International Journal of Advanced Engineering Research

and Science (IJAERS)

Peer-Reviewed Journal
ISSN: 2349-6495(P) | 2456-1908(O)
Vol-10, Issue-1; Jan, 2023
Journal Home Page Available: https://ijaers.com/
Article DOI: https://dx.doi.org/10.22161/ijaers.101.15

Determinants of Customer Satisfaction and Customer

Loyalty (Case Study of Café Grind & Pull Makassar)
Miah Said1,*, Piter Tiong2
1
Makassar Bosowa University, South Sulawesi, Indonesia
2AMKOP Makassar College of Economics, South Sulawesi, Indonesia
*Correspondence Author

Received: 10 Dec 2022, Abstract— The lifestyle of drinking coffee is currently becoming a trend
Receive in revised form: 01 Jan 2023, among people in the millennial era. This is the reason for the growth of
the domestic coffee shop industry.The purpose of this study was to
Accepted: 07 Jan 2023,
determine the effect of service quality, price on customer satisfaction and
Available online: 29 Jan 2023 customer loyalty. In addition to testing the effect of customer satisfaction
©2023 The Author(s). Published by AI on customer loyalty and testing the role of customer satisfaction in
Publication. This is an open access article under mediating the effect of service quality, price (price) on customer loyalty.
the CC BY license This study uses a quantitative approach with an explanatory method,
(https://creativecommons.org/licenses/by/4.0/). namely in the research being conducted is to explain the symptoms that
arise in a research subject. The data analysis technique of this study used
Keywords— quality, price, customer
Amos' SEM, where the findings of this study were that service quality and
satisfaction, customer loyalty.
price had a positive and significant effect on customer satisfaction and
customer loyalty at Grind & Pull, Makassar.

I. PRELIMINARY Indonesia from year to year has increased in the last 4 years
Cafes or coffee shops are one of the places that have (2015-2018). So it will show the growth of coffee
mushroomed in Indonesia in recent years. Factors in the consumption in Indonesia (Figure 1)
development of lifestyle and necessities of life are balanced
with creativity and innovation for cafe business
owners(Priawan, 2016). The prospect of coffee shops is
currently very bright, where every year coffee shops are
mushrooming and increasing by 10-15 percent. It can be
seen that the number of coffee shops in Indonesia in the last
three years has tripled, from 1,083 outlets in 2016 to 3,000
outlets in 2019. Fig.1: Consumption Growth
The problem with the development of coffee shops
cannot be separated from how easy it is for the community
The growth of coffee consumption in the last 4 years
to open this business, where previously opening a coffee
has increased from year to year, an increase in people who
shop required a large investment and is now accessible to
consume coffee in Indonesia has caused the café business to
the community.(Prasetyo, 2020). Until 2019 the
experience very rapid development. This is marked by the
development of coffee shops is expected to increase by 15%
proliferation of business people involved in the café
- 20% compared to 2018. Meanwhile, the contribution of
business, causing the level of competition in the café
cafe shops to breakfast coffee has increased by 25% to
business to become increasingly stringent. Efforts made by
30%.(Pradika, 2019).The growth of coffee consumption in
café business people are preparing coffee quality with

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Said and Tiong International Journal of Advanced Engineering Research and Science, 10(1)-2023

