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FORMOSA NEWS - Bali - Product and Service Quality Drive Customer Loyalty
in Small Garment Businesses. Product and service
quality are becoming the main drivers of customer loyalty in Indonesia’s small
garment industry. A recent study published in 2026 in the Asian Journal of
Management Analytics found that customer satisfaction plays a crucial role in
strengthening repeat purchase intentions among consumers of micro, small, and
medium enterprises (MSMEs). The research was
conducted by Ni Ketut Gustini, together with Ni Nyoman Kerti Yasa, I Gusti Ayu Ketut
Giantari, and Ni Made Wulandari Aksari from Udayana University. The study focused on customers of “Mr.
Konveksi Bali,” a garment MSME business, to understand how product
craftsmanship, service quality, and customer experience influence repeat
purchasing behavior.
Product Craftsmanship Builds Customer Trust
The research found that product quality significantly affects repurchase intention, with a statistical coefficient of 0.329. This means customers are more likely to return when they perceive the products as reliable and professionally made. In the garment industry, product quality is primarily evaluated through stitching precision, material consistency, durability, and conformity with customer specifications. Among these factors, stitching accuracy emerged as the most influential indicator shaping customer confidence. According to Gustini and the research team, customers often associate technical craftsmanship with overall business professionalism. Well-made products strengthen trust and encourage long-term relationships between consumers and MSMEs. The study also emphasized that maintaining consistent product standards is not only necessary to meet customer expectations but also serves as a strategic advantage for MSMEs operating in competitive markets. Researchers linked these findings to the Stimulus–Organism–Response (S-O-R) framework, where product quality acts as an external stimulus that directly influences customer behavior and loyalty.
Fast and Responsive Service Encourages Repeat Purchases
Service quality also showed a significant positive influence on repurchase intention, with a coefficient value of 0.262. Customers who perceive services as reliable, responsive, and professional are more likely to continue engaging with the business. The study identified responsiveness as the most influential service dimension in encouraging repeat transactions.Fast communication, clear information, and timely order completion were considered essential factors in reducing customer uncertainty during transactions. Researchers explained that service interactions play a major role in strengthening customer confidence. Positive service experiences shape favorable evaluations that directly influence future purchasing decisions. The study suggests that small businesses cannot rely solely on product features. Instead, they must create meaningful and consistent customer experiences to remain competitive in the growing digital marketplace.
Customer Satisfaction Strengthens Loyalty
One of the most important findings of the study concerns the mediating role of customer satisfaction. Researchers found that product quality significantly influences customer satisfaction with a coefficient of 0.403. Meanwhile, service quality demonstrated an even stronger influence on customer satisfaction, recording a coefficient of 0.517. These findings indicate that customers evaluate not only the final product but also the quality of interactions throughout the purchasing process. Customer satisfaction itself was found to significantly influence repurchase intention, with a coefficient of 0.351. Customers whose expectations are fulfilled are more likely to develop trust and maintain long-term loyalty toward service providers. However, researchers discovered an important difference between the mechanisms underlying product and service quality. Customer satisfaction partially mediates the relationship between product quality and repurchase intention. In practical terms, high-quality products increase repeat purchases both directly and indirectly by generating customer satisfaction. In contrast, customer satisfaction does not significantly mediate the relationship between service quality and repurchase intention. Researchers suggest that customers may respond directly to good service experiences without necessarily forming a deeper evaluative process related to satisfaction. The study proposes that other factors, such as trust, perceived value, or emotional connection, may explain how service quality influences customer loyalty.
Important Lessons for MSMEs in the Digital Economy
The research has important implications for MSMEs, particularly garment businesses and creative industries operating in increasingly digital environments. The study highlights that competitive advantage cannot depend solely on low prices. Consumers are becoming more attentive to product consistency, communication quality, professionalism, and overall customer experience. Researchers also encourage MSMEs to adopt digital tools that improve customer communication, accelerate order management, and strengthen service efficiency. In the digital economy, satisfied customers are not only more likely to repurchase products but also more likely to recommend businesses through social media, online reviews, and word-of-mouth promotion. The study further recommends future research on additional variables, such as perceived value, customer trust, brand image, and digital engagement, to better understand evolving consumer behavior in MSMEs.
Author Profiles
Ni Ketut Gustini from Udayana University is a researcher specializing in marketing, customer loyalty, and consumer behavior in MSMEs.
Prof. Dr. Ni Nyoman Kerti Yasa from Udayana University focuses on consumer behavior, strategic marketing, and business management.
Dr. I Gusti Ayu Ketut Giantari from Udayana University conducts research in marketing strategy, MSME competitiveness, and business development.
Ni Made Wulandari Aksari from Udayana University specializes in research on customer satisfaction, service quality, and consumer loyalty.
