the effect of brand image and service quality on …
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THE EFFECT OF BRAND IMAGE AND SERVICE QUALITY ON CUSTOMER
LOYALTY THROUGH CUSTOMER SATISFACTION AS INTERVENING
VARIABLE IN PANDANARAN UNIVERSITY, SEMARANG
Dukut Martinus Prabantara
Program Studi Magister Manajemen, Universitas 17 Agustus 1945 Semarang
Email: [email protected]
Abstract
This research was conducted for the magnitude of the influence between brand image and
service quality on customer loyalty with customer satisfaction as a mediating variable. The
research method used is quantitative research. Primary data used are data from questionnaires
that are measured using a Likert scale. The population in this study were students at
Pandanaran University Semarang. Determination of the sample is done using the Slovin’s
formula, so that a sample of 87 respondents is obtained. The data were collected using a
questionnaire which was then tested for validity and reliability. This study uses path analysis
to examine the role of mediation on direct and indirect effects. The results stated that brand
image has a positive and significant effect on customer satisfaction, service quality has a
positive and significant effect on customer satisfaction, brand image has no significant effect
on customer loyalty, service quality has an effect positive and significant impact on customer
loyalty, and customer satisfaction has a positive and significant effect on customer loyalty.
Keyword: brand image, service quality, customer satisfaction, customer loyalty.
INTRODUCTION
Today, people have more hope to be able to continue and complete their education up
to the highest level, namely the University. The decision of prospective students to continue
their studies at the desired place of study is a decision where students make considerations
that are tailored to the circumstances or conditions that exist.
University is currently seen as a potential new business world. Even now the image of
a university becomes very important and becomes the main capital for business developers in
the field of education. A good image reflects the quality of the university. Such intense
competition makes universities realize the need to fully exploit their assets to maximize
performance and develop competitive advantage. One way for consumers to determine the
University of their choice is to consider the brand image of a university that can increase
customer loyalty.
Brand image, is defined as an impression in consumer thinking about brand
personality that is usually developed through advertising with a consistent and confirmed
theme directly by the personal experience of consumers (Semuel and Wibisono, 2018). A
good brand image at a university will get a positive value to the consumers and can also
provide an overview of the quality of the tertiary institution.
In addition, one factor that affects customer loyalty is service quality. Service quality
is the fulfilment of customer needs and desires as well as the accuracy of delivery to balance
customer expectations and has two main factors that affect the quality of services, namely
expected service (perceived service) and perceived service (Susanto, 2017). Research by
Amanah (2011) found that there was a significant effect of brand image and customer loyalty
60 International Conference on Business, Economics and Governance (ICBEG)
on Ades mineral water consumers. Likewise, a study by Pramudyo (2012) found that there
was a significant influence on brand image variables on consumer loyalty in private university
students in Yogyakarta.
Research by Aryamti (2019) found that service quality has a significant influence on
customer loyalty in beauty clinic customers. Likewise, research by Yulianto et al. (2017)
found that service quality has a positive effect on customer loyalty in Shiba Communication
counter mobile consumers. This study was also based on a research gap by (Susanto, 2017)
who found that the service quality had no significant effect on customer loyalty in Manulife
Indonesia Life Insurance, Surabaya.
The gap phenomenon in this study is the number of new student admissions at
Pandanaran University which has decreased from 2015 to 2018 in the Table 1. This is because
to the intense competition between Private Universities in Semarang and also the lack of
promotion and branding that are carried out.
Table 1. Admission of New Students Pandanaran University
Year Number of New Students
2014 792
2015 399
2016 292
2017 288
2018 273
From the overall explanation above, this study was conducted to examine the factors
that influence customer loyalty in student at Pandanaran University in Semarang, which
consists of brand image, service quality and customer satisfaction. Based on the above
phenomenon, research will be conducted on the factors that influence customer loyalty at
Pandanaran University Semarang students, so that the following problem formulations can be
arranged: 1. Does brand image have a significant effect on customer satisfaction? 2. Does
service quality have a significant effect on customer satisfaction? 3. Does brand image have a
significant effect on customer loyalty? 4. Does service quality have a significant effect on
customer loyalty? 5. Does customer satisfaction have a significant effect on customer loyalty?
