International Journal of Economics, Business and Management Research

Vol. 5, No.12; 2021

ISSN: 2456-7760

ANTECEDENTS OF CONSUMER LOYALTY FURNITURE AND

CARVING PRODUCTS IN INDONESIA
Sri Raehana1, Zunan Setiawan2, Salamatun Asakdiyah3
1
Master of Management Program, Universitas Ahmad Dahlan, 42, Pramuka, Yogyakarta 55161,
Indonesia
2
Department of Management, Universitas Ahmad Dahlan, 42, Pramuka, Yogyakarta 55161,
Indonesia
3
Department of Management, Universitas Ahmad Dahlan, 42, Pramuka, Yogyakarta 55161,
Indonesia

Abstract
This research analyzes the model of the factors that influence consumer loyalty for furniture and
carving handicraft products to find beneficial results in formulating appropriate consumer
retention strategies and loyalty schemes. It will also assist in developing product and service
designs and implementing strategies that will help maintain long-term profitability and
competitive advantage through product life cycle extensions. This research was conducted in the
demographic area of Indonesia, and consumers who have purchased furniture and carving craft
products, with a minimum age of 17 years. The total data after the screening process were 330
respondents who met the requirements. Data analysis was carried out using PLS-SEM through
SMART PLS software Version 3.3.2. The testing process is carried out in 3 stages: internal
consistency reliability, convergent validity, and discriminant validity. The results of hypothesis
testing examine the effect of influencing relationships service quality, corporate image, value,
trust, satisfaction on loyalty. The company's image is also surprising with a significant influence
on satisfaction, trust and loyalty. Limitations/Implications of the research The present study takes
a sample of customers only in certain large cities of Indonesia. Using cross-sectional data makes
it impossible to study customer perceptions changes over time. However, the results of this study
can help product sales managers develop strategies for building customer loyalty to consolidate
market share.

Keywords: Customer loyalty, Satisfaction, Corporate image, Service quality, Trust, Structural
equation modeling

1. Introduction
1.1 Introduce the Problem
Marketing academics and professionals have realized that maintaining long-term relationships
with consumers and critical internal and external stakeholder groups of a business should be the
main focus of management (Stan et al., 2013). Maintaining consumer loyalty is more important
than a narrow focus on one-time transactional requests for a company's products or services. The
goal of a business is to ensure that beyond the initial transaction, consumers have a good
experience and continue to view the company or service provider, and by extension, its products,
and services. When consumers have a positive perception of service providers, consumers are

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likely to spread favorable views about the quality of services provided by the company, thereby
increasing the company's market potential.

In addition, various researchers have shown that it is more expensive to acquire new customers
than to retain existing ones. Therefore, companies need to understand the needs of their
consumers and aim to build relationships around those needs to promote long-term consumer
loyalty and profitability. According to Hasiri and Afghan pour (2016), consumers show loyalty
to a product or service produced by a company. The company, when the product or service best
meets consumer needs. However, attracting consumers to business products and services is more
psychological than the utilitarian value of products to satisfy consumer wants. However,
manufacturers may be able to meet consumer desires.
This study determines the factors that encourage consumer loyalty and retention of carved
furniture and handicraft products. According to Ganiyu et al. (2012), satisfaction is a condition
of passive consumers alone cannot achieve active and proactive goals to retain consumers and
ensure loyalty. The literature primarily describes a direct and positive relationship between
service quality and loyalty (Quach et al., 2016). However, other studies elsewhere examine the
relationship between service quality and consumer loyalty by involving several mediating
variables that influence the relationship (Ofori et al., 2018). These variables include company
image, value, trust, and customer satisfaction, following the example of an expanded study of the
relationship between service quality and consumer loyalty. How these factors interact with each
other will help make the right decision regarding their loyalty package. Over time, research has
found that other factors influence consumer loyalty (repeat purchases) and the continuing
intention of consumers. These factors include service or product quality, value, perceived
organizational image, and Trust (Bilgihan et al., 2016).
1.2 Explore Importance of the Problem
Based on the above background, the formulation of the problem in this study is to examine
empirically the factors that influence consumer loyalty, which will contribute to the literature on
consumer loyalty in general, but more specifically to the literature and understanding of the
loyalty of furniture and carving handicrafts.
Based on the background and problem formulation, the research questions in this study are
Does the quality of service have a positive effect on the company's image?
Does service quality have a positive effect on value?
Does service quality have a positive effect on trust?
Does the corporate image have a positive effect on trust?
Does company image have a positive effect on trust?
Does company image have a positive effect on satisfaction?
Does company image have a positive effect on loyalty?
Does trust have a positive effect on satisfaction?
Does trust have a positive effect on loyalty?
Does the value have a positive effect on satisfaction?
Does satisfaction have a positive effect on loyalty?

