A Comprehensive Analysis of Cloud Kitchen Operations: Evaluating INDSERV and the Marketing Mix as Factors Influencing Customer Loyalty through Satisfaction

Purpose of the study : The aim of this paper is to analyze the loyalty of Cloud Kitchen’s user through satisfaction as the impact of industrial service quality and marketing mix. Design/methodology : This study utilizes a quantitative approach with Structural Equation Modelling by using the Smart PLS program and involves responses from respondents selected by purposive sampling method. Findings : The results of this study indicate a direct effect of service quality on satisfaction; marketing mix on satisfaction; and satisfaction on loyalty. Meanwhile, no direct effect of service quality on loyalty; and marketing mix on loyalty was found. However, there is an indirect effect of service quality on loyalty through satisfaction; and marketing mix on loyalty through satisfaction. Research limitations/Implications : This research only measures loyalty based on service quality, marketing mix and customer satisfaction. Further research is needed by looking at other influential aspects and other symptoms or problems that may arise. Novelty/Originality of the study: To analyze the loyalty of Cloud Kitchen’s user as a new culinary business model that utilizes digital technology through satisfaction affected by industrial service quality and marketing mix.


INTRODUCTION
There is currently a change in tourism trends in the world, which emerged during the COVID-19 (Novel Corona Virus Disease) pandemic.According to a report by the Indonesian Ministry of Tourism and Creative Economy (Kemenparekraf) in 2021, there is a shift in restaurant business trends in the form of contactless services and take away services.The data also reported that around 70% of Indonesians now rely on food delivery services (delivery, takeaway and catering services) during the pandemic (Kemenparekraf, 2021).
Changes in tourism trends cannot be separated from the massive development of the technology sector.In recent years, technological developments have changed the way we live.Digital transformation has become a topic of much discussion and further research because the impact of major technological developments has shown the potential and how companies can benefit by utilizing technology in business (Udovita, 2020).The emergence of digital-based businesses that combines the use of technology to create innovations and business models that can improve customer experience which is then adopted into various other forms of business is inevitable (Himki et al., 2021).With this trend, a new culinary business model that utilizes digital technology and focuses only on delivery services known as Cloud Kitchen has emerged (Upadhye & Sathe, 2020).Cloud Kitchen or shared kitchen is a breakthrough in the culinary business that utilizes digital transformation and emerges due to how people's lifestyles has change since the COVID-19 pandemic.Cloud Kitchen, which utilizes the digital asset platform of online food delivery, had an extraordinary moment after and during the pandemic.However, some disruption is arising as to whether this business may become a new and sustain model or just a momentary one.
In Indonesia, the Cloud Kitchen concept has been widely discussed and has begun to become a sensation among culinary entrepreneur because it is considered cost-friendly, has a strategic location, and has been supported by the use of digital technology from online food delivery service providers such as Gofood and Grabfood (Sitorus, 2021).With the ever-changing situation, the sustainability of using this cloud kitchen system has become a question.How cloud kitchen providers provide services and how the marketing mix strategy is carried out to maintain customer loyalty commitment is the reason this research was conducted.

LITERATURE REVIEW
According to Kotler and Keller (2016), consumer loyalty is an attitude that encourages behavior to buy products or services from a company which includes aspects of feelings in it, especially those who buy regularly and repeatedly with high consistency, but not only repurchase of goods and services, but also have a commitment and positive attitude towards the company that offers the product / service.And to gain customer loyalty, customer satisfaction must be met.Customer satisfaction is a crucial factor that creates a form of customer loyalty to the company that can make the company's business sustainable in the midst of highly competitive conditions.It will also increase company's performance both in terms of revenue and service (Srivastava & Rai, 2018;Umanailo, 2019;Zaripour et al., 2016).
In an effort to make customers satisfied, a company must meet the needs and wishes of customers.Customers can feel satisfied through the perception of service quality, which then becomes a standard of service and an advantage in doing business (Lu et al., 2015;Omar et al., 2015).According to Ramya et al. (2019), service quality is an association of two elements, namely quality and service.Service quality is defined as the ability of service providers to satisfy customers efficiently.However, since cloud kitchen is a form of industry that utilizes a digital asset platform, a more distinctive measurement tool is needed.Eliakunda (2019) supported the Industrial Service Quality measurement model proposed by Gounaris (2005) that measure the potential quality, hard process quality, soft process quality and the output quality of an industry.
On the other hand, elements of marketing mix including product, promotion, place and price, have an impact on the satisfaction of a customer (Kotler & Armstrong, 2016;Sudari et al., 2019), but it is necessary to fulfill the wants and needs of these customers (Setiawan et al., 2019).According to Nuseir and Madanat (2015), indicators in the marketing mix have an important impact on the emergence of a sense of loyalty to a product.

