Aarhus School of Business, Denmark

Faculty of Business Performance Management

Joanna Waligóra
Student ID 254 581

Robert Waligóra
Student ID 254 582

MEASURING CUSTOMER SATISFACTION AND

LOYALTY IN THE AUTOMOTIVE INDUSTRY

A CASE OF PREMIUM BRAND OF PASSENGER CARS

Master Thesis Advisor:

Jacob Kjær Eskildsen
Department of Marketing and Statistics

Aarhus, 2007
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 CONTENTS

EXECUTIVE SUMMARY ..................................................................................................5

INTRODUCTION – A NEED FOR THE STUDY..............................................................7
MAIN OBJECTIVES OF THE PAPER..............................................................................8
1. THE IMPORTANCE OF CUSTOMER SATISFACTION FOR BUSINESS
PERFORMANCE ................................................................................................................9
1.1. Customer satisfaction in customer orientation model .................................................10
1.2. Customer satisfaction in The EFQM Excellence Model .............................................13
1.3. The evidence of positive impact of satisfaction on business results ............................15
1.3.1. Satisfaction influence on ROI, stock prices and shareholder value.......................16
1.3.2. Customer retention impact on business results.....................................................17
1.3.3. Dissatisfaction influence on business performance ..............................................18
2. THE THEORY OF CUSTOMER SATISFACTION....................................................22
2.1. The definition of customer satisfaction.......................................................................22
2.2. Antecedents of customer satisfaction .........................................................................22
2.3. Consequences of customer satisfaction. .....................................................................25
3. CUSTOMER SATISFACTION MEASUREMENT SYSTEMS ..................................29
3.1. Antecedents of satisfaction measurement system implementation – customer’s personal
values research .................................................................................................................29
3.2. Rationale for development and use of industry or nation universal customer satisfaction
measurement indexes........................................................................................................32
3.3. National Customer Satisfaction Indexes .....................................................................33
3.3.1. Swedish Customer Satisfaction Barometer ..........................................................33
3.3.2. American Customer Satisfaction Index ...............................................................36
3.3.3. European Customer Satisfaction Index................................................................39
3.3.4. Automotive industry specific customer satisfaction indexes ................................43
4. COMPANY X CUSTOMER’S PROFILE ....................................................................47
4.1. Company X customers – demographics .....................................................................47
4.2. Company X customers – benefits driving the car purchase.........................................53
4.3. Company X customers – attitudes to vehicle ..............................................................58
4.4. Summary of Company X customer’s profile ..............................................................59
5. STRUCTURAL EQUATION MODELING AND PARTIAL LEAST SQUARES .....61
5.1. Structural Equation Modeling – covariance-based approach.......................................61
5.2. Partial Least Squares..................................................................................................62
5.2.1. Specification of the model...................................................................................62
5.2.2. Estimation...........................................................................................................64
5.2.3. Validation of model ............................................................................................67
6. MEASURING CUSTOMER SATISFACTION AT COMPANY X IN POLAND ......71
6.1. Customer Satisfaction Index at Company X – Sales Service Quality..........................72
6.2. Customer Satisfaction Index at Company X – After - Sales Service Quality...............74
6.3. Brand Satisfaction Model at Company X in Poland – history, underpinnings and
structure ...........................................................................................................................75
6.3.1. Questionnaire development .................................................................................79
6.3.2. Computer software for Partial Least Squares models...........................................84
6.3.3. Working out the structure of the model ...............................................................85
6.3.4. Discussion on BSM structure ..............................................................................89
6.3.5. Quality criteria evaluation ...................................................................................92
7. RESULTS OF BRAND SATISFACTION MODEL FOR COMPANY X ...................95
7.1. Sample description.....................................................................................................95

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 7.2. Estimation results for Brand Satisfaction Model – Total Brand ................................101
7.3. Estimation results – Total brand - detailed analysis of performance..........................108
7.4. Estimation results for Brand Satisfaction Model – 3 segments of customers.............115
7.4.1. General estimation results for 3 customer segments...........................................115
7.4.2. Total effects analysis – 3 customer segments .....................................................119
7.4.3. Satisfaction vs. importance analysis - 3 clients segments - inner model .............123
7.4.4. Satisfaction vs. importance analysis - 3 customer segments –outer model..........127
7.4.5. Summary of analysis for 3 customer segments...................................................135
CONCLUSIONS AND RECOMMENDATIONS ...........................................................137
REFERENCES .................................................................................................................139
APPENDICES ..................................................................................................................142
Appendix 1. ....................................................................................................................142
Appendix 2. ....................................................................................................................143
Appendix 3. ....................................................................................................................149
Appendix 4. ....................................................................................................................163
Appendix 5. ....................................................................................................................182
Appendix 6. ....................................................................................................................203

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EXECUTIVE SUMMARY

The new method of customer satisfaction and loyalty measurement has been developed for
Company X in Poland. The method is called Brand Satisfaction Model.
The Company X is operating on the automotive market representing premium brand of
passenger vehicles in Poland.
The model has been created based on customer satisfaction and loyalty theories and so far
implemented and practically adopted models. The Brand Satisfaction Model is mainly built
on the ACSI, ECSI and JD Power CSI studies with particular use of satisfaction theories
presented in the paper.
The BSM structure is adjusted to industry specific requirements which have been verified by
customer focus groups and statistical validity tests.
Therefore unique, industry specific method for measuring satisfaction of passenger
vehicles clients has been developed and is presented below:

Practical research on a group of 346 customers of Company X in Poland has been

conducted. After analysis of satisfaction scores and importance levels for all the areas
included in the study four areas that need to be definitely improved have been revealed: After
Sales service quality, Value for money, Costs of ownership and Brand Image.
The results of the study have been made well-known across the entire organization. The
reparation program has been developed and implemented and as a result of it the next After

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Sales service satisfaction study presented the increase in overall score by 2 percentage points.
Further actions concentrating on improvement of the other three mentioned areas have been
implemented but their results were not known yet when the paper was written.
Therefore the knowledge gained with Brand Satisfaction Model helped Company X prioritize
its actions and concentrate on those areas that need to be taken care of in a first place.

Furthermore the study analyzed three customer groups separately: Compact, Mid-size and
Full-size and Large vehicles owners in order to discover differences in their definition of
satisfaction and loyalty. Compact vehicles users are much more price and costs sensitive.
They also pay stronger attention to the image of a brand and post-purchase service they
receive. Mid-size vehicles users are definitely closer in terms of their profile to the third group
of customers however they are more vehicle comfort and quality oriented while at the same
time do not expect so high value for money as other clients. The full-size and large vehicles
owners are definitely the least price and costs sensitive. Vehicle quality, comfort and
functionality and sales service quality are the most important elements strongly affecting the
level of their loyalty.
The knowledge gained from the analysis of three customer segments helped the sales and
marketing as well as PR departments adjust its operations and strategy to specific
requirements of different customer groups in order to improve their overall satisfaction and
loyalty to a brand.

Developed model proved to be very explanatory with regard to the type of knowledge
received after application of the structure to the dataset gathered during interviews with
Company X customers. The BSM is also an effective tool that not only helps to understand
customers better but also answers the question: how to improve customers’ satisfaction and
loyalty.

The Polish Automotive Market Research Institute presented interest in the model with the aim
to make the Brand Satisfaction Model the uniform platform for measuring and comparing
customer satisfaction and loyalty across whole polish automotive sector. Successful
implementation of Brand Satisfaction Model by all brands of passenger vehicles operating in
Poland would definitely supply automotive companies in Poland with knowledge
comparisons of brands performance on the Polish market.

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INTRODUCTION – A NEED FOR THE STUDY

There is a need for the comprehensive study at Company X in Poland which would cover all
aspects of customer satisfaction and loyalty. The need was recognized by the marketing and
sales department and the board of directors due to the fact that so far the knowledge about
Company X clients was limited to their demographic and social profile and customer’s
evaluation of sales and after-sales service quality. All other areas such as vehicle quality,
design, comfort and functionality, cost of ownership, value for money etc. have been so far
neglected and not measured. Therefore the Brand Satisfaction Model has been created in
order to close the gap in knowledge about Company X clients.

Customer Satisfaction can be measured and monitored on many levels of advancement. First
of all, customer orientation concept, means-end chain theory, expectations disconfirmation
and performance models, Hirschman’s exit theory are important theories which define clients’
satisfaction and loyalty concepts and their influence on company business results. Than, the
EFQM Excellence Model takes the satisfaction studies to the next level and measures
customer satisfaction importance and influence on company’s profitability and success.
Finally, there are those customer satisfaction measurement nation-wide studies such as SCSB,
ECSI and ACSI, which define the satisfaction concept empirically and help understand the
relationships between antecedents of satisfaction and its consequences such as loyalty and
retention. Additionally, there are industry specific types of researches such as JD Power
automotive CSI that measure clients’ satisfaction with different aspects of product usage
which are usually applicable to only one industry.
Taking into consideration all the above mentioned satisfaction theories, the Brand Satisfaction
Model has been built up based on the above mentioned theories and researches as a complete
and comprehensive measurement method of clients’ satisfaction and loyalty for Company X
in Poland. Although its structure is similar to ECSI, the BSM includes some of the JD Power
CSI study elements. Such combination of the theories and the two researches offers a valuable
tool that combines most of theoretical and empirical knowledge so far possessed by academic
and professional environment.

The Brand Satisfaction Model may be useful sales and marketing tool not only for Company
X but also for other automotive companies operating on Polish market. If the study was
applied to other firms, than a great portion of knowledge could be added to the whole

7
automotive sector in Poland by allowing for cross industry comparisons. Provided that the
BSM is well grounded in terms of its statistical properties as well as satisfaction theories,
there is high probability that the same structure could be applied to other automotive brands.

So far there has been no other unified measurement model of customer satisfaction and
loyalty created and used in the polish automotive sector. There are different researches
covering some aspects of company’s performance but the unified and complete approach
allowing for comparison between different brands is not available. Therefore the study that is
comprehensive and at the same time industry specific – such as Brand Satisfaction Model -
would be a huge contribution to the Polish automotive sector.

MAIN OBJECTIVES OF THE PAPER

The main objective of the study is:

- Creation of complete satisfaction measurement model for Company X selling
premium passenger vehicles in Poland and assessment of Company X customers’
satisfaction and loyalty based on the new methodology. Up till now the Company X
has been only using its own Customer Satisfaction Index study as the measure for sales
company performance. However such approach leads to severe limitations of the study
results, as the Customer Satisfaction Index concentrates only on measurement of
satisfaction with sales and after-sales service quality. Therefore more comprehensive
approach covering all aspects of customer experience with product, brand and dealerships
is needed.

In order to support the main goal some sub objectives shall be fulfilled:
- Creation of theoretical satisfaction measurement model and statistical validation of the
model. The model shall be based on customer satisfaction theories and measurement
models described in this paper.
- Application of the theoretical model into the practical research - measurement of
Company X customers’ satisfaction and loyalty using the new methodology.
- Analysis of the research results and comparison of the differences between Company X
customer segments. The Company X clientele shall be segmented into three groups based
on existing Customer Profile study: Compact vehicles, Mid-size vehicles, Full-size and
Large vehicles owners.

