Factors Influencing Service Quality and Product Quality: A Case Study of a Water Filter Company (PT XYZ)

Background: PT XYZ is a national private company operating in the water purification industry. Products offered by PT XYZ include water filters, reverse osmosis, and domestic waste processing machines with more than 23,000 customers in Indonesia. Over the last few years, the household product income of PT XYZ decreased from 2021 to 2023 with an average decrease of 5%. Apart from the decline in revenue, customer satisfaction scores have also not met the targets set by the company.Purpose: This research was conducted to identify the factors affecting service quality and product quality in the water filter industry.Design/methodology/approach: A mixed method approach was conducted in this research. Fifteen customers were interviewed and 367 customers filled out the questionnaire. Non-probability sampling was used in this research as a sampling method which was carried out by purposive sampling with several predetermined criteria. Items will be measured using 7 Likert scales. Findings/results: The factors that determine service quality improvement at PT XYZ are excellent service, excellent after sales service, responsive customer care, and standardization and competence of the sales and service team. These factors represent the service quality improvement of 47.5%. The factors that determine product quality improvement at PT XYZ are reliable filters with optimal results, products that meet customer expectations, added filter maintenance indicator feature, and crack resistant filter. These factors represent the product quality improvement of 48.9%.Conclusion: Increasing customer satisfaction and revenue, PT XYZ needs to provide excellent quality services. Good service quality management can also be a competitive advantage while encouraging continuous improvement. Improving the quality of PT XYZ's services and products is determined by excellent service, responsive after-sales service, competent and standardized teams, and reliable filter products that meet customer expectations, equipped with maintenance indicator features and are crack-resistant.Originality/value (state of the art): This study emphasizes the importance of comprehensive quality improvement, encompassing both service and product aspects to maintain customer loyalty. PT XYZ should continuously invest in employee training and product innovation. This study enriches the literature on the determinants of customer satisfaction in the water filtration industry, particularly within the context of local companies. Keywords: customer satisfaction, exploratory factor analysis, product quality, service quality, water filtration