Rational or Emotional? An Examination of Customer Loyalty in B2B Packaged Food Retail Setting.
Consumers in Asia are accustomed to packaged food. The Asia Pacific region has successfully recorded USD 619 billion of packaged food sales in year 2017, in comparison to the world sales of USD 2,181 billion (Euromonitor International, 2017). The packaged food market in Malaysia is also experiencing an upward trend for the 2003-2017 period, recorded RM28, 165million of retail market sales in 2017 with a 7.3% growth compared to the year before (Euromonitor International, 2018a). With a higher population growth index than the world and Asia Pacific averages, and 55% of the population fall under the middle-income segment (Euromonitor International, 2017), the biggest portion of Malaysian spending are food and nonalcoholic beverages, including packaged food (Euromonitor International, 2017).
Malaysian food retail market has become increasingly competitive due to the major shifts occurred in the recent dealings between retail customers and suppliers (Christopher, Payne & Ballantyne, 1991; Ellram, 1995; Han, Wilson & Dant, 1993; O'Neal, 1989 in Caceres, 2017). According to the Euromonitor report on Brands in Malaysia Packaged Food Market (2017) on a total of 130 active brands for the period of 2012-2017, established brands which lose their competitive edge are replaced by new entrants. The internet retailing in particular, has recorded growth of 294% compared to half a decade before, or an average growth rate of 59% per annum (Euromonitor International, 2018b). Malaysian Internet-retailed packaged food market has embraced an average annual growth rate of 17% compared to the store-based retailing of 7% per annum. Store based retailing has decreased market share from 99.2% in 2012 to 98.9% in 2017 and the downward trend is predicted to continue in the near future, indicated lesser attractiveness to new entrants. Losing market share also affects a company performance and sustainability negatively (Chen, 2015).
With almost 98.5% of Malaysian business establishments cutting across all sizes and sectors are SMEs, SMEs are facing intensified competition, general lack of info and knowledge as well as limited capacity for knowledge (SMIDEC, 2002). Retaining customer loyalty has becoming crucial to increase market share or customer count among Malaysian business to business (B2B) entities, through customer repurchase or positive recommendations by existing customers (Lam, Shankar, Erramilli & Murthy, 2004). Customer loyalty creates positive word of mouth (WoM) recommendations, greater resistance to rival suppliers' competitive strategies (Caceres & Paparoidamis, 2005) and lower maintenance costs (Fornell & Wernerfelt, 1987). Loyal customers are also known to willingly pay premium prices (Liu, Eisingerich, Auh, Merlo & Chun, 2015), thus generate greater profitability (Reichheld, 1996; Lam et al., 2004). These effects are greater in B2B setting where purchase and transaction are normally larger with longer member relationships, making the examination of factors contributing to customer loyalty critical (Oliver, 1999; Howard, & Sheth, 1969). Unfortunately, despite the importance and growth of the Malaysian business retailer as well as the channel member loyalty (e.g. Gilliland & Bello, 2002; Sahade, 2008), there are only a handful of customer-based brand loyalty studies in B2B setting (Mokhtar & Yusri, 2016).
For a long period of time, scientific scholars mainly focus on studies related to customer loyalty in B2C setting, adopting Aaker's brand equity framework (Aaker, 1991) or in B2B settings but focus on other fields such as engineering (Ramaseshan, Rabbanee & Tan, 2013; Caceres & Paparoidamis, 2007). Others examine customer loyalty (similar industry) in different geographical region (Rauyruen and Miller, 2007; Susanty, Bakhtiar, Jie & Muthi, 2017; Glynn, Taasoobshirazi & Brickman, 2007). Based on the theory of composite loyalty, some authors (Pritchard and Howard, 1997; Baldinger & Rubinson, 1996; Knox & Denison, 2000) explained the disadvantage of focusing solely on behavioural loyalty (e.g. buying intention), which limits loyalty measurement and identification of real loyalty. Attitudinal loyalty is then proposed to complement behavioural loyalty. This study aims to fill in the gap by providing a comprehensive examination of both behavioural and attitudinal loyalty among the B&B consumers.
As a key determinant of brand loyalty (Aaker, 1991; Heskett, Sasser, & Schlesinger, 1997), customer satisfaction is another critical issue (Bitner, 1990; Oliver & DeSarbo, 1988; Parasuraman, Zeithaml, & Berry, 1988). People learn to perform a behaviour or act that satisfies them in which they expect to lead to positive outcomes (Tolman, 1932). Furthermore, previous consumer behaviour researchers focus on product performances or other tangible product features in a B2B setting (Rosenbroijer, 2001). Product quality and service quality are used to determine the relationship between industrial buyer and a specific brand (Martensen & Gronholdt, 2004). Meanwhile, intangible and non-functional features such as brand or manufacturing country's products image, salesman's expertise and advertising campaign receive less attention until the importance of these subjective product attributes are recently examined (Shaw, Giglierano & Kallis, 1989; Bendixen, Bukasaa, & Abratt, 2004). Distribution quality and price perception were crucial because high distribution quality (Meidute-Kavaliauskiene, Aranskis & Litvinenko, 2014) and frank and honest price information (Somogyi and Gyau, 2009) are found to lead to customer satisfaction among B2B channel members (Geyskens, Steemkamp & Kumar, 1999).
This study expands the existing literature by covering both rational brand qualities and emotional associations of the transaction-specific characteristics, namely product quality, service quality, distribution quality, price perception, advertising campaign, brand image, salesman's expertise and manufacturing country's products image, separating the examination of behavioural loyalty (repurchase intention) and attitudinal loyalty measures (positive word-of-mouth). This study also examines the mediating role of customer satisfaction among the retail packaged food buyers.
Review of the Literature
Customer Loyalty and Satisfaction
Oliver (1999) defined loyalty as "a deep commitment to re-purchase or re-patronize of a preferred product or service consistently in the future, causing repeated same brand (or brand-set) purchasing, despite differences happened due to situational influences or marketing efforts". In a B2B context, loyal buyers are willing to pay premium price (Taylor, Hunter & Lindberg, 2007) and recommend or give positive WoM to others. They pay extra and special consideration on other products of the same brand too (Bendixen et al., 2004). Understand customer loyalty hence enable marketers to maintain well-established profitable relationship with customers (Lam et al., 2004).
Some researchers argue that observing loyalty in term of repurchase intention (behavioural) might not be distinguishable from spurious loyalty (Baldinger & Rubinson, 1996) even though it positively affects a company's profitability and is important towards the establishment of a successful business (Zeithaml, Berry and Parasuraman, 1996; Oliver, 1999; Kotler & Pfoertsch, 2007). Chaudhuri and Holbrook's (2001, p. 82) definition of attitudinal loyalty or "the level of customer's psychological attachments and attitudinal advocacy towards the supplier or service provider" is argued to complement behavioural loyalty. Peer feedbacks and evaluations are extremely important in trust or confidence building in a B2B setting, which further lead to repurchase intention (Cheung, Lee & Thadani, 2009; Wu, Chen, Chen & Cheng, 2014).
