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Volume XX, Issue 3A, 2017

pp. iii-xii

ERSJ, Vol. XX, Issue 3A, 2017

Guest Editor:

Professor Dr. Ramona Rupeika-Apoga, Professor of Finance, Chair,

Department of Finance and Accounting, Faculty of Business, Management

and Economics, University of Latvia, Latvia

Guest Co-Editor:

Professor Dr. Tulus Suryanto, Akt., CA., Professor of

Accounting and

Auditing, The State of Raden Intan Lampung Islamic University,

Indonesia

Guest Editorial Board Members:

Jean Pierre Allegret, Professor of Economics, University of Paris X Ouest -

Nanterre La Défense, France

Anca Bandoi, Ass. Professor of Economics, University of Craiova, Romania

Theologos Homer Bonitsis,

Ass.

Professor of Finance, School of

Management, New Jersey Institute of Technology, Newark, NJ, USA

Agnieszka Brelik,

Professor of Economics, West Pomeranian University of

Technology of Szczecin, Szczecin, Poland

Slawomir I. Bukowski, Professor of Economics, Deputy Rector, Kazimierz

Pulaski University of Technology and Humanities in Radom, Poland

Pavla Breckova, Ph.D. Ing. Professor of Management, Head of Management

Department, Faculty of Economic Studies, University of Finance and

Administration, Czech Republic

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iv

Andees Faíña,

Professor of Economic Analysis, European Chair Jean

Monnet in European Industrial Economics, Department of Economic

Analysis, University of Coruña,

Spain

Jesus Andree Filipe,

Professor of Economics, Instituto Universitário de

Lisboa (ISCTE-IUL), Portugal

Hardy Hanappi, Professor of Political Economy, Ad Personam Jean Monnet

Chair for Political Economy of European Integration, IWM- Economics,

Technology University of Vienna, Austria

Christis Hassapis, Professor of Finance, Department of Economics,

University of Cyprus, Cyprus

Spyros Makridakis, Emeritus, Professor of Econometrics, Rector Neapolis

University of Pafos, Pafos, Cyprus

John Malindretos, Editor TIJF, Professor of Finance, CC College of

Economics, Finance & Global Business, William Paterson University, New

Jersey, USA

Vera Palea, Ph.D. in Economics, Università Degli Studi di Torino,

Italy

Statty Stattev,

Dr. Sc. Professor of Macroeconomics, Rector of the

University of National and World Economy, Bulgaria

Ileanna Tache, Professor of Economics, Vice Dean, Ad Personam European

Chair Jean Monnet, Faculty of Economic Sciences, Transylvania University

of Brasov, Romania

Eleftherios I. Thalassinos, Professor of International Economics, European

Chair Jean Monnet, Director Jean Monnet Centre of Excellence, Editor ERSJ,

IJEBA, IJMTEI, Chair ICABE, University of Piraeus, Greece

Natalia G. Vovchenko Professor Dr. of Economic Sciences, Vice Dean,

Rostov State University of Economics, Russia

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v

Guest Editor’s Note

Professor Ramona Rupeika-Apoga

I have been asked by the Editor-in-Chief of ERSJ to act as Guest Editor for

this volume on the occussion of the

20th anniversary of the Journal. I

accepted the invitation with great pleasure working with a team of distinquist

colleagues from several countries on the preparation of the issue.

All articles were selected based on specific criteria set by the

Guest

Editorial Board, appointed for this issue of the European Research Studies

Journal in accordance with the Code of Ethics and the Basic Requirements

for Publication that have been adopted by the Journal since its circulation in

1998.

As the Guest Editor of this volume I am very thankful to the members of the

Editorial Board consisting of

19 colleagues from 14 different countries. I

am also thankful to the Guest Co-Editor Professor Dr Tulus Suryanto and

the

Editor-in-Chief of ERSJ Professor El Thalassinos for their effective

cooperation in the preparation stage of this volume. For the

successful

completion the Guest Editorial Board has followed the double blind method

in the evaluation process of each article according to their professional and

academic experience.

