THE EFFECT OF SERVICE QUALITY AND PERCEIVED ...

FINAL PAPER

THE EFFECT OF SERVICE QUALITY AND PERCEIVED

QUALITY ON BRAND LOYALTY THROUGH PERCEIVED

VALUE AND CUSTOMER SATISFACTION ON NIKE SHOES

OUTLET IN DIPONEGORO SURABAYA

Written to fulfill academic requirements to obtain

the degree of Sarjana Ekonomi Sastra Satu

By:

NAME: FICHELA DWIRANI

NPM: 01120130055

PROGRAM STUDI MANAJEMEN

FAKULTAS EKONOMI

UNIVERSITAS PELITA HARAPAN

SURABAYA

2016

IINTVERSITAS PELITA HARAPAN ST]RABAYASTATEMENT OF ORIGINALITY OF' FINAL PAPER

I, a student of International Business Management Study Program, Faculty of Economy, PelitaHarapan University of Surabaya with the following:

Student Name : Fichela DwiraniNPM :01120130055Department : Management

Hereby declare that the Thesis Proposal that I have written, titled "THE EFBECT OFSERVICE QUALITY AND PERCEIVED QUALITY ON BRAND LOYALTYTHROUGH PERCEIVED VALUE AI\D CUSTOMER SATISFACTION ON IIIKESHOES OUTLET IN DIPONEGORO SURABAYA" iS:

l) Written and completed by myself using lecture materials, field research, textbooks, andjoumals listed in the references sections ofthis Final Paper.

2) Not a duplication of published final paper or thesis used for obtaining the Bachelor'sdegree from other universities, except for the review of literature with proper referencecitation; and

3) Not a translation of a book or journal listed in the references section of this Final Paper.

If I am proven for not being truthful, this Thesis Proposal will be invalid or cancelled.

Surabaya, 1l August 2016

Declared by,

Fichela Dwirani

UNIYERSITAS PELITA HARAPAI\ SURABAYAFAK{.ILTAS EKONOMI

AGREEMENT OF MENTORIIYG GUIDANCE FOR THESIS PROPOSAL

TIItr EFFECT OT SERVICE QUALITY AI{D PERCEIVED QUALITY ONBAAND LOYALTY THROUGH PERCEIVED VALUE AND CUSTOMENSATISFACTION ON NIKE SHOES OT]TLET IN DIPONEGORO SURABAYA

By:Name : Fichela kiraniNPM :01120130055Department z Manajemen

Has bccn ehecked and recommended for final and comprehensive oral defense in order to obtainthe degree of Sarjana Ekonomi at Fakultas Ekonomi, Universias Pelita Harapan Surabaya.

Sur*b*ye, ll August 2016

Agreeil;

Advisor

z1A,i.. 1 Ih---,iu

Oliandes Mndakh, S.g., ira.u Hananiel M. Gunawan, BA, MBA.

DeaniMan4iemen

ilt

//o* c*o

,M.M.

UNIVERSITAS PELITAFAKULTAS EKO1TOMI

HARAPAN SURABAYA

THESIS PROPOSAL NXAMINATION COMMITTEE

On Thursday, Sefiember 15ft, 2016, this Thesis has been examined in a comprehensive oralpresentation to fulfill one of the academic requirements to obtain the degree of Sarjana Ekonomiat Fakultas Ekonomi, Universitas Pelita Harapan Surabaya:

The members of the Examination Committee involved in the comprehensive oral examination ofthis Final Paper titled:

..THE EFFECT OF SERVICE QUALITY AND PERCEIYED QUALITY ON BRANDLOYALTY THROUGH PERCB,IYED YALUE AND CUSTOMER SATISTACTION ONNIKE SHOES OUTLET IN DIPONEGORO SURABAYA,' were the following:

