20-Customer Perceived Values associated with Automobile and Brand Loyalty_2.pdf

8/18/2019 20-Customer Perceived Values associated with Automobile and Brand Loyalty_2.pdf

1/16

Page 1

Research Paper

Customer Perceived Values associated with Automobile and Brand

Loyalty

Muhammad Yousif MoosaSchool of Accounting and Business Management

FTMS College, Malaysia

[email protected]

Zubair HassanSchool of Accounting and Business Management

FTMS College, Malaysia

[email protected]

Abstract

The purpose of this study is identifying the customer perceived value associated with automobile

and examining its impact on customer satisfaction and brand loyalty. A sample size of 198

respondents was chosen from various points in Jeddah, Saudi-Arabia using convenient sampling. A

multi-factor CPV questionnaire with a Likert-Scale from 1-5 was used to collected the data to

determine customer perceived value associated with automobile and its impact on customersatisfaction and brand loyalty. To ensure reliability and validity of the data set, sample size only

includes respondents who have been using/driving an automobile for a year. Descriptive statistics

shows that the most significant perceived value associated with automobile is functional value

followed by emotional value and epistemic value. Social value was the least reason that

respondents purchase an automobile. In terms of correlations, this study found that overall

customer perceived value associated with automobile is highly correlated with customer

satisfaction and brand loyalty. Bivariate multiple regression analysis shows that there is a

significant and positive impact of FV and CV on customer satisfaction. We do not find any

significant influence of EV, EPV and SV on customer satisfaction. However we found that there is a

significant and positive impact of EV, FV and CV on customer brand loyalty. Again we did not find

any significant impact of SV and EPV on brand loyalty. The current study contributes to the body of

research by investigating the combined impacts of customer perceived value on automobiles usingone instrument on cross-sectional setting. This research shows that customer perceived value

associated with automobile is crucial in increasing customer satisfaction and brand loyalty. Future

research should be undertaken on different context or by increasing the sample size by widening

the research context to ensure validity and reliability of the results.

Key Terms: Customer Perceived Value, Emotional Values, Social Values, Conditional Values,

Epistemic Values, Functional Values and Customer loyalty, Automobile

1. Introduction


2/16

Page 2

In past many researches were done on this topic in various parts of the world. Most ofthe studies were conducted on developed countries compared to developing countries. Amongthese studies most of the researches were done on U.S.A ( Sheth, 1991; Chi 2011; Yang 2009).Among these studies most of them were focus on European countries such as UK, Spain, Italy,Portuguese, Norway, and France (Lasley 2011; Christine 2011; Desmet 2014). However

handfuls of researches were done on developing countries. Among these studies most of thestudies were done on developing countries such as Taiwan, Malaysia, Indonesia, china, SaudiArabia, United Arab Emirates, Korea, and South Korea Pakistan (Abu Bakar, 2014; Hallet 2013;Yu Wu 2014;Yusuf 2013). In terms of customer perceived value there were very limitedresearches, particularly in Saudi Arabian context there were shortage of literature on this field(Abu Bakar,2014; Eid, 2011; Abu Bakar, 2013; Jamil,2014). Most of the past studies were takenplace on retail, tourism, IT, food, online, airline, bank and automobile industries. (Park, 2014;Chi, 2011; En-Chi, 2013; Vera, 2013; Joon ,2011). Limited research were done on education,tobacco, furniture, mobile. (Sheth,1991; Lasley, 2011; Marketla, 2012). In terms of studies doneon Middle Eastern countries, in particular Saudia Arabia, it seems there is no research done onto identify the impact of CPV on brand loyalty in automobile industry.

In past the key themes that were emphasis on measuring CPV includes quality,emotional value, brand image, social value and price (Lasley, 2011; Markus, 2013; Sandra,2012). One of the most popular and cited theoretical framework was Sheth et al. (1991)’sproposed five values (Sheth, 1991). As this research intended to conduct on Saudi Arabia,quality, price, design, privacy and satisfaction were identified as most commonly cited variablesused to measure customer perceived value. (Abu Bakar, 2014; Eid, 2011; Abu Bakar, 2013;Jamil, 2014). As this research investigates the key issues such as retention, loyalty, satisfactionand repeat purchase associated with CPV. Most of the research shows CPV has a positiveimpact on brand loyalty. Also CPV has a positive impact on retention, satisfaction and repeatpurchase (Yang, 2009 ). There are many factors which impact positively on CPV such as, Pricewhich is considered the most powerful factor for customer retention for an organization.