LITERATUR REVIEW
Brand Image
Brand image is a collection of impressions that are in the minds of consumers about a
brand that is composed of consumers' memories of the brand (Rizan, Saidani, & Sari, 2012).
Brand image can be classified: functional benefits, has an intrinsic relationship with the
product / service and also has correspondence with product attributes; symbolic benefit,
relating to emphasizing social needs or individual expressions and basically relating to
nonproduction related attributes; and experiential benefits, discuss what the customer feels
after using the product / service and corresponds to the product's attributes (Salim &
Dharmayanti, 2014). Brand image to choose a university can also be done by considering
several indicators related to ease of access, a large and safe parking space, and a supportive
environment (Hariyani & Sartana, 2015).
The Effect of Brand Image and Service Quality on Customer Loyalty Through Customer Satisfaction as Intervening Variable … 61
Service Quality
For universities that are service providers, quality of service is an issue that must be
really considered because from this dimension it will be a differentiator from other types of
service companies. Service is any action or performance offered by one party to another party
that is in principle intangible and causes any transfer of interests (Sugianto and Sugiharto,
2013).
Service quality is summarized into five dominant factors or better known as
SERVQUAL, namely reliability, responsiveness, assurance, empathy, and tangible ((Sugiyarti
& Mardiyono, 2018; Susanto, 2017). Reliability is the ability to provide the promised service
reliably and accurately. In a broad sense, reliability means that the company delivers its
promises regarding supply, problem solving and price. Responsiveness is willingness to help
customers and provide services quickly. This dimension emphasizes attention and accuracy
when dealing with customer requests, questions and complaints. Assurance is knowledge,
manners, and the ability of employees to generate confidence and trust. This dimension might
be very important in services that require a fairly high level of trust. Empathy is personal care
and attention given to customers. The essence of the empathy dimension is to show customers
through the services provided that customers are special, and their needs can be understood
and fulfilled. Tangible is in the form of physical facilities, equipment, staff, and building
appearance. This dimension describes the physical form and the services that will be received
by consumers.
On the university service quality has indicators including 1) tangible (direct evidence)
including physical facilities, infrastructure, employees; 2) reliability, namely the ability to
provide services quickly and satisfactorily; 3) responsiveness (responsiveness), namely
providing services to students with responsiveness; 4) assurance includes the knowledge,
competence, courtesy and trustworthiness of staff; 5) empathy (empathy), namely ease in
establishing good relations and communication with students (Susanto, 2017).
Customer Satisfaction
Customer satisfaction is defined as a function of how well the expectations of product
buyers with the performance that buyers think of the product (Pramudita and Japarianto,
2013). There are three main attributes to measure customer satisfaction are: consumer
satisfaction with attributes related to products (attributes related to product), among others:
value price relationship, product quality, product benefit, product features, product design,
product reliability and consistency and range of product or service; satisfaction with attributes
related to services (attributes related to service), including: guarantee or warranty, delivery,
complaint handling, resolution of problem; and satisfaction with attributes related to
purchases (attributes related to purchase), including: communication, courtesy, ease of
convenience acquisition, company reputation, and company competence (Senjaya, Semuel
and Dharmayanti, 2013).
Customer Loyalty
Consumer loyalty is one source to build competitive advantage for service companies,
where customer satisfaction will be able to establish a harmonious relationship between
producers and consumers. Creating a good basis for repurchase and creating customer loyalty
and forming word of mouth recommendations that will benefit a company (Irfal and
Mulyanto, 2016).
62 International Conference on Business, Economics and Governance (ICBEG)
Grace et al. (2007) defines customer satisfaction as a result of customer evaluations of
what they expect to buy and consume a product. This expectation is then compared to his
perception of the performance he receives by consuming the product. If the expectations are
lower than the product performance, he will feel unsatisfied. Conversely, if the expectations
are equal to or higher than the product performance, he will feel satisfied. The dimensions of
strong loyalty are: say positive things about a company, is saying positive things about goods
or services that have been consumed to others; recommending the company to someone who
seeks advice, is recommending goods or services that have been consumed to friends or other
parties and even encourage friends to consume the goods or services; continue purchasing
(doing more business with the company), is to re-buy products and services that have been
consumed before.
