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1. Introduction

Part one presents an outline of this research. The following two parts describe the core idea of this research; make the literature reviews and draw theoretical framework as well as hypothesis. The last three parts will focus on design of this research and statistical analysis of the results of this study.

1.1. Research Objective

The purpose of this study is to show relationship between service quality and customer loyalty in order to explain how to make profit in 3rd wave coffee sector.

1.2. Importance of this Research

Previous researches show that customer loyalty is one of the most important subjects which directly cause increase in profit of companies. In order to create customer loyalty; companies should provide customer satisfaction. Reaching highly satisfied customers is related to the service quality in café sector. The objective of the study is to find that how service quality affects the customer satisfaction which creates customer loyalty, which then maximized the profit of the company. This was especially regarded as ‘important' for 3rd Wave Coffee Sector due to the fact that the sector is newly-emerging and investors want to learn the main issues about the relationship between variables that have been chosen for this research. Therefore; it can be said that with this research's results, it is aimed to create knowledge in this subject which would be beneficial for companies and small medium sized enterprises when they are making decision to invest this sector; and they can understand how to gain competitive advantage in the sector.

When it is looked at the literature, it can easily be seen that there are many studies touching upon the relationship between service quality and customer loyalty. In this research paper, we are using these studies to reach the results about the 3rd wave coffee sector in Izmir. We focused on making research about this topic because nowadays there are a lot of coffee festivals in Turkey, such as Izmir and Istanbul coffee festivals  , which demonstrate the increasing place of the coffee sector. These are also indicators of some new attempts in terms of improving service quality, differentiating the products etc. It is undeniable fact that trends have been changing in coffee market sector and more aggressive competition is seen, therefore making research in this dynamic sector and providing insight could be very beneficial for possible investors as well as owners of these Cafés in order them to catch the trends and to survive. To survive in this new kind of trend as a brand is all about the customer loyalty which is directly related with the service quality. It is aimed here to find out the degree of this relationship and try to understand how it is possible to reach high level satisfied customers to make more profit in the sector.

In order to reach the best results, related data was obtained from both qualitative and quantitative analysis from following Cafés in Alsancak district:  Brewery Café and Two Cups Coffee Bar.

Third Wave Coffee Concept

The term “Third Wave Coffee” was coined Trish Rothgeb, who had deep experience as a coffee roaster and was teacher of all things coffee. The use of this relatively new term goes back to 2002, when Trish Rothgeb defined coffee movements as ‘waves'. Following this description, “third wave” became the mainstream term representing the movement. The third wave is characterized by coffee lovers interested in the character of coffee itself. In this type, marketing and social are important, but not as driving force.

In the first wave, the consumer led the way. It was about availability to masses. In the second wave, coffee is better but the marketing was seen as the driving force. With the third wave, production and marketing take the back seat and the product takes center stage.

However; despite the fact the product quality is the focus of 3rd wave cafés, service quality is tried to be provided at maximum in these types of cafés as well. It is all because of that when there is a ‘customer' it is believed that there will be expectations regarding services except from product quality and differentiation. Therefore, within this research, we aimed to reach out the level of these service qualities on customer's current and future behaviors.  

It should also be highlighted that the reason of choosing 3rd wave cafés in this research was not to go into details of the sector; rather, it was because of our preference to make some groupings in café choices in Alsancak district. Therefore, based on this brief information, it can be said that 3rd wave was not seen as highly more different concept than other types of cafés for this research. This, in return, made our questionnaires more general rather than specific touches on 3rd wave.

    

2. Literature Review and Theoretical Framework

2.1. Literature Review

The positive relationship between service quality and customer satisfaction in different sectors has been examined in many academic articles (Agbor, 2011; Gagliano and Hathcote,1994). In this research, this relationship in Third Wave Coffee Shops, whose popularity has been increasing recently as a sub-branch of food & beverage sector, will be touched upon. As Sirinun Maieiam mentioned in his article A Study Of The Customer Satısfactıon Towards Coffee Shop Third Place, the service quality can be divided into elements. In most of the researches, the ‘service quality' includes following elements: Assurance & Empathy, Cleanliness, Reliability, Responsiveness and Tangibles. These elements generate different measurement scales. For instance, CFFRSERV measurement scale was used in China, while DINESERV measurement scale was applied in United States, because of the role of cultural elements and problems on generalizability (Tan, Oriade and Fallon, 2014). However; most articles used SERVQUAL scale, because it is broader in scope and generally more applicable (Ramseook, 2012; Sabir et al., 2014).