Emotional value also considered one the factor which has positively impact on CPV (Vera,2013). Customers emotionally satisfied from service or products are enabling to repeat inpurchase. Most researches show that quality has positive impact on CPV, whereby the customerbecome more loyal toward the organization (Yu Wu, 2014). If the customer are not satisfiedthere is chance to lose the market-share. Some of the research shows that purchase intension isinfluences by CPV (Calabuig, 2013; Yusuf, 2013). If the requirements of customers are notfulfilled there are many negative impacts for the organization to have risk for having bad wordof mouth from their customers, the image of an organization will be affected negatively (Sandra,2012).

As there were no research done on automobile industry on examining the impact ofcustomer perceived value on brand loyalty, particularly in Saudi Arabian automobile industry,

this research intends to fill the research gap on CPV impact brand loyalty of Saudi Arabianautomobile industry. Therefore the following key objectives are formulated for this research

To examine the impact of customer perceived values on customer satisfaction To examine the impact of customer perceived values on brand loyalty

To examine the impact of customer satisfaction on brand loyalty

This paper is organised as follows: first part is discussed above. Second part is thetheoretical framework and research hypothesis development. Third part discusses the researchdesign and methodology, data collection procedures and process. Fourth part presents theresults and discussion. Final part is conclusion and recommendation, and implication for furtherresearch

2. Literature Review


3/16

Page 3

2.1. Definitions of Key Concepts

Basic definitions of CPV are overall assessment of the utility of a product based onperception of what is received and what is given (Ulaga, 2000). Some defined CPV as direct

determinant of behavioral intensions and consumer loyalty (Peterson, 2004). While othersargue that consumption values explained why consumer chooses to buy or not to buy a specificproduct (Sheth, 1991). Also some defined CPV as overall economic perspective assessment ofproduct effectiveness by the consumers (ziethmal, 1988). Satisfaction or dissatisfaction hasdirect effect on consumer’s assessment of service quality and value. (Bolton, 1991).

2.3. Review of key theories

Monroe (1985) Price Quality Model was widely adopted and discussed model inmeasuring CPV. This framework focused on the categorization and analysis of price-qualityrelationship. Monroe (1985) proposed that perceived value is an important factor for customersor consumers purchase decision process and they will buy a product with high perceived value.

According to Monroe (1985) that consumers will assess what they give and what they receivedin their personal perception when they are buying a product/ service. This framework consistonly price as its variable to measure the customer perceived value, meanwhile it has shortfall ofmany variables in order to measure customer perceived value in particular associated withautomobile.

Another pioneering model is Trade-off model introduced by Zeithmal(1988). This isone of the uni-dimensional models to measure perceived value which applies quality and priceas key factors to measure the customer perception toward the products and services (Ziethmal,1988). Ziethmal (1988), identified four different dimension in terms of customer values suchas, ‘value as low price, value as whatever the consumer wants in product, value as quality obtained from the price paid and lastly value as what consumer gets for what he or she paid

.’ Further itwas explained as trade-off between what is paid and what is received. This suggested that thisapproach of measuring perceive value is uni-dimensional. This indicated that many shortfalls ofthis theory in measuring customer perceived value associated with products characteristics, inparticular automobiles. Ziethmal (1988) states the perceived quality as benefits and perceivedprice as sacrifices for a particular product or service. The limitations of this model is muchattributed to the service experiences rather than nature of service experiences as multi-dimensional model build with traditional functional dimension such as; quality, benefit andprice, perceived risk (Robinson, 2010).

Also Typology for Consumer Value introduced by Holbrook (1999) is one of the keytheoretical framework use to measure CPV associated with products. This framework contains

eight variables for measure the customer perceived value. The variables are efficiency, play,excellence, aesthetics, status, ethics, esteem and spirituality (Holbrook, 1999). The concept ofthis framework is referring to the value of product which includes the services and goods. Thisframework is based on three- dimensional paradigms which are those, consumer value can beeither extrinsic vs. intrinsic, active vs. reactive and self-oriented or other oriented (Holbrook,1999). This model is considered to be one of the suitable frameworks to measure CPVassociated with automobile such as cars. However this model is less useful in case if customerchanges their value preferences overtime.

The Value Hierarchy Model developed by Woodruff (1997) was widely adopted tomeasure CPV associated with services , especially in banking industry. This multi-dimensionalframework of Woodruff (1997) to measure customer perceived value is the trade-off betweendesirable attributes compared with sacrifices attributes. Woodruff (1997) hierarchy modelincludes consumption goals, consequences and attributes. This is measurement framework to


4/16

Page 4

monitor the customer perceived value in four types of customers, (1) First-time customer, (2)short-time customer, (3) Long-term customer and (4) defectors (Woodruff, 1997; Parasuraman,1997). This framework has taken the means-end theory of perceived value and suggested it haswide- range applicability. This framework proposed to use to determine the strategic goals oforganizations and individual to make them understand the value in a use situation before the

purchase situation rather than only understanding the buyer behavior and decision-making.According to Halt (n.d) that there is no evidence in literature to suggest that this frameworkcould not be applied to other groups of customers such as business-to-business customers.Similarly there is no evidence which can suggest that it could not apply for an organizationalsetting as oppose to an individual setting (Halt, n.d). However this framework is less relevant tomeasure the perceived value among the consumer-to-consumer market, this framework is moretoward the measure the perceived value for business-to-business market (Hall, n.d). Meanwhilethis study intends to measure customer perceived value of automobile brands from individualusers which is called business-to-consumer. Hence this framework is less relevant to measurethe impact of customer perceived value on brand loyalty among consumers particularly tangibleproducts(Hall, n.d).