Student Namel\IPMDepartment

: Fichela llwirani, :01120130055

: Ma*ajemen

Siguature

D-l,onrt

MName

1. Oliandes Sandakh, S.8., M.M

2. Dr. Ronald, S.T., M.M.

Status

as Head of theCommittee andThesis Advisor

as the Memberof theCommittee

as the Member3. Yanuar Dananjaya, B.Sc., M.M of the

Committee

IV

vi

ACKNOWLEDGEMENTS

First of all, I want to praise and deepest gratitude to God for blessing and help me to complete

this thesis on time. His guidance, blessings, comfort, and encouragements are the other reasons

why I am capable to finish the study process in Pelita Harapan Universiy Surabaya. Especially in

the final research paper that entitled “THE EFFECT OF SERVICE QUALITY AND

PERCEIVED QUALITY ON BRAND LOYALTY THROUGH PERCEIVED VALUE

AND CUSTOMER SATISFACTION ON NIKE SHOES OUTLET IN DIPONEGORO

SURABAYA” as a requirement for obtaining bachelor’s degree in Economy majoring in

International Business Management in the Faculty of Business School of Pelita Harapan

Universiy Surabaya.

The author would like to take this opportunity to give immeasurable appreciation and

gratitude for the help and support are extended to the following persons/institutions who in one

way or another have contributed in making this study possible.

1. Dr. Ronald S., S.T., M.M. as the Vice Rector of Universitas Pelita Harapan

Surabaya.

2. Oliandes Sondakh, S.E., M.M. as the First Thesis Advisor and PA of International

Business Management 2013, who has painstakingly spent her valuable time to

guide and give excellent suggestions to me in completing this paper. Her patience,

supports, and comfort are the things that she always gives to us that make us feel

warmth and calm in every situation whenever we are with her. Thank you very

much Mam Oli for everything that you have done for us in the past three years.

Nothing could replace that memories and kindness that you gave to us. I am just

beyond blessed that you can be my thesis advisor as well as my PA. There are too

many gratitude that I couldn’t list all of it in here, but the only thing that you

should know is that you will always be in our, International Business

Management 2013’s heart. Thank you once again, Mam Oli. We will never forget

you. Keep smiling as you have always be, because that smile is our medicine, the

vii

one that make us always feel warmth, comfort, and cureness our stress :) we love

you!

3. Hananiel M. Gunawan, B.A., MBA. as the Second Thesis Advisor, for the

invaluable criticism and who has always support and encourage me whenever I

feel down. Thank you for sparing your time and always welcome us whenever we

want to share our thoughts and stories. Without you knowing, the way you treat us

really make us cheered up and feel comfortable around you. Thank you also sir

for the memories you gave us for the past three years. Hope you will not forget

this lovely and cute International Business Management 2013 who loves you!

4. All the Lecturers at the Universitas Pelita Harapan Surabaya, thank you for

teaching and sharing your knowledge with us.

5. All the Staffs at the Universias Pelita Harapan Surabaya.

6. International Business Management Students 2013, which are Pooja, Gracia,

Kelvin, David, Mark, Wylie, Jason, Christopher, Hendry, and Fifi. Who have

striven together since the day one and always support, encourage and cheer each

other until our last day in university. This is the first time when I can actually feel

that classmates can be united as a family. We always had lunch together, go

outings whenever we have a chance to, and went to a field trip together. Even

though it was not that often, but we really had a quality time together. I am really

glad that I am part of the IBM 2013, it has been amazing and fun three years with

all of you. Even though I know it would be very difficult even for us to meet as

we will be taking different path in the future, but I am really looking forward to

our next and next outings. I will never forget this awesome family, hope we will

still keep in touch in the future. I love you, IBM 2013!

7. Biggest thanks especially for my Grandmother, Yenny Prayogo, Grandfather, Eka

Tony Suharto, and my Mom, Felina Sulimiati Suharto who always pray for me in

every situations, guide me since I was small to be a better person, encouraging

and support me all the time, giving me love and compassion, giving materials that

I need, always try to fulfill my desires, working hard and always trying to do the

best to give the best happiness that I could ever receive. They are the best present

that I could ever get in this life, without them I would not survive and have the

viii

spirit to face the world like the way I am today. Thank you very much Emak,

Engkong, and Mama. Even though I may nag to you sometimes, but trust me,

deep inside my heart I do love you to the very much. I can not be grateful enough

to have you as my parents.

8. Another big thanks for my Papi who has always been watching me all the time,

giving me virtual prayers, supports, and love. A person who teaches me what love

is, a person who teaches me to be a better person, a person who supports me and

teaches me to smile in every single situations that happen. Thank you, Papi.

