THE INFLUENCE OF VALUE AND QUALITY ON SATISFACTION AND THEIRIMPLICATIONS ON THE TRUST OF PRIVATE UNIVERSITY STUDENTS

Herman SoegotoUniversitas Komputer Indonesia

herman@unikom.ac.id

ABSTRACT

Some private universities in Bandung and Cimahi are highly popular among students; however,

there are also universities that are less popular. The popularity of a university is identified by

how many students are attracted to enroll and study there. Prospective students are likely to

choose a university if they believe that the university has good value and quality that furnish

them with a degree of satisfaction and trust. This research is aimed at investigating the influence

of Value and Quality on students’ satisfaction, and the influence of Value, Quality and

Satisfaction on students’ Trust. The units of analysis for this research were 400 student

respondents from 35 private universities in Bandung and Cimahi that had been drawn by means

of proportional systematic random sampling. This research used a Multiple Regression analysis

peformed with the help of SPSS 17 to test the hypotheses.

The result of this research showed that the perception of Value and Quality did influence the

students’ degree of Satisfaction. It also showed that Value, Quality and Satisfaction collectively

and respectively independently influenced the Students’ Satisfaction.

Key words: Value, Quality, Satisfaction, Trust, Private Universities

1. INTRODUCTION

1.1 Research BackgroundIndonesia has a sizeable number of universities, state as well as private. According to the

Higher Education Database of the Ministry of Reseach, Technology and Higher Education, in June 2017 there were 4494 higher education institutions, of which 556 were universities, 2424 colleges, 158 institutes, 1102 academies, and 254 polytechnics. Out of these numbers, 116 was

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located in the municipality and the regency of Bandung. Some of these higher education institutions have a large number of students, whereas many others have very few.

It is a common knowledge that most prospective students choose a state university as their first choice. When they are unsuccessful in their bid to get a place in a state university, due to the much higher number of applicants compared to the available capacity, they will choose a private university as an alternative.

Hence the question, why some private higher education institutions have large number of students whereas many have very few. What makes a prospective student choose to study in a private higher education institution but not in other private higher education institution?

The Indonesian government has made the efforts to continually increase the quality of both state and private higher education institutions through the accreditation process that is conducted both at the insitutional level and the study program level. The better the quality of a higher education institution is, the more attractive it is for the prospective students to decide to study there. However, the quality factor is not the only reason that makes a student choose to study in a particular higher education institution. There are other factors that also play a role in the students’ decision of choosing or not choosing a higher education institution.

Today, with the rapid development of information technology, prospective students or their parents can easily find information about a higher education institution that they want to consider as a choice for their studies. Positive information will receive a favorable response from the prospective students and increase the probability of the university receiving more applications from prospective students wanting to study in that university, whereas negative information will result in decreasing the number of prospective students who want to apply to the university.

In order to increase the students’ interest in giving positive information about the university where they are currently studying, it is necessary to build a high level of trust among these students. Theoretically, level of trust is influenced by the Perception of Value, good Quality, and the high level of students’ satisfaction.

A university needs to continually make the efforts to improve, develop, and explore what is expected and needed by the students, and increase the value, the students’ satisfaction and trust in the university vis a vis what other universities give. If the students feel that they are getting more benefits relative to the costs that they have spent, they will increase their satisfaction and trust to the university, hence improving the positive word of mouth communication they spread to their closest relatives.

1.2 Formulation of the ProblemsRelevant to the background that has been discussed, the problems of this research can be

formulated as follows:1. Does Value influence students’ Satisfaction?

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2. Does Quality influence students’ Satisfaction?3. Does Value influence students’ Trust?4. Does Quality influence students’ Trust?5. Does Satisfaction influence students’ Trust?

1.3 Reseach ObjectivesPursuant to the above problems, the objectives of this research:

1. To find out if Value influences students’ Satisfaction.2. To find out if Quality influences students’ Satisfaction.3. To find out if Value influences students’ Trust.4. To find out if Quality influences students’ Trust.5. To find out if Satisfaction influences students’ Trust.

