Study on the Impacts of Service Quality and Customer Satisfaction on Customer Loyalty in B2C E-Commerce

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2009 ISECS International Colloquium on Computing, Communication, Control, and Management

Study on the Impacts of Service Quality and Customer Satisfaction on Customer Loyalty in B2C E-commerce
Yangcheng Hu
Department of Management Engineering
Nanchang Institute of Technology
Nanchang, China
hyczju@126.com
Although, a number of studies have documented the
relationship between service quality, satisfaction and loyalty in traditional service industries and e-commerce settings,
theoretical foundations as well as empirical confirmations
are lacking (Kassim and Ismail, 2009). The present study
deals with the question of how service quality and customer
satisfaction influence loyalty in e-commerce. We first review the relevant literature leading to our research hypotheses.
This is followed by discussions of the research method and
results of the empirical study conducted in a city of China. We conclude the paper with the implications of the findings
and give some suggestions for future research.

Abstract—In e-commerce, loyal customers are considered
extremely valuable. However, little attention has been given in the literature to understand customer loyalty and its
antecedents especially in e-commerce settings. The present
study empirically investigates the impacts of service quality, customer satisfaction on customer loyalty in a B2C ecommerce context. Factor analysis and structural equation modeling (SEM) are conducted based on a sample from

undergraduate student respondents. Results indicate that,
although the direct effect of service quality on customer loyalty is significant, the indirect effect (with customer satisfaction playing a mediating role) is a stronger driver for customer
loyalty. E-commerce managers are recommended to devise
operations and marketing strategies that focus on service
quality dimensions in order to enhance customer satisfaction and, in turn, foster loyalty. The present study focuses only on the B2C e-commerce and uses convenience sampling method.
Future research should examine other types of e-commerce
settings with random sampling method.

II.

A. Customer Loyalty and its Definition in E-commerce
The various definitions of loyalty have been discussed by
some scholars for more than 40 years. Early views of loyalty focused on repeat purchase behavior. For example, Kuehn
(1962) argued that loyalty should be measured by the
probability of product repurchase. Day (1969) criticized
previous views by arguing that there is more to loyalty than just consistent buying of the same brand (Caruana, 2002).
Loyalty is now defined as repeated purchase behavior
exhibited over a sustained period and driven by a favorable
attitude toward the subject (Hsin and Su Wen, 2008)
The concept of loyalty in e-commerce extends the
traditional concept to online consumer. Anderson and
Srinivasan (2003) investigated loyalty in e-commerce and
defined loyalty as a customer’s favorable attitude toward an electronic business that leads to repeat buying behavior
(Grace and Chia-Chi, 2009), including both attitudinal and
behavioral aspects. Although the underlying theoretical
foundations of traditional loyalty and the loyalty in ecommerce settings are generally similar, they have unique aspects related to internet based marketing and buyer
behavior (Hsin Hsin and Su Wen, 2008).

Keywords-services quality; customer satisfaction; customer
loyalty; e-commerce

I.

CONCEPTUAL FOUNDATIONS AND HYPOTHESES

INTRODUCTION

Customer loyalty is considered crucial because of its
positive effect on company survival (Semejin et al., 2005).
Developing and managing customer loyalty is very strongly
related to the profitability and the long-term growth of a firm (Reichheld, 1993, 1995; Zee-Sun and Linda, 2007). Indeed,
loyal customers that indulge in repeat purchases are the
bedrock of any business (Caruana, 2002). As a result, it is
urgent for e-commerce companies to create a loyal...
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