Strategic Location and Service Quality Drive MSME Purchases, Study Finds in Probolinggo
A new study by Bintang Rafi Ghoniyyu and Amirullah from the Management Study Program at Universitas Panca Marga, Indonesia, reveals that business location and service quality significantly influence consumer purchasing decisions, with purchase intention acting as a crucial bridge between the two. Published in 2026 in the International Journal of Global Sustainable Research (IJGSR), the research highlights practical strategies that could strengthen micro, small, and medium enterprises (MSMEs) in competitive regional markets.
The findings matter because MSMEs remain a backbone of Indonesia’s economy, supporting employment, entrepreneurship, and local production. Understanding what motivates consumers to complete a purchase can help local businesses improve competitiveness while supporting sustainable economic growth.
Background: Why Consumer Decisions Matter for MSMEs
Consumer behavior has become increasingly complex as markets grow more competitive and customer expectations continue to rise. Businesses are no longer judged solely on product quality; accessibility and service experience now play equally decisive roles.
For MSMEs, especially those promoting locally crafted products, attracting customers requires more than marketing promises. Strategic store placement and responsive service can shape how consumers perceive value, ultimately influencing whether they proceed from interest to purchase.
The study focused on Dekranasda—an MSME development outlet operating under the Office of Cooperatives, Small and Medium Enterprises, and Trade of Probolinggo City. As a platform dedicated to showcasing regional products, Dekranasda offers an ideal environment for examining real-world consumer behavior.
Methodology in Brief
The researchers applied a quantitative explanatory design to examine causal relationships between variables.
Key methodological details:
- Sample: 97 consumers who purchased products at Dekranasda in Probolinggo City
- Data collection: Structured questionnaires supported by secondary data
- Analytical method: Structural Equation Modeling–Partial Least Squares (SEM-PLS) using SmartPLS software
- Variables analyzed
- Independent variables: location and service quality
- Mediating variable: purchase intention
- Dependent variable: purchasing decision
This approach allowed the researchers to measure both direct and indirect effects among the factors influencing consumer behavior.
Key Findings
The study confirmed that both external business factors and internal consumer motivation work together to shape purchasing outcomes.
Direct Effects
- Location → Purchase Intention: Positive effect (0.298; p=0.001)
- Service Quality → Purchase Intention: Stronger positive effect (0.458; p<0.001)
- Location → Purchasing Decision: Significant influence (0.406; p<0.001)
- Service Quality → Purchasing Decision: Positive impact (0.233; p=0.012)
- Purchase Intention → Purchasing Decision: Meaningful relationship (0.271; p=0.009)
Indirect Effects Through Purchase Intention
- Location → Purchase Decision: Mediated effect (0.081; p=0.045)
- Service Quality → Purchase Decision: Mediated effect (0.124; p=0.033)
Together, the results demonstrate that consumers are more likely to complete purchases when they first develop a strong intention—an intention shaped heavily by convenience and service experience.
What Drives Consumer Interest?
The analysis suggests that a strategic location improves accessibility, visibility, and exposure to potential buyers. Businesses situated near public facilities or high-traffic areas benefit from increased consumer attention and faster decision-making.
Service quality emerged as an even stronger driver of purchase intention. Responsive staff, efficient transactions, and courteous interactions help build trust, encouraging customers not only to buy but also to recommend products to others.
In explaining the results, the authors note that “a strategic location enhances consumers’ purchase intention through improved product availability and accessibility, while high service quality strengthens trust and satisfaction, increasing the likelihood of purchase.”
Real-World Implications
The research offers several actionable insights for MSME managers, policymakers, and local economic developers.
For Business Operators
- Invest in accessible and visible business locations.
- Prioritize service training to ensure responsiveness and professionalism.
- Create positive first impressions that convert curiosity into purchase intention.
For MSME Development Centers
- Provide larger, well-equipped spaces to support exhibitions, training, and production.
- Develop permanent showrooms to attract domestic and international buyers.
- Use digital platforms as promotional storefronts to expand reach.
For Policymakers
- Strengthening infrastructure around MSME hubs can directly support local economic growth.
- Encouraging service-quality standards may increase consumer confidence in regional products.
Ultimately, the study suggests that improving both physical and experiential aspects of retail environments can stimulate stronger purchasing behavior, benefiting local industries and communities.
Academic Insight
Amirullah of Universitas Panca Marga emphasizes that purchase intention plays a pivotal role in consumer psychology.
“Purchase intention functions as a mechanism that connects external business factors with final purchasing behavior, making it a critical focus for marketing strategy within MSMEs.”
By identifying this mediating role, the research contributes new understanding to marketing studies focused on locally produced goods—an area previously underexplored.
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