Determinants of customer satisfaction and loyalty Waroeng Steak Restaurant in DKI Jakarta

Abstract

This study aims to determine the effect of facilities, brand image, product quality, promotion, and service quality on customer satisfaction and loyalty at Waroeng Steak Restaurants in DKI Jakarta. This research design is descriptive and quantitative explanatory, with a multivariate analysis method. The research sample is 135 respondents. Data were collected with a questionnaire instrument and analyzed with a structural equation model. The results of this study concluded that; facilities have a significant effect on customer satisfaction but have no significant effect on customer loyalty, brand image has a significant effect on customer satisfaction but has no significant effect on customer loyalty; product quality has a significant effect on customer satisfaction, and customer loyalty; promotion has no significant effect on customer satisfaction and customer loyalty; service quality has a significant effect on customer satisfaction, but has no significant effect on customer loyalty and customer satisfaction has a significant effect on customer loyalty.

Keywords:

• facilities
• brand image
• product quality
• promotion
• service quality
• satisfaction
• loyalty

1. Introduction

Today the development of the modern and business world is as of now not straight. It emerges on the grounds that changes happen that are unusual, astounding, and intricate and trigger different contentions inside the association. The serious circumstance shows that it is getting more testing at times. Thus, the idea of contest has in a general sense changed from rivalry to foe. Organizations with seriousness in speed and advancement will just win the opposition. It implies that whoever the quick and inventive is the person who emerges as the victor, no longer who is the huge one. The eatery business is one area that requests speed and advancement to quickly create.

The development of the restaurant business in Indonesia, including in DKI Jakarta, has pushed the level of competition even higher. Therefore, customer care must be satisfied and loyal to the company’s services. At high levels of competition, retaining customers is much more profitable than attracting new customers (Olson & Jerry, 2016). Attracting new customers requires five times more cost and time than retaining existing customers. One effort is to prevent customers from moving to other companies by fostering customer loyalty, measuring customer satisfaction can estimate future purchasing levels and purchase attrition rates (Kotler & Keller, 2016; Lainatussifa & Suwarsinah, 2021).

Loyalty is a commitment that occurs when customers are loyal to a restaurant, even when they have the opportunity to move. It can be built through creating customer satisfaction, making a good image, and implementing the right marketing mix. Increased customer loyalty will increase the detention or retention of a restaurant’s customers (Schiffman & Kanuk, 2004; Srivastava & Rai, 2018).

This study aims to conduct analysis efforts and collect data and information related to marketing mix variables (service quality, physical evidence, product, promotion), image, satisfaction, and customer loyalty.

2. Literature review

2.1. Facilities

Facilities are everything physically provided by service sellers to provide convenience to customers (Kotler & Keller, 2016). The design and layout of service facilities are closely related to the formation of customer perceptions (Tjiptono, 2007). Therefore, service companies with adequate facilities can make it easier for consumers to use their services to encourage them to purchase (Raharjani, 2005).

According to Tjiptono (2007), several essential elements in determining the service facilities to be provided are spatial planning, room planning, equipment/equipment, lighting, color, and complimentary messages. Meanwhile, according to Nirwana (2004), in designing physical facilities, several factors must be considered: facility design, function value, aesthetics, supporting conditions, supporting equipment, employee uniforms, reports, and guarantees.

The study results show that service facilities have a significant effect on customer satisfaction (Han & Hyun, 2017; Mongkaren, 2013; Mubarok et al., 2020; Nurcahyo et al., 2017; Tarigan et al., 2020). Likewise, the study results show that service facilities have a significant effect on customer loyalty (Han & Hyun, 2017; Nurcahyo et al., 2017; Tarigan et al., 2020).

2.2. Brand image

Image and corporate identity are two different things, although they are closely related (Nurjanah, 2017). Philosophically, image is a person’s beliefs, ideas, and impressions (Kotler & Keller, 2016). Image is a summary of customers’ beliefs, ideas, and impressions about an object (Kotler & Keller, 2012), which is dynamic and complex and differs from one organization to another (Nguyen & Leblanc, 2002). Identity describes what exists in the company or the identity displayed, while the image shows the public’s perception of the identity itself. Corporate identity has two main elements: the name or brand and the logo (Koporcic & Tornroos, 2019).

Brand image, as an element of corporate identity, is defined as how people perceive the actual brand impression (Kotler & Keller, 2016), which can store in a person’s mind for a long time. Russell and Brannan (2016) define a brand image as a subjective and perceptual phenomenon formulated through a reasoned or emotional consumer interpretation. Building a good image can create demand, satisfaction, and customer loyalty. The image formed through advertising must reflect the true identity of the company. Advertising about the image is the company’s effort to prepare consumers to know the updated product or the new product they will market (Gregory et al., 1999 in Koporcic & Tornroos, 2019). Even among employees, the image needs to be done to perceive the company (Berbegal-Mirabent et al., 2020) positively. Thus, brand image is essential, especially in differentiated products or services based on the best service.

