The Influence of Price, Product, Promotion, and Situation on

Customer Decision and the Impact on Customer Satisfaction

Widyaningrum Rahayu,

Dyah Sugandini

and Wisnalmawati

Universitas Pembangunan Nasional Veteran Yogyakarta

Keywords: Product, price, promotion, situation, purchasing decisions, customer satisfaction.

Abstract: This research meant to find out the influence of product, price, promotion, and situation on customer

decision and its impact on customer satisfaction. The research object is all of the customers whoever

purchased at Restaurant on Yogyakarta. The sample collection has been done by performing a non-

probability sampling technique, and the numbers of the sample are 200 respondents. In this study, there are

four independent variables, namely product, price, promotion, and situation. And the dependent variable is

customer satisfaction. For the intervening variable is a purchasing decision. The data analysis use Structural

Equation Models. The results of this study obtained that (1). Product has a significant effect on purchase

decisions, (2) the price affects purchasing decisions, (3). The promotion affects purchasing decisions, (4).

Situations influence on purchasing decisions, (5). Purchase decisions affect customer satisfaction.

1 INTRODUCTION

Development of the tourism industry in Yogyakarta

today, followed by increasing tourism providers

supporting components such as hotels, recreation,

and restaurant. On the other hand, the development

of the tourism industry is needed support with

several restaurants whose quality and quantity can

be relied upon to serve the needs of tourists. The

restaurant industry is one of the key distributors for

the service sector for countries in Asia (Voon,

2011). One of the fundamental reasons for culinary

entrepreneurs is that "people eat to live," so the

culinary and restaurant business is a business that is

quite promising at this time when the economic level

and the population is increasing. This is a factor in

the increasing culinary market in Indonesia today.

Today's culinary trends are another factor that is

increasing competition in the culinary industry.

Supported by active social media, culinary

development is becoming faster.

To be able to maintain its existence as the largest

restaurant in Yogyakarta, restaurants need to

measure the level of customer satisfaction. The

increasingly competitive foodservice industry is a

challenge for culinary businesses. With an

increasingly competitive market, companies must

always pay attention to competition in the business

environment.

Restaurants, as culinary service business

businesses, need to pay attention to the level of

customer satisfaction. Creating ongoing and

continuous customer satisfaction needs to be done.

Achieving customer satisfaction can be created by

improving the quality of service with several

approaches. Satisfying customer needs is the desire

of every producer or service provider. In addition to

being an important factor for the survival of the

institution, satisfying customer needs can increase

excellence in competition.

Customer satisfaction in the culinary industry

needs to pay attention to the level of customer

satisfaction. Creating ongoing and continuous

customer satisfaction needs to be done. Achieving

customer satisfaction can be created by improving

the quality of service with several approaches.

Satisfying customer needs is the desire of every

producer or service provider. In addition to being an

important factor for the survival of the institution,

satisfying customer needs can increase excellence in

competition. Customers who are satisfied with the

product or service tend to repurchase and invite

prospective new customers to use the services they

have felt the satisfaction of their service

performance.

This paper intends to examine and analyze the

effect of the product on customer satisfaction, the

effect of promotion on purchasing decisions, the

Rahayu, W., Sugandini, D. and Wisnalmawati, .

The Inﬂuence of Price, Product, Promotion, and Situation on Customer Decision and the Impact on Customer Satisfaction.

DOI: 10.5220/0009965100940101

In Proceedings of the International Conference of Business, Economy, Entrepreneurship and Management (ICBEEM 2019), pages 94-101

ISBN: 978-989-758-471-8

effect of prices on purchasing decisions, the effect of

prices, the influence of the situation on purchasing

decisions and the influence of purchasing decisions

on customer satisfaction.

2 LITERATURE REVIEW AND

HYPOTHESIS

2.1 Purchase Decision

According to Kotler and Keller (2012), states that

the higher the benefits or performance of products

that can be offered to customers, the higher the value

the customer thinks. This means that customers'

incentives to make purchasing decisions will be even

higher. In other words, customer decision making is

directly proportional to the value thought by the

customer.

While Kotler (2000) states that purchasing

decisions are a process of all stages in the consumer

purchasing process, consumer decisions are based on

consumer perceptions about the product.