Irawan and Japarianto (2013) divide customer loyalty into indicators of going back to
visiting, recommending and inviting others. Consumer loyalty according to Mulyadi and
Haryono (2018) also has an indicator that is not easily influenced to move, not only buying
one product, comfort has been formed during consumer services, want to reuse, want to
recommend.
Based on the literature review, empirical models can be made as shown in Figure 1.
Figure 1. Research Model
The Relationship between Brand Image and Customer Satisfaction
Semuel and Wibisono (2018) in his research found that brand Image has a positive and
significant effect on customer satisfaction. So that hypothesis can be proposed:
H1: Brand image has a positive and significant effect on customer satisfaction.
The Relationship between Service Quality and Customer Satisfaction
Research by Mulyadi and Haryono (2018) found that service quality has a positive
effect on customer satisfaction. So that hypothesis can be proposed:
H2: Service quality has a positive and significant effect on customer satisfaction.
The relationship between Brand Image and Customer Loyalty
Research by Pramudyo (2012) found that brand image had a positive and significant
effect on student satisfaction. So that hypothesis can be proposed:
H3: Brand image has a positive and significant effect on customer loyalty.
Brand
Image
Service
Quality
Customer
Satisfaction Customer
Loyalty
H1
H2
H3
H4
H5
The Effect of Brand Image and Service Quality on Customer Loyalty Through Customer Satisfaction as Intervening Variable … 63
The relationship between Service Quality and Customer Loyalty
Julius and Jatmika (2019) in their research found that there was a positive and
significant effect between service quality on customer loyalty. So that hypothesis can be
proposed:
H4: Service quality has a positive and significant effect on customer loyalty.
Relationship between Customer Satisfaction and Customer Loyalty
Aryamti (2019) in her research found that customer satisfaction provides a positive
and significant influence on customer loyalty to beauty clinic customers. So that hypothesis
can be proposed:
H5: Customer satisfaction has a positive and significant effect on customer loyalty.
METHODS
Types of research
This research is a quantitative study, which is a process of finding knowledge that uses
data in the form of numbers as a means of analysing information about what you want to
know (Hidayat, 2012).
Population and Sample
Population is a generalization area that consists of objects or subjects that have certain
quantities and characteristics determined by researchers to be studied and then drawn
conclusions (Sora, 2015). The sample is a portion of the number and characteristics possessed
by the population (Sugiyono, 2016). The study population consisted of all Pandanaran
University students who had paid SPP until August 2019 totalling 691. While the sample in
this study were male and female consumers who were students of Pandanaran University.
Sampling technique
Sampling in this study uses the Slovin’s formula, which is a formula or formula to
calculate the minimum number of samples if the behavior of a population is known with
certainty (Hidayat, 2017). Then Slovin’s formula was found that the samples to be used were
rounded up to 90 people. Samples was taken using purposive sampling, that it is a non-
random sampling technique where the researcher determines the sampling by determining
specific characteristics that fit the research objectives so that it is expected to answer the
research problem (Hidayat, 2017). Specific characteristics determined in this study are
students of Pandanaran University at least semester 4 and have paid SPP.
Variable Measurements
Brand image is an important aspect in a brand, an image, it can be based on reality or
fiction depending on how consumers perceive and measure brand image can be related to the
dimensions of service quality. Indicators of brand image are: the ease of name is recognized
by consumers, the name is well known in the community, and good reputation in the
community.
Service quality is actioner deeds which can be offered by one party to another party,
which at basically intangible (intangible physical) and does not produce anything while the
production of services can be related to physical products or not. Indicators of service quality
are: a pleasant atmosphere, availability of a large and safe parking space, and the quality of
teaching staff.
64 International Conference on Business, Economics and Governance (ICBEG)
Customer satisfaction is a feeling of pleasure or disappointment someone who comes
from the comparison of his impression of the performance or results of a product and its
expectations. If performance is below expectations, customers are dissatisfied and can have a
negative impact on the company that can reduce the number of customers and cause
customers to be no longer interested in using company services so that it will reduce company
profits. Indicators of customer satisfaction in this study are: satisfied with the course given,
satisfied with service, ease of obtaining employment after graduation, and satisfied with the
facilities and infrastructure.