The study results confirm that brand image has a significant effect on customer satisfaction (Nurrahmi, 2020; Pratiwi, 2015; Riyadi, 2016;). Likewise, other study results confirmed that brand image has a significant effect on customer loyalty (Nurrahmi, 2020, Pratiwi, 2015; Riyadi, 2016).

2.3. Product quality

In serving a restaurant, product quality is a factor that significantly influences consumers’ decisions to become restaurant customers. It also influences customer loyalty (Lee et al., 2020). Several studies have evaluated product quality based on several characteristics (Josiam and Monteiro (2004).

According to Raajpoot (2002), assessing product quality in the food service industry includes food display, portion size, menu design, and variety. The study results of Josiam and Monteiro (2004) state that there are seven food attributes as determinants of quality: taste, presentation, menu variety, healthful options, freshness, appropriate temperature, and food safety. Meanwhile, according to Ha and Jang (2010), assessing food quality includes choosing taste, portion, menu variety, and healthful options.

The study results confirmed that product quality significantly affects customer satisfaction and loyalty (Alada & Castaño, 2020; da Costa Oliveira et al., 2020; Madjid et al., 2021; Zhong & Moon, 2020).

2.4. Promotion

Promotion is one of the key components of the 4Ps in the marketing mix and is vital to study because it is an essential part of achieving market share (Syarifuddin & Tumbuan, 2022). Promotion is an organizational tool to inform, persuade, and remind consumers directly and indirectly about its products and brands (Kotler & Keller, 2016). Promotion is designed by combining advertising, personal selling, sales promotion, and publicity into one integrated program to communicate with buyers and influence buying decisions (Nangoy & Tumbuan, 2018). Besides that, the promotion contains widespread speculation. It is often difficult to separate the impact of promotion and other components of the marketing mix (Huang & Sangollu, 2014).

The promotional message is then understood by the customers, who understand the content in various ways. Dwivedi et al. (2021) emphasizes that the core message of advertising inspires the power of consumer trust. Maulani (2017) argues that marketing communication tools provoke different views among individuals.

According to Rehman et al. (2022), the increased usage of social media forced the brands to integrate social media in their marketing communication channel, as it becomes the need of the hour, as it determines overall brand identity, brand image, and company performance in the present marketing competition. This research aimed to track the evolution and advancement of the IMC concept, and how it reformed the way of marketing communications.

Study results confirmed that promotion significantly affects customer satisfaction (Nawaz, 2018; Rehman et al., 2022). Likewise, the study results confirm that promotion significantly affects customer loyalty (Hatta et al., 2018; Rehman et al., 2022; Zinaida & Anggraini, 2022).

2.5. Service quality

Service quality is an essential criterion for growth and increased customer satisfaction. Service quality issues, over the years, have become an important consumer trend and have gained ground in service marketing literature in general, consumer perceptions of service quality result from comparing expectations prior to receiving the service, and their actual experience of the service”. Perceived quality represents a form of attitude, that is similar to satisfaction, though not the same. Moreover, perceived quality is the result of an evaluation and comparison between consumers’ expectations in relation to a service with its performance perceptions (Danjuma et al., 2018). Services are offers that may be sold for customers and companies and, sometimes, both. They differ from tangible products due to three main characteristics: (i) intangibility, the service is mainly a process and not an object; (ii) heterogeneity, the service experience may vary each time it is delivered and, (iii) simultaneity, the services are normally produced and consumed simultaneously. Good service quality will increase customer satisfaction and loyalty (Meesala & Paul, 2018).

Five dimensions can be used in assessing the level of good service; there are (1) Tangible, the appearance of various facilities and employees; (2) Reliability, the ability to provide services as promised reliably; (3) Responsiveness, attention, and accuracy of employees in providing services quickly; (4) Assurance, the ability of employees to convince and build customer trust; (5) Empathy, personal care and attention of employees to customers (Lazarevič & Brandt, 2020).

According to Zeithaml et al. (2018) service quality is determined by three dimensions; there are (1) Technical quality, the quality of service that consumers can evaluate before, during, and after buying; (2) Functional quality, components related to the quality of delivery methods; and (3) Corporate image, which includes the profile, reputation, public image, and unique attractiveness of a company. Meanwhile, Fitzsimmons and Fitzsimmons define four service dimensions, namely: (1) Care and concern, full of care and concern; (2) Spontaneity, concrete actions in helping customers; (3) Problem-solving, the ability to solve problems according to procedures; and (4) Recovery, unique action on an incident. Anggreini (2016) state that service quality is defined as how far the difference between expectations and services customers desire compared to the services that the company may provide.

