the influence of marketing mix toward customer
TRANSCRIPT
THE INFLUENCE OF MARKETING MIX TOWARD
CUSTOMER SATISFACTION AND
ITS IMPLICATION ON CUSTOMER LOYALTY (A CASE OF PULLMAN JAKARTA CENTRAL PARK HOTEL CUSTOMER
IN JAKARTA 2014)
By
Windy Chintya Wesanta
ID 014201100121
A Skripsi presented to the Faculty of Business President University
in partial fulfillment of the requirements for Bachelor Degree in Economics Major in Management
January 2015
i
PANEL OF EXAMINERS
APPROVAL SHEET
The Panel of Examiners declare that the Skripsi entitled “The
Influence of Marketing Mix Toward Customer Satisfaction and
its Implication on Customer Loyalty (A Case of Pullman Jakarta
Central Park Hotel Customer in Jakarta 2014)” that was submitted
by Windy Chintya Wesanta majoring in Hotel and Tourism
Management from the Faculty of Business was assessed and approved
to have passed the Oral Examinations on March 5, 2015.
Ir. Farida Komalasari, M.Si. Chair – Panel Examiners
A.B.M. Witono, M.S.B.A. , Ph.D. Examiner I
Suresh Kumar, S.T., M.Si Examiner II
ii
DECLARATION OF
ORIGINALITY
I declare that this Skripsi, entitled “The Influence of Marketing Mix
Toward Customer Satisfaction and its Implication on Customer
Loyalty (A Case of Pullman Jakarta Central Park Hotel
Customer in Jakarta 2014)” is, to the best of my knowledge and
belief, an original piece of work that has not been submitted, either in
whole or in part, to another university to obtain a degree.
Cikarang, Indonesia, January 26th 2015
Windy Chintya Wesanta
iii
ABSTRACT
Pullman Jakarta Central Park is the first and the newest five star international hotel in West Jakarta with distinctively designed with an industrial raw concept. The number of occupancy in Pullman Jakarta Central Park is increasing by the time, but the researcher found out that from the survey of Medallia, there are many complaints. The purpose of this research is to analyze the influence of marketing mix (Product, Price, People, Physical Evidence, and Process) toward customer satisfaction and it’s implication on customer loyalty. This research used secondary data which gathered from Medallia customers’ survey and limited to the Pullman Jakarta Central Park guests who have stayed in Pullman Jakarta Central Park for at least one night and have filled and sent back the Medallia survey during the period of August until October 2014. There were 385 questionnaires were usable and analyzed through Structural Equation Modeling (SEM). The research concludes that product and people have significant influence on customer satisfaction, and customer satisfaction has significant influence on customer loyalty and recommends further study to increase the number of sample and add more marketing mix variables.
Keywords: Pullman Jakarta Central Park Hotel, Marketing Mix, Customer
Satisfaction, Customer Loyalty, Structural Equation Modeling (SEM).
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ACKNOWLEDGMENT
First of all, I would like to praise Jesus Christ for His blessings and for His
presence in all that I do. Thank You God for Your continuous love and guidance
in my life. I have been waiting for so long for this moment when I can proudly finish
my undergraduate research in order to achieve Bachelor Degree of Business. It’s
been a wonderful experience to study in three and half years at President
University. All struggles through-out my study are finally paid off. This is just
another new beginning, new life to be written and new dreams to be realized.
In this opportunity, I would like to thank people who have made my life become
more colorful and meaningful:
My family, my dearest parents, my caring sister, and my lovely little brother
who always carrying me with so much love. They always support, guide, and
motivate me. I am so blessed and lucky to have this family. I Love them so
much.
Mr. Suresh Kumar, S.T., M.Si as my research advisor. Thank you for being
such a great advisor to me. I am grateful to have had the opportunity to be
guided by you. Thank you so much for your patience, guidance, help, advice,
and support. You have been very kind, helpful, supportive, and motivate me
to finish my research. I could not have asked for a better advisor. I am
thankful more than I can say.
All lecturers who have ever taught me, especially Ms. Ma. Carmel Umbao,
MBA, our Hotel and Tourism lecturer. Thank you very much for the
knowledge and guidance.
My Closest Person, Kessa. Thank you very much for your endless
encouragement and love. I really appreciate everything that you have done for
me. May success and happiness always be with you.
v
My dearest dormmates, Nadya Michaela, Pricilla Di Chiara, Selvia Belly,
Ardelia, Fransisca Olivia. Thank you very much for showing me how
friendship and support goes a long way in facing our challenges in life. I Love
you girls.
My Best friends, Wu Fan Fan. We come from different country, but that is the
beauty of our friendship. Thank you for being my coop. I am going to miss
you. My university life did not complete without you.
My Classmates Hotel and Tourism Management batch 2011. Such an amazing
class with awesome people! Now we will continue our life to the next level.
Special thanks to Christine Febrianita and Silvia. Both of you have been very
kind, supportive, and helpful. Thank you very much for the hospitality, the
comfort, stories, kindness, and endless laughter that you gave so I could
finished my research.
Last but not least, I would like to say thank you for every single person that I
cannot mention one by one. Thank you for the support and help in writing this
research. May God always be with you.
Cikarang, Indonesia, January 26th2015
Windy Chintya Wesanta
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TABLE OF CONTENTS
PANEL OF EXAMINERSAPPROVAL SHEET ............................................... i
DECLARATION OF ORIGINALITY ............................................................... ii
ABSTRACT .......................................................................................................... iii
ACKNOWLEDGMENT ..................................................................................... iii
TABLE OF CONTENTS .................................................................................... vi
LIST OF TABLES ............................................................................................... ix
LIST OF FIGURES .............................................................................................. x
LIST OF APPENDICES ..................................................................................... xi
CHAPTER I -‐INTRODUCTION ......................................................................... 1
1.1 Research Background ............................................................................... 1
1.2 Problem Identification .............................................................................. 9
1.3 Problem Statement ................................................................................. 10
1.4 Research Objectives ............................................................................... 10
1.5 Definition of Term .................................................................................. 11
1.6 Scope and Limitations ............................................................................ 12
1.7 Research Benefit ..................................................................................... 12
1.7.1 The Researcher ........................................................................... 12
1.7.2 President University ................................................................... 12
1.7.3 Pullman Jakarta Central Park Hotel ........................................... 13
1.7.4 The Future Researcher ............................................................... 13
CHAPTER II -‐LITERATUREREVIEW .......................................................... 14
2.1 Theoretical Review ................................................................................. 14
2.1.1 Hotel Industry ............................................................................ 14
2.1.2 Customer Perception .................................................................. 17
2.1.3 Marketing Mix (7P’s) ................................................................. 17
2.1.4 Customer Satisfaction ................................................................ 24
2.1.5 Customer Loyalty ....................................................................... 26
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2.1.6 Relationship Between Marketing Mix ...........................................
and Customer Satisfaction ......................................................... 29
2.1.7 Relationship Between Customer Satisfaction ................................
and Customer loyalty ................................................................. 29
2.2 Previous Researches ............................................................................... 30
2.3 Theoretical Framework .......................................................................... 36
2.4 Hypothesis .............................................................................................. 37
CHAPTER III -‐ RESEARCHMETHOD .......................................................... 38
3.1 Research Design ..................................................................................... 38
3.2 Sampling Design .................................................................................... 39
3.2.1 Population .................................................................................. 39
3.2.2 Sample Size ................................................................................ 39
3.2.3 Sampling Technique .................................................................. 40
3.3 Research Instrument ............................................................................... 40
3.3.1 Data Source ................................................................................ 40
3.3.2 Data Collection Tools ................................................................ 41
3.3.3 Operationalization of Variables ................................................. 43
3.4 Validity and Reliability .......................................................................... 44
3.5 Data Collection Procedure ...................................................................... 44
3.6 Hypothesis Testing: Structural Equation Modeling (SEM) Analysis .... 45
CHAPTER IV - ANALYSIS AND INTERPRETATION ............................... 50
4.1 Company Profile ..................................................................................... 50
4.2 Data Analysis ......................................................................................... 52
4.2.1 Respondent Profile ..................................................................... 52
4.2.2 Structural Equation Modeling (SEM) Analysis ......................... 54
4.3 Interpretation Result ............................................................................... 61
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CHAPTER V -‐ CONCLUSION AND RECOMMENDATION ...................... 63
5.1 Conclusion ............................................................................................. 63
5.2 Recommendation .................................................................................... 64
5.2.1 The Researcher ........................................................................... 64
5.2.2 President University ................................................................... 64
5.2.3 Pullman Jakarta Central Park Hotel ........................................... 64
5.2.4 The Future Researcher ............................................................... 65
REFERENCES .................................................................................................... 66
APPENDICES ..................................................................................................... 74
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LIST OF TABLES
Table 2. 1 Previous Researches ............................................................................. 30
Table 3. 1 Questions Constructed in Research ..................................................... 43
Table 3. 2 Summary of Goodness of Fit Index (GFI) ........................................... 49
Table 4. 1 Summary of Good Fit Criteria ............................................................. 55
Table 4. 2 Regression Weight ............................................................................... 57
Table 4. 3 Standardized Regression Weight ......................................................... 58
Table 4. 4 Square Multiple Correlations (R2) ....................................................... 59
Table 4. 5 Standardized Total Effect .................................................................... 60
Table 4. 6 Summary of Result Examination of Structural Model and Fit ............ 61
x
LIST OF FIGURES
Figure 1. 1 Indonesia’s Tourist Arrivals 2011 - 2014 ............................................. 2
Figure 2. 1 The Seven P’s of the Marketing Mix .................................................. 19
Figure 2. 2 Theoretical Framework ....................................................................... 36
Figure 4. 1 Pullman Logo ..................................................................................... 50
Figure 4. 2 Gender ................................................................................................ 52
Figure 4. 3 Nationality .......................................................................................... 53
Figure 4. 4 Purpose of Trip ................................................................................... 53
Figure 4. 5 Standardized Estimates Calculation ................................................... 54
xi
LIST OF APPENDICES
Appendix 1 – Printed Out Questionnaire ....................................................... 74
Appendix 2 – Printed Out Raw Data ............................................................. 78
Appendix 3 – SEM Analysis .......................................................................... 85
Appendix 4 – Classical Assumption Test ...................................................... 88
1
CHAPTER I
INTRODUCTION
1.1 Research Background In the era of globalization, Economic developments around the world are
growing rapidly, especially in service industries; one of the rapidly
growing in service industries currently is in the field of tourism.
Scheyvens and Momsen (2008) believe that tourism is the world’s largest
industry. Tourism is one of the major activities for people in social and
economic aspects. In development process, tourism is one of fundamental
pillars for developing countries, because tourism becomes one of the
sources of foreign exchange earnings, income, and employment
(Benavides, 2001). This is the reason why tourism is become one of major
aspect in expanding the economic opportunity (Ashley, 2007).
Tourism industry helps the country for being not dependent in agriculture
and manufacture industry, because the country able to earn foreign
exchange and income from it. Tourism destinations are developing day by
day as a means of attracting and enhancing visitor experience (Esu and
Arrey, 2009). Therefore, many countries, including Indonesia, rely on
tourism as a promising source of Gross Domestic Product.
As the one of developing country, Indonesia can be considered as a rich
country because it has many of natural resources with enormous number
of breathtaking views and human resources which makes Indonesia the
fourth largest country on earth (behind just China, India, and the United
States). Indonesia has a high population density which is consist of
252,812,245 people living in it with various numbers of ethnics and
cultures (World Population Review of Indonesia, 2014). Indonesia is in
2
fact a vast archipelago that comprises over 17,000 Islands, which go to
form a land mass equating to 1,919,440 square kilometers (735,355 square
miles). This means that Indonesia is the 19th largest country in terms of
land mass and it has a high population (World Population Review of
Indonesia, 2014).
The number of foreign tourist who comes to Indonesia is increasing every
year. Statistics Indonesia (SI) noted that the cumulative (January-October)
of 2014, the number of foreign tourists visits reached 7.76 million visits,
up 8.71 percent compared to foreign tourists visits at the same period in
previous year, which amounted to 7.13 million visits. Here is the chart
showing the growth of foreign tourists who came to Indonesia start from
year 2011 – 2014, Based on Statistics Indonesia (SI)).