Loyalty is the behavior after making an interest in repurchasing a product determined
by feeling satisfied. This is being positive, seen by the loyalty of a customer to a product and
recommending it to others. Indicators of customer loyalty are: repurchase at a future, will not
move to another place, comfort while consuming services, and say something positive.
Data collection with Likert scale, respondents were asked to complete a questionnaire
that required them to indicate their level of agreement with a series of questions that were
stated with answers of strongly agree, agree, neutral, disagree and strongly disagree and
measured with values starting at 5, 4, 3, 2, 1.
RESULT
Validity and Reliability Test
Validity test is a test used to show the extent to which the measuring instrument used
in measuring what is measured. Validity test is used to measure the validity or validity of a
questionnaire. A questionnaire is said to be valid if the questions on the questionnaire are able
to reveal something that will be measured by the questionnaire (Ghozali, 2016). In
determining the feasibility of an item to be used, a significance coefficient correlation test is
usually performed at the 0.05 significance level, meaning that an item is considered valid if it
has a significant correlation to the total score.
In research that uses quantitative methods, the quality of data collection is largely
determined by the research indicators used. A study is said to be of good quality and can be
accounted for if its validity and reliability have been proven. Testing the validity and
reliability of an indicator, of course, must be adjusted to the form of the instrument that will
be used in research. This test is done by comparing the Cronbach's alpha numbers with the
minimum Cronbach’s alpha value of 0.6. This means that if the Cronbach's alpha value
obtained from the calculation results of this study is greater than 0.6, then it can be concluded
that the indicators in this study are reliable, and vice versa.
From the questionnaire data of respondents that have been collected and tested for
validity and reliability, the results are in the Table 2. In this study, validity test is in Table 2
provides information about the number of samples analyzed as many as 25 people and the
valid number is 100%. Table 1 also shows the number of questions is 16 items with
Cronbach's Alpha value above 0.60, it can be concluded that all question items used in this
study are reliable or consistent.
The Effect of Brand Image and Service Quality on Customer Loyalty Through Customer Satisfaction as Intervening Variable … 65
Table 2. Validity and Reliability Test
Indicators Coefficient
Correlation
Cronbach’s Alpha
if Item Deleted
The ease of name is recognized by consumers (X1.1) 0,781 0,976
The name is well known in the community (X1.2) 0,982 0,972
Good reputation in the community (X1.3) 0,808 0,975
Reliability (X2.1) 0,939 0,973
Responsiveness (X2.2) 0,828 0,975
Assurance (X2.3) 0,859 0,974
Empathy (X2.4) 0,831 0,975
Tangible (X2.5) 0,811 0,975
Satisfied with the course given (Z1.1) 0,794 0,975
Satisfied with service (Z1.2) 0,982 0,972
Ease of obtaining employment after graduation (Z1.3) 0,846 0,974
Satisfied with the facilities and infrastructure (Z1.4) 0,982 0,972
Repurchase at a future (Y1.1) 0,841 0,975
Will not move to another place (Y1.2) 0,755 0,976
Comfort while consuming services (Y1.3) 0,849 0,974
Say something positive (Y1.4) 0,875 0,974
Path Analysis
Path analysis is used to test whether there is a direct influence given by the
independent variables, namely Brand Image (X1) and Service Quality (X2) on the dependent
variable, Customer Loyalty (Y) and also explains about the presence or absence of indirect
influence given by the independent variable through the intervening variable is Customer
Satisfaction (Z). To test the hypothesis in this study two regression models will be performed.
Table 3. Model Regression Result
Independent Variables Dependent Variables t-value Sig. value Decision
Brand Image Customer Satisfaction 0,256 2,762 0,007 Accepted
Service Quality Customer Satisfaction 0,595 6,434 0,000 Accepted
R Square = 0,638; Adjusted R Square = 0,630
Brand Image Customer Loyalty 0,154 1,956 0,054 Rejected
Service Quality Customer Loyalty 0,525 2,939 0,004 Accepted
Customer Satisfaction Customer Loyalty 0,270 6,003 0,000 Accepted
R Square = 0,762; Adjusted R Square = 0,754
In the Table 3 it is known that the significant value of brand image is 0.007 <0.05 and
service quality is 0.000 <0.05 which means that the brand image and service quality have
positive and significant effect on customer satisfaction. The magnitude of R square is 0.638
indicating the contribution of the effects of brand image and service quality to customer
satisfaction amounted to 63.8% while the remaining 36.2% was contributed by other variables
not included in this study. The value of e1 is (1-0,638) = 0.601664.
