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Introduction
Although there is a business boom in Asian casinos, competition is intensifying. For instance, the Malaysian "Resorts World Genting" enjoyed a four-decade monopoly but is now confronted with competition from the recent opening (in 2010) of two mega-casinos in Singapore, and from the newly erected casinos in Philippines and Macau. Competition prompts casino marketers to undertake aggressive promotions to acquire domestic and international players, particularly high rollers. This acquisition approach is insufficient, since competitors are generally well placed to match or exceed any promotional activity (see [17] Klebanow, 2002). Casino marketers have become aware that retaining loyal customers is more profitable than acquiring new players. Gaming researchers (e.g. [15] Kale and Klugsberger, 2007; [31] Thompson and Comeau, 1991; [32] Watson and Kale, 2003) have reported a positive relationship between player retention and casino profitability. Relationship marketing strategy is in practice in the casino industry, manifested by membership cards and deployment of customer relationship management (CRM) software.
Customer loyalty and retention is the central aim of relationship marketing and is closely related to company profitability (e.g. [13] Heskett et al. , 2008; [28] Rust and Zahorik, 1993). The relevant literature has indicated that service quality is an important antecedent of customer retention. Gaming experts (e.g. [14] Kale, 2005) have argued that service quality is predictive of player loyalty and retention. [39] Baird (2002) views customer service as essential for customer loyalty and sustainable competitive advantage. However, [20] McCain et al. (2005) noted that very little research has been undertaken to investigate service quality and player loyalty in casinos.
Although service quality is important in developing customer loyalty, customers are not served equally, as organisational resources are limited. [38] Zeithaml et al. (2001) suggested a Pyramid approach to segmenting customers into different tiers on the basis of the customer's profitability level and relationship strength with the firm. The service a customer receives is consistent with the tier that is assigned to the player. In the casino industry, this assignment is often manifested through the membership or reward card a customer possesses. This practice seems to be realistic and cost effective. However, it is commonly known that customers always expect maximal services from the firm. When they perceive the differentiated services, will the perception affect their...