The Effects of Price Perceptions, Food Quality, and Menu

Variations on Ordering Decisions and Their Impact on

Customer Loyalty in Online Culinary Products
Rahayu Lestari1, Tiara Pradani2, Kumba Digdowiseiso3
1,2,3
Faculty of Economics and Business, Universitas Nasional, Jakarta, Indonesia
[email protected]

Abstract Keywords
price perceptions; food quality;
This study aims to investigate whether perceptions of price,
menu variations; ordering
quality of food, and menu variations have a significant effect on
decisions; customer loyalty;
ordering decisions and their impact on customer loyalty in online online culinary products
culinary products among Millennials. Our study put more
emphasize on improving the ordering decisions and consumer
loyalty in culinary businesses. We utilize a Purposive Sampling
technique, with as many as 100 respondents using proportional
random sampling. The analytical method used is statistical-
partial least squares by incorporating SPSS Version 24.00 and
SmartPLS 3.0 software. The results showed that price perception
had an insignificant effect on ordering decisions. In addition,
food quality had a positive and significant effect on ordering
decisions. Meanwhile, menu variations produced an insignificant
effect on ordering decisions. Similarly, menu variations showed
an insignificant effect on ordering decisions. Price perception
had a positive and significant effect on customer loyalty, while
both food quality and menu variations had an insignificant effect
on customer loyalty. Ordering decisions had a positive and
significant effect on customer loyalty.

I. Introduction

Today, digital or online businesses are starting to grow, including the food ordering
business where we can order food using smartphone applications. Ordering food can be done
anywhere and anytime, without directly coming to the store or the mall (Hidayatullah et al.,
2018).
One area that does not escape the above phenomenon, where a modern pattern of life
demands everything to be more accessible and more practical, is in several cities of DKI
Jakarta and Tangerang Raya, which Millennials carry out. The rise of similar culinary
businesses requires business people to make their business look different to attract consumers
to visit and try it to maintain business continuity. One way to achieve company goals is to
know the needs and wants of consumers or target markets and what consumers expect. In this
case, marketing strategies play an essential role.
Rifa’i (n.d.) research results showed that if the quality of service, location, and menu
variations are built or appropriately managed, it will further improve purchasing decisions at
Airin Kebumen food stalls.
Based on the research results by Gumelar et al. (2016), it is known that service quality,
menu variations, and prices have a significant effect on purchasing decisions, either partially

______________________________________________________________
DOI: https://doi.org/10.33258/birci.v5i1.3754 1518
 Budapest International Research and Critics Institute-Journal (BIRCI-Journal)
Volume 5, No 1, February 2022, Page: 1518-1527
e-ISSN: 2615-3076(Online), p-ISSN: 2615-1715(Print)
www.bircu-journal.com/index.php/birci
email: [email protected]

or simultaneously. The independent variable that has the most important influence on buying
decisions is the price variable.
The research results by Mustaqim & Amboningtyas (2017) revealed that food variety
has a positive and significant impact on customer satisfaction. Food business owners need to
know the factors that influence purchasing decisions to affect customer satisfaction, including
food, service, and atmosphere variations. According to Priansa in Nusjirwan (2020)
"Implementation of communication activities to customers within the company is carried out
formally, however, currently there are also companies that practice their communication
activities to consumers in an informed manner so that they can explore in-depth information
from customers". Regarding the background, this research considers the customer value as an
important element for an industry, both in service and manufacture. Moreover, the maximum
customer value can be made only if positive influence of marketing and individual
environment association does exist (Kusumadewi, 2019). The quality of products that are in
great demand by consumers can be seen from several factors including packaging, price,
quality, and benefits obtained by consumers (Romdonny, 2019).