In Table 2 it is known that the significant value of brand image is 0.054> 0.05 which
means that the brand image is positive and not significant to the variable customer loyalty.
The significant value of service loyalty is 0.004 <0.05 which means that the service quality is
66 International Conference on Business, Economics and Governance (ICBEG)
positive and significant towards the customer loyalty. The significant value of customer
satisfaction is 0,000 <0.05 which means that the customer satisfaction is positive and
significant towards customer loyalty. The magnitude of R square is 0.762 indicating the
contribution of the effects of X1 and X2 to Y amounted to 76.2% while the remaining 23.8%
is the contribution of other variables not included in this study. The value of e2 is (1-0,762)
= 0.487852.
Figure 2. Structure Model Path Diagram
Effect of Brand Image on Customer Loyalty through Customer Satisfaction
It is known that the direct effect given X1 on Y is 0.154. While the indirect effect of
X1 on Y through Z is 0.256 x 0.525 = 0.1344. The total effect of X1 on Y is the direct effect
plus the indirect effect of 0.154 + 0.1344 = 0.2884. So that 0.154> 0.134, the direct effect
(Brand Image on Customer Loyalty) is greater than the indirect effect (Brand Image on
Customer Loyalty through Customer Satisfaction). Then the variable Z (Customer
Satisfaction) partially influences the dependent variable, namely Customer Loyalty (Y).
Effect of Brand Image on Customer Loyalty through Customer Satisfaction
It is known that the direct effect of X2 on Y is 0.525. While the indirect effect of X2
on Y through Z is 0.595 x 0.525 = 0.312. The total effect of X2 on Y is the direct effect plus
the indirect effect of 0.525 + 0.312 = 0.837. So that 0.525> 0.312, the direct effect (Service
Quality on Customer Loyalty) is greater than the indirect effect (Service Quality on Customer
Loyalty through Customer Satisfaction). Then the variable Z (Customer Satisfaction) partially
influences the dependent variable, namely Customer Loyalty (Y).
Discussion
Brand Image (X1) to Customer Satisfaction (Z).
In the results of this study note that the brand image of Pandanaran University has a
significant influence on customer satisfaction where the significant value of the variable X1
(Brand Image) to Z (Customer Satisfaction) is 0.007 smaller than 0.05. So that hypothesis 1,
namely Brand Image, has a positive and significant effect on customer satisfaction at
Pandanaran University Semarang students. This is consistent with the opinion expressed by
Harianto and Subagio (2013) which states that Brand Image has a significant effect on
customer satisfaction at Kedai Deja-vu Surabaya. This shows that the better the Brand Image
built by the Pandanaran University, the higher the Customer Satisfaction or customer
satisfaction in this case is students. Improving brand image can be done by increasing
X1
X2
Z Y
0,154 e1=0,601664
0,256
0,270
e2=0,487852
0,595
0,525
The Effect of Brand Image and Service Quality on Customer Loyalty Through Customer Satisfaction as Intervening Variable … 67
promotion so that the name of Pandanaran University is more widely known in the
community so that it has a good reputation.
Service Quality (X2) on Customer Satisfaction (Z).
From the regression results above it is known that the Service Quality variable has a
significant effect on Customer Satisfaction where the significant value of the variable X2
(Service Quality) on Z (Customer Satisfaction) is 0,000 less than 0.05. So hypothesis 2, that
is, Service Quality has a positive and significant effect on Customer Satisfaction at
Pandanaran University Semarang students. This is in accordance with the results of research
from Jimanto et al. (2014) namely service quality has a positive effect on customer
satisfaction in The Premiere Surabaya cinema consumers. This shows that the services
provided by Pandanaran University to their students are already good, so that the services
received by these students form satisfaction with Pandanaran University. Quality of service
can be interpreted as how students get service in terms of guidance and counselling for
students conducted through guardianship activities, thesis guidance, extracurricular activities,
entrepreneurship, and careers.