Oliver (1999) expanded the three-stage loyalty model by Dick and Basu (1994) to include cognitive loyalty, affective loyalty, conative loyalty and finally, action (behavioural) loyalty. These authors argue on the importance of repeated established positive feelings toward a brand that lead to repurchase because a huge percentage of satisfied consumers still switch away from their originally selected brands (Reichheld & Scheffer, 2000). Conative loyalty is achieved when there's an existence of a profound commitment to purchase a certain brand. The intention turns into a huge willingness to act (Oliver, 1999) where consumer is ready to overcome any possible problems or obstacles to acquire a preferred product or service. Loyalty was measured from the behavioural aspect (e.g. repurchase intention) as well as the attitudinal aspect (e.g. positive word-of-mouth). In the case of retail industry, several transaction-specific characteristics are identified and used to examine the influences on customer satisfaction and loyalty.
Product quality is the standard of correspondence between customers' expectations and their realization of product's actual performance (Hoffman and Bateson, 2011). It affects customer-based brand equity (and outcomes) in a B2B setting (van Riel, deMortanges & Streukens, 2005) through satisfaction on a specific product performance (Elsaber & Wirtz, 2017) as compared with other brands, leading to higher loyalty (Cronin, Brady & Hult, 2000; van Riel et al., 2005; Taylor et al., 2007; Baumgarth & Binckebancl, 2011). Industrial purchasers are said to be more rational and concern with factors like product quality, product performance, delivery, service and price, compared to end consumers (Shipley & Howard, 1993). Retailers and suppliers are focusing on reliability, durability, durability and consistency in measuring product quality. Based on this, the following hypothesis is developed:
H1 Product quality has a positive influence on customer satisfaction.
Service quality is a focused evaluation that reflects the perception on superior and high-quality delivery compare to competitors, in which service and after sale service are provided promptly and readily (van Riel et al., 2005; Davis-Sramek, Droge, Mentzer & Myers., 2009; Elsaber & Wirtz, 2017). Service quality has always been a focus in marketing research due to its critical role to measure organizational performance (Jensen & Markland, 1996). Assessment of the relationship between service quality and loyalty at company or industry level provides useful information about a company's sustainability and viability of future performance (Ruyter & Wetzels, 1998). Many researchers are interested to understand the causes and consequences of perceived service quality, with an aim to identify the most accurate method to improve service quality and establish a competitive advantage as well as build customer loyalty (Palmer and Cole, 1995). A handful of researchers (e.g. Cronin & Taylor, 1992; Anderson & Sullivan, 1993; Bloemer & Kasper, 1995; Cronin et al., 2000; Olsen, 2002) have confirmed the positive influence of service quality on loyalty.
In B2B settings, Boulding, Kalra, Staelin & Zeithaml (1993) and Parasuraman (1998) pointed out the needs and importance of service quality research. Service quality becomes the focus in many industrial marketing studies (Jensen and Markland, 1996; Ruyter et al., 1998; Huang, Lee & Chen, 2019). Service quality attributes such as aftersales service, reliability and competency are found to affect customer satisfaction (Aaker, 1991; van Riel et al., 2005; Kasiri, Kenny, Murali & Samsinar, 2017). Kasiri et al (2017) examined the relationship between service quality and satisfaction in three industries: hospitality, tourism and healthcare and concluded that 'how' a service is delivered has more impact on satisfaction compared to 'what' is being delivered. Kasiri et al (2017) argued that Malaysian consumers stress more on 'form' rather than 'substance' (Baker, 2008 in Kasiri et al., 2017) hence making service quality more critical. Based on this, the following hypothesis is formulated:
H2 Service quality has a positive influence on customer satisfaction.
Distribution quality refers to the "union of aspects such as ordering, delivery and availability with evaluation of perceived customers' expectation" (van Riel et al., 2005, p. 843; Mudambi, Doyle & Wong, 1997). It has a positive influence on industrial buyers' brand perceptions (Mudambi et al., 1997), in which high distribution quality includes perceived quality of logistic service quality (Mudambi et al., 1997), and high-quality delivery and goods availability increase customer satisfaction (van Riel et al., 2005).
Rational evaluation of a company's distribution quality is common among B2B customers, in which excellent distribution qualities (such as required lead times after order is placed, the number of unable to deliver-in-time, and the readiness of online ordering systems) enhance brand equity outcomes, including customer satisfaction and customer-based brand loyalty (Mudambi et al., 1997; Huma, Ahmed, Ikram & Khawaja, 2019). Intangible factors such as the overall general reliability, ease of ordering (active or passive), and the willingness and ability to respond in the case of an emergency also serve as added values to a company's distribution quality. In this study, both tangible and intangible distribution quality dimensions such as timeliness, availability, reliability and convenience of ordering, are examined. Based on this, it is hypothesised that:
H3 Distribution quality has a positive influence on customer satisfaction.
Price is the financial value given out in exchange for a service or product. It plays the role as cost and acts as one of the crucial judging points for value (Andaleeb & Conway, 2006). Psychological difference between price expectation and perception affects satisfaction (Matzler. Krauter & Bidmon, 2006; Gyau & Spiller, 2011). Low price satisfaction might not refer to high monetary value, as it could be due to price perception, or "the trade-off in monetary value between total benefit received to total sacrifices by considering available suppliers' offerings and prices" (Lam et al., 2004, p. 295).
A perceived fair and honest price positively and significantly affect customer's satisfaction (Johns, Tyas, Ingold & Hopkinson, 1996; Matzler et al., 2006; Herrmann, Xia, Monroe and Huber, 2007; Somogyi and Gyau, 2009). Matzler et al (2006) confirmed price perception as one of the price specific dimensions that influence WoM and brand switching intention. Geyskens et al. (1999) further confirmed the positive relationship between price value perception with brand equity, customer satisfaction and loyalty in a B2B setting. Elsaber and Wirtz (2017) also call for the need to study price perception in a retail setting, which covers favourability, informed pricing, profitability, consistency and timeliness (Geyskens et al., 1999; Somogyi & Gyau, 2009: Gyau & Spiller, 2011; Susanty et al., 2017). Based on this, the following hypothesis is developed:
H4 Price perception has a positive influence on customer satisfaction.
Advertising (Ads) Campaign
An ads campaign is a series of paid communication that identifies the sponsored message (Eisend & Kuster, 2011). It usually comes with a theme which acts as a central message during the campaign period (Belch & Belch, 2004) and is said to be the overall market feedback of the advertised products to a certain extent. Advertising, especially a creative one, could create strong and positive brand equity outcomes, help brand building in both consumer and business aspects (Baack, Dessel, Wilson & Patti, 2015). Caceres and Paparoidamis (2005) test and confirm that high quality ads campaigns positively affect satisfaction and later contribute to loyalty. Similar results were confirmed by other authors such as Villarejo-Ramos and Sanchez-Franco (2005), Alex (2012), Amoako, Anabila, Effah and Kumi (2017), and Elsaber and Wirtz (2017). In particular, an ads campaign which high in attractiveness, sufficiency, consistency, frequency and product demand (Caceres & Paparoidamis, 2005; Villerejo-Romos & Sanchez-Franco, 2005; Alex, 2012) is expected to create customer satisfaction. Based on this, the following hypothesis is formulated:
H5 Advertising campaign has a positive influence on customer satisfaction.
