Customer Satisfaction As The Moderating Variable Of Customer Loyalty

The internet is an aspect that become one in the daily activities of Indonesian society, even in Purwokerto, almost all activities involve the help of the internet. PT Telkom as the largest internet service provider in Indonesia has facilitate the society to get internet access with its products, Indihome. Lately, a competitor is emerging which threatens the existence of PT Telkom as an internet service provider in Purwokerto, which is Biznet. Therefore, PT Telkom needs to examine what factors that make Indihome's customers loyal. Based on the problems above, this study was conducted to analyze the components of perceived product quality, perceived service quality, perceived value, and perceived price to the customer loyalty, mediated by customer satisfaction. The research methodology used for this study is a case study with survey research methods. The sample for this study were 155 people selected through convenience sampling technique derived from non-probability sampling technique. The sample comes from Indihome internet users in Purwokerto. The software used to analyze data is SPSS and AMOS statistical software. The research conclude that Perceived product quality, Perceived value, Perceived price has a positive effect on customer satisfaction. Perceived service quality has no effect on customer satisfaction. Customer satisfaction, Perceived service quality has a positive effect on customer loyalty. Perceived product quality, Perceived value, Perceived price has no effect on customer loyalty.


INTRODUCTION
One of many factors that causing the high number of internet users in Indonesia is the ease of accessing the internet.People can access the internet anywhere using their mobile devices without having to use a computer.According to a survey held by APJII (Asosiasi Penyelenggara Jasa Internet Indonesia) in 2016, 65% of internet user in Indonesia came from Java, followed by 15.7% from Sumatera, 6.3% from Sulawesi, 5.8% from Borneo, 4.7% from Bali, and 2.5% from Maluku and Papua.This makes Java a quite promising market for Internet Service Provider to look for potential customers.there are some Internet Service Providers that dominate the Indonesian market such as Telkom, Firstmedia, Biznet, MNC Play Media and Innovate.In Purwokerto, there are two ISP companies that already well known nationwide which are Telkom who were established prior to Biznet.Beside those two ISP, there are also another Purwokerto based ISP companies such as HostNet, Citranet, Mentarisatria and Centro, and they can be competitors that should be considered by Telkom.Amid the increasingly tight competition of Internet Service Providers in Purwokerto, Telkom must be able to maintain and reach new consumers by improving the quality of service, and competitive price so that customer satisfaction will be achieved and will eventually become a loyal customer.Internet product from PT Telkom is IndiHOME (Indonesia Digital HOME).
IndiHOME is a package of communication and data services such as home phone (voice), internet (Internet on Fiber or High Speed Internet), and interactive television service (USee TV Cable, IP TV).IndiHOME was launched to replace Telkom Speedy which has been operating since 2004 until closed in 2015.Although the number of Indihome users in Purwokerto is increasing every month (Gumilar 2018), Telkom also experiencing a problem, which is decreasing in selling quantity.This phenomenon can cause a problem to company because it can indicate the decrease of loyalty in the customer.It's suitable with a research conducted by Danny and Chandra (2001) that states that increase in loyal customers will lead to increase in company's sales and profit.Consider that total number of internet users in Purwokerto is just 49,000 from 249,000, the market is still very potential and decreased selling quantity should have been avoided.
The decrease of selling quantity of IndiHOME product can occurs because of many factors, such as the product and service quality offered by Telkom, pricing and also value that offered for the customer.Based from data obtained from several sources, there are some problems related to product quality, service quality, perceived price, and perceived value of IndiHOME.Telkom has Fair Usage Policy (FUP) which limits IndiHOME users to use internet excessively.This causes users who use internet more frequently can experience the decrease of internet speed (Maulana, 2016).According to viva.co.id, aside from FUP, the customers sometimes experience a sudden drop of internet connection speed with no reason.When customers want to complaint to Telkom's call center number 147, the customer service can't give exact solution to the problem (Asrul, 2018).Beside that, the price offered by Telkom is quite expensive if compared to their closest competitor, Biznet.
Telkom offers a 30Mbps internet and TV cable package for Rp575.000,00while Biznet for the same internet speed and TV cable package just priced for only Rp400.000,00.With those problems from service quality and perceived price, IndiHOME product become perceived giving less value for the consumers.Previous researches show that service quality, perceived price and perceived value have positive effect towards customer satisfaction (Agbor, 2011;Soegoto, 2013;Tampi, 2013).Another study also found that perceived service quality, perceived price and perceived value directly affecting customer loyalty (Lin et al., 2017;Rahi and Ghani, 2016;Asma et al., 2018).

