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THE EFFECT OF RETAILER AWARENESS, RETAILER QUALITY
PERCEPTION, RETAILER RELATIONSHIP QUALITY ON CUSTOMER
LOYALTY MEDIATED CUSTOMER SATISFACTION (A STUDY OF PERAHU
SALT BRANDS)
Febry Aditya Pratama
1*
, Susilo Toto Raharjo
2
Faculty of Economics and Business, Diponegoro University, Semarang, Indonesia
febriaditya998@gmail.com
1
, [email protected]m
2
ABSTRACT
Salt is a basic need that is no less important than sugar. Almost every household needs consumption
salt every day. The existence of salt in everyday life cannot be ignored. The problem that arises in this
study is that in recent years sales at perahu salt have experienced fluctuating sales, some complaints
about the services provided by Perahu salt principal sales are still unsatisfactory to retailers, especially
wholesalers. The purpose of this study is expected to be used by company management as a reference
to provide customer satisfaction through the services provided by the principal of the Perahu salt
producer through retailer awareness, perceived retailer quality, relationship quality, customer
satisfaction and customer loyalty. Quantitative data is taken directly from filling out questionnaires
from shops, especially wholesalers in the Central Java area. The results showed that in order to
increase customer loyalty in purchasing Perahu salt through retailers, Perahu salt customer satisfaction
through retailers needs to be improved. Increasing Perahu salt customer satisfaction through retailers
can be done through retailer awareness, perceived retailer quality and relationship quality. Retailers
have a big role in driving sales of Perahu salt. When the retailer has the power where the customer
realizes the existence of the retailer, the customer will want to make a purchase at the retailer,
especially when the customer and the retailer have a good quality relationship such as the customer has
a long transaction relationship with the retailer, then this will satisfy the customer more. When
customers feel this satisfaction, there is an increase in customer loyalty where customers will want to
continue making purchases.
Keywords : Retailer Awareness; Perception of Retailer Quality; Customer Loyalty; Customer
Satisfaction
INTRODUCTION
In the business world, every firm place customer satisfaction as the company's goal
because it leads to a stronger competitive position under intense competition according to
Fornel, (1992) in (Kahreh et al., 2011). It is common practice that the true purpose of a business
relationship is to create and maintain reciprocal value between seller and buyer (Christopher,
2011). The effect of the company's service quality on the company's profitability has increased
due to increased consumer movements and increasingly fierce global competition. Because of
this, the business community has realized that customer satisfaction is the key to business
success, as satisfied customers not only have higher returns but also bring in more customers,
while dissatisfied customers cause negative publicity and shrinking company profits. The
business-to-business (B2B) model involves the marketing characteristics of high customer
loyalty, high customer switching costs, specific marketing channels, and a distinct corporate
image of brand cognition (P.-L. Huang et al., 2019).
Salt is a basic need that is no less important than sugar. Almost every household need salt
consumption every day. The existence of salt in everyday life cannot be ignored. Based on its
use, salt is grouped into two groups, namely consumption salt and industrial salt.
The problem that arises in this study is that in recent years sales of Perahu salt have
fluctuated, some complaints about the service provided by Perahu salt principal sales are still
unsatisfactory to retailers, especially wholesalers. Retailer awareness states that consumers have
the ability to recognize or remember that a retailer is a member of a particular retailer category
(Pappu & Quester, 2006). Retailer awareness is the extent to which the retailer's name is familiar
to shoppers.
The Effect of Retailer Awareness, Retailer Quality Perception, Retailer Relationship Quality on Customer
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According to Aaker (1991) This is the strength of the retailer's presence buyer's mind. The
power of retailer awareness is again influenced by the expertise to recognize retailers in several
conditions including store recognition and store recall (Keller, 2013). The study explains that
the retailer is an information-rich cue for its image (Grewal et al., 2004).
Kotler, (2001) defines the quality required as the entirety of the characteristics of a
product/service derived from its ability to meet all express/implied needs. Literature finds two
forms of quality: objective and subjective (Y. Huang & Huddleston, 2009). While objective quality
refers to actual quality, the latter means consumers' perception of quality (Kotler, 2001).