METHODOLOGY
The aim of this study is analyze and determine the level and influence of service quality and marketing mix on Cloud Kitchen's user loyalty through satisfaction.In this study, service quality and marketing mix serve as independent variables, while customer satisfaction has a function of intervening variable and customer loyalty serve as dependent variable (see figure 1).Table 1 provides an overview of the demographic characteristics of the study's respondents.The data reveals a diverse sample, with respondents distributed across various age groups, with the majority falling in the 20-29 years old category (62%), followed by 30-39 years old (24%), 40-49 years old (12%), and a smaller representation in the 50-59 years old category (2%).In terms of gender, the sample is predominantly male (76%) compared to female (24%).Monthly rental price preferences of the respondents show that a significant portion prefers rental prices in the range of IDR 1-2 million (24%), IDR 2-4 million (26%), and > IDR 6 million (28%).Rental duration indicates that the majority have a rental duration of 1-2 years (63%), followed by less than 1 year (17%) and more than 2 years (20%).Monthly revenue generated by the respondents is distributed across various income brackets, with 32% falling in the IDR 20-40 million range, followed by IDR 1-20 million (24%), IDR 60-80 million (12%), IDR 40-60 million (15%), and > IDR 80 million (17%).These demographic insights provide a comprehensive understanding of the characteristics of the study's participants, which can be instrumental in shaping the research's context and implications.

RESULTS
In this section, we present the outcomes of the validity and reliability assessments (see table 2) conducted on the constructs used in our research model.These assessments help ensure the robustness and accuracy of our measurement model.

Internal Consistency Reliability
Cronbach's Alpha: Cronbach's Alpha values assess the internal consistency reliability of the constructs.Values exceeding 0.7 are considered acceptable.Composite reliability values also assess internal consistency and should ideally exceed 0.7.These results demonstrate the acceptable levels of construct validity and reliability for all measured constructs in the research model, ensuring the robustness of our measurement model.

SEM-PLS Analysis
The test model and result for hypothesis testing from the bootstrapping method of the Smart PLS program is shown on Figure 2. The 'Kualitas Pelayanan' construct has multiple antecedents with varying strengths.This suggests that several aspects (possibly different service attributes) contribute to perceived service quality.Similarly, 'Keunggulan Pemasaran' is influenced by multiple factors, each with its own path coefficient indicating the strength of influence.
'Kepuasan Pelanggan' is positioned as a mediator between 'Kualitas Pelayanan', 'Keunggulan Pemasaran', and 'Loyalitas Pelanggan'.This implies that the impact of service quality and marketing excellence on customer loyalty is at least partly explained through customer satisfaction.The presence of direct paths to 'Loyalitas Pelanggan' alongside the mediated path via 'Kepuasan Pelanggan' suggests that there are both direct and indirect effects of the antecedent constructs on loyalty.

DISCUSSION
The hypothesis testing results provide valuable insights into the relationships between different variables in this study.
Hypothesis 1: Service quality has a positive effect on customer satisfaction The hypothesis (H1) that service quality positively influences customer satisfaction is supported by the data.The T-statistics value of 20.523 indicates a highly significant relationship between service quality and customer satisfaction, and the p-value of 0 confirms this significance.The results of this study indicate that service quality has a significant effect on customer satisfaction, and good service quality increases customer satisfaction.This finding is also supported by the research of Hidayat et al. (2020), which found that service quality has a significant and positive effect on customer satisfaction.Research by Andre et al. (2020) also found that service quality increases customer satisfaction.Product quality is positively correlated with customer satisfaction, which can result in an increase in the number and volume of purchases.In this study, the indicator regarding Soft Process Quality received the highest score where respondents felt that the Cloud Kitchen personnel were helpful in solving the problems they faced and had a good personality.Meanwhile, Output Quality received a low score where the use of Cloud Kitchen was deemed unable to help achieve the business goals of its users.

Hypothesis 2: Marketing mix has a positive effect on customer satisfaction
The hypothesis (H2) that the marketing mix positively influences customer satisfaction is also supported by the data.The T-statistics value of 8.519 indicates a highly significant relationship between the marketing mix and customer satisfaction, and the p-value of 0 confirms this significance.The above tests show that the marketing mix, which consists of product, place, price, and promotion, has a significant effect on customer satisfaction.According to research conducted by Sudari et al. (2019) and Alipour et al. (2018), the marketing mix has a significant effect on customer satisfaction.Product quality increases customer satisfaction and increases the ability to attract more customers.Strategic location is also an important factor in customer satisfaction.The price of the product also plays an important role in determining how customers sees the product.Customers will be satisfied if the value they get is greater than what they pay.In addition, promotions carried out in an honest, informed and heartfelt manner can increase customer satisfaction.In this study, the respondents gave high scores for the Place indicator, where they thought that Cloud Kitchen had a clean and strategically located place that was easy to access.However, the Promotion indicator received a low score, especially regarding the suitability of promotional content carried out with reality.