2. REVIEW OF LITERATURE 2.1 Definition of Value

In the concept of marketing, value mainly refers to a combination of quality, service and price. The perception of Value increases with the increase in quality and benefit of a service and decreases with the increase in price (Kottler, Keller 2012:32). Holbrook (2001:5) defines customer value as a relative and interactive preferential experience. According to Zeithaml, Bitner and Gremler (2006), a customer value can be identified into four different meanings, namely (1) value is a low price, (2) value is whatever one wants from a product, (3) value is quality received by a customer for what he has paid, and (4) value is what a customer gets as a compensation for what he has given. Hence, according to Woodruff et al (1997), value can be classified as value, desired value, and judgement value. According to Rokeach (1993), values are are beliefs that are embedded in a person, whereas value is a preference that results from an exchange (e.g., between benefit and cost) and an interaction (e.g. between a customer and a product or service). Benefit is a set of advantages received by a customer from evaluating, receiving, consuming or disposing of a product or service that includes the convenience of a product/service, assistance, employee and image (Kottler, Keller 2012: 147). Manfaat (benefit), according to the the first edition of the Great Dictionary of the Indonesian Language (KBBI), is a function or utility, or to be more precise the utility for those who use or utilize a product or service. Sheth, Parvatiyar, and Shainest (2001) believe that cost components include money, time, risks, humans, and energy. A customer’s total cost is a set of costs that the customer spends to evaluate, get, use and discharge of a certain product or service (Kottler, Keller 2012: 147). The monetary cost is not the only cost that is relevant to customer service. There are non-monetary costs that also play a role in customer service (Zeithamal, Bittner, Gremler 2013: 442-447).

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2.2 Definition of QualityQuality is a product’s total features and characteristics that are dependent on its ability to fulfill expressed or implied needs (Kottler, Keller 2012: 153). Quality is a degree where performance meets or fulfills expectations (Chandruptala, T.R., 2009: 2). Relevant to the above definitions, it can be inferred that quality is highly relevant to customers’ evaluation on the ability of a product or service to fulfill what has explicitly or implicitly been promised by a product or service.

2.3 Definition of SatisfactionSatisfaction reflects the judgement about a product that a person makes by comparing its performance with the expectation he has about it. If the performance is below the expectation, the custumer will be disappointed, and if the performance is above his expectation, he will be very satisfied (Kottler Keller 2012: 31). Satisfaction is a customer’s evaluation about a product or service, whether the product or service meets his needs and expectations. Failure to meet the needs and expectations will result in dissatisfaction with the product or service (Zeithamal, Bittner, Grembler 2013: 80). The high quality of a service will make a customer satisfied and make it likely for him to recommend the product or service to his friends (Dib, H., Alnazer, M., 2013).

2.4 Definition of TrustA university should make the efforts to develop students’ trust as its customers. A

customer who feels confident will be emotionally persuaded to increase its committment to his univesity. Customers’ trust can be developed if the university has practical values with perceivable benefits. As Storbacka and Lehtinen (2001: 29) stated, basic values whose benefits are perceived by the customers will raise customers’ trust in a company, hence winning their trust and committment. Morgan and Hunt in Egan (2001:100) explained that trust and committment are important indicators of a successful customer - company relation. The existence of trust and committment is considered to be a central issue in marketing strategy, particularly in relation to customer’s attachment. It is also central to the issue of how an effective relation between the custormer and the company can be established. Trust is considered to be an important factor in effectively maintaining and improving relationship and reducing the risks of perception. Trust is also considered as a foundation for an interpersonal relationship, a prerequisite for cooperation, and a basis for a stable relationship between social institutions and the market. If a company can demonstrate its trustworthiness to the customers, then the customers will have trust in the company and their pattern of relationship.

3. RESEARCH METHODThis research is a causal research that aims at investigating the influence of Benefits,

Costs and Quality on the degree of students’ Satisfaction. The data used were primary data

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collected by means of questionnaires. Sample of the data were collected with proportional random sampling technique.

3.1 Population and SampleThe population for this research is all the students of the 116 private higher education

institutions located in Bandung municipality, Bandung regency and Cimahi municipality as recorded by the higher education institution database of the Ministry of Research and Higher Education in May 2017.