Figure 1.1 Indonesia’s Tourist Arrivals 2011 - 2014
Source: Statistics Indonesia (SI), 2014.
According to the data that were released by the Statistics Indonesia (SI),
the number of international tourists visiting Indonesia was cumulatively
increasing. The statistic number shown that, the tourism industry in
Indonesia is incredibly promising because of its significant growth from
3
year to year and Government also paying more attention to the tourism
destination by develops the infrastructures and makes regulations to
protect the natural resources within surrounded destination. Amongst
numerous potential areas of tourism in Indonesia, its capital city Jakarta
has a lot to offer.
As the capital city, Jakarta has an abundance of exquisite tourism
infrastructures and entertainment centers with international-class
hospitality amenities (DivisiHumasUniversitasParamadina, 2011). Jakarta
is also granted with vigorous historical places and cultural heritages. In
terms of tourism development, Jakarta has acquired a special attention.
The government’s policy towards travelling and tourism has continuously
altered for Jakarta economics upgrades gradually.
Numerous business opportunities have opened up, one of the businesses
that are closely related to the current tourism is hotel. Hotel became
supporting facilities for tourism activities, where the hotel provides
accommodation for travelers with professional management conducted
and supported by the workers who have good skills in the field of
hospitality. Not only as a means of accommodation, but the hotel also
provides other facilities, such as food and beverage, relaxation,
entertainment, and other guest services.
Based on Sheela (2007), the author of the book “Economics of Hotel
Management”, hotel is the place where the tourist stops being the traveler
and become a guest. Hotels generally offer a full range of
accommodations and services, which may includes suites, public dinning,
banquet facilities, lounges and entertainment facilities. It is considered as
an industry whose core objective is also to make profits for the hoteliers,
although this may change at times. A hotel is a temporary or permanent
home where food and beverages, cleaning services and a whole range of
other services are normally provided (Open University Malaysia, 2009).
4
The history of hotels is intimately connected to that of civilizations. Or
rather, it is a part of that history. Facilities offering guests hospitality have
been in evidence since early biblical times. The Greeks developed thermal
baths in villages designed for rest and recuperation. Later, the Romans
built mansions to provide accommodation for travelers on government
business. The Romans were the first to develop thermal baths in England,
Switzerland and the Middle East (Bonvin, 2003).
Caravanserais appeared, providing a resting place for caravans along
Middle Eastern routes. In the Middle Ages, monasteries and abbeys were
the first establishments to offer refuge to travelers on a regular basis.
Religious orders built inns, hospices and hospitals to cater for those on the
move.Inns multiplied, but they did not yet offer meals. Staging posts were
established for governmental transports and as rest stops. They provided
shelter and allowed horses to be changed more easily. Numerous refuges
then sprang up for pilgrims and crusaders on their way to the Holy
LandTravelling then became progressively more hazardous. At the same
time, inns gradually appeared in most of Europe.Around 1200, staging
posts for travellers and stations for couriers were set up in China and
Mongolia. (Bonvin, 2003).
According to Bonvin (2003), the beginning of hotel industry took place in
Europe. The first time in fifteenth century, in France, there was a law
required that hotels must register. During this period, the first guidebooks
for travelers were also published. English rules for inns also introduced at
that time. At the same time, around 1500 thermal spas were developed in
Carlsbad and Marienbad.During this epoch, more than 600 inns were
registered in England. Their architecture often consisted of a paved
interior court with access through an arched porch. The bedrooms were
situated on the two sides of the Courtyard, the kitchen and the public
5
rooms at the front, and the stables and storehouses at the back. The first
guide books for travelers were published in France during this period.
An embryonic hotel industry began to develop in Europe. Distinctive
signs were hung outside establishments renowned for their refined cuisine.
At the end of the 1600s, the first stage coaches following a regular
timetable started operating in England. Half a century later, clubs similar
to English gentlemen's clubs and Masonic lodges began to appear in
America. In Paris in the time of Louis XIV, the Place Vendôme offered
the first example of a multiple-use architectural complex, where the
classical façades accommodated boutiques, offices, apartments and also
hotels (Bonvin, 2003).
Bonvin (2003) stated in the nineteenth century, hotels take over the town.
The industrial revolution, which started in the 1760s, facilitated the
construction of hotels everywhere, in mainland Europe, in England and in
America. In New York first of all, and then in Copenhagen, hotels were
established in city centers. At the beginning of the 1800s, the Royal Hotel
was built in London. Holiday resorts began to flourish along the French
and Italian rivieras.In Japan, Ryokan guest houses sprang up. In India, the
government run Dak bungalows provided reliable accommodation for
travelers. The Tremont House in Boston was the first deluxe hotel in a city
centre. It offered inside toilets, locks on the doors and an "à la carte"
menu.
The Holt Hotel in New York City was the first to provide its guests with a
lift for their luggage. In 1822, in Venice, a certain Giuseppe Dal Niel
transformed an old palace into a hotel and gave it his name, "Le Danieli".
As trains began to replace horse-drawn transport, highway inns for stage
coaches started to decline. The prosperous nineteen-twenties saw a
veritable boom in the hotel industry. Numerous hotels were established in
this decade (Bonvin, 2003).
6
Nowadays, people in industries have generally understood the term of
loyalty. Loyal customer is one who makes regular purchases, purchases
across product and service lines, refers others, and demonstrates immunity
to the pull of the competition (Griffin, 2002). In hotel business
environment, understanding guests’ expectations, demands, and essentials
along with the elevated level of service that the hotel delivers can give a
significant impact on the sustained success of the hotel.
All of the hotels around Indonesia try to compete each other to offer the
best service and facilities that they had in order to attract guest and
achieve guest loyalty. Therefore, hotels must be concerned about
everything that can affect the guest’s satisfaction. Customer satisfaction is
one of the most important aspects that must be considered by every
service industry, because it is a key factor in information of customer’s
desires for future purchase (Mosahab, 2010).
The competition between each hotel in Jakarta is now getting tight.
Pullman Hotel Jakarta Central Park is one of the upscale hotels located in
Podomoro City Super Block in the capital city of Indonesia. This hotel is
one of the hotels belongs to Accor Group. Accor is the European Leader
and one of the world’s largest groups in travel, tourism and corporate
services, with two major international activities. Accor businesses in
hospitality are prepaid services and hotels. Accor’s brand offer hotel stays
tailored to the specific needs of each business and leisure customer
(Pullman, 2014).
Headquartered in Paris, France, the group owns, operates and franchises
3,600 hotels on 5 continents representing several diverse brands, from
budget and economy lodgings to luxurious accommodations in exotic
locales, present in 92 countries with more than 3,600 hotels and 470,000
rooms. With more than 170,000 employees in Accor brand hotels
7
worldwide, the Group offers to its clients and partners nearly 45 years of
know-how and expertise (Pullman, 2014).
Pullman Hotel Jakarta Central Park recently honored with award in the
category of the Best Business Hotel in Indonesia by Hospitality
Investment World 2013, Best New Hotel Construction and Design for
Indonesia at the Asia-Pacific International Hotel Awards 2012-2013, and
the Platinum Winner of the prestigious A ‘Design Award in the
Hospitality, Recreation, Travel and Tourism Design Category in 2012-
2013 period (Pullman, 2014).
Pullman Hotel Jakarta Central Park offers a distinctive design with an
Industrial Raw concept, a cross between a modern museum and a designer
signature hotel with strategic location for both business and leisure
travelers with only a short distance from and to Jakarta International
Airport, Soekarno – Hatta. While its convenience for businesspersons is
unrivaled, Pullman Jakarta Central Park hotel is also adjacent to the
international award winning Central Park Mall, the extraordinary
shopping icon in Asia that won several prestigious international
achievements over the years (Pullman, 2014).
The Pullman room signatures are starting from high floors, so that each
room has a view of the best in each side. Featuring a contemporary design,
a combination 12 of grey tones and rich woods, our 317 rooms are
including 195 Deluxe room, 67 Executive Deluxe rooms, 54 Executive
Suites and 1 spacious Central Park Suite with unrivaled city skyline
views. Rooms are dashingly appointed with sleek and stylish furniture
with the latest high-tech amenities plus high-speed Internet Access/Wi-Fi.
All of these are enhanced by floor-to-ceiling window through which
spectacular city views add to a wondrous experience in Jakarta. The hotel
is ideal for business and leisure travelers who look for an exceptional
experience stay in Jakarta(Pullman, 2014).
8
Apart from leisure, Pullman Jakarta Central Park is providing a fresh
approach to the planning of meetings, conventions, seminars and incentive
events. The hotel‘s capacity over 5000 sqm of meeting and function
spaces include a spectacular Grand Ballroom, 6 meeting rooms, and a pre-
function area, where flexible configurations can be provided for events
requirement. Extensive line up of dining and entertainment facilities are
available including, Collage all day dining for a trendy atmosphere with
live cooking shows, Bunk Lobby Lounge, an interactive and cozy space to
chill-out. While the Fit and Spa offers full range facilities to relax after
that tiring business day(Pullman, 2014).
In order to identify if their guests felt satisfied or not with their service,
Pullman Jakarta Central Park uses some measurement tools. One of their
measurement tools is called Medallia. Medallia is an online survey
company that processes the feedback from the guests and the result will be
sent to Pullman Jakarta Central Park every month. The result will show
the guest satisfaction score. The guest satisfaction score gather from the
guest experienced during their stay in hotel. The surveys include the guest
satisfaction level that they get from the very first time which is checked in
experience until the guest checked out and walked out from the
hotel(Pullman, 2014).
Besides that, there also another source, this called online guest comment.
This online guest comment is provide by many online travel websites,
such as Trip advisor, Agoda.com, and another online websites that provide
column for guest to give their comment about the hotel they have been
stayed. The Quality and Attitude Manager is the one who take care about
the guest online survey and guest comments (Pullman, 2014).
9
1.2 Problem Identification Pullman Jakarta Central Park is not the only upscale hotel in Jakarta.
There are so many other hotels that are equivalent to the Pullman Hotel,
therefore to keep the guests loyalty; Pullman Hotel should be able to
provide services and products that can differentiate it from the other
competitors to know and understand guests’ opinions about the hotel are
absolutely essential to improve the quality and performance of the hotel to
maintain the guest satisfaction which related to loyalty behavior.
The number of occupancy in Pullman Jakarta Central Park is increasing
by the time. In early 2013 until present, the average occupancy every
month is above 70% which is good for the hotel. The average occupancy
in 2014 always above 80%, but the researcher find out that even the
occupancy percentage is high, it does not guaranteed in increasing the
number of loyal guests.
One of the example of Medallia survey (see appendix 1) that have been
filled by one guest showed that the guest that gave low score for the
services and facilities, will give low score as well in recommend Pullman
Jakarta Central Park. This showed that even the occupancy is high, but if
the guests feel unsatisfied with the service and facilities, the guest will not
revisit Pullman Jakarta Central Park Hotel on their next trip and they will
not recommend the hotel to others as well.
The researcher adapted the Medallia survey to marketing mix (Product,
Price, People, Physical Evidence, and Process) to examine if there is a
positive relationship on customer satisfaction, and to determine if
customer satisfaction has a positive impact toward customer loyalty.
10
1.3 Problem Statement This research aims to identify the problems as following:
1. To what extent does product influence customer satisfaction?
2. To what extent does price influence customer satisfaction?
3. To what extent do people influence customer satisfaction?
4. To what extent does physical evidence influence customer
satisfaction?
5. To what extent does process influence customer satisfaction?
6. To what extent does customer satisfaction influence customer loyalty?
1.4 Research Objectives In this research, the researcher would like to analyze the customer
perception toward marketing mix (Product, Price, People, Physical
Evidence, and Process), customer satisfaction and customer loyalty. This
research is going to attempt to do that by focusing on:
1. To find out to what extent does product influence customer
satisfaction.
