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Journal of Retailing and Consumer

Services Volume 12, Issue 2, March 2005, Pages 99-111

The service quality–loyalty relationship in retail services: does commitment matter? Gordon Fullerton

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https://doi.org/10.1016/j.jretconser.2004.04.001

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Abstract

The marketing literature has produced two schools of thought on the cause of customer loyalty in services industries. The service quality perspective puts forward that service quality evaluations substantially drive customer loyalty in services industries. The relationship marketing perspective puts forward that customer commitment to the service provider substantially drives customer loyalty in services industries. In addition, commitment is a complex construct with at least two forms, one based in liking and identification (affective commitment) and one based in dependence and switching costs (continuance commitment). These positions were examined in an integrated model of retail–service relationships. It was found that affective commitment and continuance commitment were mainly partial mediators of the service quality–loyalty relationship. It was also found that affective commitment to the retailer had a positive impact on customer loyalty while continuance commitment in marketing relationship had a deleterious effect on customer loyalty.

Keywords Retail relationships; Service quality; Customer commitment

1. Introduction

The marketing management literature has seen a significant emphasis on both services marketing (Zeithaml, 2000) and relationship marketing (Sheth and Parvatiyar, 2002) over the past decade. For the most part, these two streams of literature have developed without much overlap, even though the area of relationship marketing was pioneered by a prominent services marketing scholar (Berry, 2002) and it has been argued that services industries are natural venues for the study of organization to consumer relationships (Bitner, 1995). In addition, service marketing scholars (Zeithaml et al., 1996) and relationship- marketing scholars (Morgan and Hunt, 1994) are interested in many of the same loyalty- related dependent variables. Recently, a number of scholars have attempted to study the nature of service relationships thereby merging two fields of study (Garbarino and Johnson, 1999; Gruen et al., 2000; Gwinner et al., 1998; Pritchard et al., 1999). From the relationship marketing perspective, customer commitment is seen as being the key determinant of customer retention and loyalty (Gundlach et al., 1995; Morgan and Hunt, 1994). On the other hand, the services marketing literature generally views service quality as the central construct that drives customer loyalty (Cronin and Taylor, 1992; Zeithaml et al., 1996; Zeithaml, 2000). As a result of this work, there is a significant opportunity to merge these two fields of study in order to build a more comprehensive understanding of organization–consumer relationships in services industries (Gruen et al., 2000).

This paper will examine the ways that service quality and the relationship marketing perspective both contribute to our understanding of customer loyalty in retail and services industries. The major research question explored in this paper is whether service quality or customer commitment is the prime driver of customer loyalty-related behaviors in the context of a retail–service relationship. The paper begins with a discussion of the nature and role of service quality in retail relationships. This is followed by a discussion of the role and nature of commitment in retail relationships. Then, the paper will present an integrated conceptual model of retail service relationships. This is followed by an explanation of the methodology used to test this model. Finally, the results of the study are discussed with a particular emphasis on both theoretical and managerial contributions of the study.

2. The nature and role of service quality

Service quality is a complex construct that is one of the most investigated constructs in the marketing discipline (Iaccobucci, 1998). It is generally viewed as an overall evaluation of the service provided (Taylor and Baker, 1994). It has also been viewed as a multidimensional construct formed from the consumer's evaluation of a number of service-related attributes (Parasuraman et al., 1988; Brady and Cronin, 2001). The service quality literature has seen a substantial debate on the nature and dimensionality of the construct (Cronin and Taylor, 1992; Parasuraman et al., 1991). Most of this debate centered on the dimensionality of the SERVQUAL scale and the appropriateness of measuring service quality as a gap between customer expectations and customer evaluations of performance (Cronin and Taylor, 1992; Parasuraman et al., 1991). The result of this debate was general agreement that it is not necessary to measure consumer expectations of service performance in measuring the service quality construct (Cronin and Taylor, 1994; Zeithaml et al., 1996). In addition, while service quality may indeed have multiple dimensions, researchers were unable to resolve the questions surrounding the dimensionality of the SERVQUAL scale (Brady et al., 2002; Cronin and Taylor, 1994; Parasuraman et al., 1994). Even tough it is a widely used measure of service quality, one of the serious deficiencies of the SERVQUAL scale is that it captures less than the full spectrum of issues and attributes on which consumers evaluate service quality (Brady and Cronin, 2001). In resolving this problem, an alternative position is that there are three major dimensional antecedents of overall service quality; interaction quality, outcome quality and environment quality and in addition each dimension may have a number of sub- dimensions (Brady and Cronin, 2001). The nature of interaction quality is that what goes on in the service encounter between the customer and the service provider is a key determinant of the customer's evaluation of service quality (Brady and Cronin, 2001). Environment quality relates to the extent to which the tangible features of the service-place play a formative role in consumer perceptions of overall service quality (Brady and Cronin, 2001). Outcome quality is defined as the customer's evaluation of the result of the service act, including the punctuality of the service provider (Brady and Cronin, 2001).