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1. THE IMPORTANCE OF CUSTOMER SATISFACTION FOR BUSINESS
PERFORMANCE

Satisfaction understood as emotional state shall be held by people, who are willing to develop
successfully personal relations, but has also been of utmost importance in business and
professional situations. The latter will be of our interest in the further course of this work.
In general, satisfied customers, satisfied employees and satisfied shareholders all have one
common characteristic – they are positive and enthusiastic about the company they are
dealing with. Talking in more detail, they shall behave in a way desired and understood by a
firm, when it comes to making decision about further cooperation with the company.
Specifically, they will be making repeat purchases, delivering best quality of work and
investing additional funds in the company stocks. Such behavior of satisfied customers,
employees and shareholders will contribute to business growth. Therefore satisfaction,
understood in such a wide context, shall definitely be on the top of board of directors’ list as it
has strong positive impact on business results.
Although satisfaction is applicable to organization’s customers, employees and shareholders,
within the course of this work customer satisfaction will be discussed. Specifically, customer
as the ultimate judge of products or service quality and his or her satisfaction with the
delivered products or services will be taken into account.

Customer satisfaction is crucial for business performance, as it is the driver of customer

loyalty and consecutive retention. This statement, although intuitively true, could be argued
with.
On one side, it could be said, that there is no need to dedicate time and funds to make the
customer’s satisfied, but it is less expensive and sufficient to deliver high quality offerings,
which will certainly be purchased by some clients. Furthermore, one could argue that even
though customers are not loyal and will not stay with the company, new clients can be easily
found.
On the other side it can be argued, that even though customers will buy the product, they will
not repurchase unless the offering meets customers’ needs. Moreover, it may turn out, that
despite product’s quality is high it does not fill client’s expectations, as it misses some of
required benefits. Finally, one could say that it is much more expensive to acquire new
customers than retain current ones, as the costs associated with the customer recruitment are
higher than those connected with customer retention.

9
The above arguments connected with customer satisfaction concept have been widely
measured and discussed in the literature. As a result there is lots of evidence supporting the
initial statement: customer satisfaction is crucial for business performance, as it is the driver
of customer loyalty and consecutive retention the importance of customer satisfaction for
business results.
Within the course of this chapter, we will focus on only few supportive theories.
First of all, the importance of customer satisfaction for business performance has been
justified within the customer orientation concept. Secondly, the actual importance of customer
satisfaction for business performance versus importance of other factors has been quantified
within the EFQM Excellence Model. Finally, also the impact of increased satisfaction on
business results was researched and quantified within the literature.

1.1. Customer satisfaction in customer orientation model

Customer satisfaction concept has been placed at the heart of customer orientation model.
Based on this model, there are two kinds of companies;
 on the one side, there are product oriented companies, who are trying to sell the
products which they produce regardless of the level, to which those products satisfy
their customers’ needs. To simplify it, product oriented companies are searching for
customers, whose needs can be matched with the products, that the company is
offering. Very often those companies end up in the business stagnation phase, as they
are not be able to follow the natural development of customer needs – they continue to
offer what they think is desired by the consumers instead of delivering what is actually
desired.
 on the opposite side, there are customer oriented companies, who are focused on
meeting customer’s needs and satisfying him or her, as they know that satisfaction is a
prerequisite to retention, which in turn has positive impact on the long-term health of
their business.

Customer orientation is an ongoing process, during which organizations pursue three goals:
1. attain customer information,
2. disseminate and use that information when making decisions
3. implement change (Johnson, Herrmann, Huber, Gustafsson, 1997).

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First goal - “attain customer information” - means that a firm must collect information
about its customers. This is done through various research techniques in order to find out,
what are the needs and values of customers and how they are served by current products and
services. The information attained shall also point out future customer’s needs and the
direction into which they will be developing.
Secondly, a customer oriented company needs to ensure, that the “disseminate and use the
information” goal is met. Therefore it is necessary to make sure that the information
collected is shared between all departments involved in production and delivery of products
or services to customers. For that to be possible, tight cooperation between market research
and other departments is necessary. Moreover, organization’s leadership must understand the
necessity of and support the facts-based decision process.
Finally, there is no use of information, which is collected and stored in databases. To fulfill
the third goal – “implement the change” - it is necessary to translate the conclusions and
recommendations from the research into actions, which will enable the company to deliver
improved products and services.

To summarize, a customer oriented company has one primary goal – to satisfy its customers,
which is realized by getting to know customer needs and values, sharing this knowledge
throughout the company and translating it into improved products and services, which are
able to satisfy the customer to largest possible extent.

Satisfying the customers is a never ending process. As the customer grows up, gets older and
ages, his or her needs and values change. Moreover, as the economies develop, mature and
decline, the wants of human beings also change. As a result, companies are forced to follow
or even be ahead of customer’s needs in order ensure business growth. Customer orientation
process never comes to an end – it is a sequence of repetitive stages. The theory of customer
orientation distinguishes four major phases, which a customer oriented company has to go
through all over again to ensure growth in customer orientation (Johnson, Herrmann, Huber,
Gustafsson, 1997):
1. Customer strategy and focus
2. Customer satisfaction measurement
3. Analysis and priority setting
4. Implementation.

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Figure 1.1. The four phases of customer orientation

Phase I: Phase II: Phase III: Phase IV:

Customer Customer Analysis and Implementation
Strategy and Satisfaction Priority
Focus Measuremen Setting
t

Source: Johnson, Herrmann, Huber, Gustafsson, 1997

In the first phase of the process, companies should answer the question, how important is the
customer for their business performance and to what extent is the customer orientation their
business priority. In other words, it shall be clearly stated, to what extent company shall and
can adjust their strategy to consumers needs. Furthermore, phase 1 is the right time to specify,
which customer segments shall be in the center of organizations attention – e.g. referring to
automotive industry, shall the company focus on premium or mass cars’ users, shall the
company target young and dynamic or adult and affluent customers?
During phase two of customer orientation process, organization shall develop a measurement
system, which will enable to evaluate the level of customers’ satisfaction of particular target
groups with currently delivered products or services. In more detail, the measurement system
shall answer the question, which needs, values and benefits are key for consumers within
customer segments. Specifically, the research shall evaluate, to what extent current products
and services’ attributes deliver the desired benefits and therefore fill customers’ needs.
As the second phase provides the company with the assessment of benefits’ importance and
the extent to which current offerings fill those benefits, during third phase organization shall
analyze the information gathered and set priorities for further actions. In other words,
organization shall spot for product benefits, which are very important for target customers,
however not delivered by current products or services. Such benefits shall be the key priority
for company and a main focus in order to make the customers more satisfied and therefore
more prone to repeat purchases.

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Fourth phase of the customer orientation process requires that all the priorities set in phase
three are translated into specific actions and process, which will be conducted. Those actions
shall result in making the customer more satisfied through delivery of improved product or
service.
This customer orientation process shall never end and shall be repeated – after fourth phase,
phase one shall start, which shall verify, if the improved product really satisfied customer to
larger extent.

To summarize the customer orientation model, it is entirely focused on customer satisfaction.

Based on this model, only customer oriented company, which tries to deliver offerings
tailored to customer’ needs may expect returns from their actions. Returns equal higher
satisfaction levels being observed, which in turn shall increase the probability of repeat
purchases and as a result, increasing returns for the organization. Customer orientation model
undoubtedly has the customer focus and customer orientation in its hearth and stresses the
importance of customer satisfaction for the business performance.
Although customer orientation model has stressed the importance of customer satisfaction for
business performance, it has not quantified the importance. This leads us to the next theory,
which has taken the discussion to next level and quantified the importance of customer
satisfaction to business performance – The EFQM Excellence Model.

1.2. Customer satisfaction in The EFQM Excellence Model

The authors of The EFQM Excellence Model have not only acknowledged the importance of
customer satisfaction for organizations, but also measured the importance for the business
performance.
The EFQM Excellence Model was introduced in 1992 and is a practical tool, which in mid-
term helps organizations to evaluate and improve their performance, and in long term enables
them to strive for excellence.
The organizations are evaluated based on nine criteria, which are included in The EFQM
Model. Five of them are “enablers” – they cover, what an organization does, and remaining
four are “results”, which include what an organization achieves. There is relation between
two groups – the “results” are driven by “enablers”. The structure of the model is presented in
the below figure.

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Figure 1.2. The EFQM Excellence Model

Source: www.efqm.org

The EFQM Excellence Model, similarly as customer orientation model, puts customer and his
satisfaction in the heart of the theory. Specifically, it discusses the concept of customer
satisfaction within three of its nine criteria:
1. firstly, it is stressed within “Leadership” criterion, that company leaders need to
meet, understand and respond to needs and expectations of stakeholders, which also
include customers as one of most important groups.
2. secondly, also “Processes” criterion concentrates on satisfaction. Processes in the
organization shall be designed in such manner that they support organizations’ policy
and strategy, fully satisfy and generate value for its customers and other stakeholders
(The EFQM Excellence Model 1999 manual).
3. lastly, “Customer results” criterion is completely dedicated to customers’
satisfaction. Measures within this criterion are supposed to assess customer’s
perception of overall organization’s image, his or her satisfaction with

14
 products/services, sales and after sales support and evaluate customer loyalty to the
organization.
The focus on customer and his or her satisfaction in three out of nine criteria in The EFQM
Excellence Model is the evidence supporting the importance of customer satisfaction for the
business performance.
The authors of the model have established importance weights for each criterion in the model.
It is necessary to stress, that “Customer results”, called also customer satisfaction criterion,
is the weightiest criterion in the model and accounts for twenty percent of the total scoring
system when companies assess and measure their own excellence (Gronholdt, Kristensen,
Martensen, 2002). To put it differently, customer satisfaction has not only the largest impact
on evaluation of organization excellence, but most importantly understanding the customers
and measuring their satisfaction is important step in quality improvement, which than results
in higher satisfaction levels, improved business results and business excellence.

To summarize, based on the EFQM Excellence Model, customer satisfaction is the most
important factor driving the organization towards excellent performance and increasing
financial results. Having in mind that customer satisfaction is important for business
performance, that it is the most important factor in driving business towards excellence, it is
important to quantify the influence of increased satisfaction on the company performance.

1.3. The evidence of positive impact of satisfaction on business results

In literature, there have been lots of empirical studies conducted on satisfaction influence on
company’s performance, as well as effect on the influence of customer dissatisfaction on the
firm’s results. The satisfaction or dissatisfaction influence on organization’s performance may
be discussed in three aspects:

1. positive impact of growing satisfaction on return on investments (ROI), prices of

stocks and shareholder value
2. positive impact of satisfaction on customer retention and as a result lower costs or
higher returns resulting from long term relationship with the customers
3. negative impact of customer dissatisfaction on business performance and business
results

15
There is strong evidence within those three aspects for positive correlation between growing
customer satisfaction and business results.

1.3.1. Satisfaction influence on ROI, stock prices and shareholder value

The empirical studies were conducted based on customer satisfaction measurement models
and using the data acquired during models testing and implementation in order to evaluate if
there is positive correlation between increased satisfaction and ROI, stock prices and
shareholder value.