As a research methodology, surveys and questionnaires were used and supported by statistical data in most of the articles.After all, correlation between service quality and consumer satisfaction were indicated. For instance, in The Influence of Perceived Service Quality on Customer Loyalty and an Empirical Research in the Fast-Food Industry article from Turkey, there was 53% change in customer loyalty related to service quality.

We believe that this study will bring effective results supported by statistical data for both Third Wave Coffee Shops owners and customers by indicating positive correlation between service quality and consumer satisfaction. Furthermore, it will also show priority of elements under service quality.  

2.2. Theoretical Framework   

 

In this research, we measure service quality with using SERVQUAL model, which is a multiple-item scale that is developed by Parasuraman, Valarie A. Zeithaml and Len Berry, in 1988. It highlights the main components of high quality service. The SERVQUAL authors originally identified ten elements of service quality, but in later work, these were collapsed into five factors - reliability, assurance, tangibles, empathy and responsiveness.

Table 2.2: Dimensions and their elements

Dimension Definitions Elements

Tangibles Physical facilities, equipment, and appearance of personnel. - Well dressed employees

- Modern equipment and materials

- Charming of place

Reliability Ability to perform the promised service dependably and accurately. - Service performed at the right, promised time

- Accurate order fulfillment

- Accurate in billing

Responsiveness Willingness to help customers and provide prompt service. - Employees respond to customers quickly

- Employees willing to help customers

Assurance Knowledge and courtesy of employees and their ability to inspire trust and confidence. - Employees be kind

- Employees provide consistent information to the customers

- Customers should feel safe in their transaction

Empathy Caring, the individualized attention the firm provides its customers. - Employees understand the customer needs

- Knowing the customers\' name, preferences

2.2.1. The Purpose of the Study

The purpose of this study is to find “The Effect of Service Quality on Customer Loyalty in 3rd Wave Cafés in Izmir” The research question; how does service quality affect customer loyalty in 3rd Wave coffee sector in Izmir. In order to answer this question following framework and hypotheses were created;

Figure 2.2.1: Theoretical Framework of Research Topic

2.2.2. Research Question

How do service quality and its SERVQUAL dimensions affect customer loyalty in 3rd Coffee Sector Izmir ?

2.2.3. Variables & Hypotheses Development

As can be seen above, the dependent variable of our topic is “Customer Loyalty” which can be caused by the independent variable. Service Quality is the independent variable that can be predicted and Customer satisfaction is intervening variable which occurs with effect of the service quality in a time dimension. There can be some moderating variables which refer to contingent effects like income, age and gender. Therefore the satisfaction level differs from to girl to boy or maybe with the age of the people.

There are some simple hypotheses that we search in this topic;

H1: If service quality is increased, the customer loyalty will increase.

H2: Customer satisfaction leads to customer loyalty.

H3: Customer loyalty directly increases profit.

Conceptualization scheme and hypotheses show that the major concepts in our research are Service Quality, Customer Satisfaction and Customer Loyalty.

2.2.4. Conceptualization

Conceptual (Nominal) Definitions

It is a conceptual definition is the underlying understanding of something that is necessary to attain before understanding how it is used and applied.

Service Quality: An assessment of how well a delivered service conforms to the client\'s expectations. From the viewpoint of business administration, service quality is an achievement in customer service. Service quality is a comparison of expectations (E) about a service with performance (P) SQ=P-E

Customer Loyalty: Likelihood of previous customers to continue to buy from a specific organization. Great attention is given to marketing and customer service to retain current customers by increasing their customer loyalty.

Customer Satisfaction:  It is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as \"the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals.

Operational Definitions

It is the statement of the specific dimensions and elements through which a concept will become measurable. In this part we decide that how we are going to measure the variables.

In our study we define the concepts as the following;

Service Quality: Service Quality = Consumer Service Expectations – Consumer Service Perceptions.

Service quality is one of the main factors in order to provide customer loyalty in many sectors. Quality can be referred to many different products or services; and service quality is also quite diverse in nature and thus has different definitions made by various authors. Some authors may prefer to use more quantitative definitions, whereas other can use more qualitative approaches.  From the viewpoint of business administration, service quality is an achievement in customer service. These definitions of service quality can be also product-attribute approach or customer-satisfaction approach which we will use in this research. Because customers are major actors who satisfy or do not satisfy and who will provide profit to a company, the degree which they meet their expectation with the cafe is important. Therefore, by benefiting from this idea, we preferred to use following service quality relationship: Service Quality = Consumer Service Expectations – Consumer Service Perceptions

Customer Loyalty: The customers who are continuously visit 3rd Wave Coffee Café.