2.2 Customer Satisfaction

Satisfaction is seen from the extent to which the

performance of a product is felt following the

expectations of the buyer so that it can cause

feelings of pleasure or disappointment to the buyer.

If the performance of the product or service does not

meet expectations, the customer is not satisfied. If

the performance of products and services meets

expectations, the customer is satisfied. If the

performance of a product or service exceeds

customer expectations, then the customer becomes

very satisfied or happy (Kotler & Armstrong, 2012)

2.3 Product

Product is everything that is offered to the market to

satisfy wants or needs (Kotler & Keller 2012). From

this definition, it can be concluded that the product

is everything that is made by a company to meet the

needs or meet customer satisfaction. While quality is

the totality of features and characteristics of a

product or service in meeting or satisfying needs

(Kotler & Keller, 2012). Product and service quality,

customer satisfaction, and company profits are

related, the higher the quality of service, the higher

the level of customer satisfaction that will bring

profits to the company. In this research, the product

will be divided into product quality and service

quality.

2.4 Quality Food

Quality has an important role in influencing decision

making in a restaurant and has a direct correlation

with the level of customer satisfaction (Soriano,

2002) and is directly related to customer satisfaction

(Bitner and Hubbert, 1994). Food is a major

component of a restaurant. Because the restaurant

serves food products, then food is a very important

and fundamental thing in a restaurant. If the food

served meets consumer expectations, both in taste,

appearance, and cleanliness of food, then certainly

consumers will feel satisfied and return to the

restaurant. (Sulek & Hensley, 2004) combining all

food elements into one variable called “Food

Quality," which includes Presentation, Taste, Safety,

Color, Temperature, and Size.

2.5 Quality

ServiceService is an inseparable dimension in the

foodservice industry at this time. Customers not only

enjoy food as a fulfillment of their needs, but

customers also need more culinary services.

According to Rozheki (2016), service quality is a

dynamic situation that is closely related to products,

services, human resources, and processes and the

environment that can at least meet or even exceed

the quality of service expected.

According to Rozheki (2016), the quality of

service is an effort to meet the needs coupled with

the desires of consumers and the accuracy of the

delivery method to meet the expectations and

satisfaction of these customers. In a good quality of

service, there are several types of service criteria as

follows: Punctuality in service, Accuracy of service

to the food menu, Polite and friendliness when

providing services, Appearance, and expertise of

restaurant employees in serving customers.

2.6 Prices

In addition to environmental and food quality, prices

are another important customer element (Andaleeb

& Conway, 2006; Liu & Jang, 2009). While Zeihaml

(1988) describes the price as what is given or

sacrificed to get a product, which means that

customers pay uncertainty, not knowing what they

are experiencing what is offered by a company.

Price is one element in the marketing mix that

generates income if the other elements produce costs

The Inﬂuence of Price, Product, Promotion, and Situation on Customer Decision and the Impact on Customer Satisfaction

(Kotler & Keller, 2012). Price is the most important

characteristic used by consumers in deciding where

to eat. Value of money is another high-ranking

attribute for dining at upscale restaurants. Price is an

important variable that is considered by a consumer

where they will eat. The price will be compared with

quality. Customers have high expectations for a

product when they have incurred a high enough cost.

They will expect the quality of food, service, and

place commensurate with the value spent. If it does

not meet expectations, then the customer will feel

dissatisfied.

2.7 Promotion

Promotion is one component of the marketing mix.

The function of promotion in the marketing mix is to

achieve various objectives of communication with

consumers. Promotion is one way to attract

customers to be interested in buying a product. With

the digital era as it is today, marketing strategies

cannot be separated from promotions, especially

with online media. The influence of social media in

society is an era that must be used positively in the

marketing mix in terms of promotion. Because

feedback from the influence of online media is very

fast at the moment. Promotional communication

through word of mouth is also one of the best forms

of promotion for a restaurant. The direct experience

of negative information tends to be stronger than

positive information. The saying goes that "satisfied

consumers are your best sales" this illustrates the

importance of Word of Mouth for marketers,

satisfied consumers will influence friends and

relations to buy. Dissatisfied consumers will hamper

sales (Assael, 1998)

Definition of promotion, according to Kotler &

Armstrong (2012), 'promotion means activities that

communicate the merits of the product and persuade

target customers to buy it.' It means promotion is a

part of activities that communicate the benefits of a

product and persuade the target consumer to buy the

product.