Brand image is being defined as brand perceptions "reflected by the associations held in consumer's memory" (Keller, 1993, p. 3). Feldwick (1996) refers brand image to "information and beliefs carried in mind of consumers with respect to the specific brand". Approached by customers emotionally (Malar, Krohmer, Hoyer & Nyffenegger, 2011), a brand with positive and favourable image is preferred by customers, thus increasing their responses towards the marketing activities (Keller, 1993) and influence brand equity outcomes in both consumer (Aaker, 1991; Keller, 1993) and B2B settings (Elsaber & Wirtz, 2017). In many B2B and brand equity studies, brand image is said to affect brand loyalty and price premium (Taylor, Celuch & Goodwin, 2004; van Riel et al., 2005; Davis, Golicic & Marquardt, 2008). A positive relationship between brand image and brand strength was found related to the determinants of brand loyalty, such as: why customers "choose" (Mudambi et al., 1997), "select" (Kuhn, Alpert and Pope, 2008), stay "loyal" to (Taylor et al., 2004; van Riel et al., 2005), or "continuously purchase" (Han & Sung, 2008) a brand. In a retail setting, a good brand image should be positive, famous, well known, can be recall easily and has strong personality (Villerejo-Romos & Sanchez-Franco; Davis et al., 2008; Juntunen et al., 2011; Elsaber & Wirtz, 2017) to create customer satisfaction. Based on this, the following hypothesis is developed:
H6 Brand image has a positive influence on customer satisfaction.
Salesman's expertise is referred to "the ability or power to influence people to buy at mutual benefit which we have to sell but they might not have the thought of purchasing until we call their attention to it" (Knox, 1912, p. 179). Salesman is crucial in improving the relationship quality between supplier and buyer and between their companies (Crosby, Evans & Cowles, 1990; Lagace, Dahlstrom & Gassenheimer, 1991), contributing toward emotional evaluations (satisfaction; Baumgarth & Binckebanck, 2011) and affecting brand equity outcomes by generating trust, safety and sympathy (Lynch & de Chernatony, 2007) and even delight (Barnes, Collier, Howe & Hoffman, 2016).
Salesman's expertise plays an important role particularly in the industrial branding research (Ahearne, Jelinek & Jones, 2007; Choi, Ying & Sternquist, 2015). Investing in relationship equity is essential for B2B marketers as it helps to entice delight (Barnes et al., 2016) and even improve or develop trust in buyer-seller relationship (Hennig-Thurau, Gwinner & Gremler, 2002; Macintosh, 2007). Special relationship established between customer, company and its brand strengthen brand equity, leading to satisfaction and loyalty (Richards and Jones, 2008). Buyers and sellers will be in a static state and less willing to cease their relationship unless things get terribly wrong due to their tendency to form long term relationships (Gounaris & Venetis, 2002). Salesman's personality, expertise, social skill, product and market knowledge influences on brand evaluation by buyers and brand equity outcomes are widely studied in business branding context (Lynch & de Chernatony, 2004; van Riel et al., 2005; Baumgarth & Binckebanck, 2011; Elsaber & Wirtz, 2017). To create satisfaction, salesman should be sociable and possess knowledge on market, product and customers (Baumgarth & Binkebanck, 2011; Chen & Su, 2012; Elsaber & Wirtz, 2017). Based on this, the following hypothesis is developed:
H7 Salesman's expertise has a positive influence on customer satisfaction.
Manufacturing Country's Product Image
Aaker (1991) stressed on the role of country as a powerful character which relates closely to its materials, products and capabilities. Consumers hold relative preference (affinity) or aversion (animosity) for products, depending on the manufacturing-country of origin (Klein, Ettenson & Morris, 1998; Oberecker et al., 2008). Focuses on the manufacturing country, the effects of origin manufacturing country largely vary across product category (Jain, 2012; Schweiger, 2012), be it beneficial or harmful. Consequent to globalization, bi-national or hybrid products of brands, country-of-manufacture image captures more attention in industrial branding (Chao, 1998; Chen and Su, 2012) and in B2B studies (Chen & Su, 2012). Bilkey and Nes (1982, p. 89) refer it to "the inference of consumers that the characteristics of a country transfer onto a product". Elsaber and Wirtz (2017) also confirmed on the positive effect of manufacturing country's image on the brand equity outcomes. Favourable image is formed when the products carried by supplier are from country with higher quality, better value, durable, reliable and produced carefully and with much control (Klein et al., 1998; Elsaber & Wirtz, 2017). Based on this, the following hypothesis is formulated:
H8 Manufacturing country's product image has a positive influence on customer satisfaction.
Customer loyalty is positively influenced by satisfaction (Bloemer & de Ruyter, 1997). In industrial branding researches, customer-based brand loyalty has always been one of the most important brand equity outcomes (van Riel et al., 2005; Baumgarth & Binckebanck, 2011). Both consumer branding (Brakus, Schmitt & Zarantonello, 2009) and B2B researches (Biedenbach, Bengtsson & Marell, 2015, Huang et al., 2019) consistently confirm the positive relationship between customer satisfaction and customer-based brand loyalty.
Research on behavioural loyalty (Tucker, 1964; Anderson & Sullivan, 1993) found that customer satisfaction positively affects repurchase intention, while attitudinal loyalty researchers (Zeithaml et al., 1996; Bennett & Rundle-Thiele, 2002) have confirmed the positive relationship between customer satisfaction and positive word-of-mouth (WoM). Both loyalty dimensions are widely supported and used (Jacoby & Chestnut, 1978; Dick & Basu, 1994; Lu, Wu & Hsiao, 2019). In a retail study on three industries (healthcare, hospitality and education), Kasiri et al. (2017) also confirm the significant influence of satisfaction on loyalty. Based on this, the following hypothesis is developed:
H9 Customer satisfaction has a positive influence on customer loyalty.
H9a Customer satisfaction has a positive influence on repurchase intention.
H9b Customer satisfaction has a positive influence on positive word of mouth (WoM).