In 1990s, a key multi-dimensional theories that contributed toward customer perceivedvalue is Seth, Norman and Newman (1991) consumption value framework. This frameworkcomprises with five variables to measure customer perceived value. These are functional, social,emotional, epistemic and conditional values (Seth et al, 1991). This framework is very useful inmeasuring various attributes of a product using customer perspective. As most of the researchindicated that customer purchase a product based on benefits (Monroe,1985). Monroe (1985)’sproposed model of CPV that depicts benefits versus sacrifices failed in detailing the key sourcesof values. Seth et al (1991) overcome this problem and detail-out various aspects of a productand how these attributes derives function values is very suitable to assess the types of valuesthat a customer derive before and after they purchase a product, in particular a car. In case ofmeasuring CPV associated with automobile, four variables such as functional, social, emotional,

and epistemic values seems quite appropriate to measure CPV of a car (Seth et al, 1991).Further Sheth et al. (1991) framework were tested in three different choices such as, whetherto buy or not to buy specific product, the choice of one type to another, and lastly choice ofbrand to another (Gaskill, 2004). Further this model is used to determine the possible reasonsfor buying or not buying a particular product or service (Candan, 2013) ‘This framework islimited to choice by individual and it only addresses choice, which are systematic and voluntary’(Gaskill, 2004, p.27). This model is much suitable for voluntary decisions. However values suchas conditional factor are less relevant in this framework associated with automobile industry,because conditional value is not easy to understand of customers unless the situation, time andplace which might make conditional factor valid (Canadan, 2013).However it is important toretain all the values as proposed in the framework.

2.4 Conceptual Framework


5/16

Page 5

Figure 1 – Conceptual Framework of CPV and its influences on satisfaction and loyalty

3. Research Design and Methodology

Subjects

A total of 250 questionnaires were distributed and a total of 213 questionnaires werereturned (response rate 85.2%). However, some of these returned questionnaires wereexcluded from the sample as some respondents do not complete the questionnaire. This meansthe study only used 198 completed questionnaires.

Procedure and data collection

The researchers independently contacted the respondents using non-random samplingtechniques of convenience sampling techniques. Additionally, permission from the eachrespondent was obtained by requesting them to sign the Participant Consent Form.Respondents were given a Participant Information Sheet to indicate the purpose and theimportance of this research. The completed questionnaires were collected by the researchersand reminded the respondents to inform the researcher if they wish to withdraw from thisstudy before the data were processed (30 days).

Questionnaire

Questionnaire is designed to gather the data. It consists of three parts 1, 2, and 3.

Part – 1:It deals with personal details such as sex, education, age, etc.

Part – 2:Consists 25 statements to measure the customer perceived value (CPV). Four dimensions suchas function value (FV), social value (SV), emotional value (EV), and epistemic value (EPV),conditional values (CV).

Part – 3:Consists of 10 statements which are divided into two main variables. 5 statements were used tomeasure customer satisfaction and 5 statements to measure customer brand loyalty.


6/16

Page 6

By including variables, questionnaire is prepared with five points Likert scaling system.Then analysis is made with appropriate statistical tools, in order to prove the objectives of thestudy and to test the causal impact of CPV on customer satisfaction and loyalty. For this study,following baseline models were established.

Customer Satisfaction = β0 + β1X1 + β2X2 + β3 X3 + β4X4+ β5X5 --------(1)Brand Loyalty = β0 + β1X1 + β2X2 + β3 X3 + β4X4 + β5X5----------------- (2)Brand Loyalty= β0 + β1 (Customer Satisfaction) ------------------------ (3)

Where,

X1= Social Values (SV)X2= Emotional Value (EV)X3= Epistemic Value (EPV)X4= Functional Value (FV)X5= Conditional Values (CV)

4. Results and Discussion

4.1. Demographic Analysis

The respondents are grouped in 7 clusters including age group, gender, automobile brand,occupation, level of education, automobile type, and income level. In terms of respondents73.2% of respondents are from age 20 to 31 years indicating that most users are young adults.Only 8.1% of respondents are above 41 years. In terms of gender, 93.9% of respondents aremale and only 6.1% users are female. This significant fewer number of females driving or using

an automobile could be attributed to the strict rules against Muslims women in driving a car inSaudi-Arabia.