Thank you. I really miss you, I hope to see you soon. Also, thanks to Mami, who

has been accompany me day me day since I was small, who always took care of

me, and who always supported me. I would never be able to repay your kindness,

thank you. I love you both!

9. My brother, Jevicko Gautama who has always given me supports, advices, and

comfort whenever I need, who always make sure that I am doing fine, always

make a way to make me happy, and who is willing to accompany me in his busy

days. Thank you for being the best brother I could ever ask for. Good luck for

your studies too and may you have a bright future! I love you, Koko :D

10. My family in Surabaya as well as those who are in America. Thank you for

always support and motivate me. I am very lucky to have you all as my family.

Thank you and love you!

11. Special thanks for my best friend as well as my sister, Pooja A. Lakhwani who I

met on the first day of university and became my closest and best friend ever.

Who also strive together since the first day of class until the last day of university,

we have always been in the same group, do the homework and projects together,

and face the difficulties as well as the joy of the university together. Thank you

very much for everything you have done to me as a classmate as well as my best

friend. Thank you for 24/7 always be there for me whenever I need you, support

me and cheer me up during my ups and downs. I would never be able to thank

you enough for everything that you have done to me. Meeting you on the first day

of class is really a bless and greatest gift in my life. Thank you very much, Pooja

for being my best friend ever. Hope our friendship will last forever. I love you!

ix

12. All friends in Universitas Pelita Harapan Surabaya, especially for my ‘group

makan’ Charlie, Virgina, Chrestella Feli, Izhaq, Anthony S, and Stefano. As well

as other friends, Mohit, Fransisca Angelina, and Yophita. Thank you for all your

supports and encouragement. I am so blessed to have you all as my friends!

13. All friends in UPH UKM Basketball, especially for Nella, Sylveislie, Yuke,

Vrindia, Livia, Oktafani, Faustine, Anggi, Christine, Lala, and the boys. Thank

you also for all your supports. I am really blessed to have you as my basketball

buddies, hope we can still able to play basketball together!

14. All my basketball friends, especially Jessica Novia, Gabriela Layora, Sheila

Stefani Liang, and my brahwijaya friends. Thank you very much for your support.

Even though we barely meet but you still support me unconditionally, thanks!

15. All who have contributed to fill the questionnaire of my research paper. Without

you I will not be able to finish the thesis on time, thank you!

Last but not least, my very sincere thanks to those who are not mentioned personally here,

without their supports, guidance, patience, and cooperation, this paper could have never been

written. Although this thesis is far from being perfect, but I hope that this thesis will be useful for

further usage.

Surabaya, 11 August 2016

Fichela Dwirani

x

TABLE OF CONTENT

Page

COVER ................................................................................................................................i

STATEMENT OF ORIGINALITY OF FINAL PAPER .............................................. ii

AGREEMENT OF MENTORING GUIDANCE FOR FINAL PAPER .................... iii

FINAL PAPER EXAMINATION COMMITTEE ........................................................iv

ABSTRACT ........................................................................................................................ v

ACKNOWLEDGEMENT ................................................................................................vi

TABLE OF CONTENTS .................................................................................................. x

LIST OF TABLES ..........................................................................................................xiv

LIST OF FIGURES ......................................................................................................... xv

LIST OF APPENDICES ................................................................................................xvi

CHAPTER I INTRODUCTION

1.1 Background of the Study ................................................................................................. 1

1.2 Research Problem ............................................................................................................ 8

1.3 Research Objectives ......................................................................................................... 9

1.4 Research Contributions .................................................................................................... 9

1.5 Research Limitations ....................................................................................................... 10

1.6 Research Outlines ............................................................................................................ 10

CHAPTER II REVIEW OF RELATED LITERATURE

2.1 Brand Loyalty .................................................................................................................. 12

2.2 Customer Satisfaction ...................................................................................................... 14

2.3 Perceived Value ............................................................................................................... 16

xi

2.4 Perceived Quality ............................................................................................................. 17

2.5 Service Quality................................................................................................................. 20

2.6 Relation among Variables ................................................................................................ 21