Table 1 – Criteria for Research SampleCriteria for Research Sample Number of Private Higher Education

Institutions (PHEI)Number of PHEI in Bandung municipality, Bandung 116regency, and Cimahi MunicipalityTotal number of students 147844Number of sample based on Slovin formula for student 400population of 147844 with 95% level of trustNumber of higher education institutions surveyed (30% 35of PHEI population)

The research samples were selected from the population of higher education institutions that have the lagest number of students as shown in Table 2. Samples were drawn randomly from 30% of the selected higher education institutions, i.e. those that have the largest number of students, using proportional ramdom sampling technique. The selection of 30% of the total population of existing higher education institutions is in accordance with Gray’s point of view (Husein Umar, 1998: 108) which stated that the fraction zise of the sample for research using correlational method should be at least 20% of the population. The survey with the distribution of questionnaires to the universities was conducted between April 2017 – June 2017.

Table 2 – Reseach SampleNumber

Number Name of the Higher Education Institutions Number of ofStudents Samples

1 Universitas Pasundan (UNPAS) 16236 502 Telkom University (Tel-U) 14082 443 Universitas Islam Bandung (UNISBA) 11311 354 Universitas Komputer Indonesia (UNIKOM) 11261 355 Universitas Kristen Maranatha (MARANATHA) 9362 296 Universitas Jenderal Achmad Yani (UNJANI) 8269 267 Institut Teknologi Nasional 8009 258 Politeknik Piksi Ganesha 6324 20

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9 Universitas Langlangbuana (UNLA) 4518 1410 Universitas Islam Nusantara (UNINUS) 4155 1311 STKIP Pasundan 3389 1112 Universitas Nurtanio (UNNUR) 2842 913 Universitas Nasional Pasim (UNAS PASIM) 2578 814 Politeknik LP3I Bandung 2282 715 Sekolah Tinggi Ilmu Ekonomi Ekuitas 2066 616 Universitas Bandung Raya (UNBAR) 1823 617 Universitas Bandung (UNBAN) 1823 618 Sekolah Tinggi Ilmu Kesehatan Achmad Yani 1736 519 Politeknik Telkom 1689 520 Politeknik TEDC Bandung 1383 421 Universitas Widyatama (UTAMA) 1277 422 Sekolah Tinggi Ilmu Kesehatan Dharma Husada 1155 423 Politeknik Komputer Niaga LPKIA 1130 424 Sekolah Tinggi Ilmu Kesehatan Bhakti Kencana 1081 325 Universitas Al-Ghifari (AL-GHIFARI) 1074 326 Universitas Informatika dan Bisnis (UNIBI) 932 327 Institut Teknologi Harapan Bangsa 869 328 Akademi Pariwisata NHI Bandung 837 329 STMIK Likmi 824 330 STMIK Bandung 815 331 Sekolah Tinggi Bahasa Asing Yapari 812 332 Sekolah Tinggi Ilmu Kesehatan Immanuel Bandung 805 233 Politeknik Kesehatan TNI AU 761 234 Universitas Kebangsaan (UNKE) 712 235 STMIK Mardira Indonesia 704 2

128926 4003.2. METHOD OF DATA ANALYSISThe method of multiple regression data analysis is formulated as follows:Y1 = α1 + β1 X1+ β2 X2+ ε,Y2 = α2 + β3 X1+ β4 X2+ β5 Y1+ ε, where:Y1 = Degree of Students’ Satisfaction Y1 = Degree of Students’ TrustX1 = Value X2 = Qualityα1 = constants 1; α2 = constants 2 β1,2,3,4,5 = regression coefficient

Variable OperationalizationThe operationalization of the variables refers to the variables to be tested, namely:

a. Independent variable 1, i.e. value and qualityb. Dependent variable 1, i.e. students’ satisfaction

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c. Independent variable 2, i.e. value, quality, satisfactiond. Dependent variable 2, i.e. trust

Value

Satis-faction Trust

Quality

3.3. Testing3.3.1 Validity and Reliability Testing

To test whether the questionnaires used as data collection instrument were valid, a validity test was conducted using SPSS 17 for Pearson Product Moment Correlation. The validity test was conducted to 30 preliminary samples prior to data collection from the 400 total samples. Based on the correlation value obtained, the r count for all the questions was found to be above 0.3, which is higher that the r table of 0.3 for alpha 0.05. This result indicates that the instrument was valid.