Study results confirmed that restaurant service quality significantly affects customer satisfaction (da Costa Oliveira et al., 2020; Lazarevič & Brandt, 2020; Madjid et al., 2021; Magdalena, 2018; Zardi et al., 2019). Likewise, the study results confirmed that service quality significantly affects customer loyalty (Ghaliyah & Mubarok, 2017; Mubarok, 2017; Naini et al., 2022; Timo et al., 2019).

2.6. Customer satisfaction

The concept of empathy, assurance, reliability, responsiveness, and tangibles contribute to customer satisfaction (Zygiaris et al., 2022). According to Cai et al. (2021), the customers perceive the service quality as a basic service expectation and will not bear the extra cost for this criterion. Customer satisfaction refers to the level of fulfillment expressed by the customer after the service delivery process. This is a subjective assessment of the service based on the five dimensions of service quality. Customer satisfaction is important due to its direct impact on customer retention (Zhou et al., 2019) level of spending and long-term competitiveness of the organization (Suchánek & Králová, 2019). According to Kotler et al. (2018), customer satisfaction is the level of customer feelings after comparing the perceived service performance with service expectations.

Khadka and Maharjan (2017) customer satisfaction defining as an overall evaluation based on the total purchase and consumption experience with the good or service over time. With marketing, customer satisfaction also comes along with it which means it ascertains the expectation of the customer on how the goods and services are being facilitated by the companies. Actionable information on how to make customers further satisfied is therefore, a crucial outcome.

Customer expectations are dynamic and are shaped by many factors (Tjiptono et al., 2008), including past shopping experiences, opinions of friends and relatives, and information and promotions from companies and competitors. In measuring the level of satisfaction, five methods can be used; there are (1) Customer satisfaction surveys, responses, and feedback from customers; (2) Complaint and suggestion systems, suggestions, opinions, and customer complaints; (3) Attentive frontline personal, collecting information from frontline employees; (4) Ghost shopping, some people are given the role of a buyer; (5) Customer defection analysis, call back customers who have stopped (Kotler et al., 2018).

Customer loyalty and satisfaction is vital for modern day business for two main reasons. First, customers are scarce resource it is far easier to obtain from an old customer than from a new one. Second, customer loyalty and satisfaction has a positive effect on the profitability revenues of the company (Rosenberg & Czepiel, 2017).

2.7. Customer loyalty

Loyalty is an inherent affection in a person for a product, service, and the people involved (Kotler et al., 2018), which customers show in repurchase behavior that tends only to use the same company’s services. Customer loyalty is created due to the relationship process between customers and employees who provide services (Allard et al., 2017). A relationship with a customer is equally important in customer loyalty and this requires that company work in a broader context that extends beyond itself, as no company can be world class at everything, divided customer loyalty into three different categories that include behavior loyalty, intentional loyalty, and emotional loyalty. Behavior loyalty is repeating purchasing behavior while intentional loyalty is the possible buying intention. Emotional loyalty, however, is achieved (Khadka & Maharjan, 2017).

When a customer feels that a brand corresponds with their value, ideas, and passion.). Two main factors in building customer loyalty are attention to the product or service’s value and building customer relationships (Allard et al., 2017). Macintosh and Lockshin show that loyalty in a service transaction highly depends on interpersonal relationships, the stronger the positive emotions experienced by consumers, the more loyal consumers will be (Amanah & Harahap, 2019). With a behavioral approach, customer loyalty is built by the customer’s trusting attitude towards the company and the quality of customer relationships with employees they meet, Muhammad et al. (2023) state one way to measure customer loyalty is by looking at customers’ willingness to invite other people to buy. Based on some of the thoughts above, it is shown that satisfaction has the most direct and significant influence on customer loyalty behavior.

To retain customers, mastery of knowledge about customer demands and the ability of competitors becomes very important. Therefore, the customer’s trust in the company and the quality of customer relationships with the company and employees will determine loyalty (Foster & Cadogan, 2020 in Muhammad et al., 2023). The things that underlie the company continues to strive to carry out various customer loyalty programs continuously; there are (1) The greater volume of purchases followed by the lower costs of sales and distribution; (2) The emergence of a positive image that is conveyed by word of mouth and continued to other parties; and (3) The customer’s willingness to pay more than the value he gets (Khoo, 2020).

The study results of Gremler and Brown (1999) confirm that there are four benefits for the company if customers recommend their products or services to other parties, there are (1) The addition of new customers with a positive picture of the company; (2) New customers with positive recommendations tend to be loyal; (3) The increase in revenue due to a large number of loyal customers; and (4) Lower advertising and promotion costs. In measuring loyalty, four dimensions can be used (Zeithaml et al., 2018), there are (1) Positive word of mouth, (2) Complaint behavior, (3) Switching behavior, and (4) Willingness to pay more.

2.8. Hypothesis of research

Based on the theory and the results of previous studies, the hypothesis is formulated as follows.