Customer loyalty is a dependent variable in our research and it has become very important concept for literature as well, because it has been found that it has important relationship with firm's profitability. Therefore, now it has become an indispensable part in decision making process. It became ostensible to see that customers who are satisfied with the firm have tendency to use the firm's products more. In our case, our foresight is also in same direction, i.e. highly bonded customers will come to that cafe again and become loyal by also providing some recommendations to others and strongly defending their choices to others.

Customer Satisfaction: It refers to post-purchase evaluation of service quality given pre-purchase expectation of 3rd Wave Coffee customers.

In the way to being loyal to a brand/firm, customers first should be satisfied by the services of the firm. Here, if costumers are satisfied with the services of 3rd Wave Cafes and has good perceived service quality in their minds, then their possibility to be loyal customer increases.

Therefore, measuring customer satisfaction provides a comprehensive insight to the customers\' pre and post purchase behaviour. In our research, customer satisfaction refers to post-purchase evaluation of service quality given pre-purchase expectation. Satisfied customers are who receives significant added value to his/her bottom line and customer satisfaction appears as a performance indicator in order to increase company\'s profit and competitiveness.

The concept, dimensions and elements:

Figure 2.2.4: The Customer Loyalty Dimensions and Elements which are based on Service Quality

3. The Research Design

3.1. The Purpose of the Study

The purpose of this research is to identify the effect of service quality on customer loyalty. It is an applied study on 3rd wave coffee sector. In the study, descriptive research approach was used in order to show effect of service quality on customer loyalty, because it is considered as one of the best ways to define events or situations. The descriptive studies offer ideas for further probe as well as research and also help make certain simple decisions.

3.2. Target Population

The target population for this study consists of customers of 3rd Wave Cafés in Alsancak district of city of Izmir.

3.3. Types of Investigation

The major aim in this research is to provide some information about the service quality effect on customer loyalty in 3rd wave coffee sector. We are providing this information because the trends are changing in coffee market sector, so in order to catch the trend we think that we should make research about this new topic to create knowledge. The competition of these style coffee shops are getting more aggressive and to survive in this new kind of trend as a brand is all about the customer loyalty which is directly related with the service quality. In this study, we want to find the degree of this relationship and try to understand how it is possible to reach high level satisfied customers to make more profit in sector. In addition, the correlation investigation helped us to analyze linear relationships between numerical variables. It is correlation studies because our interference is minimal. We know that the correlation is positive between variables but we want to measure degree of the correlation when we consider 3rd coffee sector.

3.4. Sampling Design

 

Sample design helps us to determine elements of population and how they are selected. One of the reasons that behind back to select a sample size that we don't reach the whole population. In this study, our unit of analysis is 3rd wave coffee customers. Our aim is to provide some information about the service quality effect on customer loyalty in 3rd wave coffee sector, we are providing this information because the trends are changing in coffee market sector, so in order to catch the trend we think that we should make research about this new topic to create knowledge. Therefore, we can say that with our research result we are aiming to create knowledge about this subject which would be beneficial for companies and small medium sized enterprises when they are making decision to invest this sector; and they can understand how to gain competitive advantage in sector.

3.4.1. Unit of analysis

According to this study, we collected data by applying questionnaires and observation in randomly chosen samples based on SERVQUAL model (V.A. Zeithaml, A. Parasuraman & L.L. Bery 1988) in order to examine relations among variables. The data was collected from consumers at the level of individuals (comparing different gender and age) in Izmir and was analyzed by using SPSS.

3.4.2. Sampling Technique

There are two types of samples, namely probability and non-probability sampling. In this study, we use probability sample with the simple random sampling. It is the most representative of the population for the research purpose; every single customer has an equal chance to be chosen. Also, it is one of the most common technique, which is ‘simple random sampling' are interested in our study. When we look our sampling frame; 3rd wave coffee shops in Izmir can be said as a sampling frame. In this research, precision and confidence are really important. High confidence level and low margin of error is important for the reliability of research.

