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Kasetsart Journal of Social Sciences 38 (2017) 24e30

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Perceived quality, perceived risk and customer trust affecting
customer loyalty of environmentally friendly electronics
Lalinthorn Marakanon*, Vinai Panjakajornsak
Faculty of Administration and Management, King Mongkut's Institute of Technology Lad Krabang, Bangkok 10520, Thailand

a r t i c l e i n f o a b s t r a c t

Article history: At present, industrial business competition causes producers to be aware of quality, price,
Received 31 March 2016 and variety in developing new products to meet the consumers' needs. This research
Received in revised form 3 August 2016 reviewed the literature on green marketing and proposes a new conceptual framework of
Accepted 15 August 2016
customer loyalty. It uses four constructsdperceived quality, perceived risk, customer trust,
Available online 9 January 2017
and customer loyaltydin the context of environmentally friendly electronics products in
Thailand. This research employed an empirical study using the questionnaire survey
method to verify the hypotheses. Data were obtained from 420 consumers who bought
customer loyalty
and used environmentally friendly electronic products, particularly mobile phones, com-
customer trust
puters, and laptops using a purposive sampling method. The data were analyzed using
environmentally friendly electronics prod-
confirmatory factor analysis (CFA) and structural equation modeling (SEM). The results
showed that perceived risk and customer trust had a direct effect on customer loyalty
perceived quality
while perceived quality had an indirect effect on customer loyalty via customer trust.
perceived risk
Furthermore, perceived quality had direct effects on perceived risk and customer trust. The
results from the final SEM model were used to confirm the proposed relationships among
the variables.
© 2017 Kasetsart University. Publishing services by Elsevier B.V. This is an open access
article under the CC BY-NC-ND license (

Introduction services, and marketing activities with the intention to
purchase and to repeatedly purchase, as well as word of
The idea of natural reserves has become an important mouth to maintain the customer base and to continuously
matter, and globalization has pressured various industries expand. Businesses should have an interest in the envi-
to be motivated to improve their environmental operations ronmentally friendly market or so-called “green market-
(Lee, 2008). Furthermore, the increase in regulations ing” to add value to products where a customer's perceived
applied to many industrial factories, including social reg- value and reduced perceived risk have an influence on the
ulations concerning environmental sustainability, re- consumer's decision. Studying consumers' behavior is very
inforces the importance of environmental strategies as a important to meet green market principles. Nevertheless, a
source of competitive advantage. significant factor to driving a sustainable business is
In addition, there must be a customer loyalty base for a customer loyalty, which is related to the success and profit
product or service that is ready to support products, of the company. Loyalty keeps the old consumers and
builds new interactions which are a challenge that the
business must face. A company needs to adjust its loyalty
* Corresponding author.
E-mail address: (L. Marakanon).
trend to set up a consumer-tied strategy that can help the
Peer review under responsibility of Kasetsart University. marketing efforts of the company.
2452-3151/© 2017 Kasetsart University. Publishing services by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://

