determinants of customer satisfaction and its implication...

I J A B E R, Vol. 13, No. 7 (2015): 5043-5064

DETERMINANTS OF CUSTOMER SATISFACTION AND ITS IMPLICATION ON CUSTOMER LOYALTY

(THE EMPIRICAL STUDY OF AUTOMOTIVE CUSTOMER IN MEDAN)

Lili Suryati1 and Nandan Lima Krisna2

Abstract: The aims of this study are to determine the partially and simultaneously influence of the product quality, brand image, price on customer satisfaction; and determine the partially and simultaneously influence of the product quality, brand image, price, customer satisfaction on customer loyalty. The research methods that we use are descriptive and explanatory survey methods. Using 210 car’s customers who are using Honda brand as respondents and SEM instrument analysis, the results indicate that to improve customer loyalty especially on sub variable “customer will buy the same car brand that is offered by a corporation (repeat buyer)”. The showrooms of Honda car brand in Medan should be able to improve the brand image especially on sub variable “the using of car brand must very easy to be remembered”. The high of customer satisfaction is especially on sub variable “satisfaction on car that has been used”. Customer satisfaction will increase if the showrooms of Honda car brand in Medan able to provide a good price especially on sub variable “comparison with another brand” and high product quality, especially on sub variable “the durability cars and its spare part in according with the condition of use”.

Key Words: Product Quality, Brands Image, Prices, Customer Satisfaction, Customer Loyalty

INTRODUCTIONToday, automotive industry development become more and more competitive. This can be seen of various product innovation and advertising in communicated through the public and electronic media. It is of course intended to seize market share competitors own and maintain the share was. Every automotive companies perceived need to in a continuous manner and sustainable impart the quality of products and the quality of service to its subscribers. By providing excellent services and quality of products of particular importance to its subscribers expected automotive companies capable of giving satisfaction to customer’s loyalty (Jahanshahi, Gashti, Mirdamadi, Nawaser, and khaksar, 2011: 255).

1. STIE IBBI, Medan, Indonesia2. Universitas Persada Indonesia YAI, Jakarta, Indonesia, Corresponding Author: suryatylili@yahoo.

com

Automotive industry is one type of business that is growing rapidly in Indonesia. The rate of the automotive industry development in Indonesian society currently relative show significant progress after early in 2009 as of early 2010 experienced an economic downturn resulting from the impact of the global crisis. Since the beginning of 2010, Indonesian economic condition has gradually started to improve. It can be seen from a strengthening of the IDR exchange rate against the American dollar, this looks surge IDR from 2008 whose origin Rp.11,092 $ US per 1, to Rp.10,358 per $ US 1 in 2009, then strengthened back into RP.9,181 per $ US 1 in 2010 (Economic Statistics Indonesian Financial, 2012). The economic development has a huge impact on development automotive in Indonesia. It can be seen from the many will demand a means of transportation to support all activities performed by the people of Indonesia. To face the increase in community demand will be a means of transportation, then the car factory in Indonesia vying to increase production and quality of the goods it produces. Based on sales, sales growth, and market share, that the growth of increased sales at Honda car brand (a family car type) from 2008 to 2009 (-11.91) increased to 2009 to 2010 (20.756), instead having of market share is declining, namely 10,44% in 2008 to 9,87% in 2009, as well as declining again become 9,61 in 2010. It indicates that Honda car into focus on this problem.

Based on the above phenomenon, the declining in market share and sales growth fluctuation indicate that there is a customer disloyalty on Honda car brand. It can be seen the decline in consumers loyalty based on an indication, namely consumers generally own a car more than a brand, consumers in Medan prefer another brand accessories that is cheaper and suitable with a brand (made-in-China) than accessories Honda brand. Honda consumers in Medan rarely provide recommendations on others, and consumers interested in other brand, if there is cheaper than Honda (Lili Suryati, 2013).

Haq (2012: 367) said that if customers satisfied, then consumers would be loyal. Similarly, Sondoh, Omar, Wahid, Ismail, and Aaron (2007: 91) said that customer satisfaction would affect on customer loyalty. Based on a statement above, dissatisfaction customers may cause customer disloyalty of Honda car brand.