Starting with Swedish Customer Satisfaction Barometer index (which will be described in
detail in further course of this paper), it was analyzed, what is the effect of increased
satisfaction on ROI. The results of the study conducted by Anderson, Fornell and Lehmann
(1994) are the first, large sample evidence, that customer satisfaction is related with company
performance. The study revealed that as the satisfaction changes by one percent, ROI changes
by 0.4 percent.
Further studies conducted on SCSB by Anderson, Fornell and Rust (1997) proved that
average elasticity of ROI is higher for goods – 0.265 than for services – 0.14. This implies
that it is much more difficult for service companies to satisfy their clients than it is for
production companies. Such difference may be related to the fact, that it is much easier for a
consumer to distinguish between and objectively evaluate the quality of the product rather
than the service.
Referring further to the Swedish example, Ittner and Larcker have taken the analysis to the
next level, and examined the correlation between satisfaction and stock prices. The results of
their study prove that a one percent change in the satisfaction index translate into about seven
percent change in shareholder value (Gronholdt, Kristensen, Martensen, 2002).
The same authors carried the analysis based on American Customer Satisfaction Index
(ACSI). The study results were in line with the Swedish results and they confirmed that there
is relation between satisfaction levels and stock prices; companies with highest customer
satisfaction indexes earn return on stock price of 1-2 percent per month above the average
return on the market (Gronholdt, Kristensen, Martensen, 2002).

To summarize, there is solid evidence in the form of results of various empirical studies, that
customer satisfaction is correlated with financial results in following manner:

16
 1. increasing customer satisfaction positively influences return on investments (ROI)
2. the higher the customer satisfaction, the higher earnings on stocks for shareholders
3. increasing satisfaction drives positive change in shareholder value
1.3.2. Customer retention impact on business results

Satisfaction is a prerequisite for customer loyalty and retention. In other words, if customers
are satisfied with the product, it is probable, that they will be loyal to the company and that
the loyalty will be translated into repeated purchases. Repeated purchases are in turn
prerequisite to increasing financial results for the company, what implies that customer
retention is profitable to the organization. Going further, the benefits from retaining the
customers are larger than from acquiring new one and the costs associated with current
customer are lower and declining as compared to new customer.
This thesis has been supported by Reichheld (Johnson, Herrmann, Huber, Gustafsson, 1997),
who has been discussing effects of customer retention on business performance and he
defined areas – both cost and revenue, which are strongly impacted by customer retention:
1. Acquisition costs; all costs related with attracting customer to the company, such as
incentive program, creation of customer accounts, customer training. As these costs
appear in the early stage of relationship with the customer, customer retention allows
for avoiding them.
2. Start-up costs; costs, they are related to the beginning of cooperation with the
customer, egg. set up of customer bank account. With time, the account is maintained
and some costs are associated with that, but one time set up costs do not happen again.
3. Base revenues; the revenue, which a company accounts for regularly during each
following period, e.g. base revenue from monthly payment for mobile phones. When
customer is retained, the base revenue is guaranteed cash flow for a firm.
4. Volume effects; the surplus revenue, which company earns as the relation with a
customer is developing. Customers, if satisfied, tend to increase their spending with a
company by either buying larger quantities of a product.
5. Spin-off effects; with time, customers have a tendency to purchase complementary
products or services, e.g. satisfied car owner shall buy second car for his family
members or will acquire a car gadgets from the company, e.g. watch from Company X
collection
6. General efficiency effects; operation costs are expected to decrease with time, as the
company gets to know its customers better and therefore is capable of delivering the

17
 products or services in the required manner. On the other hand, customers get to know
the structure of the company and the requirements from the company side, which
enable for delivery of higher quality offerings. In other words, cooperation between
both sides becomes smoother.
7. Referral effects; satisfied customer shall talk to two persons about his or her positive
purchase experience, however dissatisfied customer will talk to and discourage ten
persons from potential cooperation with the organization. Nowadays, this factor is
becoming of extreme importance – as the traditional marketing tools have become
well known and understood by customers, customer referrals and so called word of
mouth has a great power.
8. Price- sensitivity effects; loyal customers are less price sensitive than new customers.
If the relationship with the company is satisfactory for the customer, he is willing to
pay more for the same products. Moreover, if the customer is acquired in his early
stage of life, as he grows older and becomes more affluent, he is also willing to trade
for premium products within the same supplier.

If customer is satisfied, he is probable to continue the relationship with the company. If that is
the case, the above described effects shall happen – they will either lead to lower costs or
higher returns. In the end, as the relationship with customer is continued, profit per customer
shall grow over time.

1.3.3. Dissatisfaction influence on business performance

We have already explained the importance of customer satisfaction for business performance
and proved that there is measurable, positive impact of increased customer satisfaction on
business results. This implies that companies, which enjoy increasing satisfaction of its
customers, at the same time note increasing business results. However, there are those
companies, who observe declining satisfaction. The question is therefore what are the results
of customer satisfaction decline?

Based on Hirschman’s theory (Johnson, 1996), dissatisfied customers may react in two ways
– they may either voice or exit.
Customer exit is the worse consequence of customer evaluation of product offering. In such
situation, the organization looses customers, what results in declining sales and revenues for

18
the company. Moreover, such customer, called “dissatisfied switcher”, will most probably
express his or her dissatisfaction through word of mouth to other potential customers. In other
words, dissatisfaction has not only direct effect on organization business measured as lost
potential sales, but may also have indirect effect on the business in the form of negative word
of mouth. Therefore it is of extreme importance for the company to handle in the right manner
second possible reaction of dissatisfied customer –customer voice.
If a customer is dissatisfied, before he or she exits, he or she may also complain to the
company. Depending on how his or her complaint is handled – whether in satisfactory or non-
satisfactory manner, he or she will either exit or retain with a company. Therefore it is
extremely crucial for the company to establish effective complaint management system which
will ensure, that two actions happen: a) listening to complaints and b) reaction to the
complaints.
The establishment of complaint system is important due to three reasons:
1. effective complaint handling system may prevent from customer exit and therefore
business loss
2. it may prevent from negative word of mouth from dissatisfied switchers
3. dissatisfied customers, who are potential “dissatisfied switchers” and whose
complaints are handled in satisfactory manner, may become even more satisfied and
loyal clients – so called “satisfied repeaters”. As a result, they shall not only
repurchase from the company, but shall also convert the negative word of mouth into
the positive one.

Apart from dissatisfaction consequences described by Hirschman – exit or voice, it may also
happen that a dissatisfied customer will not voice and will not exit. In such case the
dissatisfied customer will not voice a complaint, as he or she believes that there will be no
benefit from such action – no positive response from the company. At the same time, he or
she will retain with the company, as there is no other available or no better product or service
provider. Such consumers are called dissatisfied repeaters. They are most often acting in the
low competition or even monopoly markets – e.g. state-owned services, where a choice is
limited or none, therefore despite dissatisfaction, consumers need to repeat the purchase.
However, if the economic environment changes, competition increases and more interesting
offerings appear, dissatisfied repeaters are likely to switch to those new options. Therefore
those customers shall also be in the loop and actions shall be taken to increase their
satisfaction levels so as to prevent them from switching to other companies.

19
The below table presents four types of customers, out of which two were described above –
dissatisfied switchers and dissatisfied repeaters.

Figure 1.3. Four customer types

Repurchase Behaviour

Repeat Switch

Satisfied Satisfied
High
Repeaters Switchers
Customer
Satisfaction
Dissatisfied Dissatisfied
Low
Repeaters Switchers

Source: Johnson 1996

The empirical studies on satisfaction and dissatisfaction influence on business performance in

general confirm and support the conclusions, that;
 satisfaction is of crucial importance for business performance
 satisfaction has positive impact on business results
 retention, as a result of satisfaction, has positive influence on lower costs and higher
returns
 dissatisfaction may lead to customer base decline and therefore generate lower return

In more detail, the discussed studies justify organizations’ choice of customer orientation
strategy. Starting from positive influence of customer retention on lower costs and higher,
increasing profits and ending with higher return on investment for companies, who are able to
raise customer satisfaction levels – these are all undeniable evidences, that investment in
customer satisfaction and retention shall be the key area of focus for managers. In particular
in maturing economies, where market dynamics presents a one-digit quote or even zero
number, where markets are saturated with competing, comparable products or services, it is
important to adopt defensive strategy. Defensive marketing concentrates on customer
retention by either increasing customer satisfaction or building switching barriers and is
opposite to offensive marketing, which focuses on increasing market size and building market

20
share. Majority of companies adopt balanced mix of both strategies - acquiring new customers
and retaining the current ones. However, in maturing economies, the skewness is towards
defensive strategies, as it becomes more and more difficult and costly to acquire new clients.
Therefore, increasing customer satisfaction has become a key focus area for managers in
today’s organizations.

In the course of this chapter we have proven the undeniable importance of customer
satisfaction for increasing business excellence and described the studies, which measure the
impact of customer satisfaction on ROI and on stock prices. We came to the conclusion that
as increasing customer satisfaction has positive effects on business growth, it shall be the top
priority for the management. However, we have also discussed that in order to satisfy the
customers better, it is necessary to diagnose current level of satisfaction by establishment and
implementation of customer satisfaction measurement model. Thank to such model, the
weaknesses of current offerings can be spotted and eliminated to deliver products capable of
satisfying the customer to larger extent. However, to build the satisfaction measurement
system, it is necessary to understand the concept of satisfaction, its drivers and consequences.
Therefore next chapter will focus on theoretical framework of satisfaction, its antecedents and
consequences.

21
2. THE THEORY OF CUSTOMER SATISFACTION

2.1. The definition of customer satisfaction

In the literature, there has been discussion about two major concepts of satisfaction;
transaction-specific satisfaction and cumulative satisfaction (Gustafsson, Herrmann, Huber,
Johnson, 1997).
The first one is described as customer evaluation of single experience with a product or
service – therefore how happy the customer is with the offering at given point of time, during
concrete transaction. Transaction-specific concept refers to satisfaction as the evaluation of
single experience.
Opposite to transaction specific satisfaction is the concept of cumulative satisfaction, which
understands satisfaction as customer’s up to date experience with a product or service. In such
comprehension, satisfaction is the sum of evaluations of all purchase and consumption
experiences with a product during whole relationship.
During the course of this paper, cumulative satisfaction concept will be used, as it is more
appropriate for automotive industry. In this durables business, purchases are infrequent and
satisfaction is understood as a long term experience. The owners of the cars, if asked about
satisfaction with the particular brand, refer to cumulative satisfaction – they talk about
purchase experience, vehicle use experience, ending with after-sales service experience.

2.2. Antecedents of customer satisfaction

Satisfaction has its antecedents or drivers – factors, which influence the satisfaction levels.
In general, there are two major drivers of customer satisfaction – product’s performance,
which includes both product’s quality and product’s value (relation of price and quality). In
more detail, satisfaction drivers were initially defined in two models in the literature –
disconfirmation model, which is often associated with transaction-specific satisfaction and
performance model used in studies of cumulative satisfaction.
Specifically, the theory of the models and the differences between them are described below:

a) Disconfirmation model
Referring to disconfirmation model, the difference between perceived product’s
performance and expected performance is a driver of satisfaction.

22
 Disconfirmation model assumes that satisfaction increases if performance exceeds
expectations – in such case we talk about positive disconfirmation. In the opposite case,
when product or service performs below expectations, there is negative disconfirmation
effect, which leads to decline in satisfaction.

The figure below graphically presents the reasoning of disconfirmation model. It assumes
that expectations may have both positive and negative influence on satisfaction. If
performance increases over constant expectations, there is positive disconfirmation, which
positively influences satisfaction. However, if expectations grow above constant
performance, there is negative disconfirmation of expectations and satisfaction decreases.
Such transaction specific gaps are than aggregated into an overall customer satisfaction
(Johnson, M.D., 1996).

