The Effect of Price and Perceived Quality Dimensions on Customer Satisfaction

The goal of this research is to analyze the effect of service quality dimensions and price toward customer satisfaction on western fast-food restaurant in Jabodetabek. Total of 134 questionnaire responses from three most well-known brand western fast food restaurants in Jabodetabek were collected and used as the main data for this research. The method used in this research was Likert seven-point rating scales. The findings of this research indicate reliability, assurance, empathy from SERVQUAL factors have significant positive effect on customer satisfaction. However, tangibles, responsiveness, and price does not affect customer satisfaction in western fast-food restaurant in Indonesia. It seems assurance and empathy play the most important role on western fast-food restaurants in Jabodetabek region in Indonesia. The result suggests to prioritize some elements of SERVQUAL and price strategy that possibly western fast-food restaurants utilize later in future especially on urban and agglomeration area in Indonesia such as Jabodetabek.


INTRODUCTION
In Indonesia, western fast-food industry is growing rapidly. It is projected to grow 9.7% annually until 2023. Food spending has the largest proportion of Indonesian household's expenditure, accounting for over 35% household expenditure (Fitch Solution, 2019).
According to Ernawati, et al. (2019), western food is the most preferred food in Indonesia, followed by Indonesian food. There is an increasing trend toward demand of western food in growing middle class consumer in Indonesia (Fitch Solution, 2019). The trend toward convenience also contribute to the growth of western food in Indonesia. There are several western fast foods in Indonesia, such as McDonald's, KFC and Burger King, which compete with domestic restaurant brands. However, affordability issue is still present. (Fitch Solution, 2020).
Additionally, customer satisfaction could be influenced by price factor. Whereas, price could give information related quality of goods and service. At a particular circumstance, consumer will obtain more value as the increase of perceived consumer benefit. As explained by Malik, et.al (2012), fairness of price is one main factor in determining the level of customer satisfaction and maintains customer retention. In addition, by maintaining customer satisfaction, customers are less likely to bargain and ignore price differences.
Different culture seems to have different perception towards western fast-food restaurant. According to Etemad-Sajadi et al. (2013) with their research on comparing between Swiss and Chinese fast-food consumers, Chinese consumers perceive esteem symbol on western fast-food and have a better overall quality of meal. According to them, they are more willing to pay more costly price relative to their income.
In addition to price, the determining factor affecting customer satisfaction is service quality. Service quality consist of five dimensions, they consist of tangible, reliability, responsiveness, assurance and empathy. As for this study, three western fast-food restaurants were taken as subjects. These three fast food chains are well known for Indonesian people and their stalls are scattered to almost every city in Indonesia. Overall, this research objective is to analyze the consequence of service quality dimensions and price toward customer satisfaction (Nguyen et al., 2017).

Service quality
The service quality perceived by customer is considered the degree and direction of gap between customer perception and expectations. In some literatures about service quality, there are many different definitions for the term of expectations used. In the customer satisfaction literature, expectations are observed as customer predictions regarding how a transaction will happen (Parasuraman et al., 1988).
The perceived service quality can be measured using several models or instruments. One of the most popular instruments is SERVQUAL. In 1988 Parasuraman et al. developed SERVQUAL instrument which consisted of 22 items to assess customers' service quality perceptions of service and retail companies. SERVQUAL is composed of five dimensions with the definitions as follows: • Tangibles: physical facilities, equipment, and personnel's appearance • Reliability: the accuracy and dependability to perform the service as promised • Responsiveness: willingness to assist customers and provide prompt service • Assurance: knowledge and politeness of employees, their ability to inspire trust and confidence • Empathy: the ability to provide attention and care to customers individually The application of SERVQUAL is widespread, but it is may not be suitable for measuring all aspects of restaurant industry, specifically fast-food restaurant due to differences in the characteristics and features of the service quality in the fast-food restaurant industry compared to other industries. Some authors had challenged the universality of the five dimensions of SERVQUAL (Cronin and Taylor, 1992;Culiberg, 2010). Cronin and Taylor (1992) developed a performancebased scale called SERVPERF which was claimed more efficient and applicable for the banks, dry cleaning, pest control, and fast-food industry in comparison with the SERVQUAL scale which had a good fit just in two (bank and fast-food) of the four industries. The analysis result using SERVPERRV suggested that service quality significantly affects customer satisfaction.
Then in 1995, Stevens et al. used the instrument SERVQUAL and LODGSERV scale to the restaurant industry named DINESERV. The DINESERV scale contained 40 statements in the beginning and after confirmatory factor analysis, the number of items were reduced to 29. A seven-point Likert scale from "strongly disagree" (1) to "strongly agree" (7) was used to assess the responses. Service quality is defined as a function of the interaction of standard expected value, predictive expected value, and actual quality of service. The lower the expectation of the consumer regarding what will happen, the higher the perception of the actual service. Jain and Gupta (2004) explained that an obvious managerial implication to emerge from the findings of the study was when one was interested in evaluating the service as a whole company quality or quality comparison across the service industry, one might use the SERVPERF scale due to the soundness of its psychometry and the prudent of the instrument. However, if someone is interested in identifying areas of poor quality of service in a company for management intervention, one should choose the SERVQUAL scale for its superior diagnostic capabilities.