2. To find out to what extent does price influence customer satisfaction
3. To find out to what extent does people influence customer satisfaction.
4. To find out to what extent does physical evidence influence customer
satisfaction.
5. To find out to what extent does process influence customer
satisfaction.
6. To find out to what extent does customer satisfaction influence
customer loyalty.
11
1.5 Definition of Terms The following key terms would be used throughout this research.
1. Product: Anything that can be offered to a market for attention, use,
acquisition, or consumption that might satisfy a want or need
(Armstrong &Kotler, 2006).
2. Price: Amount of money that consumers are willing to pay to obtain
the right to use the product or service (Kotler et al., 2008).
3. People: Anyone who comes into contact with customers will make an
impression, and that can have a profound effect – positive or negative
on customer satisfaction (The Chartered Institute of Marketing, 2009).
4. Process: The actual procedures, mechanisms, and flow of activities
that service delivery, operate system (Booms &Bitner, as cited in
Yang, 2012).
5. Physical evidence: The type of image that business portrays through
its physical presence, namely its premises, the appearance of its staff,
its vehicles, etc (The Chartered Institute of Marketing, 2009).
6. Customer Satisfaction: an overall attitude towards a service provider,
or an emotional reaction to the difference between what customers
anticipate and what they receive, regarding the fulfillment of some
needs, goals or desire (Hansemark and Albinson, 2004).
7. Customer Loyalty: Something that consumer may show to brands,
services, and product categories such as hotel room (Uncles et al.,
2003).
12
1.6 Scope and Limitations The scope of this research is to identify the influence of
marketingmix(Product, Price, People, Physical Evidence, and
Process)towardcustomer satisfaction and its implication on customer
loyalty. The researcher limited for the Pullman Jakarta Central Park guests
who have been stayed in Pullman Jakarta Central Park for at least one
night and have been filled and sent back the Medalliasurveywith range of
stay during the period of August 2014, September 2014, and October
2014.
1.7 Research Benefit This research is intended to provide more valuable contributions in terms
of knowledge, information, and suggestion for the following parties:
1.7.1 The Researcher
This research is a partial fulfillment of the requirements to obtain a
Bachelor’s degree, but not only as the fulfillment in order to graduate
from President University and achieve the bachelor degree, through this
research the researcher could apply and expand her knowledge in hotel
and tourism field. Right after assuming the Bachelor’s degree, the
researcher also plans to earn a Master’s. This research can be used as a
portfolio or academic support should the researcher applies any
scholarship to study abroad
1.7.2 President University
As we know that Hotel and Tourism Management students are view in
number at President University, so it is difficult for these students to get
related material, data or information. In order to support Adam Kurniawan
Library of President University book collection. For that reason, this
13
research is expected to increase the literature collections, which concern in
the hospitality studies.
1.7.3 Pullman Jakarta Central Park Hotel
The researcher wishes the results of this research can provide the data
about the analysis of customers’ perception based on Marketing Mix
towards Customer Satisfaction and the implication on Customer Loyalty
in Pullman Jakarta Central Park. This research also expected to give
contribution to Pullman Jakarta Central Park to have more understanding
about their guests’ perception and perform better quality in their service
and facilities in order to achieve higher customer satisfaction and increase
the number of loyal guests.
1.7.4 The Future Researcher
Researcher wishes the results of this study could be a source of
information for the future researcher, especially in the field of hospitality
management and could be used as reference for other research to solve the
problem that related to analysis of Marketing Mix, Customer Satisfaction,
and Customer Loyalty.
14
CHAPTER II
LITERATURE REVIEW
2.1 Theoretical Review 2.1.1 Hotel Industry
Hotel industry is one of the important aspects to provide lodging to the
travelers with several of facilities and services its offered.According to
Open University Malaysia (2009), there are six types of lodging
establishments, which are:
1. Commercial Hotel
An establishment that provides overnight accommodation, goods and
services to the transient public or temporary guests needing
accommodation for a few nights.
2. Residential Hotel
In contrast to transient hotels, some hotels have traditionally provided
accommodation for long-term guests - individuals who consider the
hotel as their temporary or permanent home.
3. Resort Hotel
Feature recreational activities for guests. These activities may be
strictly for enjoyment, health purposes or both.
4. Airport Hotel
Hotels located near an airport catering to short stopovers or passengers
of cancelled flights, providing limousine with pick-up schedules.
5. Economy Hotel
Lodging facilities for cost - conscious travelers.
6. Casino Hotel
Transient hotel that house gaming casinos. They also provide lavish
entertainment, nationally known artists and professionally staged
shows- as added attractions.
15
In other hand, Bardi (2003) stated there are five types of the lodging
facilities, those are listed below:
1. Hotels
Hotels provide the guests with full range of service and accommodations,
which include reservations, suites, restaurant, banquet facilities, lounge,
room service, cable television, hair care, gym, spa, meeting rooms,
personal computers, valet, laundry, swimming pool, concierge service,
specialty shops, pub/bar, club, and other recreational activities. Hotels are
easy to found in suburban, airport area; centre of the city, and near tourist
attraction. There are various type of guests who stay in hotels, start from
the guests who only stay overnight until the long term stay, such as
several weeks or months.
Based on Open University Malaysia (2009), a hotel is a temporary or
permanent home where food and beverages, cleaning services and a whole
range of other services are normally provided. Andrews (2007) in his
book “Hotel Housekeeping Management and Operations” stated that the
hotel may be classified into five by the number of rooms, which are:
1. 25 rooms and less : small hotel
2. 26 – 100 rooms : medium hotel
3. 101 – 300 rooms : large hotel
4. 300 – 1000 rooms : very large hotel
5. Above 1000 rooms : mega hotel.
2. Motels
Different with the hotels, motels usually smaller than hotels, it is only
have 10 rooms to 50 rooms and offer limited range of service, such as
reservations, vending machine, swimming pools, and cable television. The
typical guests who stay in motels usually are short term stay with range of
stay overnight or few days only. Motels can be found in suburban
16
highway, airport location, and usually located near with the freestanding
restaurant.
3. All Suites
All Suites is the new concept in hotel industry. This type of lodging offers
guests with the wide range of services. The services provided by all suites
include reservations, public dining room, room service, valet, laundry,
swimming pool, specialty shops, and concierge. There are various
facilities offer in the suit, such as living room, separate bedrooms, kitchen,
cable television, hair care, video and audio player. The size of property
starts from 50 suites to more than 100 suites. This all suites can be found
in centre of the city, suburban, and airport location. The length of stay of
the all suite guests are similar with hotels, which is the guests who stay
overnight, several days, or in a long term.
4. Limited Service Hotels
As the name, limited service hotels offer limited services to its guest. This
caused by the market segmentation is business travelers and cost
conscious travelers. The services and facilities offer to the guests are
reservations, minimal public dining and meeting facilities, cable
television, personal computers, personal services, drop off and pickup
services from and to airport. Usually this kind of hotels also provides
business center to fulfill their business traveler guests. Suburban, centre of
city, and near airport is the location of the limited service hotels. The
number of the rooms of limited service hotels is quite big; it is start from
100 rooms to more than 200 rooms. In limited service hotels, guests stay
can be overnight or long term stay.
5. Extended Stay Hotels
The extended stay hotels offer full facilities and services for the guests,
because their target market is the long stay guests. The facilities are
complete enough in the room such as king size bed or double beds in the
17
bedroom, sofa bed in the living room, fully equipped kitchen, refrigerator,
coffee maker, iron and ironing board, and all the other equipments that
can support the long stay guest. The facilities around the hotel are
arranged to fulfill guests’ needs, such as business centre, gym, spa,
swimming pool, and restaurant.
2.1.2 Customer Perception
Customer perception was interpreted as customer’s belief that related to
the received service (Parasuraman et al., 1985). Kotler, Thang& Tan, as
cited in Yang (2012) described perception as the process by which an
individual selects, organizes, and interprets information inputs to create a
meaningful picture of the world, each person perceives the world
differently, and perceptions are manifested as attitude. According to
Harris (2000) a perception is the way that we see something based on our
experience. There are three dimensions in which guests assess the service
conformance. The dimensions include material (e.g. food in the
restaurant); facilities that compliment the core offering as comfortable
seating in restaurant and personnel such as friendly and pleasant bellboy
(Kandampully, 2007).
2.1.3 Marketing Mix (7P’s)
The Chartered Institute of Marketing (2009) defines marketing as the
management process responsible for identifying, anticipating and
satisfying customer requirements profitably. Marketing is a social and
managerial process by which individuals and groups obtain what they
need and want through creating, offering and exchanging products of
values with each other (Kotler& Armstrong, 2005). Mahoney, Edward,
Warnell, and Gary (as cited in Ayed, 2012), noted that modern marketing
is a way of doing business, deeply based on the marketing concept which
requires businesses and organizations should:
(1)Design their products/services to meet customer needs and wants.
18
(2)Focus on those people most likely to buy their product rather than the
entire mass market.
(3)Develop marketing efforts that fit into their overall business objectives.
Marketing mix is the set of marketing tools which apply to pursue the
marketing objective in the target market (Kolter et al., 1994). As the set of
controllable, marketing mix was considered as the tactical marketing tools
that the firm combines to create the response it wants in the target market
(Kolter& Armstrong, 2001). Booms and Bitner (1981) learned marketing
mix in other areas of marketing and stated that by adopting marketing
mix, the provision of better products is not only accomplished but
additionally, the saving of costs and time in developing and promoting the
product is accomplished as well (Mahoney et al., as cited in Ayed, 2012).
The term marketing mix refers to the four major areas of decision making
in the marketing process that are blended to obtain the results desired by
the organization. The marketing mix consists of everything the firm can
do to influence the demand for the product or service. The four elements
of the marketing mix are sometimes referred to the 4P’s of marketing that
include product/service, price, place and promotion (Kotler, 2000).
Booms and Bitner (1981) added three more element about service on that
include people, process and physical evidence on the basis of traditional
market marketing theory 4P’s. “People” refers to the employees of the
organization with whom customers come into contact with. “Process” is
the processes and systems that within the organization that affects its
marketing process. “Physical evidence” is elements within the store that
include the store front, the staff uniforms, signboards, etc. Therefore the
7P’s refer to the product, price, promotion, place, people, process and
physical evidence that make up the marketing mix.
19
Figure 2.1 The Seven P’s of the Marketing Mix
(Source: Marketing and the 7 P's, 2014)
1. Product
Product is the first element of the marketing mix strategy that retailers can
offer unique attributes that differentiates their product from their
competitors (Ferrell, 2005). Armstrong and Kotler (2006) defined product
as anything that can be offered to a market for attention, acquisition, use,
or consumption that might satisfy a want or need. Based on Hirankitti,
Mechinda, and Manjing (as cited in Ayed, 2012), there are two
components of the product offer in respect of services, which are: (1) The
core service which represents the core benefit; (2) The secondary services
which represent both the tangible and augmented product levels. Product
is characterized by quality, design, features, brand name and sizes
(Borden, 1984).
A product is something tangible or intangible that can be offered for
purchase or use by consumers. A tangible product is one that consumers
can actually touch, such as food and beverages. An intangible product is a
service that cannot be touched, such as room service. The demand in a
careful product development rises day by day to make sure that the
20
customers get the services they require and expect (Haksever, Render,
Russell and Murdick, 2000).
2. Price
Price is the second element in the marketing mix. The price of a product
or service is amount of money that consumers are willing to pay to obtain
the right to use the product or service (Kotler et al., 2008). The intangible
nature of services causes price becomes a crucial quality indicator where
other information is not lacking or absent (Zeithaml, 1981).
Economic often assume that lower price for the same product will result in
more sales than higher prices (Hawkins et al., 2001). Additionally,
Zeithaml, (as cited in Ayed, 2012) noted that in deciding to return to the
service provider, the customers normally think whether or not they
received their value for money. Moreover, price is inclusion in making
purchase decisions of services (Kotler& Armstrong, 2004).
3. Place
Place is a set of interdependent organizations that caters to the process of
making a product available to consumers (Armstrong &Kotler, 2006).