Source
Ni Ketut Gustini, Ni Nyoman Kerti Yasa, I Gusti Ayu Ketut Giantari, Ni Made Wulandari Aksari (2026). The Role of Customer Satisfaction in Mediating the Effects of Product and Service Quality on Repurchase Intention: A Study at Mr. Konveksi Bali. Asian Journal of Management Analytics Vol. 5, No. 2, Tahun 2026, hal 363–380.
DOI: https://doi.org/10.55927/ajma.v5i2.16398
URL: https://journal.formosapublisher.org/index.php/ajma
Product Craftsmanship Builds Customer Trust
The research found that product quality significantly affects repurchase intention, with a statistical coefficient of 0.329. This means customers are more likely to return when they perceive the products as reliable and professionally made. In the garment industry, product quality is primarily evaluated through stitching precision, material consistency, durability, and conformity with customer specifications. Among these factors, stitching accuracy emerged as the most influential indicator shaping customer confidence. According to Gustini and the research team, customers often associate technical craftsmanship with overall business professionalism. Well-made products strengthen trust and encourage long-term relationships between consumers and MSMEs. The study also emphasized that maintaining consistent product standards is not only necessary to meet customer expectations but also serves as a strategic advantage for MSMEs operating in competitive markets. Researchers linked these findings to the Stimulus–Organism–Response (S-O-R) framework, where product quality acts as an external stimulus that directly influences customer behavior and loyalty.
Fast and Responsive Service Encourages Repeat Purchases
Service quality also showed a significant positive influence on repurchase intention, with a coefficient value of 0.262. Customers who perceive services as reliable, responsive, and professional are more likely to continue engaging with the business. The study identified responsiveness as the most influential service dimension in encouraging repeat transactions.Fast communication, clear information, and timely order completion were considered essential factors in reducing customer uncertainty during transactions. Researchers explained that service interactions play a major role in strengthening customer confidence. Positive service experiences shape favorable evaluations that directly influence future purchasing decisions. The study suggests that small businesses cannot rely solely on product features. Instead, they must create meaningful and consistent customer experiences to remain competitive in the growing digital marketplace.
Customer Satisfaction Strengthens Loyalty
One of the most important findings of the study concerns the mediating role of customer satisfaction. Researchers found that product quality significantly influences customer satisfaction with a coefficient of 0.403. Meanwhile, service quality demonstrated an even stronger influence on customer satisfaction, recording a coefficient of 0.517. These findings indicate that customers evaluate not only the final product but also the quality of interactions throughout the purchasing process. Customer satisfaction itself was found to significantly influence repurchase intention, with a coefficient of 0.351. Customers whose expectations are fulfilled are more likely to develop trust and maintain long-term loyalty toward service providers. However, researchers discovered an important difference between the mechanisms underlying product and service quality. Customer satisfaction partially mediates the relationship between product quality and repurchase intention. In practical terms, high-quality products increase repeat purchases both directly and indirectly by generating customer satisfaction. In contrast, customer satisfaction does not significantly mediate the relationship between service quality and repurchase intention. Researchers suggest that customers may respond directly to good service experiences without necessarily forming a deeper evaluative process related to satisfaction. The study proposes that other factors, such as trust, perceived value, or emotional connection, may explain how service quality influences customer loyalty.
Important Lessons for MSMEs in the Digital Economy
The research has important implications for MSMEs, particularly garment businesses and creative industries operating in increasingly digital environments. The study highlights that competitive advantage cannot depend solely on low prices. Consumers are becoming more attentive to product consistency, communication quality, professionalism, and overall customer experience. Researchers also encourage MSMEs to adopt digital tools that improve customer communication, accelerate order management, and strengthen service efficiency. In the digital economy, satisfied customers are not only more likely to repurchase products but also more likely to recommend businesses through social media, online reviews, and word-of-mouth promotion. The study further recommends future research on additional variables, such as perceived value, customer trust, brand image, and digital engagement, to better understand evolving consumer behavior in MSMEs.
Author Profiles
Ni Ketut Gustini from Udayana University is a researcher specializing in marketing, customer loyalty, and consumer behavior in MSMEs.
Prof. Dr. Ni Nyoman Kerti Yasa from Udayana University focuses on consumer behavior, strategic marketing, and business management.
Dr. I Gusti Ayu Ketut Giantari from Udayana University conducts research in marketing strategy, MSME competitiveness, and business development.
Ni Made Wulandari Aksari from Udayana University specializes in research on customer satisfaction, service quality, and consumer loyalty.
Source
Ni Ketut Gustini, Ni Nyoman Kerti Yasa, I Gusti Ayu Ketut Giantari, Ni Made Wulandari Aksari (2026). The Role of Customer Satisfaction in Mediating the Effects of Product and Service Quality on Repurchase Intention: A Study at Mr. Konveksi Bali. Asian Journal of Management Analytics Vol. 5, No. 2, Tahun 2026, hal 363–380.
DOI: https://doi.org/10.55927/ajma.v5i2.16398
URL: https://journal.formosapublisher.org/index.php/ajma
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