Mediating effect of customer satisfaction was also proven in mediating brand equity factors and customer loyalty (Aaker, 1991; Bloemer & De Ruyter, 1998; Olsen & Johnson, 2003; Bodet, 2008; Gorondutse & Hilman, 2013). Gorondutse and Hilam (2013) found satisfaction mediates service quality and customer loyalty in the F&B industry context. Similar findings were found in other industries (Osman & Sentosa, 2013). Some corroborate the mediating role of satisfaction in explaining repurchase intention (Westbrook & Oliver, 1991; Babin, Lee, Kim & Griffin, 2005). Malaysian researchers such as Kheng, Mahamad, Ramayah and Rahim (2010) and Osman and Sentosa (2016) suggest satisfaction mediates the relationships between bank service quality and customer loyalty and customer trust. Similar result was found between service quality, corporate image, perceived value, and customer loyalty in the airline industry (Hussain, 2016). Mohd Kassim, Igau, Harun and Tahajuddin (2014)'s study also concurs customer satisfaction as a mediator in the relationship between perceived product quality, perceived value, and brand loyalty. Jones and Suh (2000) argued that overall customer satisfaction has a partial mediating effect on the relationship between transaction-specific characteristics and customer loyalty. Hence:
H10 (a-i) Customer satisfaction mediates the relationship between transaction specific characteristics and customer loyalty.
Purposive sampling method was adopted as the respondents need to possess the required purchasing related knowledge, expertise and experience. The respondents were buyers in charge of buying on the purchasing department of retailer formats (e.g. hypermarket, supermarket, convenience stores, provision, traditional grocery store, wholesaler and others). The buyers are in charge of buying decisions in a retail outlet, in which the examination of the proxy to their satisfaction and loyalty is critical. This study adopted self-administered questionnaire to "minimize the biasing error caused by the interviewers' characteristics and skills" (Phellas, Bloch & Seala, 2011, p. 7). The questionnaires were translated into two languages (Malay and Mandarin), by two native language speakers and crosschecked by an expert in the field. Five cognitive interviews were carried out to minimize grammatical and typo mistakes and to ensure correct interpretation of measurement items. The data collection was conducted for a period of 2 months among the packaged food buyers around the state of Sabah, Malaysia with a total 250 questionnaires distributed.
G* Power analysis with a Priori test (Soper, 2015) was used to determine the minimum required sample size. The results indicated 178 observations (anticipated effect size=0.15, desired statistical power level=0.95, number of predictors=11, probability level=0.05) as acceptable. The total valid responses collected and analysed in this study was 221 (response rate of 88.4%), which is more than the minimum requirement. The measurement items were adapted from past literatures, which consisted of 47 items to measure the constructs. All constructs were measured with five-point Likert scale, range from 1 "strongly disagree" to 5 "strongly agree". Product Qualuty was measured with 4 items, adapted from van Riel et al. (2005); Baumgarth and Binckebanck (2011) and Ramaseshan (2013). Service quality was measured with 4 items, adapted from van Riel et al. (2005); Davis-Sramek et al. (2009) and He and Li (2011). Distribution quality was measured with 4 items adapted from Mudambi et al. (1997); van Riel et al. (2005) and Chen and Su (2012). The five items measuring price perception were adapted from Geyskens et al. (1999); Somogyi and Gyau (2009); Gyau and Spiller (2011) and Susanty et al. (2017), while the 5 items measuring advertising campaign were adapted from Geyskens et al. (1999); Somogyi and Gyau (2009); Gyau and Spiller (2011) and Susanty et al. (2017). Brand image and salesman expertise was adopted from Elsaber and Wirtz (2017), each with 4 items. Manufacturing country's product image was measured with 5 items adapted from Darling and Arnold (1988) and Klein et al. (1998). Customer satisfaction was measured with 4 items adopted from Cronin et al. (2000); Davis-Sramek et al. (2009); and Askariazad and Babakhani (2015). The two loyalty outcomes, namely repurchase intention and positive WOM, each measured with 4 items, adapted from Elsaber and Wirtz (2017).
Findings of the Study
Refer to Table 1, a majority of the respondents were male (50.2%) who aged 29 or below (29.4%), are employed to take care of the purchasing work of the corresponding company (54.8%) and hold the position of manager and above (e.g. purchasing manager, general manager, directors; 55.7%). Most of them are involved in modern trade outlets (44.3%) such as hypermarkets, supermarkets, minimarkets and convenience stores. Comparing Elsaber and Wirtz (2017)'s study where majority of the respondents were buyers who hold at least executive positions, the respondent profile of this study is considered acceptable.
Harman's single factor test was conducted to check if the percent of variance of a single component in extraction sums of squared loadings is less than 50%. The results indicated 36.246 percent, which suggests that the common method variance (CMV) is of no concern in this study (Podsakoff, MacKenzie, Lee & Podsakoff, 2003). Refer to Table 2, the generally low standard deviation values implied little opposite ideas among respondents. The mean scores for all the studied variables were above 3 (neutral), with salesman's expertise scored the highest (m=4.087). The respondents somehow agreed that product quality, service quality, distribution quality, price perception, ads campaign, brand image and manufacturing country's product image were important attributes for them to evaluate their suppliers. It also indicates that satisfaction affects the choices of supplier; while they have higher repurchase intention and provide positive WoM when they are loyal.
Convergent validity is the degree to which multiple indicators of a specific constructs converge or share a huge proportion of common variance and this was examined through the factor loadings, average variance extracted (AVE), and composite reliability (CR) (Hair, Hult, Ringle & Sarstedt, 2017). The recommended value for a valid result is composed of loadings and AVE which greater than 0.5 while CR should be higher than 0.7. Table 3 shows that all the loadings and AVE values constructed were higher than 0.5 and CR greater than 0.7. The AVE values varied from 0.654 to 0.818, exceeding the minimum requirement of 0.5. The measurement model achieved satisfactory convergent validity. Besides, all Cronbach's Alpha coefficients were greater than 0.8, which indicated good internal reliability (Sekaran, 2003).
The discriminant validity is the extent of distinctiveness for a construct compared to other constructs, and it is measured using Fornell and Larcker's criterion, Cross Loading measurement and HTMT (Hair et al., 2017). Table 4 shows the bolded numbers of square root of AVE were greater than the value of the other constructed measurement in row and column, fulfilling the Fornell-Larcker's criterion (1981).
The results of cross loadings between constructed measurements were examined. The loadings for each block were found greater than the other values in row and column sections which indicated the existence of acceptable discriminant validity between all constructs. Henseler, Ringle, & Sarstedt (2015) have suggested the assessment of the correlations' Heterotrait-Monotrait ratio (HTMT) to show the estimation of the true correlation between two latent variables and a threshold value of 0.90 has been suggested. Refer to Table 5, none of the values exceeded 0.90, hence fulfilling the HTMT criterion.
Lateral collinearity issue must be avoided before evaluating the structural model as it may mask the strong causal effect in the studied model (Kock and Lynn, 2012). All inner VIF values for the independent variables were found less than 5, indicating lateral multicollinearity is not a concern in the study (Hair, Hult, Ringle, & Sarstedt, 2014).
Bootstrapping procedure with 500 subsamples was carried out to generate the t-value and the structural model. [R.sup.2] values indicate the variance in dependent variables that explain by the independent variables. The values of [R.sup.2] for all three relationships of the test are 0.546, 0.485 and 0.339, which above the 0.26 value as suggested by Cohen (1988), indicating a substantial predictability of the structural model.