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This study aims to test and analyze the model of the factors that influence consumer loyalty for
furniture and carving handicraft products to find beneficial results in formulating appropriate
consumer retention strategies and loyalty schemes. It will also assist in developing product and
service design and implementing strategies that will help maintain long-term profitability and
competitive advantage through product life cycle extension. This study has important theoretical
implications. As an expanded study, this study integrates and examines the relationship between
variables in the previous research model by Omoregie et al. (2019). It broadens the
understanding of the nature of the influencing relationships among crucial factors: service
quality, corporate image, value, trust, satisfaction, and loyalty. Researchers need to broaden the
scope and complexity of research, particularly in emerging industries, to broaden our
understanding and respond to emerging business problems. Provide insight into the factors that
influence consumers of furniture and carving craft product companies to become loyal. Thus, it
can be implemented in a marketing strategy package to increase loyalty and profit through
service quality. The process of ensuring loyalty affects loyalty directly and indirectly through its
interaction with beliefs and values to create customer satisfaction. This research was conducted
in the demographic area of Indonesia, and consumers who have purchased furniture and carving
handicraft products, with a minimum age of 17 years.
1.3 Describe Relevant Scholarship
Consumer loyalty is the company's ability to continue to win the patronage of particular
consumers over other competitors. It is an ongoing process that does not end with the satisfaction
of consumer needs but continues with the formation of long-term repeat buying relationships
with consumers concerning a particular brand. Lam et al. (2004) defined consumer loyalty as
repeated patronage and recommendations from service providers to other consumers. Following
the existing literature, Ganiyu et al. (2012) highlight that consumers display loyalty by
repurchasing products despite attractive competitive alternatives that might encourage them to
try competing products; give large sums of money to the company's product lines and services;
support and promote the company's goods or services to other consumers; and offer honest and
unequivocal feedback on product or service performance. Ofori et al. (2018) further explain that
organizations influence consumer loyalty and trust by forming consumer satisfaction and service
quality. Hapsari et al. (2017) also show that perceived service quality, consumer-held corporate
image of service providers, and perceived value have the same solid and positive relationship
with consumer loyalty.
Ofori et al. (2018) suggest that service quality drives consumer satisfaction, creating consumer
loyalty. Unlike goods markets where physical products can be easily perceived, the banking
sector offers services whose quality may be difficult to assess (Pleshko and Hein, 2015).
Empirical studies in the literature have shown the impact of service quality on both customer
satisfaction and loyalty (Makanyeza and Chikazhe, 2017; Ofori et al., 2018). In Parasuraman et
al. (1994) study, service quality can be measured using indicators such as empathy, reliability,
responsiveness, assurance, and tangibles. Hasiri and Afghanpour (2016) empirically show that
service quality significantly affects company image and trust in business.

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The trust built with consumers will produce an excellent corporate image, leading to consumer
loyalty. Variables such as employee competence, reliability, physical evidence, and product
innovation affect service quality. The literature shows a strong direct relationship between
service quality and loyalty in many studies (Chen and Hu, 2012). Various studies also suggest
the mediating role of variables such as Trust (Ofori et al., 2018), satisfaction (Aguila-Obra et al.,
2013; Howat and Assaker, 2013), image, and value (Lai et al., 2009) between service quality and
consumer loyalty. Such behavioral intentions may include product and service purchases and
loyalty.

As an external marketing dimension, corporate image results from consumers comparing various
attributes of the company's organization. Consumers determine which service provider to protect,
given the uncertainty in the service provider's credibility (Afsar et al., 2010). As noted by Tu et
al. (2012) and Ofori et al. (2017), corporate image is a form of an intangible asset for a unique
company that can be easily identified but difficult to imitate. Contributions from Stan et al.
(2013) show that the corporate image held by consumers towards service providers and
perceived service quality has a strong relationship with consumer loyalty. Arsyad et al. (2016)
found that corporate image has both practical and emotional components. The practical
component is connected to a tangible dimension that can be known, considered, and experienced.
Meanwhile, the emotional component is related to consumers' psychological characteristics and
experiences and their attitudes towards the company's body, which ultimately gains strong trust
in the minds of consumers. Therefore, a solid corporate image needs to enhance consumers'
experiences and perceptions about their products and services to attract new and loyal customers.
The interdependence and reciprocal relationship between image, trust, satisfaction, and loyalty
have been proven empirically.
Several studies have shown that trust precedes consumer satisfaction with products and service
providers. The consumer must initially build trust because the supplier or provider will offer the
best product or service. Distrust develops if the provider fails on consumers' trust, adversely
affecting loyalty (Schoormandkk., 2007). In the view of Schoorman et al. (2007), trust is a
reflection of a consumer's willingness to be vulnerable to a service provider or supplier based on
positive expectations about the future quality of the product or service to be delivered.
Companies need to deal with consumers in good faith to build trust. not only will they provide
maximum satisfaction to consumers, but consumers will also be willing to repeat patronage of
products or services. Beyond this, the trust built from consumers can be another strategic
marketing way to recommend brands of interest to friends and family (Afsar et al., 2010).
To patronize services continuously, consumers must perceive some value in the product or
service and with the delivery process and the service provider's image. Herman (2014) notes that
consumer cost is paid for a product or service in a competitive market. For consumers to
experience value, the benefits of enjoying a product or service, for example, must be higher than
the price. In other words, the price must be fair. Korda and Snoj (2010) argue that value comes
from a benefit-sacrifice relationship; the higher the relationship, the higher the level of perceived
value. Creating consumers' perceived value for service providers is the main essence of
marketing because repurchase intentions are motivated by consumers' perceived value.
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Chen (2015) suggests that the driving factor for consumer loyalty is better based on the
consumer perspective. The value(s) perceived by consumers significantly influences consumer
loyalty, and competition between service providers plays an intermediary role in the relationship
between value and loyalty. Value satisfaction studies such as Keshavarz and Jamshidi (2018) and
Bakar et al. (2017) show a significant positive relationship between value and satisfaction,
identifying consumer value as an assessment of satisfaction derived from the consumption of
service providers' products and services.
1.4 State Hypotheses and Their Correspondence to Research Design
The literature has highlighted various factors that can lead to consumer loyalty, with customer
satisfaction essential. Satisfied consumers are more likely to repeat purchases and are frequent
users of a particular product or service brand than consumers with unsatisfactory experiences
(Pleshko and Heiens, 2015). The studies of Pandey and Devasagayam (2012) and Lei and
Jolibert (2012) are in line with these findings and further demonstrate responsiveness as an
antecedent of satisfaction. This responsiveness on the part of consumers leads to praise and
word-of-mouth referrals in financial services marketing. When the level of customer satisfaction
increases, which leads to an increase in loyalty. Although there is a direct relationship between
customer satisfaction and loyalty,
Makanyeza and Chikazhe (2017) study found that service quality, satisfaction, and company
image positively affect loyalty. In addition, this study found that satisfaction and company image
mediates the effect of service quality on loyalty. However, Saleem et al. (2017) found that the
relationship between service quality and repurchase intention was not mediated by image.
Furthermore, Saleem et al. (2017) find that service quality and trust are directly related to
repurchase intentions. In addition, the effect of service quality and trust on loyalty was mediated
by consumer satisfaction (Saleem et al., 2017). Other country-focused studies have explored
such relationships between service quality, corporate image, trust, and loyalty. It is expected that
with increasing competition, the relationship between service quality and loyalty will be
complicated by other variables. Given the evidence from the literature described above, other
variables were examined elsewhere, belief, image, and value into the hypothesis.
This study proposes the following hypothesis to investigate the role of service quality in
increasing consumer loyalty to carved furniture and handicraft products.
H1a. Service quality has a positive effect on corporate image.
H1b. Service quality has a positive effect on value.
H1c. Service quality has a positive effect on trust.
H1d. Service quality has a positive effect on loyalty.