Hypothesis 3: Service quality has no positive effect on customer loyalty
The hypothesis (H3) that service quality positively influences customer loyalty is not supported by the data.The T-statistics value of 0.037 is not significant, and the high p-value of 0.971 indicates that there is no significant relationship between service quality and customer loyalty.According to research by Gopi and Samat (2020), service quality does not have a direct effect on customer loyalty, but rather has an indirect effect.Because customers must feel satisfied first before they can become loyal.However, service quality can possess a positive effect on loyalty directly and indirectly.This is supported by study conducted by Dharma and Bastaman (2022) which states that service quality has a direct and indirect effect that significantly affects customer loyalty.And the most influential component is service quality.Based on the exposure of the respondents, the use of Cloud Kitchen, especially for small-scale entrepreneurs or those who are just starting their business, has not provided output quality as expected.This happens because the use of Cloud Kitchen as a mode of new culinary business facilities has led to business centralization, where there are more competitors in the same location.As for new business people, they face difficulties in marketing their products and as a result, their business goals have not been achieved, so that customers who use the Cloud Kitchen system cannot become loyal.

Hypothesis 4: Marketing mix has no positive effect on customer loyalty
The hypothesis (H4) that the marketing mix positively influences customer loyalty is also not supported by the data.The T-statistics value of 1.474 is not significant, and the p-value of 0.141 indicates that there is no significant relationship between the marketing mix and customer loyalty.The same statement was also made by Ardani (2021) who stated that the marketing mix did not have a significant positive effect directly on customer loyalty.However, the marketing mix should be able to influence customer loyalty directly and significantly.This was revealed by Setiawan et al., (2019) which states that the marketing mix has a strong direct influence on customer loyalty.Meanwhile, Tandi (2012) states that the marketing mix has a direct and significant effect on loyalty.The promotion has the greatest influence on customer loyalty compared to other indicators.In this study, the value for the promotion indicator has the lowest value, especially regarding the conformity of promotional content to reality, for example advertisements made with exaggerated or distorted information.This is what makes the marketing mix fail to have a direct and significant influence on loyalty for this study.

Hypothesis 5: Customer satisfaction has a positive effect on customer loyalty
The hypothesis (H5) that customer satisfaction positively influences customer loyalty is strongly supported by the data.The T-statistics value of 8.400 is highly significant, and the p-value of 0 confirms the strong relationship between customer satisfaction and customer loyalty.The results of this study indicate that customer satisfaction increases customer loyalty.According to Ardani's research (2021), customer satisfaction has positive effect towards loyalty, as shown by Supriyanto et al., (2021), andSudari et al., (2019), customer satisfaction also shows a positive correlation with loyalty.Therefore, to get loyal customers, satisfied customers are needed.Customer satisfaction is the key to the success of a business.Based on information from respondents, the results of data processing show that there is a good level of satisfaction with the products and services and places of Cloud Kitchen, but not the overall level of satisfaction.Respondents have not felt overall satisfaction with the use of Cloud Kitchen, but rather only felt satisfied with certain indicators.

Hypothesis 6: Service quality has a positive indirect effect on customer loyalty through customer satisfaction
The hypothesis (H6) that service quality indirectly influences customer loyalty through customer satisfaction is supported by the data.The T-statistics value of 7.761 is highly significant, and the p-value of 0 confirms the presence of a significant indirect relationship.A study conducted by Supriyanto et al. (2021) found that service quality does not affect customer loyalty directly but only indirectly with customer satisfaction as an intervening variable.Therefore, it can be concluded in this study that service quality affects customer satisfaction and ultimately affects customer loyalty.Improving service quality aims to increase customer satisfaction, which in turn results in increased customer loyalty.According to Dam and Dam (2021), there is a positive and mutually sustainable relationship between service quality, satisfaction, and customer loyalty.Improving service quality and customer satisfaction is necessary to get loyal customers.With good service, customers will have a tendency to feel satisfied, which allows them to remain loyal.In this study, respondents expressed a desire to purchase or reuse the Cloud Kitchen system and the tools offered by the manager in it.