Customer Loyalty
Customer loyalty is a deeply held commitment from a customer to re-buy a product or a service from a specific company in the future, even though there are factors that may cause a switching behavior (Kotler and Keller, 2016).The concept of customer loyalty is more related to behavior rather than attitude.When someone is already become a loyal customer, he represents a buying behavior defined as a nonrandom purchase expressed over time by some decisionmaking unit (Griffin 2009).A customer can be a loyal customer is affected by several factors.Company should pay attention to these factors in order to make them loyal to the company.
According to several studies, those factors are service quality, price, and customer's perception of value (Hasan et al., 2014;Hermawan et al., 2017).According to Tjiptono (2006) customer loyalty is a customer's commitment to a brand, store or supplier based on a very positive nature in long-term purchases.Tjiptono states four loyalty situation, no loyalty, spurious loyalty, latent loyalty and loyalty.No loyalty occurs when both attitude and repurchase behavior are weak, so no loyalty formed.Spurious loyalty occurs when repurchase are made on the basis of situational considerations, such as familiarity.Customer have seemingly positive attitudes towards a specific vendor, yet they are just as likely to purchase similar products from competitors.Latent loyalty occurs when ustomer have a very positive attitude towards a specific vendor, but a weak repurchase behavior.Loyalty is the most ideal situation wanted by marketers, where customer have positive attitude towards a product or company, followed by consistent repurchase behavior.According to Griffin (2005), there are some indicators to measure customer loyalty which are makes regular repeat purchases, purchases across product and service lines, refers other and demonstrates an immunity to the full of the competition

Customer Satisfaction
Satisfaction is feelings of pleasure and disappointment from a customer that result from comparing the product or service outcome to their expectations (Kotler & Keller, 2016).Customer will feel dissatisfied if the outcome falls short of expectation, satisfied if it matches the expectation, and delighted if it exceeds the expectation.Satisfied customer will eventually become a loyal customer which can lead to the increase of selling volume (Hasan, 2008).Company should do researches to find out whether the customer is satisfied or not.According to Loureiro, et al. (2012) and Irawan (2008) there are some indicators to measure customer satisfaction that are: Suitability of product specifications received with expected., suitability of performance and service received with expected and Generally feel satisfied (with the product or the service)

Perceived Price
Price is one of the customer's consideration when deciding which product they will use.In most cases people will not buy a product if the price they have to sacrifice is too high than what they will get.Price is the amount of payment that should be paid by one party to another in the return of goods or services (Schindler, 2012).Perceived price is the perception from a customer's mind about a product or service price, including sacrificed money, time cost, search cost, effort and psychic cost.Customer only interpret the price as cheap or expensive, and do not always remember the actual price (Wang and Chen, 2016).From company's point of view, price is a component that has direct effect to the profit of the company.But from customer's point of view, price is an indicator to compare the benefit they get and what the customer must sacrifice.According to Machfoedz (2005) pricing is influenced by various factors, both internal and external factors.
Internal factors include the company's marketing goals, marketing mix strategies, costs, and pricing methods.External factors include market and demand traits, competition, and other environmental elements.According to Tjiptono (2006) there are some indicators to measure perceived price that are price suitability with product's quality, price suitability with product's benefit and price competitiveness.

Perceived Value
Customer perceived value is the difference between the prospective customer's evaluation of all the benefits and all the costs of an offering and the perceived alternatives (Kotler and Keller, 2016).Meanwhile Schiffman and Kanuk (2008) states that the perception of value is based on monetary and non-monetary costs combined with perceptions of quality.Customer is influenced by perceived value when they are deciding to buy a product or service (Wu, 2014).According to Kanzu and Soesanto (2016), there are four factors that indicate the customer perceived value, which are quality value, value of money, emotional state and social value.Quality value is a benefit the customer gains from a product because of long-term and short-term reduction.Value of money is a benefit gained from the perception of the expected performance of a product or service.Emotional value is a benefit derived from the feelings or affective/positive emotions that result from consuming the product.Social value is a benefit gained from the ability of the product to improve the social self-concept of consumers.

