Essays /

13 Essay

Essay preview

American International Journal of Social Science

Vol. 3 No. 2; March 2014

Relations between Service Quality and Customer Loyalty: An Empirical Investigation of Retail Chain Stores in Emerging Markets
Neringa Ivanauskienė
Doctor of Social Sciences
Vice-Dean for Academic Affairs
ISM University of Management and Economics
Arklių St. 18, Vilnius 01129, Lithuania
Justina Volungėnaitė
Master of Science
ISM University of Management and Economics
Arklių St. 18, Vilnius 01129, Lithuania

The current study investigated the relationship between service quality and customer loyalty across three emerging countries. The quantitative research data was collected through a survey of current customers of the specific retail sector, the household retail chain in Lithuania, Latvia and Estonia. Data obtained from 370 survey questionnaires was analyzed using SPSS; the Principal Component Analysis and Linear Regression statistical methods were applied. The study findings indicate that the dimensions of retail service quality in a specific sector of the industry are different in emerging markets compared to those that are in the original measurement scale such as RSQS. The study revealed that the three dimensions of service quality, namely, personal interaction, policy and product quality have a positive impact on customer loyalty across household retail markets in the three researched countries.

Keywords: Service Quality, Loyalty, Retail, Emerging Markets.

Literature analysis discloses that there are discussions on the dimensions of retail service quality. Retail service quality dimensions are different than those in any other service industries (Finn and Lamb, 1991). Researchers should evaluate whether RSQS measurement instrument developed by Dabholkar, Thorpe and Rentz (2001), is applicable in specific retail sector or different cultural environment (Thenmozhi and Dhanapal, 2010). Myriad studies are done in this regard including studies in Iceland (Eysteinsson and Bjorsdottir, 2012), South Africa (Boshoff and Terblanche, 1997), Singapore (Mehta, Lalwani and Han, 2000), India (Kaul, 2007; Ramakrishnan and Ravindran, 2012), Taiwan (Huang, 2009), and other retail markets. However, it can be stated that emerging markets like Lithuania, Latvia and Estonia are not researched intensively in this regard (according to Hoskinsson, Eden, Lau and Wright (2000) Post Soviet countries can be defined as emerging markets). Thus the research with an attempt to test the usefulness of RSQS in Lithuania, Latvia and Estonia reduces the gap in research and makes it possible to compare what impact each of the retail service quality dimensions make on customer loyalty. Thus the aim of this study is twofold: (1) to evaluate the applicability of RSQS instrument in Lithuania, Latvia and Estonia household retail sector and (2) to examine the relationship between retail service quality dimensions and customer loyalty. A quantitative survey of retail customers in Lithuania, Latvia and Estonia was executed, and data obtained from 370 survey questionnaires was analysed using Principal Component Analysis and Linear Regression method.

1. Theoretical Considerations and Hypotheses
1.1. Service Quality and Customer Loyalty
Service quality is defined as the difference between customers’ expectations and perceptions of service (Parasuraman, Zeithaml and Berry, 1988) and can often be seen as a way to build a competitive advantage. 113

© Center for Promoting Ideas, USA

Service quality as a multi-dimensional construct commonly regarded as customer judgements about service supplier and customer interactions and service itself (Cronin and Taylor, 1992; Babbakus and Boller, 1992; Zeithaml et al., 1996).

According to Sargeant and West (2001), it is obvious that the perceptions of service quality and commitment are related to loyalty, but each of the aforementioned factors, may have a different impact on customer loyalty in a particular market. There are two kinds of reasons that can determine relationship breakdown between the customer and the organization - the natural causes (customer demand extinction) and artificial causes (inadequate product specifications, insufficient quality of service level) (Sargeant and West, 2001). It is obvious that in order to increase customer loyalty the organization must seek to eliminate both natural and artificial customer exit reasons.

Service quality analysis makes an impact on the development of the customer loyalty concept – service quality can be regarded as one of the most frequently analyzed customer loyalty determinants. Tangible and intangible constituents of service quality were important in evaluating either customer view of an organization or customer trust in an organization (Doney and Cannon, 1997; Garbarino and Johnson, 1999). It has been defined that service quality is very important for customer satisfaction, and by it service quality impacts customer loyalty (Cronin and Taylor, 1992; Oliver, 1999). It can be stated, that the limitation of service quality studies is the inconsistency in determining the link between service quality and customer loyalty. Some studies have found that service quality determines customer satisfaction and affects customer loyalty through satisfaction (Cronin and Taylor, 1992; Rust and Oliver, 1994). Other studies, in contrast, have justified the influence of customer satisfaction on the quality of service (Bolton and Drew, 1991).

Howat, Crilley, and McGrath (2008) attributed the approach of research into service quality to American and Nordic schools of thought. The approach of American school of thought to service quality is best revealed in SERVQUAL model developed by Parasuraman et al., (1985). In conceptualizing the basic service quality model the authors identified ten key determinants of service quality: access, communication, competence, courtesy, credibility, tangibility, reliability, responsiveness, security and understanding the customer. Later the authors grouped SERVQUAL dimensions into five and added assurance and empathy dimensions...