According to Hirankitti et al. (as cited in Ayed, 2012) place is the ease of
access which potential customer associates to a service such as location
and distribution. Moreover, place can also be described as availability of a
product/service. This availability means where the product is located in
the market or how often the product can be found (Williams, as cited in
Yang, 2012).
According to The Chartered Institute of Marketing (2009), the product
must be available in the right place, at the right time and in the right
quantity, while keeping storage, inventory and distribution costs to an
acceptable level. Place also measure as a ways of displaying your product
21
to customer groups. This could be in a shop window, but it could also be
via the internet (The Chartered Institute of Marketing, 2009).
4. Promotion
Borden (1984) stated that promotion is defined as sales promotion,
advertising, direct marketing, personal selling and public relations.
Promotion can be defined as a decision of how best to relate the product to
the target market and persuade them to buy it (Lovelock et al., 1998).
Promotion included various ways of communicating to customers of what
the hotel should offer and promotion contained a variety of activities, such
as branding, advertising, direct promotion mail, public relationship,
corporate identity, special offers and exhibitions (Behera, as cited in
Yang, 2012). Communications supposed to be devised by marketers in
such a way that it (1) offer consistent messages about their products and
(2) are placed in media that consumers in the target market are likely to
use (Munusamy and Hoo, 2008).
Ogenyi (2009) stated that promotion is a plan with the objective to
increase sales of product or services within a short period; it helps to
stimulate customers to make decisions of buying a product or service in
the market. Moreover, for the companies, promotion is the way of
communicates what it does and what it can offer to the customers. It
includes activities such as branding, advertising, PR, corporate identity,
sales management, special offers and exhibitions. Promotion must gain
attention, be appealing, tell a consistent message and above all else give
the customer a reason to choose the product (The Chartered Institute of
Marketing, 2009). According to Lovelock & Wright (2002), a
communication program was significant in marketing strategies, because
it plays three vital roles: providing needed information and advice,
persuading target customers of the merits of a specific product, and
encouraging them to take action at specific times.
22
5. People
Iselin & Judy (as cited in Yang, 2012) stated that people factors is one
factor that influence customer’s satisfaction. Additionally, People are
essential in service delivery. Employees’ performance, on how to handle
customers and how to deal with contingencies is crucial to the success of
business, therefore intensive training from the human resources
department is necessary. People refer to the service employees who
produce and deliver the service and they strongly influence the customer’s
perception (Hartline & Ferrell; Rust &Zahorik, as cited in Yang, 2012).
Behera (as cited in Yang, 2012) stated that all people who directly or
indirectly involved in the consumption of a service are an important part
of the extended marketing mix. In hotel industry, people refer to the
customers, employees/staffs, management and everybody else who
involved in it. Every time the employees/staffs come into contact with a
customer, an impression is made immediately. Make sure it is a good
impression by having properly trained, the reputation of the hotel was
rests in the hands of well-motivated staff who with a good attitude (Yang,
2012).
Based on Kotler (2000), people considered as the key element in a
customer centered organization as well as a way to differentiate variables
with product, services, channel, and image. The employees who have
directed interact with customers affect decision making of customers.
Staff should have service knowledge, appropriate interpersonal skills, and
good attitude to provide the service that consumers are paying for.
6. Process
According to Booms &Bitner (1981), process defined as the
implementation of action and function that increase value for products
with low cost and high advantage to customer and it is more important for
service than for goods. Process is destined for the reflection of the whole
23
experience the customers receive to make a final decision about the
service quality level and the core product itself. In fact, the process itself
constitutes an integral part of the whole servicing process (Haksever et al.
2000). Process in service is the actual procedures, mechanisms, and flow
of activities that service delivery, operating system Booms &Bitner
(1981).
The pace of the process as well as the skill of the service providers are
clearly revealed to customers and it forms the basis of his/her satisfaction
with the purchase (Hirankitti, as cited in Yang, 2012). Process refers to the
methods and process of providing a service and is hence essential to have
a thorough knowledge on whether the services are helpful to the
customers, whether the services are provided in time, whether the
customers are informed in hand about the services and many such things
(Behera, as cited in Yang, 2012).
Process refers to the systems used to assist the organization in delivering
service. The process of giving service is essential to customer satisfaction.
Issues such as the information given to customers, waiting times and the
helpfulness of staff are all vital to keep customers happy. What customers
interested in is getting good service, but not the details of how the
business runs. The hotel business will run most smoothly for customers if
there are processes in place that the staff understands (Yang, 2012).
7. Physical evidence
Physical evidence is the type of image that business portrays through its
physical presence, namely its premises, the appearance of its staff, its
vehicles, etc (The CIM, 2009). Physical evidence is the environment in
which the service delivered and where the firm and customer interact, and
any tangible components that facilitate performance or communication of
service Booms &Bitner (1981). Bitner (1990) adds that other visible
surroundings can affect the impressions perceived about service quality by
24
the customers. Physical evidence is a significant element of the service
mix; based on their sight customers will make perceptions of the service
provision which will have an impact on the organizations perceptual plan
of the service. Dissimilar with a product, it is impossible to experience a
service before it is delivered. It is mean that there can be an element of
risk for customers choosing to use a service (Yang, 2012).
2.1.4 Customer Satisfaction
2.1.4.1 Definition of Customer Satisfaction
Hansemarkand Albinson (2004) state customer satisfaction is an overall attitude
towards a service provider, or an emotional reaction to the difference between
what customers anticipate and what they receive, regarding the fulfillment of
some needs, goals or desire. According to Jones et al (2000), satisfaction is
an overall evaluation of performance based on all prior experiences with a
firm. Satisfaction is the level of enjoyment or disappointment, originating
from expectation of the product. Dominici et al (2010) considered the
important to recognize and anticipate customers' needs and to be capable
to satisfy them in order to achieve customer satisfaction.
Customer satisfaction is the feeling of well-being and pleasure that
customers get from what they hopes and expects from the appealing
service. It’s a business philosophy that tends to the creation of value for
customers, to anticipate, manage their expectations, and demonstrate
ability and responsibility to satisfy the needs of them. And just like the
outcome of customer’s perception of the value that customers received in
a transaction or relationship, where value equals perceived service quality
when compared to the value what customers expected with the competing
vendors (Blanchard & Galloway, Heskett, Zeithaml, et al., as cited in
Yang, 2012).
25
According to Barsky (1992), Customer satisfaction is considered to be one
of the most important outcomes of all marketing activities in a market-
oriented firm. The obvious need for satisfying the firm’s customer is to
expand the business, to acquire repeat and referral business all of which
lead to improved profitability, and to gain a higher market share. The
greater customer satisfaction leads to higher intent to repurchase (Rust and
Zahorik, 1993). Gerson (1993) stated that the more customers are
satisfied, the more they spend. The more customers spend, the more is
sold. And usually, when more is sold, profits are greater.
2.1.4.2 Confirmation-Disconfirmation Theory
Customer satisfaction was defined as a post purchase evaluative judgment
concerning a specific buying decision (Homburg &Giering, 2001).
According to the confirmation-disconfirmation paradigm; customers
assess the level of satisfaction by comparing their actual experiences with
their previous experiences, expectations, and perceptions of the product’s
performance (Oliver, 1980). The theory postulates that three outcomes of
this evaluation are possible:
(1) Confirmation occurs when the actual performance matches the
standard, leading to a neutral feeling;
(2) Positive disconfirmation occurs when the performance is better than
the standard, which then leads to satisfaction; and
(3) Negative disconfirmation occurs when the performance is worse than
the standard, which then leads to dissatisfaction.
2.1.4.3 The Importance of Customer Satisfaction in the Hotel
Industry
Customer satisfaction is an overall attitude towards a product or an
organization that provides services or customer’s reaction towards the
difference between customer’s expectation and what is received
concerning the satisfaction of needs, desires or goal (Hansemark,
Albinson, 2004). As the competition in the hotel industry intensifies,
26
hoteliers have to learn how to shift their strategies from customer
acquisition to customer retention and loyalty, which is only possible with
effective customer satisfaction (Schultz, 2012). In addition, customer
loyalty is achieved when the hotel satisfy the needs of the customers so
that they would continue to patronize or increase their purchases from the
hotel (Anderson, Jacob, 2000). Customer’s satisfaction has a positive
effect on the profitability of a company. Any customer who is satisfied
due to the good customer relation marketing will repurchase, be loyal to
the brand and will give positive word of mouth (Hoyer &McInnis, 2001).
2.1.5 Customer Loyalty
2.1.5.1 Definition of Customer Loyalty
There is no globally agreed definition of loyalty. Loyalty can be defined
as something that consumer may show to brands, services, and product
categories such as hotel room (Uncles et al., 2003). Customers display
varying degrees of loyalty, commitment, or allegiance in various aspects
of their daily interactions. Loyalty also occurs in consumption situations,
and has received much attention in the marketing literature (Kandampully
et al., 2000). Generally, the term, customer loyalty, has been described as
occurring when customers:
1. Repeatedly purchase a good service over time, and
2. Hold favorable attitudes towards a good service.
Customer loyalty consists of three separate dimensions which are:
behavioral, attitudinal, and composite. Behavioral loyalty considers
measurements of consistent, repetitious purchase behavior as an indicator
of loyalty. In particular, it interprets a form of customer behavior directed
towards a particular brand over time (Bowen and Shoemaker, 1998).
Retaining loyal customers for hoteliers is essential and a core factor in
keeping the industry in shape and competitive enough to measure itself up
to the changing trends of the industry (Schulz, 2012)
27
When a new hotel opens across the street, they switch because the new
hotel offers better value. Thus, repeat purchase does not always mean
commitment (Bowen and Chen, 2001). Rousan et al (2010) observed that
loyal customers don’t get swayed by price inducement from the
competitors, but will continue as loyal customers. Customer loyalty
consists of both an attitudinal commitment to the relationship (such as
price insensitivity), as well as other, more-overt loyalty behavior (such as
positive word of mouth and repeat patronage) (Oliver, 1999).
According to Zeithaml, Berry, and Parasuraman (as cited in Carev, 2008),
there are three dimensional definitions is consistent with loyalty to
company factors in the behavioral intensions battery. In their study, the
items measuring the loyalty factor included:
1. Saying positive things about the company;
2. Recommending the company to someone who seeks advice;
3. Encouraging friends and relatives to do business with the company;
2.1.5.2 The Importance of Customer Loyalty in the Hotel Industry
The hotel industry today has been recognized as a global industry, with
producers and consumers spread around the world (Kandampully et al.,
2000). Oh, as cited in Na (2010) stated that the essence of focusing on
loyalty in the hotel industry is to increase rent volume by raising booking
or usage levels and increasing the range of services used by guests. The
use of hotel facilities such as: guestroom, restaurant, bar, spa or wellness
services, is no longer considered a luxury (Kandampully et al., 2000).
Moreover, in the last two decades, demand for supply of hospitality
services beyond that of traditional services intended for travelers have
escalated the growth of the hospitality industry globally, leading to intense
competition in the marketplace (Kandampully et al., 2000). According to
Kandampully and Suhartanto (2000), one of the greatest challenges facing
28
hotel organizations today is the ever-growing volume and pace of
competition. Competition has major implications for the customer,
providing increased choice, greater value for money, and augmented level
of service.
Additionally, Kandampully and Suhartanto (2000) found out there is little
to distinguish one hotel’s products and services from another. Thus, it is
imperative for hotel organizations to gain a competitive advantage. To
gain a competitive advantage, hotel operators are using two commonly-
known strategies, which are:
1. Providing low-cost leadership through price discounting, and
2. Developing customer loyalty by providing unique benefits to
customers.
Hotels that attempt to improve their market share by discounting price run
the serious risk of having a negative impact on hotel’s medium- and long-
term profitability. Thus, it is quality of service rather than price that has
become the key to a hotel’s ability to differentiate itself from its
competitors and to gain customer loyalty (Kandampully et al., 2000). Due
to the importance of customer loyalty, companies are trying to enhance
their customers’ loyalty through retention programs and relationship
marketing strategies (Hallowell, 1996).
