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Journal of Internet Banking and Commerce

An open access Internet journal (http://www.arraydev.com/commerce/jibc/)
Journal of Internet Banking and Commerce, August 2010, vol. 15, no.2
(http://www.arraydev.com/commerce/jibc/)

Factors Influencing Customer Loyalty of Mobile Phone Service:
Empirical Evidence from Koreans
Hyung Seok Lee, Ph.D.
Assistant Professor, Department of Business Administration, Sahmyook
University, Seoul, Korea
Postal Address: Gongneung 2-dong, Nowon-gu, Seoul, 139-742 Korea
Author's Personal/Organizational Website: www.syu.ac.kr
Email: hslee (at) syu.ac.kr
Dr. Hyung Seok Lee is an Assistant Professor in the department of Business
Administration at Sahmyook University, Seoul, Korea. His current research interests are
on IT Service, Operations Management and Quantitative Modeling. His work has
previously been published in Journal of Internet Banking and Commerce, Electronic
Commerce Research and Applications, and International Journal of Business and
Management.

Abstract
The purpose of this paper is to verify the relationships among service quality, perceived
value, customer satisfaction, and customer loyalty in mobile phone service. The study
conducted an empirical research. A total of 384 mobile phone users’ responses were
collected from Seoul in Korea. The findings show that service quality positively
influences customer loyalty. In addition, perceived value and customer satisfaction
positively affects customer loyalty respectively. For customers with high perceived
service quality, perceived value, and satisfaction, they have a strong loyalty.
Keywords: customer
satisfaction
© Hyung Seok Lee, 2010

loyalty;

service

quality;

perceived

value;

customer

No. many subscribers use mobile phones to surf the Internet. In addition. The study also suggests that. Korean mobile carriers have also realized the importance of customer-oriented marketing strategies. Furthermore. This retention-based competition has intensified through the elimination of switching barriers. Turel and Serenko. 2004).2 individuals out of every 100 had access to mobile phone services. 1997). in the mobile phone service sector. December 15 2009). The changes in Korea’s competitive mobile phone service market demonstrate the importance of identifying the factors that influence customer loyalty.9% to $53. Brady. According to the International Telecommunication Union (ITU). In this regard. As such. service providers need to implement marketing strategies focusing on customer retention. The mobile phone penetration rate refers to the number of active mobile numbers as a percentage of a specific population (The Korea Herald. Brand. helped by expanding wireless internet services and a recovery in the advertising industry. Park and Jeong. However. In particular.8% in 2010 from a year earlier. The motivation for understanding and improving loyalty emerges from empirically validated relations among customer loyalty. indicating that 90. the number of mobile phone subscribers in Korea reached 43. More than 3 billion people use mobile phones for personal and business purposes (The Korea Herald. which could help them to maintain their competitiveness and profitability by preventing existing customers from churning to other carriers. and make financial transactions. As the mobile phone service market is already saturated.JIBC August 2010. Vol. 1996. this raises a question for managers because it is also well known that customers do not always buy the highest quality service (Olshavsky. the concept of perceived value should be applied to the mobile phone service market to gain a deeper understanding of customer satisfaction and customer loyalty. Since January 2004.1%. the number of mobile phone subscribers is expected to increase by 2. In addition. among others.5 million in 2007. and profitability (Reichheld. this in turn has sharply increased competition in the mobile phone market. Hightower and Shemwell. It is widely known that previous studies examining customers’ purchases of services have generally focused on the link between service quality and purchase intentions (Cronin. reaching a penetration rate of 101.2 -2- INTRODUCTION The introduction of mobile phones in everyday life has dramatically changed lifestyles worldwide. Thus.1 billion in 2010. giving the country one of the highest subscription rates in the Asia-Pacific region. watch movies. 2006). it would be important to develop marketing strategies that promote profitability by retaining existing customers through strengthened customer loyalty and value (Kim. the implement of number portability regulations has allowed customers to retain their phone number when they switch to another service provider. which allows users to switch service providers while keeping the same handset. rather than on acquiring new subscribers to increase market shares (Turel and Serenko. most Koreans use mobile phones on a daily basis. Korea’s telecommunications market is expected to grow by 3. 2006). do their shopping. December 22 2008). as with prior research. 1985). this study aims to show that value-based customer management and the understanding of customers play a very important role in the mobile phone service market. November 13. 15. retention. .