II. Review of Literature

2.1 Millennial Generation

According to Yuswohady (2016) in the Millennial Trends article, the millennial
generation is the generation born in the early 1980s to 2000. This generation is often referred
to as Gen-Y, Net Generation, Generation WE, Boomerang Generation, Peter Pan
Generations, etc. They are called the millennial generation because they are the generation
that lives at the turn of the millennium. Simultaneously, digital technology began to penetrate
all aspects of life in this era.
Based on the research results from Stillman (2003), Generation Y is known as the
millennial generation or millennium. The phrase Generation Y began to be used in editorials
of major United States newspapers in August 1993. This generation uses many instant
communication technologies such as email, SMS, instant messaging, and social media such
as Facebook and Twitter, IG, and others. So, in other words, Generation Y is the generation
that grew up in the booming internet era.

2.2 Price Perception

According to Kotler & Armstrong (2015), perception is a process carried out and used
by individuals to select, organize, and interpret information input to create a meaningful
picture of the world. Customers' expectations and perceptions are formed from their own
experiences with the same situation, recommendations from friends or institutions (mass
media, experts, government, consumer institutions, and others). Then the price is the amount
of value charged for a product or service, or the sum of the values exchanged by consumers
for the benefits of having or using the product or service (Kotler & Armstrong, 2015).
The indicators of price perception, according to Kotler & Armstrong (2015), are as
follows:
1. Price affordability is consumers' purchasing power or ability at prices set by producers.
2. Competitive price with similar products is the company's ability to adjust the price of
its product with the price of similar products in the market.
3. According to consumer predictions, prices are prices under consumer expectations,
such as the quality of an item's product, and the price can satisfy consumers.

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 1. Price as an indicator of quality is the amount of money spent by the buyer in a certain
amount for a product adjusted to the quality of the product purchased.
2. The set price period is the period needed to set the price of a product.

2.3 Food Quality

According to Kotler & Keller (2012), product quality is a characteristic of a product or
service capable of bearing promises or insertions to satisfy customer needs. Gaman &
Sherrington (1996), Jones et al. (2001), and West et al. (2006) stated that broadly the
indicators of food quality consist of 1) color, 2) appearance, 3) portion 4) shape, 5)
temperature 6) texture 7) aroma 8) ripe level 9) taste.
Davis et al. (2018) states that there are seven dimensions of food product quality,
namely:
1. Portion in each serving of food, a standard portion has been determined, called the
Standard Portion Size.
2. Taste The taste points on the tongue are sweet, sour, salty, bitter.
3. Texture: Food texture is usually smooth or not, liquid or solid, hard or soft, dry or
moist.
4. Aroma Reaction of food that will affect consumers before enjoying the food.
5. The color of the food ingredients must be combined not to look pale because the color
combination affects the consumer's appetite.
6. The temperature of the food served must be appropriate. The temperature can affect
the taste of food.
7. In the presentation of food, the freshness, and cleanliness of the food served will
affect the appearance of the food itself.

2.4 Menu Variations

One of the critical elements in the culinary business competition is the variety of menus
provided by restaurants. Therefore, the company must make the right decision regarding the
types of menus sold. The service offerings from restaurants for a variety of cuisines in the
sense of a complete menu ranging from taste, types of food and drinks, and product
availability at any time as indicated, will be able to attract consumers' attention to make a
purchase and make it easier for consumers to choose and buy various kinds of menus
according to their wishes.
Kotler & Keller (2012) also says that product completeness is the availability of all
types of products offered to be owned, used, or consumed by consumers produced by a
producer. It is hoped that by presenting a varied food and beverage menu, the task of
marketing is not finding the right customer for a product, but rather finding the right product
for the customer. Consumers, each of which has differences in taste and preference for shape
or taste (Rifa’i, n.d.).
The composition of the food ingredient groups in one dish is different at each serving.
This study uses indicators of the menu varies according to Kotler & Keller (2012), namely:
1. The products sold have various sizes, variants, and flavors.
2. Menu innovation.
3. Products meet consumer tastes

2.5 Order Decision

In the evaluation stage, the consumers from preferences among the brands in the choice
set and may also from an intention to buy the most preferred brand (Kotler & Keller, 2016). It
means that purchasing decisions are the process of consumers forming preferences among the