According to Zeithaml, (1988) states that perceived quality represents the consumer's
assessment of their overall superiority/superiority. The perception of quality can be derived
from the product to the product market. However, on the goods service continuum of the retail
business, the product can be either a good or a service. So, here the perceived quality retailer is
defined as the retailer's perception of quality as well as the perception of the quality of the
product of goods or services offered by the retailer (Pappu & Quester, 2006).
According to Hennig-Thurau and Klee, (1997) argue that relationship quality is the degree
to which a relationship fits to meet customer needs related to the relationship. Whereas
Grönroos, (2000) states that relationship quality as the dynamic of long-term quality formation
in sustainable customer relationships and shows that from the customer's point of view,
relationship quality is a perception of quality that continues to evolve over time.
According to Griffin, (1995) defines loyalty as the regular repurchase of a particular
product or service, the act of recommending this to others, and immunity to promotion of
similar and competing products or services. Kotler, (2003) states that the cost of developing new
customers is five times the cost of retaining existing customers in a competitive environment,
highlighting the importance of increasing or maintaining the loyalty of existing customers. So,
repurchase behavior is a direct measurement used to evaluate customer loyalty.
Based on this background, researchers are interested in taking research with the title "The
Effect of Retailer Awareness, Perception of retailer quality, quality of Retailer Relationships on
Customer Loyalty by Mediating Customer Satisfaction”
RESEARCH METHOD
Types of research
This study used primary data for analysis purposes, while the tool used to collect data was
in the form of questionnaires, which allowed researchers to get diverse responses from
respondents (Sekaran & Bougie, 2016). Secondary data collection, such as information from
publication journals, websites, or other media will help researchers in compiling research at an
early stage (Sekaran & Bougie, 2016). Therefore, secondary data such as publication journals,
master theses, doctoral dissertations, websites, and other supporting media are also used in this
study to develop research models. Data was taken directly from filling out questionnaires from
shops, especially wholesalers in the Central Jawal area. Secondary data is data obtained
indirectly. This indirect data is obtained from Retailer stores in the Central Jawa Area.
Population and Sample
The population in this study is all wholesale retailers in Central Java. The representative
and ideal number of samples is between 100-200. The samples used in this study were
wholesale retailers in the cities of Juwana, Pati, Kudus.
Data collection
The instrument used to obtain and collect data in this study was through the distribution
of online questionnaires using a google form media containing a list of questions regarding
individual perceptions related to variables in this study. Furthermore, data collection in this
study was carried out through 2 (two) kinds of questions in the questionnaire, including:
The Effect of Retailer Awareness, Retailer Quality Perception, Retailer Relationship Quality on Customer
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1. Closed question questionnaire, in the form of closed questions used to obtain data on
respondents' perceptions of Reseller Awareness, Retailer Quality Perception, Reseller
Relationship Quality, Customer Satisfaction and Customer Loyalty.
2. Open-ended questionnaire, in the form of questions used to obtain input and additional
information from respondents related to variables in the study.
Metode Analisis
This study used mediation variables, namely knowledge sharing behavior. A variable can
be said to be a mediator variable if it can explain the extent of the relationship between the
independent and dependent variables" (Baron & Kenny, 1986). Mediation testing is carried out by
procedure "(Sobel, 1982) which is carried out by testing the effect of the independent variable
(X) on the dependent variable (Y) through the mediation variable (M). Furthermore, the
standard error coefficients a and l b are denoted with Sa and Sb. The magnitude of the indirect
effect Sab is calculated by the formula:
𝑠𝑎𝑏 =
√
𝑏
2
𝑠𝑎
2
+ 𝑎
2
𝑠𝑏
2
+ 𝑠𝑎
2
𝑠𝑏
2
Description:
sab : The magnitude of the standard error indirect influence
a : independent variable path (X) with interverning variable (I)
b : intervening variable path (I) dengan variable dependen (Y)
sa : standard error of coefficient a
sb : standard error of coefficient b
Further to test the significance of indirect influencers, it is necessary to calculate the t value of
the ab coefficient with the formula:
𝑎𝑏
t =
𝑆𝑎𝑏
The calculated t value compared with the table t value, among others t table ≥ 1.96l for 5%
significance and t table ≥ 1.64l showed 10% significance. If the calculated t value > the table t
value, then there is a mediation effect” according to Ghozali, (2009).
