The Influence of Perceived Value and Price Perception Toward Customer Loyalty

Abstract

Nowadays, the competition in the market becomes tighter everyday. A market that was once a blue sea market has turned into a blood-coloured sea because there are too many competitors in one market. This, unexceptionally, affects the airline industry. In order to survive in this situation, a company must make a managerial decision, whether to create a differentiation or to withdraw from the competition. In the domestic airline context, one of the solutions for this problem is by creating an upgraded service that will be offered to the customer. This upgraded service sometimes called as a business class or first class. The aim of this research was to examine the influence of perceived value, which was mediated by brand affect and brand trust, toward customer loyalty. This research is also aiming to investigate the moderating influence of price perception on the relationship between brand affect, brand trust and customer loyalty in the domestic flight context. This research was conducted in Yogyakarta in the context of customer’s perception on premium airline services. The data was collected using questionnaire based on Likert Scale. The selection of respondent was done by convenient sampling of 237 respondents which were chosen to represent the overall customer’s opinion. The data was analyzed using Structural Equation Modeling and Moderated Regression Analysis using AMOS and SPSS as the software. The result of this research found that perceived value, mediated by brand affect and brand trust, had a significant influence on customer loyalty. The moderating influence of high price perception also found to have a positive influence, but not significant, on the relationship between brand trust and customer loyalty. However, there is no moderating influence of high price perception on the relationship between brand affect and customer loyalty.