Price
Customer satisfaction is known as being closely related to «value», and thus to «price». In the meantime, service quality is not commonly affected by price (Anderson, et al., 1994). The more customer satisfaction level, the more they will tolerate higher price (lower price elasticity), which leads to larger profits (Garvin, 1988). Conceptually, customer satisfaction combine the dimensions of service quality with other dimension such as price (Fornell, 1992;Lewis, 1993).

Customer satisfaction
Measuring customer satisfaction is one of the most important issues concerning any kinds of business organizations, which is explained by customer orientation philosophy and the main principles of continuous improvement of modern enterprises (Siskos and Grigoroudis, 2002). The research of customer satisfaction has turned into one of the key factors in marketing as more companies are trying to increase customer retention. (Munusamy and Chelliah, 2011).
In the traditional organization chart in marketing management, company put customers in the lowest hierarchy in the pyramid, while the modern chart shows that customers are in the top of pyramid, a customer-oriented organization chart. Successful marketing companies carefully cultivate customer satisfaction and loyalty (Kotler and Keller, 2016).

Research model and hypotheses
Five independent variables (tangible, reliability, responsiveness, assurance, and empathy) used in this research to measure the service quality. The 23 items from the five dimensions mentioned above were evaluated by combining the DINESERV model from Stevens et al. (1995) and the SERVPERF model by Cronin and Taylor (1992). Additional of one independent variable, price, is added based on study from Andaleeb and Conway (2006) which found that one of the influence to customer satisfaction in restaurant industry was price. Thus, two items related to price were evaluated. There are additional of three items related to customer satisfaction as well. The effect between dependent and independent variables are illustrated in the research model in Figure 1.
Based on the above literatures, the following hypotheses are proposed: H1. Tangibles positively affects customer satisfaction in Jabodetabek western fastfood restaurants. H2. Reliability positively affects customer satisfaction in Jabodetabek western fastfood restaurants. H3. Responsiveness positively affects customer satisfaction in Jabodetabek western fast-food restaurants. H4. Assurance positively affects customer satisfaction in Jabodetabek western fastfood restaurants. H5. Empathy positively affects customer satisfaction in Jabodetabek western fastfood restaurants. H6. Price has negatively affects with customer satisfaction in Jabodetabek western fast-food restaurants.

METHODOLOGY
The study was conducted in Jakarta, Tangerang, Bogor, Depok, and Bekasi (Jabodetabek) area in Indonesia during the Covid-19 pandemic situation. This paper applies survey methodology by using online survey platforms such as Google Form and deployed using WhatsApp and Instagram to adapt with the safety protocols. The data collected from July to August 2020. The population in this research are customers of the fast-food restaurants that located in Jabodetabek area in Indonesia. The fast-food restaurants must have a separated parking area special for the fast-food restaurants' customers.
Several steps have been taken to develop the research instrument. First, literature review from the recent previous research was conducted to find suitable research instrument. Second, all variables of the instrument were translated into Bahasa Indonesia because the target of respondents are Indonesian. Third, the questionnaire was shared and tested by twenty random respondents before sharing the final version to refine the sentences so that there would be no confusing questions. Based on these feedbacks, some improvements were made. Confusing questions may lead to ambiguous answers, so refined the question on a trial basis would help to adjust the cultural differences between UK and Indonesia. The questions were modified to adapt the fastfood restaurants' condition in Indonesia and to eliminate items that did not seem to fit the content (e.g. wet tissue availability). The design of questionnaire using a Likert seven-point rating scales.
Questionnaire using four pre-liminary questions, 25 main questions related to variable and additional four demography questions. In total, 447 questionnaire responses were collected and 134 valid questionnaire responses used as the main data for this research. The data collected from valid questionnaire responses were analyzed using SPSS version 22.0. The validity was calibrated using Kaiser-Meyer-Olkin Measure of Sampling Adequacy (KMO) to make sure sufficiency of the data. Afterwards, Cronbach alpha was measured to test reliability of each factor. The level significance of regression coefficients used as the reference for the main evaluation criteria of the structural model.
The first 20 items of service quality (tangible, reliability, responsiveness, assurance, and empathy) below based on the study by Nguyen et al. (2017). The two items of price based on study from Andaleeb and Conway (2006). Three items related to customer satisfaction based on study from Zhong and Moon (2020 Sharma (1996), when the KMO value reach 0.8 or higher, the number of samples are good enough to continue with factor analysis.

