The role of customer satisfaction as a mediating mechanism in linking service quality and selling price to business profit: evidence from generation z consumers in micro retail
Article Sidebar
selling price,
customer satisfaction,
business profits,
generation z
Main Article Content
Abstract
This study aims to analyze the influence of service quality and selling price on business profits through customer satisfaction as a mediating variable, focusing on Generation Z consumers in the context of micro-retail businesses. The study used a quantitative approach with the Partial Least Squares Structural Equation Modeling (PLS-SEM) method on 100 respondents. The results showed that selling price and service quality have a positive and significant effect on customer satisfaction, with selling price having a more dominant influence. Furthermore, customer satisfaction was shown to have a strong and significant influence on business profits. However, the direct effect of selling price and service quality on business profits was not significant. Mediation analysis showed that customer satisfaction fully mediates the relationship between selling price and service quality on business profits. These findings confirm that customer satisfaction is a key mechanism linking marketing strategy to financial performance. This study contributes to broadening the understanding of the role of mediation in the context of micro-businesses and provides practical implications for business actors in increasing profitability through strategies oriented towards customer satisfaction.
Article Details
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
References
Anderson, E. W., & Mittal, V. (2000). Strengthening the satisfaction-profit chain. Journal of Service Research, 3(2), 107–120. https://doi.org/10.1177/109467050032001
Anderson, E. W., Fornell, C., & Lehmann, D. R. (1994). Customer satisfaction, market share, and profitability: Findings from Sweden. Journal of Marketing, 58(3), 53–66. https://doi.org/10.1177/002224299405800304
Becker, L., & Jaakkola, E. (2020). Customer experience: Fundamental premises and implications for research. Journal of the Academy of Marketing Science, 48(4), 630–648. https://doi.org/10.1007/s11747-019-00718-x
Bolton, R. N., Gustafsson, A., McColl-Kennedy, J., Sirianni, N. J., & Tse, D. K. (2014). Small details that make big differences: A radical approach to consumption experience as a firm's differentiating strategy. Journal of Service Management, 25(2), 253–274. https://doi.org/10.1108/JOSM-01-2014-0034
Chaerudin, S. M., & Syafarudin, A. (2021). The effect of product quality, service quality, price on product purchasing decisions on consumer satisfaction. Ilomata International Journal of Tax and Accounting, 2(1), 61–70. https://doi.org/10.52728/ijtc.v2i1.202
Cronin, J. J., Jr., Brady, M. K., & Hult, G. T. M. (2000). Assessing the effects of quality, value, and customer satisfaction on consumer behavioral intentions in service environments. Journal of Retailing, 76(2), 193–218. https://doi.org/10.1016/S0022-4359(00)00028-2
Dabija, D. C., Bejan, B. M., & Tipi, N. S. (2018). Generation X versus Millennials communication behaviour on social media when purchasing food versus tourist services. E+M Ekonomie a Management, 22(1), 191–205. https://doi.org/10.15240/tul/001/2018-1-013
Djafarova, E., & Bowes, T. (2021). “Instagram made me buy it”: Generation Z impulse purchases in fashion industry. Journal of Retailing and Consumer Services, 59, 102345. https://doi.org/10.1016/j.jretconser.2020.102345
Drosos, D., Skordoulis, M., & Chalikias, M. (2019). Measuring the impact of customer satisfaction on business profitability: An empirical study. International Journal of Technology Marketing, 13(2), 143–155. https://doi.org/10.1504/IJTMKT.2019.102264
Fornell, C., Johnson, M. D., Anderson, E. W., Cha, J., & Bryant, B. E. (1996). The American customer satisfaction index: Nature, purpose, and findings. Journal of Marketing, 60(4), 7–18. https://doi.org/10.1177/002224299606000403
France, S. L., Shi, Y., & Kazandjian, B. (2021). Web trends: A valuable tool for business research. Journal of Business Research, 132, 666–679. https://doi.org/10.1016/j.jbusres.2020.10.019
Friess, M., & Kassemeier, R. (2024). Price increases and their financial consequences in international business-to-business selling. Journal of International Marketing, 32(1), 92–111. https://doi.org/10.1177/1069031X231214160
Fujawati, E., Susnita, T. A., & Ratnasari, N. (2024). Strategi harga dan kualitas produk dalam meningkatkan kepuasan konsumen pada industri roti. Journal of Innovation in Management, Accounting and Business, 3(1), 11–21. https://doi.org/10.56916/jimab.v3i1.537
Grewal, D., Roggeveen, A. L., & Nordfält, J. (2017). The future of retailing. Journal of Retailing, 93(1), 1–6. https://doi.org/10.1016/j.jretai.2016.12.008
Gruca, T. S., & Rego, L. L. (2005). Customer satisfaction, cash flow, and shareholder value. Journal of Marketing, 69(3), 115–130. https://doi.org/10.1509/jmkg.69.3.115.66364
Homburg, C., Jozi?, D., & Kuehnl, C. (2017). Customer experience management: Toward implementing an evolving marketing concept. Journal of the Academy of Marketing Science, 45(3), 377–401. https://doi.org/10.1007/s11747-015-0460-7
Kumar, V., Rahman, Z., Kazmi, A. A., & Goyal, P. (2012). Evolution of sustainability as marketing strategy: Beginning of new era. Procedia - Social and Behavioral Sciences, 37, 482–489. https://doi.org/10.1016/j.sbspro.2012.03.313
Ladhari, R. (2009). Service quality, emotional satisfaction, and behavioural intentions: A study in the hotel industry. Managing Service Quality: An International Journal, 19(3), 308–331. https://doi.org/10.1108/09604520910955320
Lemon, K. N., & Verhoef, P. C. (2016). Understanding customer experience throughout the customer journey. Journal of Marketing, 80(6), 69–96. https://doi.org/10.1509/jm.15.0420
Luo, X., & Homburg, C. (2007). Neglected outcomes of customer satisfaction. Journal of Marketing, 71(2), 133–149. https://doi.org/10.1509/jmkg.71.2.133
Mittal, V., Anderson, E. W., Sayrak, A., & Tadikamalla, P. (2005). Dual emphasis and the long-term financial impact of customer satisfaction. Marketing Science, 24(4), 544–555. https://doi.org/10.1287/mksc.1050.0142
Morgan, N. A., & Rego, L. L. (2006). The value of different customer satisfaction and loyalty metrics in predicting business performance. Marketing Science, 25(5), 426–439. https://doi.org/10.1287/mksc.1050.0180
Oliver, R. L. (2010). Satisfaction: A behavioral perspective on the consumer (2nd ed.). Routledge.
Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1988). SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality. Journal of Retailing, 64(1), 12–40.
Priporas, C. V., Stylos, N., & Fotiadis, A. K. (2017). Generation Z consumers' expectations of interactions in smart retailing: A future agenda. Computers in Human Behavior, 77, 374–381. https://doi.org/10.1016/j.chb.2017.01.058
Rust, R. T., Lemon, K. N., & Zeithaml, V. A. (2004). Return on marketing: Using customer equity to focus marketing strategy. Journal of Marketing, 68(1), 109–127. https://doi.org/10.1509/jmkg.68.1.109.24030
Supraptiningsih, J. D. (2025). Enhancing customer satisfaction in digital services through perceived value mediating information quality and system quality. International Journal of Integrative Sciences, 4(9), 2031–2048. https://doi.org/10.55927/ijis.v4i9.566
Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: A means-end model and synthesis of evidence. Journal of Marketing, 52(3), 2–22. https://doi.org/10.1177/002224298805200302