Customer loyalty is important because loyal customers bring many
benefits to a firm. According to Reichheld and Teal (as cited in Na, 2010),
the various advantages of customer loyalty include: a continuous stream
of profit, reduction of marketing cost, growth of per-customer revenue,
decrease in operating cost, increase in referral, increase in price premium,
and switching barriers among loyal customers who do not easily surrender
to the competitors’ promotion efforts. Considering these benefits,
customer loyalty is a necessary prerequisite for the future survival of hotel
29
organizations (Reichheld and Tea, Reinartz and Kumar, YianJeon, as cited
in Na (2010).
2.1.6 Relationship between Marketing Mix and Customer Satisfaction
According to Kotler (2005), Marketing is a social and managerial process
by which individuals and groups obtain what they need and want through
creating, offering and exchanging products of values with each other.
When customers accept a higher level of satisfaction while buying a
product, they will repeat to buy the same product (Reichheld, 1996), and
they will also recommend it to others (Oliver & Swan, 1989a). The
relationship between marketing and customer satisfaction is highly
expressed among researchers (Zineldin&Philipson, 2007).Yelkur (2000)
found that the critical elements in the services marketing mix influence
and positively effects customer satisfaction. Cengiz and Yayla (2007) also
found out marketing mix have a positive effect on satisfaction and loyalty
on word of mouth communication from accounting offices in Turkey.
2.1.7 Relationship between Customer Satisfaction and Customer Loyalty
Hua et al. (2009) indicated that, in order to maintain relationship with
customers, budget hotel has to think about customer satisfaction and
customer loyalty, since these two factors determine whether the
company’s relationship with customers is tight or stable. Customer
satisfaction is the starting point to build customer loyalty; it is a loyalty
stock that will improve image of corporate, therefore a long-term
relationship (Gandolfo, 2010).
Customers’ satisfaction affects customers’ loyalty directly. In business
activities, companies make great effort to improve customers’ satisfaction,
reducing customer dissatisfaction, attracting new customers, and
maintaining existing customers (Anna, as cited in Yang, 2012).
Satisfaction or dissatisfaction is more than a reaction to the actual
30
performance quality of a product or service. It is affected by prior
expectations regarding the level of quality.
Hallowell (1996) stated that there is a connection between customer
satisfaction, customer loyalty and profitability. Customer satisfaction
improves profitability increased. However, there are some customers who
will never be satisfied or will never be profitable to the product or service
of hotel, the corporate should not waste energy and budget to satisfy all
customers, the hotel should focus on the customers who can satisfy in a
profitable way (Anna, as cited in Yang, 2012).
According to Schiffman and Kanuk (2004) stated that, the objective of
providing value to customers continuously and more effectively than
competitors is to have and to retain highly satisfied customers.
Satisfaction has been widely studied as a predictor of customer loyalty
(Yang, 2012). Satisfaction has a strong positive effect on customer loyalty
intentions across a wide range of product and service categories
(Gustafsson, as cited in Yang, 2012). Anderson and Srinivasan (2003)
indicated that, it is an important factor for a long-term relationship
between a firm and a customer.
2.2 Previous Researches
Table 2.1 Previous Researches
No. Author/
Year Title Variables Research Design
1 Yang Yu/
2012
Factors and
Customers
Satisfaction of
- Customer
perception
toward
• Population:
the tourist numbers
in 5 cities (Beijing,
31
Budget Hotel
Customers in
China
- Marketing
mix (7P’s):
1.Product/
Service
2. Price
3. Place
4.Promotion
5. People
6. Process
7.Physical
evidence
- Customer
Satisfaction
- Customer
Loyalty
Shanghai,
Guangzhou, Wuhan
and Guilin) in
China, 2011.
• Sample size:
400
• Sampling
technique:
Non probability –
Convenience
• Instrument:
Questionnaire
• Data Gathering:
Primary Data
• Validity:Test
• Reliability:Cronbac
h’s Alpha
• Data analysis:
Quantitative –
Regression
2
Ayed Al
Muala&
MajedAl
Qurneh/
2012
Assessing the
Relationship
between
Marketing Mix
and Loyalty
through Tourists
Satisfaction in
Jordan Curative
Tourism
-Marketing
mix (7P’s):
1.Product/
Service
2. Price
3. Place
4.Promotion
5. People
6. Process
7.Physical
• Population:
Jordanian, Arab and
international
tourists who visit
several determined
places of
destinations
included in the
study of curative
tourism destination
32
evidence
-tourist
satisfaction
- destination
loyalty
in Jordan.
• Sample size:
690
• Sampling
technique:
non-probability
purposive judgment
sampling
• Instrument:
questionnaires
• Data Gathering:
primary data and
secondary data
• Validity:convergent
• Reliability:Cronbac
h’s Alpha
• Data analysis:
Quantitative –
exploratory factor
analysis (EFA)
3
Junqi
Lin/
2012
The factors
affecting
customer
satisfaction and
behavioral
intentions in
using mobile
telecommunicat
ions service in
-Perceived
value
-Service
quality:
tangible,
reliability,
responsiveness
, assurance,
• Population:
People who are age
over 17 years old at
the rest area around
the entrances of
Central Ladprao
department store,
Bangkok.
33
Bangkok,
Thailand
and empathy
- Marketing mix (7P’s): Product/Service, Price, Place, Promotion, People, Process, Physical evidence - Customer
Satisfaction
- Behavioral
Intention
• Sample size:
400
• Sampling
technique:
Probability –
random sampling
• Instrument:
questionnaires
• Data Gathering:
Primary
• Validity:test
• Reliability:
Cronbach’s Alpha
• Data analysis:
descriptive statistic
- Multiple
regressions
4
Hossein
NezakAti
, Yuhanis
Abdul
Aziz,
Dahlia
Zawa Wi
and
Preliminary
Study of 4A
Marketing Mix
Impacts on
Tourists’Satisfa
ction
(Malaysian
Food)
-tourist’s
satisfaction
- Marketing
Mix 4As.
- variable and
food quality,
restaurant
location, brand
• Population:
international
tourists who will
visit Malaysia and
particularly Kuala
Lumpur
• Sample size:
400
34
Roghaye
hSohrabi
nezhadtal
emi/
2011
awareness, and
price.
• Sampling
technique:
systematic sampling
• Instrument:
questionnaires
• Data Gathering:
Primary
• Validity:Face
Content –expert
panel
• Reliability:Cronbac
h’s Alpha
• Data analysis:
Quantitative –
correlation
5
Zhicheng
Qin/
2012
The Factors
Influencing
Low-cost
Airline
Passenger
Satisfaction and
Loyalty in
Bangkok,
Thailand
- Marketing mix (7P’s): Product/Service, Price, Place, Promotion, People, Process, Physical evidence -Service
quality:
tangible,
reliability,
responsiveness
, assurance,
and empathy
-Customer
• Population:
The low-cost airline
passenger in
Bangkok, Thailand
• Sample size:
384
• Sampling
technique:
Non probability –
Convenience
• Instrument:
questionnaires
• Data Gathering:
Primary
• Validity:test
• Reliability:Internal
35
Satisfaction
-Customer
Loyalty
consistency,
Cronbach’s Alpha
• Data analysis:
Quantitative –
multiple linear
regression
6
Ala'Eddi
n
Mohamm
ad Khalaf
Ahmad,
Abdullah
Ali Al-
Qarni,
Omar
ZayyanA
lsharqi,
Dalia
Abdullah
Qalai
&NajlaK
adi/ 2013
The Impact of
Marketing Mix
Strategy on
Hospitals
Performance
Measured by
Patient
Satisfaction: An
Empirical
Investigation on
Jeddah Private
Sector Hospital
Senior
Managers
Perspective
- marketing
mix strategy
components
(namely health
service,
pricing,
distribution,
promotion,
physical
evidence,
process, and
personal
strategies)
-patient
satisfaction
• Population:
managers from
34 private hospitals
in Jeddah.
• Sample size:
190
• Sampling
technique:
purposive sampling
• Instrument:
questionnaires
• Data Gathering:
Primary
• Validity:–
• Reliability:Internal
consistency,
Cronbach’s Alpha
• Data analysis:
Quantitative –
Correlation
(Source: Researcher)
36
2.3 Theoretical Framework As shown by the figure, it simply describes on how dependent variables
influences independent variable used in this research.
Figure 2.2 Theoretical Framework
This theoretical framework was adapted from Yang (2012) as the
comparison with Pullman Jakarta Central Park Hotel Customer Survey.
There are two independent variables that consist of customer satisfaction
and customer loyalty. Those variables will be examined and analyzed in
this research to see influences of marketing mix (Product, Price, People,
Physical Evidence, and Process) towards customer satisfaction and
customer loyalty.
37
2.4 Hypothesis Based on the research theoretical framework above, six statements of
hypothesis can be indicated as follow:
H1: Product significantly influences customer satisfaction.
H2: Price significantly influences customer satisfaction.
H3: People significantly influence customer satisfaction.
H4: Physical evidence significantly influences customer satisfaction.
H5: Process significantly influences customer satisfaction.
H6: Customer satisfaction significantly influences customer loyalty.
38
CHAPTER III
RESEARCH METHOD
3.1 Research Design Based on the methods of conduction, there are two frequent types of
researches, which are qualitative and quantitative research. Quantitative
research tends to be more focused on the number and statistical tools
utilization and the results can be measured and counted. Distinctively,
qualitative research is more concerned on the comparison and usage of
many theories from various sources. The difference between quantitative
and qualitative research are the type of the data research process,
instrument in collecting data and the purpose of research.
Quantitative observations are made using scientific tools and
measurements which the results can be measured and counted. It involves
smaller numbers of respondent and utilizes open-ended questionnaires or
protocols. Every single piece of information gathered is done by surveying
large numbers of randomly selected respondents and it will be analyzed
using statistical methods and programs. Quantitative method is best used
to answer what, when and who questions (Civicpartnership, 2013).
According to Greetham (as cited in Nurmi, 2013), the aim of quantitative
research is to be as objective as possible by basing conclusions on
statistical findings and other measureable empirical data.
The overall aim of this research is to analyze the influence of marketing
mix (Product, Price, People, Physical evidence, and Process) toward
customer satisfaction and its implication on customer loyalty. As the basis
of this research conduction, the researcher utilizes the quantitative
approach and the data were obtained from Pullman Hotel Customer
Survey. This research employed a Structural Equation Modeling (SEM)
analysis to examine the relationships among the selected research
39
constructs. The reason of selecting the quantitative method is that the
researcher finds it more efficient and effective in terms of cost and time.
A quantitative approach was fundamental in order to examine the
relationship between marketing mix (Product, Price, People, Physical
Evidence, and Process), customer satisfaction, and customer loyalty. Thus,
the researcher believed that by utilizing quantitative approach, the
objectives of the research would be achieved. In addition, quantitative
research allows for greater accuracy and objectivity of results obtained.
Quantitative research usually filters out all external factors and if well
designed, it provides unbiased and real result.
3.2 Sampling Design 3.2.1 Population
Sekaran&Bougie (2010) stated that population refers to the entire group of
people, events, or things of interest that the researcher wishes to
investigate. Population is all elements, individuals, or units that meet the
selection criteria for a group to be studied (Businessdictionary, 2013). In
this research, research population is focused to Pullman Jakarta Central
Park guests.
3.2.2 Sample Size
Sample is a subset of population (Sekaran&Bougie, 2010). The samples in
this research will be used to investigate the research problems. In this
research, Structural Equation Modeling (SEM) was used to be the method
of testing the hypothesis. Since SEM requires a large samples which
usually takes more than 200 (N >200) (Kline, as cited in Lei and Wu,
2007). As the sample should be more than 200, then the researcher
decided to target 400 samples. There were 464 customer survey results but
only 385 which are required to be analyzed. The target respondent of this
research is primarily Pullman Jakarta Central Park guests that filled the
40
customer survey with range of stay during the period of August 2014,
September 2014, and October 2014.