Arsyad et al. (2016) reported that consumer satisfaction affects company image, image affects
trust and trust affects consumer loyalty. Reputation also affects customer switching behavior for
conventional bank customers. In his research, Tu et al. (2012) also suggest that companies must
create a brand image embedded in customer satisfaction and loyalty because it was revealed that
its brand image significantly affects consumer satisfaction and customer loyalty, and consumer

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satisfaction significantly affects consumer loyalty. This study proposes the following hypotheses
to be tested in the model, including

H2a. Company image has a positive effect on trust.

H2b. Company image has a positive effect on satisfaction.
H2c. Corporate image has a positive effect on loyalty.

Adam et al. (2018) observed a positive relationship between service quality, trust, and consumer
loyalty. Hasan et al. (2014) found that perceived value and trust create consumer loyalty,
mediating consumer satisfaction. Leninkumar (2017) also observes the significant impact of trust
on consumer satisfaction and loyalty, with trust playing an intermediary role between satisfaction
and loyalty. Therefore, consumer satisfaction is guaranteed, and willing to re-subscribe and be
more committed to consuming the services offered. So this study proposes the following
hypothesis:

H3a. Trust has a positive effect on satisfaction.

H3b. Trust has a positive effect on loyalty.

Irfan et al. (2016) view value as a consumer's assessment of the strengths and weaknesses of a
service provider and find evidence of a significant impact on customer satisfaction. Consistent
with these findings, Lai et al. (2009) and Sugiati et al. (2013) show that consumer value
significantly affects consumer satisfaction. Rasheed and Abadi (2014) also found that perceived
value had a significant positive effect on consumer loyalty. Similarly, Atulkar and Kesari (2017)
show a significant relationship between the hedonic value of shopping centers and consumer
satisfaction. Based on the above, we propose the following hypotheses to be tested:
H4. Value has a positive effect on satisfaction.
Stan et al. (2013) highlight two types of consumer satisfaction in the literature. Attribute
satisfaction refers to the formation of cognitive and logical satisfaction by consumers and
pleasant satisfaction, which refers to consumers' affection or emotional reaction to the product or
service. Ganiyu (2017) concludes that consumer satisfaction is paramount in building and
increasing consumer loyalty and increasing profitability, but it is not always sufficient in all
cases. In addition, as a core factor that affects consumer loyalty. Some researchers, such as
Fraering and Minor (2013), have reported a negative relationship between consumer satisfaction
and loyalty. Therefore, it is necessary to test the following hypotheses:
H5. Satisfaction has a positive effect on consumer loyalty.
The research model in this study includes six latent variables, each of which is measured by
several items. The items for this construct were adapted from previous literature to increase
content validity (Straub et al., 2004). The items were then rearranged to reflect the retail banking
context and study environment. The questionnaire was first reviewed by experienced
professionals in the industry and senior researchers with expertise in the field. The comments of

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these experts were taken into account in revising the questions to improve understanding. Based
on the research model above, the following research hypotheses can be made:

H1a. Service quality has a positive effect on corporate image.