The theoretical descriptions and results of previous studies that are relevant to this research and formulated in hypotheses can be simplified in the research model diagram as follows (See Figure 1):

Figure 1. The proposed Research Model.

Source: Data processed

3. Methodology of research

The sampling method is non-probability sampling. Sampling is done purposively, meaning that the researcher selects and determines the respondents themselves who will be sampled based on specific criteria. This study was conducted in 2021 at 7 Waroeng Steak Restaurants in DKI Jakarta. Structural equation modeling (SEM) statistical analyzing technique based on the partial least squares (PLS) method. The SEM-PLS method is used for a limited sample, and the data assumptions are not stringent (Hair et al., 2019). Because SEM-PLS does not calculate the significance test directly, the significance level is computed using bootstrapping assistance. The sample size in the SEM analysis is at least five times the number of attributes analyzed (Malhotra et al., 2017).

This study uses 26 attributes and 135 samples, more significant than the minimum limit (130 samples), as shown in the tables 1 and 2 below.

Table 1. Hypotheses of Research

H1	Facilities have a significant effect on satisfaction
H2	Facilities have a significant effect on loyalty
H3	Brand image has a significant effect on satisfaction
H4	Brand image has a significant impact on loyalty
H5	Product quality has a significant effect on satisfaction
H6	Product quality has a significant effect on the loyalty
H7	The promotion has a significant effect on satisfaction
H8	The promotion has a significant impact on loyalty
H9	Service quality has a significant effect on satisfaction
H10	Service quality has a significant effect on the loyalty
H11	Satisfaction has a significant impact on loyalty

Source: Data processed.

Table 2. Respondent Profile

Demographic Variables	Frequency	Percentage
Gender
Male	60	44.44
Female	75	55.56
Age
17–25	65	48.15
26–35	46	34,07
36–45	19	14,07
Older than 45	5	3.71
Job
Student	21	15.56
Employee	75	55.55
Entrepreneur	28	20,74
Housewife	9	6.67
Unemployed	2	1.28
Visit
2–5 times	51	37.78
More than five times	84	62.22

Source: Data processed

4. Results of research

4.1. Model evaluation on SEM-PLS

SEM-PLS is a statistical method consisting of measurement and structural models. So that the evaluation of the SEM-PLS model is carried out in two stages, there are (1) Evaluation for estimating the measurement model and (2) Evaluation of the structural model. The order of evaluation of this model is essential to note because it must ascertain the results of the SEM-PLS model to measure what was previously assumed to be able to calculate a latent variable before concluding a relationship between latent variables (Malhotra et al., 2017).

The thing to note in using SEM-PLS is that there is no statistical criterion that can assess the overall quality of a model, so researchers cannot perform inferential statistical analysis to test the feasibility of the model. Alternatively, non-parametric tests through resampling methods such as jackknifing or bootstrapping can be used to estimate the goodness of the resulting model.

4.2. Measurement model (outer model)

The outer model describes the relationship between latent variables and their indicators. In other words, the outer model defines or explains how each hand relates to its latent variable, as to check whether the indicators of each construct measure what they should measure, it is necessary to test convergent validity and discriminant validity.

4.2.1. Convergent validity

Convergent validity measures the extent to which an operation is similar to other operations, which theoretically should be similar. This measure is analyzed with indicators of reliability and constructs reliability (Malhotra et al., 2017). The reliability indicator is checked by using the factor loading value. Based on the processing results (Figure 2 and Table 3) that use the recommended value limit of 0.7 for the existing latent variables, the facility variable indicator numbers will drop X21 and X24 from the calculation because they have a loading factor value of less than 0.7. Therefore, reprocessing will be carried out without including all the indicators that have been dropped. After reprocessing, the loading factor values were all above 0.7 (Figure 3 and Table 4).

Figure 2. PLS algorithm items and latent variables.

Source: Data processed.

Figure 3. PLS algorithm items and latent variables (stage 2).

Source: Data processed.

Table 3. Load factor value of all items

	Loading		Loading
X11	0.8232	X42	0.8554
X12	0.8786	X43	0.7697
X13	0.8152	X44	0.8582
X14	0.7623	X51	0.7215
X21	0.5460	X52	0.9039
X22	0.8395	X53	0.8186
X23	0.8194	Y11	0.8910
X24	0.6304	Y12	0.8976
X31	0.7034	Y13	0.8726
X32	0.8599	Y21	0.7394
X33	0.8767	Y22	0.7438
X34	0.7893	Y23	0.7350
X41	0.8920	Y24	0.8384

Source: Data processed.

Table 4. Loading factor value of all items (final stage)

	Loading		Loading
X11	0.8232	X43	0.7697
X12	0.8785	X44	0.8582
X13	0.8152	X51	0.7212
X14	0.7623	X52	0.9038
X22	0.9054	X53	0.8189
X23	0.9015	Y11	0.8908
X31	0.7035	Y12	0.8975
X32	0.8599	Y13	0.8729
X33	0.8768	Y21	0.7361
X34	0.7892	Y22	0.7442
X41	0.8920	Y23	0.7376
X42	0.8554	Y24	0.8394

Source: Data processed.