2.8 Situation

Besides product and price, another dimension that

supports the level of customer satisfaction is the

situation. In this study, the situation will be

measured through the state of the physical

environment in the restaurant. For some consumers,

the physical condition of a restaurant gives a big

enough influence in determining where they will eat.

Physical conditions in the form of building

conditions, equipment used, atmosphere, wi-fi

facilities, cleanliness to support a restaurant to

become a destination for a consumer.

The quality of the Physical environment can be

determined by the physical surroundings, not by

Nature or the Social Environment. Service is an

invisible thing, but the environment of the service

situation has a huge influence on the level of

customer satisfaction. According to Ryu and Han

(2011), for most people, eating at a restaurant is

more important than just eating. Some customers

may be looking for a dining experience that will

always be remembered, and therefore the

environmental situation of a restaurant plays an

important role in making an experience that will

always be remembered.

2.9 Research hypothesis

H1: Price influences purchasing decisions

H2: Situations affect purchasing decisions

H3: Promotion influences purchasing decisions

H4: Products affect customer satisfaction

H5: Prices affect customer satisfaction

H6: Buyer decisions affect customer satisfaction

3 RESEARCH METHODS

3.1 Population and Samples

The population in this study is all visitors of

Yogyakarta Restaurant, whose number is not

limited to the age where visitors can be from

adolescents to the elderly. The number of samples

used was 200 respondents. The sampling technique

is purposive sampling, namely the sampling

technique based on the consideration and

determination of researchers. In this study,

researchers chose the sample criteria, including the

respondents in this study, were consumers who

bought in a restaurant with more than one visit.

Another criterion is respondents who are over 17

years old with the assumption that the customer has

full awareness in choosing a product.

3.2 Operational Variables Customer

Satisfaction

Satisfaction is seen from the extent to which the

performance of a product is felt following the

expectations of the buyer so that it can cause

feelings of pleasure or disappointment to the buyer.

ICBEEM 2019 - International Conference on Business, Economy, Entrepreneurship and Management

If the performance of the product or service does not

meet expectations, the customer is not satisfied. If

the performance of products and services meets

expectations, the customer is satisfied. If the

performance of the product or service exceeds

customer expectations, then the customer becomes

very satisfied or happy (Kotler & Armstrong, 2010).

Indicators of customer satisfaction are as follows:

Effect of product performance to customer

satisfaction: product quality affects customer

satisfaction, value-added privilege, reliability of

products and services, conformity of products to

customer expectations, customers convenience

3.3 Purchase Decision

Kotler (2000) states that the purchase decision is a

process of all stages in the process of consumer

purchases. Consumer decisions are based on

consumer perceptions about the product. Before

consumers decide to buy, consumers usually go

through several stages and the following purchase

decision indicators: identification of problems,

information search, evaluation of alternative, buying

decisions or not post-purchase decisions.

3.4 Product

Product is everything that is offered to the market to

satisfy wants or needs (Kotler, 2012). From this

definition, it can be concluded that the product is

everything that is made by a company to meet the

needs or meet customer satisfaction. While quality is

the totality of features and characteristics of a

product or service in meeting or satisfying needs

(Kotler, 2012). Product aspects in a restaurant can be

in the form of food quality and service quality.

3.4.1 Food Quality

Quality in a restaurant is the main thing and has a

role in making decisions where people will eat. Food

quality has an important role in influencing decision

making in a restaurant and has a direct correlation

with the level of customer satisfaction (Soriano,

2002) and is directly related to customer satisfaction

(Bitner and Hubbert, 1994).

(Sulek& Hensley, 2004) combining all food

elements into one variable called 'Food Quality',

which includes: Food taste, Food temperature,

Safety indicators, namely through hygienists and

freshness of food ingredients, and food performance.