In this issue of ERSJ we have published several articles selected among

others after a peer evaluation by the Guest Editorial Board members. It is in

the intention of the Journal to take opportunities

disseminating scientific

research from colleagues from all over the world. We strongly believe that

some of the publications are of high quality with innovative ideas that can be

adopted easily for the benefit of the economies they are referred to.

Professor Dr. Ramona Rupeika-Apoga

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vi

ERSJ

Editor’s Note

ERSJ celebrates its 20

th

anniversary in 2017 with the publication of issues

dedicated to international conferences, special events, economic and business

themes and more.

Selected articles have been included in this issue covering economic and

business disciplines after an extensive evaluation procedure set by the Guest

Editorial Board.

I would like to take this opportunity to express my sincere thanks to all the

members of the Board for their collaborative behavior, especially to the

Guest Editor Professor Ramona Rupeika-Apoga for her cooperation in the

preparation of this issue. It is also my pleasure to cooperate with a new

colleague from Indonesia the Guest Co-Editor Professor Dr. Tulus

Suryanto, Akt., CA.,

reviewer and editor in many journals for his effective,

productive and professional involvement, his valuable coordination regarding

the collection of the articles, his generosity to reply to my e-mails every time

I had a problem, question or comment with the evaluation process and the

texts. Their intervention was always valuable and very helpful.

It was a great honor for me to cooperate with all the authors, to read all

the articles getting a very good understanding of the content, the conclusions

and the methodology used in each one of the articles where I had an interest.

Recommendations and conclusions included in the published articles could

be of great importance in case they were adopted by the corresponding

bodies.

After 20 years of publication experience I would like to congratulate my

cooperatives from several countries for their valuable comments and their

help in the circulation of ERSJ.

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vii

ERSJ Volume XX, Issue 3A, 2017

Contents:

1. Exchange Rate Volatility and Export Volume: The Case of Indonesia and its Main Trading Partners

S. Safuan………3-13

2. The Concept of Convergent Development of Rural Areas of the Russian Federation

M. Afanasova...14-38

3. The Mathematical Model of the Law on the Correlation of Unique Competencies with the Emergence of New Consumer Markets

A.A. Chursin, R.V. Shamin, L.A. Fedorova...39-56

4. Access to Finance for Latvian SMEs

R. Rupeika-Apoga, I. Solovjova...……….57-68

5. The Function of Financial Services Authority (FSA) in Dispute Settlement Banking Customers in Indonesia24

Zulfi Diane Zaini ……….69-81

6. The Role of Shared Leadership and Work Environment in Strengthening the Influence of Compensation on Nurse’s Performance

Armanu Armanu….……… ………..82-95

7. Situation and Development Opportunities of Creative Industries Companies in Latvia

M. Dunska, A. Marcinkevica………96-114

8. The Measuring of the Spiritual Tourism in Regions of South Kazakhstan A.Kuralbayev, N. Abishov, A. Abishova, G. Urazbayeva……….115-133

9. Foreign Experience of Regulation of Migration Processes by the Example of the Migration Policy of Canada

Y.I. Prytkova………......134-142

10. Evaluation of Perception of Accountant’s Role at the Enterprise in Latvia and Lithuania

I.Bruna, K. Senkus, R. Subaciene, R. Sneidere...143-163

11. Poverty Reduction Models: Indonesian Agricultural Economic Approach

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viii

12. Assessing Incentive and Monitoring Schemes in the Corporate Governance of Maltese Co-operatives

P.J. Baldacchino, C. Camilleri, S. Grima, F.H. Bezzina…….……….177-195

13. Management Compensation and Auditor Reputation on Earnings Management and on Share Returns

F. Farichah...196-208

14. Consequences of Going Concern Opinion for Firms and Capital Market with Accounting Firm Size as Moderation Variable

D. Hapsoro...209-230

15. Favourable Tax Regimes that Constitute Selective State Aid from the Perspective of the Cjeu Recent Case Law

I.Būmane, D.Vodolagins……….231-245

16. Solvency Evaluation, Comparing Traditional Financial Situation

Assessment Methods with Information from Cash Flow Statements, Using Data from Insolvent Companies in the Republic of Latvia