3.2.3 Sampling Technique
Since the target respondents are the guests that filled the customer survey
of Pullman Jakarta Central Park Hotel with unknown number of
population, non-probability sampling was used and focused on
convenience sampling technique. The respondents should have stayed at
Pullman Jakarta Central Park Hotel as the research object in investigating
their perception about the hotel.
3.3 Research Instrument This section will be discussing about the tool used to answer the research
questions as stated in Chapter 1 and how the information and data were
collected. The researcher intended to collect information and data as many
as possible from any various sources. Data can be obtained from either
primary or secondary data or even from both.
3.3.1 Data Source
According to the source, data can be categorized into two, primary and
secondary data as explained as following:
a. Primary data refers to information obtained first-hand by researcher on
the variables for specific purpose of the study (Sekaran&Bougie,
2010).According to Malhotra& Peterson (2010), primary data include
all information that researcher needs to conduct the study and they are
necessary in order to obtain the latest information directly from the
sources. Questionnaire is a method on how to collect data primarily.
By employing the data from questionnaire, researcher may shorten the
time duration to gather all data needed.
41
b. Secondary data refers to information obtained from sources that
already exist which mean the information and data have been
gathered, published in statistical and other journals, as well as from
unpublished source available either within or outside the organization
which might be useful to researcher (Sekaran&Bougie, 2010).
Secondary data can be obtained from existing sources such as web
sites, company records, publications, articles, journals and so on. This
research use secondary data which obtained from books, academic
journals, papers, company records or survey, internet articles as well
as previous studies which include master theses and dissertations.
3.3.2 Data Collection Tools
To produce accurate data, conducting an appropriate data collection
process is compulsory and there will be 3 classifications on what tools
were used to collect the data.
a. Observation
The object of this research is Pullman Jakarta Central Park Hotel,
where the researcher joined 6 months internship program. This hotel is
one of the upscale hotels in Jakarta that recently honored with award
in the category of the Best Business Hotel in Indonesia by Hospitality
Investment World 2013, Best New Hotel Construction and Design for
Indonesia at the Asia-Pacific International Hotel Awards 2012-2013,
and the Platinum Winner of the prestigious A ‘Design Award in the
Hospitality, Recreation, Travel and Tourism Design Category in 2012-
2013 period. The tight competition between each hotel pushed
researcher to conduct an analytical research about the influence of
marketing mix (Product, Price, People, Physical Evidence, and
Process) toward customer satisfaction and its implication on the
customer loyalty.
42
b. Literature Review
In this research, the literature review was used to collect all data
needed as well as the theory needed, mostly books/journals-oriented.
Among those helpful references, previous researches also play a
significant role in the data collection in terms of literature review.
Internet articles and official websites are also included to enhance
some theories stated and statistical data in this research.
c. Questionnaires
Product, Price, People, Physical Evidence, and Process, Customer
Satisfaction, and Customer Loyalty variables would be examined in
this research. The questionnaires were adapted from Yang (2012) as
comparison with Pullman Jakarta Central Park Hotel Customer Survey
which processed by Medallia through email after the guests check out
from the hotel. The research questionnaires were proved reliable and
valid from Medallia.
Overall, questionnaires are divided into two sections. Section 1
requires respondents to fill out their brief personal profiles and to
answer some questions regarding their visit at Pullman Jakarta Central
Park Hotel. Section two requires respondents to fill out Likert-scaled
questionnaire. This research’s Likert-scaled questionnaire uses 10
abbreviations legends that consist of:
(1) extremely dissatisfied, (2) strongly dissatisfied, (3) very
dissatisfied, (4) slightly dissatisfied, (5) dissatisfied, (6) satisfied, (7)
slightly satisfied, (8) very satisfied, (9)strongly satisfied, and (10)
extremely satisfied. Respondents will only have to tick one of the
columns to respond the statements given.
43
3.3.3 Operational Variables
To integrate with the present study to find out the relationship among
marketing mix (Product, Price, People, Physical Evidence, and Process),
Customer Satisfaction, and Customer Loyalty, Table 3.1 shows the source
and number of items of constructs used.
Table 3.1Questions Constructed in Research
No Variable Statement Previous Study
1 Product
1. Condition of guest room
2. Condition of guest room
equipment 3. Comfort of bed
4. Cleanliness of guest room
5. Atmosphere and Design of guest
room 6. Safe and Secure Yang (2012)
as comparison with
Pullman Jakarta
Central Park Hotel
Customer Survey
2 Price 1. Value for price paid for fine
dining breakfast 2. Value for price paid
3 People
1. Friendliness of front office staff
2. Pleasant welcome from team
3. Responsive to needs and
requests.
4 Physical
evidence
1. The cleanliness and Condition of
Hotel surroundings 2. Atmosphere and Design of the
hotel
5 Process 1. Speed of Check-In
44
2. Quality of Service Fine Dining Breakfast
3. Speed of Check-Out
6 Customer Satisfaction
1. Overall Experience
2. Overall Service
3. Overall Accommodations
4. Your Room and Bathroom
overall 5. Overall Fine Dining
7 Customer
Loyalty
1. Recommend
2. Recommend Brand
3.4 Validity and Reliability In this research, the researcher did not construct validity and reliability
test. Validity and reliability have been tested by Medallia and the results
of customer survey have been given to Pullman Jakarta Central Park Hotel
by Medallia.
3.5 Data Collection Procedure The secondary data collected for this research were obtained and gathered
from Pullman Jakarta Central Park Hotel’ Customer Survey. The
questionnaire consisted of two sections, which are demographic section
with 3 questions and response section with 23 questions for the response
on independent and dependent variables. The questionnaire applied 10
points of Likert Scale to ease and distinguish the specific choice of
respondents. Moreover, the results of responses were inputted. Lastly, all
the secondary data obtained were tabulated by using statistical tools.
45
3.6 Hypothesis Testing 3.6.1 Structural Equation Modeling (SEM) Analysis
This research applied SEM as the analysis tool for hypothesis testing.
According to Lei and Wu (2007) structural equation modeling is a general
term that has been used to describe a large number of statistical models
used to evaluate the validity of substantive theories with empirical data.
Statistically, it represents an extension of general linear modeling (GLM)
procedures, such as the ANOVA and multiple regression analysis.
SEM takes a confirmatory (hypothesis testing) approach to the
multivariate analysis of a structural theory, one that stipulates causal
relations among multiple variables. The goal is to determine whether a
hypothesized theoretical model is consistent with the data collected to
reflect this theory. SEM has a number of synonyms and special cases in
the literature including path analysis, causal modeling, and covariance
structure analysis, which are measurement model and path model.
Path model is an extension of multiple regressions that involves various
multiple regression models or equations that are estimated simultaneously
(Lei and Wu, 2007). This provides a more effective and direct way of
modeling mediation, indirect effects, and other complex relationship
among variables. The measurement model in SEM is evaluated through
confirmatory factor analysis (CFA) which allows an indicator to load on
multiple factors. The combination of CFA models with structural path
models on the latent constructs represents the general SEM framework in
analyzing covariance structures. Latent constructs such as intelligence or
reading ability are often gauged by responses to a battery of items that are
designed to tap those constructs.
46
One of the primary advantages of SEM (vs. other applications) is that it
can be used to study the relationships among latent constructs that are
indicated bymultiplemeasures. It isalso applicable to both experimental
and non-experimental data, as well as cross-sectional and longitudinal
data.SEMtakes a confirmatory (hypothesis testing) approach to the
multivariate analysis of a structural theory, one that stipulates causal
relations among multiple variables.
More thanother statistical tools, SEM inspires enthusiastic praise as well
as persistent rejection. On the one hand, SEM allows for conducting and
combining a vast variety of statistical procedures like multiple
regressions, factor analysis, (M) ANOVA and many others.There are four
main advantages to using SEM, which are:
1) Flexibility
2) Latent variable modelling
3) Dealing with error
4) Testing models and theory
The possibility of modeling complex dependencies (95%) and latent
variables (82 %) were regarded as being the main advantages, as well as
the main reasons to use SEM.SEM is very flexible, because it deals not
only with a single simple or multiple linear regressions, but with a system
of regression equations. SEM represents a multitude of techniques
‘underone umbrella’, which might be explained more comprehensively by
its core concepts and typical examples.
According to Sentosa (2006), several suitability indexes and the cut-off
value which used in the test to determine whether a model is accepted or
not could be described as follow:
47
a. Chi-Square Statistic (χ2)
Chi-square statistic defined as the most fundamental test tool to
measure overall fit and according to Joreskog and Sorbom (as cited in
Sam, 2006), chi-square will be better if the value is smaller and a
model considered as a good if the probability with cut off value
p<0.05, which means the smaller the chi-square, the better model fit.
b. RMSEA (The Root Mean Square Error of Approximation)
RMSEA is an index that can be used to help chi-square statistic in a
big number of samples. RMSEA value shows goodness-of-fit which
expected if the model is estimated in population. According to
Arbuckle (1999), RMSEA = 0 is exact/good fit, RMSEA < 0.05 is
close fit, RMSEA > 0.08 means reasonable error of approximation.
RMSEA of 0.08 to 0.10 provides a mediocre fit and below 0.08 shows
a good fit (MacCallum et al, 1996).
c. Goodness of Fit Index (GFI) and Adjusted Goodness-of-Fit-Index
(AGFI)
GFI is a non-statistical measurement which has value ranged between
0 (poor fit) up to 1.0 (perfect fit) (Sentosa, 2006). AGFI is an adjusted
GFI value with the available degree of freedom.
d. CMIN/DF
Index fit is the minimum sample discrepancy function (CMIN) divided
by degree of freedom (DF) which will create a result of CMIN/DF.
Usually, the researchers report it as one of the indicators for measuring
fit level of a model. In this case, CMIN/DF can be defined as chi-
square statistic because χ 2 is divided by its DF thus it is called as chi-
square relative. χ 2 relative that is less than 2.0 or even less than 3.0
shows that the model and the data is fit (Sentosa, 2006). In addition, if
CMIN/DF is close to 1, it means the data is good fit, while [1-2] is
acceptable fit, and sometimes [1-3] or [1-5].Recommendations
48
rangefrom as high as 5.0 (Wheaton et al, 1977) to as low as 2.0
(Tabachnick and Fidell, 2007).
e. TLI (Tucker Lewis Index)
TLI is an alternative incremental fit index which compares a tested
model towards a baseline model. The TLI is not normed, and thus its
value can fall below 0 or above 1 (Hair et al., 2005). According to
Arbuckle in Ferdinand, value closes to 1.0 is a very good fit (Sentosa,
2006).
f. CFI (Comparative Fit Index)
The values for this statistic range between 0.0 and 1.0 with values
closer to 1.0 indicating good fit. CFI greater than roughly .90 may
indicate reasonably good fit of the researcher’s model (Hu &Bentler,
1999).
g. NFI (Normend Fit Index)
NFI value is the value of mismatch between the target model and the
basic model. NFIvalues for this statistic range between 0.0 and 1.0
with values closer to 1.0 indicating good fit (Hu and Bentler, 1999).
h. IFI (Incremental Fit Index)
Values ≥ 0.90 indicate a good fit (Hair et al., 2005), while 0.8 ≤ IFI ≤
0.9 it means mediocre fit.
49
The summary of Goodness of Fit Index (GFI) will be presented in table
below:
Table 3.2 Summary of Goodness of Fit Index (GFI)
Index Abbreviation Recommended Criteria
Chi-square statistic CMIN/DF 2.00 ≤ x ≤ 5.00
Root mean square error of
approximation RMSEA 0.08 ≤ x ≤ 0.10
Tucker lewis index TLI 0 ≤ x ≤ 1
Normend fit index NFI 0 ≤ x ≤ 1
Comparative fit index CFI 0.80 ≤ x ≤ 0.90 or ≥0.90
Incremental fit index IFI 0.80 ≤ x ≤ 0.90 or ≥0.90
Goodness-of-fit index GFI 0 ≤ x ≤ 1
(Source:Tabachnick and Fidell, 2007; MacCallum et al, 1996; Hair et al., 2005;
Hu and Bentler, 1999; Sentosa, 2006)
Based on Hair, et al. (2010), that when SEM results show at least 4
goodness of fit index in recommended criteria, hence the model is considered fit
for stable.