Perceived risk has been measured by sequences are likely to be unpleasant. Customers customer trust on customer loyalty (Aydin & Ozer. 2013. very important factors concerning green marketing man. Chen & Thailand. “green perceived quality”. 2008. It is necessary to investigate the relationship of these variables Customer loyalty is defined as a deeply held commit- in the Thai context. perceived insensitivity. Olsen. 2004) because consumer behavior Prior literature argues that a reduction in perceived risk involves risk in the sense that any action of a consumer will leads to an increase in purchase probability. and marketing efforts that have the potential to cause perceived risk. € Ozer. Chen. perceived risk. 2010). perceived risk. social risk. 2005. Chen. Li. and complaint behavior (Bloemer & quality. Although the literature on the relationships among reputation (Chang & Chen. con. Korda. Tuu. pothesis explains the relationship between perceived performance risk (Chen & Chang. 2010). purchase intention. 2008). and marketing Chang & Chen. consistently in the future. & Pervaiz. The forces of going green are now extending to Chang. and physical risk (Chen & Chang. 2012. expectation (Chen & Chang. Chen & Chang. 2002. trust more highly reputable organizations. Another way customer loyalty can be measured is by keting literature. worthiness. Hu. 2013. 2013. L. tionship between perceived quality and customer loyalty: This research suggested a six-dimensional construct of H1. repurchase intention (Li & Green. sumers pay more attention to rising environmental protection activities. 2008. Chen. claims (Chen & Chang. Snoj et al. Chen & Chang. Most studies measure loyalty out- comes using behavioral loyalty dimensions such as word- This study presents a review of the empirical literature of-mouth communication. physical risk. ment to rebuy or repatronize a preferred product or service Thus. Li. 2012. despite situational influences fluence of the above variables of perceived quality. This research sug- Perceived Quality gested a four-dimensional construct of customer loyalty using repurchase intention. Hu. Marakanon. durability.€ 2005. . 1990). 2011. quality and customer loyalty. 2012. alty were selected after an extensive review of the mar. relationship of the mentioned variables on the customer Chen. perceived quality. Snoj. 2011.. 2008. Lai. 2012. dimensional construct of customer trust using reputation. and some of those con- (Chang & Chen. quality and perceived risk: 1990). & Linh. 2008. social risk H2. Tuu et al. ing local governments and citizens. psychological risk (McCorkle. Chen and Chang (2013) between perceived quality and customer loyalty (Aydin & proposed a novel construct. Marakanon & Panjakajornsak.. 2012). 2010). perceived risk. about an entity's services containing overall excellence or Previous research indicated that there is a relationship superiority (Snoj et al. complaint behavior. financial risk (Chang & quality and perceived risk. The subsequent hy- functional risk (Chen & Chang. expectation. Chen. 2009). customer trust. 2004). Specifically. perceived risk. 2013). McCorkle. 2012. and commitment (Chang & Chen. no work has been done on the Chang. and commitment. 2012. Customer Trust mental activities for beneficial social effects. This research suggested a five- the Asian region. 2012. 2008). and product safety. and green consumption has gained Customer Loyalty more momentum for environmental protection. There is a significant association between perceived perceived quality using performance. Consequently. loyalty of environmentally friendly electronics products in 2010). (2011) defined customer regard to environmentally friendly electronics products. and Chen. Customer trust has been measured by 2011). Odekerken-Schro €der. performance (Chang & Chen. Hu. 2011. where environmental threats are alarm. and customer loyalty with switching behavior. 1990). and considering the business-to-consumer market. Chen & customer loyalty is rich. 2012). and financial risk. (Keh & Xie. Sarwar. Hu. reliability. performance risk. McCorkle. Previous research indicated that there is a relationship Perceived Risk between perceived quality and perceived risk (Chang & Chen. organizational distinctiveness than on the product features 2012. The subsequent hypothesis explains the rela- although environmental consciousness is more popular. 2012. 2008. This research suggested a six. 2012. agement and influence the consciousness of being responsible and encouraging participation in environ. price and the theoretical framework. 2008. so a decrease in produce consequences that the consumer cannot anticipate perceived risk is useful for increasing customer trust with any approximating certainty. 2013). and customer loy. customer trust. attention. 2005). 2013. organizations need more emphasis on corresponding Ming Tam. loyalty as a cumulative construct including both the act of consuming (action loyalty) and expected consumption Literature Review (future repurchasing). Abbasi. There is a significant association between perceived (Chen & Chang. and word-of-mouth. psychological risk. 2004. performance. price Perceived quality is defined as the consumers' judgment insensitivity. the researcher was interested in studying the in. There was evidence to support a relationship between dimensional construct of perceived risk using functional € perceived quality and customer trust (Aydin & Ozer. & Mumel. 2012. A review of prior studies indicated that researchers have studied the Trust development is more suitable for trade when relationship between perceived quality. 2010). Ibrahim & Najjar. V. Panjakajornsak / Kasetsart Journal of Social Sciences 38 (2017) 24e30 25 Perceived quality. and customer trust are risk. customer trust. claim.