Figure 2.1 The Disconfirmation Model

Performance
minus + Customer
expectations satisfaction

Source: Johnson, M.D., 1996

b) Performance model
Within the performance model, expectations of product or service performance are
similar to product’s image, which is based on either personal experiences with the
product or information and opinions heard and learned from other users. As opposite
to disconfirmation model, expectations have only positive influence on satisfaction.
Moreover, expectations shall have positive impact on perceived performance, what
means that expectations are able to predict current level of performance. In addition, if
expectations are strong, than they shall positively influence the perceived performance
– therefore in such case the evaluation of performance may be far from real
performance level.

23
Figure 2.2. The Performance Model

Expectations

+ +

+
Customer
Performance satisfaction

Source: Johnson, M.D., 1996

Despite the expectations importance in the performance model, it is the performance,

which is main driver of customer satisfaction. Based on the model, performance has
positive effect on satisfaction level. The graph below represents the performance
model (Johnson, M.D., 1996).

Comparing disconfirmation and performance models, it is necessary to say, that the second
one has been evaluated as more appropriate model for predicting customer satisfaction. In
general, empirical studies of satisfaction confirm that expectations have rather positive than
negative influence on satisfaction. Moreover, disconfirmation model is adjusted to studies of
transaction specific satisfaction, while majority of empirical studies understand satisfaction as
cumulative, not transaction specific. As an effect of the above arguments, performance model
is evaluated as superior to disconfirmation model in the studies of customer satisfaction. Such
conclusion will be also valid in the practical part of this work, as the satisfaction measurement
model will be assessing up to date experience and therefore satisfaction with the automobiles,
rather than single transaction satisfaction.

24
2.3. Consequences of customer satisfaction.

Satisfaction has not only its drivers – performance and expectations, but also its results –
loyalty and retention. Those two consequences are correlated with each other, but are at the
same time distinct results of customer satisfaction.

Loyalty is only expressed psychological predisposition toward purchasing and/or using a

particular product/service once again, however it does not guarantee a success to an
organization measured as customer retention. In other words, loyalty is a high perceived or
expressed likelihood of repurchase or willingness to pay a higher price, but does not mean,
that customer will repurchase from an organization (Johnson, M.D., 1996). It is the retention,
which is ultimate consequence of satisfaction and which is the actual act of repurchase.

There are various reasons, due to which loyal customer – or the one, who expresses the
loyalty attitude, in the end switches to competition. The Customer Experience Model
(presented in the figure below) explains why loyalty does not necessarily end up with
retention.

Figure 2.3. The Customer Experience Model

Customer’s internal
knowledge database

Customer Consumption,
perceptions, customer
judgements and satisfaction and
choice loyalty

External market infomation

Source: Johnson, M.D., 1996

25
The model separates the consumption experience and resulting satisfaction and loyalty from
the repurchase decisions and explains, what happens, when potentially satisfied consumer
does not repeat the purchase with the same company. Based on the model, there are three
aspects of product or service consumption and the consecutive satisfaction and loyalty.

First of all, customer relation with the company starts with the decision about the product or
service purchase and the consumption. As a result of consumption experience, customer
forms the evaluation, perception and expectation towards the product and at the same time, he
or she becomes more or less satisfied with the product.

Secondly, during the consumption process, consumer stores in mind all the information
learned regarding experience with the product. He or she uses those experiences and
information when making decision about the future repurchase. Supposing that he or she is
satisfied with the product, this makes him or her more predisposed towards repeated purchase.

Finally, the consumer comes to the decision about repurchase of the product. He or she will
most probably make the decision based on the knowledge and experience gained so far.
However, as the world is changing, customer is exposed to new information during the
consumption – repurchase process. He or she receives information about new offerings, is
exposed to word-of-mouth information. As a result, even though customer is satisfied with the
current product and expresses to be loyal, external markets conditions may influence his
decisions and he or she may switch. Such customers are called satisfied switchers – they may
switch e.g. from Audi to BMW, because BMW will offer better priced offer – therefore
customer will perceive BMW as higher value car, or BMW will offer technological
advancements, that Audi is not able to deliver. On the other side, the above described scenario
may not happen. Even though a customer is exposed to external information and knows other
options, he may stick with the current brand and repurchase. But such case will most often
happen by habitual, daily purchases. In case of durables – and such is the automotive industry,
companies need to make sure, that they have the absolute competitive advantage and that no
other brand is capable of attracting current customers.

Both satisfaction drivers and results are linked in a theoretical framework, which helps to
understand the relations between drivers and effects of satisfaction. The framework is
presented in the below figure.

26
Figure 2.4. A framework for linking quality, satisfaction and retention

Internal C
product and Customer O
service Perceived value, loyalty and N
Customer Customer
production quality, and complaint T
satisfaction retention
and expectations behavior E
maintenance X
process T

Source: Johnson, Herrmann, Huber, Gustafsson, 1997

At the beginning of the whole process is the actual production of product or service and
placing an offer to the consumer. Providing that the product matches consumers needs, the
consumption process starts. During that process, consumers evaluate the product with regard
to its performance – understood as evaluation of quality, value (equal to quality versus price
paid and price paid versus quality) and confront the performance versus expectations. Such
evaluation lays ground for perception of satisfaction – the extent to which product or service
met customers needs. The level of satisfaction or dissatisfaction strongly affects and predicts
customer loyalty and as a result customer retention, however it guarantees nothing, as even
satisfied customers may switch to competition. Therefore in order to retain customers,
companies need to continuously improve current offering, present revolutionary and
innovative products and constantly deliver higher customer value. In other words, satisfying a
customer is a constant process, which means that new and better ways need to be found to
customer needs.
To summarize, customer satisfaction is important concept for business performance and has
measurable impact on business results. It is due to the fact that satisfaction influences loyalty
and consecutive retention. In other words, dissatisfied consumers may substantially negatively
impact business results. Therefore, it is of extreme importance to measure the current
satisfaction levels to be able to spot problems, eliminate them and deliver improved products
and services to customers in order to lift current satisfaction levels.

27
Having discussed the theory of satisfaction, its importance and impact on business
performance, we will now discuss satisfaction measurement systems developed so far within
the literature.

28
3. CUSTOMER SATISFACTION MEASUREMENT SYSTEMS

3.1. Antecedents of satisfaction measurement system implementation – customer’s

personal values research

Referring to customer orientation strategy, an organization, which recognizes the need to

make its customers more satisfied, shall first develop the customer satisfaction measurement
system in order to evaluate current level of satisfaction and be able to translate findings of the
study into the specific improvement plans. Therefore, for each organization, which is
customer focused, settlement and implementation of customer satisfaction measurement
system is a must and a major step towards customer satisfaction growth. However, customer
satisfaction measurement systems are just part of overall customer research.

Before any satisfaction measurement system is implemented, an organization shall get to

know its customers better. This includes knowledge of demographic characteristics, such as
age, gender, income, but most of all the set of customer’s personal values.
The theory, which justifies the importance of the knowledge of customer’s values is the
means-end theory. The theory explains how the choice of concrete product enables the
consumer to satisfy his or her personal values. In other words, how the “means” – products
lead to desired end states – called “ends”.
Referring to the theory, customers consider products as bundles of attributes (Johnson,
Herrmann, Huber, Gustafsson, 1997). During the decision - making process, they do not
analyze the attributes of the offering separately, but they analyze all product attributes
together as a set, and based on their perceived utility, customers make decision about the
offering purchase. As a result, these are those attributes, which enable the customer to fill his
or her wants. What drives customer perception of attributes utility and ability to satisfy his or
her wants are the personal values in life, which the customer is trying to satisfy and which
guide his or her decision-making process. The central hypothesis of the means-end theory is
that customers consider bundles of products attributes to be the instrument (means) for
fulfilling desirable goals or values (ends) (Johnson, Herrmann, Huber, Gustafsson, 1997).
The means-end theory argues, that customers make their decisions about the product purchase
based on the knowledge gained during up to date consumption process, which is structured
into so called means-end chains. These chains link product’s attributes, utility components

29
and set of personal values into a process, which explains, what drives customer decision about
the purchase and how the process is being conducted.

Figure 3.1. The means-end model

attributes utility components set of values

concrete abstract functional socio-psychological instrumental terminal

Figure 3.1. Johnson, Herrmann, Huber, Gustafsson, 1997

Attributes, which are products characteristics, can be divided into:

 Concrete attributes – which include physical, chemical or technical properties of the
product
 Abstract attributes – which are as opposite to concrete attributes, non-measurable
ones, they are one’s subjective perceptions about the products, e.g. aggressive line of
the vehicle

Based on concrete or abstract attributes of the product, consumer evaluates its utility. There
are two types of utility assessment, which are connected with two kinds of attributes:
 functional utility is the assessment of the concrete attributes – therefore of physical
characteristics of the product.
 socio-psychological utility is connected with abstract attributes – usefulness and
results of non-measurable attributes, e.g. thank to aggressive line of the vehicle
customer will feel much younger, when driving the car.

Finally, the set of values is understood as series of individual standards, which remain
constant over period of time and serve to formulate goals in life and put them into practice in
everyday behaviour (Johnson, Herrmann, Huber, Gustafsson, 1997). In other words, personal

30
values are the ultimate drivers of consumers’ behaviour and decisions. The values are split
into two distinct types:
 instrumental goals consist of moral (tolerance, responsibility, honesty) and
achievement-oriented values (logical, intellectual and imaginative)
 terminal values include desirable goals in life, which can be divided into personal
values (inner harmony, maturity in love) and social values (global peace, national
security).

Based on the means-end theory, consumers will choose products with attributes, which will
produce desirable consequences – therefore will offer desirable utility components and will
respond to customer’s personal values. For example, if social acceptability value is core to
customer, than he or she will choose a car with high brand image, e.g. BMW, as driving the
BMW will confirm his or her membership in a high class of society and will impress family,
friends and colleagues and as a result will lead to feeling of social acceptability. Such
customer will under any circumstance choose e.g. a Fiat brand, as this is brand has value or
mass image and will not impress the others and therefore will not lead to social acceptability
feeling or state.

In general, consumers hold different personal values in their lives and based on those values,
they make choices between offerings. Knowledge of customers’ values helps the organization
to tailor its offerings to those needs and by that respond to them better than competitors. As
the end result, such action will ensure that organizations’ product, not the competitors’ is
chosen and that customers’ satisfaction is brought to higher levels.
In more detail, all customers of a particular company have diverse values and needs. As a
result of such heterogeneity between customers, only differentiated offerings are able to
satisfy customer’s diverse needs.
Specifically, based on the knowledge of customers’ personal values and needs, a firm’s
clientele shall be divided into groups, which will be homogenous inside and heterogeneous
between the groups. Only such segmentation will enable to:
 deliver products tailored to needs of each customer segment
 lead to higher satisfaction of firm’s clientele.

31
Therefore before satisfaction measurement system is implemented, creative and flexible
research methods shall be used to discover the hidden needs and values of customers. Most
often qualitative methods used for this part of research are focus groups, face to face
interviews, surveys, laddering methods etc.
After knowledge of customer personal values is gained, satisfaction measurement system
shall be implemented, as it is the most informative tool to measure the extent, to which
product attributes are able to respond to customer needs.