H1b. Service quality has a positive effect on value.
H1c. Service quality has a positive effect on trust.
H1d. Service quality has a positive effect on loyalty.
H2a. Company image has a positive effect on trust.
H2b. Company image has a positive effect on satisfaction.
H2c. Corporate image has a positive effect on loyalty.
H3a. Trust has a positive effect on satisfaction.
H3b. Trust has a positive effect on loyalty.
H4. Value has a positive effect on satisfaction.
H5. Consumer satisfaction has a positive effect on consumer loyalty.

2. Method
Customer satisfaction is that satisfied customers are more likely to repeat purchases and become
more frequent users of a particular product or service brand than customers with unsatisfactory
experiences (Pleshko and Heiens, 2015). Value is the customer's assessment of the advantages
and disadvantages of the service provider and finds evidence of a significant impact on customer
satisfaction (Irfan et al., 2016). Trust reflects the customer's willingness to be vulnerable to the
service provider or supplier based on positive expectations about the future quality of the product
or service. To be delivered (Schoolman et al. 2007).
Corporate image is the result of customers who bring comparisons between the various attributes
of the company's organization. It helps customers determine which service provider to protect,
given the uncertainty in its credibility (Afsar et al., 2010). Service quality is a driver of customer
satisfaction, creating customer loyalty (Ofori et al., 2018). Customer loyalty is repeated
protection from service providers and recommendations from service providers to other
customers (Lam et al., 2004).
2.1 Identify Subsections
The research was conducted using an online survey which was distributed to the target
respondents. Data screening is carried out to detect respondents who have problems. According
to Hair (2019), detection of respondent data needs to be done to avoid Response Bias, for
example, respondents who fill in the origin or respondents who fill in a specific pattern.
2.2 Participant (Subject) Characteristics
The total data after the screening process were 330 respondents who met the requirements.
2.3 Sampling Procedures
Respondent profile data can be seen in the following table:

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Table 1. Characteristics of Respondents

Description Description Percentage
Gender Male 54.66%
Female 45.34%
Age 17 - 25 73.56%
26 - 35 19.33%
36 - 45 4.67%
45 - 55 2.44%
Level of Education Academy (D3) 4.44%
Doctoral (S3) 0.44%
Postgraduate (S2) 14.00%
Bachelor (S1) 55.33%
Highschool (SMA/SMK? 25.33%
Not Filling 0.44%
Income < Rp.1.000.000 40.67%
> Rp. 10.000.000 24.89%
Rp.1.000.000 - Rp.10.000.000 34.00%
Not Filling 0.44%
Source: Data processed 2021
From the table, it can be seen, based on gender criteria, most of the respondents are male by
54.66%. Based on age criteria, most of the respondents are between 17-25 years old, with a
percentage of 73.56. Based on the criteria for education level, most of the respondents have a
bachelor's degree (S1) with a percentage of 55.33%. Based on income criteria, most of the
respondents have income levels below 1 million, with a percentage of 40.67%.
2.3.1 Sample Size, Power, and Precision
The population is a generalization area consisting of objects or subjects with specific qualities
and characteristics set by the researcher to be studied and then conclude Sugiyono (2017: 136).
According to Sugiyono, the population is a collection of elements or elements in the form of
humans, objects, data, and events within a specific scope and time that concern researchers to
become the research object. The population used in this study are consumers of furniture and
carving handicraft products in the demographic area of Indonesia. Along with the description of
subjects, give the mended size of the sample and number of individuals meant to be in each
condition if different conditions were used—state whether the achieved sample differed in
known ways from the target population. Conclusions and interpretations should not go beyond
what the sample would warrant.
2.3.2 Measures and Covariates
The sample is part of the sum of the characteristics possessed by the population. The sample is
part of the existing population, so sampling must use a particular method based on specific
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characteristics and considerations (Sugiyono, 2017: 137). The sample in this study were
consumers of carved furniture products in Indonesia. In this study, the authors took samples with
the purposive sampling technique. Arikunto (2010) explains that purposive sampling takes
subjects not based on strata, random, or regional but on specific goals. According to Sugiyono
(2016: 85), purposive sampling is based on existing data sources with specific considerations.
Each subject taken from the population is chosen intentionally based on specific goals and
considerations. What the author considers in selecting the sample bought carved furniture
products in the demographic area of Indonesia. The research was conducted using an online
survey which was distributed to the target respondents. At least 17 years old.
The sample size that is feasible in the study is between 30 to 500 samples.
If the sample is divided into categories, then the number of each category minimum of 30
samples. If the research will conduct multivariate analysis, the number of sample members is at
least ten times the number of variables studied. The researcher uses the first point in this study, a
decent sample size between 30 to 500. So that the minimum sample in this study is 30 and a
maximum of 500 samples, primary data will be obtained using a questionnaire by giving
questions to respondents who are distributed using google form. The answers to this
questionnaire will be used as hypothesis testing data. The paradigm used in this quantitative
study uses positivistic research. Sugiyono (2017:10) states that quantitative research methods are
referred to as positivistic methods because they are based on the philosophy of positivism. The
philosophy of positivism is a scientific method that explains concrete/empirical, objective,
measurable, rational, systematic and causal relationships.
Suharsaputra (2014: 50) states that quantitative research is based on the understanding of
positivism empiricism which sees the truth as being in facts that are proven or tested empirically.
Three critical points can be collaborated on this research to get a deeper understanding. First, the
phenomenon or symptom that occurs can be described as a form of curiosity to understand the
condition or event. Second, lies in the use of numeric data or numbers as the primary material for
conducting analysis. Third, the use of statistical tools to assist the implementation of the analysis.
Strict quantitative research procedures are generally used to verify theory through hypothesis
testing determined from the start by referring to a particular theoretical framework
(Suharsaputra, 2012:55). Lies in the use of numeric data or numbers as the primary material for
conducting analysis. Third, the use of statistical tools to assist the implementation of the analysis.
Strict quantitative research procedures are generally used to verify theory through hypothesis
testing, which has been determined from the start by referring to a particular theoretical
framework (Suharsaputra, 2012:55). Lies in the use of numeric data or numbers as the primary
material for conducting analysis. Third, the use of statistical tools to assist the implementation of
the analysis. Strict quantitative research procedures are generally used to verify theory through
hypothesis testing, which has been determined from the start by referring to a particular
theoretical framework (Suharsaputra, 2012:55).
According to Nursiyono (2015:16), the data used in research is secondary data obtained through
other parties (data providers) and collected by researchers. Secondary data is data obtained from
agencies, organizations, or other parties who have previously received the data, which is used for
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data collection interests of institutions, organizations, or individuals who become data

