Effect of Service Failure on Ferry Passenger Switching Behavior: The

Role of Dissatisfaction

Shania Melinda, Sri Zuliarni

Applied Business Administration, Politeknik Negeri Batam, Jl. Ahmad Yani, Batam, Indonesia

Keywords: Service Failures, Brand Switching Behavior, Customer Dissatisfaction.

Abstract: This study examines the effect of Service Failures on Brand Switching Behavior through Customer

Dissatisfaction (Studies in PT. XYZ Ferry Passengers). Respondents from this study are passengers departing

from Batam to Johor who have used the PT. XYZ Ferry at least 2 times and have an age of 17 years and

above. The population in this study was PT. XYZ Ferry passengers with a sample of 186 respondents.

The sampling technique here uses the Purposive Sampling method with the Slovin formula. In this study,

data were collected manually through a questionnaire given directly to respondents. The data analysis method

used is Path Analysis with a significance level of 0.05. The results of this study are that service failures affect

brand switching behavior, service failures affect customer dissatisfaction, customer dissatisfaction affects

brand switching behavior, and service failures affect brand switching behavior through customer

dissatisfaction.

1 INTRODUCTION

1.1 Research Background

Nowadays the competition in the passenger ship

business in Batam is getting tougher. Whether it's a

ship that crosses from one island to another or ships

that cross between countries. This happens because

Batam has a strategic location that is close to various

islands and also with neighbouring countries such as

Singapore and Malaysia. There are many passenger

ship companies in Batam, so this business

competition cannot be avoided. At present, there are

various types of ship crossing routes in Batam. One

of the routes is the crossing from Batam to Stulang

Laut (Johor Bahru, Malaysia). One of the passenger

ship companies that have a route from Batam to

Stulang Laut (Johor Bahru, Malaysia) is PT. XYZ.

According to Hammer (2004), the background on

the business canvas has now been reversed where

customers are now in the foreground and the

company has been moved to the background. So,

customers are the center of good business in the form

of products or services. Today's business world has

been dominated by customers, so that customers are

no longer adjusting to the products or services

offered. However, companies must adapt to

customers by providing solutions to customer needs.

Then, it is also said that companies that remain self-

centred and not customer-centred cannot survive.

Now is an era of choice, where every customer

can choose and consider the product or service they

have to use because there are a variety of choices

offered. This could be one of the factors switching

customers to other brands that might result from

dissatisfaction with the company. Brand switching

behavior according to Hawkins & Mothersbaugh

(2010) is the result of customer dissatisfaction with a

product or service that causes customers to stop using

a product or service on a brand and replace it with

another brand. Factors that influence the intention to

switch brands according to Firmansyah (2019) can be

due to advertising, price, product/service quality,

word of mouth, personality, brand image, variety

seeking, customer dissatisfaction and promotions

offered by competitors. From the factors mentioned

that product/service quality and customer

dissatisfaction can make customers do brand

switching.

The company engaged in services and serving

hundreds of passengers every day, PT. XYZ as much

as possible provides optimal services to the people

who use their services. However, it cannot be denied

that the company is not always able to provide

services in accordance with the expectations of

Melinda, S. and Zuliarni, S.

Effect of Service Failure on Ferry Passenger Switching Behavior: The Role of Dissatisfaction.

DOI: 10.5220/0010355202910297

In Proceedings of the 2nd International Conference on Applied Economics and Social Science (ICAESS 2020) - Shaping a Better Future Through Sustainable Technology, pages 291-297

ISBN: 978-989-758-517-3

 2021 by SCITEPRESS – Science and Technology Publications, Lda. All r ights reserved

291

service users. When that happens, service failures

occur. Service Failures are situations where the

services provided are not successful in realizing the

expectations of customers (Michel, 2001). So far,

there are still failed services provided by PT. XYZ

officers. If there is a failure in the services provided

by the company and cause passengers to feel less

satisfied, then this is called customer dissatisfaction.

Thus, service failures are a failure of PT. XYZ

officers in providing services to customers. The failed

service can make customers feel dissatisfied so that

it can lead to brand switching behavior from

customers. So, brand switching behavior occurs

because of service failures and customer

dissatisfaction.

1.2 Research Purposes

This study investigated how service failures affect

dissatisfaction and brand switching behavior on PT.

XYZ ferry passengers. The research results help the

company to understand the real reasons why

customers dissatisfied and switch to another brand.

So the company can be improving and developing a

strategy to avoid service failures. Based on the

research background, the following purposed are

listed:

1. To analyze the effect of service failures on brand

switching behavior.