In terms of occupations, most of the car drivers or users are administrative officers(26.8%), supervisors (15.2%) followed by managers (13.1%). Only 7.6% of respondents arebusiness owners. 36.9% of respondents completed certificate level studies, followed bybachelor’s degree with 28.8% of respondents, and 15.7% of respondents obtained master

degrees. 56% of respondents earns an average income ranged between US$1000-US$1500 permonth indicating that most of the respondents are doing administrative job and also itcorrelates with the level of education completed (certificate). 80.8% of respondents earned anaverage income ranged from US$1000 to US$2500. Only 17.2% of respondents earned anaverage income ranged between US$2600 to US$4500.

In terms of automobile type, 83.4% of respondents drives or uses cars followed by truckwith 11.7% followed by van with 4%. This indicates the most of the car users are young adults.The users who uses van could have larger families so that they can move around together whereSaudi-Arabia is considered as collectivist society. However due to the changing life style, mostpeople , especially young adults aged between 20 years to 30 years may prefer to have theirown vehicle such as a car. In terms of brand choice among the users or drivers of automobile,30.3% respondents drives or uses Toyota brand cars or vehicles followed by Nissan and Hondawith each 9.1%. South Korean Hyundai is among the fourth rank with 8.1%. As most of therespondents average income ranged between US$1000-2500, this could influence the car brandchoice due to the price and reliability of car. Toyota is considered to be one of the reliable care

with most affordable price around the world.


7/16

Page 7

The Table below shows the detail demographic aspects of the respondents.

VariableCategories Frequency Percent Cumulative

Percent

Age Group 20 29 14.6 14.6

21-30 116 58.6 73.2

31-40 37 18.7 91.9

>41 16 8.1 100Gender Female 12 6.1 6.1

Male 186 93.9 100

AutomobileBrand

Toyota 60 30.3 30.3

Nissan 18 9.1 39.4

Hyundai 16 8.1 47.5

Honda 18 9.1 56.6

Others 86 43.4 100

Occupation Manager 26 13.1 13.1

Own Business 15 7.6 20.7

Supervisor 30 15.2 35.9

Admin Officer 53 26.8 62.7

Office/factory secretory/clerk 20 10.1 72.8

Others 54 27.2 100

Level of

Education

PHD 4 2 2

Masters 31 15.7 17.7Bachelors 57 28.8 46.5

Diploma 27 13.6 60.1

Certificate 73 36.9 97

Professional Accounting 6 3 100

Automobile Type Car 167 84.3 84.3

Truck 23 11.7 96

Van 8 4 100

Income Level US$1000-1500 111 56 56

US$1600-2000 33 16.7 72.7

US$2100-2500 16 8.1 80.8

US$2600-3500 21 10.6 91.4

US$3600-4500 13 6.6 98

US$4600-5500 2 1 99

>US$5600 2 1 100

Table 1: Socio-demographic Profile of the Participants

4.3. Reliability and Validity

Before applying statistical tools, testing of the reliability of the scale is very muchimportant as its shows the extent to which a scale produces consistent result if measurementsare made repeatedly. This is done by determining the association in between scores obtainedfrom different administrations of the scales. If the association is high, the scale yields consistentresult, thus is reliable. Cronbach’s alpha is most widely used method. It may be mentioned thatits value varies from 0 to 1 but, satisfactory value is required to be more than 0.6 for the scale tobe reliable (Malhotra, 2002; Cronbach, 1951). If we compare our reliability value with the

standard value alpha of 0.6 advocated by Cronbach (1951), our scale is highly reliable in mostcases. Nunnally and Bernstein (1994) or with the standard value of 0.6 as recommended byBagozzi and Yi’s (1988) we find that the scales used by us are highly reliable for facto r analysis,except emotional values as it is 0.555 , which is lower than 0.6. However we decided to retainthe variable of emotional value as overall reliability for CPV is 0.869, which exceeds 0.6. TheCronbach alpha results listed in Table 2 , were based on all the retained items and offeredstrong support for reliability in four customer perceived value dimensions.

Variable Driver Number of items Cronbach Alpha (α)

Customer Perceived Value Social Value 5 0.695

Emotional Value 5 0.555

Epistemic Value 5 0.743

Functional Value 5 0.674

Conditional Value 5 0.791

Overall CPV 25 0.869


8/16

Page 8

Satisfaction Satisfaction 5 0.747

Brand Loyalty Loyalty 5 0.794

Table 2- Reliability Analysis

Factor Analysis

To assess the dimensionality of customer perceived value (social, emotional, epistemic ,functional and conditional value scale) associated with automobiles among Saudi Arabians,factor analysis (principal component, varimax rotation) was conducted on the items listed inTables 3. The indicators related to customer perceived value were function perceived functionalvalues, emotional values, social values, and epistemic values. The 25 retained items from 5variables of CPV.