D. Steinberga, I. Millere……….246-258

17. Implementaion the International Financial Reporting Standards IFRSs as a Moderating Variable of the Relationship of Corporate Governance with

Earnings Management

A. Komalasari...259-277

18. Leadership Styles, Motivation Achievers and Quality in Cultural Teaching

S. Patimah...278-290

19. The Risk Assessment Method in Prognostic Models of Production Systems Management with Account of the Time Factor

L. Mylnikov, M. Kuetz………..291-310

20. Clustering in Education

A.Rahmat...311-324

21. Formation of Human Resource Management System in Organizations

V.Y. Morozov, Y.V. Murashova, T.N. Lustina, A.G. Panova, V.A. Danilova…325-337

22. Scientific Cooperation between Russia and the EU in the Development and Use of Large Research Infrastructure

G.V. Prytkov, N.Y. Tsvetus, A.A. Balyakin, A.S. Malyshev, S.B. Taranenko….338-353

23. Networking Quality and Trust in Professional Services

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ix

24. Food Security of Russia in the Contextof Import Substitution

G.M. Zinchuk, M.Ye. Anokhina, A.V. Yashkin, S.A. Petrovskaya……….371-382

25. ASEAN Tourism Marketing Communication Attribute: An exploratory Research at Goaseantv

Arisetyanto Nugroho……….383-395

26. Analysis of the Macroeconomic Impact towards the NPL National Banking in Indonesia: The Study of Macro-Economic Shock Using Vector

Autoregression Models

M. Ekananda...396-416

27. How to Improve Brand Equity in Tourism

S.V. Riorini...417-434

28. Antecedents of Tourism Destination Image and Customer Satisfaction in Tourism Industry

T. Teviana, P. Ginting, A.N. Lubis, P. Gultom...435-445

29. Analogy of Law in the Mechanism for Increasing Authorized Capital of a Limited Liability Company

Viktor A. Mikryukov……….446-457

30. Preparing Consolidated Financial Statements in Accordance with IFRS

S.A. Issakova, A.Sh. Moldabekova, M.T. Kenzhebayeva, V.N. Alibekova, G.T.

Tuleyeva……….458-469

31. Reflexive Governance of Import Substitution Mechanism in Clusters

B.G. Khairov, D.T. Novikov, T.A. Prokof’yeva, I.O. Protsenko,

S.M. Khairova...470-483

32. The Organization of the Innovation Transfer in the Agro-industrial Complex of Russia

M.Y. Veselovsky, P.P. Pilipenko, V.G. Savenko, A.G. Glebova, L.A. Shmeleva...484-499

33. Analysis of Antecedent and Consequence of Employee Engagement in Small and Medium-Sized Enterprises in Central Java, Indonesia

S. Handayani, A.I. Anggraeni, Andriyansah, Suharnomo, E. Rahardja...500-510

34. Commodity Prices, Exchange Rates and Investments on Firm’s Value Mediated by Business Risk: A Case from Indonesian Stock Exchange

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x

35. Analysis of Auditor Performance by Using Covariance Based Structural Equation Modeling: A Study of Public Accounting Firms in Indonesia

Y. Sunyoto, I. Ghozali, A. Purwanto...524-537

36. Preventing Corruption in the Indonesian Public Sector

J. Sriyana, H.Y. Prabowo, M. Syamsudin………538-553

37. Relationship between Servant Leadership in Organizational Culture, Organizational Commitment, Organizational Citizenship Behaviour and Customer Satisfaction

Retno P. Setyaningrum...554-569

38. Implications of Tax Receivables and Retribution for the Economic Growth of Indonesia

R. Bratamanggala………570-579

39. Influence on local government performance: Budget Participatory, Budget Control and Organizational Structure Working Procedures of Dysfunctional Behavior