RESULT AND DISCUSSION
Research results
The respondents in this study were wholesalers who were in the city of lJuwana, Pati,
Kudus. The questionnaire has been distributed until 254 respondents are eligible to be
processed. Data from sample collection was obtained through two ways of distributing
questionnaires door to door and online such as Google Form with dissemination through
WhatsaApp groups. Respondents are described in general terms through profile criteria
consisting of the last level of education, and income per month.
The respondents used were wholesalers who were in the city of Juwana, Pati, L Kudus
dominated by respondents from the high school education level of 134 respondents with a
percentage of 52.8% of the total respondents. In addition, there were respondents with Diploma
education levels of 48 people (18.9%), S1 with 63 people (24.8%), and S2 with 9 people
(6.5%).
SEM Analysis
Exogenous and Endogenous Confirmatory Factor Analysis
Table 1 Goodness-of-fit Test Results of Exogenous Construct Confirmatory Factor Analysis
Goodness of
Fit Index
Cut of Value
Analysis Results
Model Evaluation
Probability
≥0,05
0,000
Marjinal
The Effect of Retailer Awareness, Retailer Quality Perception, Retailer Relationship Quality on Customer
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CMIN/DF
≤2,00
1,986
Fit
GFI
≥0,90
0,937
Fit
AGFI
≥0,90
0,904
Fit
NFI
≥0,90
0,914
Fit
CFI
≥0,95
0,955
Fit
IFI
≥0,90
0,956
Fit
TLI
≥0,95
0,942
Marjinal
RMSEA
≤0,08
0,062
Fit
Source: Processed primary data, 2023
To obtain the results of the extracted indicators in forming latent variables can be
generated from the value of the standardized loading factor. Each loading factor is required to
meet a value of ˃0.50 or have an ideal value of 0.7 according to Ghozali, (2014). In accordance
with these criteria, it can be indicated that the indicator is good enough to be able to form a
latent variable.
Endogenous Variable Constructs
Table 2 Goodness-of-fit Test Results Endogenous Constructory Confirmatory Factor Analysis
Goodness of
Fit Index
Cut of Value
Analysis Results
Model Evaluation
Probability
≥0,05
0,080
Fit
CMIN/DF
≤2,00
1,498
Fit
GFI
≥0,90
0,974
Fit
AGFI
≥0,90
0,948
Fit
NFI
≥0,90
0,941
Fit
CFI
≥0,95
0,979
Fit
IFI
≥0,90
0,979
Fit
TLI
≥0,95
0,967
Fit
RMSEA
≤0,08
0,044
Fit
Source: Processed primary data, 2023
To produce indicators that are extracted in forming latent variables can be seen from the
value of standardized loading factors, each loading factor is required to meet the value ˃0.50 or
have an ideal result of 0.7 according toGhozali, (2014). These criteria are able to indicate that
the indicator has good criteria to be able to form a latent variable.
Normality Test
Table 3 Full Model Goodness-of-fit Test Results
Full Model Construct Goodness-of-Fit Criteria
Goodness of
Fit Index
Cut of Value
Analysis Results
Model Evaluation
Probability
≥0,05
0,006
Marjinal
CMIN/DF
≤2,00
1,312
Fit
GFI
≥0,90
0,928
Fit
AGFI
≥0,90
0,901
Fit
NFI
≥0,90
0,911
Fit
CFI
≥0,95
0,977
Fit
IFI
≥0,90
0,977
Fit
TLI
≥0,95
0,971
Fit
RMSEA
≤0,08
0,035
Fit
Source: Processed primary data, 2023
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From the table, it is known that the Goodness of Fit Index with each cut of value, where
the results of the analysis of this research model show that it must meet the specified cut of
value criteria. Of all Goodness of Fit Index, there is a marginal result value in probability with a
value of 0.006 with a classification for probability ≥0.05. Other Goodness of Fit Indices, namely
CMIN/DF, GFI, AGFI, NFI, CFI, IFI, TLI, and RMEA have met the fit criteria based on their
respective cut of value.
