Satisfaction, trust and loyalty: investigating the mediating effects of commitment, switching costs and corporate image

DOIhttps://doi.org/10.1108/JABS-08-2015-0119
Pages361-380
Date10 December 2018
Publication Date10 December 2018
AuthorHarsandaldeep Kaur,Harmeen Soch
SubjectStrategy,International business
Satisfaction, trust and loyalty: investigating
the mediating effects of commitment,
switching costs and corporate image
Harsandaldeep Kaur and Harmeen Soch
Abstract
Purpose The purpose of this study is to develop an understanding of the factors influencing Indian
consumers’ loyalty toward mobile phone service providers by exploring the mediating roles of
commitment, corporate image and switching costs on causal relationships between customer
satisfaction,trust and loyalty.
Design/methodology/approach A survey of 855Indian mobile phone users was carried outto test the
hypothesizedrelationships using structural equationmodeling. The results support most of the proposed
hypotheses.
Findings The direct linkages in the model are found to be statistically significant. Of these
relationships, corporate image emerged as the strongest determinant of attitudinal loyalty. Calculative
commitment and corporateimage are found to be partial mediators betweensatisfaction and attitudinal
loyalty. Calculative commitment and switching costs are each proven to be partial mediators between
trust andattitudinal loyalty, while corporateimage is proved to be a complete mediator.
Research limitations/implications The study is limited to examining the impact of relationship
variables on Indian consumers’ loyalty toward mobile phone companies. Future research can examine
the impact of variablessuch as rate plans, value-added services, billingexperience and voice quality on
customerloyalty.
Practical implications The results have implicationsfor retaining customers in highly competitiveand
maturing Indian mobile telecommunications. The research provides some initial insights into corporate
brand buildingas an important area for mobile phonecompanies.
Originality/value This is one of the first studies to test the mediating role of commitment, switching
costs and corporateimage in the relationship between satisfaction,trust and loyalty in the Indian context.
Keywords Commitment, Customer loyalty, Switching costs
Paper type Research paper
1. Introduction
The topic of customer loyalty has been extensively studied in the marketing literature.
Customer loyalty is considered to be significant determinant of financial success of a
business organization, as existingcustomers are significant drivers of price premium, share
of wallet and share of visits (Evanschitzky et al.,2012;Pan et al.,2012). Loyal customers
develop a strong attachment to the brand, favorably evaluate a company and resist
competitive offerings (So et al.,2013). For these reasons, it is important for the firm to retain
its current customers and make them loyal to the company. In a competitive set up, an
understanding of factors which influence the development of loyalty in current customers is
an important issue (Chen, 2012).
Previous research in the field of marketing has made significant contribution in the
identification and study of factors that drive customer loyalty. There are significant gaps in
Harsandaldeep Kaur is
based at Department of
Commerce, Guru Nanak
Dev University, Amritsar,
India. Harmeen Soch is
based at the Department of
Management, I.K. Gujral
Punjab Technical University
Kapurthala, Kapurthala,
Punjab, India.
Received 5 August 2015
Revised 29 July 2016
26 August 2016
19 February 2017
8 May 2017
Accepted 14 May 2017
DOI 10.1108/JABS-08-2015-0119 VOL. 12 NO. 4 2018, pp. 361-380, ©Emerald Publishing Limited, ISSN 1558-7894 jJOURNAL OF ASIA BUSINESS STUDIES jPAGE 361
knowledge of antecedents of loyalty. Many studies exist on the antecedents of loyalty,
including customer satisfaction (Deng et al., 2010;Chen, 2012;Picon et al., 2014), trust
(He et al., 2012;Amin et al., 2013;Phan and Ghantous, 2013), commitment (Evanschitzky
et al., 2012;Wu et al.,2012), service quality (Gonzalez et al., 2007;Lai et al.,2009)and
perceived value (Pan et al.,2012;Roger-Monzo et al.,2015). Recently variables like
corporate image and switching costs as predictors of loyalty have been of interest to
academics (Hur et al.,2010;Edward and Sahadev, 2011). To date, no studies have
examined simultaneously the structural relationships between customer satisfaction, trust,
commitment, corporate image and switching costs as antecedents of loyalty. The first
purpose of this study is to examine an integratedmodel of loyalty.
Second, recent studies have pointed out that customer satisfaction does not always have a
direct effect on loyalty, but often works through mediators (Chen, 2012;Picon et al.,2014;
Izogo, 2015). Kumar et al. (2013) havepointed that holistic models that encompass relevant
variables as moderators, mediators, antecedent variables or all three are better predictors
of loyalty than models with just customer satisfaction. The literaturedealing with influence of
commitment, corporate image and switching costs on the relationship between satisfaction
and loyalty has used variety of approaches. For example, commitmenthas been suggested
as an antecedent of loyalty (Richard and Zhang, 2012;Wu et al.,2012) or as moderator of
the satisfaction-loyalty link (Liljander and Strandvik, 1995). In addition, commitment is also
considered a mediator in the satisfactionloyalty relationship (Han et al.,2008;Tsai, 2011;
Ting and Yeh, 2014). Various studies consider corporate image as an antecedent of
customer satisfaction and trust (Lin and Lu, 2010;Richard and Zhang, 2012;Wu, 2014).
Some studies view corporate image as driver of satisfaction and trust (Flavia
´net al., 2005;
Martenson, 2007;Srivastava and Sharma, 2013). Many authors consider corporate image
as an attitude and view corporate image as a consequence of customer satisfaction
(Johnson et al.,2001;Kandampully and Hu, 2007;Moon et al.,2013). In addition, corporate
image has been suggested as mediatorin some studies (Ladhari et al., 2011;Jani and Han,
2014). Despite the vast literature on switching costs, there are inconsistent views regarding
the role of switching costs in the satisfaction-loyalty link. Some studies consider switching
costs as an antecedent of loyalty (Deng et al.,2010;Edward and Sahadev, 2011;Pan et al.,
2012); mediator in the satisfaction-loyalty link (Aydin and O
¨zer, 2005;Augusto de Matos
et al.,2009
;Edward and Sahadev, 2011) and as moderators on the relationship between
satisfaction and loyalty (Lee et al.,2001;Ranaweera and Prabhu, 2003). Little work reports
on the mediating roles of commitment, corporate image and switching costs in an
integrated model. The gaps found in the literatureprovide a strong base for introducing the
mediating roles of commitment, corporate image and switching costs in the relationships
between satisfaction, trust and attitudinal loyalty. The second purpose of this study is to
develop and empirically test an integrative model that examines the mediating role of
commitment, corporate image and switching costs in the relationship between customer
satisfaction, trust and attitudinal loyalty in the mobile phone servicescontext.
Third, the model will be empirically testedin the mobile phone services industry because of
the crucial importance of customer retention for mobile phone companies (Gerpott et al.,
2001). In a highly competitive market like telecommunication sector, firms are expected to
stay competitive by implementing customer retention strategies and preventing customers
from switching to competing brands(Izogo, 2015). As the main objective of mobile services
companies is to increase customer retention, an understanding of drivers of customer
loyalty will provide useful insights(Calvo-Porral and Le
´vy-Mangin, 2015).
Fourth, most previous research in services relies on theoretical frameworks developed in
highly individualistic Western contexts (Mattila and Patterson, 2004). The Western-
developed theories may not be applicable in other cultural contexts. Limited evidence
suggests that consumers do not become loyal the same way in different cultures (Lai et al.,
2009). Therefore, there is a need to developa model to explore factors influencing loyalty of
PAGE 362 jJOURNAL OF ASIA BUSINESS STUDIES jVOL. 12 NO. 4 2018

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