The hypothesis testing results shown in Table 6 indicated five supported direct hypotheses. First of all, a significant relationship was found between product quality and customer satisfaction, supporting H1 ([beta]=0.269; t= 3.531; p<000; [f.sup.2]=0.09). Secondly, price perception was found to affect customer satisfaction significantly, supporting H4 ([beta]=0.187; t= 2.253; p<05; [f.sup.2]=0.04). Significant relationships were found between brand image and customer satisfaction ([beta]=0.170; t= 2.565; p<0.005; [f.sup.2]=0.04) and between manufacturing country's product image and customer satisfaction ([beta]=0.137; t=1.809; p=0.012; [f.sup.2]=0.02), supporting H6 and H8. According to Cohen (1988) that effect sizes ([f.sup.2]) of 0.02, 0.15, and 0.35 represent small, medium, and large effect size respectively (Cohen, 1988). All the four significant constructs were found to have small effect sizes.
The rest of the four hypotheses, namely H2, H3, H5 and H7 were found not supported. Service quality was found to have an insignificant relationship with customer satisfaction (t=1.331, p=.092), hence not supporting H2. Similarly, there is no significant relationship found between distribution quality and the customer satisfaction (t= 0.757; p= 0.225) and between ads campaign and customer satisfaction (t=0.329; p= 0.371), hence not supporting H3 and H5. Finally, Hypothesis 7 was not supported as there was no significant relationship between salesman's expertise and customer satisfaction (t=0.568; p= 0.285).
Customer satisfaction was found positively related to repurchase intention ([beta]=0.696; t=11.463; p< 0.000) and to positive WoM ([beta]=0.582; t= 8.690; p< 0.000), supporting both H9a and H9b. Customer satisfaction has a large effect size on repurchase intention ([f.sup.2]= 0.94) and WoM ([f.sup.2] =0.51) respectively.
Mediating effect between the two tested variables is found when there is no zero between the upper limit (UL) value and lower limit (LL) value (Ramayah, 2014). Refer to Table 7, customer satisfaction has mediated a total of six relationships out of the sixteen total analyzed relationships. First, customer satisfaction has mediated the relationship between product quality and repurchase intention (behavioural loyalty) ([beta]=0.164, p<0.01), and between product quality and positive word-of-mouth (attitudinal loyalty) ([beta]=0.137, p<0.01). Then, customer satisfaction has mediated the relationship between price perception and repurchase intention (behavioural loyalty) ([beta]=0.140, p<0.05), and between price perception and positive word-of-mouth (attitudinal loyalty) ([beta]=0.117, p<0.05). Third, customer satisfaction has mediated the relationship between brand image and repurchase intention (behavioural loyalty) ([beta]=0.105, p<0.05).
Predictive relevance ([Q.sup.2]) value should be included in the blindfolding analysis as validation test to check the fitness of model (Stone, 1974). According to Fornell and Cha (1994) and Hair et al. (2014), a [Q.sup.2] value should be greater than zero to indicate that exogenous construct has predictive relevance over endogenous constructs. Refer to Table 6, the [Q.sup.2] values for customer satisfaction, Repurchase Intention (Behavioural Loyalty) and Positive WoM (Attitudinal Loyalty) are 0.364, 0.287 and 0.229 respectively, indicating that the model has sufficient predictive relevance.
Discussion of the Findings
Product quality is found to have the most significant association with customer satisfaction in a B2B packaged food retail setting, followed by price perception. This result corroborates van Riel et al. (2005)'s and Elsaber and Wirtz (2017)'s studies that product quality significantly affects customer satisfaction in an industrial context. In particular, product quality dimensions such as reliability, accuracy, durability and consistency are important in determining buyers' satisfaction level. However, the insignificant role of service quality is rather unexpected, inconsistent with Ruyter and Wetzels (1998), Elsaber and Wirtz (2017) and Kasiri et al. (2017)'s study. A possible reason could due to the uniqueness of Malaysian packaged food retail environment. The traditional trading business model which operates in many Malaysian packaged food retail markets tend to focus more on price rather than service quality. Kasiri et al (2017) in their study argued that Malaysian consumers are stressing more on 'how' rather than 'what' service is delivered. However, in this study, the industry buyers are fond to stress on 'what' rather than 'how' the service is delivered. In addition, the limited numbers of distributor or supplier also leave food retail businesses less choice and have less demand power, especially in term of service quality. The other reason could be the due to the nature of the packaged food market which serves the needs of the masses with low priced products which further leads to less emphasis on service quality. Kumar (2018) for instance, posits service quality to have less importance in the low-cost airline industry. Other researchers such as Dachyar and Siva (2015) argued that service quality doesn't significantly affect customer satisfaction, in which customer could be satisfied or compensated with the low-priced products with low level of service quality.
Price perception (PP) has a positive influence on customer satisfaction. Consistent with Lam et al. (2004) and Matzler et al. (2006), a favourable and profitable pricing that is properly informed and communicated timely to the business customers is important. This is especially true during the tough economic situation where industrial retail players and end consumers become more price sensitive in their effort to survive. They are willing to sacrifice other aspects in order to enjoy lower price. Next, brand image is found to have a positive effect on customer satisfaction, corroborate Davis et al. (2008)'s and Elsaber and Wirtz (2017)'s studies. Customers are not only getting familiar with famous brands but also feel confident and safer to buy these products (Persson, 2010). Buyers could have a list of established brands in mind that represent a particular product category. For example, it is commonly known in Malaysia that Maggi is the number 1 instant brand; Milo for malt drinks and Nescafe for instant coffee. These brands are famous, well known, easily recalled, have strong brand personalities and listed as priority in buyers' consideration sets.
Manufacturing country's product image is also found to significantly influence customer satisfaction, consistent with Chen and Su (2012) and Elsaber and Wirtz (2017). News of fake food such as fake eggs, melamine mixed in milk powder and etc. has raised Malaysian consumers' concern over food safety, further causing buyers to pay close attention to the origin of the manufacturing country, besides brand. Products manufactured in countries that are of high quality, high value, more durable and reliable, and with more control in the process of manufacturing may increase end users' buying intention and hence are preferred by buyers.
Good distribution qualities such as availability, on-time delivery and convenient ordering are previously posited to satisfy customers. However, contradicting Mudambi et al. (1997), Innis and La Londe (1994) and Huma et al. (2019)'s findings, this study did not support the role of distribution quality. This is surprising because sea and land transportation play important roles in Malaysian packaged food retail markets. A possible explanation could be due to the large number of small sized Malaysian packaged food retailers who are mostly independent rather than chain retailers. The small operation size limits the ability to make fair comparison. In fact, they could have viewed the distribution quality that they receive as the norm of the industry. In many occasions, distribution qualities such as on time delivery and availability are depending on uncontrollable factors such as port and custom clearance. Due to limited choices of distribution channels available, buyers could have no choice but to tolerate the inefficiencies.