consumers. This study uses a form of quantitative research. This quantitative research
emphasizes using statistical data, images, structures, and controlled experiments (Hamdi and
Bahruddin, 2014). Questionnaires were used as a data collection technique for this research.
Questionnaires have advantages because they contain valuable and efficient information
following research objectives (Abdillah and Jogiyanto, 2015). The questionnaire used in this
study was included in a closed questionnaire. A closed questionnaire means that the researcher
directs the respondent to answer or argue based on the answer choices given by the researcher in
the questionnaire (Abdillah and Jogiyanto, 2015). The closed questionnaire consists of several
statements with a predetermined number of choices. Then respondents were asked to answer by
marking the most suitable option (Suwartono, 2014).
The questionnaire in this study will consist of 2 parts: Part I Contains questions whether the
respondent is a consumer of carved furniture products and the respondent's profile. Part II
Contains questions related to the variables in this study. The questionnaire in this study used the
"Likert Scale" data measurement method, where the scores given for each respondent's answer
were: Strongly Agree, Agree, Neutral, Disagree, Strongly Disagree. In this study, the
questionnaire includes all scale items that measure the seven constructs in the research model. In
addition, several demographic questions such as age, education level, occupation, and income
were entered at the beginning of the questionnaire. A pretest with a small sample of consumers
was used to test the questionnaire, it was content-based, and the format was created for the final
questionnaire.
2.3.3 Research Design
A validity test is used to determine whether or not a questionnaire is valid in obtaining data. A
questionnaire is said to be good if it shows the level of validity. Researchers do not use a manual
system in processing research findings data but use a computerized system for the SMART PLS
program. This study ran a discriminant validity test using the Fornell-Larcker Criteria (Fornell
and Larcker, 1981; Hair et al., 2014). In particular, discriminant validity was established if the
square root of the AVE of each construct was more significant than the highest correlation with
the other constructs. Confirm the discriminant validity of all constructs in the model. As all the
scales used in our study were defined in the literature, scale validity and reliability were assessed
through performing confirmatory factor analysis (CFA) and Cronbach's Alpha. After that,
structural equation modeling (SEM) was used to test the proposed model and hypothesis. These
results showed a satisfactory level of reliability with an alpha coefficient exceeding the cutoff
value of 0.70 (Hair et al., 2014).
The load estimates for each indicator were examined, and the composite reliability (CR) and
mean-variance extracted measure (AVE) were assessed (Fornell and Larcker, 1981). The results
showed that all factor loadings were significant at p < 0.01. All CR and AVE are above the limit
value of 0. 70 and 0.50, respectively (Hair et al., 2014). Data collected from the survey were
analyzed using partial least squares structural equation modeling (PLS-SEM). SEM allows
researchers to examine causal relationships between latent variables in the proposed research
model. There are two approaches to SEM (Hair et al., 2014) covariance-based SEM which

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requires data to show multivariate normality, and a PLS-SEM variance-based approach that does
not require multivariate normality. A preliminary study of the data collected showed that the data
were abnormal, thus confirming the choice for PLS-SEM. Using the two-step approach 6 to
evaluate the structural equation model recommended by Chin (1998), first tested the reliability
and validity of the measurement model and then proceeded to test the significance of the
structural path between latent constructs in the hypothesized model. Smart PLS 3.2 was used to
evaluate the reliability and validity of the measurement model and for testing the structural
model.