In recent years, research has focused on the behavioral consequences of service quality (Zeithaml et al., 1996). The enhancement of customer loyalty is a significant research focus among services marketing scholars (Zeithaml, 2000). Loyalty can be viewed as a multifaceted behavioral construct that includes customer retention, positive word of mouth communications and willingness to pay more for the service (Zeithaml et al., 1996). Customer retention is perhaps the most investigated consequence of customer service quality evaluations (Zeithaml, 2000). Many researchers have identified a positive link between service quality and customer retention (Bansal and Taylor, 1999; Brady et al., 2002; Fullerton and Taylor, 2002; Roos, 1999; Rust et al., 1995; Zeithaml et al., 1996). Others have found that service quality is positively related to customer willingness to act as a reference customer (Anderson, 1998; Fullerton and Taylor, 2002; Zeithaml et al., 1996). Some have even suggested that there may be positive link between service quality and consumer willingness to accept price increases (Anderson, 1996; Fullerton and Taylor, 2002; Zeithaml et al., 1996). Under service quality perspective of retail relationships, service quality is the prime driver of consumer loyalty and loyalty-related behaviors. This is not to say that other variables do not play a role, but service quality makes the most potent impact on customer loyalty. The conceptual foundation for this view lies in the assumption that service quality is an evaluative, attitude-like construct that drives behavioral intention (Cronin and Taylor, 1992; Zeithaml et al., 1988).

3. The nature and role of commitment in

marketing relationships

In the past decade, there has been a significant growth in our understanding of relationship marketing (Sheth and Parvatiyar, 2002). Under a relationship marketing paradigm, customer commitment, rather than service quality, is the prime driver of consumer loyalty to the service provider. Commitment is a complex construct that has been defined in a number of ways in the marketing discipline. For the most part, marketing scholars have conceptualized commitment as an attachment between two parties that leads to a desire to maintain a relationship (Moorman et al., 1992; Morgan and Hunt, 1994). In essence, customer commitment is a psychological force that links the customer to the organization with which the customer does business. Marketing scholars have recognized that relationships can be built upon multiple forms of commitment (Gilliland and Bello, 2002; Gruen et al., 2000; Gundlach et al., 1995; Harrison-Walker, 2001; Kumar et al., 1995). The discipline of organizational behavior has developed a considerable body of literature on the nature of employee commitment to the organization. Researchers in this field have recognized that the commitment construct is not monolithic, but one with multiple components of commitment (Mathieu and Zajac, 1990). Marketing scholars have started to bring that wealth of literature to bear in the investigation of consumer-organizational relationships (Fullerton, 2003; Gilliland and Bello, 2002, Gruen et al., 2000). The two major components of commitment are affective commitment and continuance commitment (Allen and Meyer, 1990; Mathieu and Zajac, 1990). Each form of commitment will now be discussed in some detail.

3.1. Affective commitment

Parties can become committed to a marketing relationship because one party has an affective, attitudinal attachment to the other party. While it has not generally been labeled as such, affective commitment has a lengthy tradition in the relationship marketing literature (Gundlach et al., 1995; Kumar et al., 1995; Morgan and Hunt, 1994). For example, Morgan and Hunt (1994) operationalized relationship commitment as affective commitment by substantially borrowing their measure of the construct from the Allen and Meyer (1990) affective commitment scale. Affective commitment in marketing relationships has been defined as a complex mixture of attitudinal loyalty, involvement and attachment (Gundlach et al., 1995). The definition of affective commitment put forward by marketing scholars is almost identical to the definition of affective commitment in the organizational behavior literature (O’Reilly and Chatman, 1986; Allen and Meyer, 1990).

