Defensive Strategies for Managing Satisfaction and Loyalty in the Service Industry: ABSTRACT

The investment model is used to predict customer responses to defensive value-added and value-recovery strategies. The two strategies were manipulated under different competitive environments with airline services scenarios in a controlled experiment. Hypotheses were affirmed as value-added and valu...

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Bibliographic Details
Published in:Psychology & marketing 1998-12, Vol.15 (8), p.775
Main Authors: Dube, Laurette, Maute, Manfred F
Format: Article
Language:English
Subjects:
Brand loyalty
Competition
Cost reduction
Customer satisfaction
Customer services
Frequent flier programs
Hypotheses
Market strategy
Marketing
Personal relationships
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Summary:The investment model is used to predict customer responses to defensive value-added and value-recovery strategies. The two strategies were manipulated under different competitive environments with airline services scenarios in a controlled experiment. Hypotheses were affirmed as value-added and valuerecovery strategies influenced customer satisfaction and loyalty with varying sensitivities to the competitive environment and different mechanisms consistent with prediction derived from the investment model. Regardless of value-added strategy and competitive environment, value-recovery strategy strongly and positively influenced customer satisfaction, situational loyalty, and enduring loyalty. Value-added strategy also had a positive effect on customer satisfaction and loyalty, but these effects emerged primarily when a value-recovery strategy was already present, and under conditions of less intense competition. Satisfaction was found to mediate strategic effects on loyalty, with more pronounced effects observed for value-recovery strategy and situational loyalty.
ISSN:0742-6046
1520-6793