It can be seen, based on a symptom of the low Honda customer satisfaction, that is they do not generally satisfied with their car, because that there is always a new car with better quality, less satisfied with the available car’s features and after sales service, because of being an service intervals having a long queue (Lili Suryati, 2013).

Based on the research, brand image may cause on the lack of customer satisfaction. It is seen from brand cars that used less superior (Honda-Vs-Toyota), the type of car difficult to remember (Jazz-Vs-Avanza), the car is not unique (Honda City-Vs-Honda Civic). (Lili Suryati, 2013).

5044 • Lili Suryati and Nandan Lima Krisna

According to the above description, it appears that the low of product quality and prices caused the low level of customer satisfaction. It indicated that the poor of product quality, namely the lack of due car performance with the customer expectations, additional features unfavorable with car performance, there are functions that cannot meet the customer needs, durability and lack of appropriate car spare parts, the length of the handling of customer complaints, car does not have the characteristics to suit customer expectations and perceived quality does not correspond to the desired perception by the customer.

Likewise, according to the above description, the price discrepancy may cause the low of customer satisfaction. It showed that the car price offered was not relevant to the ability of consumers, the price offered less competitive with other brands and prices are fewer cars purchased in accordance with the perceived quality of the car.

Based on the above, it is important to investigate the determinants of customer satisfaction and its implications for customer loyalty.

THEORETICAL FRAMEWORKBetter product quality and customers in accordance with the needs is expectations to increase customer satisfaction. A product produced can invest for image. Consumers feel the need to make a product or in accordance with the needs of the consumers (Mahaputra, Kumar, and Chauhan 2010 :221).

Customer satisfaction is an important factor in the marketing of goods and services. As presented by Normann, the image of affecting the mind of customers through a combination of advertising, community relations, public relations, the story of the mouth of mouth and actual experience to products and services. The image of a brand impact on the behavior of purchases by customers because of brand image of having the effect on perception of customers about service offered.

The price is one part of hotchpotch marketing. With the determination of an affordable price to produce a products and services are in accordance with customers wishes and expectations, it will increase customer satisfaction (Dua and Savita 2013: 31) and (Harmon, 2004: 254).

By determining the product price will be worthy for all consumers and provide the product quality which is in conformity with expectation and the desire of customer, can increase the rate of customer satisfaction. In addition to the product quality and price, brand image affected customer satisfaction. Brand a product very much determines the quality of life of the customers. By the presence of the three factors are, expected increase customer satisfaction (Singh, 2011: 48), (Lohana and Sharma, 2012: 56), (Matta and Conlon, 2001: 89), and (Deng et al, 2010: 65).

Determinants of Customer Satisfaction and its Implication on Customer… • 5045

The product quality is that research subjective by customers. This research is determine the perception on what is desirable and required by customers of that product. Quality products have an important role to customer satisfaction. More quality products and services, the satisfaction felt by customers getting high, the body can generate profits for the business. Similarly should if without any satisfaction, can result in customers move on other products because of the quality of products related to do with customer loyalty.

Awareness of customer brand built along a continuous product life cycle it lasts. The perception of the quality of the brand holders formed at that moment, with the firm commitment to make a brand as the brand that has the future. If the third element brand image is formed and customer loyalty to brands will be, high that is committed buyer where loyal customers have the pride of being customers of the brand. At this, level one feature customer loyalty to be demonstrated by the act of recommending and promoting a brand to others.

Customer loyalty is an important concept on marketing strategies. The products on customer loyalty are indispensable to the survival. Loyalty can be defined as a profound commitment to conduct the purchase of products or services are becoming its preference consistently at the forthcoming by means of buying the same brand although the ticket and marketing business that could result in the transfer. One of the factors influencing prices customer loyalty is competing (Yuen, et al, 2010: 51).