2. To analyze the effect of service failures on

customer dissatisfaction.

3. To analyze the effect of customer dissatisfaction

on brand switching behavior.

4. To analyze the effect of service failures on

brand switching behavior through customer

dissatisfaction.

of each service provided will be different whether it

is satisfying or not.

According to Mccoll-Kennedy & Sparks (2003)

there are four sources of service failures, there are

service, service provider, things out of control, and

customers. Service or facility provided by the service

provider that is less than optimal, such as the wrong

product/service, the wrong price, and the waiting

time is too long. From service providers, service

failures can occur because of improper employee

actions and behavior. The things out of control are

things that the company does not want and cannot

avoid during the process of providing services to

passengers caused by natural factors and other

organizational behavior. Then, the service failures

can originate from the behavior of the customer itself

and also because of other customer behavior.

2.2 Brand Switching Behavior

Brand switching according to Peter & Olson (2002)

is a buying pattern that has the characteristics of a

change or change from one brand to another. Hawkins

& Mothersbaugh (2010) said brand switching is the

result of customer dissatisfaction with products that

make customers stop buying or using products on

certain brands and replace them with other brands.

Meanwhile according to Ray (2019) brand switching

is a loyal process of one product or service for a

certain period but can also decide to exchange with

another, due to dissatisfaction or changes in

preferences.

According to Mazursky, LaBarBera, & Aiello

(1987), factors that influence brand switching are

intrinsic motives and extrinsic incentives. Intrinsic

Motives are factors that come from the customer.

The dimension is that the customer does not like the

product/service used and the customer moves to

another brand because they want to try a new

product/service. Extrinsic Incentives are factors that

affect brand switching that comes from outside the

customer. Its dimensions are the products/services

offered by competitors are cheaper and competitors

offer attractive promotions.

Then, the factors that influence brand switching

intentions according to Firmansyah (2019) are

advertising, price, product quality, word of mouth

communication, personality, brand image, variety

seeking, customer dissatisfaction and promotion. Of

all the factors that have been mentioned, there are

product quality or service failures and customer

dissatisfaction as factors that influence brand

switching behavior, so that the worse the services

provided and can cause customer dissatisfaction and

greater chances of customers to switch brands. So,

brand switching behavior can arise because of their

own desires or no longer want to use the old brand

again due to perceived dissatisfaction.

2.3 Customer Dissatisfaction

According to Kotler & Keller (2009) dissatisfaction

is a situation where customers' expectations are

higher or not in accordance with the services they

receive from marketers. The opposite of quality

service is service that fails, the consequence that must

be accepted is the dissatisfaction of the customer.

Customers have spent money and time to get

satisfaction for themselves (Laws, 2004). The use of

services is temporary so that there can be many

possibilities of contact between service providers and

customers (Kaihatu, Daengs, & Indrianto, 2015). Lu,

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Lu, & Wang (2012) formed customer dissatisfaction

in 3 types, there are overall dissatisfaction with the

product / service, dissatisfaction due to negative

experiences felt more than positive experiences and

general dissatisfaction which is not happy with the

product / service offered.

In addition, García & Pérez (2011) stated that

dissatisfaction due to service failure caused customer

anger and regret. Then, the things that are often

experienced by customers who are dissatisfied with

the attitude of officers according to Kaihatu, Daengs,

& Indrianto (2015) are the company employs service

personnel who have a sour or sullen face and a rude

way of speaking, employees give a passive attitude

when serving customers like reluctantly or serving

customers while chatting with friends, being

discriminatory with customers is like differentiating

services provided between one customer and another

and underestimate customers.

3 METHODOLOGY

3.1 A Research Framework

Service failures are failures of officers in a company

in providing services to customers. The failed service

can make customers feel dissatisfied so that it can

lead to brand switching behavior from customers. So,

brand switching behavior can arise because of service

failures and customer dissatisfaction. From the

description presented, the research model that will be

conducted by researchers is illustrated in Figure 1.

Figure 1: A Research Framework

3.2 Research Hypothesis

Hypotheses that can be developed from the research

framework are:

H1: Service failures affect brand switching

behavior.

H2: Service failures affect customer

dissatisfaction.

H3: Customer dissatisfaction affects brand

switching behavior.

H4: Service failures affect brand switching

behavior through customer dissatisfaction.

3.3 Population and Sampling Methods

The population in this study were all PT. XYZ

passengers both Indonesian and overseas citizens who

came from Stulang Laut to Batam or who departed

from Batam to Stulang Laut.