Ads campaign is also failed to influence customer satisfaction in the packaged food retail industry, inconsistent with Caceres and Paparoidamis (2005), Villarejo-Ramos and Sanchez-Franco (2005) and Lu et al. (2019). One possible reason could be the negative perceptions toward ads campaign, which buyers have less trust on the authenticity of the ads campaign, consistent with Chirambo (2011)'s arguments. Finally, salesman's expertise is found not significantly affecting customer satisfaction, inconsistent with Baumgarth and Binckebanck (2011)'s and Chen and Su (2012)'s studies. One of the possible explanations could be stated by Chen, Yeh and Yeh (2011) whereby sales representatives' expertise didn't significantly influence the trust building mechanism in economic aspects; while trust itself is crucial in strengthening the brand equity and customer satisfaction. In addition, characteristics such as sociable and knowledge might not be critically important to buyers due to the simplicity of the packaged food products. Most of the transactions are routine reordering or even straight rebuy which require less modifications and market or product knowledge. Salesman expertise could also be viewed as fundamental requirement, in which sales representatives are expected to be knowledgeable in the area concerned (Barnes et al., 2016) and hence does not surprise the customers.
Customer satisfaction is found to significantly influence both behavioural (repurchase intention) and attitudinal (positive WoM) loyalties, corroborates past research studies conducted by Oliver (1999), van Riel et al. (2005), Baumgarth and Binckebanck (2011), Biedenbach et al. (2015), Lu et al. (2019), Huang et al. (2019) and even earlier studies such as Anderson and Sullivan (1993), Tucker (1964), Zeithaml et al. (1996) and Bennett and Rundle-Thiele (2002). Customer satisfaction has larger impact on repurchase intention ([f.sup.2]=0.94) compared to positive WoM ([f.sup.2]=0.51). In term of behaviours, buyers tend to stay longer with a supplier that they are satisfied with for a long time and try to continue to buy the same products from them. They also encourage their counterparts or other retailers to buy the products, and even talk positively to their customers, competitors, friends and acquaintances about the brands. The mediating role of satisfaction was found valid only for product quality and price perception on their relationships with repurchase intention and positive WoM; as well as between brand image and repurchase intention.
Implications, Limitation, Future Research and Conclusion
This study recognises the lack of study of transaction-specifics characteristics on customer satisfaction and loyalty in a B2B packaged food context. Understanding of the relationships among these variables is important in predicting loyalty outcomes such as repurchase intention and positive WOM. As such, this study has the following implications: From a total of eight transaction-specific characteristics tested, only four factors namely product quality, price perception, brand image and manufacturing country's product image, showed significant influences; while service quality, distribution quality, advertising campaign and salesman's expertise, did not significantly influence customer satisfaction. Secondly, by examining both behavioural (repurchase intention) and attitudinal components (positive WoM), this framework is aligned with Oliver's four-stage loyalty framework (1999), which includes the positive influence of customer satisfaction (affective stage) on customer loyalty (conative stage). Such composite approach examines customer loyalty in a more comprehensive manner, understanding of the stochastic representation of behavioural loyalty additionally through study of the attitudinal components, and easier to identify true loyal customers and their degree of loyalty.
Thirdly, the empirical findings from the present study also posit that customer satisfaction plays a larger role on behavioural loyalty than attitudinal loyalty. Satisfied buyers are more likely to engage in repurchase rather than spreading positive WoM to their friends and alliances. Fourthly, the mediating role of customer satisfaction on the relationships between transaction-specific characteristics and customer loyalty was only proven in the case of product quality and price perception constructs on their relationships with repurchase intention and positive WoM; as well as between brand image and repurchase intention.
From the managerial point of view, the findings of this paper could serve as a guideline to packaged food marketers to plan for effective marketing strategy and enhance their market competency. Marketers are suggested to focus on enhancing the overall retail customer satisfaction as it would directly and positively influence buyer loyalty outcomes such as repurchase intention and spreading of positive WoM, which eventually lead to a better profit margin and performance. The highly competitive Malaysian retail market is forcing brands to fight for the limited resources and market share. Under such environment of ongoing commoditization, it is more difficult and challenging for supplier(s) to build up unique selling propositions. The overall customer satisfaction should be improved through improvements on product quality, price perception, brand image and manufacturing country's product image.
Importantly, product quality should be given the priority as it exhibits the most significant influence and largest effect on customer satisfaction. Packaged food marketers should avoid low quality products which risk their reputation and reduce customer willingness to pay for premium prices. The findings of this study also highlight the importance of price perception in an industry full with packaged food brands selling similar items. It is critical for marketers to provide timely information on price changes so buyers are well aware and able to act accordingly in order to prevent any inconveniences; and to carry out price promotions such as "last-bite" purchase with old price before price increment.
The findings also highlight the importance of brand image and manufacturing country's product image. The packaged food retail buyers are more susceptible to the effect of brand image and have more confidence to choose products of with positive, familiar or strong image. It is hence important for packaged food marketers to invest in brand building effort to ensure their brands are perceived as good quality and fair value by buyers. Finally, manufacturing country's product image is another important factor to be considered. Marketers should stress on favourable manufacturing country images in their selling proposition to retail buyers. For product with less favourable country image, packaged food marketers could highlight other transactional characteristics such as price and product quality as their selling point to divert buyers' attention and encourage sales.
This research has several limitations. First of all, the respondent profile indicated that business or outlets types are neither average nor according to the actual proportions of the total business in Malaysia, limiting the generalizability of the findings. Secondly, the questionnaires were distributed to buyers via sales representatives. This might affect the assessment of the "salesman's expertise" as the respondents might not want to reveal their actual negative impressions. Thirdly, the present study adopted a cross-sectional design. Due to the ever-changing nature of perceptions and intention, exploring the longitudinal evidences on the customer satisfaction in B2B context would be beneficial.
Future Research and Conclusion
Further research could focus on a particular type of retail format (e.g. supermarket or hypermarket) or types of business (e.g. wholesaling or trading). The impacts of transaction specific characteristics on loyalty outcomes could be different across retail format or types of business. Future researchers could also divide their respondents that have inhouse or outsourced logistic team, or through different area as those in easily accessed areas and those rural areas without proper way of transport could have perceived this factor differently in the examination of distribution quality. Apart from that, salesman aspect could be also analysed separately through different aspects of salesman like expertise and behaviours. Service quality is found to be a neglected concept for the Malaysian packaged food buyers, which required further investigation. Lastly, other mediating variables such as customer trust and habits could be considered. It's recommended to continue the practice of conceptualizing customer loyalty into both behavioural component and attitudinal component.
In a nutshell, this study provides useful insights to brand owners, manufacturers or distributors in the packaged food industry, in maintaining and enhancing customer loyalty, thus advancing their corporate and marketing strategies, to reach the final aim of improvement of overall firm's performance.
Implications for Asian Business Context
Malaysian packaged food retail market is experiencing tremendous changes due to the change in consumer taste and preference, advancement of technology as well as the unstable macroeconomic condition. The packaged food manufacturers and the distributors or even the retail marketers have to fight for the limited resources and market share. Under such environment of ongoing commoditization, it is more difficult and challenging to build up unique selling propositions.