2.3.4 Experimental Manipulations or Interventions

The measurement model was evaluated based on the instrument's reliability, convergent validity,
and discriminant validity. Reliability was assessed using Cronbach and composite reliability. For
a construction to be considered reliable, Henseller et al. (2009) recommend that the construct's
Cronbach and composite reliability values be above 0.7. It is evident from the table that all
constructs are reliable because the values for Cronbach and composite reliability are well above
0.7. Convergent validity was also assessed using the mean of extracted variance (AVE). Henseler
et al. (2009) recommend that the measurement model shows sufficient convergent validity, the
AVE for each construct in the model should be above 0.5. Evidence of convergent validity is
presented in the table because the AVE for all constructs is above 0.5.
Discriminant validity, on the other hand, was assessed using the guidelines following the Fornell
Larker criterion, which states that the AVE of each latent construct must be greater than the
highest squared correlation between the other constructs (Fornell and Larcker, 1981); and a load
of each indicator must be greater than all of its cross-loads (Chin, 1998; Gotz et al., 2010;
Henseler et al., 2009). The table shows that all indicators load the highest on their respective
constructs. Again, from the table, it is evident that the square root of the AVE for each construct
is greater than the cross-correlation with the other constructs. Based on the results presented in
the measurement model, we conclude that psychometric properties are suitable for latent
constructs in the model. After verifying the measurement model, we assess the structural model
and determine whether the structural relationships in the tested model are meaningful. The
bootstrap resampling procedure (with 5,000 iterations of sub-samples taken with replacement
from the initial sample) was used to determine the significance of the path coefficients in the
structural model. The explanatory power of the structural model was assessed from its ability to
predict endogenous constructs using the coefficient of determination R2.

3. Results
Measurement Model Evaluation
Data analysis was carried out using PLS-SEM through SMART PLS software Version 3.3.2. The
testing process is carried out in 3 stages: internal consistency reliability, convergent validity, and
discriminant validity. The results of the internal consistency reliability test were carried out using
Cronbach alpha. From the data analysis carried out, the results obtained as shown in the
following table:

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Table 2. Internal Consistency Reliability Test

Variable Cronbach's Alpha Test Result
Corporate Image 0.910 Very Good
Loyalty 0.889 Very Good
Satisfaction 0.805 Very Good
Service Quality 0.863 Very Good
Trust 0.896 Very Good
Value 0.867 Very Good
Source: Data processed 2021

The test results in the table above show a reliability value above 0.7. Hair (2017) states that a
Cronbach alpha score above 0.7 is in an outstanding category. Thus overall, it can be concluded
that all variables pass the internal consistency reliability test.

Structural Model Evaluation

After evaluating the measurement model, the next step is to analyze the structural model to test
the previously proposed hypothesis. This analysis was conducted by testing the direct or indirect
effect between the hypothesized variables. The following are the results of the PLS-SEM
analysis:
Figure 1. Structural Model Testing

Source: SMART PLS Visual Output from data processing

3.1 Recruitment

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Convergent validity testing is done by looking at the value of Indicator Reliability (Outer
Loading) and the value of AVE (Average Variance Extracted). Hair (2017) states that the
standard outer loading value is excellent if a score above 0.7 and the standard AVE value above
0.5 has perfect criteria. The results of convergent validity testing can be seen in the following
table:
Table 3. Convergent Validity Testing
Construct Indikator Factor CR AVE Status
Loading
Corporate Image IMG1 0.85 0.933 0.735 Very Good
IMG2 0.834
IMG3 0.855
IMG4 0.884
IMG5 0.864
Loyalty LYT1 0.846 0.923 0.750 Very Good
LYT2 0.881
LYT3 0.89
LYT4 0.847
Satisfaction SAT1 0.846 0.885 0.719 Very Good
SAT2 0.873
SAT3 0.824
Service Quality SQL1 0.699 0.895 0.551 Good
SQL2 0.645
SQL3 0.682
SQL4 0.786
SQL5 0.784
SQL6 0.788
SQL7 0.797
Trust TST1 0.880 0.928 0.763 Very Good
TST2 0.889
TST3 0.876
TST4 0.847
Value CVP1 0.821 0.910 0.716 Very Good
CVP2 0.840
CVP3 0.877
CVP4 0.845
Source: Data processed 2021

The results of the convergent validity test in the table above show that the outer loading value is
above 0.7, and the AVE value is above 0.5. So it can be concluded that each variable and its
indicators have excellent convergent validity. Provide dates defining the periods of recruitment
and follow-up and the primary sources of the potential subjects, where appropriate. If these dates
differ by group, provide the values for each group.

3.2 Statistics and Data Analysis

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The discriminant validity test was carried out using the Fornell-Larcker criteria (Hair 2017). The
value of cross-loading is expected to have the highest value for that variable. The results of
discriminant validity testing can be seen in the following table:

Table 4. Discriminant Validity Testing

Variabel (1) (2) (3) (4) (5) (6) Status

Corporate Image 0.857 Fulfilled
Loyalty 0.819 0.866 Fulfilled
Satisfaction 0.819 0.822 0.848 Fulfilled
Service Quality 0.836 0.778 0.851 0.743 Fulfilled
Trust 0.868 0.833 0.834 0.812 0.873 Fulfilled
Value 0.471 0.476 0.522 0.729 0.499 0.846 Fulfilled
Source: Data processed 2021
The results of the discriminant validity test show that each variable meets the Fornell-Larcker
criteria because it has the highest correlation score compared to other correlations.
3.3 Ancillary Analyses
The result of testing the complete hypothesis can be seen in the following table:
Table 5. Hypothesis Test
Hipothesis Standard T Test P Values Description
Deviation
Corporate Image → Loyalty 0.069 3.761 0.000 Significant
Corporate Image → Satisfaction 0.078 4.712 0.000 Significant
Corporate Image → Trust 0.059 10.652 0.000 Significant
Satisfaction → Loyalty 0.061 5.554 0.000 Significant
Service Quality → Corporate Image 0.018 46.158 0.000 Significant
Service Quality → Trust 0.062 4.615 0.000 Significant
Service Quality → Value 0.070 13.54 0.000 Significant
Trust → Loyalty 0.064 5.066 0.000 Significant
Trust → Satisfaction 0.082 5.546 0.000 Significant
Trust → Value 0.086 3.175 0.002 Significant
Value → Satisfaction 0.033 3.662 0.000 Significant
Source: Data processed 2021