Perceived Service Quality
Service is any act of performance given from a party to another which is intangible and doesn't resulting in any ownership of anything (Kotler and Keller, 2016).Service can be related with physical product or not.Meanwhile quality is everything that needed and wanted by the customers (Yamit, 2010).Thus perceived service quality can be defined as overall judgement from the customers about the excellence of service offering (Ishaq, 2012).Meanwhile according to Wardhani (2011) perceived service quality is is a process of customer's overall evaluation of service performance opportunities.
Service quality is closely related to the customer's perception of the business' quality.Lovelock and Wright (2008) states that service quality should starts from customer's needs and ends at customer's perception.It's mean that good service quality is not from the service provider's point of view, but from the viewpoint of the customers.Customer's expectation formed from their past experience, word of mouth done by other people, and then compared them.According to Lupiyoadi (2006) there are some indicators used known as SERVQUAL to measure service quality, which are tangibles (such as buildings, warehouse, and the physical appearance of the employees) reliability (the performance of the company must be in accordance with consumer expectations, such as timeliness, the same service for all consumers), responsiveness (provide prompt and precise service to the consumers), assurance (knowledge, courtessy and the ability of employees to grow consumer confidence in the company) and empathy (giving genuine, individualized attention to the customers by trying to understand the customer's desire).

Perceived Product Quality
Generally, product can be defined as something offered to the market to fulfill customer's needs.According to Kotler and Keller (2016), product is anything such as physical objects, services, personalities, place, organizations or ideas that can be offered to a market for attention, acquisition, use or consumption.Product is not limited to tangible goods but the intangible ones also included as product.Product quality itself can be defined as consumer's assessment of the superiority or privilege of a product (Tjiptono, 2008).In order to make a good perception of the product, company should make their product have advantages or superior if compared to their competitors.Company should improve their product's quality from time to time because increase in product's quality can make consumer's satisfied and can lead to them to make another purchase.When planning the market offer, marketers should consider about the levels of product.According to Tjiptono (2008), there are some dimensions that can be used to measure perceived product quality, which are Performance ( operational characteristic of the core product used by the customers), features (additional privileges in the form of complementary characteristics on the product), reliability (how strong the product is or free from any kind of damage), conformance to specification (the extent to which design and operation characteristics meet predetermined standards) and durability (related with how long the product can be used before have to be replaced with the new one).

METHODS
The type of this research is causal quantitative research with survey method using questionnaires for 155 respondents of Customers of Indihome product in Purwokerto.The measurement scale used in this study is Likert scale type.The answer of each instrument using Likert scale with 7 scales have gradations from strongly positive to strongly negative.

RESULTS AND DISCUSSION
As shown in the Table 1, the result of validity and reliability test is done using discriminate analysis factor.Table 1 shows that loading factor value of each indicator of perceived product quality, perceived service quality, perceived value, perceived price, customer satisfaction and customer loyalty variable are greater than the critical value (0.500).Therefore, all indicators of these variables are valid and it can be used as data collection instrument of this research.Goodness of Fit Index (AGFI), Goodness of-Fit Index (GFI) and Comparative Fit Index (CFI), with the result summary can be seen in Table 2.

Hypotheses Testing
The result of hypothesis testing is provided in Table3.

First Hypothesis Testing
Based on confidence level of 95% (α = 0.05) and degree of freedom (n -k) with one tailed test, it known the ttable value within study is 1.660.From the result of Structural Equation Modeling (SEM) analysis, it is obtianed the CR value of perceived product quality on customer satisfaction of 2.653 is greater than the value of ttable.Thus, Ho is rejected and Ha is accepted, it means that perceived product quality has a positive effect on customer satisfaction.Therefore, first hypothesis which states that perceived product quality has a positive effect on customer satisfaction is accepted.

Second Hypothesis Testing
SEM analysis result shows that the CR value of perceived service quality on customer satisfaction of 0.104 is less than value of ttable.Thus, Ho is accepted and Ha is rejected, it means that perceived service quality has no effect on customer satisfaction.Therefore, second hypothesis which states that perceived service quality has a positive effect on customer satisfaction is rejected.

Third Hypothesis Testing
Refers to the result of Structural Equation Modeling analysis, it is obtianed the CR value of perceived value on customer satisfaction of 2.105 is greater than ttable value.Thus, Ho is rejected and Ha is accepted, it means that perceived value has a positive effect on customer satisfaction.Therefore, third hypothesis which states that perceived value has a positive effect on customer satisfaction is accepted.

Fourth Hypothesis Testing
Furthermore, based on the SEM result, it is obtianed the CR value of perceived price on customer satisfaction of 2.398 is also greater than the value of ttable.Thus, Ho is rejected and Ha is accepted, it means that perceived price has a positive effect on customer satisfaction.Therefore, fourth hypothesis which states that perceived price has a positive effect on customer satisfaction is accepted.