Darden. Berry and Parasuraman. According to Babin. Service quality has a positive effect on perceived value. Cronin and Taylor (1992) and Teas (1993) argued that performance measures eliminated expectations measures is superior to the “perceptions-minus-expectations” measures. 1992. assurance. Thus. Grönroos (1984) proposed two dimensions of service quality: technical quality and functional quality. 1994. 2006). Cronin and Taylor. 1991. Bloemer. No. 1988). 15. reliability. 2009. (1988) defined perceived service quality as “the consumer’s judgment about the superiority or excellence of a product. Thus. Berry and Zeithaml. perceived value is a consumer’s perception of the subjective worth of some activity or object by considering all net benefits and costs of consumption. The model consists of five specific dimensions: tangibles. Parasuraman. Lai. service quality can be described as a form of attitude that is related but not equivalent to satisfaction. Service quality not only entices new customers away from competitive firms but also induces customers’ repurchase intentions (Venetis and Ghauri. and empathy would be blended into one dimension. 2000). and previous studies examining the mobile phone service markets suggested that service quality positively affects customer satisfaction (Kim et al. 2009. Kuo et al. 2004). Technical quality is “what a customer receives. 2004). profitability. Several empirical studies examining the mobile phone service market revealed the a link between service quality and perceived value (Kuo. The SERVQUAL model provides a theoretical basis for examining the relationship between service quality and customer satisfaction (Tung. Some empirical studies have shown that service quality is related to customer satisfaction (Cronin and Taylor. 1992. McDougall and Levesque. Taylor and Baker. 1992. the consumer’s consumption behavior is the global service received from a specific service provider. Wang. Thorpe and Rentz. which results from the comparison of expectations with performance (Bolton and Drew. assurance. Service quality is considered to be a key factor in firms’ financial performance.” and functional quality is “how a service is provided or delivered. 1996). Dabholkar. Vol. In sum. 1996. and they professed the collapsibility of the five dimensions. Hypothesis 1 is proposed as follows: H1. responsiveness. Tung. Hypothesis 2 is proposed as follows: H2. Zeithaml and Berry. 1996. Turel and Serenko.. 1996. Zeithaml. 2004. Parasuraman. Thus. . Zeithaml. 1988. 1991). 2004. where responsiveness. Prior research has revealed that there has been much debate as to whether service quality dimensions are antecedents of customer satisfaction (Cronin and Taylor.2 -3- THEORETICAL BACKGROUND AND HYPOTHESES 1) Service Quality There have been a considerable number of empirical studies focusing on the dimensions of service quality (Cronin and Taylor. Wu and Deng. Parasuraman. Lo and Yang. Parasuraman et al. Service quality has a positive effect on customer satisfaction. higher perceived service quality would positively affect the consumer’s perception of value toward the service. 2000). and Griffin (1994).. and Berry (1994) proposed a reduced measure with 21 items and the use of nine-point scales. 2006. Zeithaml et al.JIBC August 2010. In their study. Levesque and McDougall. that is. 1992. and empathy.. 2009. Griffin and Babin.” They suggested the SERVQUAL model conceptualized as a difference between perceptions and expectations.” Parasuraman et al. Turel and Serenko.

