Mediating Effect of Customer Satisfaction in Enhancing Customer Loyalty

Abstract

Objective: The main aim of this study is to investigate the influence of brand image and perceived price on customer loyalty, with a focus on the role of customer satisfaction as a mediating variable. Theoretical Framework: The provision of car maintenance services is a lucrative business potential in the automotive industry, as consumers have an urgent need to ensure proper care and maintenance of their vehicles. The automotive after-sales market covers a wide range of operations, including many aspects such as post-purchase vehicle maintenance and the last phase of vehicle life. It includes all activities related to spare parts and after-sales service. Method: The demography being examined comprises the customer base of the Auto2000 West Sumatra workshop. The research study used a sample size of 254 people. The research used a purposive sampling methodology. The data analysis conducted in this study was performed using the SmartPLS software version 3.2.9. SmartPLS is a software application that facilitates researchers in analyzing data to investigate models. Results and Discussion: The establishment of strong and reliable relationships between consumers and organizations is an important determinant of true client loyalty. Evaluating customer loyalty requires the use of measures centered on customers' propensity to provide recommendations or engage in favorable communications, along with their intention to make repeat purchases and pay higher prices. Research Implications: Research has significant value for companies in increasing consumer loyalty. The suggested conceptual model aims to improve understanding of how customer loyalty can be improved by integrating the quality of service quality, price fairness, customer happiness, brand image, and trust. Originality/Value: The management of company models requires a serious approach, as changes can have a significant impact on the way companies operate and generate revenue. To increase the revenue of various companies, research and recommendation systems emerged over the past decade and consist of valuable services.