Examining the Relationships among Product Quality, Customer Satisfaction and Loyalty in the Bamboo Institute, Dili, Timor-Leste

The objectives of this research are to test and explain the influence of product quality and customer satisfaction on customer loyalty, in addition to customer satisfaction on the relationship between product quality and customer loyalty. A total of 190 valid questionnaires were collected from costumers of Bamboo Institute in Dili, Timor-Leste, and the relationships between 3 variables were tested using SMART-PLS 3.0. The result of the study revealed that product quality and customer satisfaction influence positively and significantly on customer loyalty, and customer satisfaction fully mediate the relationship between product quality and customer loyalty. The result of study confirms that product quality and customer satisfaction are strong antecedent factors for customer loyalty. Therefore, to enhance customer loyalty, it is important to provide the product quality that meets the customer’s satisfaction level.