2.6.1 Service Quality Significantly Affecting Perceived Value ................................... 21

2.6.2 Service Quality Significantly Affecting Customer Satisfaction ........................ 22

2.6.3 Perceived Quality Significantly Affecting Perceived Value ............................... 22

2.6.4 Perceived Quality Significantly Affecting Customer Satisfaction ...................... 22

2.6.5 Perceived Value Significantly Affecting Customer Satisfaction ........................ 22

2.6.6 Perceived Value Significantly Affecting Brand Loyalty..................................... 23

2.6.7 Customer Satisfaction Significantly Affecting Brand Loyalty ........................... 23

2.7 Theoretical Framework .................................................................................................... 23

2.8 Operational Framework ................................................................................................... 24

2.9 Hypothesis........................................................................................................................ 24

CHAPTER III RESEARCH METHODOLOGY

3.1 Research Design............................................................................................................... 25

3.2 Research Variables........................................................................................................... 25

3.2.1 Operational Definitions ....................................................................................... 25

3.2.2 Variable to be Tested ........................................................................................... 26

3.2.3 Levels of Measurement and Scaling Techniques ................................................ 27

3.3 Method of Data Collection............................................................................................... 27

3.3.1 Source of Data ..................................................................................................... 27

3.3.2 Sample and Sampling Plan .................................................................................. 28

3.3.3 Research Instruments........................................................................................... 29

3.4 Method of Data Analysis ................................................................................................. 29

xii

3.4.1 Validity Test ........................................................................................................ 29

3.4.2 Reliability Test .................................................................................................... 30

3.4.3 Classical Assumption Test .................................................................................. 30

3.4.3.1 Normality Test ...................................................................................... 30

3.4.3.2 Homoscedasticity Test .......................................................................... 30

3.4.3.3 Linearity Test ........................................................................................ 31

3.4.3.4 Multicollinearity Test ........................................................................... 31

3.4.4 Multiple Linear Regression Analysis .................................................................. 31

3.4.5 Coefficient of Correlation and Coefficient of Determination ............................. 33

3.4.5.1 Coefficient of Correlation ..................................................................... 33

3.4.5.2 Coefficient of Determination ................................................................ 33

3.4.6 Hypothesis Testing .............................................................................................. 33

3.4.6.1 F-test ..................................................................................................... 33

3.4.6.2 t-test ...................................................................................................... 33

CHAPTER IV RESULT AND DISCUSSION

4.1 Description of Nike .......................................................................................................... 35

4.2 Data Analysis ................................................................................................................... 37

4.2.1 Descriptive Statistic of Respondent Age ............................................................. 37

4.2.2 Descriptive Statistic of Respondent Gender ........................................................ 37

4.2.3 Descriptive Statistic of Respondent Job .............................................................. 38

4.2.4 Descriptive Statistic of Respondents Perceptions ............................................... 38

4.2.4.1 Descriptive Statistic of Service Quality ................................................ 39

4.2.4.2 Descriptive Statistic of Perceived Quality ............................................ 40

4.2.4.3 Descriptive Statistic of Perceived Value .............................................. 42

xiii

4.2.4.4 Descriptive Statistic of Customer Satisfaction ..................................... 43

4.2.4.5 Descriptive Statistic of Brand Loyalty ................................................. 44

4.2.5 Hypothesis Testing .............................................................................................. 46

4.2.5.1 Validity Test ......................................................................................... 46

4.2.5.2 Reliability Test ..................................................................................... 47

4.2.5.3 Classical Assumption Test of Normality .............................................. 47

4.2.5.4 Classical Assumption Test of Homoscedasticity .................................. 49

4.2.5.5 Classical Assumption Test of Linearity ................................................ 51

4.2.5.6 Classical Assumption Test of Multicollinearity ................................... 52

4.2.5.7 Multiple Linear Regressions of Service Quality and Perceived Quality on

Perceived Value ................................................................................... 52

4.2.5.8 Multiple Linear Regressions of Service Quality, Perceived Quality, and

Perceived Value on Customer Satisfaction ........................................... 53

4.2.5.9 Multiple Linear Regressions of Perceived Value and Customer Satisfaction

on Brand Loyalty .................................................................................. 54

4.3 Discussion ........................................................................................................................ 55

CHAPTER V SUMMARY, CONCLUSION, AND RECOMMENDATION

5.1 Summary .......................................................................................................................... 68