Component

CV EPV EV&SV EPV&SV FV FV&EV EV

CV4 .827CV3 .802CV2 .770CV5 .674EPV1 .749EPV2 .643EPV4 .634EPV3SV1CV1SV4 .717EV1 .637SV2 .633EV2SV3 .745EPV5 .648SV5 .633FV2FV4 .752FV5EV3 .795FV3 .629FV1EV5 .747EV4 .613

EigenValue

6.188 2.93 1.577 1.272 1.247 1.045 1.023

Extraction Method: Principal Component Analysis.Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 10 iterations.

Table 3-Rotated Component Matrixa

The factor analysis further grouped the functional and emotional values as one factor.An analysis of the Eigen values and the scree plot for customer perceived value suggested thatseven (7) factors exist related to the Customer perceived value (Table 3). The total variances

extracted by the 7 factors were 61.1%. To retain the dimensions, the Eigen value must be 1.0. ormust exceed 1.0. All the components in used in the construct , including customer perceived


9/16

Page 9

value associated with automobile is more than 1.0 and cumulative variance for all the itemsincluded in the construct exceeded 60%, we decided to retain all the items falls under eachvariable.

Sample Adequacy

After checking the reliability and validity of scale, we tested whether the data socollected is appropriate for factor analysis or not. The appropriateness of factor analysis isdependent upon the sample size. A study conducted by MacCallum, Windaman, Zhang and Hong(1999) have shown that the minimum sample size depends upon other aspects of the design ofthe study. According to them, as communalities become lower, the importance of sample sizeincreases. They have argued that if all communalities are above 0.5, relatively small samples(less than 300) may be perfectly adequate. It is clear that a sample size of 198 as is used in thiscurrent research is good for a suitable factor solution because all commonalities are 0.5 andabove except for FV2, FV5 and CV1. This suggested to examine the sample adequacy usingKaiser-Mayer-Olkin (KMO) method.

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .815

Bartlett's Test of Sphericity

Approx. Chi-Square 1644.115

df 300

Sig. .000

Table 4-KMO and Bartlett's Test

Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy is still another useful methodto show the appropriateness of data for factor analysis. The KMO statistics varies between 0 and1. Kasier (1974) recommends that values greater than 0.5 are acceptable. Between 0.5 and 0.7

are mediocre, between 0.7 and 0.8 are good, between 0.8 and 0.9 are superb (Field, 2000). Inthis study, the value of KMO for customer perceived value or the whole construct is 0.815suggesting that the factor analysis is good and statistically significant (Kaiser-Meyer- Olkin =0.815, Bartlett’s test of Sphericity was significant at p = 0.000 level). Therefore this suggests toretain all the variables proposed initially in the scale construct.

Descriptive Statistics

N Minimu

m

Maximu

m

Mean Std.

Deviation

Skewness Kurtosis

Statistic Statistic Statistic Statistic Statistic Statistic Std.Error

Statistic Std.Error

SV 198 1.60 5.00 3.4798 .85656 -.088 .173 -.995 .344

EV 198 1.20 5.00 3.7747 .69015 -.551 .173 .349 .344

EPV 198 1.60 5.00 3.7677 .80944 -.374 .173 -.796 .344

FV 198 2.20 5.00 4.0828 .67441 -.648 .173 -.320 .344

CV 198 1.40 5.00 3.6313 .97545 -.308 .173 -.846 .344

SATIS 198 2.20 5.00 4.0788 .71351 -.458 .173 -.685 .344

LOYALTY 198 1.20 5.00 3.8879 .79117 -.824 .173 .565 .344

Valid N(listwise)

198


10/16

Page 10

Table 5-Descriptive Statistics

Looking into Table 5, it shows that distribution of data is normal as it satisfies theskewness and kurtosis rules. The general rule is that the skewness should of the curve shouldnot exceed more than 1 or less than -1. Similar rules apply to kurtosis. This means the peak

value of the curve should not exceed 1 and the flatness of the curve should not go below -1.

In terms of the CPV, functional value is mostly associated with automobile compared toall other CPV (M=4.08, SD=0.674). Emotional value is the second most important CPV associatedwith automobiles with a mean value of 3.77 (SD=0.690). The least CPV associated withautomobile is social value (M=3.4798, SD=0.857). Most of the respondents seems very satisfiedwith their automobile with the highest mean score (M=4.078, SD=0.714) compared to brandloyalty.