different tastes and preparing all café facilities so that they customer loyalty
can compete with other cafés. Then another factor in order
to maintain the sustainability of the café business is paying
II. RESEARCH METHODS
attention to customer loyalty, which is a manifestation and
continuation of consumer satisfaction through the use of This research is a quantitative research, which
facilities and services provided by the business according to Arikunto (2017: 10) is defined as an approach
owner.(Lusiah, 2018) that requires a lot of numbers, starting from data collection,
interpretation of the data, as well as the appearance and
Customer loyalty is very important in maintaining
results. The type of research using the explanatory method
business continuity, because loyal consumers are consumers
is research conducted by explaining the symptoms that arise
who are satisfied with the service they get from business
from the subject of this study. Judging from the objective, it
owners. Loyalty is a customer's deep commitment to
is a causal study that explains the causal relationship
resubscribe or repurchase selected products/services
regarding the effect of service quality and price on customer
consistently in the future, even though situational influences
loyalty with customer satisfaction as an intervening
and marketing efforts have the potential to cause behavior
variable. This research was conducted at grind & pull cafes
changes (Hurriyati, 2019: 129). The opinion expressed by
in Makassar City. The reason for choosing Café in this study
Hasan (2014: 120) that customer loyalty is the key to
is that it is often visited by young and old people.
success, not only in the long term but also sustainable
This study used 187 samples, where the sampling
competitive advantage. One way that is done by business
technique used was a purposive sampling technique, which
owners to increase loyalty is customer satisfaction
according to Sugiyono (2019: 138) namely determining the
(Customer Satisfaction).
sample based on certain criteria or considerations, namely
According to Wijaya (2018: 153), customer customers who have members and have visited the café
satisfaction is the level of one's feelings after comparing the more than 2 times. Ferdinand (2014: 109) stated that the
performance (results) that he feels compared to his sample size that must be met in Amos' SEM modeling is a
expectations. Satisfied customers will increase customer minimum of 100 and uses a comparison of 5-10
loyalty in making repeat purchases. Findings made by observations for each estimated parameter. In this study
previous researchers found differences or inconsistent. So using 14 indicators, so the ideal sample size is 140 samples
that there is a research gap found. Then in increasing (10 observations x14). However, to obtain a representative
customer satisfaction and customer loyalty, there are a sample, researchers determined 187 samples to be used as
number of determining factors, namely service quality and respondents.
price. Service quality according to Tjiptono and Chandra To find out the relationship between service quality
(2017:59) is the quality of service. Service quality is the and price on customer loyalty through customer satisfaction
expected level of excellence and control over that level of can be visualized in the form of Figure 2 below:
excellence to meet consumer desires.
Then price or price according to Sudaryono (2016:
216) is an exchange rate that can be equated with money or
other goods for the benefits obtained from an item or service
for a person or group at a certain time and a certain place.
Affordable prices provide satisfaction for customers so that
it has an impact on customer loyalty for the services offered.
Based on the theory, the results of previous research
and gap research, research questions will be presented,
namely:
a) Does service quality affect customer satisfaction
b) Does price affect customer satisfaction Fig.2. Framework of Mind
c) Does service quality affect customer loyalty
d) Does the price affect customer loyalty Then the indicators of each latent variable in this
e) Can customer satisfaction mediate the effect of service study are according to Tjiptono (2017: 159) service quality
quality on customer loyalty is measured by 5 indicators namely reliability,
responsiveness, assurance, empathy, tangibles. ). Kotler &
f) Can customer satisfaction mediate the effect of price on Lane (2009:83) explains that there are 3 indicators in

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Said and Tiong International Journal of Advanced Engineering Research and Science, 10(1)-2023

measuring price (price), namely price affordability, price whose role is to confirm whether the measurement model
compatibility with benefits, price according to ability or built is in accordance with the hypothesis. Before
price competitiveness. Then the endogenous variable in this conducting a confirmatory test (CFA) on latent variables, a
study is customer satisfaction as measured by 3 research model feasibility test will be presented first which aims to
indicators namely price suitability, intention to return, find out whether the confirmatory model to be used can be
willingness to recommend (Tjiptono, 2017: 101). While said to have a fit model or not (Table 2).
Kotler & Lane (2009:101) explains that there are 3 Table 2: Confirmatory model feasibility in Amos's SEM
indicators in measuring customer loyalty, namely Repeat
Purchase, Retention, Referral. Information cut off Model Test Results Conclusion