Sarwar et al.. variables were elements in the model and as the factor mensions. Panjakajornsak / Kasetsart Journal of Social Sciences 38 (2017) 24e30 Chang & Chen. imum sample size of 420 respondents. Hence. 1996). Marakanon & Panjakajornsak.5 were acceptable due to the congruence Tam. (2004). 2014. Cronbach's alpha values were calculated with the results of Customer trust may lead to buying a product or service. was a proportional allocation separated by regions ac- The variables used in Figure 1 and the corresponding cording to which sampling data were representative of hypotheses are further elaborated on in the following relevant data in the data collection. The research framework is as Data Analysis follows. 2012. the causal relationship be. The 2011). Items with an IOC index perceived risk and customer loyalty (Hu. (3) CFA was conducted to indicate whether the observed Perceived risk: there were 20 items covering six di. 5e20 respondents per parameter estimate) Research Framework (Schumacker & Lomax. 2012). loyalty.8 and thus indicating that and customer trust has a direct relationship with customer the questionnaire had high reliability. (5) Customer loyalty: there were 19 items the CFA show that the variables of perceived quality can be Figure 1 Conceptual framework . 2008. From Figure 2. (1) Background: these questions covered research variables Results of Confirmatory Factor Analysis including gender. Reference was made to Chen preceding discussion leads to the following hypotheses: (2010).971 and the risk and customer loyalty. (2) Perceived quality: there were 23 items covering six dimensions. Li (2011). Chen and Chang (2012. Chen & Chang. The sample size trust and customer loyalty. V. Hence. the covering four dimensions. 2013). H3. 2012. Hence. Li and Green (2011). the H4. Li. considering the 21 variables used in CFA and SEM. confirmatory factor analysis (CFA) and structural equation modeling (SEM). and Snoj et al.26 L. There is a significant association between customer used environmentally friendly products.7 (Hair. tween the potential variables was analyzed using structural equation modeling (SEM). There was evidence to support a relationship be- € tween customer trust and customer loyalty (Aydin & Ozer. Hence. between the objective and content (Brown. Marakanon. impacted by the requirement of a sufficient sample size (for example. 1996). Black. Measurement Design Results The questionnaire structure consisted of five sections. the results of five dimensions. Hence. 2013). anchors of (1) ‘strongly disagree’ to (7) ‘strongly agree’ can There was evidence to support a relationship between reduce variability in the results. Lai-Ming higher than 0. The use of SEM could be sections. each construct being more than 0. Tuu et al. Babin.. There is a significant association between perceived questionnaire achieved an IOC value of 0. this study proposes the following hypothesis: acceptable value of Cronbach's alpha should be greater than 0. & Anderson. 2010). Data Collection 2005. (4) Customer trust: there were 15 items covering loading of observed variables. 2011. and buying experience. The data were analyzed using descriptive statistical Methodology analysis. There is a significant association between perceived Questionnaires using a 7-point Likert scale with the quality and customer trust. the preceding discussion leads to the following hypotheses: This research used the purposive sampling method due to the almost infinite population of people who bought and H5. this study required a min- Based on the hypotheses. age.

with standardized loadings: l ¼ 0.754. All observed vari- respectively.843. respectively. price insensi- blesdfunction risk. claim. 0.634.812. performance risk. reliability. Customer trust can be measured from three ables were significant when considering a p value < . Panjakajornsak / Kasetsart Journal of Social Sciences 38 (2017) 24e30 27 Figure 2 Confirmatory factor analysis of perceived quality. L.843 and 0.001.777. Customer loyalty can be measured from three Perceived risk can be measured from three observed varia.814. Marakanon.001) measured from four observed variablesdperformance. and product safetydwith standard.657 and 0. l ¼ 0. . 0. 0. 0. customer trust. and financial riskd. respectively. and word-of-mouthdwith standardized loadings: with standardized loadings: l ¼ 0. and commitmentd- worthiness. observed variablesdreputation.688. ized loadings: l ¼ 0.751. and customer loyalty (p value < . observed variablesdrepurchase intention. perceived risk. 0.759 and 0. respectively.842.771 and 0. V. tivity.