The nature of affective commitment has been well investigated in the marketing discipline. It has been argued that the development of social bonds between the customer and the organization with which the customer does business is an important stage in the development of commitment in marketing relationships (Berry, 1995). Achrol (1997) argued that people develop affective commitment for organizations to which they feel they belong. Bendapudi and Berry (1997) put forward that effective marketing relationships are based on dedication. Relational social norms (Gundlach et al., 1995; Joshi and Arnold, 1997; Heide and John, 1992) can be viewed as being synonymous with affective commitment. When a marketing relationship is built on affective commitment, customers maintain a relationship because they identify with and like the firm with which they do business.

3.2. Continuance commitment

Although it has rarely been recognized as a distinct construct, continuance commitment also has a tradition of research in the marketing discipline (Gundlach et al., 1995). Continuance commitment is rooted in side-bets (Becker, 1960), switching costs (Gilliland and Bello, 2002), contractual arrangements (Anderson and Weitz, 1992) and scarcity of alternatives (Allen and Meyer, 1990). A party is likely to be committed to a relationship if it faces concrete switching costs or if the benefits that it receives from its partner are not easily replaceable from other potential exchange partners (Bendapudi and Berry, 1997; Dwyer et al., 1987; Gundlach et al., 1995). Continuance commitment is a psychological state brought forward by a perceived lack of choice or perceived switching costs (Fullerton, 2003). When a marketing relationship is built on continuance commitment, customers remain loyal to their relational partner because they feel bound to that relational partner (Fullerton, 2003).

4. An integrated model of retail–service

relationships

It was previously noted that service quality is a complex construct. A recent position is that service quality has three distinct dimensions; interaction quality, outcome quality and environment quality (Brady and Cronin, 2001). These dimensions of quality may be particularly relevant in a retail–service context where consumers form evaluations of quality on the basis of their interactions with store personnel, their evaluations of the physical environment of the store and their perceptions about the consistency and reliability of the store (Dabholkar et al., 1996). These dimensions of service quality may be viewed as three distinct antecedents of an overall service quality construct.

Interaction quality is positively related to overall service quality.

Outcome quality is positively related to overall service quality.

Environment quality is positively related to overall service quality.

Morgan and Hunt (1994) found that customer commitment entirely mediated the relationship between consumer evaluations of background variables and consumer loyalty-like intentions regarding the relationship (Morgan and Hunt, 1994). Under this perspective, retail service quality could be viewed as one of a number of commitment-creating background evaluative benefits that consumers seek from their relationship with service providers (Gruen et al., 2000). Service quality also includes issues of reliability and integrity that lie at the foundation of trust (Doney and Cannon, 1997), which Morgan and Hunt (1994) found was an immediate antecedent of commitment to the relational partner. These feelings of attachment and trust may well be a result of the same processes which create the overall service quality construct. Thus, in a retail services context, overall service quality would be an immediate antecedent of affective commitment in service relationships. At the same time, to the extent that the elements of service quality represent potential relationship benefits that would be lost in the event of a switching decision, service quality will also drive continuance commitment in the relationship.

Overall service quality is positively related to affective commitment.

Overall service quality is positively related to continuance commitment.

In addition, continuance commitment in a relationship is also a function of the dependence resulting from a scarcity of available alternatives (Allen and Meyer, 1990). Scarcity of alternatives leads to a situation where customers are truly trapped in the relationship even though they may not recognize the existence of a relationship (Barnes, 1997). Both the sacrifice and scarcity of alternatives perspectives on continuance commitment have been the subject of considerable research in organizational/business to business marketing situations (Anderson and Weitz, 1992; Dwyer et al., 1987; Gilliland and Bello, 2002; Heide and John, 1992; Kumar et al., 1995; Morgan and Hunt, 1994).

Scarcity of alternatives is positively related to continuance commitment.

We have a good understanding of the consequences of affective commitment in a marketing relationship because it is a well- studied construct. Even in studies where the term “affective commitment” is not used, it is clear that affection lies at the core of a positive relationship between a customer and service provider (Price and Arnould, 1999). Researchers have identified a positive relationship between affective commitment and customer retention (DeWulf and Odekerken- Schroeder, 2003; Doney and Cannon, 1997; Fullerton, 2003; Garbarino and Johnson, 1999; Morgan and Hunt, 1994; Pritchard et al., 1999). Affective commitment is also positively related to customer willingness to act as an advocate (Harrison-Walker, 2002; Fullerton, 2003) and customer willingness to acquiesce (Morgan and Hunt, 1994), in particular to price increases (Fullerton, 2003).

Affective commitment is negatively related to customer switching intentions.

Affective commitment is positively related to customer advocacy intentions.