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existing brand choices and forming intentions to buy the most preferred brand. This purchase
decision can be influenced by several factors such as price, product quality, and brand image
will examine the brand image in this study.
Kotler & Keller (2016) states that purchasing decisions have indicators, namely:
1. Product choice
Consumers can decide to buy a product or use their money for other purposes. In this
case, the company must focus its attention on people interested in purchasing a
product and alternatives.
2. Brand Choice
Consumers have to make decisions about which brands to buy. Each brand has its
differences. In this case, the company must know how consumers choose a trusted
brand.
3. Dealer choice
Consumers have to decide which one to visit. Each consumer is different in terms of
choosing a distributor. This can be due to close location, low prices, a complete
inventory of goods, convenience of shopping, the spaciousness of the place, etc.
4. Purchase Amount (Amount of purchase or quantity)
Consumers can decide how much of a product to buy at a time. Purchases made may
be more than one type of product. In this case, the company must prepare the number
of products according to the different wishes of the buyers.
5. Payment method
Consumers can make decisions about the payment method used in making consumer
decisions to use products or services. Currently, purchasing decisions are not only
influenced by culture, environment, and family aspects.

2.6 Customer Loyalty

According to Kotler & Keller (2012), loyalty is a deeply held commitment to
repurchase or subscribe to a preferred product or service in the future despite situational
influences and marketing efforts having the potential to cause consumers to switch to another
product. Suppose the product cannot satisfy the customer, the customer will react by exit (the
customer declares to stop buying the brand or product) and voice (the customer expresses
dissatisfaction directly with the company).
A loyal or loyal consumer will show buying behavior that tends to be influenced by full
awareness and consideration in making purchasing decisions (Griffin, 2003). The indicators
of loyalty are the following:
1. Makes regular repeat purchase
Loyalty refers more to the behavioral form of the decision-making units to make
continuous purchases of the goods or services of a selected company. The level of
satisfaction will influence them to repurchase.
2. Purchase across product and service lines
This means that the desire to buy more than the products and services that have been
offered by the company, customers who already believe in the company in one matter
will also feel the same on other issues.
3. Refers other
Loyal customers will voluntarily recommend products to friends and colleagues.
4. Demonstrates an immunity to the full of the competition
Consumers are not easily influenced by the competitive pull of other similar
companies.

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2.7 Conceptual Framework

Figure 1. Conceptual Framework

2.8 Hypothesis
The hypotheses in this study include:
H1. There is a significant effect of price perception on the decision of Millennials ordering
H2. There is a significant effect of food quality on the decision of Millennials ordering
H3. There is a significant effect of menu variations on the decisions of Millennials ordering
H4. There is a significant effect of influence of price perception on millennial customer
loyalty
H5. There is a significant effect of food quality on millennial customer loyalty
H6. There is a significant effect of menu variations on millennial customer loyalty
H7. There is a significant effect of ordering decisions on millennial customer loyalty.

III. Research Methods

The population used is Millennials as customers and customers of culinary products.

The sample studied by the researcher was as many as 85 Millennials who ordered food both
offline and online. For the current research, the researcher uses a purposive sampling
technique which is a non-probability sampling technique where the opportunity for each
individual to become a sampling is not the same. Questionnaires will be given to customers
of culinary products, in this case, who are considered Millennials.
According to Ferdinand (2014), data analysis was carried out for presenting empirical
findings in the form of descriptive statistical data that explained the characteristics of
respondents, especially about research variables used in hypothesis testing and inferential
statistical analysis used to test research hypotheses. After that, it can conclude. The data
analysis method used is the descriptive analysis method, and the researcher uses the
Structural Equation Modeling (SEM) technique using SmartPLS 3.0 software for Windows.

IV. Discussion

4.1 Results
a. Inner Model Evaluation
The evaluation of the inner model in the partial least square analysis is carried out to
determine the suitability of the structural model that has been prepared. The review of the
inner model will describe the value of R-squared (R2) and test the research hypothesis.