3.4.3. Sampling Size

In our research, we determine our desired level of confidence %95 because it should be %95 and this is needed for the research of social science. First of all we think that getting 1000 customers of 3rd wave coffee shop from population and collect data by applying questionnaires. According to sample size table, population at 1000, the simple size should be 278 people but we have a time limitation. So, as a result of this, we determine our population 80 and according to sample size table, population at 80, the simple size for precision of ± 5% refers to 66 at desired confidence level 95%. So, in this research, we need 66 respondents. Furthermore, we increase reliability of research to directly go and apply survey to customer of 3rd wave coffee in Izmir.  It will be sufficient to understand what we try to reach in this research. In addition to that the similar research studies are used approximately same number of people in order to reach the expected result.

3.5. Study Setting

This research mainly focuses on quantitative research method that is based on deductive research approach in order to test hypotheses by using numerical data. Quantitative data was obtained by a field study (correlational study, minimal researcher interference).

3.6. Data Collection Methods

Cross-sectional study was used in order to gather the necessary data. Because of the limited time, we implemented survey strategies in order to explain variables. It was also one of the cheapest ways to collect data.

In order to collect necessary data, questionnaire was prepared as a research tool consisting of 2 Sections and total number of 23 questions in different types. 3 nominal, 5 ordinal, 14 interval scale questions And 1 open-ended question were asked to the participants.

Questionnaire was prepared and delivered personally by hand to customers of 3rd Wave Cafes. The respondents completed the questionnaires and after that the questionnaires was collected back by the researchers.

Section I presented the demographic profile of respondents by using both nominal and ordinal scales as scales of measurement. The gender, marital status and the questions related to respondents' awareness about 3rd Wave Coffee places were measured using nominal scale. In contrast to these, the age, occupation, monthly income, the length of time for most recent visiting to these cafes and priority ranking questions were measured using ordinal scale. This part consisted of 8 questions in total.

Section II included questions related to the five dimensions of SERVQUAL that focuses on service quality. In this section, even though not mentioned in the questionnaire, the questions are divided into six parts, namely tangibles, reliability, responsiveness, assurance, empathy and consumer loyalty. In this section, the measurement scale was interval scale which was five-point Likert-type scale. The scales ranged from 1 to 5 indicating from strongly disagree to strongly agree. Moreover, as a last question, 1 Open-Ended question was asked in order to get some recommendations from respondents for improvement of the café.  This part consisted of 15 questions.

    Table 3.6: Construct Measurement

Variables Sample Items Measurement

Tangibles (T)  “Interior and Exterior design of café is attractive”

 “The staff are dressed well and organized”

Interval (Five-point Likert scale)

Reliability (R)  “Staffs serve the meals exactly as you ordered it”

 “Staff serve your orders in time that they promised” Interval (Five-point Likert scale)

Responsiveness (RP)  “Staff offer to fast service”

 “Staff are willing to help customers” Interval (Five-point Likert scale)

Assurance (A)  “Staff are kind”

 “Customers should feel safe in their transaction” Interval (Five-point Likert scale)

Empathy (E)  “Staff are carefully listening to needs of customers”

 “Staff know the customers\' name, preferences”

Interval (Five-point Likert scale)

Customer Loyalty (CL)  “I am pretty satisfied about this café”

 “I am going to recommend this café to others”

 “I am planning to come this café again”

 “I am going to talk about this café in a positive way” Interval (Five-point Likert scale)

4. Preliminary Data Analysis

In this study, we collected data by using survey method as mentioned before. After this step, we prepared data for processing.  Our data processing step included data checking, coding and entering. These steps were significant in order to be sure that all data was ready to be analyzed in SPSS. We had already collected 66 surveys and firstly, we checked all of these 66 surveys in order to determine missing data. We did not find any missing data in this step. Secondly, the data were coded by using numerical formats in order to assure and to enter easily into SPSS. For example, we coded 1=female and 2=male for our first question. Moreover, for the scale questions, we coded from 1 to 5 that represented from strongly disagree to strongly agree. Lastly, we entered data into SPSS and checked it again to increase consistency between responses and data of SPSS.

After these data processing steps, we analyzed data by using SPSS Statistics 23 which is data analysis software that makes analysis on statistical data. By using this software, we chose to use Descriptive Statistic, Reliability Test and Linear Regression Analysis as our analysis tools.

4.1. Descriptive Analysis

The main aim of descriptive analysis is to show demographic profile of people. In this research, we used frequency table to show this. Demographic profile of this included gender, age, marital status, occupation, monthly income, number of visiting time, reasons of customers to go to 3rd wave café and how many of customers realize the differences of 3rd wave cafes.