The quality of a product and the price of having close relations with the satisfaction of customers to establish a bond strong relationship with the company, in the long term, such ties as it allows companies to understand carefully the hope of customers and need them. This will be better if supported by the image of the brand better. The three factors will increase customer loyalty. The price and product quality is associated with customer loyalty if goods and services purchased fit with what is customers expectation, then there will be satisfy or loyalty and otherwise (Mosahab, et al, 2010: 32).

The met of customers expectations will be more satisfied. A company should have the strategies in marketing their products. Therefore, customers can be maintained its existence or more increased the number again. If customers feel satisfied and he will repeatedly purchase. The repeated purchase on one brand or product on the same company can be said that the customers have loyalty to a brand or the company. Customer loyalty is the nature of customers who have a desire to buy birthday. Customer loyalty can be formed with the customer satisfaction to products used (Kiyani, et al, 2012: 71), (Chai et al, 2009: 82), (Bei and Chiao, 2001: 32), and (Jahanshasi et al, 2011: 88).

Based on the above analysis, the schematic thinking of research was shown in figure 1.


Figure 1: Model of Research Proposed

The Hypothesis

Hypothesis is the answer while opinion or answer to a question submitted while, in which the truth need to attest (Juanda, 2009: 33), the hypothesis of this research is:H1: There is a positive influence the quality of products on customer satisfaction. H2: There is a positive influence brand image on customer satisfaction.H3: There is a positive influence the price on customer satisfaction.H4: There is a positive influence quality products, brand image, and price

simultaneous on customer satisfaction. H5: There is a positive influence the quality of products on customer loyalty H6: There is a positive influence brand image on customer loyalty.


H7: There is a positive influence the price on customer loyalty.H8: There is the influence of customer satisfaction on customer loyalty.H9: There is a positive influence the quality of products, brand image, price, and

customer satisfaction simultaneous on customer loyalty.

METHODSResearch method used is descriptive survey method and explanatory survey method. A type of investigation in this research is causality. A unit of analysis in this research is individual, namely car buyers who have bought the Honda brand more than a Honda car dealers in the three times in Medan city.

The definition of operational variable intended to clarify the variables that will be examined, where the subject matter of this research is that:

1. Product quality (ξ1) as independent variables.2. Brand Image (ξ 2) as independent variables.3. Price (ξ3) as independent variables.4. Customer satisfaction (η1) as intervening variable.5. Customer loyalty (η2) as dependent variables.Population refers to all groups of people, events, or objects that researchers

become interest to scrutinize (now called sergeant, 2010: 262). In this research, which used as populations (unit is analysis) car buyers Honda brand that more than one time in 3 dealer in Medan city and who meet the criteria as follows:

1. Brand Honda type family car with a license plate number to Police BK.2. The owner of the minimum purchase 2 times, and domiciled in the city of

Medan. 3. Purchases made in the period 2009 to 2013. 4. The sampling Techniques used was proportionate random sampling.

Where the sample is taken from the third frame dealer Honda in Medan, then chosen at random numbers by using, as well as the respondents visited by surveyors to address each of them.

5. The Surveyor who helped in this study there are 10 students from the Bachelor of management STIE IBBI Medan, who previously collected in advance and are given an explanation of the meaning of the questionnaire as well as how to pass it on.

In this way, the size of a minimum of samples to be taken in this research was of 210 respondents. While sampling from a population used technique


proportional random sampling. According to Supranto (2001), what is meant by proportional random sampling sample is that we could take from that which it had divided based on the group. Therefore, great samples will be taken is about 210 respondents from a dealer using proportional technique random sampling.

Based on the purpose of this research is the influence measurement of the independent variable (the product quality, brand image, and price), dependent variable (loyalty), and involving intervening variable (customer satisfaction). Then, approach technique in modeling and analysis of a solution used as an instrument (tools of analysis in the dissertation this equation is to use structural equation model with LISREL software. The reason the election of this method is its ability in measuring construct indirectly, namely through the indicators as well as indicators as well as latent and variable analyzed.