Zeithaml et al. A critical point that has been formed regarding the conceptualization of value is that the monetary cost is a typical component of what consumers sacrifice to receive a service offered. Anderson. and resistance to switching are dependent on service quality (Cronin et al. 1996). and (4) value is what I get for what I give. qualitative study. Wang et al. (2009) suggested that there is a positive relationship between service quality and customer loyalty. Levesque and McDougall. 2004. Turel and Serenko. perceived value can be described as a cognitive tradeoff between perceptions of quality and sacrifice. She defined value as follows: (1) value is low price. Thus. Brady and Hult. 2006. the perceived financial price or actual price of the service is the primary monetary sacrifice involved in the service transaction (Brady and Robertson. Vol. Cronin. Johnson. behavioral intentions such as repurchase intentions.. 1999). 1996. No. Aydin and Özer (2005) and Kuo et al. Fornell. (2) value is whatever I want in a product. 2004). Hypothesis 4 is proposed as follows: H4. Zeithaml (1988) investigated the consumer’s perception of value through a literature review and an exploratory. Thus. 15. That is. and Lehmann (1994). and Wetzels (1998) and Aydin and Özer (2005) indicated that service quality is positively related to customer loyalty. value is the difference between perceived benefits and costs (McDougall and Levesque. In addition. 1997. 2009. 2) Perceived Value Perceived value can be roughly defined as the results or the benefits customers receive relative to total costs. (2000) showed that perceived value is a significant predictor of satisfaction. such as time and efforts (Cronin et al. That is. 2000). 2000.JIBC August 2010. She then combined these into a single definition: “perceived value is the consumer’s overall assessment of utility of product based on perceptions of what is received and what is given” (Tung. value is an encounter-specific input to customer satisfaction. (3) value is the quality I get for the price I pay. According to Rust and Oliver (1994). Thus. 1987).. Hypothesis 5 is proposed as follows: . and Bryant (1996) and McDougall and Levesque (2000) contended that perceived value is directly and positively related to customer satisfaction. Sacrifice is a construct that includes non-monetary costs needed to consume a service. Tung. 1997). recommending a provider. Anderson. Sacrifice has a negative effect on perceived value. Cronin et al. Simply defined. Previous empirical studies examining the relationship between perceived value and customer satisfaction in the context of the mobile phone service market have found considerable evidence that perceived value directly influences customer satisfaction (Kuo et al. Quality has been identified as the “gets” feature. Service quality has a positive effect on customer loyalty.. Hypothesis 3 is proposed as follows: H3. The link between perceived value and customer satisfaction has been debated in the service management literature. Therefore. 2004).2 -4- Ruyter. Bolton and Drew (1991) extended the definition of perceived product value by Zeithaml (1988) to perceived service value. Fornell. whereas sacrifice has been identified as the “gives” (Drew and Bolton. Cha. and Ravald and Grönroos (1996) argued that value is related to customer satisfaction.

that is. Therefore. Perceived value has a positive effect on customer satisfaction. Wang et al. Money and Berthon. Customer satisfaction can be defined as a consumer’s fulfillment response. 1990). satisfaction can be conceived as an attitude because it can be assessed as the combined level of satisfaction with various attributes of a product or a service (Churchill and Surprenant. (2009) and Lai et al. it is a judgment that “a product or service feature. Kuo et al. Hypothesis 6 is proposed as follows: H6. 3) Customer Satisfaction and Loyalty Customer satisfaction results from experiencing a service quality encounter and comparing that encounter with what was expected (Oliver. whereas the dimensions underlying quality are fairly specific (Oliver. provides a pleasurable level of consumption-related fulfillment” (Oliver. (2009) examined the mobile phone service market and showed that customer satisfaction has a positive impact on purchase intentions. 1993).. 2000... Turel and Serenko (2006) and Kuo et al. On the other hand. As customer satisfaction reflects the degree of a customer’s positive feeling about a service provider. (1996) suggested that favorable behavioral intentions are related to service providers’ ability to maintain their customers’ loyalty and persuade them to recommend their services to potential customers. According to LaTour and Peat (1979). satisfaction is a post-decision experience construct. (2009) found that perceived value is positively related to customer loyalty. 15. Zeithaml and Bitner. a high level of customer satisfaction may have a positive effect on customer loyalty (Deng. There is also sufficient evidence that customer satisfaction can be viewed as an attitude (Yi. whereas an attitude is a pre-decision construct (Caruana. (2004) and Lin and Wang (2006) also revealed that perceived value has a positive effect on customer loyalty. many studies have examined repurchase intention (Tung. Vol. Zeithaml et al. Lu. Kuo et al.JIBC August 2010. 2009). Wang et al. 1982).. (2000) revealed that there is a positive relationship between perceived value and customer loyalty. Lin and Wang. Cronin and Taylor (1992) proposed that customer satisfaction significantly influences future purchase intentions. 2004).2 -5- H5. Perceived value has a positive effect on customer loyalty. or product or service itself. and they may be more likely to continue their use and recommend the service to their friends and relatives (Zeithaml et al. Satisfaction judgments have a broader range of dimensions that include quality aspects. Lai et al. The relationship between perceived value and customer loyalty has aroused service practitioners’ interest. Recently. Satisfied customers may use mobile phone services more than those who are not satisfied. 2009. Marketing professionals have recognized perceived value as one of the key drivers improving customer loyalty. 2004). 2009). Customer loyalty is the consequence of customer satisfaction. 2009. No. 1996). In addition. Fornell (1992) stated that higher customer loyalty depends mainly on higher customer . 2006. Wei and Zhang. Several researchers have proposed that perceived value positively influences customer loyalty (Cronin et al. 2000). From an operational definition point of view.. 2000). it is important for service providers to understand customers’ perception of their services.. 1997. It has also been found to be a key determinant of a firm’s long-term viability (Deng et al. Cronin et al. 1980).

