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Keywords Product quality, Customer satisfaction, Customer loyalty, Brand awareness
Abstract This paper develops a general service sector model of repurchase intention from the consumer theory literature. A key contribution of the structural equation model is the incorporation of customer perceptions of equity and value and customer brand preference into an integrated repurchase intention analysis. The model describes the extent to which customer repurchase intention is influenced by seven important factors - service quality, equity and value, customer satisfaction, past loyalty, expected switching cost and brand preference. The general model is applied to customers of comprehensive car insurance and personal superannuation services. The analysis finds that although perceived quality does not directly affect customer satisfaction, it does so indirectly via customer equity and value perceptions. The study also finds that past purchase loyalty is not directly related to customer satisfaction or current brand preference and that brand preference is an intervening factor between customer satisfaction and repurchase intention. The main factor influencing brand preference was perceived value with customer satisfaction and expected switching cost having less influence.
Introduction
The objective of this paper is to test a general model which aims to describe the extent to which customer intention to repurchase a service is influenced by customer perceptions of quality, equity and value, customer satisfaction, past loyalty, expected switching cost and brand preference. The objective is important because customer repurchase intention research is largely fragmented and is in need of an empirically verified general theory.
Some studies have concentrated on determining the basic antecedent variables to repurchase intention (Hocutt, 1998; Storbacka et al., 1994; Zahorik and Rust, 1992). Other studies, such as Bitner et al. (1990), Bolton and Drew (1991a, b), Boulding et al. (1993), Grayson and Ambler (1999), Liljander and Strandvik (1995), and Price et al. (1995) have considered the single incident, critical encounters and longitudinal interactions or relationships between these variables.
Still others have considered the predictive validity of repurchase intention for subsequent repurchase behaviour (Bemmaor, 1995; Mittal and Kamakura, 2001; Morwitz et al., 1993). Despite the fact that research in this area largely relies on stochastic and deterministic approaches to customer retention analysis (Ehrenberg, 1988; Howard, 1977; Lilien et al., 1992), few comprehensive, empirically tested, structural models of the customer retention...