THE RESULTSModel equations on the full of SEM with LISREL 8.70 obtained two models a diagram a trajectory, namely standardized and the t-values model, each such a model shown in figure follows:

Figure 2: Standardized Model


Figure 3: t-value Model

Description:KP = Product Quality CM = Brand Image HG = PriceKEP = Customer SatisfactionLOY = Customer LoyaltyBased on figure 2 and a picture of 3, these calculations on the next test will be

mentioned parameters (loading factor and the coefficients) structural dimension on the model of an exogenous and endogenous. Testing is intended to find causal relationships or the influence of one variable latent to other latent variables, the indicators’ strength of each variable latent (construct).

DISCUSSIONThe Influence of Product Quality on Customer Satisfaction

In this section, it will be carried out from the testing of hypotheses about exogenous variable influence the quality of the product (ξ1) on variables endogenous customer satisfaction (h1).


Based on Fig. 2 and Fig. 3 above, it turns out that the value of t from the influence of the quality of the product against customer satisfaction is as much as 2,85 > 1,96, that it could be significant thus the product quality have had a positive impact and significantly to customer satisfaction Honda car brand in Medan city. As for large a direct influence the quality of the product against customer satisfaction is 0.26, as much as it means getting better and better product quality Honda car brand in Medan city, then customer satisfaction of Honda car brand in Medan city will increase / high and thus hypothesis 1 accepted.

The results of testing the hypothesis of 1 of this research in line with the results of research from (Singh 2011: 48) that prove through a model research that customers prefer having the quality of automobiles commercial because of better, brand image, easy to get repair center, the quality of spare parts and others. An indicator that the dominant form on the quality of the product is durability (X5), while the dominant form of satisfaction is the satisfaction of the car used (Y1). This is a durability in this research findings that owned the Honda car brand able to increase customer satisfaction over the car they use.

Durability is the length of the resilience of resources and a reduced ability of time-to-time, so to cause a setback excellence compete sustainable level. As an example, changes in technology and equipment can be obsolete. With the same way, brand and reputation can also be dropped from time to time. It means the resilience of the Honda car brand can make customers are satisfied in using the car.

The Influence of Brand Image on Customer Satisfaction

On the part of this will do the testing of hypotheses about exogenous variable influence brand image (ξ2) against endogenous variable customer satisfaction (h1).

Based on figure 2 and figure 3 above, it turns out that the value of t from the influence of brand image on customer satisfaction is of 5,90 > 1,96, that it could be significant, thus brand image influential positive and significantly to customer satisfaction Honda car brand in Medan city.

The large a direct impact on brand image by 0.49 customer satisfaction is, it means the more well known brand image, Honda car brand and customer satisfaction and higher will increase, and thus hypothesis 2 accepted. The results of testing the hypothesis of 2 of this research in line with the results of research from Singh (2011: 48) that prove through a model research that customers prefer having the quality of automobiles commercial because of better, brand image, easy to get repair center, the quality of spare parts and others.

The same applies to the results of the testing of hypotheses this is in line with the results of the research of the Lohana and Sharma (2012: 56) suggested that a customer is satisfied with the whole performance of his car. It is satisfied with


customer’s car efficiency, brand image, after sales services, the price economical and so on. The dominant indicators that form an image of strength of brand is brand association (X10), while an indicator that a dominant form on customer satisfaction is satisfaction top of a car used (Y1). This brought an invention that association strong brand can increase customer satisfaction in the use of the car.

Understanding according to a brand association Aaker (1996: 160) is related to the memory of a brand. Related on brands will increase with more and more sightings the brand in the communications strategy. Because that memory customers on a brand of the Honda car capable of increasing customer satisfaction in using the car.

The Influence of Price on Customer Satisfaction

In this section will be conducted the testing of hypotheses about exogenous variable influence of prices (ξ3) t on variables endogenous customer satisfaction (h1).

Based on Fig. 2 and Fig. 3 above, it turns out that the value of t from the influence of the price on customer satisfaction is of 2,33 > 1,96, that it could be significant, thus the price of influential positive and significantly to customer satisfaction Honda car brand in Medan city. The large price a direct influence on customer satisfaction is 0.20 as much as, it means more affordable price, then customer satisfaction Honda car brand will increase / high, and thus accepted hypothesis 3. The results of the testing of hypotheses 3, this study did not in line with the results of the research of the Harmon (2004: 254) did research on customer reaction about the situation the price of a dynamic. The results show that the satisfaction with a transaction influenced by knowledge of price paid for the same products. The results showed that the higher the price offered, it will be lower the level of customer satisfaction.