By using a 95% confidence level, the standard used for the t value is 1.96. Because the t-test
value is more significant than 1.96 and the p-value is below 0.05, it can be concluded that the
hypothesis is accepted. Corporate Image positive effect on loyalty. Corporate image on
satisfaction 4.481 with a p-value of 0.000. By using a 95% confidence level, the standard used
for the t value is 1.96. Because the t-test value is more significant than 1.96 and the p-value is
below 0.05, it can be concluded that the hypothesis is accepted. Corporate image positive effect

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on satisfaction. Satisfaction to loyalty 5.190 with a p-value of 0.000. By using a 95% confidence
level, the standard used for the t value is 1.96. Because the t-test value is more significant than
1.96 and the p-value is below 0.05, it can be concluded that the hypothesis is accepted.
Satisfaction positive effect on Loyalty.

The results of testing the hypothesis that examine the effect of Service Quality on Corporate
Image the value of the t-test test was obtained by 46.66with a p-value of 0.000. By using a 95%
confidence level, the standard used for the t value is 1.96. Because the t-test value is more
significant than 1.96 and the p-value is below 0.05, it can be concluded that the hypothesis is
accepted. Service Quality positive effect on Corporate Image. The results of testing the
hypothesis that examine the effect of service quality to trust image the value of the t-test test was
obtained by 38,124with a p-value of 0.000. By using a 95% confidence level, the standard used
for the t value is 1.96. Because the t-test value is more significant than 1.96 and the p-value is
below 0.05, it can be concluded that the hypothesis is accepted—service quality positive effect
on trust.
The results of testing the hypothesis that examines the effect of Service Quality to Value the
value of the t-test test was obtained by 14,070 with-value of 0.000. By using a 95% confidence
level, the standard used for the t value is 1.96. Because the t-test value is more significant than
1.96 and the p-value is below 0.05, it can be concluded that the hypothesis is accepted. Service
Quality positive effect on values. The results of testing the hypothesis that examines the effect of
Service Quality to Value the value of the t-test test was obtained by 4,764 with-value of 0.000.
By using a 95% confidence level, the standard used for the t value is 1.96. Because the t-test
value is more significant than 1.96 and the p-value is below 0.05, it can be concluded that the
hypothesis is accepted. Trust positive effect on loyalty.
The results of testing the hypothesis that examines the effect of Service Quality to Value the
value of the t-test test was obtained by 5,401 with-value of 0.000. By using a 95% confidence
level, the standard used for the t value is 1.96. Because the t-test value is more significant than
1.96 and the p-value is below 0.05, it can be concluded that the hypothesis is accepted. Trust
positive effect on satisfaction. Testing result hypothesis that examines the effect of service
quality to value of the t-test test were obtained by 3354 with a p-value of 0.001. By using a 95%
confidence level, the standard used for the t value is 1.96. Because the t-test value is more
significant than 1.96 and the p-value is below 0.05, it can be concluded that the hypothesis is
accepted. Trust positive effect on Values. Testing result hypothesis that examines the effect of
Value to Satisfaction the value of the t-test test was obtained by 3,531withp-value of 0.000. By
using a 95% confidence level, the standard used for the t value is 1.96. Because the t-test value is
more significant than 1.96 and the p-value is below 0.05, it can be concluded that the hypothesis
is accepted. Value positive effect on satisfaction.

4. Discussion
Furthermore, the study provides empirical literature on customer loyalty. PLS-SEM estimates
are based on 11 relationships, of which ten are supported. The analysis results show that there is
a strong positive significant effect of service quality on corporate image. The perception of the

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quality of services provided influences the company's image. The results are in harmony with
Ofori et al. (2018), the perception of customer service quality shows the influence on customer
perceived value of service quality is revealed to have a strong positive effect on customer-placed
values. Trust in the services provided is also influenced by service quality because service
quality significantly affects trust. Above all, service quality is revealed to have a significant
favorable influence on customer loyalty. The results reveal that service quality is an essential
driver of customer loyalty. In line with the study of Tweneboah-Koduah and Farley (2015),
which suggests that service quality is embedded in responsiveness, good work knowledge,
courtesy, and the ability to inspire trust, confidence, empathy, assurance, and tangibles in service
delivery is a significant driver of loyalty.