3.2. Rationale for development and use of industry or nation universal customer
satisfaction measurement indexes

Thank to knowledge of customer’s needs, company is able to evaluate, how well its current
offerings serve customer needs. Such evaluation shall be done with use of customer
satisfaction measurement system.

Satisfaction measurement system is a crucial part of customer research helpful in diagnosing

customers’ satisfaction levels. Such findings are good guidance about areas of products
performance, which shall be improved in order to lift the satisfaction to the next level. Many
companies have been measuring satisfaction levels on continuous basis. It has been done in
more or less advanced manner and most probably many tools – mainly qualitative - were
developed to measure customer satisfaction. However regardless of the advancement of
methodology used by single companies, satisfaction measurement systems developed for a
single organization have major limitations.
First of all, measurement systems of that kind can not verify whether satisfaction index equal
to 80 is a “high” or “low” result, as there is no benchmark. As companies build satisfaction
measurement systems based on different methodologies and measurement indexes, which are
tailored to only this organization’s competitive environment, results are not comparable
between the organizations. It means that satisfaction index of 70 scored by company A’s may
be in reality higher result than index of 80 reached by company B provided that both
companies use different satisfaction measurement systems.
Secondly, such indexes deliver results, which are not comparable within the industry. It
implies that it is not possible to say, whether index of 80 is “good” or “bad” result on industry
level, as there is no average for industry available. Therefore, it can not be assessed if
companies in industry A satisfy their customers better than companies in industry B.

32
Finally, without unified, industry or even nation wide index, satisfaction levels can not be
compared across companies from other industries, sectors or other countries.

To summarize, without usage of industry universal index, an organization can only monitor
progress and dynamics of its customer’s satisfaction over time. Such firm is even not able to
say, whether the score is on high or low level. What is more, there is no benchmark to
competition, not to mention industry or other economies.

In order to respond to such limitation and enable comparisons, nation and industry wide
measurement models were developed in various countries and continents. The ones that are
perceived as pioneering ones and which laid ground for further development of satisfaction
models were:
1. Swedish Customer Satisfaction Barometer – SCSB
2. American Customer Satisfaction Index – ACSI
3. European Customer Satisfaction Index – ECSI

3.3. National Customer Satisfaction Indexes

3.3.1. Swedish Customer Satisfaction Barometer

First national customer satisfaction index was developed in Sweden in 1989. It was designed
in such a manner, that it enabled for estimating satisfaction index on the level of company and
total industry. As a result, it enabled to make comparisons of satisfaction measurement results
between companies, but also industries.

Since SCSB establishment, data was collected annually. Every year customers of about 100
companies from 30 leading industries were contacted for the interview, what resulted in ca.
25 000 respondents answering to the survey questionnaire every year. Respondents were
contacted via telephone and during ca. eight minute survey they were answering to the
questions using 10 point scale (Fornell, 1992). The customers evaluated their satisfaction with
organizations offerings on the brand level. However, if a company was selling multiple
brands, only the largest brand was chosen to represent the company.

33
After data collection results of the survey were analyzed using partial least squares
methodology, which details will be described in further chapters of this paper.

The structure of the original SCSB model is presented in the below figure.
Figure 3.2. The SCSB (Swedish Customer Satisfaction Index)

Perceived
Performance Customer
(Value) Complaints

Customer
Satisfaction
(SCSB)

Customer Customer
Expectations Loyalty

Source: Fornell, 1992

In each satisfaction measurement model, which will be discussed within the course of this
work, satisfaction is central variable and has its antecedents and consequences. What is more,
usually all or majority of variables in the model are latent variables – variables, which can not
be observed separately. Each of the latent variables is described by set of observable
variables.

Within the SCSB model, satisfaction is a function of only two antecedents – expectations and
perceived performance. This part of the model is based on the performance model described
in the chapter 2.2 of this paper.
Expectations are defined as what customers expect regarding the product performance – how
well, they believe, the product or service will perform. In the SCSB model, expectations play
an important role as determinants of satisfaction. According to the model, they shall
positively influence the perceived performance, as customers learn from experience and based
on the knowledge form expectations towards a product performance. Moreover, as

34
expectations forecast firm’s ability to provide future performance, it is argued that
expectations shall have positive impact on satisfaction (Andreassen, Cha, Gustafsson,
Johnson, Lervik, 2001). The SCSB model lays heavy importance on confirmation /
disconfirmation of expectations, as driver of satisfaction. Expectations are not only included
as a separate construct, which influences perceived performance and satisfaction, but
discrepancy of expectations is also part of definition of satisfaction construct. In the SCBS
index expectations are the observable variable, operationalised by just one question.

Second driver of customer satisfaction in the SCSB model - perceived performance (value) -
is defined as relation of product price to product quality. This variable is described by two
measures:
 quality given price
 price given quality.

In other words, authors of the SCSB model believe, that customers evaluate product’s
performance by comparing the quality of the offering versus price paid and price paid versus
quality of the offering. Perceived performance is expected to positively influence customer
satisfaction – when it increases, so does the satisfaction.

Satisfaction variable in the SCSB index described by three measures:

1) general satisfaction,
2) confirmation of expectations,
3) the distance from the customer’s hypothetical ideal product or service (Fornell,
1992).

Such defined satisfaction is expected to have two immediate consequences – customer

complaint and customer loyalty.
Customer complaints are measured by two variables – complaint to personnel and complaints
to management. Similarly, customer loyalty is also operationalized by two variables: (1)
tolerance to price increase – how much more the customer is ready to pay provided that he or
she is likely to repurchase, (2) declared repurchase intention.
Such consequences of satisfaction are derived from previously discussed Hirschman’s exit –
voice theory. Based on it, if a customer is dissatisfied, he or she may either stop the
relationship with a company (exit) or complain (voice). Within the SCSB model, there is

35
relation between customer complaint and customer loyalty. The authors of the model suggest
that, if the company develops proper complaint handling system, the complaining customers
may turn into loyal ones. However, if the company does not handle complaints, customer exit
is likely.
The SCBS model, as the first national satisfaction measurement system, delivered few key
findings, which were later often discussed in the literature.
Firstly, the SCSB index turned out to be higher for industries, where:
1. offerings were differentiated and customer demand was also such, therefore match
between supply and demand was possible. An example is an automobiles industry,
where heterogeneous demand was satisfied by differentiated offerings and this
industry in 1991 scored 78 on satisfaction index.
2. needs and supply were homogenous – basic foods (milk, sugar) scored also highest
results in 1991 – 78 as in case of automobile.

Secondly, lowest satisfaction levels were visible for industries, where heterogeneous demand
could not be matched by supply, which was not differentiated. Good example of such industry
is television broadcasting, which received one of the lowest scores of SCSB index – 48.
Finally, it was apparent, that services received lower scores on satisfaction index than
products (Fornell, 1992).

The Swedish Customer Satisfaction Index, as the first truly national satisfaction measurement
system, laid ground for development of the indexes in other countries, as well as other
continents.

3.3.2. American Customer Satisfaction Index

Second national satisfaction measurement index was developed in United States in 1994 and
was named The American Customer Satisfaction Index.
The methodology of the ACSI was based on the SCSB, however due to size of American
economy, was applied to larger number of companies, industries and sectors.
The largest companies from industries representative to major industry groups, which were
chosen from seven major economic sectors were included in the design of the sample used in
ACSI research. As a result, in 1994 ACSI research covered more than two hundred companies
from over forty industries in the seven major consumer sectors of the economy (Anderson,

36
Bryant, Cha, Fornell, Johnson, 1996). Within each company approximately 250 interviews
with company customers were conducted.
Respondents were supposed to answer brand or model level questions using 10 point scale.
As in case of SCSB, partial least squares methodology was applied to the analysis of the
results from the survey.
The structure of the ACSI model was based on the SCSB, however there were few differences
regarding model structure, but also measurement properties of the model.

Figure 3.3. The American Customer Satisfaction Index (ACSI) Model

Perceived Customer
quality Complaints

+
-
+
Customer
+ Perceived Satisfaction
value (ACSI)
+
+

+
Customer Customer
expectations Loyalty

Source: Anderson, Bryant, Cha, Fornell, Johnson, 1996

The major improvements in the ACSI versus SCSB models are as follows:
1. Expectations variable is explained by three observable variables - as opposite to
SCSB, where it was measured by only one construct.
2. Perceived performance (value) construct used in SCSB model was replaced with
two separate constructs – perceived quality and perceived value. The first one
measures the influence of the quality and the second one the influence of the price on

37
 customer satisfaction. Such modification enables to evaluate, whether satisfaction in
certain companies or industries is more driven by price or by quality of the offering.
Perceived value variable was described by two questions – quality relative to price and
price relative to quality. Perceived quality variable is measured by three questions,
which enable to confront the product or service actual performance versus
expectations held by customer before the purchase.
3. Customer loyalty is described by one extra variable as compared to SCSB index –
the additional variable is supposed the give answer to the questions, of how much the
price would need to be discounted to encourage the customers to repurchase, provided
that they are unlikely to repurchase.

Findings from ACSI index contributed greatly to explanation of satisfaction concept and its
consecutive driver - loyalty.
In general, in line with findings from SCSB index, the ACSI Model confirmed, that
satisfaction is greatest in goods, lower in services and definitely lowest in public
administration. However, satisfaction scores for goods and services were higher in ACSI than
in SCSB. Referring to literature, satisfaction levels are expected to be higher when
competition, differentiation, involvement, or experience is high or when switching cost,
difficulty of standardization or ease of evaluating quality is low (Anderson, Bryant, Cha,
Fornell, Johnson, 1996). Authors of ACSI model used those findings to conclude, that
satisfaction is higher in U.S. compared to Sweden due to higher differentiation and
competitiveness in U.S. To comment further on that conclusion, it shall be also taken into
consideration, that cultural and psychological conditions may to large extent explain those
differences. As Americans are much more optimistic than Europeans on average and Swedes
in particular, this shall in general predispose Americans to choose higher scores on the scale,
when responding to survey questionnaire.
Furthermore, the ACSI model delivered important findings, which explain the complex theory
of satisfaction and loyalty. Specifically, there were three major conclusions from the ACSI
Model (Anderson, Bryant, Cha, Fornell, Johnson, 1996):
1. Customization of an offering (how well does the offering fit the personal needs?)
is more important than reliability of the offering (how often has the things gone
wrong?). Naturally, customization is more important for services than manufactured
goods, however it still implies that tailoring the product or service to customer’s needs
shall have larger impact on perceived quality and satisfaction than standardizing the

38
 offerings in order to ensure greater reliability.
2. Expectations have stronger influence on perceived quality and perceived value
for industries, where there is relatively low variance in consumption and
production – and where customers make routine purchases. Once the variance in
offerings is large and so is variance in consumption, than expectations shall have
weaker impact on perceived quality and price. As a result, expectations impact turned
out to be lowest in manufacturing durables, finance/insurance and services. The same
conclusions were valid with regards to expectations influence on satisfaction – lowest
impact was observed in manufacturing durables and finance/insurance. Simplifying,
the latest quality experiences with an automobile or insurance play more central role
to satisfaction than expectations held before purchase. If a customer is more engaged
in the decision process and the purchase, product performance will influence to larger
extent his or her satisfaction than the expectations held before the purchase and before
the experience with the offering.
3. Based on ACSI Model, quality has larger impact on customer satisfaction than
value. As long as value concept plays important role in customer attraction and during
decision-making process, quality is more important in satisfying the customer and
therefore predisposing him to be loyal and retain with a company. There were industry
differences visible; price-driven satisfaction was highest for non-durables, while
lowest for durables, services, retail and government agencies. Implication from this
finding is such, that in maturing economies, where industries are saturated, where
supply is heterogeneous where acquiring the customer is extremely difficult and in
practice very often equals taking over competitor’s customer base, quality is crucial
and is much stronger predictor of customer loyalty and therefore probable repeated
purchase than price.