The findings of this study present useful insights for both marketing and business practitioners. In specific, the packaged food marketers are recommended to focus on enhancing the overall retail customer satisfaction as it would directly and positively influence on buyer loyalty in terms of repurchase intention and spreading of positive Words of Mouth (WoM), which eventually lead to a better profit margin and performance. The buyers not only stay longer with a supplier that they are satisfied with for a long time and try to continue to buy the same products from them, they also encourage their counterparts or other retailers, and talk positively to their customers, competitors, friends and etc. about the brands.
The overall customer satisfaction should be improved through improvements on product quality, price perception, brand image and manufacturing country's product image. Product quality should be given the priority as it exhibits the most significant influence and largest effect on customer satisfaction. Understanding that selling low quality products will harm their reputation and reduce customer willingness to pay for premium prices, quality of the product is a great concern to buyers.
In addition, the packaged food retail markets are full with brands selling similar items. Points of differentiation are harder to be identified and price perception then plays a crucial role. It is important for the packaged food marketers to have timely information on price changes so their customers (the buyers) are well aware and able to act accordingly in order to prevent any inconveniences; and carry out price promotions for such scenario, like "last-bite" purchase with old price before price increment. The findings also showed that retail buyers are more susceptible to the effect of brand image. They are more confident to choose products of with positive, familiar or strong image. In fact, they could have a list of preferred brands in their minds which pre-determined their choices of packaged food. Branding building effort through effective positioning strategy is hence critical for packaged food manufacturers and distributors. Finally, manufacturing country's product image is also an important factor to be considered. It is important to stress on manufacturing country in their selling proposition to retail buyers. It is important for packaged food marketers to pay attention to consumers' concern over food safety. News of fake food such as fake eggs, melamine mixed in milk powder and etc. has raised Malaysian consumers' attention to the origin of the manufacturing country, besides brand. They tend to choose products manufactured in countries that are of high quality, high value, more durable and reliable, and with more control in the process of manufacturing to increase end users' buying intention.
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Phang Ing @ Grace
Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Kota Kinabalu, Malaysia
Yee Sheng Sim
Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Kota Kinabalu, Malaysia
Publication Details: Received 8 Sep 2019; Revised 25 Feb 2020; Accepted 22 Mar 2020
Table 1: Profile of Respondents Demographic Variables Categories Frequency Gender Male 111 Female 110 Age 29 years or below 65 30 to 39 years 63 40 to 49 years 44 50 years or above 49 Ownership Status Yes 100 No 121 Position Held in Company Manager and above 123 Executive and below 98 Type of Business Traditional Wholesale Trading 72 General Trading Company 51 Modern Trade Outlets 98 221 Demographic Variables Percentage Gender 50.2 49.8 Age 29.4 28.5 19.9 22.2 Ownership Status 45.2 54.8 Position Held in Company 55.7 44.3 Type of Business 32.6 23.1 44.3 100.0 Table 2: Mean and Standard Deviation for the Studied Variables Variables Mean Standard Deviation Product Quality (PQ) 3.872 0.6360 Service Quality (SQ) 3.956 0.6845 Distribution Quality (DQ) 3.851 0.7044 Price Perception (PP) 3.749 0.6754 Ads Campaign (AC) 3.523 0.6685 Brand Image (BI) 3.785 0.6397 Salesman's Expertise (SE) 4.087 0.6478 Manufacturing Country's Product Image (MCPI) 3.604 0.6570 Customer Satisfaction (CS) 3.902 0.5936 Repurchase Intention (Behavioural Loyalty) (RI) 3.801 0.6363 Positive WoM (Attitudinal Loyalty) 3.870 0.5715 Table 3: Convergent Validity Construct Measurement Loading AVE CR Item Product Quality (PQ) PQ1 0.900 0.686 0.896 PQ2 0.893 PQ3 0.820 PQ4 0.684 Service Quality (SQ) SQ1 0.888 0.776 0.933 SQ2 0.911 SQ3 0.889 SQ4 0.834 Distribution Quality (DQ) DQ1 0.751 0.701 0.903 DQ2 0.884 DQ3 0.843 DQ4 0.866 Price Perception (PP) PP1 0.712 0.654 0.904 PP2 0.860 PP3 0.825 PP4 0.807 PP5 0.833 Ads Campaign (AC) AC1 0.871 0.725 0.930 AC2 0.828 AC3 0.865 AC4 0.871 AC5 0.823 Brand Image (BI) BI1 0.835 0.756 0.925 BI2 0.883 BI3 0.881 BI4 0.877 Salesman's Expertise (SE) SE1 0.906 0.818 0.947 SE2 0.930 SE3 0.872 SE4 0.909 Manufacturing Country's PI1 0.799 0.749 0.937 Product Image (MCPI) PI2 0.878 PI3 0.891 PI4 0.880 PI5 0.875 Customer Satisfaction (CS) CS1 0.833 0.733 0.917 CS2 0.892 CS3 0.866 CS4 0.833 Repurchase Intention RI1 0.845 0.660 0.885 (Behavioural Loyalty) (RI) RI2 0.872 RI3 0.810 RI4 0.712 Positive WoM PW1 0.863 0.740 0.919 (Attitudinal Loyalty) PW2 0.858 PW3 0.860 PW4 0.860 Construct Cronbach's Alpha Product Quality (PQ) 0.845 Service Quality (SQ) 0.904 Distribution Quality (DQ) 0.858 Price Perception (PP) 0.868 Ads Campaign (AC) 0.905 Brand Image (BI) 0.893 Salesman's Expertise (SE) 0.926 Manufacturing Country's 0.916 Product Image (MCPI) Customer Satisfaction (CS) 0.878 Repurchase Intention 0.826 (Behavioural Loyalty) (RI) Positive WoM 0.883 (Attitudinal Loyalty) Table 4: Fornell-Larcker's Criterion Constructs AC BI CS DQ MCPI Ads Campaign (AC) 0.852 Brand Image (BI) 0.461 0.869 Customer Satisfaction (CS) 0.388 0.512 0.856 