Hypothesis 7: marketing mix has a positive indirect effect on customer loyalty through customer satisfaction
The hypothesis (H7) that the marketing mix indirectly influences customer loyalty through customer satisfaction is supported by the data.The T-statistics value of 5.866 is highly significant, and the p-value of 0 confirms the presence of a significant indirect relationship.The results of this study indicate that the 4P marketing mix has a positive impact on loyalty through customer satisfaction.Research conducted by Sudari et al., (2019) found that the elements in the marketing mix which include product, place, price, and promotion have an indirect impact on customer loyalty through customer satisfaction, so the marketing mix has a positive effect on loyalty through customer satisfaction.This result is also found in Khalayeh and Al-Hawary's research (2022) which summarizes previous studies showing the positive impact of the marketing mix on company performance characterized by satisfied and loyal customers, where the price element is the most influential element and determines the repeat purchases of loyal customers.In this study, respondents were satisfied with the price and place offered by the Cloud Kitchen manager, but it should be underlined that the data processing results showed a low value of commitment of Cloud Kitchen users where they might switch to competitors or other more attractive business models that have more potential.
The data presented in the hypothesis testing results reveal significant relationships among key variables in the study.Firstly, the analysis indicates strong support for the hypotheses that service quality and the marketing mix positively influence customer satisfaction, as evidenced by highly significant T-statistics and p-values of 0 for both hypotheses.These findings underscore the importance of delivering high-quality services and effective marketing strategies in enhancing customer satisfaction.Conversely, the hypotheses that service quality and the marketing mix directly affect customer loyalty are not supported, with non-significant T-statistics and higher p-values.However, the data strongly supports the hypothesis that customer satisfaction plays a pivotal role in driving customer loyalty, with a highly significant T-statistics value and a p-value of 0. Additionally, the study highlights that both service quality and the marketing mix have significant indirect effects on customer loyalty through their influence on customer satisfaction, indicating the importance of focusing on customer satisfaction as a mediator in building customer loyalty.Overall, these results provide valuable insights for businesses in understanding the complex dynamics between service quality, marketing strategies, customer satisfaction, and loyalty in the context of the studied market.

CONCLUSION
In summary, this study confirms several important relationships: service quality and marketing mix influence customer satisfaction positively, customer satisfaction positively influences customer loyalty, and both service quality and marketing mix have indirect positive effects on customer loyalty through customer satisfaction.
However, there is no significant direct relationship between service quality or marketing mix and customer loyalty.
The conclusion of this study indicates that from the seven hypotheses filed, there are five accepted hypotheses: Service quality has a positive effect on customer satisfaction; Marketing mix has a positive effect on customer satisfaction; Customer satisfaction has a positive effect on customer loyalty; Service quality has a positive indirect effect on customer loyalty through satisfaction; and Marketing mix has a positive indirect effect on customer loyalty through satisfaction.As for the two rejected hypotheses are: Service quality has no positive effect on customer loyalty; and Marketing mix has no positive effect on customer loyalty.This happens because customers have not felt the impact of the output of service quality on achieving business goals such as sales expectations on the financial condition of the business, meanwhile respondents also feel that the promotional content carried out by Cloud Kitchen providers does not match reality.Some examples are exaggerated or distorted information such as the average number of transactions per week and the average amount per transaction informed by Cloud Kitchen providers.
In terms of service quality, respondents felt that soft process quality such as dexterity, accuracy, sincerity and personality of Cloud Kitchen managers; and hard process quality such as attention to operational details were very good.However, output quality related to achieving business goals is still lacking.In terms of marketing mix, respondents felt that the place and price offered were very good, but in terms of promotions whose content did not match reality made respondents feel less good.While customers are satisfied, especially with the products, including services, offered by Cloud Kitchen providers and the location of Cloud Kitchen itself, the overall satisfaction of customers is neutral because there are things that make customers satisfied and dissatisfied.As a form of loyalty commitment, Cloud Kitchen users are willing or have plans to open new outlets using the Cloud Kitchen system, but Cloud Kitchen users are also still interested in other business models besides Cloud Kitchen.
If the quality of service and marketing mix can be improved, it is expected that customers will feel satisfied so that it leads to customer loyalty in the next few years for Cloud Kitchen system customers.This is necessary to create a good and sustainable form of business in the midst of such dynamic business conditions.Cloud Kitchen users show a form of loyalty, but it does not mean full commitment, because they are still willing to move to other business platforms.The limitation if this research only measures loyalty based on service quality, marketing mix and customer satisfaction.Further research is needed by looking at other influential aspects and other symptoms or problems that may arise.

Figure 2 :
Figure 2: Bootstrapping Result from Smart PLS

Table 2 :
Validity and Reliability Testing Result Construct Validity Average Variance Extracted (AVE): The AVE values demonstrate the convergent validity of the constructs.AVE values greater than 0.5 are generally considered acceptable.The outer loading values indicate the strength of the relationships between each indicator and its corresponding construct.Values should ideally exceed 0.7 to ensure discriminant validity.
Source: Output from Smart PLS, 2023