Functional Forms of the Satisfaction-Loyalty Relationship

International Journal of Research in Marketing, Vol. 28, No. 1, pp. 38-50, 2011

48 Pages Posted: 23 Sep 2010 Last revised: 19 Dec 2011

See all articles by Songting Dong

Songting Dong

Australian National University (ANU) - Faculty of Economics & Commerce

Min Ding

Pennsylvania State University - Department of Marketing

Rajdeep Grewal

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Ping Zhao

Tsinghua University - School of Economics & Management

Date Written: September 21, 2010

Abstract

The linear functional form of the effect of customer satisfaction on repurchase intentions may not be adequate in all circumstances; a clear understanding of factors that might drive variation in functional forms for the satisfaction-loyalty relationship remains lacking though. Building on extant research, the authors consider how the functional form of the effect of satisfaction on repurchase intentions varies across segments formed at the intersection of product categories and customer economic and demographic variables. A comprehensive data set from sponsors of the Chinese Customer Satisfaction Index provides the input for a flexible cubic regression configuration to model the functional form. The linear functional form emerges as the most prominent across 972 product-customer segments (51%), followed in frequency by S-shaped and convex, and finally, inverse S-shape and concave. Different product category characteristics, customer economic and demographic variables, and market characteristics moderate the effect of satisfaction on repurchase intentions differently for the linear, quadratic, and cubic terms. This research offers key resource allocation implications based on the functional form for the effect of satisfaction on repurchase intentions, as well as strategic segmentation implications related to the varying influence of product category characteristics, customer economic and demographic variables, and market characteristics.

Keywords: Customer Satisfaction, Loyalty, Repurchase Intentions, Functional Form

JEL Classification: M31, C11, C12, C42

Suggested Citation

Dong, Songting and Ding, Min and Grewal, Rajdeep and Zhao, Ping, Functional Forms of the Satisfaction-Loyalty Relationship (September 21, 2010). International Journal of Research in Marketing, Vol. 28, No. 1, pp. 38-50, 2011, Available at SSRN: https://ssrn.com/abstract=1680661

Songting Dong (Contact Author)

Australian National University (ANU) - Faculty of Economics & Commerce ( email )

Canberra, ACT 0200
Australia

Min Ding

Pennsylvania State University - Department of Marketing ( email )

University Park, PA 16802-3306
United States

HOME PAGE: http://www.planetding.org

Rajdeep Grewal

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

Ping Zhao

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

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