Brand Image (X1) on Customer Loyalty (Y)
From the results of this study note that the brand image variable has no significant
effect on customer loyalty variables, where the significance value of X1 (Brand Image) to Z
(Customer Satisfaction) is 0.054 greater than 0.05. So hypothesis 3, namely Brand Image, has
a positive and significant effect on Customer Loyalty of Pandanaran University students. In
other words, Brand Image has no direct and significant effect on Customer Loyalty. The
above findings reject the theory put forward by Aryamti1(2019) finding that service quality
significantly influences customer loyalty to beauty clinic customers. This means that if the
brand image of Pandanaran University increases or decreases there is no direct effect on
student loyalty.
Service Quality (X2) to Customer Loyalty (Y)
The regression results above show that the Service Quality variable has no significant
effect on Customer Loyalty where the significant value of the X2 variable (Service Quality)
on Y (Customer Loyalty) is 0.004 smaller than 0.05. So hypothesis 4, that is, Service Quality
has a positive and significant effect on Customer Loyalty in Semarang Pandanaran University
students. This finding is also in accordance with the theory put forward by Eckhard et al.
(2016) who found that Service quality has a significant effect on Customer Loyalty for
Garuda Indonesia Airline Airlines Service Users in the City of Surakarta and DIY. This
means that the quality of service (service quality) Pandanaran University received by students
directly affects student loyalty to the University of Pandanaran.
Customer Satisfaction (Z) against Customer Loyalty (Y)
In the results of this study note that customer satisfaction has a significant effect on
customer loyalty where the significant value of the variable Z (customer satisfaction) on Y
(customer loyalty) is 0,000 less than 0.05. So that the hypothesis 5 is that Customer
Satisfaction has a positive and significant effect on Customer Loyalty from Semarang
Pandanaran University students. This is consistent with the opinion Irfal and Mulyanto (2016)
in his research effect of service quality on customer satisfaction and customer loyalty which
states that customer satisfaction influences positive towards customer loyalty for students who
use banking technology in Jakarta. Student satisfaction is an important factor that influences
student loyalty at Pandanaran University. Loyalty can be interpreted as the intention not to
68 International Conference on Business, Economics and Governance (ICBEG)
move until graduating college, the willingness to give positive word of mouth and recommend
to friends and family to study at Pandanaran University
CONCLUSION AND RECOMMENDATION
Conclusion
Based on the research results, it can be concluded: 1. Brand image has a positive and
significant effect on Customer Satisfaction of Pandanaran University Semarang students,
evidenced by the probability value in the hypothesis test of 0.007 <0.05. This means that the
value of a product will determine good quality and make customers satisfied; 2. Service
Quality has a positive and significant effect on the Customer Satisfaction of Pandanaran
University Semarang students, evidenced by the probability value on the hypothesis test of
0,000 <0.05. This means that the good services provided by Pandanaran University to
customers in this case are students will make students satisfied; 3. Brand Image does not
significantly influence the Customer Loyalty of Semarang Pandanaran University students, as
evidenced by the probability value in the hypothesis test of 0.054> 0.05. This means that the
brand image of Pandanaran University does not make students loyal to Pandanaran
University; 4. Service Quality has a positive and significant effect on Customer Loyalty of
Pandanaran University Semarang students, as evidenced by the probability value on the
hypothesis test of 0.004 <0.05. This means that the quality of services provided by
Pandanaran University makes students loyal to Pandanaran University; 5. Customer
Satisfaction has a positive and significant effect on Customer Loyalty of Pandanaran
University students, as evidenced by the probability value in the hypothesis test of 0,000
<0.05. This means that consumer satisfaction in this case is a student of Pandanaran
University will make it more loyal to Pandanaran University. When universities provide
services that exceed student expectations, students will feel satisfied and will have a positive
influence on customer loyalty.
Recommendation
From the results of the study, there are several suggestions given, namely: to improve
the brand image, Pandanaran University can improve quality with good relationships with
students so as to create a good impression in the minds of students and create loyalty to
students. Brand image awareness can be increased through attractive promotions and good
marketing strategies, given the large number of competitors in the same market. This is an
important thing that must be considered, so that it is better going forward. For further
researchers are expected to develop this research by adding variables to determine the
contribution of these variables to customer loyalty
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