3.4.2 Service

According to Rozheki (2016), service quality is a

dynamic condition that is closely related to products,

services, human resources, and processes and the

environment that can at least meet or even exceed

the quality of service expected. According to Negrita

& Edu (2016), the quality of this service is an effort

to meet the needs coupled with the desires of

consumers and the accuracy of their delivery

methods to meet the expectations and satisfaction of

these customers. In a good quality of service, there

are several types of service criteria as follows:

punctuality in service, the accuracy of service to the

food menu, polite and friendliness when providing

services, appearance, and expertise of restaurant

employees in serving customers.

3.5 Price

Price is the sum of all values given by customers to

benefit from owning or using a product or service,

and throughout history, the price has been a major

factor influencing the choice of buyers (Kotler &

Armstrong, 2008). Then the following are price

indicators: price compatible with food quality, price

compatible with services provided, price compatible

with convenience, and price compatible with

customer expectations.

3.6 Promotion

Definition of promotion, according to Kotler &

Armstrong (2012), 'promotion means activities that

communicate the merits of the product and persuade

target customers to buy it. ' It means promotion is a

part of activities that communicate the benefits of a

product and persuade the target consumer to buy the

product. Promotion is an activity that has a very

important role in the marketing mix, to know how

much influence the promotion of customer interest.

then the following indicators for promotion:

advertising gives influence to customers attractive,

sales promotions for customers, and source of

customer information

3.7 Situation

The situation in a restaurant in this study is in the

form of physical environment Restaurant conditions

with a natural lake nuance. The quality of the

Physical environment can be determined by the

physical surroundings, not by Nature or the Social

Environment. Service is an invisible thing, but the

The Inﬂuence of Price, Product, Promotion, and Situation on Customer Decision and the Impact on Customer Satisfaction

environment of the service situation has a huge

influence on the level of customer satisfaction.

According to Ryu and Han (2011), for most people,

eating at a restaurant is more important than just

eating. Some customers may be looking for a dining

experience that will always be remembered, and

therefore the environmental situation of a restaurant

plays an important role in making an experience that

will always be remembered. Indicators for the

situation are: Cleanliness and beauty in the

environment restaurants, Comfort Where to eat,

Layout appealing to customers, Atmosphere

restaurants attract customers.

3.8 Data Analysis Techniques

Hypothesis Test performed by analyzing the

Goodness of Fit Model values. The goodness of fit

test is performed to find out how far the model is

hypothesized to fit the sample data. Path analysis is

done by observing the weight of the path coefficient

between latent constructs by taking into account the

results of the estimated coefficient parameters and

the level of significance. Hypothesis testing can be

seen through the amount of Critical Ratio (CR) or

the P-Value. If the P-Value <0.05, then the

hypothesis will be accepted.

4 RESULTS

4.1 Validity Test

A validity test is done to measure the validity of a

questionnaire as a measurement tool. In this study,

the validity testing is done by correlation analysis

Pearson product-moment, which is done by

correlating each item score with a total score

(Sakaran, 2006). Research items are said to be valid

if the significance value is less than 5% (0.05).

Therefore it can be concluded that all items of the

purchase decision variable have passed the validity

test and are suitable for future research.

4.2 Reliability

Test The reliability test is used to determine the level

of stability and consistency of the measuring

instrument used to measure the concept of bias can

be minimized (Sakaran, 2006). The indicator for the

reliability test is Cronbach Alpha if the value

Cronbach Alpha> 0.70 indicates the instrument used

is reliable. All the variables have a value of

Cronbach's Alpha above 0, 70. Therefore it can be

concluded that all research variables have good

reliability.

5 DISCUSSION

5.1 Influence of Price to Purchase

Decision in Restaurants

Yogyakarta

Hypothesis 1 test results prove that there is a

significant influence between price on purchasing

decisions. Through the analysis that has been done

obtained an estimated value of 0.184 with a

significance value of 0.006. A positive value on the

estimation results shows that the higher the price

offered, the higher the consumer's decision to buy

the product. That is because there is an assessment

believed by consumers that the higher the price

offered, of course, the quality received will also be

better. At Yogyakarta Restaurant, there is a price

list whose purpose is to make it easier for consumers

to make purchase decisions based on prices chosen

by consumers, and the prices are following the

quality of the product and the reachability of

consumers.