Correlation

Factor Correlation

Satisfaction

P


11/16

Page 11

As can be seen from this data, none of the Tolerance level is < or equal to 1; and all VIFvalues are well below 10. Thus, the measures selected for assessing independent variables inthis study do not reach level indicated of multi co linearity as shown in Table 8.

Variable Durbin-Watson

Satisfaction 1.4848

Brand Loyalty 2.196

Table 8-Test of Durbin-Watson

The acceptable Durbin – Watson range is between 1.5 and 2.5. In this analysis Durbin – Watson values for supervisor is 2.190 which is highest score. There was no auto correlationproblems in the data used in the research. Thus, the measures selected for assessing dependentvariables in this study do not reach level indicate of multi co linearity.

Regression Analysis

For this study, regression analysis was performed to predict the level of student

satisfaction based on five independent factors. The five independent factors/dimensions of TLare idealized attributes, idealized behavior, intellectual stimulations, inspirational motivationand individual consideration.

Model R R Square Adjusted R Square Std. Error of theEstimate

1 0.606a 0.367 0.350 0.57512

Table 9-Model Summary in predicting Customer Satisfaction

The Table 9 shows that R is 0.606, R square is 0.367 and adjusted R square is 0.350. Thisindicates that 35% of the variance in customer satisfaction can be explained by the changes inindependent variables of CPV. However as a general rule, this model is considered as a ‘poor fit’

as this multiple regression model fails to explain 60% of variance in dependent variable(customer satisfaction).

Model Unstandardized Coefficients StandardizedCoefficients

t Sig.

B Std. Error Beta

1

(Constant) 1.202 .296 4.062 .000

SV -.118 .064 -.141 -1.830 .069

EV .127 .076 .122 1.659 .099

EPV .004 .066 .004 .054 .957

FV .582 .074 .550 7.844 .000

CV .115 .049 .158 2.372 .019

Dependent variable: Customer Satisfaction

Table 10-Regression model for customer satisfaction

The result of regression analysis shows that out of the five indicators of CPV ininfluencing customer satisfactions, only two are significant as shown in Table 9. The twosignificant factors are functional value (FV) with P value =0.000 (P


12/16

Page 12

This model suggest that when the most significant two factors of CPV is not associatedwith automobile of the preferred brand, customer satisfaction is still positive and by associatingany of the two CPV with the preferred brand, the empirical model can increase the level ofsatisfaction when other things remain constant. The model above suggested that the changes infunctional value(FV) can have the biggest influence on level of customer satisfaction as its Beta

coefficient is the most significant and highest.

Model R R Square Adjusted R Square Std. Error of the

Estimate

2 0.509a 0.259 0.240 0.68994

Table 11-Model Summary in predicting Brand Loyalty

The second model is about brand loyalty. The Table 11 shows that R is 0.509, R square is0.259, and adjusted R square is 0.240. This shows that only 24% of the variance in brand loyaltycan be explained by the changes in CPV. Also as a general rule, this model is considered as a‘poor fit’. This is because the adjusted R square is less than 60%.

Based on the Table 12 below, it shows that three CPV are significant and positive ininfluencing brand loyalty. These are emotional value (EV) with Beta Coefficient of 0.235(P=0.04), where P


13/16

Page 13

loyalty can be explained by the changes in customer satisfaction. Also as a general rule, thismodel is considered as a ‘poor fit’. This is because the adjusted R square is less than 60%.

Model Unstandardized Coefficients StandardizedCoefficients

t Sig.

B Std. Error Beta

1(Constant) 1.697 .287 5.915 .000SATIS .537 .069 .484 7.752 .000

a. Dependent Variable: LOYALTY

Table 14-Regression model for customer brand loyalty

Based on the Table 14 above, it shows that customer satisfaction is significant andpositive in influencing brand loyalty (adjusted R square =0.484, p=0.000). Therefore theempirical model is written as follows

Brand Loyalty = 0.484(SATIS) +1.697

This model suggest that when customer satisfaction is improved while other thingsremain constant, customer brand loyalty will improve.

5. Discussions and Conclusion

In recent years numerous theories on customer perceived values (CPV) have emerged invarious countries (Vera, 2013; Marketla, 2012; Abu-Bakar, 2014; Jamil, 2014). Also CPV in havebeen examined in many sectors (Chen, 2012; Wu, 2014; Vera, 2013; Orel, 2014; Yusuf, 2013).However, there appears to be little research available on CPV in relation to customersatisfaction and loyalty in developing countries, particularly in Saudi-Arabia. Therefore, in this

particular research, we attempted to shed light on the dimensions of CPV and its impact oncustomer satisfaction and brand loyalty in automobile industry in Saudi Arabi. However,because of the small sample size due to the limited coverage (only Jeddah), therefore it will beappropriate to repeat this research with a large sample size covering the whole Saudi Arabia,especially all the key sectors. By conducting research on these areas, we can re-examine theimpact of CPV on brand loyalty to ensure the validity and reliability of the results. Moreover,future research should continue to address specific business sectors (national cars and foreigncars). As this study attempted to cover some of the demographic factors, a future study couldexamine how each of these factors could affect the way customer perceived value in relation toservices and products.