The ACSI Index was widely commented after its creation and it was also tested and applied in
many empirical studies. It also laid ground for development of European based index called
the European Customer Satisfaction Index (ECSI).

3.3.3. European Customer Satisfaction Index

The goal of ECSI development was to supply European companies and countries with similar
diagnostic tool as American counterparts have been using since 1994. Moreover, development

39
of similar index enabled the comparisons between countries within Europe, but also between
Europe and North America.
The ECSI model was developed and tested for the first time in 1999, while second round of
research was carried out in 2000 with minor changes implemented to the original model.
Twelve European countries participated in the 1999 project. In terms of industries covered by
ECSI model, telecommunication was included in the research in all markets, while retail
banking and supermarkets in almost all participating countries (Juhl, Kristensen, Ostergaard,
2002). It was also possible to include sectors of special interest in single markets, as it was in
case of Denmark.
For majority of companies in each country, about 250 of their customers responded to the
telephone survey. As a result, almost 55 000 interviews were held in 1999. The ten point scale
was used in the survey however results were afterwards adjusted to ACSI 1-100 points scale
to enable comparisons between ACSI and ECSI index.

Figure 3.4. The European Customer Satisfaction Index (ECSI) Model

Image

Expectations

Perceived Customer Customer

Perceived value satisfaction loyalty
quality of
„hard ware”

Perceived
quality of
„human ware”

Source: Juhl, Kristensen, Ostergaard, 2002

40
As discussed previously, ECSI methodology was based on ACSI model. As in case of SCSB
and ACSI models, partial least squares methodology is used for estimation of the model.
Furthermore, as in case of ACSI, all variables are latent ones operationalized by few
measurement variables – specifically by two to six variables (indicators), which are translated
into specific questions asked during the survey.

With regard to ECSI model structure, ACSI was an exemplar for ECSI construction, however
the latter one is different due to three constructs:
1. within ECSI model, image variable was included, which is expected to influence
perceived value, satisfaction and customer loyalty variables
2. perceived quality was divided into separate variables;
 a product quality – so called “hard ware quality” – which describes performance
of the product/service attributes
 a service quality – so called “human ware quality” – the quality of service
delivered to the customer (Juhl, Kristensen, Ostergaard, 2002)
3. Customer complaint variable was excluded from the ECSI model as compared to
ACSI index.

There are also differences compared to ACSI model with regard to variables measuring
loyalty construct, which is the ultimate variable explained by the model. Within ECSI model,
loyalty is measured by following questions:
(1) the product repurchase likelihood,
(2) the probability of buying another product from the same company,
(3) intention to switch to competitor – price tolerance
(4) intention to recommend the offering to other consumers (Gronholdt, Kristensen,
Martensen, 2000).

The difference in loyalty variable compared to ACSI lies in second and fourth question.
Within ACSI first question was the same as in ECSI, however the other two questions in
ACSI regarded price tolerance, while in ECSI only third question is dedicated to price
tolerance. The remaining ones in ECSI examine the probability of purchase extension to other
offerings within the same company, probability of positive word of mouth and probability of
product repurchase.

41
Among results of ECSI pilot study from 1999 several key conclusions were drawn, from
which there is one applicable to Polish economy and business environment in which
Company X is operating. The analysis of results for Denmark revealed that the link between
satisfaction and loyalty is stronger in competitive industries. In other words, the positive
effect of customer satisfaction on loyalty increases with the degree of competition in the
market (Gronholdt, Kristensen, Martensen, 2000). This conclusion is extremely crucial for
Company X, which operates in highly competitive automotive industry. Based on this finding,
it is important, that Company X tries to increase customer satisfaction as such increases shall
be strongly reflected in growing customer loyalty. In general, increasing loyalty has
measurable, positive effects for business performance. Specifically, there are few key results
of increasing customer loyalty for company results:
1. Increasing revenues due to customer retention and repeated purchases
2. Costs decline, as there is no need to acquire new customers, because the current
ones stay with the company, so the costs connected with new customers
acquisition decrease
3. Employee retention increases as a result of job pride and job satisfaction. As the
relationship with customers and familiarity of their needs is sustained customers
are served better and therefore their satisfaction and retention increases. Increase
productivity results from increasing employee tenure (Hopton, Markey, Reichheld,
2000)

As the increased loyalty has such strong influence on business performance, and satisfaction
influence on loyalty is stronger in competitive industries, therefore it is of utmost importance
for Company X in Poland to make customer satisfaction its priority goal.

The Customer Satisfaction Indexes described so far in this chapter – SCSB, ACSI and ECSI
are the most important indexes developed so far and used for measuring customer satisfaction
and customer loyalty. They are universal methodologies and can be applied to various
industries, sectors and on various markets. As a result they allow for comparisons of results
and benchmarking between companies, industries and results.
However, specific industries often tailor satisfaction measurement studies to the specifics of
the concrete industry or even company.

42
3.3.4. Automotive industry specific customer satisfaction indexes

Within automotive industry, which lies at the heart of this paper, J.D. Power and Associates is
the most important and most referred to marketing information organization, which measures
the customer satisfaction in the automotive industry.
J.D. Power is an independent and unbiased source of customer satisfaction, product quality
and buyer behaviour researches. As it is global company, it measures customer satisfaction
with brands in many countries what enables companies to compare results on local and
regional level.

J.D. Power provides following syndicated reports, which deliver information for automotive
industry and which are widely used within automotive companies:
1. Initial Quality Study (IQS)
2. Sales Satisfaction Index (SSI)
3. Customer Satisfaction Index (CSI)
4. Automotive Performance, Execution and Layout (APEAL)
5. Vehicle Dependability Index (VDI)

Initial Quality Study

Initial Quality Study (IQS) is a research, which is supposed to evaluate the automotive quality
after three months of usage. During the study respondents are asked to asses the quality of the
car with regard to:
 design – problems with design include car components or features, which may be
working right, however they may be perceived as difficult to use or understand
 defects / malfunctions – this kind of problems include complete breakdown of any
component or car feature.

In the course of the study 217 car attributes are evaluated with regards to its functionality and
reliability. As a result, the study reports number of defects and malfunctions per 100 cars at
the level of whole brand, but also at the model level.
IQS study is conducted annually and has been is use for the past twenty years – since 1987. It
serves as benchmark for evaluating new vehicles quality.

43
In the latest, 2007 release of the study, 97 000 purchasers and lessees of new car models
launched in 2007 were surveyed ninety days after the purchase. Within this study, Company
X scored enormous improvement as a total brand with regard to quality of the vehicles. In the
ranking of the brands with lowest rate of faults, it advanced by more than 10 positions.
Moreover, such substantial increase was driven by all models and such results have been
described by Neal Oddes, director of product research and analysis at J.D. Power and
Associates as Company X commitment to quality (http://www.jdpower.com ). Company X as
a whole brand received the highest quality ratings with regard to: body and interior quality –
mechanical, overall quality – mechanical and power train quality – design.

Sales Satisfaction Index

Another important J.D Power study, widely used within automotive industry, is Sales
Satisfaction Index (SSI). It has also been in use for the past twenty years.
As opposite to IQS, which measures automotive quality itself – therefore referring to ECSI it
measures “human ware quality”, SSI evaluates the customer satisfaction with dealers and
vehicles, therefore so called “hard ware quality” as defined in ECSI. In more detail, it covers
the area of sales moment – therefore this is an evaluation of customers’ first experience with
the company. Specifically, it evaluates customer satisfaction in five dimensions: dealership
facility, salesperson, paperwork/finance process, delivery process and vehicle price
(http://www.jdpower.com). This implies that SSI results in evaluation of “human ware
quality” to larger extent than “hard ware quality”. The 2007 results of SSI study are not
available however in 2006 Company X was positioned in top ten in ranking of automotive
brands, whose customers are most satisfied with the car purchase process. Company X scored
much above the average for the industry, which in 2006 amounted to 847 points
(http://www.jdpower.com ).

APPEAL

Automotive Performance, Execution and Layout Study (APEAL) is the latest study offered by
J.D. Power, as it is in use only since 1996. This is also the only study, which measures the
emotional side of car ownership – it examines what customers feel about their cars. The study
was designed to complement the IQS study, which concentrates on the quality, while
APPEAL on the owners delight with car design, content, layout and performance.

44
The respondent in the study are car owners, who have been using their car for only 90 days.
During the research, respondents are supposed to evaluate their cars on more than 100
attributes, which cover eight categories of vehicle performance and design:
engine/transmission; ride, handling and braking; comfort/convenience; seats;
cockpit/instrument panel; heating, ventilation and cooling; sound system; and styling/exterior.
The 2007 survey was based on responses from more than 91 000 car purchases and lessees of
new 2007 model-year cars and trucks, who purchased their vehicles ninety days earlier.
The results of the APEAL study were extremely satisfactory to Company X brand. The brand
received highest scores in four out of five measured areas. Such result can be translated into
high profitability of the brand, as based on the results from the 2007 study results,
manufacturers and dealers of models with higher APEAL scores can offer lower incentives to
new-buyers (http://www.jdpower.com).

Vehicle Dependability Index

One more study offered by J.D. Power and Associates is the Vehicle Dependability Index
(VDI). The study is designed to evaluate the long-term experience with a vehicle, as it
measures the quality after three years of car ownership. The study covers such areas as
durability of specific items, frequency of warranty work, ratings of the work performed and
the amount spent on non-routine repairs during the past year (Johnson, Herrmann, Huber,
Gustafsson, 1997). Therefore the index is a solid insight for the consumers of the model’s
reliability and dependability within the warranty period.

Customer Satisfaction Index

Finally, J.D. Power could not lack customer satisfaction index in its portfolio - it is called
Customer Satisfaction Index (CSI). As all indexes described in previous chapters, the J.D.
Power CSI index is supposed to measure the level of customer satisfaction with the car usage
during the first three years of the automotive use.
The CSI index is composed of variables, while each of them is measured by few questions.
Based on results released for German market in 2005, the four variables explaining customer
satisfaction are:
 quality and reliability of vehicle - covers problems with vehicle,
 vehicle appeal – means satisfaction with the vehicle’s performance, design,

45
 function and styling
 service satisfaction – is understood as customer satisfaction with dealership and
service
 ownership costs – cover costs of car use, insurance and repairs

J.D. Power vehicle quality and satisfaction measurement studies are used widely among
automotive industry organizations. They enable to evaluate satisfaction levels and benchmark
them against competitors. Moreover, J.D. Power methodologies, as external ones, are
objective in measuring and evaluating satisfaction levels. Therefore they are good indicator of
direction, into which automotive firm is heading in terms of vehicle quality, performance,
brand image and sales services, which are prerequisites for customer satisfaction, which in
turn impacts organizations financial results.