991 customer loyalty (p < . the research results showed that customer Root Mean Square Error of 0. customer trust.289 Perceived risk.05.989 Hypothesis 4. The final model H3 There is a significant association Yes þ 0.001 did not follow the set hypothesis.020 trust had a highly significant direct positive effect on the Approximation (RMSEA) customer loyalty (p < . c2 =df <3. customer loyalty.998 Tucker-Leis fit index (TLI) >0. perceived risk.001) with a rather high effect.001) with a rather high Chi-Square ðc2 Þ p > . customer loyalty.483* were measured to support the hypotheses. perceived risk. Measurement of goodness of fit Hypothesis 3. the results showed that perceived quality had a highly significant direct positive effect on perceived Table 2 risk (p < .001) with a medium effect. and customer loyalty . customer trust.214 Goodness of fit index (GFI) >0. H2 There is a significant association Yes þ 0.9a. perceived quality was an exogenous variable.b 0. had no significant direct effect on customer loyalty which * p < . as shown in between perceived risk and Table 1. coefficients.810*** with path coefficients is shown in Figure 3. the research results indicated that Heuristic Final structural model perceived quality had a highly significant direct positive effect on the customer trust (p < .08b 0. four were significant. V. this research identified the latent variables Hypothesis Support Proposed Path that were exogenous and those that were endogenous. a Bagozzi and Yi (1988) b In addition.9a.05) with a low effect.28 L. *** p < . Panjakajornsak / Kasetsart Journal of Social Sciences 38 (2017) 24e30 Results of Structural Equation Modeling Table 1 Support hypotheses: path coefficients For SEM.996 Hypothesis 5.9a 0.b 1.b 0.189) effect. According to the results shown in Table 1: H5 There is a significant association Yes þ 0.9a. nificance of the theorized relationships. Hypothesis 2. H1 There is a significant association No 0.95c 0.b 0. In effect coefficient this study. Incremental fit index (IFI) >0. The path coefficients H4 There is a significant association Yes þ 0. (2010) c Hu and Bentler (1995) shows the results of the structural model in this study. a goodness of fit test was carried out. the research results indicated that Adjusted goodness of fit index (AGFI) >0. Of the five path between perceived quality and customer trust. Table 2 Hair et al. and customer loyalty were between perceived quality and endogenous variables.0a.998 perceived risk had a significant direct positive effect on the Normed fit of index (NFI) >0.b 0.b 38.673*** between customer trust and Hypothesis 1.83 (p ¼ . the results showed that perceived quality customer loyalty. The Figure 3 Results of structural equation modeling of perceived quality. Marakanon.05a.9a.747*** The results from the final measurement model were between perceived quality and used to evaluate the structural model that tested the sig.968 Comparative fit index (CFI) >0.