1992.” These items measured the overall perceived quality of services based on a series of adjectives. how satisfied are you with this provider” and “Overall. METHODOLOGY 1) Measures The items used to measure the constructs to confirm content validity were adapted from previous studies.” Thus. Perceived value was measured by two items: “Overall. 1997. Service quality is the customer’s overall perceived assessment of service performance. time. . “low standards” and “high standards. Zeithaml. Kuo et al. (1997) and Brady and Robertson (1999) and measured on a seven-point scale ranging from “ very low” to “very high.” Perceived value is a tradeoff between what customers receive and what they sacrifice. Oliver. 1996. Vol. Sacrifice is what customers give up to obtain a service. The first item was anchored by “poor” and “excellent. Cronin and Taylor. 2002. Three items were used to measure the overall service quality: “Overall service quality of this provider.” These items were adapted from Cronin et al.” Customer satisfaction is a customer’s positive feeling about a service provider and the overall evaluation of the consumption experience (Lai et al. how satisfied are you with the services you receive from this provider.” These items were adapted from Cronin et al.” These items were adapted from Cronin et al.2 -6- satisfaction. 1996). Oliver . Yi. 1999).” The second item was anchored by “inferior” and “superior. 1990.JIBC August 2010. Sacrifice was measured by three items: “The price charged to use this service. Goldsby and Vickery. 1997. and efforts (Cronin et al. all measures employed in the present study have been widely used in prior service marketing research (Brady and Robertson. Stank.” These items were adapted from Cronin et al. 1999.. including monetary costs such as money and non-monetary costs such as opportunity costs. (1997) and McDougall and Levesque (2000) and assessed by using a seven-point scale. As such.” “The effort I must make to receive the service offered.... (1997) and Brady and Robertson (1999) and measured on a seven-point scale ranging from “very low” to “very high. No. Jamal and Naser. 2009 . (1997) and Zeithaml (1988) and assessed on a seven-point scale ranging from “very low” to “very high. Zeithaml et al. Hypothesis 7 is proposed as follows: H7.” and the third item.. Two items were used to measure customer satisfaction: “Overall. the value of this provider’s services to me” and “The benefit I get for the price I pay to use the services. (2009) and measured on a seven-point scale ranging from “very dissatisfied” to “very satisfied. 2009. Two items were used to measure customer loyalty: “The probability that I would use this service provider again” and “The likelihood that I would recommend this provider’s services to a friend.” and “The time required to use this service. Zeithaml and Bitner.” Customer loyalty is related to a service provider’s ability to maintain its customers’ loyalty and persuade them to recommend its services to potential customers (Zeithaml et al. Customer satisfaction has a positive effect on customer loyalty. 1988). 2000).” These items were adapted from Lai et al. 1997. 15.

9) 46 (12. and 8. A stratified sampling technique was used. Table 1. the respondents were drawn from mobile phone subscribers located in Seoul. and the samples were randomly drawn from each group.9) 56 (14.0) 34(8. Vol. Table 1 presents the descriptive statistics of the respondents’ demographic characteristics.5 million won 1. A total of 384 valid responses were collected out of the 400 distributed.2 -7- 2) Data Collection The data were collected by trained interviewers in August 2009. The results of the confirmatory factor analysis are presented in Table 2.4) 96 (25.5) 8(2. No.2) 74 (19. The majority (56. Approximately 51% had an associate’s or bachelor’s degree.6% were male.30 software. which were greater than the acceptable level of 0. This study employed structural equation modeling to test the hypothesized relationships and used LISREL 8. The alpha coefficients of the measurement items for each construct are presented in Table 2. Of the 384 respondents.7 for all of the items (Nunnally. 12.0) 120 (31. 22. SPSS 12. Cronbach’s alpha coefficients ranged from 0.3) 3) Reliability and Validity Assessment To assess the reliability and validity of the measures of each construct.5 million won SK Telecom KTF Service provider LG Telecom Frequency (%) 198 (51. 25.6) 198 (51. Descriptive statistics of respondent characteristics Variable Male Gender Female <19 20-29 30-39 Age 40-49 >50 High school Education level Associate’s or Bachelor’s degree Master’s degree or above <1. 51.4) 194(50.1) 76 (19.5 million won >4.6) 186 (48.0% were between the ages of 40 and 49.3%) were in the 10-29 age group.0-4. The chi- .3) 88 (22.0 million won Monthly income 3.0% were between the ages of 10 and 19. 31.96. this study employed internal consistency and confirmatory factor analysis.3% were between the ages of 20 and 29. the population was divided into groups based on market shares. The goodness of fit of the measurement model was evaluated by using a variety of indices.6) 112 (29.9) 182 (47.8) 164 (42.9% were between the ages of 30 and 39. and 48. Further.0 software was used for the frequency analysis and the reliability test.JIBC August 2010.4% were female. 1978).9% were 50 and over.5-3.7) 88 (22. nearly 52% were SK Telecom subscribers. 15.70 to 0.

