UNDERSTANDING CONTRACTOR SELECTION DECISIONS: THE MEDIATING ROLE OF CUSTOMER SATISFACTION

Abstract

This study aims to examine the effect of price and service quality on contractor decision-making, with customer satisfaction as an intervening variable. The research employs a descriptive and verificative design using a quantitative approach. Data were collected through questionnaires measured on a Likert scale. The population and sample consisted of 100 employees of PT JI, selected using a saturated sampling technique. Data analysis was conducted to test both direct and indirect relationships among variables.

The results indicate that price, service quality, and satisfaction significantly influence decision-making. Price has a positive and significant effect on decisions both directly and indirectly through satisfaction, indicating partial mediation. Similarly, service quality also shows a positive and significant effect on decisions, with satisfaction acting as a partial mediator. However, the direct effects of price and service quality on decisions are stronger than their indirect effects through satisfaction.

These findings suggest that contractor companies should maintain competitive pricing while enhancing service quality to improve customer satisfaction and decision outcomes. Continuous evaluation, improved service delivery, and customer oriented strategies are essential to strengthen competitiveness and foster long-term customer loyalty.