50
CHAPTER IV
ANALYSIS AND INTERPRETATION
4.1 Company Profile The Pullman was created in 1864 by George Mortimer Pullman and also
named after him. The first Pullman is a sleeping car for exclusive train
travel. Pullman International Hotel was created in 1987. In 1993, Pullman
was acquired by Accor. Pullman hotels became Sofitel and Mercure. In
December 2007, Accor re-launched Pullman worldwide. The first Pullman
was Pullman King Power Bangkok.
Figure 4.1 Pullman Logo
(Source: Pullman Jakarta Central Park)
Figure 4.1 The Pullman logo inspired by the Ying and Yang symbol to
express the dual ‘Bleisure’ aspect, to describe its strategy aimed at new-
generation travelers who, says the group, are increasingly mixing business
with leisure.
Located in the main regional and international cities, Pullman hotels
provide an extensive range of tailored services, access to groundbreaking
technologies, and “co-meeting”, a new approach to organize meetings,
seminars and high-end incentives. By the end of 2011, the Pullman
network will include 70 hotels across Europe, Africa, Middle East, Asia
Pacific and Latin America.
51
Pullman Jakarta Central Park was officially open on 16 November 2011.
It is strengthened Accor’s leadership as the largest hotel operator in
Indonesia and demonstrates aggressive expansion objectives for the brand
both in the region and in Indonesia. Pullman Jakarta Central Park is
located in Podomoro City Super Block, providing strategic location for
both business and leisure travelers with only a short distance from and to
Jakarta International Airport, Soekarno – Hatta. While its convenience for
business persons is unrivaled, Pullman Jakarta Central Park hotel is also
adjacent to the international award winning Central Park Mall, the
extraordinary shopping icon in Asia, who has won several prestigious
international achievements over the years.
Pullman Jakarta Central Park is the first and the newest five star
international hotel in West Jakarta, which is distinctively designed with an
“Industrial Raw” concept, a cross between a modern museum and a
designer signature hotel, because Pullman Jakarta Central Park adopts Pop
Art as the concept for its hotel interior. The Pullman room signatures are
starting from high floors, so that each room has a view of the best in each
side. Featuring a contemporary design, a combination of grey tones and
rich woods, our 317 rooms are including 195 Deluxe room, 67 Executive
Deluxe rooms, 54 Executive Suites and 1 spacious Central Park Suite
with unrivaled city skyline views.
Rooms are dashingly appointed with sleek and stylish furniture with the
latest high-tech amenities plus high-speed Internet Access/Wi-Fi. All of
these are enhanced by floor-to-ceiling window through which spectacular
city views add to a wondrous experience in Jakarta. Pullman Central Park
Jakarta offers world sanctuary on the pulse of Jakarta city, whether
travelling for business or pleasure, the playful Jakarta city hotel is a
refreshing mix of high-tech hospitality and glamorous urban living.
52
4.2 Data Analysis The research observed about the Customer Perception adapted to
Marketing Mix (product, people, physical evidence, and process) toward
Customer Satisfaction and the implication on Customer Loyalty. This
research targeted Pullman Jakarta Central Park guest as the respondents.
This questionnaire is open for both genders, male and female. There were
464 who completed the questionnaire but only 385 eligible for further
analysis.
4.2.1 Respondent Profile
Figure 4.2 Gender
Figure 4.1 The result showed that the respondents of this research is 385
people which consist of 58.70% male and 41.30% female, which means
the number of respondents were dominated by male guest.
53
Figure 4.3 Nationality
Figure 4.1 In this research, the respondents were Indonesians and
Foreigners. There were more foreign guests filling up the questionnaire
(62.60%), followed by Indonesian guests (37.40%).
Figure 4.4 Purpose of Trip
Figure 4.2 Showed the result that 53.25% guests stayed in Pullman Jakarta
Central Park are for business purpose and 46.75% guests stayed for leisure
purpose. The percentage result is slightly different from the business and
54
leisure purpose, because Pullman Jakarta Central Park aimed to stay
tailored to fulfill the needs of business and leisure guests where the
location of the hotel near with airport and Central Business District, but
the hotel also adjacent to the international award winning Central Park
Mall, the extraordinary shopping icon in Asia which makes the guests
easy to do their business and leisure.
4.2.2 Structural Equation Modeling (SEM) Analysis
Before conducting SEM, the Classical Assumption Test has conducted
which are: normality, multicollinearity, and heterocedasticity to make sure
all the data could be processed further. After that a structural equation
modeling using AMOS V18 was conducted with the following variables:
Customer Satisfaction and Customer Loyalty as the outcome or dependent
variables, and the Product, People, Physical Evidence, and Process as the
independent variables.
Figure 4.5 Standardized Estimates Calculation
(Source: Researcher)
55
To achieved model fit, one variable was deleted which is Price, and One
indicator of Process (Pcs2) was deleted as well. Therefore in this path
model, there are exogenous and endogenous variable. Exogenous variable
is the variable that affects other variables (independent variable). In this
research, there are 4 exogenous variables; they are Product (Prd), People
(Ppl), Physical Evidence (Pse), and Process (Pcs), while endogenous
variable is the one that affected by other variables (dependent variable). In
this research, there are two endogenous variables which are Customer
Satisfaction (CS) and Customer Loyalty (CL).
4.2.2.1 Goodness-of-Fit-Criteria of the Structural Model
Goodness-of-fit-criteria are the step of which model is accepted and which
model is rejected. It is an important measurement to know the acceptance
of each variable and the first thing to measure is chi-square that indicates
the differences of observed variance and covariance.
Table 4.1 Summary of Good Fit Criteria
No
Goodness of
Fit Index Good Fit Value Value Interpretation
1 CMIN/DF 2.00≤ x ≤5.00 6.19 Poor fit
2 RMSEA 0.08 ≤ x ≤ 0.10 0.11 Mediocre fit
3 TLI 0 ≤ x ≤ 1 0.88 Good fit
4 NFI 0 ≤ x ≤ 1 0.89 Good Fit
5 CFI 0.8 ≤ x ≤0.90 or ≥
0.90 0.91 Good fit
6 IFI 0.8 ≤ x ≤0.90 or ≥
0.90 0.91 Good fit
7 GFI 0 ≤ x ≤ 1 0.83 Good Fit
(Source: Researcher)
56
Goodness-of-Fit criteria is the step in which the model is concluded as
acceptable of not.
1. CMIN
In this research, Chi-square value is 799.074, the degree of freedom is
129, and the probability level is .000. The value of CMIN/DF is 6.1,
more than 5. Therefore it is concluded that the model is poor fit.
2. RMSEA
RMSEA measures how well the model is with the parameter of
population. Since MacCallum et al (1996) stated that RMSEA value
ranging from 0.08 to 0.10 indicate mediocre fit, therefore as the
RMSEA value in this research is 0.11, this model is considerably
mediocre fit in the population.
3. Tucker-Lewis Index (TLI)
Tucker-Lewis Index is used to compare the proposed model and the
possible alternative model. The TLI value in this research is 0.88.
Therefore the model is indicated as good fit.
4. Normed Fit Index (NFI)
Normed Fit Index (NFI) is a measure to re-scale chi-square into scale 0
to 1. The value of NFI is 0.89. The model is good fit.
5. Comparative Fit Index (CFI)
Comparative Fit Index (CFI) measure the improvement in non-
centrality in going in the model. The value of CFI is 0.91. Therefore the
model is indicated as Good fit.
57
6. Incremental Fit Index (IFI)
IFI indicates the chi-square value. The function of IFI is similar with
NFI and CFI. The value is 0.91.The model is indicated as Good fit.
7. Goodness of Fit Index (GFI)
GFI is the criteria for weighing proportion from variance in matrix. The
value is 0.83.The model is indicated as Good fit.
4.2.2.2 Choosing the Input Matrix Type and Proposed Model Estimation
The type of matrix used in here is maximum likelihood matrix.
Table 4.2 Regression Weight
Estimate S.E. C.R. P Label Customer Satisfaction <--- Product .891 .252 3.544 *** par_10
Customer Satisfaction <--- People .497 .110 4.508 *** par_21
Customer Satisfaction <--- Physical
Evidence -.346 .257 -1.342 .179 par_24
Customer Satisfaction <--- Process -.145 .147 -.986 .324 par_30
Customer Loyalty <--- Customer
Satisfaction 1.096 .046 23.657 *** par_36
Table 4.2 The value of the Critical Ratio or it is written as CR (t-stats) of
all variables should be more than 1.96 and P value should be less than
0.05. From the table, it is seen that there are two variable did not match
the condition, which is Customer Satisfaction <--- Physical Evidence (CR
= -1.342) and Customer Satisfaction <---Process (CR = -.986). Therefore,
it indicated that Physical Evidence and Process did not significantly
influence Customer Satisfaction.
58
Table 4.3 Standardized Regression Weight
Estimate Customer Satisfaction <--- Product .978 Customer Satisfaction <--- People .566 Customer Satisfaction <--- Physical Evidence -.356 Customer Satisfaction <--- Process -.138 Customer Loyalty <--- Customer Satisfaction .893 Prd5 <--- Product .784 Prd4 <--- Product .819 Prd3 <--- Product .769 Prd2 <--- Product .796 Prd1 <--- Product .876 Cs1 <--- Customer Satisfaction .879 Cs2 <--- Customer Satisfaction .828 Cs3 <--- Customer Satisfaction .787 Cs4 <--- Customer Satisfaction .752 Cs5 <--- Customer Satisfaction .684 Lyt1 <--- Customer Loyalty .960 Lyt2 <--- Customer Loyalty .926 Ppl3 <--- People .861 Ppl2 <--- People .857 Ppl1 <--- People .928 Pse2 <--- Physical Evidence .800 Pse1 <--- Physical Evidence .903 Pcs3 <--- Process .740 Pcs1 <--- Process .798
(Source: SPSS AMOS V18 output)
Table 4.3 Standardized regression weights show the tendency of influence
from indicators to variable and from one variable to other variable. In this
test, there are 2 insignificant, because the variable which influences the
desired variable less than 0.5.The variables are Customer Satisfaction <---
Physical Evidence (-.356) and Customer Satisfaction <--- Process (-.138).
There is three variables which have significant value, which are
Product/Service, People, and Customer Satisfaction since the estimate
value is more than 0.5 (.978, .566, and .893).
59
Table 4.4 Square Multiple Correlations (R2)
Estimate Customer Satisfaction 1.004 Customer Loyalty .798 Pcs1 .637 Pcs3 .547 Pse1 .815 Pse2 .641 Ppl1 .861 Ppl2 .735 Ppl3 .741 Lyt2 .858 Lyt1 .922 Cs5 .467 Cs4 .566 Cs3 .620 Cs2 .685 Cs1 .772 Prd1 .768 Prd2 .634 Prd3 .591 Prd4 .671 Prd5 .614
(Source: SPSS AMOS V18 output)
Table 4.4Squared multiple correlations explain the ability of the predictors
to explain their variances. It shows the estimated value of square multiple
correlations. By seeing the result showed in the table, it indicated that the
endogenous variable are Customer Satisfaction (CS) and Customer
Loyalty (CL) were 1.004and .798or 0.01004% and 79.8% respectively by
using four exogenous variables in this research. The other variable
indicators are explained in the table above. Based on upon values, it can
be concluded that Lyt1 is the most reliable indicators of Customer Loyalty
(0.922).