but the structural equation model supported the set hypothesis the perceived quality had an indirect effect on customer that trust positively affected loyalty. They found that index (NFI) and the incremental fit index (IFI) were 0. df ¼ 32Þ. with a freedom in the specified model.991 risk. the cient of b ¼ 0. In order to effectively influence loyalty. customer loyalty. product. and Mukaiwa customer perception in order to build up longer-term loy- (2013).483 (p < . Flynn. perceived quality had observable effects on the variables of In terms of the managerial implications. The quality.996 and RMSEA ¼ 0. The current and H5 were supported in this study. (2004) and Beneke. who studied the observed variables of functional is highly acceptable. enced perceived risk and customer trust. knowledge. The perceived research results indicated that analysis of the coefficients of quality had no direct effect on the customer loyalty.020. and main- significant direct and positive effects on the perceived risk taining customers had positive relationships. In Conclusion and Recommendation addition. respectively. alty. The perceived quality had highly variables of customer trust.001.968. with a statisti- that the fit of the model is acceptable. especially for electronics products. (GFI) was 0. Four Ramayah. practitioners performance.05). (p < .998 and and trust. perceived risk had a significant direct and posi- tive effect on customer loyalty. L. which represents the overall degrees of Perceived risk directly affected customer loyalty. One value that should be statistical significance of 0. which agreed with Yap.001. customer loyalty.95 that is considered a variables of perceived risk. NFI ¼ 0. with standardized loadings of Sarwar et al. which fall into the acceptable customer loyalty. Marakanon. The perceived quality factor directly influ- customer loyalty. which is acceptable. and customer trust to increase the research found that the perceived quality was a personal likelihood of customer loyalty. Beyond studying the Perceived quality did not directly affect customer loy. The research results found that the b ¼ 0. Therefore. whose studied the effect of the mediation in this study. but did have an indirect effect. (2011). it is happened simultaneously in product purchasing. and Shahidan (2012) who investigated satisfac- estimated paths were significant. As previously mentioned. acquiring new customers is ucts. Greig.001).673 (p < . The results indicated that green c2 =df ¼ 1:214 ðc2 ¼ 38:83. Customer trust value for testing matched the proposed model and the had a highly significant direct and positive effect on empirical data. performance risk. A useful starting point for practitioners or the statistical significance being 0.989. and participation. The results of the full model are shown in Figure 3. companies and experience. with standardized regression co- efficients of b ¼ 0. the factor of perceived quality indirectly influenced customer loyalty via customer trust. important that practitioners understand which aspects of .05. Consumer undertaken for the successful launch of these practices. this study also suggests applications for alty. perceived quality had positive effects on green satisfaction AGFI ¼ 0.747 and 0. corresponding with loyalty via customer trust. Furthermore. performance risk. Panjakajornsak / Kasetsart Journal of Social Sciences 38 (2017) 24e30 29 overall fit measured for the full model in the SEM indicates Perceived quality directly affected trust. the values of the normed fit risk. which corresponded marketers is to develop marketing strategies to increase to Snoj et al. H3 H4 tion and trust compared to customer loyalty. with peak level. These results corresponded with Tuu range.546 (p < . investment in green perception TLI ¼ 0.001). How- Discussion ever. and customer trust. the value of the root mean square error of approximation Customer trust directly affected customer loyalty.001). worthiness. satisfaction and loyalty. index (CFI).988.020.214 and is green risk would be beneficial to increased green satisfac- therefore acceptable. and uncertainty on good indicator of good fit (Hu & Bentler. 1995). with a (RMSEA) was 0.991. Realization of these factors perception and consumers' perceptions were different for will help companies anticipate what activities should be products or services without definite standards. which is recognized as an index reflecting all perceived risk. respectively. including branding new products with a strong effort both costly and difficult in terms of marketing for the to increase continuous product demand. and financial risk influenced and 0. V. which is larger than 0.001.996 et al. Therefore.810. The value of CFI was 0. increased the perceived quality and showed that reduced In this study. the results demonstrated that firms should seek to and customer trust in order to elevate their customer loy- build satisfactory information on any matter of the prod. company when the number of customers has reached its Perceived quality directly affected perceived risk. relationships. perceived risk. reliability. IFI ¼ 0. The value of goodness of fit index tion and green trust. statistical significance of 0. the value of c2 =df was 1. perceptions depended on the decision of personal sense According to the empirical results of this study. which agreed with Hu (2012) considered in baseline comparisons is the comparative fit who had researched relationships among brand value. and financial risk. perceived risk. These sample sizes and measures the comparative reduction in results corresponded with Marakanon and Panjakajornsak noncentrality.989.998 in this model and (2014). (2012). businesses. to build customer loyalty to a should emphasize their perceived quality. and product safety must create different strategies to enhance perceived from collecting data in Thailand an in-depth interview. factors of perceived risk and customer trust were latent variables that directly influenced customer loyalty. Additionally. perceived risk was determined by alty in the context of environmentally friendly products consumers to be an unexpected and bad result which nowadays. CFI ¼ 0.998. The value of the Tucker-Leis fit index (TLI) was 0. Next. with a standardized The research model tested found that the statistical regression coefficient of b ¼ 0. The values of the cal significance of 0. with a standardized regression coeffi. From this research. H2. Moreover. which corresponded with Chen goodness of fit (illustrated in Table 2) were as follows: and Chang (2013). Additionally. GFI ¼ 0.

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