Structural Analysis of the Relationship between Service Quality and Loyalty : A Case Study of the Fast-Food Industry

Abstract

The significance of service industries in the global economy has increased in recent years and hence there is substantial interest in service marketing. Furthermore, the importance of customer loyalty is noted, particularly in mature markets. This paper presents the construction of structural models to investigate the conceptualization of service quality and the relationship between service quality, customer satisfaction and loyalty in the fast-food industry. Questionnaire surveys are performed for two fast-food chains : McDonald's and Mos Burger. First, factor analysis is performed to construct models for the evaluation of perceived service quality. Five- and six-factor structures are selected for Mos Burger and McDonald's, respectively. It is shown that the "Reliability in Commodity" factor has the greatest effect on perceived service quality in McDonald's, and the "Original Taste" factor has the greatest effect in Mos Burger. Structural models are estimated and the significance of relationships between service quality, customer satisfaction, loyalty and other factors (i.e., switching cost and reputation) is examined. The results suggest that (1) customer satisfaction has a significant effect on loyalty and service quality has a significant effect on customer satisfaction in both chains, (2) service quality and switching cost have a significant effect on loyalty in the case of McDonald's, (3) reputation has a significant effect on loyalty in the case of Mos Burger. The implications of the results are discussed and topics for future research are suggested.