The sample used is non-probability sampling with

purposive sampling. The sample of this study was

passengers who departed from Batam to Stulang Laut

who had used PT. XYZ at least 2 times and were

at least 17 years old, totalling 186 respondents.

4 ANALYSIS AND RESULTS

Data analysis using the statistical software SPSS 23,

the study of statistical methods used are as follows:

4.1 Validity and Reliability Analysis

Validity test is used to determine the level of validity

of the questionnaire instrument used in data

collection. Then also to find out whether the items

on the questionnaire can be examined. Items are valid

if r score > r table, conversely if r score < r table

then the item is invalid. R table seen by calculating N

- 2, and 186 - 2 = 184. Then, it can be seen the value

of R Table for 184 samples is 0.1439.

After processing the data, it was found that all the

r scores calculated for each question item on service

failures, brand switching behavior and customer

dissatisfaction > r tables, the results can be seen in

Table 1. So, the data in this study are valid.

Table 1: Validity Test Results.

les R Scores R Ta

les Result

X1 0.296 0.1439 Vali

X2 0.334 0.1439 Vali

X3 0.367 0.1439 Vali

X4 0.609 0.1439 Vali

X5 0.507 0.1439 Vali

X6 0.408 0.1439 Vali

X7 0.438 0.1439 Vali

X8 0.273 0.1439 Vali

X9 0.273 0.1439 Vali

X10 0.275 0.1439 Vali

X11 0.683 0.1439 Vali

X12 0.708 0.1439 Vali

X13 0.680 0.1439 Vali

X14 0.663 0.1439 Vali

X15 0.551 0.1439 Vali

Effect of Service Failure on Ferry Passenger Switching Behavior: The Role of Dissatisfaction

293

X16 0.350 0.1439 Vali

X17 0.443 0.1439 Vali

X18 0.624 0.1439 Vali

Y1 0.770 0.1439 Vali

Y2 0.737 0.1439 Vali

Y3 0.550 0.1439 Vali

Y4 0.629 0.1439 Vali

Y5 0.724 0.1439 Vali

Z1 0.920 0.1439 Vali

Z2 0.912 0.1439 Vali

0.895

0.1439

Vali

Reliability test is used to determine the

consistency of the measurement if used twice or more

by using the same measuring instrument. The test

method is to compare the Cronbach alpha values with

a minimum Cronbach value of 0.6. So, if the value

obtained > 0.6 then the questionnaire is reliable. After

processing the data, it was found that the Cronbach

alpha values of all variables > 0.6, shown in Table

2. The value of Cronbach alpha of service failures is

0.800, brand switching is 0.717, and customer

dissatisfaction is 0.895. Then it can be concluded that

the data of this study are reliable.

Table 2: Reliability Test Results

Variables

Cronbach

Minimum

Values

Result

Service

Failures

0.800

0.60

Reliable

Brand

Switching

Behavio

(Y)

0.717

0.60

Reliable

Customer

Dissatisfaction

(Z)

0.895

0.60

Reliable

4.2 Descriptive Statistic Analysis

Descriptive analysis is used to describe the

characteristics of each variable. This analysis presents

data into a frequency distribution table, calculating

the average value, total score, and the level of

achievement of respondents (TCR) and interpreting

it. Riduwan (2006) said to find the level of

achievement of the respondents answers used the

following formula:

The criteria for the level of achievement of

respondents (TCR) can be classified as follows:

1. 0 - 25% = Very Low

2. 26% - 50% = Low

3. 51% - 75% = Hi

4. 76% - 100% = Very High

Based on the results, from 186 respondents who

participated in this study were mobilized by

Indonesian citizens. Then, the majority of

respondents who fill in are male. The age range of

respondents was 25 - 44 years who filled out the

research questionnaire. The majority of respondents

who participated had worked as employees and the

purpose of travelling is for work.

After that, the distribution of respondents answers

was analyzed for each question item that could

support each research variable. Overall, service

failures variable resulted in accumulation of an

average score of 3.25 with the TCR reaching 81.35%.

So, it can be concluded that the level of service

failures can disappoint customers when using PT.

XYZ services are very high. Brand switching

behavior variables produce an accumulation of an

average score of 3.39 with TCR reaching 84.68%. So,

it can be concluded that the level of brand switching

behavior is very high. Then, customer dissatisfaction

variable produces an average accumulation of scores

of 1.69 with TCR reaching 42.25%. So, it can be

concluded that the level of dissatisfaction from

customers using PT. XYZ services are low.