Affective commitment is positively related to customer willingness to pay more.

It has been argued that marketing relationships built on liking and affect do not have staying power unless the relationship is also built on dependence (Gundlach et al., 1995). This view has support in the literature because side-bets, dependence and contracts that manifest continuance commitment, are positively related to customer retention (Anderson and Weitz, 1992; Fullerton, 2003; Gundlach et al., 1995). In addition, the organizational behavior literature has generally identified a weak but positive effect of continuance commitment on employee retention (Allen and Meyer, 1990).

Continuance commitment is negatively related to customer switching intentions.

The impact of continuance commitment on the softer aspects of customer loyalty, such as advocacy and willingness to pay more, has been relatively unstudied in the marketing literature. For the most part, continuance commitment represents a dark-side of relationship marketing because of its negative effects on these constructs (Fullerton, 2003; Gruen et al., 2000; Harrison-Walker, 2001). Organizational behavior researchers have studied the effects of continuance commitment on employee pro-social behaviors and have found that it generally has a negative effect (Allen and Meyer, 1990). To the extent that customer advocacy and willingness to acquiesce to price increases are “pro-social” behaviors, we would expect that continuance commitment in a consumption relationship would have a negative impact on customer intentions of to engaging in these behaviors.

Continuance commitment is negatively related to customer advocacy intentions.

Continuance commitment is negatively related to customer willingness to pay more.

Fig. 1 shows the integrated theoretical model established above. While this model is to be tested in the context of retail-service industries, it may apply to any number of service situations. Consistent with the findings of Morgan and Hunt (1994), affective commitment and continuance commitment are put forward as full mediators of the relationship between service quality and each of the loyalty-related dependent variables examined in this study. Full mediation means that the effect of any background variables, in this case retail service quality, becomes a non- significant predictor of key loyalty-related dependent variables. The important conceptual and managerial significance of this theory is that consumer feelings about the retail relationship, rather than customer evaluations of retail service quality, are the prime drivers of customer loyalty behaviors.

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Fig. 1. Integrated model of retail service

relationships.

There is an implicit second variant of this model that can be examined in the event that the proposed model offers a poor fit to the data. This model would contain three additional parameters; a service quality-switching intentions parameter, a service quality advocacy intentions parameter and a service quality- willingness to pay more parameter. In this second-variant model, the components of commitment are partial mediators of the effect of service quality on loyalty intentions in a retail service context. This means that service quality evaluations have a residual effect on the loyalty- related dependent variables in addition to any effect of the components of customer commitment. The direction of these three additional paths is drawn from the extensive literature on the behavioral consequences of service quality (Anderson, 1998; Fullerton and Taylor, 2002; Zeithaml et al., 1996). This modified model is shown in Fig. 2 and the hypotheses associated with the additional parameters present in the model are outlined below.

Service quality is negatively related to switching intentions.

Service quality is positively related to advocacy intentions.

Service quality is positively related to willingness to pay more.

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Fig. 2. Second variant of integrated model.

5. Methodology and measures

The hypothesized model was examined with data collected in two distinct retail service samples. Both samples were collected in a mid- sized Canadian city. The first sample was drawn from the customers of a men's specialty-clothing store. Participants were customers of the store and they were randomly approached after paying for their purchase and asked to complete a written survey at their leisure. They were provided with a postage-paid envelope in order to return the survey. They were also offered an incentive to participate in the study in the form of an opportunity to win a $200 voucher, redeemable for merchandise at the store. The specialty-clothing store was one of a limited number of its type in the market area. The sample size in this service setting was 217 useable surveys out of 500 that were distributed and returned over a 1-month period, for a 44% response rate.

In the second sample, the data were collected from the customers of a major Canadian retail grocery chain in a mid-sized Canadian city. Data were collected at two of the grocery retailer's eight locations in that city over a 3-day period. Customers were randomly approached as they were leaving the store and they were asked if they would participate in a short survey on grocery store service quality. Participants self- completed surveys on site. No incentive for participation was offered. Interviewers indicated that the refusal rate was approximately 70%. This method yielded 200 completed surveys.

Interaction quality, outcome quality and environment quality were each measured with 3 items adapted from Brady and Cronin (2001). Overall service quality was measured with 3 items previously employed by Taylor and Baker (1994). Scarcity of alternatives was measured with 2 items developed by the principal researcher. Affective and continuance commitment were each measured with 3 items adapted from the Allen and Meyer (1990) affective and continuance commitment scales.

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