Fifth Hypothesis Testing
SEM analysis result shows that the CR value of customer satisfaction on customer loyalty of 3.127 is greater than the ttable value.Thus, Ho is rejected and Ha is accepted, it means that customer satisfaction has a positive effect on customer loyalty.Therefore, fifth hypothesis which states that customer satisfaction has a positive effect on customer loyalty is accepted.

Sixth Hypothesis Testing
From the result of Structural Equation Modeling (SEM) analysis in Table 13, it can be seen that CR value of perceived product quality on customer loyalty of 0.186 is less than the value of ttable.Thus, Ho is accepted and Ha is rejected, it means that perceived product quality has no effect on customer loyalty.Therefore, sixth hypothesis which states that perceived product quality has a positive effect on customer loyalty is rejected.

Seventh Hypothesis Testing
SEM analysis result shows that the CR value of perceived service quality on customer loyalty of 2.100 is greater than value of ttable.Thus, Ho is rejected and Ha is accepted, it means that perceived service quality has a positive effect on customer loyalty.Therefore, seventh hypothesis which states that perceived service quality has a positive effect on customer loyalty is accepted.

Eighth Hypothesis Testing
Refers to the result of Structural Equation Modeling analysis, it is obtianed the CR value of perceived value on customer loyalty of 0.160 is less than ttable value.Thus, Ho is accepted and Ha is rejected, it means that perceived value has no effect on customer loyalty.Therefore, eighth hypothesis which states that perceived value has a positive effect on customer loyalty is rejected.

Ninth Hypothesis Testing
Furthermore, based on the SEM result, it can be seen that CR value of perceived price on customer loyalty of 0.163 is also less than value of ttable.Thus, Ho is accepted and Ha is rejected, it means that perceived price has no effect on customer loyalty.Therefore, ninth hypothesis which states that perceived price has a positive effect on customer loyalty is rejected.

CONCLUSION
As an effort to increase the customer satisfaction, marketing manager of IndiHOME in Purwokerto needs to make priority on perceived product quality, perceived value and perceived price.Furthermore, as an effort to increase the customer loyalty, marketing manager of IndiHOME in Purwokerto needs to make priority on perceived product quality, perceived price and perceived value.The ways can be done by offering and selling the products and services with the high quality based on the customers' needs and preference, improve the consumers' experience with products and services of IndiHOME.Even though Indihome product is already good, but sometimes there's still troubles on their internet connection such as the internet suddenly unstable, or the decrease on the internet speed in certain time even though the customer hasn't reach their fair usage policy limit.Even this problem is not always occurred, but Telkom should consider about this problem because when customer experienced the bad internet quality, they will have a bad image about Indihome.
Set the price of products and services that the affordable, suitability and favorable price.When compared to their closest competitor which is Biznet, Telkom is putting their price considerably expensive for a product that similar.Even Telkom has already a good image in customers' mind, but with the problem that often occurred to the customers and the customer service that sometimes can't give solution to the customers, this will make the value received by the customers decreasing because the customers feel that what they already paid is not suitable with what they receive.So Telkom should consider to make their product more affordable.
The last is always increase the perceived service quality based on customers' needs and wants, always follow up the consumer complaints quickly and accurately.Telkom already has many way to reach their customer service such as facebook, twitter, live chat from their website and by telephone.This is good and Telkom should keep it up because it make the customers easily reach Telkom and tell their problem or suggestion.But sometimes, when the customers contact the customer service for help, the customer service only give random answers just to make the customers calm such as, "Please be patient" or "We will fix it immediately" but it reality, their problem didn't solved for days.This problem also should be considered by Telkom because the customers won't trust a company that can't even give exact answer for their question and problem.
The last is set the price of products and services that the affordable, suitability and favorable price.When compared to their closest competitor which is Biznet, Telkom is putting their price considerably expensive for a product that similar.Even Telkom has already a good image in customers' mind, but with the problem that often occurred to the customers and the customer service that sometimes can't give solution to the customers, this will make the value received by the customers decreasing because the customers feel that what they already paid is not suitable with what they receive.So Telkom should consider to make their product more affordable.
Refers to the limitations of this study, further research need to develop the research model by using the mediator or moderator variable.Reduce marginal result by increasing the respondent or distribute the data in more variative ways.Further research also need to choose and add the number of respondents that in practically can be implemented the probability sampling method and using the other methods of data collection, such as interview and observation.