The dominant variable indicators that forms are comparisons with a brand latent the price of another (X13). While dominant indicators that forms customer satisfaction is satisfaction top of a car used (Y1), it became a thing the finding in this study that comparison car prices Honda brand with a brand the other, if the price offered is competitive, it can be increase customer satisfaction in the use of the car. The finding showed the culture field, that if they can buy the product that is good, but with a lower price than the others, and they will feel proudly and it makes itself more satisfaction, evenly it will not take longtime, because bored and want to have products (Pemkot Medan, 2014)

The Simultaneously Influence of Product Quality, Price, and Brand Image on Customer Satisfaction

In this section, show testing hypotheses about the simultaneously influence of exogenous variables product quality (ξ1), brand image (ξ2) and price (ξ3) on


customer satisfaction (h1). The results obtained by using LISREL program for structural equation model of 8.70, in accordance with the proposed hypothesis can be showed as a structural equation below.

KEP = 0.26*KP + 0.49*CM + 0.20*HG, Errorvar.= 0.31, R2 = 0.69………..........................1.

(0.091) (0.084) (0.087) (0.100) 2.85 5.90 2.33 F=152.8

Based on structural equation above 1, look the size of loading factors the coefficient of the variable quality products on customer satisfaction is in 0.26, the loading factors (the coefficient of the variable) brand image on customer satisfaction is at 0.49 and the loading factors (the coefficient of the variable) price on customer satisfaction is 0.20.

Based on equation 1, figure 2 and 3. At the top, it was worth f of the quality of products, of brands and prices in jointly to customer satisfaction is by 152,8 > 3,85 (F Tabel) so significant to say with the quality of products, of brands and prices jointly and positive influence significantly to customer satisfaction, and thus hypothesis 4 accepted.

The large contribution in jointly variable the product quality, brand image and prices on customer satisfaction is about 69%. The rest as much as 31% was influenced by other factors as a promotion distribution the quality of these services his service and many of the other factors that cause that drives the next research to conduct research no factor that is different from this kind of research. Thus, it can be concluded that customer satisfaction of Honda brand car in Medan is dominated by satisfaction top of a car used (Y1). The product quality is dominated by durability (X5). Brand image is dominated by strength of brand association (X10). Moreover, the price is dominated by comparison with a brand another (X13).

But in a partial factor brand image has the most dominant influence on customer satisfaction. The results analysis found that customer satisfaction of Honda brand car would be increased if durability car were increase (its function lasted longer), having a strong brand in memory of customers, and the price competes compared with other brands with the same type car. For example the Honda Jazz with Toyota Yaris, Daihatsu Sirion, Suzuki Splash, and so forth.

The Influence of Product Quality on Customer Loyalty

In this section will be carried out the testing of hypotheses about exogenous variable influence the quality of the product (ξ1) on variables endogenous customer loyalty (h2).


Under the figure 2 and 3 above, in fact, the value of the quality of products t to customer satisfaction is by -0,22 < 1,96, so to say it is not significant, thus the product not influence significantly to customer loyalty. The great quality products direct influence on the customer loyalty by -0.02, it means better quality of products and customers loyalty to the Honda cars in the field no increase at all, it thus rejected the hypothesis 5.

The results of hypotheses 5 testing is opposed to the study results from Chai, et al (2009 : 82), there is a positive relationship between product quality and services (either handsets as well as tissue) on customer satisfaction and customer loyalty. The same applies to this results with the study results from Jahanshasi, et al. (2011: 70), that car quality has significantly the influence on customer satisfaction, the product quality influential significantly on customer satisfaction and customer satisfaction influential significantly against customer loyalty. This brought an invention in this research that in Medan city, the product quality of Honda car brand formed by durability (X5) just never make loyal customers which is dominated by repeat buyer (Y4).

