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The effects of service quality and the mediating role of customer satisfaction Centre for Communication Technology, University of Malta, Msida, Malta Keywords Loyalty, Service quality, Customer satisfaction, Banking Abstract Service loyalty, with its final effect on repurchasing by customers, appears to have received relatively little attention. This study starts by first delineating the concept of service loyalty and proceeds to distinguish between service quality and customer satisfaction. A mediational model that links service quality to service loyalty via customer satisfaction is proposed. Appropriate measures are identified and a postal survey is undertaken among 1,000 retail banking customers. A response rate of 20.5 per cent is obtained. Results indicate that customer satisfaction does play a mediating role in the effect of service quality on service loyalty. The effects of a number of demographic indicators on service loyalty are also reported. Implications are discussed, limitations of the study are noted and possible areas for further research are indicated.
Received October 1999 Revised May 2000; October 2000
Introduction Service loyalty, with its final effect on repurchasing by customers, is perhaps one of the most important constructs in services marketing. Indeed, loyal customers that indulge in repeat purchases are the bedrock of any business. One of the more obvious questions relates to the demographic characteristics of loyal customers, whether any such variables are more salient than others and how these can be used for segmentation purposes (e.g. Frank, 1967). However, work that integrates the role of service loyalty within the context of other service marketing variables like service quality and customer satisfaction has received less attention. Service quality has been the subject of considerable interest by both practitioners and researchers in recent years, spurred on by the original work by Parasuraman et al. (1985). An important reason for the interest in service quality by practitioners results from the belief that this has a beneficial effect on bottom-line performance for the firm. However, practitioners often tend to use the terms service quality and customer satisfaction interchangeably. Among academics the satisfaction construct is recognised as being distinct and has developed along fairly independent lines from service quality (e.g. Oliver, 1980). The concepts of service quality, customer satisfaction and service loyalty are related to each other. Theoretically, the expectancy/disconfirmation paradigm in process theory can provide the grounding for this study, with service quality as an antecedent construct and service loyalty as an outcome variable of customer satisfaction. A better understanding of the effects of service quality and customer satisfaction on service loyalty can help academics
European Journal of Marketing, Vol. 36 No. 7/8, 2002, pp. 811-828. # MCB UP Limited, 0309-0566 DOI 10.1108/03090560210430818
European Journal of Marketing 36,7/8 812
in the development of a model of service marketing. It can also provide practitioners with indications as to where best to devote marketing attention and scarce corporate resources. This study seeks to contribute to the development of a conceptual framework that integrates service loyalty, service quality and customer satisfaction. It reviews the literature on these three constructs and outlines the expected relationships in a research model. Appropriate measures are identified and research is carried out among retail banking customers to test the hypothesised relationships. The demographic characteristics of loyal customers are also...
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