As revealed in the results of our analysis, there is a significant positive effect of company image
on trust. This conclusion is supported by Ofori et al. (2018), which implies that the perception of
a company's image developed by customers affects trust in its ability to provide good service.
Also, the findings of the corporate image are in line with existing literature such as Stan et al.
(2013) revealed that the company's image has a positive and significant effect on customer
satisfaction. The company's image affects customer satisfaction. This study also shows that
corporate image affects customer trust and satisfaction. The results regarding the effect of
corporate image on loyalty are in line with other studies in the literature, such as Ofori et al.
(2018) and Nesset et al. (2011), who found that corporate image affects loyalty. Even in cases
where the relationship is significant. As established in the literature, trust has been found to have
a positive and significant relationship with customer satisfaction (Ofori et al., 2018). Trust can
influence customer satisfaction from service. Trust is also revealed to have a significant positive
relationship with customer loyalty. Customer satisfaction plays an intermediary role.
In the same spirit, customer value is stated to have a positive and significant relationship with
customer satisfaction. Hapsari et al. (2017) suggest a positive and significant relationship
between customer value and satisfaction. It has been empirically proven that customer
satisfaction leads to loyalty. The implication is that when customers perceive that their
satisfaction from the consumption of services provided is maximal, they will tend to be loyal.
That is, when satisfaction is guaranteed, loyalty is guaranteed. Lee and Kim (2018), Ofori et al.
(2018) stated that customer satisfaction is the most critical factor determining customer loyalty.
When customer satisfaction increases, there is an increase in the relationship, then loyalty
increases. However, when compared to e-commerce-based sales. Butt and Aftab (2013) found
that the relationship between these factors in this study mainly persisted with online e-quality
being positively related to e-satisfaction.
Furthermore, perceived online service quality increases e-satisfaction and e-loyalty. Similarly, e-
trust mediates the relationship between e-satisfaction and e-loyalty. The implication is that most
of the positive relationship between service quality, corporate image, trust, customer satisfaction,
and loyalty.
This study closes the theoretical gap between the relationship of the tested variables to broaden
the scope and complexity of research, particularly in emerging industries, to broaden our
understanding and respond to emerging business problems. The study results provide important
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implications for managers. As determined by this research model, all interesting variables have a
significant and significant direct relationship to customer loyalty except for company image,
which is not significant. Stores expand and have developed products and services to gain and
maintain market share by ensuring customer loyalty. Thus, it will be able to embed in a
marketing strategy package that will increase customer loyalty. It further provides an empirical
explanation of how customer loyalty is developed.

This research has managerial implications for increasing profitability by attracting customer
loyalty. Studies reveal that service quality is paramount in ensuring loyalty because it directly
and indirectly through interaction with trust and values to create customer satisfaction. Service
quality is essential to maintain the company's image with customers, trust, and perceived values.
Therefore, the best possible service builds the image, trust and value of the company. Very
important for customer satisfaction, and increased satisfaction, hence increased loyalty.
Customers are satisfied when they have a positive impression and trust. Value-based service
delivery provides quality service, good working knowledge of products and services while
serving customers. To support Hypothesis 1a–1d, service quality was found to affect an image,
value, trust, and loyalty significantly. Image, in turn, was also found to be predictive of
significant trust and satisfaction. The relationship between image and loyalty, however, was
found to be insignificant. Trust was found to affect satisfaction and loyalty significantly, thus
supporting Hypotheses 3a and 3b, respectively.
Responsive, courteous, and confident in showing a high sense of ethical values in the process of
serving customers. This study also found that although company image affects satisfaction, it
does not guarantee loyalty. A good corporate image must first ensure satisfaction before it can
attract customer loyalty. Loyalty cannot be guaranteed if the satisfaction of the service is not
guaranteed. The results reveal that corporate image affects trust, thereby affecting satisfaction
and loyalty. The results show that the company's image can encourage trust and increase
satisfaction and loyalty with a strong service quality base. So the seller should be known to
provide good service so that the customer can trust him. Studies also show that perceived value
provides satisfaction and leads to loyalty. That is, service delivery creates customer satisfaction
and loyalty. Crucial element to drive profitability.
Customer perceived value was found to have the most significant effect on satisfaction.
Satisfaction, in turn, was found to be the most significant predictor of loyalty. It was found that
overall, the proposed model explains the dominant percentage of variance in loyalty. Finally,
assess the model fit in PLS using the standard root mean square residual (SRMR). For a good fit
model, Hu and Bentler (1999) suggest that the SRMR value should be below 0.08. The SRMR
value of the composite model for the structural model is well below the 0.08 threshold
recommended by Hu and Bentler (1999). The indication that the proposed model presents a good
fit model. Satisfaction affects most significantly. Company image is also surprising with the
results of significant influence on satisfaction, trust, and loyalty. Research
limitations/implications The current study takes a sample of customers only from certain big
cities in Indonesia. The use of cross-sectional data makes it impossible to study how customers

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perceive change over time. However, the results of this study can help product sales managers
design strategies to increase customer loyalty to consolidate market share.

Acknowledgments
I want to express the deepest gratitude to Savior and miraculous God, ALLAH Subhanawataala,
for his unique ways in guiding me to complete this research and for His continual love, guidance,
and blessing. My sincere gratitude goes to my husband and parents for their love, efforts,
prayers, support, and supervisors for their invaluable guidance, inspiration, patience, and
encouragement. I am also grateful to my brothers and sisters for their love, prayers, and support.
Last but not least, I thank my best friends from the Departement Master of Management,
Universitas Ahmad Dahlan, Yogyakarta, Indonesia, for the meaningful years of togetherness.

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