To measure the price variable, this study does

not use a benchmark of rupiah value, but the

researcher measures the price variable with

valuation indicators. Indicators used include whether

the food and drinks provided are following product

quality, affordable prices, following the comfort of

the place and the environmental situation, and

whether they are in line with expectations.

The results of this study have in common with

the price theory has two main roles in the process of

making the decisions of buyers (Negrita, & Edu,

2016).), namely: the role of the allocation of prices,

namely the function in helping buyers to decide how

to obtain the highest benefits or expected utility

based on purchasing power. And the role of

information from prices is the price function in

capturing consumers about product factors, such as

quality. This is especially useful in situations where

buyers find it difficult to assess product factors or

their benefits objectively. The perception that often

holds among consumers is that the higher prices

offered to indicate increasingly high quality.

5.2 Effect of Promotion on Purchasing

Decisions in Yogyakarta

Restaurants

Hypothesis 2 test results prove that there is a

significant influence between promotions on

ICBEEM 2019 - International Conference on Business, Economy, Entrepreneurship and Management

purchasing decisions. Through the analysis that has

been done obtained an estimated value of 0.256 with

a significance value of 0,00. A positive value on the

estimation results shows that the more often the

promotion is carried out, the more consumers will

make purchases at Yogyakarta Restaurant.

Promotion is one way to attract customers to be

interested in buying products. At Yogyakarta

Restaurant, several promotions were carried out,

including promotions with online media. This

strategy is carried out because the influence of social

media in the community is very great. Therefore

Yogyakarta Restaurant uses the opportunity

positively in the marketing mix in terms of

promotion, because feedback from the influence of

online media is very fast at the moment.

In addition, promotion through "word of mouth"

is also one of the best forms of promotion for a

restaurant, because the direct experience of a

satisfied customer will affect friends and relations to

buy, and vice versa, dissatisfied consumers, will

hinder sales because Yogyakarta restaurant always

tries to provide the maximum possible service to

consumers so that consumers feel satisfied and

provide positive information to their friends and

relations.

5.3 Effect of Situation on Purchasing

Decisions

Hypothesis 3 test results prove that there is a

significant influence between the situation on

purchasing decisions. Through the analysis that has

been done obtained, an estimated value of 0.401

with a significance value of 0,000. A positive value

on the estimation results shows that the better the

situation in the company environment, the higher the

desire of consumers to make purchases at

Yogyakarta Restaurants. The situation in this study

is related to a clean and beautiful place, comfort

when eating, the layout of the restaurant, and the

interesting atmosphere provided at Yogyakarta

Restaurant.

The results of this study are in line with the

theory revealed by Peter (2005), consumers basically

will feel superior in upper-class restaurants, because

they are well served, and they claim that the

atmosphere and style are following their self-

fulfillment needs. For some consumers, the physical

condition of a restaurant has a significant influence

in determining where they will eat. At present, the

current make trend, increasingly makes a

competitive competition more competitive, so that

supporting facilities from the physical environment

must be better. A comfortable place with good wi-fi

facilities will be a consideration for consumers today

to choose a restaurant. A comfortable place with

good wi-fi facilities is what the current being applied

at Yogyakarta Restaurant to attract visitors to

become regular customers at the restaurant.

5.4 Effect of Products on Customer

Satisfaction in Yogyakarta

Restaurants

Hypothesis 4 test results prove that there is a

significant influence between products on customer

satisfaction. Through the analysis that has been done

obtained, an estimated value of 0.136 with a

significance value of 0,000. A positive value on the

estimation results shows that the better the product

presented, the higher the level of customer

satisfaction that purchases Yogyakarta Restaurant.

The products that are targeted in this study are

the quality of food and beverages provided at

Yogyakarta Restaurants. Food quality has an

important role in influencing decision making in a

restaurant, and has a direct correlation with the level

of customer satisfaction (Soriano, 2002) and is

directly related to customer satisfaction (Bitner and

Hubbert, 1994). Good quality food and drinks can

affect customer satisfaction so that it will attract

customers to return to enjoy the food offered at the

restaurant. As stated in Andaleeb and Conway's

(2006) research, food quality has a major influence

on relationships maintaining customer satisfaction

and adding to new customers.