4.3 Classic Assumption Test

For the normality test, the data is calculated through

the Skewness & Kurtosis Test and for a significance

of 0.05, it is said to be normal if the Z value is

<1.96. The test results are Zskewness value -1.52

<1.96 and Zkurtosis -1.59 <1.96. Then, the residual

data are normally distributed and the regression

model meets the normality assumption.

The linearity test has criteria if the value of sig.

Deviation from Linearity> α, then the relationship

between variables is linear. The results found are the

relationship between service failures variables with

brand switching behavior has a value of 0.171> 0.05,

service failures with customer dissatisfaction have a

value of 0.218> 0.05 and customer dissatisfaction

with brand switching behavior has a value of 0.879>

0.05. Then, it can be concluded that the relationship

between variables is linear.

Then, multicollinearity test is used to find out

whether there is a strong correlation between

independent variables by looking at the value of VIF

(Variance Inflation Factor) does not exceed 4 or 5.

The results found are service failures and customer

dissatisfaction has a VIF value of 1,082 <of 5, so

there is no multicollinearity in this research.

Heteroskedasticity test uses the Glejser Test, by

regressing independent variables on the absolute

value of the residual. A good model is not

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heteroskedasticity if t value with probability sig>

0.05. The results found are service failures and

customer dissatisfaction has a Sig. > 0.05 which is

0.615 and 0.497. So, there is no heteroskedasticity in

this study.

The autocorrelation test was tested with the

Durbin Watson Test provided that there was no

autocorrelation in the regression model. The results

show that the DW value is greater than the dU value,

which is 1.934> 1.7818, so there is no positive

autocorrelation. Then, if (4 - DW value)> dU, which

is 2.066> 1.7818 then there is no negative

autocorrelation. So, it can be concluded that there is

no positive or negative autocorrelation and the

research is convincing and can be concluded.

4.4 Path Analysis

Path analysis is used to measure the effect of a

variable on other variables directly or indirectly

(Olobatuyi, 2006). This analysis uses a path diagram

that aims to conceptualize a problem or test complex

hypotheses. From this diagram, the effects of the

independent variables on the dependent variable can

be calculated both directly and indirectly. The effects

between these variables can be seen from the path

coefficient. The path analysis equation model used in

this study is as follows:

Z = P1X + ε1 ………… .. Substructural 1

Y = P2X + p3Z + ε2 …… Substructural 2

From the output data processed using SPSS, the

equation is obtained as follows:

1. Customer Dissatisfaction = (-) 0,275 Service

Failures + 0.9638 …………… Substructural 1

2. Brand Switching Behavior = 0.323 Service

Failures + (-) 0.161 + 0.9219 .. Substructural 2

If formed in the diagram, equation substructural 1

and 2 shown in Figure 2.

Figure 2: Path Analysis Diagram

4.5 Hypothesis Testing

T-test is used to test partially. This research is two-

way research, so if the t score > t table or t score

< -t table, then there is an effect of independent

variables on dependent variable or hypothesis is

accepted. The t-test uses α = 5% and the degree of

freedom (df) of the test is n - k = 186 - 3 = 18, so the

t table value is 1.973.

Based on the results shown in Table 3, it indicates

that service failures affect brand switching behavior

(H1 accepted), service failures affects dissatisfaction

(H2 accepted) and customer dissatisfaction affects

brand switching behavior (H3 accepted).

Furthermore, to test the fourth hypothesis using

the Sobel test. This test is used to test the strength of

the indirect effect of independent variables to the

dependent variable through intervening variables.

The calculation is performed using the formula

developed by Ghozali (2011) as follows:

Table 3: t-Test Results

Model

Unstandardized Coefficients Standardized Coefficients

Sig.

B Std. Error Beta

(Constant) 11,798 1,628 7,246 ,000

Service Failures ,108 ,023 ,3234,586 ,000

Custome

Dissatisfaction -,215 ,094 -,161 -2,284 ,023

Dependent Variable: Brand Switching Behavior.

Model

Unstanda

dize

Coefficients Stan

ize

Coefficients

Sig.

B Std. E

Beta

(Constant) 9,229 1,076

8,579 ,000

SF -,068 ,018 -,275-3,883 ,000

Dependent Variable: Customer Dissatisfaction.

Effect of Service Failure on Ferry Passenger Switching Behavior: The Role of Dissatisfaction

295

From the results, it was found that the value of t

scores 2.531 > t table 1.973. Then, there is a

mediating effect between the independent variables

on the dependent variable. So, it can be concluded

that the H4 is accepted and service failures have an

indirect effect on brand switching behavior through

customer dissatisfaction.

