Author

  • Yu-Te Tu

    • Chungyu Institute of Technology 40, Yi 7th Rd. Keelung, Taiwan
    • Taiwan, Province of China

  • Mei-Lien Li

    • Lynn University 3601 N. Military Trail, Boca Raton, Taiwan
    • Taiwan, Province of China

  • Heng-Chi Chih

    • General Education Center, Wenzao Ursuline College of Languages, Taiwan
    • Taiwan, Province of China

Abstract

The service industry has become more and more important for business activities. Service industry contributes about 60% of the annual GDP and 70% of new jobs in America. According to the statistics of Executive Yuan of Taiwan, the service industry contributes over 70% of the annual GDP in 2008. The ultimate goal for companies is to build customer loyalty. With loyal customers, companies can reduce the operating cost and acquisition expenses. An improvement of 5 percent in customer retention leads to an increase of 25 percent to 75 percent in profit. It costs more than five times as much to obtain a new customer than to keep an existing one. This initial study was from relevant literature, then set up research structure and hypotheses. Survey was employed, and respondents were from the customers of TKEC in Taipei area. There were 199 usable questionnaires to analyze descriptive statistics, reliability, validity, and SEM model. The research found that service quality significantly affects customer perceived value and customer satisfaction, and customer perceived value and customer satisfaction have strong impact on customer loyalty for the sample. Therefore, firms have to specifically focus on these factors in order to build a long-term and mutually profitability relationship with a customer and create loyalty as competitive advantages in the market.

Keywords

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How to Cite

Tu, Y.-T., Li, M.-L., & Chih, H.-C. (2011). The Effect of Service Quality, Customer Perceived Value and Satisfaction on Loyalty. Journal of Economics and Behavioral Studies, 3(3), 198-212. https://doi.org/10.22610/jebs.v3i3.273

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Research Paper

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Vol. 3 No. 3 (2011) Fiscal Policy, HRM & Corporate Strategy View issue contents

Published

2011-09-15

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