46
4. COMPANY X CUSTOMER’S PROFILE

Nowadays, majority of companies are conducting mainly qualitative research which measures
customer’s values, needs and beliefs. Such qualitative methods are also used to measure
consumer demographics.

Company X in Poland conducts an annual research with the external agency, which supplies
the company with following information:
1. consumer demographics and interests
2. benefits driving the car purchase
3. reasons for vehicle purchase and attitudes towards the car

The research is conducted on yearly basis since 2002 by the same research agency, what
allows for results comparisons and trends observations. The study, which results will be cited
in the next chapters, was conducted in autumn 2006. The research uses mail questionnaires as
a data collection methodology. In last year wave there were 326 respondents, who returned
the filled questionnaire. Within this chapter, we will present analysis of the results of 2006
wave, which will describe the demographic profile, but also personal needs and values of
Company X car owners.

4.1. Company X customers – demographics

In general, the analysis of demographics from the 2006 survey allows for customer
segmentation into groups, which are homogenous inside, while they differ between the
groups:
 Compact cars – users of smallest cars and at the same time the most affordable
among all Company X models belong to this group,
 Mid size cars – cars within this segment are larger and more comfortable than
compact cars, and at the same time more expensive as well as more luxurious.
 Full size and large cars – these are definitely the most expensive cars, largest ones
and most prestigious and luxurious ones.

47
Each of the segments can be described by seven dimensions: gender, age, size of household,
occupation, income of the owner, previous experience with Company X cars, interests and
hobby.

Starting with gender, among Company X car owners, 75% of clients is male. Across the
segments, there is correlation visible between gender and car size – the larger the car, the
larger percentage of men owners versus women. Therefore, largest percentage of women
owners is in the compact cars segment, where 32% of the car owners are women versus 25%
for the total brand. Contrary, in full size cars segment, 89% of car owners are men. Such
results are very natural – the smaller the car, the more appealing to women. As a result
compact cars are most often in the possession of women, while only few of them (11% of
total population of full size cars owners) own models from full size segment.

As Company X cars are premium ones, they are sold at correspondingly high prices and
therefore younger consumers in majority can not afford them. This is reflected in the age
structure of Company X owners – 78% of respondents are in the age of 29 to 58 years.
Another conclusion applicable in the analysis of age structure of respondents is that the
smaller the car and therefore more affordable, the youngest and the oldest consumers are
driving it. Within the owners of compact cars, there is largest percentage of youngest (below
29 years old) and oldest respondents (above 59 years old) as compared to other segments –
7% and 16% respectively. Such observation is related not only to the fact that disposable
income of youngest and oldest consumers is relatively lower than of mid age consumers, but
also to the fact, that compact cars are proper size cars at youngest and oldest stage of life, as
respondents at this stage of life usually don’t have the children yet or already don’t have
children dependent on them.

The Company X car owners most often have four members in the family (over 50% of
respondents). However, within compact cars segment, 2-persons families are statistically
more often. This finding is in line with the analysis of age structure – the youngest and oldest
customers are most often driving compact cars, as they are of comfortable size for their two-
person household.

The largest group among Company X customers are managers - entrepreneurs (private
companies’ owners), managers, directors and business owners – 45% of respondents. Second

48
largest group is intellectuals (doctors, lawyers, scientists) – 22% of respondents belonged to
this group. There were significant differences visible among segments; among compact cars
owners, intellectuals were much more visible than in mid size and full size car owners. On the
other hand, managers are largest group among owners of full size cars as compared to other
segments. Such relation has its background in the income – as the managers are on average
most affluent group, they are most likely to purchase full size car as opposite to less affluent
intellectuals.

The size of the car is reflected in its price, therefore the larger the car, the higher the price and
as a result higher income of the owners. Such relation was observed in the analysis of income
among Company X car owners. Respondents, who are driving compact cars, have on average
lower income than mid size car owners and much lower than full size car drivers.

Company X customers are split in half in terms of previous experience with the brand – 51%
of respondents confirmed, that they have had a Company X car before the current one. On
average more often men and persons working on managerial positions are within this group.
Among customers, who had Company X car before, 30% had one car before, while remaining
70% had more than one Company X car before the current one.
There were significant differences visible between customer segments with regard to previous
experience with the brand. For compact cars owners, statistically more often current car is a
first Company X car – this is valid for 62% of compact car respondents, who claim that
compact car is their first one. This is opposite to full size cars owners, where for only 22% of
respondents this is first Company X vehicle. Moreover, among full size cars owners, 77% of
them have had more than two cars of this brand previously. Among those compact car
owners, who had Company X before, only 51% had more than one such car before the current
one.

With regards to interests and hobbies, in general Company X customers are most interested
with movies (56% of respondents), house and garden (56%), winter sports (40%), travelling
(36%) and music (35%). It is important to note, that during the past four years (2002 – 2006),
increasing interest with tennis was noted, while fewer respondents claimed, that they are
interested in cooking. This observation is in line with the changes within culture and style of
living in Poland and with increasing purchasing power of Polish consumers.

49
With regards to differences between models owned and interests, the higher the car model, the
more expensive the hobby. Compact car users statistically more often claimed that they are
interested in cooking, house and garden, while they claimed lower interest in winter sports
and golf. On the opposite side, full size car owners responded, that they are most interested in
travelling, tennis, water sports and golf.
Such differences are related to financial and social status – travelling or water sports
definitely require more investments that interest in cooking, house or garden. On the other
hand, sports such as tennis or golf are regarded as sports for people from upper classes of
society, those with higher income and such hobbies are regarded as prestigious ones.
Therefore full size car owners will more often declare interest in golf or tennis, than in
cooking, house and garden.

Summing up the analysis of demographic characteristics of Company X car owners, the main
conclusions from analysis are:
 Company X cars are more appealing to men, as every 3 out of 4 respondents is
men. Female respondents are most often driving the smallest models of Company X –
compact cars. This implies that if Company X wants to target women, it shall
concentrate on offering smaller cars, while the larger cars shall be offered rather to
male customers.
 As Company X cars are premium ones, therefore they are affordable at maturity
stage of life, when disposable income is relatively larger – 78% of respondents are
in the age of 29 to 58 years. Therefore marketing efforts such as communication,
marketing campaigns shall be focused on places, media channels, which are most
often used by respondents in such age. However, if there is desire to attract younger
customers, than smaller models shall be offered to them, as these are the ones that this
target group can afford.
 As Company X cars are premium cars, customers most often purchase compact
car as their first car of this brand – 62% of compact cars owners declare, that
this is their first vehicle of Company X, while only 22% of full size cars owners
confirm this statement. This implies that to gain new customers, compact cars will
be the best incentive. Furthermore, to overcome high price barrier, promotional tools
shall be used with the offer of smallest cars, as they shall be most effective in case of
new customers. On the contrary, clients who decide to purchase larger models as their
first Company X car are affluent enough and as a result price incentives will rather not

50
 be effective tool to attract their attention.
 Company X shall target mainly managers and intellectuals with its offerings –
67% of respondents belong to those two occupation groups. It shall be noted
however, that offerings which will meet intellectuals’ needs are those placed in the
compact car segment, as they are the affordable ones for this group. Contrary,
managers shall rather be targeted with mid-size and full size cars, as these are the ones
affordable by this group, but also the ones, which are more prestigious to drive.
 As owners of Company X cars are mainly in their mature life stage, most often
four persons live in their household – two adults and two children. This implies,
that Company X shall offer solutions friendly to families – comfortable sizes of
trunks, foldable back seats to fit more luggage if necessary.
 With regard to income of respondents, compact car owners are on average less
affluent than respondents, who drive mid size and full size cars. Therefore
offerings for compact cars customers shall deliver more value for money, as these
customers will be more price sensitive than owners of mid size of full size models.

The analysis of Company X customers’ demographics showed also, that there is justification
for segmentation of respondents into three groups – compact cars, mid size cars and full size
cars, as respondents within these groups are homogenous. The differences between
respondents within each group and the average for total Company X are as below:

 The average Company X client is male (75% of respondents) in the middle age –
from 28 to 58 years old. Every second respondent lives in a four persons households
(50% of customers). Almost half of Company X clients are managers, while almost
20% of them represent intellectuals’ group. Company X customers most often agree
that their hobbies are movies, house and garden, winter sports, travelling and music.
 Compact cars owners – in general, this group differs a lot from mid and full size
car owners. Compact car drivers are mainly youngest or oldest customers (below 29
years old or above 59 years old). Majority of this group belongs to intellectuals,
pensioners and students. Within this group, two person households are much more
often present than in other groups. Compact car drivers have also the lowest income
compared to other groups – as they are either youngest or oldest persons, therefore
least affluent. Statistically, women more often drive and own compact cars than other

51
 models. Respondents within this group have only started their adventure with
Company X brand – within compact cars owners there is largest percentage of
customers who declare, that this is their first Company X car. In terms of interest and
hobbies, respondents within this group declared more often than customers within
other groups that their hobbies are those least demanding in terms of financial input –
cooking, house and garden.
 The profile of mid size car owners is most similar to average demographic profile
of Company X customer. 80% of customers within this group are men. They are in
their maturity stage of life, being between 39 to 58 years old (64% of respondents).
Their households are of traditional size – three of four persons. Almost half of the
customers in the mid size car segment are managers (45%) followed by intellectuals.
Their income is on the level of average income observed for Company X customers.
For 50% of customers within this group current Company X car is not the first one –
they have had a car of such brand previously. In terms of interests, customers within
this group statistically more often claim interest in pop music, tennis and soccer.
 The owners of full size models differ a lot compared to compact car drivers, but
there are similarities to mid size cars owners. The owners of full size Company X
cars are in almost 90% men. As in case of mid size car owners, they are most often in
the age of 39 to 58 years old – within this group there is lowest percentage of youngest
(below 29 years old) and oldest (above 59 years old) respondents. They are well
settled in life – in majority they work as managers and their income is the highest
among Company X customers. Customers within this group have larger families –
most often four persons within the household. Furthermore, as they are the wealthiest
group, they have largest experience with the Company X cars – 78% of customers
from this group have had Company X car before. Customers within this group
statistically more often declare, that they have either expensive or prestigious hobbies
and interests – they are more often than other customers interested in travelling,
tennis, water sports and golf.

The differences between three core groups of Company X customers deliver important
knowledge to the management, which enables to target each customer segment with such
offer, that it is adjusted to each customer profile and by doing so maximize the probability of
satisfying the customer. The analysis of factors, which drive the decision of car purchase,

52
shall deliver more detail knowledge of customer needs and values, which shall further
enhance the knowledge of differences between customer segments.

4.2. Company X customers – benefits driving the car purchase

During the annual customer research, not only customer profile is measured, but also
Company X customers are questioned to point out three most important benefits, as well as
factors, which are crucial in their car purchase decision making process.