3.3.2 Reliability TestingThe degree of consistency of the questionnaires was tested using reliability test. Based on

the result of the test, it was found that the Cronbach’s Alpha value was 0.86. Because this value is greater than 0.7, then all the variables tested are considered reliable.

4. Research ResultsThe data obtained from the questionnaires were analyzed with multiple regression

analysis. The analysis was conducted to find out the influence of value and quality on students’ satisfaction; and the influence of value, quality, and satisfaction on students’ trust. To understand the influence of the respective independent variables, the t-test comparing the t-count and the value of t-table was used, and to understand the influence of the independent variables as on satisfaction collectively, the F-count was compared to the F-table.

4.1 The Results of Analysis on the Influence of Value and Quality on Students’ Satisfaction

Table 3 – Results of Coefficient of Determination Test - ModelAdjusted R Std. Error of the

Model R R Square Square Estimate Durbin-Watson

1 .513a .263 .259 .62556 1.946

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a. Predictors: (Constant), Quality, Value

b. Dependent Variable: Satisfaction

The coefficient of determination test shows that the R square was 0.263. This means that 26.3% of the information pertaining to the satisfaction variable can be explained by the changes that take place in the variables of value and quality.

* F TestTable 4 - ANOVA Test Results

Model Sum of Squares df Mean Square F Sig.

1 Regression 55.342 2 27.671 70.711 .000a

Residual 155.356 397 .391

Total 210.698 399

a. Predictors: (Constant), Quality, Value

b. Dependent Variable: Satisfaction

Based on the results of the Anova test, the F-count was 70.711, which is greater than the F-table of 3.018 with the level of significance of 0.0 or smaller than 0.05. This means that collectively the variables of Value and Quality have positive influence on the changes that take place in Satisfaction variable.* T Test

Table 5 - T Test ResultsStandardized

Unstandardized Coefficients Coefficients Collinearity Statistics

Model B Std. Error Beta t Sig. Tolerance VIF

1 (Constant) .869 .219 3.963 .000

Value .216 .061 .168 3.522 .000 .812 1.232

Quality .465 .053 .416 8.707 .000 .812 1.232

a. Dependent Variable: Satisfaction

Based on the t-test results, it was discovered that the three research variables had higher t-count values than the t-table (1.97) or the significance of 0.0, which is smaller than 0.05. Hence, it can be concluded that the variables of Value and Quality respectively had positive influence on the variable of Satisfaction. The linear regression equation of the above relationship can be stated as follows:S = 0.869 + 0.216 V + 0.465 Q ;S = Satisfaction; V = Value; Q = Quality

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4.2 The Influence of Value, Quality, and Satisfaction on Students’ Trust * Coefficient of Determination

Table 6 - Model Summary of Coefficient of Determination TestAdjusted R Std. Error of the

Model R R Square Square Estimate Durbin-Watson

1 .566a .320 .315 .48297 1.924

a. Predictors: (Constant), Satisfaction, Value, Quality

b. Dependent Variable: Trust

The R Square coefficient of determation value of 0.32 indicates that 32% of the changes that take place in the Trust variable can be explained by the changes that take place in the variables of Value, Quality and Satisfaction.

* F TestTable 7 – ANOVA Test Results

Model Sum of Squares df Mean Square F Sig.

1 Regression 43.507 3 14.502 62.172 .000a

Residual 92.371 396 .233

Total 135.878 399

Based on the F-test results, it was discovered that the F-count was 62.172, larger than the F-table of 2.627. This means that, collectively, the three independent variables had a positive influence on the changes that take place in the dependent variable.