Rustam Effendi………...580-593

40. Isolating Mechanism as a Mean to Improve Performance of SMEs

Hasyim, Sahyar, Mahmud...594-612

41. Improving Business Performance: A Proposed Model for SMEs

Endi Rekarti, C.M. Doktoralina...613-623

42. Contribution of Private Fund Managers to the Accumulation of Pension Capital of the Second Tier Latvian Pension System in 2012-2016

L. Bule, L. Leitane………624-634

43. The Influence of Financial Knowledge, Control and Income on Individual Financial Behavior

A.Z. Arifin………...635-648

44. Analysis of the Relevance of Educational Programs for Applicants and the Labor Market

E.E. Nakhratova, I.Yu. Ilina, A. I. Zotova, O.A. Urzha, N.V. Starostenkov…..649-659

45. How Financial Sector and Social Overhead Capital Determine GDP Growth

Cicih Ratnasih………...660-672

46. The Role of Criminal Law Politics against Ambush Marketing Behavior in the Implementation of ASEAN Community

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xi

47. The Effect of Supervisory Board Cross-Membership and Supervisory Board Members' Expertise to the Disclosure of Supervisory Board’s Report: Empirical Evidence from Indonesia

Iskandar Muda……….691-705

48. Comparative Study on Consumer Protection in Indonesia through Mechanism of Product Liability Insurance

Hamzah...706-716

49. Analysis Banking Role to Performance Improvement on Indonesia Small Medium Enterprises

H. Esti Riwayati...717-728

50. Studying Effectiveness of the European and Eurasian Economic Union Food Safety Legislation

M.T. Nurgaliyeva, Zh.A. Iskakova, L.A. Mamayeva, V.S. Zhamurova,Attevon Wright, A.K. Smagulov………...729-747

51. Improving Anticipative Learning through Entrepreneurial Orientation in Small to Medium Size Enterprises

Meutia, Tubagus Ismail and Nurul Ummi……….748-757

52. Impacts of Export Development on Unemployment in Indonesia

Yolanda……….758-773

53. Factors Influencing Opportunity Driven Nascent Entrepreneurs in Europe and Asia

S. Tripopsakul………774-782

54. The Impact of Trust-Distrust toward Quality of Life: The Case of Poor and Non Poor Household In Indonesia

Rizal E. Halim...783-801

55. ICT Industry’s Challenge in Latvia

S. Balina, K. Rozite, I. Steinbuka...802-814

56. Factors Impacting the Low Usage of e-Services in Latvia

S. Balina, J. Skilters, D. Baumgarte, L. Zarina………..815-824

57. The Role of Co-Creation Activities, Trust and Gender on Higher Education Marketing Performance

Y. Sutarso, R.E. Halim, T.E. Balqiah, P. Tjiptoherijanto...825-845

58. Banking Business Models of the Digital Future: The Case of Latvia

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xii

59. Implementation of Pricing the Corporate Value in Indonesia

Fauzie Yusuf Hasibuan...861-873

60. Minus Margin Agreements as a Violation of Business in Business Competition in Indonesia

Hasbi...874-889

61. Design Building of Indonesian Politics Economic

Suhandi Aziz...890-904

62. The Factors Affecting the Profitability of Banks: The Case of Latvia

Kristina Bojare, Inna Romanova...905-919

63. Productivity and its Impact on the Competitiveness of Latvia

R. Skapars, S. Jekabsone, J. Priede, I. Skribane...920-930

64. Evaluation of Latvia–China Trade Potential

J. Priede, H. Feng ...931-941

65. Assessing the Role of Latvia’s Participation in Indo-EU Value Chains

V. Garde, V.P. Karnups ………942-960

66. Fintechas Financial Innovation – The Possibilities and Problems of Implementation

S. Saksonova, I.Kuzmina-Merlino……….....961-973

67. Tourism Enterprise Cooperation Specifics: Comparative Study of Riga and Novosibirsk Travel Agencies

K. Berzina, I. Medne, M. Tsoy ………..974-988

68. Should I stay or should I go? Human Resource Information System Implementation in Indonesian Public Organizations

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Volume XX, Issue 3A, 2017

pp. 435-445

Antecedents of Tourism Destination Image and Customer

Satisfaction in Tourism Industry

Tengku Teviana

1

, Paham Ginting

2

, Arlina Nurbaity Lubis

2

, Parapat Gultom

2

Abstract:

Marketing mix has largely adapted as antecedents for analyzing the marketing performance in many sectors. However, it applicability in tourism sector has not been explored well. This research aims to analyze customers’ satisfaction on tourism destination in order to increase the number of tourists visiting in Indonesia.