After the reliability indicator, the next thing to do is check the construct reliability. Construct reliability is checked using two measures; there is (1) Composite reliability (C.R.) or Cronbach's Alpha (C.A.); (2) Average variance extracted (AVE). The threshold of a good CR/CA is above 0.6, and AVE is above 0.5 (Hair et al., 2019).

Table 5 shows that all construct values for CR/CA and AVE are above the threshold values of 0.6 and 0.5, so we can conclude that the construct is adequate. With the results obtained, it can be concluded that there is no convergent validity problem in the model being tested. Therefore, the next test that can do is discriminant validity.

Table 5. Composite reliability and AVE values

	AVE	Composite Reliability	Cronbach’s Alpha
Customer Loyalty	0.5861	0.8495	0.7642
Customer Satisfaction	0.7870	0.9172	0.8646
Facility	0.8162	0.8988	0.7749
Image	0.7141	0.9088	0.8663
Product Quality	0.6564	0.8836	0.8228
Promotion	0.6692	0.8575	0.7512
Service Quality	0.6738	0.8918	0.8381

Source: Data processed.

4.2.2. Discriminant validity

Correlation of constructs with items compared to items from other constructs. The discriminant validity of construct items was checked using cross-loadings (Hair et al., 2019). The value of cross-loading is obtained by calculating the correlation between the component scores of each latent variable and each indicator block of all items in the model. Cross-loading value is the correlation between each construct and the items from each construct. If the correlation of construct indicators has a higher value than other construct indicators, it is said that the construct has high discriminant validity.

Table 6 shows that the loading value of each item on its construct is greater than the value of cross-loading with other constructs. From the results of the cross-loading analysis, there is no discriminant validity problem. Here is the output of SmartPLS 2.0 for cross-loading the construct and its items.

Table 6. Cross loading

	Customer Loyalty	Customer Satisfaction	Facility	Image	Product Quality	Promotion	Service Quality
X11	0.4474	0.5238	0.5152	0.5923	0.5203	0.3750	0.8232
X12	0.4637	0.6026	0.5326	0.6010	0.5169	0.4692	0.8785
X13	0.3572	0.4851	0.4036	0.4248	0.4204	0.3123	0.8152
X14	0.5099	0.5923	0.3747	0.4338	0.4900	0.3414	0.7623
X22	0.4060	0.4310	0.9054	0.6101	0.5044	0.4107	0.4974
X23	0.3798	0.4414	0.9015	0.5795	0.4711	0.4124	0.5112
X31	0.4455	0.5665	0.2813	0.4199	0.7035	0.4880	0.4015
X32	0.6322	0.6867	0.3370	0.5356	0.8599	0.4377	0.4803
X33	0.5557	0.6319	0.5732	0.6352	0.8768	0.5927	0.4642
X34	0.4441	0.6238	0.5660	0.6500	0.7892	0.4936	0.5981
X41	0.5438	0.6396	0.5578	0.8920	0.5885	0.5211	0.6205
X42	0.5084	0.5401	0.5584	0.8554	0.5367	0.4324	0.5690
X43	0.3605	0.4814	0.4992	0.7697	0.5079	0.3943	0.3552
X44	0.4658	0.6843	0.6057	0.8582	0.6909	0.6286	0.5443
X51	0.2658	0.4054	0.2512	0.4013	0.3539	0.7212	0.2823
X52	0.4170	0.5345	0.3725	0.5259	0.5969	0.9038	0.3929
X53	0.4164	0.5024	0.4701	0.5137	0.5315	0.8189	0.4384
Y11	0.5149	0.8908	0.4745	0.6754	0.6880	0.5492	0.6265
Y12	0.6236	0.8975	0.3816	0.5750	0.7778	0.5181	0.5723
Y13	0.5840	0.8729	0.4277	0.6146	0.5977	0.5090	0.6058
Y21	0.7361	0.5700	0.3304	0.4548	0.5285	0.3458	0.5100
Y22	0.7442	0.4842	0.2937	0.4441	0.4594	0.3302	0.3070
Y23	0.7376	0.4106	0.3162	0.3723	0.4553	0.3210	0.3310
Y24	0.8394	0.4995	0.3840	0.4426	0.5314	0.3951	0.5006

Source: Data processed.

According to Ghozali (2008), it can’t test discriminant validity by comparing the value of the square root of the AVE with the correlation value between constructs. Table 7 shows that the value of the square root of the AVE (main diagonal) is greater than the correlation of each construct, so there is no problem regarding discriminant validity.

