A model of customer loyalty, an empirical investigation of the relationship between value, satisfaction and commitment

Customer loyalty has been recognised as a potent defensive weapon in the marketing literature (Reichheld, 1996a). However, the relationship between customer perceptions of value, customer satisfaction and customer commitment in the development of customer loyalty remains unclear. In addition, many studies in this field have been primarily theoretical in nature despite the managerial utility of examining the effect of individual performance attributes (Patterson and Spreng, 1997). The objective of this study is therefore to develop and empirically test an integrated post-consumption model of customer loyalty. The proposed model is built on the components of customer commitment, customer satisfaction and customer perceived value, and includes the hypothesised antecedents of these components (product quality, service quality, relationship quality, extra benefits, problem resolution and customer costs). All components were examined via structural equation modeling (Bagozzi, 1982). Because it was desired that the results of the study also be operationally relevant, the factors that significantly impact customer commitment were examined at the individual attribute level. In this way, areas of potential opportunity for enhancement of the hotel industry's offering to the meeting market were identified. Finally, the outcomes of customer commitment were investigated. The model was tested in the meeting market segment of upscale (4 and 5 star) hotels. Both qualitative and quantitative methodologies were employed. The qualitative data was in the form of in-depth semi-structured field interviews with eight top-level meeting planners from the UK and USA. The quantitative data was in the form of self-administered mail-in questionnaires. The questionnaire sample included 206 meeting planners from the USA and the UK who use upscale hotels for their meetings. The study found that both customer satisfaction and perceived value influence customer commitment directly. In addition, perceived value affects commitment indirectly through satisfaction. The results of the research also indicate that in the meeting market of upscale hotels, (1) relationship quality and problem resolution are significant antecedents of customer satisfaction, (2) product quality and relationship quality are significant antecedents of perceived value, and (3) customer costs have a negative impact on perceived value but a positive impact on customer satisfaction. At the attribute level, the results indicate that the greatest area of opportunity for hotels to increase the level of meeting planner commitment to booking meetings at their hotel is in fully meeting the agreements that it makes with the meeting planner, with particular care being given to the related issues of staff reliability, low turnover of top executives, attention to detail and the accurate recording of meeting requirements. The results of the present study also confirm that committed customers (1) are proactive in their purchase behaviour; (2) are not actively pursuing alternatives; (3) speak positively to others; that (4) their behaviour is voluntary; and that (5) they intend to continue doing business with the company. Furthermore, although usually only about 5% of customers who encounter problems will let a company know (Hart et al, 1990), the results of the present study indicate that committed meeting planners communicate with the hotel they are committed to when they encounter problems, thus providing the hotel with invaluable information.Customer loyalty has been recognised as a potent defensive weapon in the marketing literature (Reichheld, 1996a). However, the relationship between customer perceptions of value, customer satisfaction and customer commitment in the development of customer loyalty remains unclear. In addition, many studies in this field have been primarily theoretical in nature despite the managerial utility of examining the effect of individual performance attributes (Patterson and Spreng, 1997). The objective of this study is therefore to develop and empirically test an integrated post-consumption model of customer loyalty. The proposed model is built on the components of customer commitment, customer satisfaction and customer perceived value, and includes the hypothesised antecedents of these components (product quality, service quality, relationship quality, extra benefits, problem resolution and customer costs). All components were examined via structural equation modeling (Bagozzi, 1982). Because it was desired that the results of the study also be operationally relevant, the factors that significantly impact customer commitment were examined at the individual attribute level. In this way, areas of potential opportunity for enhancement of the hotel industry's offering to the meeting market were identified. Finally, the outcomes of customer commitment were investigated. The model was tested in the meeting market segment of upscale (4 and 5 star) hotels. Both qualitative and quantitative methodologies were employed. The qualitative data was in the form of in-depth semi-structured field interviews with eight top-level meeting planners from the UK and USA. The quantitative data was in the form of self-administered mail-in questionnaires. The questionnaire sample included 206 meeting planners from the USA and the UK who use upscale hotels for their meetings. The study found that both customer satisfaction and perceived value influence customer commitment directly. In addition, perceived value affects commitment indirectly through satisfaction. The results of the research also indicate that in the meeting market of upscale hotels, (1) relationship quality and problem resolution are significant antecedents of customer satisfaction, (2) product quality and relationship quality are significant antecedents of perceived value, and (3) customer costs have a negative impact on perceived value but a positive impact on customer satisfaction. At the attribute level, the results indicate that the greatest area of opportunity for hotels to increase the level of meeting planner commitment to booking meetings at their hotel is in fully meeting the agreements that it makes with the meeting planner, with particular care being given to the related issues of staff reliability, low turnover of top executives, attention to detail and the accurate recording of meeting requirements. The results of the present study also confirm that committed customers (1) are proactive in their purchase behaviour; (2) are not actively pursuing alternatives; (3) speak positively to others; that (4) their behaviour is voluntary; and that (5) they intend to continue doing business with the company. Furthermore, although usually only about 5% of customers who encounter problems will let a company know (Hart et al, 1990), the results of the present study indicate that committed meeting planners communicate with the hotel they are committed to when they encounter problems, thus providing the hotel with invaluable information

Does franchising create value? An analysis of the financial performance of US public restaurant firms

Author's OriginalIt is commonly believed that the franchising method of distribution provides strategic and operational benefits to the companies that adopt it. These benefits should result in superior financial performance as compared to that of firms that do not use franchising. Yet, the empirical evidence of the effects of franchising on financial performance is sparse and mixed. The purpose of this paper is to further examine the empirical evidence of the impact of franchising on a firm’s financial performance by using performance metrics (Economic Value Added and Market Value Added) that are extensively used in corporate finance. This study focuses on the US public restaurant sector. The results provide some evidence that franchising firms create more market and economic value than do non-franchising firms. A revised version of this paper has since been published in the International Journal of Hospitality and Tourism Administration. Please use this version in your citations.Aliouche, E. & Schlentrich, U. (2009). Does Franchising Create Value? An Analysis of the Financial Performance of US Public Restaurant Firms. International Journal of Hospitality & Tourism Administration, 10(2), 93-10

Progress and prospects for event tourism research

This paper examines event tourism as a field of study and area of professional practice updating the previous review article published in 2008. In this substantially extended review, a deeper analysis of the field’s evolution and development is presented, charting the growth of the literature, focusing both chronologically and thematically. A framework for understanding and creating knowledge about events and tourism is presented, forming the basis which signposts established research themes and concepts and outlines future directions for research. In addition, the review article focuses on constraining and propelling forces, ontological advances, contributions from key journals, and emerging themes and issues. It also presents a roadmap for research activity in event tourism

Toward a strategic model of global franchise expansion

Abstract This paper develops the first global index of international franchise expansion that ranks countries according to their attractiveness to US-based franchise firms. A quantitative model combining insights from academic research and business practice generates a ranking of 143 potential expansion target countries according to their risk/opportunity profiles. The rankings suggest that countries with large markets and strong political and legal systems (large European countries, and Canada, Japan, and Australia) are the most attractive for US-based franchisors, while the small, unstable African countries are the least attractive. China (and the other BRIC countries-Brazil, Russia, India) though attractive from a market opportunity perspective, is nevertheless not highly ranked due to their significant risks and large cultural and geographic distances. This study reaffirms the importance of a strategic approach to international franchising decisions, underscores the importance of properly assessing the relative importance of key determinants in internationalization decisions, highlights the importance of a comprehensive and systematic assessment of the various risks in international franchising decisions, shows the usefulness of quantitative modeling in international franchising, and advocates the development of effective risk management methods in order to cope with rapid changes in the global marketplace