This novelty is reviewed in depth with relevant theoretical studies and tested in empirical research conducted on how managing marketing mix in tourism sector to boost the number of tourists to visit a destination.

Model testing conducted using Structural Equation Modelling (SEM). By taking 350 respondents with purposive sampling technique, the results showed that tourism actors capable of improving marketing mix is able to improve customer satisfaction in tourism industry.

Keywords: marketing mix, customer satisfaction, image creation, destination design, consumer loyalty.

1PhD Student in Management, at Universitas Sumatera Utara, and lecturer at Faculty of

Economics and Business, Medan State University, Jalan Willem Iskandar Pasar V, Medan

Estate, Sumatera Utara, Indonesia, Tel. +62616613365, email: tgtevi.unimed@gmail.com

2 Faculty of Economics and Business, Universitas Sumatera Utara, Jl. Abdul Hakim, Padang

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1. Introduction

The role of tourism in boosting state revenues is the most important aspect to analyze. This paper attempts to analyze the antecedents of tourism marketing. Experts have given various definitions of tourism marketing. According to Krippendorf (1987), tourism marketing is a systematic and coordinated execution of business policy by tourist undertaking whether private or state owned by local, regional, national and international level to achieve the optimal of satisfaction. Wahab, et al. (2001) state that the term tourism marketing is a management process execute by national tourism organizations or companies.

Tourist desire to travel and tourists is a potential from the side of tourism organization by communicating with them, affecting their wants, needs, and motivation, and by providing tourist objects and attractions for tourists to obtain optimal satisfaction. The tourism sector in North Sumatra, Indonesia has the opportunity to grow with the enactment of the ASEAN Economic Community. This is in line with international organizations including the UN, the World Bank and the World Tourism Organization (WTO), which recognizes that tourism is an integral part of human life, especially with regard to social and economic activities. The problem raised in this research is how to build new theoretical approach to analyze the influence of marketing mix on destination image and customer loyalty in tourism industry. This research proposes a new concept that is customized network capability based on the basic theory in the field of management that is Resources Based View (RBV) theory.

2. Services Marketing Mix

Service is an activity or benefit that offers by one party to another and does not result in ownership transfer. Services are intangible, inseparable, fluctuating and not durable. Each characteristic has a problem and requires a strategy (Cotirlea, 2011; Keisidou et al., 2013; Giannakopoulou et al., 2016; Faizova et al., 2015; Ryzhkova and Prosvirkin, 2015; Srimuk and Choibamroong, 2014). In service marketing, the strategic approach directed at the ability of marketers to find ways to realize the intangible increase the productivity of inseparable providers of the product, create quality standards with respect to variability, and influence the movement of demand and supplier capacity. In general, service-marketing strategies applied in the overall corporate context, requiring not only external marketing, but also internal marketing to motivate employees and interactive marketing to create service provider expertise.

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and used properly, so that companies can achieve marketing objectives effectively, as well as satisfying the needs and desires of consumers. Marketing mix is a tool for marketers by exploring various elements of marketing program to implement the marketing and positioning strategy (Lupiyoadi, 2009). Perreaul and McCarthy (2002) classify the marketing mix, particularly goods, consisting of four variables in terms of product, price, place and promotion. Particularly in the context of ecotourism services, the four variable factors considered inadequate. Thus, marketing experts add three more factors in terms of people, process, and physical evidence (Lupiyoadi, 2009; Payne, 2005; Liapis et al., 2013; Thalassinos and Dafnos, 2015; Akopova et al., 2017; Frank et al., 2016).