Table 7. Latent variable correlation and AVE. Square root

	Customer Loyalty	Customer Satisfaction	Facility	Image	Product Quality	Promotion	Service Quality
Customer Loyalty	0.7656
Customer Satisfaction	0.6465	0.8871
Facility	0.4350	0.4827	0.9035
Image	0.5619	0.7012	0.6585	0.8450
Product Quality	0.6485	0.7763	0.5400	0.6917	0.8102
Promotion	0.4569	0.5926	0.4555	0.5923	0.6172	0.8181
Service Quality	0.5491	0.6781	0.5581	0.6289	0.5978	0.4609	0.8208

Source: Data processed.

4.3. Evaluation of the structural model (inner model)

After obtaining confidence that there are no problems with the measurement model, the next step that needs to be done is to evaluate the structural model. One of the structural model evaluations is to look at the strength of the independent variables of the entire model. The power of the independent variable is checked by looking at the fair value of the existing dependents’ multiple correlations (R2), as shown in the following table.

From Table 8, it can see that the R² value for the consumer satisfaction variable is 0.7052. It means this value indicates that variations in consumer satisfaction can be explained by the construct variable facilities, brand image, product quality, promotion, and service quality of 70.52%; the remaining 29.48% is influenced by other variables not included in this research model. Meanwhile, the consumer loyalty variable has an R² value of 0.4886. This value indicates that the variables that can explain variations in consumer loyalty construct a facility, brand image, product quality, promotion, service quality, and customer satisfaction by 48.86%; the remaining 51.14% is influenced by other variables not included in this research model.

Table 8. Value of R2 dependent variable

	R Square
Customer Satisfaction	0.7052
Customer Loyalty	0.4886

Source: Data processed.

According to Ghozali (2008), the inner model could also be evaluated by checking the predictive relevance (Q²). Predictive relevance measured how well the model generated the observation value and the estimated parameters. The Q² value above zero indicated that the model had a predictive relevance value. In contrast, the Q² value lower than zero indicated that the model had less predictive relevance. Q2 value obtained from the calculation is as follows.

$\begin{array}{rl}& Q^2=1-\left(1-R_1^2\right)\left(1-R_2^2\right)\\ & \hspace{0.17em}=1-\left(1-0.4886\right)\left(1-0.7052\right)\\ & \hspace{0.17em}=0.8492\end{array}$

Based on the calculation$Q^2$, 0.8492 or higher than zero was obtained; consequently, the model obtained had predictive relevance.

The final step in evaluating the inner model was to evaluate the overall model unable to be done in SEM-PLS. To overcome this problem, Tenenhaus et al. (2005) proposed global criteria for goodness-of-fit (GoF) to validate the SEM-PLS model globally. The formulation proposed was as follows.

$\begin{array}{rl}& GoF=\sqrt{\left(\overline{Communality}\right)\ast \left(\overline{R^2}\right)}\\ & \hspace{0.17em}=\sqrt{\left(0.7004\right)\ast \left(0.5969\right)}\\ & \hspace{0.17em}=0.6466\end{array}$

After the calculation, the GoF obtained was 0.6466. In measuring GoF, according to Tenenhaus et al. (2005), the value of small GoF = 0.1, medium GoF = 0.25, and large GoF = 0.36. Based on the testing$R^2$$Q^2$, GoF appeared that the model formed was already robust so that the hypothesis testing could be carried out.

4.4. Hypothesis testing

In this research, 11 hypotheses were tested as previously formulated. Table 9 below provides the correlation results among the constructs of the intended hypothesis. When deciding whether the hypothesis is statistically significant, we will compare the t-statistics value with the t-value from the table. If the t-statistic value is higher than the t-table value, the hypothesis is statistically significant, and vice versa. By conducting a two-way test with a significance level of 5 percent, the t-table value is 1.96. Meanwhile, If a significance level of 10 percent is used, the t-table value was 1.28. Table 9 presents the results of hypothesis testing.

Table 9. Path coefficients (mean, StDev, T-Values)

	Coefficient	Error Standard	T-Statistics	Decision
Facility -> Customer Satisfaction	0.1139	0.0845	1.3480	Significant α = 0.10
Facility -> Customer Loyalty	−0.1139	0.1106	0.2244	Not significant
Brand Image -> Customer Satisfaction	0.2273	0.1094	2.0780	Significant α = 0.05
Brand Image -> Customer Loyalty	0.0674	0.1270	0.5306	Not significant
Product Quality -> Customer Satisfaction	0.4474	0.0807	5.5452	Significant α = 0.05
Product Quality -> Customer Loyalty	0.3089	0.1398	2.2090	Significant α = 0.05
Promotion -> Customer Satisfaction	0.1029	0.1015	1.0129	Not significant
Promotion -> Customer Loyalty	0.0018	0.1032	0.0175	Not significant
Service Quality -> Customer Satisfaction	0.2839	0.0855	3.3186	Significant α = 0.05
Service Quality -> Customer Loyalty	0.1342	0.1269	1.0578	Not significant
Customer Satisfaction -> Customer Loyalty	0.2554	0.1669	1.5299	Significant α = 0.10

Source: Data processed.

