflamme products, so the prices offered on the market are truly affordable for customers. To employees of PT. Orindo Alam Ayu, it is recommended to further improve service quality so that it can increase customer loyalty in purchasing oriflamme products.
Key words: Service Quality, Price, Customer Loyalty and Satisfaction
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