3. Destination Image

Essentially, tourist attraction comprises all elements possessed of a place that attracts visitors. These elements include landscapes for viewing, activities to follow, and experiences to remember. However, it is sometimes difficult to distinguish between attraction and not attractiveness. Transportation, accommodation, and other services can be integral part of attraction attributes. Mcintosh et al. (1995) state that every tourist destination has a certain image to a destination that contains beliefs, impressions and perceptions. According to Lawson and Band Bovy (1977) (as cited in Mathison and Wall, 1982), the image is an expression of all the knowledge, impression, prejudice, imagination and emotional outlook that a person or group has toward a particular object or place.The image of a destination is an important part for tourists and stakeholders. According to Fakeye and Crompton (as cited in Chen and Tsai, 2007), the image of the destination is a picture of thoughts, beliefs, feelings and perceptions of a destination. Calantone, et al. (2003) state that the image of the destination is the perception of potential tourists to a destination.

Gartner (2003) states that the image of the destination is the perception of the complex combination of the various products and related attributes. The formation of the image of tourist destinations according to Tocquer and Zins in Lopes (2011) examines the influence of perceptions on tourists related to a particular purpose, and the grouping of images into four stages of formation, that are vague and realistic image, distortion of image, improved image, and resulting image. The image of tourist destinations is a reflection of the tourist attraction that consumers perceived.

4. Customer Loyalty

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satisfied consumers will likely tell their friends that in turn will reduce the cost of advertising. Companies can isolate from price competencies because loyal customers did not affected by discounts from competitors.

Eventually, satisfied customers will be happy to try other company products, thus helping the company to gain a wider market share. Kotler and Keller (2013) reveal the indicators of customer loyalty, in terms of repeat purchase or loyalty to product purchases; retention or resilience to negative influence of company; referral behavior (totally references the company's essence). Foumier and Mick (2003) suggest that satisfaction, dissatisfaction, and complaints are the result of the consumer buying decision process. Satisfaction and dissatisfaction represent positive, neutral, or negative feelings that arise after purchase. Consumer complaints are a clear expression of dissatisfaction. Consumer satisfaction is the focus of marketing concepts and the dominant cause of consumer loyalty. The characteristics of loyal customers are making regular repeat purchase, purchasing across product and service, referring other products, and demonstrating in immunity to the pull of the competition.

4.1 Relationship between Marketing Mix and Destination Image

A good tourist destination should be able to provide tourist facilities in accordance with the needs of visitors to provide convenience and fulfill their needs during the visit. Kotler and Keller (2009) states that the facility is everything that deliberately provide by service providers to use and enjoy by consumers providing the maximum level of satisfaction. When tourist facilities can provide maximum satisfaction to the visitors, it will be a good base for them to re-visit in the future and their willingness to tell positive things to others. Dahmiri (2010) states that marketing mix variables affect the image on a positive way. Thus, this following hypothesis is proposed:

Hypothesis 1: There is positive effect of marketing mix's capability on destination image.

4.2 Relationship between Marketing Mix and Customer Satisfaction

The satisfaction of tourists encourages them to be loyal to a destination by making re-visit and willing to recommend tourist destinations to others. According to Oliver (1997) loyalty is an in-depth customer commitment to re-subscribe or re-purchase products or services consistently in the future, even though the influence of the marketing situation and efforts has the potential to cause behavioral change. All elements of marketing mix, product and promotion have a very strong effect on the satisfaction of tourists. Furthermore, Owomoyela et al. (2103) reveal that all elements of the marketing mix have a significant effect on customer satisfaction.