4.1.1 Demographic Profile of People

Table 4.1: Gender

What is your gender?

Frequency Percent Valid Percent Cumulative Percent

Valid female 37 56,1 56,1 56,1

male 29 43,9 43,9 100,0

Total 66 100,0 100,0

The frequency and percentage of gender is shown in table 4.1. As a result of this table, 37 (%56,1) of them are female and 29 (%43,9) of them are male among the 66 out of respondents.

Figure: 4.1: Gender

Table 4.2: Ages

What is your age?

Frequency Percent Valid Percent Cumulative Percent

Valid 18-29 ages 42 63,6 63,6 63,6

30-39 ages 14 21,2 21,2 84,8

40-49 ages 6 9,1 9,1 93,9

50 ages and above 4 6,1 6,1 100,0

Total 66 100,0 100,0

The age distributions of respondents are shown in table 4.2. The majority of people are between 18-29 ages (%63,6) and other age groups are between 30-39 ages, 40-49 ages and 50 ages and above respectively among 66 out of respondents.

Figure 4.2: Ages

Table 4.3 Marital Status

 What is your marital status?

Frequency Percent Valid Percent Cumulative Percent

Valid single 49 74,2 74,2 74,2

married 17 25,8 25,8 100,0

Total 66 100,0 100,0

The marital status of people is shown in table 4.3. While 49 (%74, 2) of them are single, 17 (%25,8) of them married among 66 out of respondents.

Figure 4.3: Marital Status

Table 4.4: Occupation

 What is your occupation?

Frequency Percent Valid Percent Cumulative Percent

Valid student 21 31,8 31,8 31,8

freelancer 9 13,6 13,6 45,5

public 6 9,1 9,1 54,5

private sector 22 33,3 33,3 87,9

academician 4 6,1 6,1 93,9

retired 4 6,1 6,1 100,0

Total 66 100,0 100,0

Occupations of respondents are shown in table 4.4. Among 66 out of respondents, 22 (%33,3) of them are working in private sector, 21 (%31,8) of them are students, 9 (%13,6) of them are freelancer, 6 (%9,1) of them are working in public and lastly there are four respondents that are both academician and retired.

Figure 4.4: Occupation

Table 4.5: Monthly Income

What is your monthly income?

Frequency Percent Valid Percent Cumulative Percent

Valid 0 10 15,2 15,2 15,2

1000TL and below 10 15,2 15,2 30,3

1000TL-2000TL 21 31,8 31,8 62,1

2001TL-3000TL 10 15,2 15,2 77,3

3001TL-4000TL 6 9,1 9,1 86,4

4001TL and above 9 13,6 13,6 100,0

Total 66 100,0 100,0

The monthly incomes of respondents are shown in table 4.5. According to the table, among 66 out of respondents, 21 (31, 8) of them refer to income that is between 1000TL and 2000TL. There are 3 categories that have same percentages (15, 2) and these are; no income, 1000TL and below and income that is between 2001TL-3000TL. Also, monthly income of 9 respondents (13, 6) are 4001TL and above. Lastly, minority of respondents are fall in the income that is between 3001TL-4000TL (9, 1).

Figure 4.5: Monthly Income

Table 4.6: Number of visiting times

How many times a week you go to a Third Wave Café?

Frequency Percent Valid Percent Cumulative Percent

Valid never go 4 6,1 6,1 6,1

1 time 27 40,9 40,9 47,0

2 times 14 21,2 21,2 68,2

3 times 9 13,6 13,6 81,8

4 times 2 3,0 3,0 84,8

more than 4 10 15,2 15,2 100,0

Total 66 100,0 100,0

Table 4.6. shows the number of visiting times of 66 respondents. 27 of them said at least 1 time a week, 14 of them visited 2 times a week, 10 of them visited more than 4 times a week, 9 of them visited 3 times a week, 4 of them never visited and 2 of them visited 4 times a week respectively.