Overall, we found that this research fulfilled its purposes by identifying the degree of CPVassociated with automobile and its impact on customer satisfaction and loyalty. In short theconclusions are

Functional value(FV) positively influences customer satisfaction and loyalty. Also it isimportant to note that FV is considered as one of the most important values thatperceived by customer when they purchase a car, van or a truck.

Conditional value (CV) is the second most important value that are perceived bycustomer when they made a purchasing decision of an automobile. Similarly, CV issignificant and positively influence customer satisfaction and loyalty.

Emotional value can increase brand loyalty and also it is considered as one of the keyCPV associated with automobile.


14/16

Page 14

It is important to note that improved customer satisfaction due to CPV has a significantand positive influence on customer brand loyalty

Implications for practice: Based on the findings, it is evident that improvingfunctional, emotional and conditional values would improve customer satisfaction and brandloyalty. Therefore it is important to emphasis on improving functional aspects of automobile.Perhaps engine reliability, fuel consumption and design along with recognized brand of theautomobile could increase customer satisfaction and loyalty. This could result increase in sales.

Further Research Direction: Since this study was conducted only on Jeddah, SaudiArabia, it may not be able to generalize the finding. However by conducting this research onwider context of a particular country could confirm the findings and maybe a significantcontribution to this field of study.

References

[1] Abu Bakar, A., 2014. Customer store loyalty in the context of customer perceived value in SaudiArabia. Journal of contemporary research in business, [e-journal] available through:http://journal-archieves36.webs.com/442-460apr14.pdf [accessed 29 October 2014].

[2]

Abu Bakar, A., Al Ruwais, N., Othman, A. 2013. Customer net value: A service gap perspectivefrom Saudi Arabia. Global journal of business research, [e-journal] available through:file:///C:/Users/Yousif/Downloads/SSRN-id2239239.pdf [accessed 29 October 2014].

[3] Bolton, R. & Drew, J. (1991). A multistage model of customers’ assessments of service quality andvalue. Journal of consumer research, 17: 375-384.

[4] Calabuig, F. Juan, N., Vicente Prado, G., V. Ano. 2013. Effect of price increase on future intensionof sport consumers. Journal of business research, [e-journal] available through: Anglia RuskinUniversity library website http://libweb.anglia.ac.uk [Accessed 28 Jan 2014]

[5] Candan, B. et al. 2013. Analysing the relationship between consumption values and brand loyaltyof young people. International Association of Social Science Research. [e-journal] availablethrough: http://iassr.org/rs/010405.pdf [accessed 1 November 2014].

[6] Chi,T., Kilduff,P., 2011. Understanding consumer perceived value of casual sportswear. Journal ofretailing and consumer services, [e-journal] 18 available through: Anglia Ruskin universitylibrary website http://libweb.anglia.ac.uk [Accessed 21 Jan 2014].

[7] Christine, et al. 2011. European consumer’s perceived importance of qualifying and disqualifyingnutrients in food choices.Food quality and preferences, [e-journal] available through: AngliaRuskin University library website http://libweb.anglia.ac.uk [accessed 3 Feb 2014].

[8] Desmet, P., 2014. How retailer money-back guarantees influence consumer preferences forretailers versus national brands. Journal of business research, [e-journal] available through:˂http://libweb.anglia.ac.uk ˂ [accessed 7 July 2014].

[9] Eid, M., 2011. DETERMINANTS OF E-COMMERCE CUSTOMER SATISFACTION, TRUST, ANDLOYALTY IN SAUDI ARABIA. Journal of electronic commerce research, [e- journal] availablethrough: http://www.csulb.edu/journals/jecr/issues/20111/Paper5.pdf [accessed 29 October2014].

[10] En-Chi, C., Ya-Fen, T. 2013. E-Store image, Perceived value and perceived risk. Journal of

business research, [e-journal] available through: Anglia Ruskin University library websitehttp://libweb.anglia.ac.uk [Accessed 27 Jan 2014]


15/16

Page 15

[11] Gaskill, A. 2004. [e-journal] available through:http://www.ftsm.ukm.my/aishah/paper%20pdf_1st%20retail/Nitin%20Seth%20Service%20quality%20models%20A%20review.pdf [accessed 1 November 2014].

[12] Hallet, H. 2013. WHEN TO MAKE INNOVATION TRADITION? USING SUPPORT MEDIA: A CASESTUDY FROM THE UAE. Journal of Business and Management, [e-journal] available through:http://www.uunz.ac.nz/pdf/journal/20133.pdf [accessed 29 October 2014].