* T TestTable 8 – T Test Results

Standardized

Unstandardized Coefficients Coefficients Collinearity Statistics

Model B Std. Error Beta t Sig. Tolerance VIF

1 (Constant) 1.237 .173 7.165 .000

Value .244 .048 .238 5.091 .000 .787 1.270

Quality .162 .045 .181 3.600 .000 .682 1.467

Satisfaction .242 .039 .301 6.238 .000 .737 1.356

a. Dependent Variable: Trust

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Based on the results of the t-test, it was discovered that the variables of Value, Quality and Satisfaction respectively had the level of significance of 0.0, smaller than 0.05. This means that the variables of Value, Quality, and Satisfaction had a significant influence on the level of students’ Trust. The multiple linear regression equation of the above relationship can be stated as follows: T = 1.237 + 0.244 V + 0.162 Q + 0.242 ST = Student Trust; V = Value; Q = Quality; S = Satisfaction

4.3 Discussion on the Influence of Value on SatisfactionBased on the regression analysis test, it was discovered that the t-count value of 3.522

was larger than the t-table. This means that Value had a positive influence on Satisfaction. The result of this research is in line with other research that stated that customer’s value collectively and simultaneously had significant influence on customer’s satisfaction (Iskandar, V. & Dendi, A.K., 2013: 204). The same viewpoint was stated by Samuel H., Devie (2014), that is that the a university’s quality of service, reputation, and the fees it charges had positive influence on students’ satisfaction. Theoretically the perception of benefit has positive influence on satisfaction, which in turn will affect the customer’s loyalty (Omar et al., 2015). Benefits have a stronger total effect on behavioural intentions than visitor satisfaction (Nowacki, M., 2010). Based on results of the analysis above and other research results, it can be concluded that the Value provided by a university has positive influence on students’ satisfaction.

4.4 Discussion on the Influence of Quality on SatisfactionBased on the regression test analysis, it was discovered that the t-count for quality was

8.707, larger than the t-table of 1.97. Or, with the regression coefficient of 0.465, the level of significance 0.000 was smaller than 0.05. This result is in line with other research that stated that the Quality of service significantly influenced satisfaction and that satisfaction significantly influenced loyalty (Fikri et al., 2016). The quality of academic service positively and significantly influenced students’ satisfaction (Rinala et al., 2013). Service quality, price, and facility each of them has significant influence partially to the satisfaction (Afriady, Y., 2016).

4.5 Discussion on the Influence of Value on TrustBased on Table 8, it was discovered that the t-count for Value was 5.091, which is larger

than the t-table of 1.966 with the level of significance 0.000 smaller than 0.05. This means that the Value given by a university had a positive influence on the level of students’ Trust. This result is in agreement with Fournier, S. et al. (1998) point of view which stated that in order to obtain the customers’ trust, a company has to act in such a way that shows to its customers that it has value to be considered as a partner.

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4.6 Discussion on the Influence of Service Quality on TrustThe influence of Service Quality on Trust can be derived from Table 8, which shows that

the t-count for Service Quality was 3.6, which is greater than the t-table’s 1.966 with the level of significance of 0.000 smaller than 0.05. This means that Service Quality provided by a privateuniversity had a positive influence on the level of students’ Trust. This result is in agreement with the result of a study conducted by Chen et al, which concluded that service quality influenced Trust. Service quality influence trust (Chou, P.F. 2014).

4.7 Discussion on the Influence of Satisfaction on TrustThe influence of Value on Trust as derived from Table 8 showed that the t-count for

Satisfaction was 6.238, larger than the t-table’s 1.966. This means that the level of satisfactionexperienced by students of private universities had a positive influence on the level of students’ Trust. Customer satisfaction influences consumer trust (Chinamona, R. & Dubihlela, D., 2014).

6 CONCLUSION6.1Conclusion

Based on the results of the analysis conducted to find out if Value, Quality and Satisfaction had influence on the Trust of students of private higher education institutions in the areas of Bandung municipality and Bandung regencey and Cimahi municipality, it can be concluded that:

1. Value influenced students’ satisfaction.2. Quality influenced students’ Satisfaction.3. Value influenced students’ Trust.4. Quality influenced students’ Trust.5. Satisfaction influenced students’ Trust.

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