60
Table 4.5 Standardized Total Effects
Process Physical Evidence People Product Customer
Satisfaction Customer
Loyalty Customer Satisfaction -.138 -.356 .566 .978 .000 .000
Customer Loyalty -.123 -.318 .505 .873 .893 .000
Pcs1 .798 .000 .000 .000 .000 .000 Pcs3 .740 .000 .000 .000 .000 .000 Pse1 .000 .903 .000 .000 .000 .000 Pse2 .000 .800 .000 .000 .000 .000 Ppl1 .000 .000 .928 .000 .000 .000 Ppl2 .000 .000 .857 .000 .000 .000 Ppl3 .000 .000 .861 .000 .000 .000 Lyt2 -.114 -.294 .468 .809 .827 .926 Lyt1 -.118 -.305 .485 .838 .857 .960 Cs5 -.094 -.243 .387 .669 .684 .000 Cs4 -.104 -.268 .426 .736 .752 .000 Cs3 -.109 -.280 .446 .770 .787 .000 Cs2 -.114 -.295 .469 .810 .828 .000 Cs1 -.121 -.313 .497 .859 .879 .000 Prd1 .000 .000 .000 .876 .000 .000 Prd2 .000 .000 .000 .796 .000 .000 Prd3 .000 .000 .000 .769 .000 .000 Prd4 .000 .000 .000 .819 .000 .000 Prd5 .000 .000 .000 .784 .000 .000 (Source: SPSS AMOS V18 output)
The total effect is the result of direct effect added by indirect effect and in
this research the relation of all exogenous variables (Prd, Ppl, Pse, and
Pcs) are toward to endogenous variable (CS) directly and (CL) indirectly.
The biggest effect to Customer Satisfaction is Product’s effect which is
(97.8%), and then it is followed by People’s effect (56.6%).And The
biggest effect to Customer Loyalty is Customer Satisfaction’ effect
(89.3%), followed by Product’s effect which is (87.3%), and People’s
effect (50.5%), while Process and Physical Evidence are giving negative
impact to Customer Loyalty, which means that if Process and Physical
Evidence increasing, the Customer Loyalty will decreasing.
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4.3 Interpretation Result
Table 4.6 Summary of Result Examination of Structural Model and Fit
Hypothesis C.R. P Conclusion
H1: Product significantly influences customer
satisfaction.
3.544 0.000 Accepted
H2: People significantly influence customer
satisfaction. 4.508 0.000 Accepted
H3: Physical Evidence significantly influences
customer satisfaction. -1.342 .179 Rejected
H4: Process significantly influences customer
satisfaction. -.986 .324 Rejected
H5: Customer Satisfaction significantly
influences customer loyalty. 23.657 0.000 Accepted
(Source: Researcher)
Table 4.6, the hypothesis testing of this research has been finalized.
Among five hypotheses, two are rejected as based on the analyses which
were Physical Evidence and Process that did not have a significant
influence toward endogenous variable (Customer Satisfaction). Although
Physical Evidence and Process is one of the reasons that led guests to
come to Pullman Jakarta Central Park Hotel, but the influence of Physical
Evidence and Process are not really significant towards Customer
Satisfaction.
As the first endogenous variable (Customer Satisfaction), it has a
significant influence toward another endogenous variable (Customer
Loyalty) which is 23.657with the standardized total effect of 0.893. It
proves that Customer Satisfaction has a real significant influence that
leads guests to be a loyal customer of the hotel. This result is also
62
supported by Yang (2012), Zhicheng Qin (2012), and Ayed&Majed
(2012) who say that Customer satisfaction has a significant influence on
customer loyalty.
According to Table 4.6, it shows that Physical Evidence and Process were
two rejected variables, which mean these two variables did not have
significant influence toward Customer Satisfaction. This result is same as
the finding in Yang (2012) which states that process and physical
evidence had a negative impact on customer satisfaction. But in contrast
Junqi Lin (2012) stated that process and physical evidence are two
significant predictors on customer satisfaction.
Ayed&Majed (2012) in their research shows that Product has a positive
and significant impact on satisfaction. Yang (2012) and Junqi Lin (2012)
also supported this result, where this research also has a same result,
which is the Product variable has a significant influence toward Customer
Satisfaction.
Other than that, People variable has a significant influence toward
Customer Satisfaction. However it is rather different with the finding of
Yang (2012) who statedthat people had a negative impact on customer
satisfaction.
63
CHAPTER V
CONCLUSION AND RECOMMENDATION
In this chapter, the detail findings will be discussed as well as recommendation
for managerial implication of both studies will be drawn. The suggestions for
future research also will be drawn in this chapter.
5.1 Conclusion This research has the objective to analyze the relationship among Product,
People, Physical Evidence and Process toward Customer Satisfaction and
Customer Loyalty. Thus, after conducting research analysis to achieve
research objectives, there are some major findings found and identified as
follows:
1. From the research, two exogenous variables (Product and People)
have significant influence on Customer Satisfaction.
2. Among two accepted exogenous variables, Product gave the most
positive significant to Customer Satisfaction. Most of guests did
choose Pullman Jakarta Central Park Hotel as their accommodation
because of the product offered by the hotel.
3. As the endogenous variable, Customer Satisfaction has a great
significant influence toward Customer Loyalty as the last research
objective in this study. The indicators of Customer Satisfaction proved
that they are connected to Customer Loyalty in long-term effect.
64
5.2 Recommendation
5.2.1 The Researcher
The researcher can implement the result of this research while she is in the
field of work to help the company to achieve its goal. Through marketing
mix, the researcher can improve the factors that have positive influence
toward customer satisfaction and customer loyalty.
5.2.2 President University
President University is a body which is also engaged in services industry
like hotels. Therefore the results of this study perhaps can be use as a
reference to the President University in order to achieve students’
satisfaction and loyalty.
5.2.3 Pullman Jakarta Central Park Hotel
The managerial implication to make a good marketing mix plan for
Pullman Jakarta Central Park Hotel is the most important. Based on the
result in Chapter 4 among four variables, just two variables, product and
people have a positive impact on customer satisfaction, thus, the
researcher had some implication in these two elements as following:
a. Product Strategy
The core products of the hotel are guest room and service. The
product/service strategy is to provide and maintain the condition of
guest room and the equipments. Make sure guest room is clean and
comfortable. Provided variety of facilities (TV, Espresso Machine,
Telephone, Air-condition, Refrigerator, Working Space, etc). Pleasant
atmosphereand design in guest room, variety of guest room types so
the guests have several options and they can choose the most suitable
room that go with their need. Ensuring customers’ safety and security
are essential.
65
b. PeopleStrategy
People factors is one factor that influence customer’s satisfaction.
People are essential in service delivery. Employees’ performance, on
how to handle customers and how to deal with contingencies is crucial
to the success of the hotel, therefore the employees of the hotel must
shows a great hospitality attitude, especially for front office staff, they
should be friendly to the guests, make the guest comfortable since the
guests first arrival impression will be measure from the front office
staff in check-in process.
A pleasant welcome from all the staff and responsive to guests needs
and requests also important, it is a must to makes the guests feel the
warmness so they could feel like they are in their own home in any
parts of the hotel (lobby, restaurant, swimming pool, etc). An intensive
training from the human resources department is necessary to improve
staff performance.
5.2.4 The Future Researcher
In this research, the hypothesis testing is using Structural Equation
Modeling (SEM) analysis which some indices are depended on the
number of sample (the greater the sample, the better the value). It is better
for future research to increase the number of sample in order to get the
better result. Besides increasing the sample size, it is also suggested to add
variables such as: Place, Promotion, and etc to analyze more through other
factor than this research has. In this research, the execution time is quite
short, the study only limited by gender, nationality, and purpose of trip,
and therefore it is expected that future researchers can extend the time
limit, so the future researcher could adding certain criteria such as: the
type of room, so the results of customer satisfaction and loyalty can be
differentiated according to the type of rooms.
66
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APPENDICES
APPENDIX 1 –Printed Out Questionnaire
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APPENDIX 2 – Printed Out Raw Data
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80
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APPENDIX 3 – SEM Analysis
Appendix 3.1 Regression Weights
Estimate S.E. C.R. P Label Customer Satisfaction <--- Product .891 .252 3.544 *** par_10
Customer Satisfaction <--- People .497 .110 4.508 *** par_21
Customer Satisfaction <--- Physical
Evidence -.346 .257 -1.342 .179 par_24
Customer Satisfaction <--- Process -.145 .147 -.986 .324 par_30
Customer Loyalty <--- Customer
Satisfaction 1.096 .046 23.657 *** par_36
Prd5 <--- Product 1.000 Prd4 <--- Product .798 .045 17.740 *** par_1 Prd3 <--- Product .822 .044 18.655 *** par_2 Prd2 <--- Product .898 .052 17.152 *** par_3 Prd1 <--- Product .894 .046 19.342 *** par_4
Cs1 <--- Customer Satisfaction 1.000
Cs2 <--- Customer Satisfaction .964 .035 27.241 *** par_5
Cs3 <--- Customer Satisfaction .937 .043 21.788 *** par_6
Cs4 <--- Customer Satisfaction 1.054 .065 16.215 *** par_7
Cs5 <--- Customer Satisfaction .793 .050 15.842 *** par_8
Lyt1 <--- Customer Loyalty 1.000
Lyt2 <--- Customer Loyalty .936 .027 34.148 *** par_9
Ppl3 <--- People 1.000 Ppl2 <--- People .898 .032 28.134 *** par_19 Ppl1 <--- People 1.018 .043 23.595 *** par_20
Pse2 <--- Physical Evidence 1.000
Pse1 <--- Physical Evidence .838 .041 20.195 *** par_23
Pcs3 <--- Process 1.000 Pcs1 <--- Process 1.243 .086 14.452 *** par_29
86
Appendix 3.2 Standardized Regression Weights
Estimate Customer Satisfaction <--- Product .978 Customer Satisfaction <--- People .566 Customer Satisfaction <--- Physical Evidence -.356 Customer Satisfaction <--- Process -.138 Customer Loyalty <--- Customer Satisfaction .893 Prd5 <--- Product .784 Prd4 <--- Product .819 Prd3 <--- Product .769 Prd2 <--- Product .796 Prd1 <--- Product .876 Cs1 <--- Customer Satisfaction .879 Cs2 <--- Customer Satisfaction .828 Cs3 <--- Customer Satisfaction .787 Cs4 <--- Customer Satisfaction .752 Cs5 <--- Customer Satisfaction .684 Lyt1 <--- Customer Loyalty .960 Lyt2 <--- Customer Loyalty .926 Ppl3 <--- People .861 Ppl2 <--- People .857 Ppl1 <--- People .928 Pse2 <--- Physical Evidence .800 Pse1 <--- Physical Evidence .903 Pcs3 <--- Process .740 Pcs1 <--- Process .798
Appendix 3.3CMIN
Model NPAR CMIN DF P CMIN/DF Default model 80 799.074 129 .000 6.194 Saturated model 209 .000 0 Independence model 38 7587.731 171 .000 44.373
Appendix 3.4 Baseline Comparisons
Model NFI Delta1
RFI rho1
IFI Delta2
TLI rho2 CFI
Default model .895 .860 .910 .880 .910 Saturated model 1.000 1.000 1.000 Independence model .000 .000 .000 .000 .000
87
Appendix 3.5 RMSEA
Model RMSEA LO 90 HI 90 PCLOSE Default model .116 .109 .124 .000 Independence model .336 .330 .343 .000
Appendix 3.6 GFI
Model GFI AGFI PGFI Default model .832 .753 .565 Saturated model 1.000 Independence model .128 .031 .115
Appendix 3.6 Squared Multiple Correlations (R2)
Estimate Customer Satisfaction 1.004 Customer Loyalty .798 Pcs1 .637 Pcs3 .547 Pse1 .815 Pse2 .641 Ppl1 .861 Ppl2 .735 Ppl3 .741 Lyt2 .858 Lyt1 .922 Cs5 .467 Cs4 .566 Cs3 .620 Cs2 .685 Cs1 .772 Prd1 .768 Prd2 .634 Prd3 .591 Prd4 .671 Prd5 .614
88
APPENDIX 4 – Classical Assumption Test
Appendix 4.1Multicollinearity
Coefficientsa
Model
Collinearity Statistics
Toleran
ce VIF
1 (Constant)
Prd .334 2.996
Prc .564 1.773
Ppl .424 2.360
Pcs .369 2.711
Pse .398 2.514
a. Dependent Variable: Cs
Appendix 4.2Normality
89
Appendix 4.3 Heterocedasticity