Figure 4.6: Number of visiting times

Table 4.7: Reasons of customers to go to 3rd wave cafés

Reasons of customers to go to 3rd wave cafes

Importance of physical comfort of place Importance of service quality Importance of product quality Importance of price Importance of events Importance of locations Importance of other reasons

N Valid 66 66 66 66 66 66 66

Missing 0 0 0 0 0 0 0

Mean 4,83 5,17 5,74 3,97 3,05 3,95 1,18

Median 5,00 5,00 6,00 4,00 2,00 4,00 1,00

Std. Deviation 1,575 1,365 1,316 1,519 1,493 1,668 ,959

Minimum 2 2 2 1 1 1 1

Maximum 7 7 7 7 7 7 7

Percentiles 25 3,75 4,00 5,00 3,00 2,00 3,00 1,00

50 5,00 5,00 6,00 4,00 2,00 4,00 1,00

75 6,00 6,00 7,00 5,00 4,00 6,00 1,00

According to table 4.7., If we listed reasons of customers to go 3rd wave cafés from 7 as most important to 1 as least important to be based on their mean, their ranking on importance was as follows:  product quality, importance of service quality, importance of physical comfort of place, importance of price, importance of location, importance of events and other reasons respectively.

Figure 4.7: Reasons of customers to go to 3rd wave cafés

Table 4.8: How many of customers realize to differences of 3rd wave cafés.

How many of customers came by realizing the differences of Third Wave Café from other wave cafés?

Frequency Percent Valid Percent Cumulative Percent

Valid Yes, I  came by realizing 35 53,0 53,0 53,0

No, I didn't know Third Wave Cafés 31 47,0 47,0 100,0

Total 66 100,0 100,0

According to table 4.8., among 66 out of respondents, 35 (%53) of them came to the café by realizing differences of 3rd wave cafés and 31 (%47) of them did not know the 3rd wave cafés yet.

Figure 4.8: How many of customers realize to differences of 3rd wave cafés.

4.1.2 Summary of Descriptive Statistics

As a result of descriptive statistics, we clearly say that the most of customers of 3rd wave cafés are female, ages between 18-29, single who are working in private sector or students. Majority of them have a monthly income between 1000TL-2000TL and they are visiting 3rd waves cafés at least 1 time a week. If we based on the means of reasons to go 3rd wave cafes, we can say that the majority of customers prefer to 3rd wave cafes for their product quality, service quality and physical comfort of place. Lastly, half than of respondents have already known the differences of 3rd wave cafés.

4.2 Reliability Test

The main aims of reliability test is to  whether your data collection techniques and analytic procedures would produce consistent findings if they repeated on another occasion or if they were replicated by a different researcher. In other words, it helps to create consistent and stable findings under the similar conditions (repeatability). It expressed by numerically that is coefficient ranging from 0 to 1. In our research, we conducted Cronbach's Alpha test. According to Cronbach's Alpha test, 0.6 and above is considered moderate, 0.7 and above is considered as good, and 0.8 and above is considered as excellent.

4.2.1 Results of Reliability Test

Table 4.9: Reliability

Reliability Statistics

Cronbach\'s Alpha N of Items

,824 14

According to table 4.9., our Cronbach's alpha is %82.4 which refers to reliability of our research is excellent.

Table 4.10: Reliability of Servqual and Customer Loyalty

Item-Total Statistics

Scale Mean if Item Deleted Scale Variance if Item Deleted Corrected Item-Total Correlation Cronbach\'s Alpha if Item Deleted

Tangibles 1 55,06 24,119 ,386 ,822

Tangibles 2 55,15 25,054 ,380 ,819

Reliability 1 54,89 26,096 ,353 ,819

Reliability 2 54,98 26,446 ,232 ,828

Responsiveness 1 54,98 25,431 ,365 ,819

Responsiveness 2 55,05 26,198 ,301 ,823

Assurance 1 54,85 25,761 ,446 ,814

Assurance 2 55,02 25,184 ,470 ,812

Empathy 1 55,00 25,508 ,431 ,814

Empathy 2 54,89 24,250 ,619 ,802

Customer Loyalty 1 54,91 23,622 ,650 ,798

Customer Loyalty 2 54,85 24,069 ,607 ,802

Customer Loyalty 3 54,79 24,262 ,541 ,806

Customer Loyalty 4 54,74 23,948 ,656 ,799

Table 4.10 shows the reliability results of SERVQUAL and customer loyalty. According to Cronbach's Alpha, our variables fall in range from 0.798 (lowest) to 0.828 (highest). Servqual items of research that included tangibles, reliability, responsiveness, assurance and empathy are higher than 0.800. It means that these items are highly reliable. On the other hands, if we look at customer loyalty, it is between 0.798 and 0.806. This is also good for reliability of research.

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