Value Beginning
After repair
III. ANALYSIS AND DISCUSSION
2 88.25 102.60 84,220 Fit Models
Statistical analysis explains the description or
CMIN/DF ≤ 2.0 1.445 1,239 Fit Models
description of research variables which may include service
quality, price, customer satisfaction, customer loyalty.  0.05 0.008 0.089 Fit Models
(Table 1) GFI ≤ 0.90 0.927 0.940 Fit Models
Table 1. Descriptive Statistics of Research Variables AGFI ≤ 0.90 0.893 0.907 Fit Models
IFI ≥ 0.95 0.983 0.991 Fit Models
Standard range range
Latent variable Means CFI ≥ 0.95 0.978 0.988 Fit Models
Deviation actual theoretical
Source: Data processed, 2022
Service quality 16,87 4,18 10-24 5-25
Price 10.01 2,41 6-14 3-15
Customer The results of the feasibility of the confirmatory model
Satisfaction 10,19 2.64 6-15 3-15 in Amos' SEM analysis, that the confirmatory model has a
Customer goodness fit of index is in accordance with the requirements
Loyalty 11.08 2.35 7-15 3-15 in Amos's SEM analysis. For more details, the value of
Source: Data processed, 2022 loading factor (λ) and construct reliability, average variance
extracted (AVE) will be presented (Table 3).
Table 3 : Analysis of loading factor values, Construct
Descriptive statistics on each latent variable, namely
reliability and average variance extracted
service quality, has a score of respondents' answers with an
actual range of 10-24 while a theoretical range of 5-25. This Latent loading construct
Indicator AVE
shows that the respondents' answers related to the actual variable factor(λ) reliability
range are higher when compared to the theoretical range. Service X1.1 0.904
This indicates that the service quality at Grind & Pull in
Quality X1.2 0.742
Makassar can already be categorized as good. The same
X1.3 0.862 0.911 0.672
goes for prices with an actual range of 6-14 and a theoretical
range of 3-15 which indicates that the price set by Grind & X1.4 0.720
Pull Café is competitive, when compared to other cafes. X1.5 0.856
Then descriptive statistics namely customer Price X2.1 0.666
satisfaction with respondents' answers having an actual X2.2 0.885 0.781 0.548
range of 6-15 and a theoretical range of 3-15, so that it can X2.3 0.647
be said that customer satisfaction on grind & pull is already
customers Z. 1 0.853
high. Respondents' answer scores on customer loyalty with
an actual range of 7-15 and a theoretical range of 3-15, this Satisfaction Z. 2 0.837 0.864 0.680
indicates that customer loyalty is already high, which means Z. 3 0.782
that the application of service quality and price has customers Y. 1 0.878
increased customer satisfaction. In the analysis of
Loyalty Y.2 0.885 0.906 0.763
descriptive statistics, before analyzing the research data
Y.3 0.878
using the Amos SEM method, a confirmatory test will be
carried out first Source: Data processed, 2022
Confirmatory factor analysis is a multivariate analysis

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Said and Tiong International Journal of Advanced Engineering Research and Science, 10(1)-2023