5. Discussion of results

The results of the hypothesis test appear that the facility variable has a significant effect on customer satisfaction. Therefore it is in line with the proposed hypothesis. Safhiran (2022) stated customer loyalty refers to a person’s loyalty to continue doing business with a specific company, where the customer has a good or positive attitude toward a brand, is dedicated to the brand, and intends to continue his purchases in the future and the stage of using the facility and services offered. In satisfying and building loyalty through the facilities provided by the company, it can be done in three ways Kim and Kim (2021), such as building attention-creating medium; building message-creating medium; and building effect-creating medium. However, this study indicates that the facility variable has no significant effect on customer loyalty.

The study’s results confirm that the brand image variable significantly affects customer satisfaction, which aligns with the proposed hypothesis. However, the brand image does not significantly affect loyal customers, so it does not align with the proposed hypothesis. According to Keller and Swaminathan (2020), a good brand image is characterized by strength, easy entry, and retention in consumers’ memories; favorability, satisfying the needs and desires of consumers; and uniqueness, having uniqueness compared to others. In addition, a good brand image has a professional and modern impression, serves all segments, and has attentive service to consumers (Kotler et al., 2018).

The results of this study confirm that the product quality variable significantly affects customer satisfaction and loyalty. It is in line with each of the proposed hypotheses. As explained above, to produce quality restaurant products (Josiam & Monteiro, 2004), seven attributes determine quality: taste, presentation, menu variety, healthful options, freshness, appropriate temperature, and food safety. Therefore, it is essential to give attention to the seven attributes to achieve the quality of the food products served can make consumers satisfied and loyal.

The results of this study confirm that the promotion variable has no significant effect on customer satisfaction and loyalty, so it is not in line with the proposed hypothesis. Regarding promotion and customer loyalty, researchers have discussed the correlation between the two. The results of their research indicate that the correlation was not stable. While some other results state that promotion positively affected customer loyalty (Grover & Srinivasan, 1992). On the other hand, other researchers found that promotion negatively impact customer loyalty (Bui & Martinez, 2019), and others found that promotion did not affect customer loyalty (Cerina & Cuandra, 2022; Khanifah & Budiono, 2022; Meitiana & Sembhodo, 2022).

The results of the study confirm that the service quality variable has a significant effect on customer satisfaction. Therefore it is in line with the proposed hypothesis. However, service quality does not significantly impact customer loyalty, so it does not align with the proposed hypothesis. Mahmood et al. (2018) revealed a significant effect of service quality on customer loyalty. Customer satisfaction was found to have a significant mediating effect on the relationship between service quality and customer loyalty. The outcomes of our study could be useful for policy-making in bank management, and future banking expansion. There is additional generalized benefit to having insight into customers’ thinking regarding the banking sector. Parasuraman et al. (1988) hypothesized that quality requires three main aspects: intangibility, heterogeneity, and inseparability. Therefore, evaluating service products compared to goods seems like it takes work. The expectations of consumers, processes, and results are essential in evaluating service quality.

The results of the study already confirmed that satisfaction has a significant effect on customer loyalty. Therefore it is in line with the proposed hypothesis. This study is along with the study which shows that satisfaction has a significant effect on customer loyalty (Andriyani & Hidayat, 2021; Gill et al., 2021; Haghighi et al., 2012).

Several behavioral studies have found that only a few consumers classified as loyal, monogamous (100% loyal), or promiscuous are not loyal to any other brand (Tjiptono, 2005). On the other hand, the thing that is found frequently is the phenomenon of polygamous loyalty, where customers are loyal to a specific brand portfolio in a product category. Several factors form the phenomenon of polygamous loyalty, there are consumers use different brands for different situations, brands are complementary, consumers feel the need to combine various brands to form a complete product; some brands do not offer the full range of services expected; variety is the benefit that consumers seek; the consumer’s desire for something new; family members want a different brand; in the out of the stock situation in supermarkets, many consumers are willing to buy other brands at the same supermarket and less significant differentiation and functional similarity between brands, making it easy for consumers to switch brands.

6. Conclusion and recommendation

6.1. Conclusion

The purpose of this study is to examine the effect of facilities, brand image, product quality, promotion, and service quality on satisfaction and loyalty and customer satisfaction on loyalty; the results of this study can be formulated into the following conclusions facilities, brand image, product quality, and service quality significantly affect customer satisfaction. It means that the better and more complete the facilities provided, the stronger the brand image, the more favorable the product quality, and the faster and more comfortable the customer feels the service quality, the more customer satisfaction will increase. А service compаny could win the competition by consistently delivering high quаlity service compаred with other competitors аnd higher thаn customers expectаtion. Good service quаlity could аttrаct more customers in order to increаse compаny profit. Customers whose sаtisfied with the services will hаve а positive impаct on the experience in using restaurant. Positive experience will give аn impression to consumers in choosing а brаnd. The brаnd imаge thаt show hаs to be аble to elevаte the compаny to become better, through the encourаgement of the mediа, brаnd imаge would be eаsy to get. Positive аnd negаtive imаges of consumers’ perspective in meаsuring the compаny’s аbility in providing the services. The effort to boost up the brаnd imаge thаt is in line with customer sаtisfаction cаn be а huge opportunity in fulfilling the service quаlity.