5.2 Conclusion ....................................................................................................................... 71

5.3 Recommendation ............................................................................................................. 72

5.3.1 Recommendation for Nike Outlet Diponegoro ................................................... 72

5.3.2 Recommendation for Nike Corporation .............................................................. 72

5.3.3 Recommendation for Future Research ................................................................ 74

REFERENCES ..................................................................................................................... 76

APPENDIX ........................................................................................................................... A-1

xiv

LIST OF TABLES

Table 1 Global Apparel Retail Industry Value Forecast .................................................. 1

Table 2 National Output, Year on Year Output Growth and Export Textiles, Garments,

Leather Products and Footwear ........................................................................... 3

Table 3 Operational Definition ........................................................................................ 25

Table 4 The value of r ...................................................................................................... 33

Table 5 Interpretation of r-value ...................................................................................... 33

Table 6 Mean Rating Index .............................................................................................. 38

Table 7 Descriptive Statistic of Service Quality .............................................................. 39

Table 8 Descriptive Statistic of Perceived Quality .......................................................... 40

Table 9 Descriptive Statistic of Perceived Value ............................................................. 42

Table 10 Descriptive Statistic of Customer Satisfaction.................................................... 43

Table 11 Descriptive Statistic of Brand Loyalty ................................................................ 44

Table 12 Validity Test Result ............................................................................................ 46

Table 13 Reliability Test Result ......................................................................................... 47

Table 14 Normality Test of Kolmogorov Smirnov ............................................................ 49

Table 15 Homoscedasticity Test of Spearman Rho ........................................................... 51

Table 16 Linearity Test ...................................................................................................... 51

Table 17 Multicollinearity Test .......................................................................................... 52

Table 18 Multiple Linear Regressions of Service Quality and Perceived Quality on Perceived

Value ................................................................................................................... 52

Table 19 Multiple Linear Regressions of Service Quality, Perceived Quality, and Perceived

Value on Customer Satisfaction .......................................................................... 53

Table 20 Multiple Linear Regressions of Perceived Value and Customer Satisfaction on Brand

Loyalty ................................................................................................................ 54

xv

LIST OF FIGURES

Figure 1 GDP Growth of Non Oil and Gas Manufacturing Industry ........................... 2

Figure 2 World Brand Ranking For Apparel Industry .................................................. 4

Figure 3 Nike Jordan Shoes .......................................................................................... 6

Figure 4 Image of Nike Employees .............................................................................. 6

Figure 5 Image of Nike Products .................................................................................. 7

Figure 6 Pyramid of Brand Loyalty .............................................................................. 13

Figure 7 Theoretical Framework .................................................................................. 23

Figure 8 Operational Framework .................................................................................. 24

Figure 9 NIKE logo ...................................................................................................... 35

Figure 10 NIKE Factory Store ........................................................................................ 36

Figure 11 Descriptive Statistic of Respondent Age ........................................................ 37

Figure 12 Descriptive Statistic of Respondent Gender ................................................... 37

Figure 13 Descriptive Statistic of Respondent Job ......................................................... 38

Figure 14 Normal Probability plot for Service Quality and Perceived Quality on Perceived

Value .............................................................................................................. 47

Figure 15 Normal Probability plot for Service Quality, Perceived Quality, and Perceived

Value on Customer Satisfaction ..................................................................... 48

Figure 16 Normal Probability plot for Perceived Value and Customer Satisfaction on Brand

Loyalty ........................................................................................................... 48

Figure 17 Scatterplot of Service Quality and Perceived Quality on Perceived Value ... 49

Figure 18 Scatterplot of Service Quality, Perceived Quality, and Perceived Value on

Customer Satisfaction .................................................................................... 50

Figure 19 Scatterplot of Perceived Value and Customer Satisfaction on Brand

Loyalty ........................................................................................................... 50

xvi

LIST OF APPENDICES

APPENDIX A Research Questionnaire

English.............................................................................................. A-1

Indonesia .......................................................................................... A-4

APPENDIX B Result of Responses ......................................................................... B-1

APPENDIX C Result of SPSS ................................................................................. C-1

APPENDIX D Photos ............................................................................................... D-1