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4.3 Relationship between Marketing Mix and Consumer Loyalty

A successful marketing program can be seen from its ability to satisfy the wants and needs of consumers. The combination of marketing mix elements is created to jointly meet customer satisfaction. Previous research shows a variety of findings in which not all elements of the marketing mix affect satisfaction. How the marketing mix affects consumer satisfaction greatly influence by other factors including the type of product or service offered and the characteristics of the respondents. Widyawati (2006) indicates that service marketing mix variables significantly influence consumer loyalty. Setiawardi et al. (2013) reveal that partially that product, price, place, promotion variables, and physical facility and employee variables have no significant effect on customer loyalty, while the significant influence on customer loyalty is the process variable. Al Muala et al. (2012) show that the product has a significant effect on destination loyalty, while prices, people and processes have no significant effect on destination loyalty.

Hypothesis 3: There is a positive relationship between marketing mix capability and consumer loyalty.

4.4 The Impact of the Destination Image on Destination Loyalty

Consumer's point of view of the relationship between the destination image and the consumer behavior of the destination plays a role in the buying and satisfaction behavior. The image of the destination is the impression of tourists in general to a tourist destination. The image of the destination plays an important role in understanding the behavior of tourists in traveling. Gunn and Mercer (2009) state that image formation before the trip is the most important phase in the process of choosing a tourist destination. Moreover, the image perceived after the visit will also affect consumer satisfaction and intensity to make visits in the future, depending on the ability of tourist destination’s area managers in providing an experience that suits the needs of tourists. Park and Nunkoo (2013) suggest that the overall image has a positive effect on destination loyalty. Furthermore, the image of the destination has a significant effect on destination loyalty. Similarly, Mohamad et al. (2014) reveal that the image of the destination has a significant effect on destination loyalty.

Hypothesis 4: There is positive effect of destination image on customer loyalty.

4.5 The Effect of Consumer Satisfaction on Customer Loyalty

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company by providing recommendations and positive reference to other prospective customers. Fornell et al. (1996) and Oliver (1997) suggest that there is a strong relationship between satisfaction and loyalty. Other studies show that consumer satisfaction can influence consumer loyalty in more complex forms (Oliver, 1999). Cronin and Taylor (1992), Dick and Basu (1994), Oliver (1997) argue that consumer satisfaction is one of several causes of consumer loyalty. Cronin, Brady and Hult (2000) describe that consumer satisfaction can have a direct potential impact on a consumer's loyalty. Mohamad et al. (2014) reveal that the satisfaction of tourists has a positive and significant impact on destination loyalty. Yuningsih et al. (2014) show that consumers’ satisfaction gives influence to the loyalty of consumers’ tourism area.

Hypothesis 5: There is positive effect of customer’s satisfaction on customer loyalty.

5. Methodology

The sample size in this study is based on various considerations. First, the population is dynamic; Secondly, since this study uses the Maximum Likelihood (ML) estimation model, this estimation requires large sample size of at least 100 to 200. However, if the sample size is larger, between 400 and 500, then the sensitivity of this model in detecting the difference between data will be higher (Ghozali, 2008). Although the number of population members in this study is incalculable, deciding whether the amount will decrease or increase within a certain time is no certainty, in addition to the reason that this study was designed using the Maximum Likelihood estimation model. Therefore, the sample size in this study refers to Hair,

et al. (2010), Ferdinand (2006) and Ghozali (2008) stating that the number of samples can be calculated from indicator magnitudes multiplied by 5 to 10. Because this study uses 4 construct variables that the total indicator number of 34, then the sample in this study can be numbered between 170 up to 340 respondents. In this case the study took a sample of 286 people.

In this study, the method used to collect data is the distribution of questionnaires directly to the respondent or personally administrated questionnaire, because the respondent or the specified sample is easily contacted personally and is in the area of North Sumatera.

6. Results

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for the feasibility of the Root Mean Square Error Approximation (RMSEA) model, which relates to the predicted random value error is 0.021, generated by the model is smaller than the 0.08 limit number. This indicates that the model's prediction error is small. The next model feasibility index is the incremental fit index which includes normed fit index (NFI), Tucker Lewis Index (TLI), and Comparative Index (CFI). All three are index numbers that do not depend much on the size of the sample size. The results of the analysis show that the index values for all three sizes are above 0.90. Finally, the feasibility index for measuring model simplicity is indicated by the value of parsimony ratio (PRATIO). Small PRATIO values, such as 0.255 for this model, indicate that the proposed model is simple and good. Moreover, the value of coefficient of determination (R square) of destination image variable of 0.536, means that variable ability to explain the loyalty is equal to 53.6%.