Product quality has a significant effect on customer loyalty. It means that the higher the quality of the products served by the Waroeng Steak Restaurant and the more satisfied customers feel, the more loyal customers will be. If the quality of the product is appropriate then consumer loyalty will also increase and vice versa. Product quality is measured based on performance, features, reliability, conformance to specifications, durability, serviceability, aesthetics and quality. The products offered by business entities will be different and must have characteristics that differ from those of their competitors, even though the types have similarities. he increasingly fierce business competition requires companies to offer new innovations, both in terms of products that are more attractive and or services that make it easier for their customers.

The promotion has no significant effect on customer satisfaction and customer loyalty. It means that promotions carried out by Waroeng Steak Restaurants have not been able to encourage customer satisfaction and loyalty significantly. Therefore, more creative promotional efforts are needed to significantly encourage customer satisfaction and loyalty. Customer satisfaction contributes to a number of crucial aspects, such as creating customer loyalty, increasing company reputation, reducing price elasticity, reducing future transaction costs, and increasing employee efficiency and productivity. Satisfaction is also a response to emotional attitudes that are triggered by the customer appraisal process resulting from comparing perceptions of expectations before purchase with perceptions after using a product or service. In this restaurant, the specification of promotion doesn’t meet the criteria of unique, valuable or interesting to customer, or the value that been promising in the advertising promotion doesn’t meet the realization, so the customer giving the bad scores for the promotion.

Facilities, brand image, and service quality do not significantly affect customer loyalty. It means that the three independent variables have not been able to significantly contribute to creating customer loyalty, so this requires extra effort to increase the contribution of the three variables. From some of the result regarding facility, the researcher concludes that facility need to be upgraded in a strategy that can be implemented by a business unit to reduce costs and determine consumer decisions that will buy a business. Indicators that need to be upgraded are access, visibility, traffic, parking lots, expansion.

Customer satisfaction has a significant effect on customer loyalty. It means the satisfaction felt by customers on the services of a Waroeng Steak Restaurant can build loyalty. Customer satisfaction is a major factor in achieving business goals for the company. Customers who are satisfied with the services, products and prices provided by a company will influence other consumers. The efforts to satisfy customer needs are carried out in various strategies and ways with the hope that customers will be satisfied and will make repeat purchases.

7. Recommendations

Waroeng Steak Restaurant managers should emphasize customer comfort, satisfaction, and loyalty. This study found that facilities significantly affect satisfaction, although not significantly on customer loyalty. It is recommended that the Waroeng Steak Restaurant manager provide a more attractive environment through attractive designs with appropriate colors, proper table and chair layouts, clean toilets, and places of worship.

The study found that brand image significantly affected satisfaction, although not significantly on customer loyalty. Waroeng Steak Restaurant managers need to develop an appropriate brand to overcome the negative impact of the restaurant’s physical facilities on customer satisfaction and to increase brand trust and customer loyalty. Confidence, satisfaction, commitment, and brand image of a Waroeng Steak Restaurant must have various attributes to create brand loyalty. Product quality has a significant effect on customer satisfaction and loyalty. Therefore, it is recommended that Waroeng Steak Restaurant managers give attention to the dose of flour used and the freshness of vegetables, serve healthy products, and increase product diversity to meet the diverse tastes of consumers. The promotion has a significant effect on customer satisfaction and loyalty. Promotion is a transformation of information about products and efforts to encourage consumers to buy products offered by Waroeng Steak Restaurants; it is recommended to intensify promotions: personal selling, which includes responsiveness and appearance of employees, as well as menu availability; a discount rate which provides for special today and flyer information. Likewise, service quality has a significant effect on customer satisfaction and loyalty. It is recommended for Waroeng Steak Restaurant management to conduct training for staff and branch managers so they have speed and innovation, service time efficiency, and friendliness and courtesy in service. Future research will be expanding to focus on the variable that not significant effect on customer loyalty, by giving the upgrading facility and better promotion perhaps effect the customer loyalty. The limitation of this research are less in research sample and the period of time collecting data, the more sample can giving more accurate result.

Acknowledgments

The authors would like to thank all parties who supported this research. Hopefully, this research will be helpful for knowledge and a better future.

Disclosure statement

No potential conflict of interest was reported by the author(s).