Distribution Quality (DQ) 0.358 0.390 0.533 0.837 Manufacturing Country's 0.613 0.574 0.533 0.421 0.865 Product Image (MCPI) Positive WoM (Attitudinal 0.330 0.476 0.582 0.482 0.405 Loyalty) (PW) Price Perception (PP) 0.386 0.369 0.564 0.557 0.539 Product Quality (PQ) 0.388 0.451 0.595 0.493 0.448 Repurchase Intention 0.434 0.545 0.696 0.545 0.567 (Behavioural Loyalty) (RI) Salesman's Expertise (SE) 0.194 0.302 0.443 0.550 0.324 Service Quality (SQ) 0.316 0.353 0.576 0.681 0.390 Constructs PW PP PQ RI SE Ads Campaign (AC) Brand Image (BI) Customer Satisfaction (CS) Distribution Quality (DQ) Manufacturing Country's Product Image (MCPI) Positive WoM (Attitudinal 0.860 Loyalty) (PW) Price Perception (PP) 0.527 0.809 Product Quality (PQ) 0.458 0.405 0.829 Repurchase Intention 0.564 0.538 0.536 0.812 (Behavioural Loyalty) (RI) Salesman's Expertise (SE) 0.442 0.499 0.379 0.346 0.904 Service Quality (SQ) 0.548 0.637 0.552 0.47 0.613 Constructs SQ Ads Campaign (AC) Brand Image (BI) Customer Satisfaction (CS) Distribution Quality (DQ) Manufacturing Country's Product Image (MCPI) Positive WoM (Attitudinal Loyalty) (PW) Price Perception (PP) Product Quality (PQ) Repurchase Intention (Behavioural Loyalty) (RI) Salesman's Expertise (SE) Service Quality (SQ) 0.881 Table 5: HTMT Criterion Constructs AC BI CS DQ MPCI PW Ads Campaign (AC) Brand Image (BI) 0.515 Customer Satisfaction (CS) 0.434 0.575 Distribution Quality (DQ) 0.403 0.443 0.606 Manufacturing Country's 0.678 0.634 0.585 0.468 Product Image (MCPI) Positive WoM (Attitudinal 0.368 0.535 0.659 0.558 0.445 Loyalty) (PW) Price Perception (PP) 0.429 0.418 0.632 0.652 0.599 0.594 Product Quality (PQ) 0.456 0.521 0.685 0.578 0.518 0.528 Repurchase Intention 0.509 0.625 0.814 0.632 0.656 0.658 (Behavioural Loyalty) (RI) Salesman's Expertise (SE) 0.213 0.330 0.486 0.622 0.353 0.490 Service Quality (SQ) 0.345 0.389 0.641 0.782 0.425 0.613 Constructs PP PQ RI SE SQ Ads Campaign (AC) Brand Image (BI) Customer Satisfaction (CS) Distribution Quality (DQ) Manufacturing Country's Product Image (MCPI) Positive WoM (Attitudinal Loyalty) (PW) Price Perception (PP) Product Quality (PQ) 0.462 Repurchase Intention 0.636 0.643 (Behavioural Loyalty) (RI) Salesman's Expertise (SE) 0.556 0.426 0.397 Service Quality (SQ) 0.716 0.629 0.551 0.669 Hypothesis Relationship Std Beta Std Error t-value H1 Product Quality - > 0.269 0.076 3.531 Customer Satisfaction H2 Service Quality - > 0.131 0.098 1.331 Customer Satisfaction H3 Distribution Quality - > 0.072 0.095 0.757 Customer Satisfaction H4 Price Perception - > 0.187 0.083 2.253 Customer Satisfaction Advertising Campaign H5 - > Customer -0.025 0.077 0.329 Satisfaction H6 Brand Image - > 0.170 0.066 2.565 Customer Satisfaction Salesman's Expertise - H7 > Customer 0.038 0.066 0.568 Satisfaction Manufacturing H8 Country's Product 0.137 0.076 1.809 Image - > Customer Satisfaction H9: Customer Satisfaction positively affect customer loyalty H9a Customer Satisfaction - 0.696 0.061 11.463 > Repurchase Intention H9b Customer Satisfaction - 0.582 0.067 8.690 > Positive WoM Hypothesis p-value Decision [R.sup.2] [f.sup.2] [Q.sup.2] H1 0.000** Supported 0.546 0.09 0.364 H2 0.092 Not Supported 0.01 H3 0.225 Not Supported 0.01 H4 0.012* Supported 0.04 H5 0.371 Not Supported 0 H6 0.005** Supported 0.04 H7 0.285 Not Supported 0 H8 0.036* Supported 0.02 H9: Customer Satisfaction positively affect customer loyalty H9a 0.000** Supported 0.485 0.94 0.287 H9b 0.000** Supported 0.339 0.51 0.229 Note: t-values for one-tailed test: *>1.645 (p<0.05), **>2.326 (p<0.01) Table 7: Mediation Test Results Hypothesis Relationships Std Beta Std Error H10: Customer satisfaction mediate the relationship between transaction specific characteristics and customer loyalty H10a(i) PQ - > CS - > RI 0.164 0.061 (Behavioural Loyalty) H10a(ii) PQ - > CS - > Positive 0.137 0.051 WoM (Attitudinal Loyalty) H10b(i) SQ - > CS - > RI 0.115 0.079 (Behavioural Loyalty) H10b(ii) SQ - > CS - > Positive 0.096 0.066 WoM (Attitudinal Loyalty) H10c(i) DQ - > CS - > RI 0.043 0.074 (Behavioural Loyalty) H10c(ii) DQ - > CS - > Positive 0.036 0.061 WoM (Attitudinal Loyalty) H10d(i) PP - > CS - > RI 0.140 0.057 (Behavioural Loyalty) H10d(ii) PP - > CS - > Positive 0.117 0.052 WoM (Attitudinal Loyalty) H10e(i) AC - > CS - > RI -0.030 0.058 (Behavioural Loyalty) H10e(ii) AC - > CS - > Positive -0.025 0.049 WoM (Attitudinal Loyalty) H10f(i) BI - > CS - > RI 0.105 0.052 (Behavioural Loyalty) H10f(ii) BI - > CS - > Positive 0.087 0.045 WoM (Attitudinal Loyalty) H10g(i) MCPI - > CS - > RI 0.123 0.062 (Behavioural Loyalty) H10g(ii) MCPI - > CS - > 0.103 0.051 Positive WoM (Attitudinal Loyalty) H10h(i) SE - > CS - > RI 0.021 0.049 (Behavioural Loyalty) H10h(ii) SE - > CS - > Positive 0.018 0.041 WoM (Attitudinal Loyalty) Hypothesis t-value LL UL Results H10: Customer satisfaction mediate the relationship between transaction specific characteristics and customer loyalty H10a(i) 2.689** 0.063 0.305 Mediation H10a(ii) 2.705** 0.050 0.247 Mediation H10b(i) 1.455 -0.026 0.277 No Mediation H10b(ii) 1.455 -0.021 0.224 No Mediation H10c(i) 0.584 -0.093 0.181 No Mediation H10c(ii) 0.592 -0.089 0.146 No Mediation H10d(i) 2.444* 0.025 0.248 Mediation H10d(ii) 2.254* 0.021 0.221 Mediation H10e(i) 0.515 -0.128 0.099 No Mediation H10e(ii) 0.513 -0.112 0.081 No Mediation H10f(i) 2.012* 0.015 0.214 Mediation H10f(ii) 1.927 0.012 0.181 No Mediation H10g(i) 1.977* -0.004 0.243 No Mediation H10g(ii) 1.999* -0.002 0.202 No Mediation H10h(i) 0.432 -0.066 0.124 No Mediation H10h(ii) 0.430 -0.055 0.105 No Mediation
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|Author:||Grace, Phang Ing; Sim, Yee Sheng|
|Publication:||Asian Journal of Business Research|
|Date:||Apr 1, 2020|
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