Hypothesis Test
Table 4 Regression Weight Full Model
HIPOTESIS
JALUR
S.E
C.R
P
CONCLUSION
H1
KP → KP
0,077
4,738
0,000
Positif signifikan
H2
PKP→KP
0,204
0,212
0,832
Positif insignifikan
H3
KH→KP
0,236
2,201
0,028
Positif signifikan
H4
KP→LP
0,086
2,069
0,039
Positif siginfikan
Source: Processed primary data, 2023
Hypothesis testing is based on the value of critical ratio and significant level of regression
weight, seen from the value of c.r. ≥ 1.96 and significant ≤ α = 0.05. The statement indicates
that the conditions of the hypothesis are accepted.
1. Test Hypothesis 1 (Relationship of Reseller Awareness to Customer Satisfaction)
Based on the test results, C.R. retailer awareness of customer satisfaction was
4,738. This value has qualified > 1.96 with sig. 0.000 < 0.05; So it is concluded that
hypothesis 1 which states retailer awareness has a positive effect on customer satisfaction is
accepted.
2. Test Hypothesis 2 (Relationship of retailer quality perception with customer
satisfaction)
Based on the test results, obtained C.R. Retailer quality perception of customer
satisfaction of 0.212. This value is smaller than 1.96 with sig. 0.832 > 0.05; So it was
concluded that hypothesis 2 which states the perception of retailer quality has a positive
effect on customer satisfaction is rejected.
3. Test Hypothesis 3 (Relationship of Quality relationship with Customer satisfaction)
Based on the test results, C.R. Quality relationship to customer satisfaction was
obtained at 2,201. This value has qualified > 1.96 with sig. 0.028 < 0.05; So it is concluded
that hypothesis 3 which states the quality of the relationship has a positive effect on
customer satisfaction is accepted.
4. Test Hypothesis 4 (The relationship of customer satisfaction with customer loyalty)
Based on the test results, C.R. customer satisfaction with customer loyalty was
obtained at 2,069. This value has qualified > 1.96 with sig. 0.039 < 0.05; So it is concluded
that hypothesis 4 which states customer satisfaction has a positive effect on customer
loyalty is received.
Indirect Effects Analysis
Table 5 Indirect Value
Reseller awareness
of Customer loyalty
Retailer quality
perception of
customer loyalty
Quality of
relationship to
Customer loyalty
Indirect
0,479
0,049
0,482
Hub.
Variabel
Influence
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Source: Processed primary data, 2023
Based on the test results, there is an intersection between retailer awareness and customer
loyalty. There is an indirect relationship between retailer awareness and customer loyalty
through customer satisfaction of 0.479. Based on the test results, there is an intersection
between retailers' quality perceptions of customer loyalty. There is an indirect relationship of
retailer quality perception to customer loyalty through customer satisfaction of 0.049. Based on
the test results, there is an intersection between relationship quality and customer loyalty. There
is an indirect relationship between relationship quality and customer loyalty through customer
satisfaction of 0.482. From these results, it is known that there is an indirect relationship
between independent variables (retailer awareness, retailer quality perception, relationship
quality) with dependent variables (customer loyalty). These results prove the customer
satisfaction hypothesis mediates the influence of retailer awareness, retailer quality perception
and relationship quality on customer loyalty making a purchase.
Discussion
The Effect of Reseller Awareness on Customer Satisfaction
Based on the test results in this study, it was concluded that retailer awareness has a
positive and significant influence on customer satisfaction. The strength of retailer awareness is
again influenced by the ability to recognize retailers in several conditions including store
recognition and store recalls. Retailer awareness is the extent to which the retailer's name is
familiar to buyers. The power of retailer awareness is again influenced by the expertise to
recognize retailers in several conditions including store recognition and store recalls.
Consumers rely on outside information when they evaluate product quality. The information
includes brand names and store names. A brand is usually used as a source of information. It is
applied to distinguish a company's products or services from their competitors. The more able
consumers are aware of a retailer who is able to meet their needs well, the more satisfied the
customer will be with the retailer because his needs are met by the retailer.
This result is in line with the research of Huang & Huddleston (2009) and Gronroos (2000) which
states the positive and significant influence of retailer awareness on customer satisfaction.