04 To assess the convergent and discriminant validity. All of the standardized path coefficients of the items were significant (t>1. GFI.70 0. 1989).72 12.12*** Sacrifice SA2 0. t-values were used. and the AVE values were higher than 0. NFI.56*** Service quality SQ2 0. Generally. NFI.35(p<0. fit statistics greater than or equal to 0.16*** 0. composite reliability (CR).90 22. Average variance extracted (AVE) is shown on the diagonal elements.32 1.53 CS 4.44*** 0.47 0.96).59 PV 3.53 1.00*** PV1 0.21 1.93 0. 1988).61*** CS1 0.91 16.79 0. and CFI) were considered in conjunction with the chi-square test.69 0.96 0. James. standard deviations.96 RMSR=0.90*** Perceived value PV2 0. the measurement model provided a good fit to the observed data. Results of confirmatory factor analysis Standard Construct Item t-value loadings SQ1 0.39*** -0. and construct correlations Construct Mean SD SQ SA PV CS CL SQ 4.73*** SA3 0.01 CR Cronbach’s α 0.62 *** p<0. and the root mean square residual (RMSR) was 0.01.06 0. Thus. the goodness-of-fit index (GFI) was 0.g.95 CFI=0. and CFI indicate a good model fit (Bagozzi and Yi.95 23. Bennett. and average variance extracted (AVE). The results of the confirmatory factor analysis indicated that the chi-square was 153.74 12.77*** Customer loyalty CL2 0.76 0. Because of its tendency to be sensitive to the sample size.74 0.00) GFI=0.38 1. the normed fit index (NFI) was 0. The chi-square test assessed the adequacy of the hypothesized model in terms of its ability to reflect the variance and covariance of the data.94 NFI=0. .2 -8- square test was used to assess the overall goodness of fit.20*** *** p<0. No. Means.93 0.50.90 for GFI.25*** SA1 0.41 0. As shown in Tables 2 and 3. Lind and Stilwell.82 16. Van Alstine. 1981).91 21. statistical significance of each standardized path coefficient.94.83 1. 15. 1988. Vol. this study used the fit of model. Fornell and Larcker.96. The RMSR indicated that the average residual correlation value was acceptable (Bagozzi and Yi.35 df=44 (p=0.JIBC August 2010.59*** 0.46*** Customer satisfaction CS2 0. Table 2.43 -0.95.88*** CL1 0. the CR values were higher than 0.75 15. other fit indices (e.77 Fit indices χ2=153.38 0.73*** SQ3 0. the comparative fit index (CFI) was 0.49 -0.97 25.55 0.01).15*** 0.04.96 25. For the statistical significance of parameter estimates. 1988.56*** -0.87 *** *** CL 4.70. Table 3..96 0. Mulaik. suggesting that the convergent validity of the scale was satisfied (Anderson and Gerbing.39 0.32 6.04 0.92 17.89 SA 4.