The results of the convergent validity test on After the Amos SEM test, the research hypothesis will
indicators on latent variables, namely for service quality be tested, but previously the feasibility test of the model will
have a value of the loading factor range of 0.742-0.904 be presented in testing the hypothesis based on the value of
which is greater than 0.50, so that it can be said that the five the goodness of fit index (Table 5), namely:
indicators of service quality already have good convergent Table 5: The results of testing the feasibility of the testing
validity. Then the price variable with 3 indicators, which has model research hypothesis
a loading factor value of 0.647-0.837 which is greater than
0.50 so that it can be said that the three indicators already Cut of Value Test results
Information Conclusion
have good convergent validity. In addition, the customer Model
satisfaction variable has 3 indicators with a loading factor 2 88.25 0.089 Fit Models
value of 0.782-0.853, as well with customer loyalty there
are 3 indicators with a loading range of 0.878-0.885 which CMIN/DF ≤ 2.0 1,239 Fit Models
is greater than 0. Then seen from the results of the construct  0.05 0.089 Fit Models
reliability test, where all construct reliability, namely GFI ≤ 0.90 0.940 Fit Models
service quality, price, customer satisfaction and customer
loyalty, is greater than 0.70, besides that the AVE value is AGFI ≤ 0.90 0.907 Fit Models
already greater than 0.50. So that it can be said that all the IFI ≥ 0.95 0.991 Fit Models
indicators used in testing the research hypothesis are CFI ≥ 0.95 0.991 Fit Models
reliable. Before testing the hypothesis in this study, a
Source: Data processed, 2022
normality test will be carried out in Amos' SEM first, where
the results of the normality test show that multivariate
normality has a critical ratio (CR) of 0.018 which is smaller The results of the model feasibility test in testing the
than 2.58. This shows that the data in the SEM analysis research hypothesis show that all goodness of fit index
Amos is normally distributed. Then the results of the outlier values are in accordance with the requirements in Amos'
test from SEM Amos (Table 4) are as follows: SEM. This indicates that the model used in testing the
Table 4: Outlier Test Results in Amos' SEM research hypothesis already has a fit model, so that the
regression weight will be presented in Amos's SEM for
Observations Mahalanobis
p1 p2 testing the research hypothesis, namely:
number d squared
a) The effect of service quality on customer satisfaction,
35 34,245 ,002 ,299 with a standardized regression weights coefficient of
50 30,288 ,007 ,374 0.374 and a pvalue = 0.005 <0.05. This shows that
service quality has a positive and significant impact on
48 26,657 ,021 ,763
customer satisfaction. This indicates that providing
174 25,375 .031 ,835 good service to café customers will make customers
55 25.104 .034 ,755 feel satisfied, so as to increase customer interest in
170 24,925 .035 ,650 visiting the Grind & Pull Makassar café again.
b) The effect of price on customer satisfaction shows that
26 24,303 .042 ,676 with a standardized regression weight coefficient value
1 24,006 .046 ,626 of 0.359 with a valuevalueof 0.001 < 0.05, indicating
169 23,684 .050 ,594 that the price (price) can have a positive and significant
influence on café customer satisfaction (customer
63 23,605 .051 ,487
satisfaction)
158 23,216 ,057 ,498 c) The influence of service quality on customer loyalty,
173 22,376 ,071 ,686 which obtained a standardized regression weight value
Source: Data processed, 2022 of 0.428 with a value ofvalue= 0.000 <0.05, this
shows that service quality has a positive and significant
influence on customer loyalty. This indicates that
The highest d-squared mahalanobis value is at service quality has a real influence in increasing
observation number 34 with a d-squared mahalanobis value customer loyalty.
of 34,295 which is smaller than the chisquare table d) The effect of price on customer loyalty, with a
(p=0.001; df 14) of 36,125 which means that the data in standardized regression weight value of 0.310, and
Amos' SEM did not find any outlier data. besides that a pvalue = 0.002 <0.05, this shows that

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Said and Tiong International Journal of Advanced Engineering Research and Science, 10(1)-2023

price has a positive and significant influence on future.

customer loyalty. These findings indicate that price can Limitations in the study, where the researcher only
significantly increase customer loyalty. chose one café and did not examine other cafes as a
e) The effect of customer satisfaction on customer loyalty comparison. This is due to limited time and costs of
obtained by a standardized regression weight value of researchers. Apart from that, another limitation is that the
0.262 besides that with a pvalue = 0.000 <0.05, it can researcher only distributed questionnaires to customers who
be said that customer satisfaction has a significant have members and besides that, choosing customers to be
influence on customer loyalty. These findings may respondents were customers who visited the Grind & Pull
indicate that customer satisfaction can significantly café 2 times. So it is necessary for future research to make
increase customer loyalty. observations of more than 1 café and increase the number
Then seen from the indirect effect of service quality of research samples, in order to provide representative
and price on customer loyalty mediated by customer information.
satisfaction and customer loyalty which shows that the
magnitude of the indirect effect of service quality on
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