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International Journal of Disaster Recovery and Business Continuity

Vol.11, No. 3, (2020), pp. 255–264

Customer Perceived Value to Build Intention to Return to Agro-tourism in


Bali
Study of the Covid Era 2020
Dewa Ayu Agung Putri Ratnasari *
Nengah Landra**
I Gst Agung Eka Teja Kusuma **
Anak Agung Putu Agung**

*Post Graduated, University of Mahasaraswati Denpasar Bali-Indonesia


**Lecture, Post Graduated, University of Mahasaraswati Denpasar Bali-Indonesia

Abstract

This paper reveals promotional weaknesses and service quality ignores perceived value to build return-
visit intentions. This research is motivated by the desire to measure the importance of promotion and service
quality in creating perceived value in order to build intention to return to visit. Insights from various
literatures provide an explanation that promotion and service quality can build value with customers for
long-term business continuity. The important idea is that the promotion and quality of services that have
been designed in the context of the agro-tourism business is meaningless if it is unable to provide the
perceived value of the customer so that it is able to compete to increase the intention to visit again. This
study used customer data in an agro-tourism in Bali. This type of quantitative research uses an existing
measurement scale with a PLS-based SEM analysis tool. The Covid 19 situation has provided new insights
into the context of agro-tourism. Although promotion is able to increase customer perception about value,
it will not be able to stimulate intention to come. Service quality is able to stimulate intention to come, but
unable to build value because customers think the sacrifices made to come are still greater than the benefits
they feel. This finding means that no matter how great the promotion and service quality is to build value
in the Covid-19 situation, but the value created in the minds of customers is very difficult to build the
intention to come Contribution: promotion and service quality built on agro-tourism is led to the creation
of greater value for increase and win the competition in increasing return visits.

Keywords: promotion, service quality, customer perceived value, revisit intention, Bali.

1. Introduction
Tourism is an important concern as a strategic sector of economic development (Sacco, & Cassar,
2019; Ye, 2008), because tourism has provided economic benefits (Jean-Pierre and Perrain, 2016; Titus et
al., 2019; Li et al., 2020) ). Bali is a part of Indonesia whose economic life has greatly benefited from the
development of the tourism sector. For decades, Bali has enjoyed a surplus from the tourism sector.
However, when the Covid 19 pandemic stagnated Bali's economy. The pandemic is very detrimental to Bali
because no one travels to take the risk of contracting this deadly disease. One of the tourism businesses
affected by the pandemic is Jambe Asri Agro tourism.

Jambe Asri agro tourism is one of the agro or plantation tourism destinations in Bali which offers
various variants of civet coffee. Luwak coffee is known for its distinctive taste and high quality coffee. The
number of visitors always increases even though they have not been able to reach the predetermined target.
When Covid 19 in Wuhan had begun to emerge, foreign visitors who were still in Bali and happened
to visit Jambe Agro tourism said they were very impressed with the condition of the quality of Jambe agro-
tourism services so that they felt they had nothing to lose so they intended to visit again. They got
information about this agro-tourism thanks to promotions from the travel agency. Although the visitors'

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Copyright ⓒ2020 SERSC
International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 255–264

statements were strong enough to come back, there are doubts about the strength of this intention when
Covid occurred. This phenomenon encourages conducting studies on the effect of service quality,
promotion on customer perceived value perceived by visitors to create their intention to come back.
The results of an empirical study of the effect of service quality on customer perceived value show a
significant positive (Wang and Chen, 2012, Mathur, and Gupta, 2019). Research by Ryu et al., (2012) in
their research shows that service quality has no significant effect on customer perceived value. The existing
research is mostly done in restaurants. Very limited research was conducted on agro-tourism to prove the
effect of service quality on consumer perceived value to satisfy customers and support a positive evaluation
of repurchase intention.

The phenomena and research gap that have been described provide clear directions regarding the
formulation of the research problem, namely: Does promotion affect the value perceived by customers,
does promotion affect the intention to visit again, does service quality affect the perceived value of the
customer, does service quality affect the intention revisit, whether the perceived value affects the intention
to return.

2. Literature Review
Promotion
According to Kotler & Gary (2018), the promotion mix is a combination of promotional tools used
by the company to communicate value and establish relationships with customers. The general components
of the promotion mix consist of four, namely advertising, public relations, sales promotion / direct
marketing, and personal selling (Bosce et al., 2012; Eric , 2012; and Kotler and Keller, 2011). According
to Kotler and Keller (2016), there are four dimensions of promotion, explained as follows 1. Advertising,
which is one form of impersonal communication used by goods or service companies, 2. Personal selling
is the nature of individual selling, it can be said more flexible because salespeople can directly tailor
offerings to the needs and behavior of each prospective buyer, 3.Public relations is another important
marketing tactic in which companies not only have to deal with customers but also have to deal with a
larger public pool. 4. Sales promotion and direct marketing (sales promotion / direct marketing) is a type
of marketing by directly meeting consumers to inform and explain about the product. The realization of
promotional activities in this research only uses two types of promotion carried out by management, namely
advertising (advertising) and sales promotion / direct marketing.

