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UM E-Theses Collection (澳門大學電子學位論文庫)

Title

The impacts of customer satisfaction and switching barrier on customer loyalty in the post-monopoly electricity supply industry

English Abstract

EXECUTIVE SUMMARY In the post-monopoly era, customers become more aware of their rights of choosing their preferred service providers. Therefore, for the companies facing the possible change from a protected to a competitive business environment, sustaining and winning customer loyalty and understanding the determinant factors turns out to be their major concern. As a result, there are numerous studies in marketing which have attempted to explain the relationships between loyalty and its various determinants (Fornell, 1992; Jones ef al., 2000). Customer satisfaction has traditionally been regarded as a fundamental determinant of long-term consumer behaviour (Yi, 1990). The more satisfied customers are, the greater their loyalty is (Fornell, 1992). It is no surprise that most of the companies’ fundamental goal is to seek to manage and increase customer satisfaction. However, satisfaction alone does not ensure continued customer patronage (Jones and Sasser, 1995) while some researches show that switching barriers may have both main and interaction effects on customer loyalty (Bansal and Taylor, 1999; Oliver, 1999). To this end, it is essential to understand the relationship between customer satisfaction towards company service performance, switching barriers, and customer loyalty. This study contributes to the discussion by demonstrating that customer satisfaction and switching barriers act jointly to impact customer loyalty and categorizing the determinants of customer satisfaction and switching barriers. Data was obtained from 525 electricity consumers who were responsible for handling the electricity related matters in their households or companies in Macau through structured questionnaires. The data was analyzed by regression analysis to test all the hypotheses in the conceptual model. The findings supported most of the proposed hypotheses, which are consistent with the theoretical framework. The analysis results showed that the factors affecting customer satisfaction were corporate image, customer communication, supply quality, customer service and price while those constituting switching barriers were relationship investment, switching cost and alternative attractiveness. Both customer satisfaction and switching barriers are directly affecting customer loyalty and customer satisfaction exerts a stronger impact on customer loyalty than switching barriers under the post-monopoly situation. This indicates that building both customer satisfaction and switching barriers is a preferable option rather than focusing on satisfaction alone. While service providers may be able to retain even dissatisfied customers who perceive high switching barriers, companies should aim at an integrated strategy to make switching barriers as a complement for customer satisfaction.

Issue date

2006.

Author

Leong, Wai Cheng

Faculty

Faculty of Business Administration

Department

Department of Management and Marketing

Degree

M.B.A.

Subject

Consumer satisfaction -- Evaluation

Customer loyalty

Supervisor

Hong, Jacky

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Location
1/F Zone C
Library URL
991002631299706306