4.6 Coefficient of Determination

Then, for the test results, the coefficient of

determination is the Adjusted R

value is 0.150, which

means the ability of the model of the independent

variable (service failures & customer dissatisfaction)

explains the variation of the dependent variable

(brand switching behavior) is 15%.

4.6.1 The Effect of Service Failures on

Brand Switching Behavior

Based on the results of tests with the t-test, it was

found that service failures affect brand switching

behavior on PT. XYZ ferry passengers (H1 accepted).

Service failures affects brand switching behavior

because the t scores in the influential area. Thus, the

behavior of switching brands from passengers was

created because customers felt disappointed by the

failed service provided by PT. XYZ officers.

The results are the same as the results of research

from Awan, Nadeem & Faisal (2016) in their research

that explained that service failures affect brand

switching in the telecommunications industry related

to cellular service providers in Punjab-South

Pakistan. Then, the researchers say that if the failure

of the service increases, the desire to switch brands

from customers can increase as well.

4.6.2 The Effect of Service Failures on

Customer Dissatisfaction

Based on the results of tests with the t-test, it was

found that service failures affect customer

dissatisfaction on PT. XYZ ferry passengers (H2

accepted). Service failures affect customer

dissatisfaction because of the t scores in the

influential area. Thus, with the occurrence of a

service that fails will give dissatisfaction to the

customer.

The results of this study are in line with research

from Janjua (2017) which in his research found that

the type and intensity of service failures affected the

level of customer dissatisfaction. Then, it is also

explained that the size of the service failures that

occur will affect customer dissatisfaction. So, the

level of dissatisfaction with the customer depends on

how big or how often the intensity of service failure

occurs.

But the research of Rokhyadi & Putri (2017) has

the result that service failure and dissatisfaction have

a less powerful influence. The researchers explain

that the level of service failure felt by visitors is still

at reasonable level. So, if there is a failure in

providing service when serving customers, it does

not always make the customer immediately feel

disappointed or dissatisfied with the service

provided by the officer.

4.6.3 The Effect of Customer Dissatisfaction

on Brand Switching Behavior

Based on the results of testing with the t-test, it was

found that there was an effect of customer

dissatisfaction on brand switching behavior on PT.

XYZ ferry passengers (H3 accepted). Customer

dissatisfaction affects brand switching behavior

because of the t scores in the influential area. If

customers are not satisfied with the services provided,

they will switch from PT. XYZ by looking for

variations and try the services of other companies that

offer the same service, or switch because the prices

offered by competitors are cheaper and offer

attractive promotions.

In research of Widianti & Trinanda (2019) also

explained that customer dissatisfaction affects brand

switching behavior. In their research, it was stated

that the higher the customer dissatisfaction, the higher

brand transfer decisions. And conversely, the lower

the customer dissatisfaction, the decision to move the

brand will be lower too.

4.6.4 The Effect of Service Failures on

Brand Switching Behavior through

Customer Dissatisfaction

Based on the Sobel test results, it was found that

service failures affected brand switching behavior

through customer dissatisfaction on PT. XYZ ferry

passengers (H4 accepted). From these results indicate

that customer dissatisfaction as a mediating variable

plays a role in the effect of service failures on brand

switching behavior. So it can be concluded that if the

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customer gets a service that fails, the customer will

switch to another brand because of the feeling of

dissatisfaction due to receiving the failed service.

The results of this study are strengthened by the

results of research from Buttle & Burton (2001)

which in his research explained that customers will

leave a brand because the customer is not satisfied

due to a failed service. So, if a customer experiences

a service that fails then they are not satisfied with this.

So, if customer dissatisfaction is out of tolerance then

they will take action that is certainly not desired by

all companies, which is to switch to another brand.

5 CONCLUSIONS

Based on the test results it can be concluded that

service failures affect brand switching behavior on

passengers using PT. XYZ. So brand switching

behavior of passengers is created because customers

feel disappointed from service failures provided by

PT. XYZ.

The test results also concluded that service

failures affect customer dissatisfaction on passengers

using PT. XYZ. So the occurrence of service failures

will cause dissatisfaction from customers of PT.

XYZ.

Then, the results that the influence of customer

dissatisfaction on brand switching behavior on

passengers using PT. XYZ If customers are not

satisfied with the services provided, they will switch

from PT. XYZ by looking for variations and try the

services of other companies.

This study also found that service failures affect

brand switching behavior through customer

dissatisfaction on passengers using PT. XYZ. Then

it can be concluded that if the customer get service

failures, the customer will switch to another brand

because dissatisfied wih the failed service.

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