Indicators of product quality assessment in this

study include the suitability of the taste of food and

drinks with the listed menu, good temperature,

freshness of food, whether the presence of hygiene

and the display presented is attractive. Yogyakarta

Restaurant does product quality because,

considering that the current increasing culinary

competition, the measurement of food quality for a

restaurant is important. With good quality food,

consumers will feel satisfied, thus providing a

positive impact on the restaurant.

5.5 Effect of Prices on Customer

Satisfaction

Hypothesis 5 test results prove that there is a

significant effect between prices on customer

satisfaction. Through the analysis, has done obtained

an estimated value of 0.140 with a significance value

of 0.05. A positive value on the estimation results

show that the higher the price, the higher the

customer satisfaction at Yogyakarta Restaurant.

That is because the price is a reflection of the quality

of the goods, the higher the price, the better the

The Inﬂuence of Price, Product, Promotion, and Situation on Customer Decision and the Impact on Customer Satisfaction

quality of goods to be obtained, so that the

satisfaction felt by consumers will also increase.

Price is an important variable that is considered

by a consumer where they will eat. Prices will be

compared with quality. Customers have high

expectations for a product when they have already

spent a high enough cost, and they will expect

quality food, service, and a place commensurate

with the value incurred if it does not meet

expectations, the customer will feel dissatisfied with

the restaurant. Zeihaml (1988) describes that price as

what is given or sacrificed to get a product, which

means that customers pay uncertainty, not knowing

what they are experiencing what is offered by a

company. Whether or not the product will be

received later, that will be a benchmark of the level

of satisfaction that will be felt by consumers.

5.6 Effect of Purchasing Decisions on

Customer Satisfaction

Hypothesis 6 test results prove that there is a

significant influence between purchasing decisions

on purchasing decisions. Through the analysis, that

has been done obtained an estimated value of 0.208

with a significance value of 0.008. A positive value

on the estimation results shows that the more often

the customer makes a purchase, the customer

satisfaction level also increases. Vice versa, when

customers rarely make a purchase, it shows that

customer satisfaction with the company decreases.

Purchasing decisions are actions of consumers to

decide to buy or not on a product. In this study,

consumers consider in terms of product quality,

price, promotion, and situation. Consumers will

experience a level of satisfaction if the goods

obtained following their needs and desires; likewise,

consumers will experience dissatisfaction after

making a purchase, and the products obtained are

not following their expectations.

6 CONCLUSION

Based on the results of the research described in the

previous chapter, the following research conclusions

can be obtained: (1) Price is proven to have a

significant effect on purchasing decisions at

Yogyakarta Restaurants. That price is the

dimension that influences the customer's decision to

decide on a restaurant. (2) The promotion proved to

have a significant effect on purchasing decisions at

Yogyakarta Restaurant. The more attractive and

frequent promotions carried out by the restaurant

will increase consumers to make purchases at the

restaurant. (3) The situation proved to have a

significant effect on purchasing decisions. (4) The

product proved to have a significant effect on

purchasing decisions. (5) Purchasing decisions

proved to have a significant effect on customer

satisfaction.

7 SUGGESTIONS

Based on these conclusions, further suggestions can

be proposed that are expected to be useful for

Restaurants as follows. (1) Proven price as a factor

that influences consumers in purchasing decisions

and customer satisfaction should be a consideration

for restaurants to be more careful in determining

pricing strategies. (2) Promotion is also proven as a

factor that influences consumers in determining

purchases, should also be taken into consideration

by the restaurant, because promotion also provides

an important role in the sustainability of restaurants,

the more attractive the promotion delivered to

prospective consumers will affect the increasing

number of consumers who come to Yogyakarta

Restaurants.

In this study, the situation also proved to

influence purchasing decisions. A beautiful and

clean place supports the situation is a supporting

factor for the situation. The products in this study

proved to be influential on purchasing decisions;

therefore, the restaurant must always pay attention to

the quality of the food and drinks that will be served

so that consumers will always decide to buy at the

restaurant. Proven purchasing decisions as a factor

that influences consumer satisfaction should also be

a concern of the restaurant because when they

decide to buy at the restaurant of course consumers

have high expectations of the restaurant and hope to

obtain maximum service so that consumers will feel

satisfied enjoying while in Restaurant.

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