ANALYSIS OF TIE STRENGTH AND PURCHASE DECISION INVOLVEMENT TOWARDS WORD-OF-MOUTH INFLUENCE IN SERVICE BUSINESS

• Main Author: Qonitah, Ummu
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/40991
• Institution: Institut Teknologi Bandung

The increase in services industry must be handled, the high cost of services has the potential to shake off economic growth. Therefore, services have to become more efficient and productive. Handling a service business that mostly intangible are dissimilar from the product-based business. In service word of mouth (WOM) is very important. WOM influence is affected individually, and in combination, by two main constructs tie strength and service purchase decision involvement, where the former is external to the consumer (related to others), and the latter is internal (related to the self). This research would investigate the interaction and direct effects of tie strength between sender and receiver of WOM and the receiver’s service purchase decision involvement towards WOM influence. A secondary aim is to investigate how a perceived risk affects service purchase decision involvement. This research is quantitative research conducted to explore the objective of the study. The researcher conducts a questionnaire to collect data and PLS-SEM analysis is used for the data analysis. The result indicates tie strength and involvement positively affected WOM influence. However, the moderation effect whereby, tie strength was found to diminish the effect of involvement on WOM influence. The other finding is perceived risk has a highly significant effect on involvement. Also, the relationship between WOM influence and the purchase decision is positively significant. Thus, it is recommended for the service business owner to know the relationship between customers. Then build a good image and provide a good testimonial from the previous customer to make the customer get the best information about the service