Quality of Service
The definition of service according to Kotler & Keller (2016) is any action that a party can offer to
another party, which is basically intangible and does not result in any ownership. Service quality can be
identified by comparing consumers' perceptions of the real service they receive or receive with the real
service they expect and want for service or company attributes.
Experts have developed a service quality dimension known as SERQUAL developed by Parasuraman et al.
(1988) which consists of five dimensions, namely tangible, reliability, responsiveness, assurance, and
empathy.
The experts then developed a SERQUAL scale on ecotourism suitable for use in environment-
based agro-tourism Khan (2003). The ECOSERVE scale consists of six dimensions and a total of 29
indicators. Menuru Khan (2003) used environmental and socio-cultural items to measure the tangible
dimensions of the environmentally friendly tourism context. The six dimensions are as follows: 1. Tangible,
namely material facilities and the appearance of personnel reflecting local influences, 2. Environmental-
based existence (eco-tangible), namely facilities and physical equipment that are safe and suitable for the
environment, 3. Reliability (reliability) namely the ability to perform services that are promised to be
reliable and accurate, 4. Responsiveness, namely the willingness to help customers and provide fast service,
5. Assurance, namely knowledge, politeness and their ability to convey confidence and confidence to
provide information needed, 6. Empathy (empathy), namely the special full attention given to customers.

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International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 255–264

Customer Perceived Value


Kotler and Keller (2012) define consumer perceived value as the difference between total customer
value and total customer cost. Total customer value is a set of benefits expected by the customer from the
product or service.
Total customer cost (total customer cost) is a set of costs expected by consumers which are incurred
by consumers to evaluate obtaining, using and disposing of products and services. Schiffman and Kanuk
(2004: 14) define customer value as the ratio between the benefits obtained by consumers both
economically, functionally and psychologically to the resources (money, time, energy, and psychology)
used to obtain these benefits, namely product benefits relate to the reliability, durability, performance and
resale value of the product or service offered.
Zeithaml , an expert in the area of services marketing and service quality (1988) have identified
the factors that make up consumer perceived value, saying there are four dimensions that make up customer
perceived value. Holbrook (1996) divides into six dimensions and Sheth, Newman and Gross (1991) states
there are five dimensions. This study uses four aspects as dimensions of consumer perceived value, namely;
Emotional value, social value, quality / performance value, and price / value of money (Sweeney and Soutar,
2001).

Intention to return
Ajzen (2005) intention is an antecedent of an apparent behavior. Intention can accurately predict
a variety of behavior tendencies. Based on the theory of planned behavior, intention is a function of the
three main determinants, first is the personal factor of the individual, second is how the social influence is,
and the third is related to the control of the individual (Ajzen, 2005).
The intention to buy back in the context of tourism is the intention to visit again. Wen-Hei et al
(2017) have developed indicators of intention in the tourism sector specifically as follows: intention to
come back, choice of the best quality of service, recommending to others, and the best choice to visit.

Hypothesis
H1. Promotion has a positive effect on the intention to return to visit.
H2. Promotion has a positive effect on the intention to visit again.
H3. Service quality has a positive effect on customer perceived value.
H4 Service quality has a positive effect on intention to visit again.
H5. Customer perceived value has a positive effect on repurchase intentions

3. Method
This study uses a quantitative method research design to test the models and instruments that have
been developed by previous researchers through inferential statistics, namely by using Structural Equation
Modeling (SEM), with the Partial Least Square (PLS) approach. There are four variables involved in this
study, namely: promotion whose indicators were adapted from Kotler & Keller. (2016), the quality of
service adapted from the Khan indicator, (2003) the value felt by customers whose indicators were adapted
from Sweeney and Soutar (2001), and intention to visit again whose indicators were adapted from Wen-
Hai et al. (2017). The indicators of each construct have been tested empirically and have been used in
previous empirical studies. All items as research instruments used a five (5) point Likert scale ranging from
"strongly disagree (1)" to "strongly agree (5). The results of the validity test by involving 30 respondents
showed a significant positive correlation and Cronbach Alpha for each dimension and construct was above
0.70, according to the criteria (Ghozali, 2014).
In this study the population is tourists visiting Jambe Asri Agrotourism in February and March
2020. Sampling or respondents in this study are using non-probability sampling techniques, where sampling
does not take into account all members of the population having the same opportunity to be randomly
selected as sample. Respondents were determined using purposive sampling technique. The sample
measurement method was using the Slovin formula and obtained samples that could still be tolerated or
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International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 255–264

desired. With a confidence level of 95% or Z-1.96 and Moe of 10%, the number of samples can be
determined by 96 respondents.
The data analysis technique was used to test the empirical model and hypotheses proposed in this
study. The analysis technique used is the Structural Equation Model (SEM) using an approach Partial Least
Square (PLS) and SmartPLS as the software. According to Hair et al., (2010) PLS is designed because it
does not assume that the data must use certain measurements, the sample size is small, and can be used for
theory confirmation.