It means endurance/ durability of the Honda car brand used does not encourage customers to buy back the same brand, but in fact have a desire to try to brand another that is cheaper. Because of automotive industries currently vying to improve endurance/ durability of their products, Suzuki Ertiga for example there are now beyond the sale of Toyota Avanza, Honda Mobilio because they are considered by the subscribers has endurance better, more durable, more economizes, and more comfortable in its use. Therefore, Honda Mobilio has the better quality does not encourage customers not to glance on other car brand, for example as Ertiga (Magazine Automotive, 2014).

The Influence of Brand Image on Customer Loyalty

In this section will be carried out the testing of hypotheses about exogenous variable influence brand image (ξ2) on variables endogenous customer loyalty (h2).

Based on figure 2 and figure 3 above, value t turns from the influence of brand image against customer loyalty is worth 4,96 > 1,96, that it could be significant, thus brand image influential positive and significant against customer loyalty. The great direct influence brand image against customer loyalty 0.57 is worth, it means the more well known brand image by customers, then customer loyalty to Honda car brand in Medan city will increase/ high, and thus accepted hypothesis 6.

The results of testing the hypothesis of 6 of this research in line with the results of research of Kiyani et al (2012: 71) that both the independent variable, brand image and customer satisfaction is having a significant positive influence on customer loyalty. The results of this study found that the image of a brand that


built through strength of brand association (X10) can increase loyalty of customers built by (Y4) repeat buyer. It means the most powerful car brand remembered by encouraging customers to keep customers loyal use the car brand, as well as tending to buy back the same if a car with a brand or type out a new model again. Based on interviews with several customers (2013) Honda car, they like the Honda Jazz, there are so that each new Honda Jazz car output, replaced by the length of a new car, and continues to this. This can be seen by obtaining Honda Jazz award.

Automotive magazine (2014) awards Honda CR-V and Honda Jazz. This time, obtained to award customer loyalty the best in the event in Net Promoter Customer Loyalty Award 2011. On a held by SWA magazine and Hachiko net promoter the solution, Honda CR-V won net promoter score (NPS) star in the category SUV car, while Honda Jazz grabbed a net promoter score (NPS) excellence to mini MPV car, caused by a brand of these products remembered strong by the subscribers.

The Influence of Prices on Customer Loyalty

This will be done on hypotheses testing about exogenous variable influence the price (ξ3) on endogenous variable customer loyalty (h2).

Based on figure 2 and figure 3 above, turns value t price of influence against customer loyalty is worth -1,49 < 1,96, that it could be insignificant, thus the price of not significant affect on customer loyalty. It means the higher car prices of Honda brand in Medan, then customer loyalty not will increase/ high, hence thus rejected hypothesis 7.

The testing result of hypothesis 7 is not in line with the results of research Harmon (2004: 254) who do research on customer reaction to the price of a dynamic situation. The results show that the loyalty with a transaction influenced by the knowledge about the price paid for the same product. The results show that the high or low the prices offered, could not raise or lower the level of customer loyalty and valid on the contrary. The results of research on producing a finding that the price was built by comparison with other brands (X13) not encouraging customers to loyalty, especially one formed by (Y4) repeat buyer.

It means the price comparison between a Honda car brand with the others brand, that made no other customers being customers are encouraged to buy a car the same brand, because as the community field of culture, if the difference between a brand of car with each other a little different, and tending to them to switch brands. Because the especially automotive promo in Medan, always put in the price competition, so when there is a car that different brand, then having the qualities that relatively the same, then they would change a brand on a more competitive price.


The Influence of Customer Satisfaction on Customer Loyalty

In this section will be carried out the testing of hypotheses about the effects of the endogenous variable customer satisfaction (h1) on variables endogenous customer loyalty (h2).

Under the figure 2 and figure 3 at the top, it was worth it is not from the customer satisfaction for customers loyalty is to 2.43 > 1.96, so significant to say therefore customer satisfaction affect the customer loyalty. The big a direct impact customer satisfaction for customer’s loyalty is to 0.41, that means higher customer satisfaction and customer’s loyalty to the Honda cars in the city has increased/ high and thus hypothesis 8 accepted.