Multiple Regression Test
The regression test was conducted to establish the significant level of the independent variables of the study on the dependent variable. Direct evidence, reliability, responsiveness, assurance, empathy, and price are independent variables. Meanwhile, customer satisfaction is the dependent variable.
Regression analysis can be tested by Y = a + bX Model with Y equals Customer's Satisfaction, X1 equals Tangible, X2 equals Reliability, X3 equals Responsiveness, X4 equals Assurance, X5 equals Empathy, X6 equals Price, a equals Contant Value and b equals residual coefficient according to Hypothesis. Table 3 shows a simple regression of the influence between independent variables to dependent variable. Table 4 shows R Square value of 0.527. This value shows 52.7% variation of customer satisfaction has already been pictured throughout independent variables (reliability, tangible, price, empathy, assurance and responsiveness).
According to Table 5, reliability, assurance and empathy have significant influence to customer satisfaction (Sig < 0.05). Meanwhile tangible, responsiveness and price have insignificant influence to customer satisfaction.

Discussion
Tangible factor has positive correlation to customer satisfaction, the significance value is above 0.05 which is insignificant. Therefore, H1 is rejected. Based on Tangible's questionnaires, there might be a shifting perception of SERVQUAL of customer on fast-food restaurant to customer satisfaction factor including tangible factor. On these days, customer order fast-food more via online platform such as website and mobile application. There is also a probability that parking availability does not matter on customer satisfaction. As sometimes customer could go to fast-food restaurant without the needs for parking. Thus, the tangible factor from this questionnaire items are somewhat doesn't really matter anymore into customers' perception value. However, this statement needs to be clarified for further research.

Model
According to the result, responsiveness does not have effect toward customer satisfaction (p>0.05) which makes H3 is rejected. It can be happened due to responsiveness components which are measured, such as punctual and fast service (RS2) and Employees eager to help and assist customers' requests (RS3) have become qualifying factors in fast-food restaurant industry in Indonesia. It means that if qualifying factor exceeds customer expectation, there will be no more increase in customer satisfaction. However, with absence of this factor could decrease the satisfaction and drives customer away. Accurate billing for example, it has been controlled by using automated point of sales program to prevent it from becoming inaccurate. Therefore, as long as the restaurant do not omit the aspects, it seems responsiveness do not give significant effect toward customer satisfaction (Chowdhary and Prakash, 2001).
For assurance, empathy, and reliability factor, there are significant effect to customer satisfaction of western fast-food restaurant in Indonesia as the value of p<0.05. Therefore, H4 and H5 are accepted. This result is the same as Nguyen Quang et. Al., (2017) which said that all of them have positive significant effect to customer satisfaction. This also in line with Sierra (2017) which said that Indonesians which adopts eastern culture prefer to be served by others, which aligns with parameters such as assurance, empathy and reliability. Each individual customer has different perception to price of food due to their comparison between perceived value and the price of the food. Furthermore, it could lead to the difference in satisfaction towards the food itself (Namin, 2017). Indonesians have very rich local food culture, from traditional food to modern food, in which they have different value toward their food (Wijaya, 2019). Moreover, Jabodetabek, as agglomeration cities, are populated by diverse ethnic and culture that makes their perception toward food become more varied (Harahap, 2017). Therefore, because of diverse value perception of food, price could not give a significant effect on regression analysis toward customer satisfaction.

CONCLUSION
From SERVQUAL factors, Assurance and Empathy have positive correlation to customer satisfaction on Western fast-food restaurant in Jabodetabek. Meanwhile, tangible, reliability, and responsiveness have insignificant impact on customer satisfaction.
As for managerial implication of fastfood restaurants industries, assurance and empathy aspects of SERVQUAL should be prioritize to gain as much customer satisfaction as possible. This applies especially on urban area such as Jabodetabek. As price do not have significant effect on customer satisfaction, managers should avoid focus too much on creating price strategy. The key successful on Western-fast food restaurants lie on their service quality instead of price.
This study has a contribution to gain better understanding about SERVQUAL and Price on customer satisfaction in Jabodetabek.
There are some limitations on this research.
The first one is conducted for a limited amount of time, which is four months. Additionally, this research was only focus on Western fast-food restaurant in Jabodetabek. It might be interesting for future research to study on local and eastern fast-food restaurants with additional variables.