Service Quality, Product Diversity, and Customer Loyalty The Intervening Role of Purchase Decisions
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Abstract
This research examines the impact of service quality and product diversity on customer loyalty, specifically analyzing the mediating role of purchase decisions at Toko Madura Pak Faedi. Due to the unspecified and dynamic nature of the customer population at this family-owned retail business, this study employs a quantitative research design with a non-probability purposive sampling technique. Primary data was collected from a sample of 45 respondents representing customers who have completed transactions at the research site utilizing structured questionnaires. Data analysis was performed using Structural Equation Modeling (SEM) processed through SmartPLS software to evaluate the hypothesized relationships between latent variables. The results reveal that both service quality and product diversity exert a positive and significant influence on purchase decisions. Furthermore, purchase decisions are shown to be a critical and significant predictor of long-term customer loyalty. The major findings suggest that product diversity does not have a direct statistical effect on loyalty but operates through a full mediation mechanism via purchase decisions, while service quality influences loyalty through both direct and indirect pathways. For practitioners, these findings imply that owners of small-scale family businesses should prioritize transaction efficiency and consistent inventory availability to trigger the initial purchase decisions necessary to build lasting consumer commitment.
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