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b. R-square
Based on data processing with PLS, the value of the coefficient of determination
2
(R square) is generated in Table 1.

Table 1. Value of R-square Model

Variabel R-Square
Ordering Decision 0.766
Customer Loyalty 0.808
Source: Data processed with SmartPLS3.0

R-square is used to determine the goodness of fit model of the effect of exogenous
variables on endogenous variables, where the higher the R-squared value, the more
significant the impact will be (Ghozali, 2014). It is known that the R-squared value for the
ordering decision variable is 0.766, which means that the perception of price, food quality
and menu variations of culinary products can explain ordering decisions by 76.6%. For the R-
squared value of the customer loyalty variable, a value of 0.808 is obtained, which means that
perception of price, food quality and menu variations of culinary products can explain
customer loyalty by 80.8%.
Overall the measure of goodness of the PLS structural model is known from the value
of Q generated by the model and also its parameter estimates. The higher Q2, the model can
2

be said to be more fit with the data (Ferdinand, 2014). The following is the calculation of Q2
on the structural model:

Q2 = 1- (1-R1) (1-R2)

= 1 - (1-0.766) (1-0.808)
= 1 – (0.045)
Q2 = 0.955
Based on the calculation results obtained the value, that the value of Q2 is 95.5%. The
value of Q2 shows that the preparation of the PLS model has explained 95.5% of the
diversity of ordering decisions and customer loyalty.

c. Inner Weight
Evaluation of the inner weight is used to see the magnitude of the influence on each
path of the structural model, where the values obtained are the bootstrapping results from the
existing sample. Evaluation of the inner weight is used to see the magnitude of the influence
on each path of the structural model, where the values obtained are the bootstrapping results
from the existing sample.

Table 2. Effects between Variables in Structural Equations & Hypothesis Testing

Hypotheses Relations Original t p-value Results
Sample Statistics
H1 Price perceptions  Order decision -0.085 0.850 0.396 Rejected
H2 Food quality  Order decision 0.995 9.268 0.000 Accepted
H3 Menu variations  Order decision -0.087 0.670 0.503 Rejected
H4 Price perceptions  Customer 0.937 10.085 0.000 Accepted
loyalty

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 H5 Food quality  Customer loyalty -0.115 0.761 0.447 Rejected
H6 Menu variations  Customer -0.123 0.953 0.341 Rejected
loyalty
H7 Order decision  Customer loyalty 0.225 2.181 0.030 Accepted

4.2 Discussion
a. Perception of Price on Ordering Decisions
The results showed a significant but not significant effect of price perception on
ordering decisions. These results are supported by the theory of Kotler & Keller (2012),
purchasing decisions, namely consumers form preferences between brands in a collection of
choices. Consumers may also create an intention to buy the most preferred culinary product.
This means that ordering decisions are made after determining the attitude of a collection of
choices based on the perception of prices applied to culinary products.

b. Food Quality on Ordering Decisions

The results showed that food quality positively and significantly affected ordering
decisions. These results are supported by the theory of Potter & Hotchkiss (2012) food
quality is a quality characteristic of food that is acceptable to consumers, such as size, shape,
color, consistency, texture, and taste. Delicious and fresh food play an essential role in
surpassing the competitors. This means that good quality food by what consumers want will
be the reason consumers decide on these foods (Halimah et al., 2021).

c. Menu Variations on Ordering Decisions

The results showed an effect of menu variations but were not significant on ordering
decisions. This is supported by the theory of Kotler & Keller (2012), where product
completeness is the availability of all products offered to be owned, used, or consumed by
consumers produced by a producer. This means that a varied menu will be a different reason
for consumers to order. Therefore it becomes a driving force for marketers, especially in
culinary fields, to provide diverse menu variations so that consumers continue to place orders
(Gumelar et al., 2016).