Table 1. Goodness of Fit Testing

Chi-image creation, the higher customer satisfaction capability is accepted with the value of C.R = 3.182 and p = 0.001. Thus, by creating image, companies can increase depth, breadth, efficiency and the level of trust and satisfaction of customers which ultimately is able to increase customer loyalty.

The result shows that hypothesis 2 stating that the higher the marketing mix capability, the higher the customer satisfaction capability is accepted, indicated by the value of C.R = 2.442 and p = 0,015. The results of this test provide support to the previous findings revealing that marketing mix capability can increase customer satisfaction in accordance with consumer expectations.

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Table 2. Hypothesis Testing

Estimate S.E. C.R. P Result

IC  CS .267 .084 3.182 .001 accepted

MM  CS .200 .082 2.442 .015 accepted

DI  CS .609 .097 6.302 *** accepted

MM  CL .092 .086 1.075 .282 rejected

CS  CL .286 .081 3.550 *** accepted

IC: image creation, MM: marketing mix, CS: consumer satisfaction, DI: destination image, CL: customer loyalty.

The result of hypothesis testing showed that hypothesis 4 stating the higher the marketing mix capability, the higher the customers loyality is rejected, indicated by the value of C.R = 1.075 and p = 0.282 or above the significance level of 0.05. This result proves that marketing mix capability has no positive on consumer loyalty. This study argue that satisfaction is not influenced by the company's marketing strategy but influenced by the image destinations and services provided by the destination managers. Moreover, this finding is in line with the research of Muala and Qurneh (2012) which states that human resources and prices are insignificant to destination loyalty. Furthermore Hoang et al. (2016) find that in order to make the tourist area become a tourist choice, the local people's need to care in preserving, restoring and promoting cultural heritage, values, traditions and cultural identity that will likely able to make it a unique tourist area to visit. Tourists will seek a good natural environment in which cleanliness and aesthetic value is maintained. Hence, the price paid will determine destination loyalty.

The result reveals that hypothesis 5 stating that the higher the customers satisfaction, the higher the customer loyalty is accepted, indicated by the value of C.R = 3.550 and p = 0.00. The result shows that the uniqueness of tourism destination will increasingly boost the level of customer loyalty.

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Analysis of mediating variabled by Sobel Test Calculation on the importance of customer satisfaction capacity showed that customers satisfaction capability significantly has an important role in increasing customer loyalty. It can be seen from the value of Sobel test statistic, that is 1.754 with p-value (two-tailed probability) is 0.795 and p-value (one-tailed probability) is 0.0397 at significant level 0.05. The results of this test prove that the new concept proposed in this research that is customers satisfaction capability play an important role to increase the influence of marketing mix capability on customers loyalty.

7. Summary

Customers’ satisfaction capability is a concept in this study that can be used by tourism agents and service providers to improve tourist visits and customer loyalty. Customers satisfaction capability is the ability to provide satisfaction to the customers by attracting more interesting and unique destination that suits the needs and desires of the customer through the marketing mix approach.Based on the hypothesis testing, it is known that not all hypotheses proposed in this study proved to have a positive and significant effect. This imply to tourism companies to produce a specific product that suits the needs of customer. Hospitality service providers in improving marketing performance should be able to build customer satisfaction and loyalty. The ability of the company to produce specific and unique services according to customer needs will increase customer loyalty.

Based on the empirical findings, customers will feel satisfied when the needs are met and when the company is able to provide more than what is expected (Ciptono, 2014). The ability of providers to produce a specific and unique services can not be separated from the company's ability to build good relationships with customers, because they can further help companies promote to other consumers. Moreover, customer loyalty is also able to improve partnership relationship with customers.

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Gambar

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