4. Result
Data Analysis
The information in Table 1 shows that all variables have an AVE value above 0.5 which fulfills the
requirements for discriminant validity (Ghozali, 2014). The square root of average variance extracted
(√AVE) value of each variable is mostly above the correlation coefficient value between variables.

Table 1
Value of AVE and √AVE
KORELASI
VARIABEL AVE √AVE
(X1) (X2) (Y1) (Y2)
Promotion (X1) 0.583 0.764 1.000
Quality of service (X2) 0.606 0.778 0.148 1.000
CPV (Y1) 0.526 0.725 0.767 0.159 1.000
Revisit intention (Y2) 0.753 0.868 0.187 0.872 0.212 1.000

The results of the inner model based on the predictive relevance Q-Square obtained a value of
0.904, meaning that the information contained in the data is 90.4% and can be explained by the model,
while the remaining 9.6% is explained by errors and other variables not contained in this study. The
predictive relevance Q-Square value criterion is categorized as having relevant predictive value if the Q-
Square value is> 0, on the other hand, if the Q-Square value <0 indicates the model has less relevant
predictive value.

Hypothesis testing
Table 4 shows the results of the hypothesis testing. H1 test results (T-Statistics> 1.96; ß = 0.760)
that promotion has a positive and significant effect on the value felt by customers. H1 can be supported. H2
(T-statistic <1.96; ß = 0.006) that promotion does not affect the intention to visit again. Hypothesis 2 is not
supported. Hypothesis 3 (T-statistic <1.96; ß = 0.047), service quality has an effect on the perceived value
and cannot be proven, so H3 is not supported.
Hypothesis 4 (T- Statistics> 1.96; ß = 0.860) The hypothesis about service quality has a positive
and significant effect on intention to return to visit. H4 supported. The last hypothesis H5 (T-statistic <1.96;
ß = 0.472) is that the value perceived by customers does not have a significant effect on intention to return
to visit. H5 is not supported.

Table 1
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International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 255–264

Hypothesis Testing Results


Path
Coefficient
No Relationship Between Variables T-statistic Information
Bootstrappin
g
1 Promotion (X1) → Customer perceived value(Y1) 0.760 9.470 Significant
Not
2 Promotion (X1) → Revisit intention(Y2) 0.006 0.075
Significant
Not
3 Quality of service(X2) → Customer perceived value(Y1) 0.047 1.010
Significant
4 Quality of service (X2) → Revisit intention (Y2) 0.860 21.778 Significant
Not
5 Customer perceived value (Y1) → Revisit intention (Y2) 0.071 0.902
Significant

Promotion
0.006 (NS)
0.760 (S)
Customer Revisit
Perceived
0.071(NS)
Intention
Value

Service 0.047(NS)
0.860 (S)
Quality

Figure 1
Direct Influence
Note: S = Significant; NS = Not Significant

Examination of Mediation Effects


Examination of the effect of mediation according to Hair et al., (2010), namely (a) examining the
direct effect of the independent variable on the dependent variable in the model by involving the mediating
variable. (b) Examining the effect of the independent variable on the dependent variable in the model
without involving the mediating variable, (c) examining the effect of the independent variable on the
mediating variable, (d) examining the effect of the mediating variable on the dependent variable.
Table 2 shows the results of testing the mediating role of the variable value perceived by customers (Y1)
on the indirect effect of promotion (X1) and service quality (X2) on intention to return to visit (Y2).

Table 2
Recapitulation of Test Results for Mediation Variables
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International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 255–264

No Mediation of Customer Effect Information


Perceived Value (CPV) (A) (B) (C) (D)
Variables on:
1 Promotion (X1) 🡪 Revisit 0.072 0.201 0.767 0.161 (No. No Mediation
intention (Y2) (No. (Sig) (Sig) Sig)
Sig)
2 Quality of service (X2) 🡪 0.860 0.872 0.159 0.076 No Mediation
Revisit intention (Y2) (Sig) (Sig) (Sig) (No. Sig)

Table 2 shows the results of the variable value perceived by customers that cannot meet the
requirements of full mediation or partial mediation, so it means that the variable value perceived by
customers cannot mediate the promotional variables and service quality on the intention to return to visit.

