The Mediation Effects of Customer Satisfaction on the Relations Between Product Price, Service Quality and Purchasing Decision

Abstract

This research has two main objetives: (1) to examine the effect of price, service quality and costumer satisfaction on costumer’s purchasing decision, (2) to test the mediation effects of the costumer satisfaction on the relations between product price and service quality on purchasing decision. Data was collected from 82 insurance company’s costumers using questionnaire, and hypothesis was tested using Smart- PLS 3.0. The findings reveal that (1) price, service quality and costumer satisfaction have direct and significant effect on costumer purchasing decision, (2) costumer satisfaction has an indirect and significant effect on the relationship between service quality and costumer’s purchasing decision, and (3) costumer satisfaction has no significant effect on the relationship between product price and costumer’s purchasing decision. The study enriches the existing empirical studies on product price, service quality, costumer satisfaction and purchasing decision in emerging market. The study also provides practical implications to service industry managers to enhance costumer satisfaction and purchasing decision, ultimately increasing market share and organisation profits by considering service quality and product price.

Examining the Structural Relatiosnhips of Product Price, Product Quality and Customer Purchasing Decision

“…This is because the purchasers have to figure out the balance and the value between the price and product performance (quality of the product) that they have before buying them (Voss et al, 1998). Many studies have shown that price influence positively and significantly on the customer's purchasingdecision (Asadi et al, 2014;Papafotikas et al, 2014;Song et al, 2019;Zietsman et al, 2019;Carvalho et al, 2020;Hati et al, 2021). Therefore, hypothesis of this study will be as follow:…”

“…Product price generally as preferred option for consumers to buy any products/ services from a company (Asadi et al, 2014;Hustić and Gregurec, 2015), therefore price has significant effect on product value and costumer purchasing decision (Asadi et al, 2014;Papafotikas et al, 2014;Song et al, 2019;Zietsman et al, 2019;Carvalho et al, 2020;Hati et al, 2021). However, previous empirical studies also revealed that product price does not influence significantly consumer purchasing decision (Gok et al, 2019) or adverse impacts on purchasing decision (Kukar-Kinney et al, 2012).…”

The effect of product quality and price toward repurchase intention at Taco Casa Bali during Covid-19 pandemic

“…Customer satisfaction is a crucial thing that encourages consumers to buy and consume products that have been destroyed, it is known that product quality depends on customer satisfaction (Rivai, 2021). Customer satisfaction is a feeling of pleasure that can arise after reaching a product with the desired performance (de Fatima Carvalho et al, 2020). Customers will be reluctant to buy if they judge the product's price as not commensurate with the benefits obtained.…”

Purchase Decision Strategy Through Private Bank Customer Satisfaction: Product Quality, Product Price, And Service Quality

“…Price is part of the marketing mix which is considered as a tool to increase profitability and customer satisfaction. The impact of material value, service quality, and the relationship of consumer satisfaction on equity and purchase decisions, as evidenced by the research of Carvalho et al (2020) shows that price, service quality, and customer satisfaction strongly and directly influence purchasing decisions. From some of these studies, authors propose the following hypothesis: H2: Price has strong relevance and has a significant effect on purchasing decisions through customer satisfaction.…”

“…In contrast to the findings of Hanaysha, (2016) that the price of a product or service can affect the level of satisfaction among customers, because every time they respond to the value given to the product or service purchased, they tend to consider the price. Carvalho et al, (2020) Ultimately, this study aims to provide a thinking structure that can enhance and integrate the literature on product, price and service related purchasing decisions influenced by customer satisfaction in the banking sector.…”