The results of testing the hypothesis of 8 of this research in line with the results of research of Oliver (1999) explained that loyalty is a form of commitment. Where the commitment can be seen as a bond of the relationship the two sides. Derived from the consideration that the commitment of relationships it is important and necessary efforts to keep them (Dwyer et al. 1987) this commitment is also the orientation of a long-term relationship. In this show that customer satisfaction can be received from service the antecedent of the commitment of the customers (Oliver, 1999).

The results of the analysis above, that customer satisfaction formed by satisfaction top of a car used (Y1) can increase customer loyalty formed by repeat buyer (Y4). It means satisfied if customers top of a car in current use, then they are likely to be buy more car a brand that same if out type/ new models of brands of the car.

The Simultaneously Influence of Product Quality, Brand Image, Prices, and Customer Satisfaction on Customer Loyalty

In this section will be carried out the testing of hypotheses about the effects of the exogenous variable between the quality of the product (ξ1), brand image (ξ2), prices (ξ3) and customer satisfaction (h1) on customer loyalty (h2). Of the results obtained by the use of the program LISREL 8.70 to model structure, equation in accordance with hypothesis advanced can be seen as an equation structural below.

LOY = 0.41*KEP - 0.020*KP + 0.57*CM - 0.13*HG, Errorvar.= 0.30, R2 = 0.70…………......................2.(0.17) (0.094) (0.12) (0.087) (0.061) 2.43 -0.22 4.96 -1.48 F=119.6 Based on structural equation 2 above, seen the magnitude of loading factors

(coefficients of path); product quality variable against customer loyalty is about 0.02.


The magnitude of loading factors (coefficients of path) variable customer loyalty towards the brand image is loading, the size of 0.57 per factor (coefficient of path) variable Rates against customer loyalty is of-0.13 and magnitude of loading factors (coefficients of path) customer satisfaction variable toward customer loyalty is by 0.41.

Based on the equation of 2, figure 2 and 3 above, it turns out the f-value of the influence of product quality, brand image, price and customer satisfaction in together on customer loyalty is about 119.6 > 3,85 (F-table). Therefore, it can be said to be significant, thus the quality of products, brand image, the price and customer satisfaction in together influential positive and significant impact on customer loyalty to Honda car brand, and thus accepted the hypothesis 9.

The large contribution in simultaneous of products quality, brand image, the price and customer satisfaction on customer loyalty. It has influence about 70%, the rest of 30% influenced by other factors such as promotion, distribution, relationship with their customers, and another factor stimulates researchers next to scrutinize all of these issues. Thus, it can be concluded customer loyalty of Honda car brand in Medan influenced positively by the quality of the product, brand image, prices and customer satisfaction.

However, only partial brand image and customer satisfaction has effects that significantly to customer loyalty, while the quality of product and price directly his influence insignificant. Brand image most dominant has impact on customer loyalty. The results of hypotheses 9 testing is refutation by the results of the research of the Deng, et.al (2010). He said that the customer satisfaction variable has more influence on customer loyalty if it compared with a variable trust and the cost. Chai, et all (2009:82) conducted a study of the relationship quality of services the quality of the product customer satisfaction and loyalty customers with moderation image of products and image of the user.

The Direct and Indirect Effect

Indirect effect between the quality of the product against loyalty customers via customer satisfaction as variable mediation is 0,41 × 0.26 = 0,1066, but a direct influence on the quality of the product loyalty customer is -0,02 as much as, so that the quality of products can be increase loyalist customers if through customer satisfaction 10,66% as much as (full mediating).

Indirect effect on the loyalty of its subscribers via customer satisfaction is a variable mediation of 0.49 × 0,41 = 0.2009. It can be said that indirectly via customer loyalty brand image influence customer satisfaction have contributed by 20,09%, while the direct effect is brand image of customer loyalty by 0,57 or 32,49% contribution to have greater influence not only from 20,09%, so that they can come out of a direct is the dominant improve customer loyalty (partial mediating).