d. Perception of Price on Customer Loyalty

The results showed that price perception positively and significantly affected customer
loyalty. This is supported by Rangkuti (2009) that perceptions of price are measured based on
customer perceptions, namely by asking customers what variables he thinks are most
important in choosing a product, for example for food products, the variables include: raw
materials, taste, durability, and manufacturing process. This means that customers will
continue to compare it with prices offered by other brands in the same product class, other
characteristics of the observed brand, different brands, and additional consumer costs. This
process will then form an attitude towards various alternative prices (Fergian & Amarul,
2016).

e. Food Quality on Customer Loyalty

The results showed that food quality had an effect but was not significant on customer
loyalty. Potter & Hotchkiss (2012) research supports these results in which food quality is an
indicator of the quality of food acceptable to consumers, which can be in the form of size,
shape, color, consistency, texture, and taste. Food quality standards are difficult to define and
cannot be measured mechanically but can be evaluated through their nutritional value, level
of ingredients used, taste, and product appearance. This means that culinary entrepreneurs
must present culinary products according to customer tastes (Rizkiyah et al., 2021).

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f. Menu Variations on Customer Loyalty
The results showed that the effect but not the significant variation of the menu on
customer loyalty. This is in line with the theory of product diversity (Engel et al., 1995).
According to them, product diversity is the completeness of the product regarding the depth,
breadth, and quality of the products offered and the availability of these products (Engel et
al., 1995). A place to eat that provides a menu that is quite a lot and varied so that consumers
can choose the menu according to their taste. It is essential for places to eat to serve a diverse
menu because there is a tendency in consumers who want a variety of choices. With the
various menus provided, it is hoped that it can encourage consumers to buy food that meets
their tastes in dining.

g. Ordering Decisions on Customer Loyalty

The study results indicate that the ordering decision has an effect and is significant on
customer loyalty. This is in line with Paramita et al. (2010) research. According to them,
purchasing decisions are processes that include determining what to buy or not to buy, and
the decisions are obtained from previous activities (Diansyah & Putera, 2017). Purchasing a
product and providing more value allows customers to support the preferred product,
affecting customer loyalty.

V. Conclusion

The conclusions in this study are:

1. Price perception has an effect but is not significant in ordering decisions. This means that
ordering decisions are made after determining the attitude of a collection of choices based
on the perception of prices applied to culinary products.
2. Food quality has a positive and significant effect on ordering decisions. Food quality,
which is sometimes associated with color, consistency, texture, and taste, is why
consumers place an order. Delicious and fresh food play an essential role in surpassing the
competitors. This means that good quality food by what consumers want will be the reason
consumers decide on these foods.
3. Menu variations affect but are not significant in ordering decisions. This means that a
varied menu will be a different reason for consumers to order. Therefore it becomes a
driving force for marketers, especially in culinary fields, to provide diverse menu
variations so that consumers continue to place orders.
4. Price perception has a positive and significant effect on customer loyalty. This means that
customers will continue to compare it with prices offered by other brands in the same
product class, other characteristics of the observed brand, different brands, and additional
consumer costs.
5. Food quality is influential but not significant to customer loyalty. Food quality standards
can be evaluated through the nutritional value, level of ingredients used, taste, and
appearance of the product. This means that culinary entrepreneurs must present culinary
products according to customer tastes.
6. Menu variations effect but not significant menu variations on customer loyalty. A place to
eat that provides a menu that is quite a lot and varied so that consumers can choose the
menu according to their taste. It is essential for places to eat to serve a diverse menu
because there is a tendency in consumers who want a variety of choices. With the various
menus provided, it is hoped that it can encourage consumers to buy food that meets their
tastes in dining.
7. Ordering decisions have a significant and significant effect on customer loyalty.
Customers ordering culinary products will look for some information and then make

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 choices according to their needs and purchasing power. Culinary product marketers must
provide what customers need more than their competitors so that customer loyalty from
their culinary products will naturally form.

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