Read more


-1106 -129 -16 -2 -214 -237 -240 -252 -26 -267 -268 -330 -40 -458 -46 -490 -5 -50 -55 -6 -67 -68 -69 -72 -87 -90 0 000 003 007 01129 043 056 057 059 062 066 077 078 1 1.1 1.2 1082 11/12 113 114 115 116 117 118 119 12 120 123 125 13 131 139 14 140 142 145 15 16 161 17 177 179 18 186 19.0 190 193 1985 1988 1990 1991 1992 1994 1995 1996 1997 1998 1999 2 20 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2014 209 218 22 222 223 230 231 24 241 247 249 253 26 266 27 277 28 29 3 3/4 30 31 317 32 320 321 325 328 33 339 34 35 352 36 369 37 370 371 375 384 4 401 406 408 41 421 424 43 44 441 446 448 456 467 47 483 49 5 50 500 51 519 522 536 543 544 55 56 580 59 593 6 60 600 61 610 611 617 62 629 63 64 65 658 66 660 666 67 68 683 69 7 70 703 71 713 726 735 738 76 770 774 776 791 795 807 812 820 8375 85 87 890 891 9 95 953 965 97 977 98 986 989 a.k abl abstract academ academi accept access accord across ad adapt adequ adequaci adjust administr adopt advanc advantag affair affect aforement africa african age agrav agre agreement aim al alpha also alter altern american among analys analysi analyz answer appeal appear appli applic approach appropri aquat arklių around artifici ask aspect assess associ assort assur attempt attent attract attribut author avail b b.l babbakus bachelor back back-transl background bag bagozzi baker baltic bartlett base basi basic behavior behaviour benefit berri best beta bjornsdottir bjorsdottir bloemer boller bolton book boshoff bradi brand breakdown build busi buy buyer buyer-sel c c.m c.w ca cannon captur card carman carri catalogu caus cent center centr certain cfa chain challeng chan character characterist chi chi-squar chosen chow cis client code coeffici collect combin commit common communic compani compar compet competit complaint compon concept conceptu conclud conclus condit conduct confid confirmatori consequ consid consider consist constitu construct consum consumer-defin content context contrast contribut conveni could countri courteous courtesi credibl credit crilley criterion critic cronbach cronin cultur current custom d d.c d.f d.i d.k.h d.w dabholkar das data databas de dealt dean decid decis declar defin definit degre demand demograph depend descript design determin develop dhanap differ differenti dimens dimension direct disagr disclos discount discuss distinguish distribut doctor done doney dr.d drew driver due e e.f.t easier eb econom economi ed eden educ effect effici effort eigen either electron elimin emerg empathi empir employe english enhanc ensur enter environ equip error error-fre especi estonia estonian et etc euro european evalu exact examin excel exchang execut exist exit expect explain explan explor exploratori extens extinct extract eysteinsson f face facil factor feel feinberg femal final find finn first fit five fixtur focus follow form format found four free frequent function furthermor futur g g.c g.t.m gap garbarino gaur gender generaliz get give global good greater grewal groceri group grönroo guarante h h1 han handl hierarch high higher holman hong hoskinsson hour household howat howev huang hult hypothes hypothesi iceland idea identifi imag immedi impact implic import impress improv inadequ includ inclus incom inconsist incorpor increas independ india indian indic individu industri infer influenc insist instil instrument insuffici intang integr intend intens intent interact interest intern introduc introduct investig ism item ivanauskienė j j.h j.jr j.m j.o jame japan japanes jin johnson journal judgement justifi justina k k.d kaiser kaiser-meyer-olkin kang kaul kazakhstan keep key keyword kim kind kmo knowledg kong korea korean kumar l l.l l.w lack lalwani lamb languag latent later latvia latvian lau layout lead least lee leisur let level lexington like limit linear link literatur lithuania lithuanian load look loyal loyalti m m-h m.k m.r m.s ma made major make maker male manag mani march market master materi may mcgrath mckenzi meanwhil measur meet mehta merchand merchandis met method methodolog meyer mind minimum model modern modern-look moment money month most move multi multi-dimension multi-stag multidimension multipl multiple-item must myriad n.s n.y.m name natur need neglect neringa never new nine non non-differenti nordic normal number oak observ obtain obvious offer often oliv olkin omit one oper order organ organiz origin other outcom outlet overal p p.a packag parasuraman park particular pay pca per perceiv percentag percept perform permit person personnel perspect pertain philip physic pilot place plenti polici posit possibl post poster practic present previous price princip prioriti problem procedur process product product-servic profession promis promot prompt proper propos prove provid public purpos qualifi qualit qualiti quantit quater question questionnair r r.a r.e r.h r.n r.p ramakrishnan rate rather ration ravindran reason recommend record reduc reexamin refer reflect regard regress relat relationship reliabl rentz replic repres request research respect respond respons result retail retent return reveal review right role root rotat rsqs rule run rust ruyter s.a s.c s.l s.p s.s s.s.l safe sage saha sale sampl sargeant satisfact scale school scienc second secondari section sector secur see seek seen seller separ servic servqual set sevic shop show sig signific sincer singapor siu six size skill social soloman solv someth south soviet special specif spheric spss squar st stage stand state statist std step store strategi strongest structur studi sub sub-dimens subsequ success suggest supermarket supplier support survey t-z tabl taiwan tangibl taylor technic telephon tell ten terblanch test thenmozhi theoret theori therefor thorp thought thousand three thus time togeth total toward transact translat trappey treat tri trust trustworthi truth twenti two twofold type understand univers unstandard us usa use util v.a valid valu variabl varianc variat varimax various version vice vice-dean view vilnius visual vocat vol volungėnaitė want way well west wetzel whenc wherea whether will work wright y year yi yuen z zeithaml β