The Effect of Retailer Quality Perception on Customer Satisfaction
Based on the test results of this study, retailer quality perception variables did not have a
significant influence on customer satisfaction. The perceived quality of the retailer is defined as
the perception of the quality of the retailer as well as the perception of the quality of the
product, goods or services offered by the retailer. Perceived quality as a brand association is
elevated to the status of dimensional brand assets. The perception of quality can be derived from
the product to the product market. However, on its goods - the service continuum of the retail
business, the product can be goods. The problem arises, not all customers perceive that the
perception of retailer quality is important information for customers because the average retailer
sells products that are almost similar at almost the same price, this result shows that customers
look more at the ability of retailers to meet their needs compared to the quality of products and
services from these retailers.
These results are in line with the study (Hwang & Choi, 2013), and Pappu and Queste (2006),
which stated that retailer quality perception variables did not have a significant impact on
customer satisfaction.
The Effect of Relationship Quality on Customer Satisfaction
Based on the test results in this study, there is a positive and significant influence of
relationship quality on customer satisfaction. Good relationship quality will increase
commitment, trust, long-term sustainable relationships between customers and the company. In
addition, the quality of a good relationship can reduce the level of conflict that may occur
between customers and the company. In other words, if a good relationship is built between the
company and its customers, then customers will be satisfied due to low levels of conflict, high
The Effect of Retailer Awareness, Retailer Quality Perception, Retailer Relationship Quality on Customer
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commitment and trust between the two parties, and the occurrence of mutual relationships in the
long run. Customers who feel a good quality relationship with the company, then these
customers will feel more satisfied with the company's products and services. A high level of
customer satisfaction will result in profitability for the company. Satisfied customers will judge
the company's reputation as good because the company is communicative and this makes
customers more satisfied.
These results are in accordance with the research of Santouridis & Veraki (2017) and
Balaji, et al (2014), which stated that there is a positive and significant influence of relationship
quality on customer satisfaction.
The Effect of Customer Satisfaction on Customer Loyalty
The results of this research test state, customer satisfaction variables have a positive and
significant influence on customer loyalty variables. Customer satisfaction is the combined result
of perceptions, evaluations, and psychological reactions to experiences gained from consuming
goods or services. Thus, it can be said that excitement is relative. The only thing that can
measure satisfaction with a product is the consumer who uses or consumes the product.
Customers can derive satisfaction from the service or product as a whole; performance of
certain products representatives of companies or departments of various transactions such as
sales presentation, product delivery, repair service, after-sales service, complaint handling; and
post-purchase and pre-purchase relationships created by companies with their customers. If
customers are satisfied with the services or products offered by a brand then they are more
willing to recommend those services or products to others; have less likelihood of switching
brands, and are more likely to buy back from the same brand (Bennett & Rundle‐Thiele, 2004).
prove that customer satisfaction greatly influences loyalty intentions such as the intention to buy
back (Kandampul y and Suhartano, 2000) Various literature on customer satisfaction and loyalty
shows that customer satisfaction is the main determinant of customer loyalty.
This is in accordance with the research of Richard and Detrick (2003) and Tu and Chang (2012)
which states the variable of customer satisfaction has a positive and significant impact on the
variable of customer loyalty.
CONCLUSION
Based on the test results and analysis that have been explained based on the samples used
in this study, the following research problems can be drawn: a) In increasing customer loyalty to
purchase Perahu salt through retailers, Perahu salt customer satisfaction through retailers needs
to be improved. Increasing salt Perahu customer satisfaction through retailers can be done
through retailer awareness, retailer quality perception and relationship quality. b) Retailers have
a big role to play in driving sales of salt Perahus. When the retailer has the power where the
customer is aware of the existence of the retailer, then the customer will want to make a
purchase at the retailer, especially when the customer and retailer have a good quality
relationship such as the customer has been in contact with the retailer for a long time, then this
will be more satisfying to the customer. When customers feel the satisfaction, there is an
increase in customer loyalty where customers will want to continue making purchases.
The Effect of Retailer Awareness, Retailer Quality Perception, Retailer Relationship Quality on Customer
Loyalty Mediated Customer Satisfaction (A Study of Perahu Salt Brands)
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