[13]

Holbrook, M.B, (1999). Introduction to consumer value. In Holbrook, M.B. (Ed). Consumer value:A Framework for analysis and research. Routlege, London, 1-28.

[14] Jamil, L. 2014. Determinants Affecting Customer’s Intention to Adopt Mobile Banking in SaudiArabia. International Arab Journal of e-Technology, [e-journal] available through:http://www.iajet.org/iajet_files/vol.3/no.%204/2-58519.pdf [accessed 29 october 2014].

[15] Joon, D., Kwun, W. 2011. Effects of campus food service attributes on perceived value,satisfaction, and consumer attitude. International journal of hospitality management, [e-journal]30 available through: Anglia Ruskin university library website http://libweb.anglia.ac.uk[Accessed 26 Jan 2014]

[16] Lasley, et al. 2011. The idiosyncratic behaviour of service quality, value, satisfaction andintension to recommend in higher education. Journal of Marketing Management, [e-journal]27(11/12) available through: Anglia Ruskin university library website http://libweb.anglia.ac.uk

[accessed 20 Jan 2014].[17] Marketla, R. 2012. Product quality and value from consumer perspective- An application to

wooden products. Journal of forest economics, [e-journal] available through: Anglia Ruskinuniversity library website ˂http://libweb.anglia.ac.uk˂ [accessed 5 July 2014].

[18] Markus, S., Thomas, O., Markus, M., Antti, H., Lauri, F. 2013. Consumer value of camera-basesmobile interaction with the real world. Pervasive and mobile computing, [e-journal] availablethrough: Anglia Ruskin University library website http://libweb.anglia.ac.uk [accessed 2February 2014].

[19] Monroe, K. & Krishnan, R. (1985). The effect of price on subjective product evaluations in Jacoby,J. and Olson, J. Perceived quality, Lexington Books, Lexington, MA, pp. 209-232.

[20] Parasuruman, A., (1997). Reflections on gaining competitive advantage through customer value.Journal of the academy of marketing science, 25: 154-161.

[21] Park, J., Jang, S. (2014) Why do customers switch. International journal of hospitality

management. [e-journal] 37, pp. 159-170. available through: Anglia Ruskin University libraryhttp://libweb.anglia.ac.uk [accessed 15 July 2014].

[22] Robinson, P. et al. 2010. Perceived value. Google book. pp.171.[23] Sandra, M., Idalina, M., Lucas, R. 2012. The effect of corporate social responsibility on consumer

satisfaction and perceived value. Journal of cleaner production, [e-journal] available through:Anglia Ruskin University library website http://libweb.anglia.ac.uk [Accessed 27 Jan 2014]

[24] Sheth Newman, Gross. 1991. Why we buy that we buy. Journal of business research [e-journal]accessed [1 November 2014].

[25] Ulaga, W. & Chacour, S. (2001). Measuring customer perceived value in business markets.Industrial Marketing Management, 30: 525-540.

[26] Vera, J., Trujillo, A. 2013. Service quality dimensions and superior customer perceived value inretail banking. Journal of retailing and consumer service, [e-journal] 20 available through: Anglia

Ruskin university library website http://libweb.anglia.ac.uk [Accessed 25 Jan 2014][27] Woodruff, R.B., (1997). Customer value: The next source for competitive advantage. Journal of

the academy of marketing science, 25: 139-153.

[28] Yang, Z. & Peterson, R. (2004). The role of switching costs. Psychology & Marketing, 21: 799-822.[29] Yang,K., Jolly,L., 2009. The effects of consumer perceived value and subjective norms on mobile

data service adoption between American and Korean consumers. Journal of retailing andconsumer services, [e-journal] 16 available through: Anglia Ruskin university library websitehttp://libweb.anglia.ac.uk [Accessed 23 Jan 2014]

[30] Yu Wu, L., Yang, K., Chen, P., Cheng, S. 2014. Perceived value, transaction cost, and repurchase-intension in online shopping. Journal of business research, [e-journal] 67 available through:Anglia Ruskin university library website http://libweb.anglia.ac.uk[Accessed 24 Jan 2014]

[31] Yusuf, J., Singh, G., Razak, R. (2013) Purchase intension of environment- friendly automobile.

Social and behavioral sciences, [e-journal] 85, pp. 400-410 available through: Anglia RuskinUniversity library http://libweb.anglia.ac.uk [accessed 15 July 2014].


16/16

Page 16

[32] Ziethaml, V.A., (1988). Consumer perception of price, quality, and value: a means-end model andsynthesis of evidence. Journal of Marketing, 52: 2-22.

Documents

20-Customer Perceived Values associated with Automobile and Brand Loyalty_2.pdf