Figure 2
Result of PLS Analysis
Discussion
The results of hypothesis testing show that promotion and service quality cannot be used to predict
customer perceived value to influence the intention to come back. This means that tourists will have the
intention to visit again if the promotion and quality of service are able to shape the perceived value of the
customer. The pandemic condition has caused concern over the spread of the virus which has caused tourists
to be reluctant to visit. The characteristics of tourists who are caught in this sample have a realistic way of
thinking. Pandemic conditions such as the current promotion can increase the perceived value but customers

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International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 255–264

do not allow them to visit again in a situation full of risks. The risk of a pandemic is different from the risk
of a natural disaster. The risk perception of foreign tourists regarding the 2018 eruption of Mount Agung
in Bali has no influence on the decline in the intention of tourists to come to Bali (Adnyana et al., 2020).
The results of the tough interview showed that the eruption of the Mountain had a real form, but the Covid
19 pandemic was unclear and it was difficult to see the threat of danger. Service quality will not be able to
create value in the minds of tourists because it is not clear that the threat of Covid-19 and even personal
service can spread the virus.
Even though promotion is able to increase value which is indicated by a positive and significant
influence on the value perceived by customers, the value created from the promotion is still unable to
influence the intention to come. The results of this study are supported by the results of research conducted
by Teng & Wang (2015), namely sales promotions have a positive effect on the perceived value of
consumers in fruit and vegetable stores in Taiwan. Research by Xiao et al., (2019), and Chen & Lin (2019)
states that promotion has a positive and significant effect on perceived value. The insignificant effect of
promotion on intention to return to visit which is produced in this study supports the research of Batoteng
et al., (2019). However, research by Wen-Hsiang et al (2013) on the context of tourism destinations reveals
that promotion has a positive and significant effect on Australian tourist visits in Vietnam.
The results of this study support research conducted by Liou & Tsao (2010), Ryu & Kim (2012)
that service quality does not have a significant effect on customer perceived value. Service quality has a
positive and significant effect on intention to return to visit. This supports previous studies (Mensah et al.,
(2019); Timur (2018); and Jayampati et al., (2019) stated that service quality affects the intention to return
to visit.
The perceived value is not proven to have an effect on the intention to visit again. This supports
the research conducted by Ayuni (2017) which states that in this study the perceived value has no significant
effect on the intention to return to visit. Chang and Backman (2013) and Suhud et al., (2016) state that the
value perceived by customers does not significantly affect the intention to visit again.

5. Conclusion
Based on the results of the analysis and discussion that has been carried out in this study, it can be
concluded as follows:
1) Promotion has a positive and significant effect on the value perceived by customers. These findings
illustrate that the better the promotional activities, the increased value perceived by customers in Jambe
Asri Agrotourism.
2) Promotion has no effect on the intention to visit again. This research was conducted in covid-19
conditions, although the promotions carried out are interesting and memorable, it does not mean that
customers will come to visit Jambe Asri AgroTourism
3) . This finding illustrates that although the quality of service obtained by customers is good, it is not
necessarily an effect on increasing the value perceived by Jambe Asri Agro-tourism customers.
4) Service quality has a positive and significant effect on intention to return to visit. These findings
illustrate that the better the quality of service, the greater the desire to revisit Jambe Asri Agrotourism.
5) The value felt by customers has no effect on the intention to visit again. This research was conducted
when the world was being hit by the spread of the Covid-19 virus. These findings illustrate that in this
condition, even though the perceived value is good, it does not mean that customers have the intention
to visit Jambe Asri agrotourism again.

Suggestions
Some suggestions that can be given regarding the results of this study include:
1) Optimizing the value felt by customers and the intention to return to Jambe Asri Agrotourism should
pay more attention and increase the value felt by customers and better intention to return to visit.
Therefore we need efforts to promote and develop better promotion and service quality.
2) Promotional variables, there are items with the value, lowestnamely the length of a promotional
program. These results can provide input to increase the length of the promotional program in Jambe
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International Journal of Disaster Recovery and Business Continuity
Vol.11, No. 3, (2020), pp. 255–264

Asri Agro tourism. By increasing the length of the form of the promotion program, it will improve
value, perceived customer and intention to come back to Leih.
3) The service quality variable, there are items with the lowest value, namely the officers have
knowledge in answering questions from customers. These results indicate that the quality of service
that is owned is still lacking in answering questions from customers, so it is necessary to evaluate it
in improving service quality.
4) The variable value perceived by customers is the item with the lowest value, namely the convenience
of using and increasing the good perceptions of others. These results can provide input to improve
customer comfort and good perceptions of others on Jambe Asri Agrotourism. By fostering
convenience to customers so as to increase the value felt by customers.
5) The variable of intention to visit again is the item with the lowest value, namely the choice of the best
place to visit. These results can provide input to foster a sense of the customer that Jambe Asri
Agrotourism is the best choice of place to visit, so that it will increase the perceived value and the
intention to visit again.

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