Vol. the NFI.28.2 According to Fornell and Larcker (1981). and 0.02). CFI=0. except for H4 (significant at the 0. Service quality had an indirect effect on customer loyalty via perceived value and customer satisfaction (0. The fit of the model is shown in Figure 1. β=0. customer satisfaction (0.38 0.01) and indirectly influenced customer loyalty via customer satisfaction (0. NFI=0.90.01).45. γ=0. As shown in Table 3. and sacrifice (-0.26. p<0.-9- JIBC August 2010.99. indirect effect.01 level.9. the values of the square of the correlations between the construct and any other construct in the model were all smaller than the AVE values. p<0. The RMSR indicated that the average residual correlation was 0. which indicated that discriminant validity was satisfied. confirmed that the instrument had satisfactory construct validity.11. therefore.12 0.01).42).01. customer satisfaction positively and significantly affected customer loyalty (H7: β=0. an acceptable value.05 level). The results. the direct effect. p<0.01). γ=0.10. and total effect of each construct on customer loyalty were calculated (see Table 4).10) was significant at the 0.05 level. and the CFI were 0. GFI=0.42 Customer loyalty 2 χ =2. RMSR=0. AVE should be greater than the square of the correlations between constructs.49). perceived value had a positive and significant effect on customer satisfaction and customer loyalty (H5. p<0. perceived value (0. No.02. Results of path analysis As shown in Figure 1 and Table 4.26 Customer satisfaction -0.25). df=2 (p=0.02 The path coefficient (-0.78. As predicted by H5 and H6.05). Using the standardized path coefficients between the constructs. γ =– 0. 0.45 Perceived value 0.01). respectively. β=0. customer satisfaction (H2.21.38. The total effects of the constructs on customer loyalty (the direct effect plus the indirect effect) can be ranked as follows: service quality (0. p<0. All of the hypothesized relationships were significant at the 0. p<0.21 Service quality 0. Sacrifice as a negative predictor of perceived value significantly influenced perceived value (H4.12.99. as predicted by H7.01). p<0. They exceeded the recommended threshold value of 0. and customer loyalty (H3.01 level. PATH ANALYSIS AND HYPOTHESIS TESTS The path model was assessed to test the hypotheses. p<0. p<0. 15. 0.01). γ=0.23).10. and the others were significant at the 0.10 Sacrifice 0.99. p<0. The GFI. Figure 1. Therefore. all of the hypotheses were supported.42.99.99. These results suggest .01) and on customer satisfaction via perceived value (0. the path estimates indicated that service quality was a significant predictor of perceived value (H1. Similarly. H6.

perceived value played a mediating role in the relationship between service quality and customer satisfaction and between service quality and customer loyalty.21 Indirect effect PV CS 0. and customer satisfaction significantly affected customer loyalty. and total effect of each construct SQ SA PV CS Direct effect PV CS 0. “the quality they get for the price they pay” or “the benefit they obtain for the sacrifice they make”). .28 -0. customer satisfaction played a significant role in the mediating relationship between the others and customer loyalty and directly enhanced customer loyalty.2 .45 -0. service quality is still critical to retaining customers and maintaining competitiveness. and customer satisfaction and between these and customer loyalty.10 -0. 15. The total effect of perceived value on customer loyalty was smaller than the aforementioned two factors. customer satisfaction was an important factor in the relationship between firms and customers. Prior research has demonstrated the importance of customer satisfaction and its impact on customer retention (Woo and Fock. The direct effect.11 Total effect PV CS 0.42 CL 0. sacrifice.23 0. A comparison of the total effects indicated that service quality influenced customer loyalty more strongly than did customer satisfaction and that customer satisfaction affected customer loyalty more strongly than did perceived value. Providing higher service quality may improve customer loyalty and encourage customers to share their positive experiences with others. 1996). indirect effect.. However.49 -0. 2005.10 -0. perceived value played an important role in understanding customers’ actual behaviors (i.26 CL 0.38 0.02 0.e. For service providers. Therefore. As shown in Table 4. perceived value.42 CONCLUSIONS AND IMPLICATIONS Previous studies have focused mainly on the importance of customer satisfaction and its impact on a service provider’s profitability and customer retention. Vol. This study investigated the factors affecting customer loyalty in the context of Korea’s mobile phone service sector.10 0. That is. This result suggests that customer loyalty may be most significantly influenced by high-quality services. Service quality had the strongest total effect on customer loyalty. Table 4.JIBC August 2010.03 0.55 -0. 1999).12 0. the challenge is identifying the critical factors that determine customer satisfaction and loyalty (Aydin and Özer. if customers perceive a high-quality mobile phone service. Although customer satisfaction affected customer loyalty less than did service quality.02 0. Customer satisfaction and perceived value were also found to be important antecedents of customer loyalty. they may be more likely to stay with their existing service provider and recommend the provider to others. No.26 CL 0. perceived value played a mediating role in the relationship among service quality. Thus. The results of the path analysis indicated that service quality. In addition.38 0.03 0. perceived value as a tradeoff between quality and sacrifice is one reason why customers stay with their existing service provider. In addition. Reichheld.10 - that Korean mobile phone service providers should continuously improve their service quality.

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