THE INFLUENCES OF SERVICE QUALITY TOWARD PERCEIVED VALUE AND STUDENT SATISFACTION WHICH AFFECT LOYALTY AND WORD-OF-MOUTH (WOM)

Abstract

The literature reveals that higher institutions are becoming more aware of the importance of Service Quality. This research study examines how service quality influences perceived value and student satisfaction in affecting the loyalty and words-of-mouth, as well as to investigate the relationship between variables itself. In general the purposes of this study are; (1) to analyze the influences of institution’s service quality in student’s perceived value; (2) to analyse the influence of the institutions’ environment factors in student’s perceived value; (3) to analyze that the student’s perceived value influences student’s satisfaction; (4) to analyze that the student’s satisfaction influence the student’s loyalty; and (5) to analyze that the student’s satisfaction influence the student’s word of mouth in one of the higher educational institution so called “Perguruan Tinggi” in Surabaya. This research used convenience sampling whereas the data type drawn in the research is a quantitative and the source of the data is a primary data, using a close-questionnaire given to 140 current-undergraduate students as the respondents. To assess the adequacy of the research model, a Structural Equation Model (SEM) was conducted using AMOS 16.0 programme. The result of the study concludes that there are significant influences of (1) service quality towards perceived value; (2) perceived value towards the students' satisfaction, (3) students' satisfaction towards loyalty; (4) students' satisfaction towards word of mouth; and (5) a significant influence of loyalty towards word of mouth. As the students are the main consumer who will receive service quality directly conducted by the institution, some facilities need to be improved such as adding more book and journal references and subscribes for the up-to-date library existence. For the future research, the employees satisfaction, lectures and staffs of the educational institution, need to be tested so there will be a comprehensive improvement for the institution in order to achieved best service quality.