The price of loyalty indirect effect on customers via mediation is customer satisfaction as variable as 0.20 × 0,41 = 0,082 very small, while a direct influence on the price of -0,13 customer loyalty, consequently prices can increase customer loyalty 8.2% if, through of customer satisfaction (full mediating).

CONCLUSION1. The product quality of Honda car brand in Medan proven it has some positive

effects and significantly on customer satisfaction, with big the influence of as much as 0.26. The dimensions of the quality of a product at Honda car brand in Medan most dominant were on elements “durability (x5)”.

2. Honda car brand image in Medan proved influential positive and significant impact on customer satisfaction, with large influence of 0.49. The dimensions of Honda brand image in the city is on the most dominant field “brand element of the car which used very easy to remember customers and strength of brand association) (x10)”.

3. The price of Honda brand car in Medan proved influential positive and significant impact on customer satisfaction, with large influence 0.20. The dimensions of the price of Honda brand car in Medan the most dominant element is on “comparison with other brands (x13)“.

4. The product quality is formed by the dominant dimensions “durability”. The brand image is formed by dimensions “strength of brand association“. Car prices and Honda brand in Medan is dominant formed by dimensions “comparison with other brands”. It proven simultaneous influential positive and significant impact on customer satisfaction the dominant formed by “satisfaction over the car used”, with large contribution in together as much as 69 percent, while the remaining 31 percent of affected factors besides the product quality, brand image and prices. However, if viewed as partial, it turns out the brand image of the most dominant influence on customer satisfaction.

5. Product quality of Honda car brand in Medan proved influential negative and no significant impact on customer loyalty (only -0.02). The dimension of product quality of Honda brand in Medan is on the most dominant field “element of the endurance product / durability)” (x5).

6. Honda car brand image in Medan proved influential positive and significant impact on customer loyalty (0.57). The dimension of the Honda brand image in Medan is on the most dominant field “brand element of the car which used very easy to remember customers and strength of brand association (x10)”.


7. The price of Honda brand car in Medan proven has negative effects but no significant impact on customer loyalty.

8. Customer satisfaction of Honda car brand in Medan proved influential positive and significant impact on customer loyalty (0.41). The most dominant element of customer satisfaction of Honda car brand in Medan is “satisfaction over the car used (Y1)”.

9. A dominant product quality dimension is “durability”. Dominant brand image is formed by dimension “strength of brand association”. Price is formed by the dominant dimensions “comparison with other brands”. The dominant dimension “satisfaction over the car used” forms customer satisfaction in Medan. All of them have influential positive and significant impact on the loyalty of customers who formed by the dominant “repeat buyer”. It is simultaneous with large contribution of 70 percent, while the remaining 30 percent of affected factors besides the product quality, brand image, prices and customer satisfaction. However, if viewed as partial, it turns out the brand image is the most dominant influence on customer satisfaction.

MANAGERIAL IMPLICATION1. Formed by a dominant product quality dimension “durability”, dominant

brand image formed by “dimension strength of brand association” and Honda car prices in the city brand formed by the dominant field dimension “comparison with other brands” dominant increase customer satisfaction can be formed by dimensions “satisfaction over the car used”. Brand image of the most dominant influence on customer satisfaction, so that the brand image is the most important element in improving customer satisfaction, especially dimension strength of brand association (brand cars easily remembered by customers). Customers will be satisfied in the car used if a brand of car easy to remember.

2. A dominant product quality dimension “durability”, dominant brand image “strength of brand association”, dominant prices dimensions “comparison with other brands”, Honda car brand and customer satisfaction in Medan formed by the dominant field dimension “satisfaction over the car used” reminded his loyalty of customers who can be formed by the dimensions of the dominant “repeat buyer. Brand image of the most dominant influence on customer loyalty, this shows that cira is the most important element of the brand to increase customer loyalty, especially dimension strength of brand association (brand cars easily remembered by customers). Customers will buy the same car brand if the car easily remembered.


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