Title:
THE EFFECT OF PRODUCT QUALITY AND PERCEIVED PRICE ON CUSTOMER SATISFACTION AND LOYALTY: STUDY ON HALAL COSMETIC PRODUCTS IN INDONESIA

Authors:
Ade Permata Surya, Anton Kurniawan, Indonesia

Abstract:

Indonesia is a country with the largest Muslim population in the world, so that Indonesia is the largest share of the world halal market, including in the cosmetics sector. The high and tight level of competition in the Indonesian halal cosmetic market, both with local halal cosmetic products and various imported halal cosmetics, requires companies to increase customer satisfaction and increase their customer loyalty. This study aims to determine the effect of product quality and perceived price in increasing customer satisfaction and customer loyalty to Wardah halal cosmetic products in Indonesia. Using a quantitative approach and non-probability sampling techniques, this study uses questionnaire data from 135 respondents who are Wardah consumers from 5 major cities in Indonesia, namely Jakarta, Bogor, Depok, Tangerang, and Bekasi (Jabodetabek). Furthermore, the data is processed using Partial Least Square (SEM-PLS). Results show that both product quality and perceived price have a significant effect on customer satisfaction. Furthermore, customer satisfaction also has a significant effect on customer loyalty. The Adjusted R-squared coefficient of customer satisfaction and customer loyalty is quite high, namely 0.60 and 0.73, which means that 60% of customer satisfaction can be improved with product quality and perceived price, and 73% of customer loyalty can be improved by customer satisfaction.