Respondents are asked to choose three most important benefits from the list of fourteen,
which are the most important for them when deciding about the car purchase. The benefits
and factors used in the survey are:
1. Safety of the vehicle
2. Comfort of the vehicle and delight from driving
3. The technological advancement of the car
4. The brand image
5. The unique design of the car
6. Previous experience with the brand
7. High expected return if car is sold after few years
8. Functionality and economy of the car
9. Prestige due to car ownership
10. Recommendation from a friend regarding the car
11. Promotion or advertising influence
12. The environment friendliness of the car
13. After sales services
14. Other reasons

The results of 2006 survey revealed, that in general there are four benefits, which where
chosen most often as the crucial ones for Company X customers:
 safety of the car – 59% of respondents pointed this factor as one of most
important, when purchasing the car
 comfort of the vehicle and delight from driving – 56% of those asked pointed
this benefit as very important

53
  technological advancement of the vehicle – 28% of respondents believe, that this
benefit is crucial factor, when purchasing the car
 brand image – this benefit was chosen by 27% of Company X customers

On the other hand, the least important factors for Company X customers, which are able to
influence the decision about car purchase, were:
 after sales service – only 1% of respondents believes, that this is important factor,
which is taken into account while making decision about car purchase
 the environment friendliness of the car – was also chosen by only 1% of
customers
 promotion or advertising – this factor was taken into account by only 2% of
Company X car owners, when making the decision about the brand they want to
drive

These results have crucial implications and are important advices for Company X managers.
First of all, based on the survey, safety of the car, comfort and delight from driving are the
key benefits that Company X cars shall deliver to their owners. These are also the key car
features, which if performed on high level, are able to attract future consumers and retain
current clientele. Furthermore, these features shall be claimed in any promotional materials
and advertising, as their importance is so high to Company X clients.
Secondly, if Company X has any issues with quality, which leads to lower safety, less comfort
or lack of technological advancements, than it can expect declining number of customers
attracted or the customer exit to happen, as the most important benefits will not be delivered
to the customers.
Finally, as promotion and advertising factors are least important for Company X customers,
those tools shall not communicate promotional activities – attractive pricing or discounts. The
advertising shall rather be used for image building, as image is one of the most important
factors for Company X clientele. Therefore, instead of communication of promotional
incentives in media, advertising shall communicate brand benefits and in this manner enhance
the brand image further as the factor taken into account by 27% of respondents during car
purchase decision making process.

54
The 2006 study revealed the differences between various models owners – other benefits were
pointed out as the most important by different model owners. As a result, three customer
segments divided based on demographic characteristics may be described by other benefits,
which are on average more important for them during decision-making process.

Compact car owners pointed out more often than other models owners to safety of the
vehicle, brand image and functionality and economy of the car as benefits important to
them during the car purchase decision process.
The larger sensitivity to those factors is related to demographic profile of compact cars
customer segment:
1. Functionality and economy of the car; as discussed before, compact car owners are
the group with smallest disposable income. Therefore functionality and economy of
the car is on average more important to them than to any other customer segment, as
their funds are more limited than funds of other Company X customers.
2. Safety; Company X cars score five stars in the Euro NCAP safety ranking and are
perceived as safest cars. Safety benefit does differentiate Company X from other
brands and has been pointed out by 59% of Company X customers as very important.
However, safety benefit was chosen more often by compact car owners, than mid size
and full size car drivers. Such difference is also related to demographics. Compact car
owners are the youngest and the oldest customers of Company X and very often
compact car is their first Company X car. While comparing the options on the market,
they are searching for safe vehicles and if a car is described as very safe, this feature
may be decisive for them to choose this particular brand. Therefore Company X cars
are more appealing to them than any other brand, as they are perceived as the safest.
For mid size or full size cars owners’ safety is more of a granted benefit, as they most
often have been driving Company X before. Furthermore, as they are more wealthy
customers and they are driving more expensive cars than compact ones, they are
searching for other benefits than just safety, which is important, but basic one for
them. For the same reason safety is more important for compact car users – as they
have the smallest income, they can afford smallest Company X cars and those
delivering basic benefits, such as safety. On the other hand, those basic benefits are
the ones that compact cars owners are searching for – safety, but also reliability and
economy of the vehicle.
3. Image; this benefit is more important to compact size owners than other segments for

55
 several reasons. First of all, compact car customers are the youngest and the oldest
groups and very often they did not have previous experience with Company X.
Therefore, image benefit acts as strong differentiating feature, which makes Company
X car more attractive than other brands. Than, as this may be the customer first
Company X car, the desire to drive a high image, admired brand car is larger than for
customers, who are driving Company X for longer time. For such clients, the desire to
drive high image brand has been fulfilled before and therefore is not perceived as
important now. Contrary, for compact cars owners, image benefit may be very
important, as this may be their first premium brand car.

To summarize, customers within compact cars segment perceive safety, functionality and
economy of the vehicle, as well as image of the brand as more important factors than mid size
and full size cars segments. The skewness towards such benefits is partly related to
demographics of the compact car owners; 1) lower income of compact car owners, therefore
more focus on basic benefits such as safety, reliability and economy, 2) as the compact cars
owners are the youngest or oldest customers, it is very often their first Company X car. As a
result safety and image of the car, which strongly differentiates Company X from other
brands, push this group towards purchase of Company X, 3) as this may be their first
Company X car, the desire to drive high image car may be stronger than for mid and full size
car owners, for which this is next Company X model and they are used to such high image
cars.

Based on the benefits, which are on average more important for compact car owners, this
customer segment can be described as functional segment.

Mid size cars owners on average pointed more often to comfort and pleasure of driving than
other customer segments. At the same time, functionality and economy of the vehicle was
chosen very seldom by this customer segment. Such discrepancies are also related to
demographic characteristics of this customer segment.
Customers within this group have higher income than compact car users and are better settled
in life. They are also more often managers, therefore handling high positions within the
company, which are associated with higher standard of life. As a result, mid size car owners
can choose vehicles, which offer comfort, delight of drive and some portion of image to the
users. Those customers take functionality of the vehicle for granted and do not put so much

56
attention into economy of the vehicle, as they can afford higher expenses. They are searching
for pleasure, comfort and delight when driving. As a result, mid size car segment can be
called pleasure segment, as customers within this group value the delight higher than the
functionality.

The benefits which were on average more often chosen as the most important ones by full size
cars owners were pleasure and comfort of driving, previous experience with the brand and
prestige of car ownership.
The full size car owners are most affluent customers of Company X. Therefore pleasure and
excitement of driving is very important for them and this is why they choose the largest, most
expensive and most luxurious models. Furthermore, prestige is important for this group, as
these customers are mainly managers, well settled and affluent, therefore they need to be
surrounded by prestigious products - with cars between them. Lastly, the current model is not
their first Company X car. Those customers have experience with other Company X cars and
as a result it influences their decisions about the car purchase.
The full size car owners may be called as prestige segment due to benefits, which were
pointed by them on average more often than by other customers.

The analysis of key benefits, which are most important for Company X customers during the
decision about car purchase, revealed that Company X customers can not only be segmented
due to demographic characteristics, but also based on key benefits which they are searching
for.
Company X clientele can be segmented into three distinct groups:
1. compact car owners – so called functional segment. Customers within this group
are more often than other customers searching for cars, which are safe, functional and
economical and have high image.
2. mid size car owners – so called pleasure segment. Such customers focus more often
on pleasure and comfort of driving than customers within remaining segments.
3. full size and large car owners – so called prestige segment. Clients within this
segment are those most experienced with Company X and those searching for pleasure
of car driving and prestige of car ownership

The knowledge of key benefits, which are important for particular customer segments,
enables the company to target each customer group with different car attributes which will

57
respond to different benefits. Such knowledge is of inestimable value in creating offerings
tailored to customer needs, what in turn drives higher satisfaction and loyalty.

4.3. Company X customers – attitudes to vehicle

During the survey, not only demographic characteristics of consumers and benefits driving
car purchase were examined, but also general attitude to vehicle. Respondents were asked to
agree or disagree with twelve statements describing their attitude to cars. The statements were
ranging from “My car shall express my personality” to “I take care of my car myself”. The
respondents were supposed to evaluate whether they agree with the statement (4) or disagree
(1) or they have no opinion.

In general, the statements, with which customers agreed to largest extent, corresponded with
most important benefits taken into account during the car purchase process.
Respondents to largest extent agreed with following statements:
 “The vehicle shall guarantee maximum safety” – 97% of respondents agreed
completely with this statement. This is in line with safety benefit, which was pointed
out by largest percentage of respondents as important benefit taken into account
during purchase decisions.
 “I would like to have a feeling, that all latest technical advancements were used in
the car” – 94% of those questioned agreed with this statement. This is in line with the
technological advancements benefit, which was chosen 28% of Company X customers
are key while making car purchase decision.
 “I like the vehicles with unique design” and “The car gives me feeling of freedom
and independence” – 92% of respondents agreed with both statements completely.
This statement corresponds with two benefits; comfort and pleasure of driving, which
was chosen by 56% of respondents as important for them and unique design, which is
perceived as important factor during car purchase process by 27% of Company X
customers.

There were some differences between customers’ demographics and their attitude to vehicle.
In general, women are searching for cars, who give them sense of freedom and independence,
which have unique design and which express their personality.

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When it comes to age groups, youngest consumers (up to 39 years old) enjoy dynamic driving
more than any other group. On the opposite side are customers above 49 years old, who more
often treat their car as locomotion only.

With regards to differences between various customer segments, they were no strong
differences. The only exception is the full size segment (prestige segment). Customers within
this segment believe that the car shall reflect their social status and that it shall attract others
attention. This is in line with the list of key benefits which are important for this customer
group. As discussed before, customers from this segment are on average more often taking
into account the prestige of the car ownership when they are making their purchase decisions.
As customers within this group are most affluent ones and are most often on high managerial
positions, naturally they will be searching for cars, which are prestigious because they believe
that the car shall reflect their social status.

4.4. Summary of Company X customer’s profile

To summarize the customer profile research study results from 2006, the analysis revealed,
that Company X customers can be divided into three major groups. Customers within those
groups are alike taking into account their demographic profile, their needs and attitudes
towards vehicle. Moreover, those groups are similar in terms of car models that they choose.
Contrary, the groups differ significantly between them.

The characteristics of average Company X customer and specifics of the three customer
segments are:
1. Company X customers in majority are men (75% of respondents) in the middle age –
from 28 to 58 years old. 50% of respondent lives in a four persons households. In
terms of occupations, almost half of Company X clients are managers, while almost
20% of them represent intellectuals’ group. Company X customers are most often
interested in movies, house and garden, winter sports, travelling and music. The most
often cited benefits or factors, which are important for Company X customers during
car purchase are safety of the car, comfort of the vehicle and delight from driving and
technological advancement of the vehicle and brand image.
2. Compact cars owners – functional segment. Among this segment, there is larger
percentage of youngest and oldest customers (below 29 years old or above 59 years

59
 old) than in remaining segments. Women are also driving compact cars than other
models. Majority of this group belongs to intellectuals, pensioners and students and
live in two person households more than customers from remaining segments.
Compact car drivers have the lowest income compared to other groups and within this
segment there is largest percentage of customers who declare, that this is their first
Company X car. In terms of interest and hobbies, respondents within this group
declared more often than customers within other groups that their hobbies are those
least demanding in terms of financial input – cooking, house and garden. Customers
within this group are more often than other customers searching for cars, which are
safe, functional and economical and have high image.
3. Mid size cars owners – pleasure segment. 80% of customers within this group are
men in the age between 39 to 58 years old (64% of respondents). They have
households with three or four persons. Almost half of the customers in the mid size car
segment are managers (45%) followed by intellectuals. Their income is on the level of
average income observed for Company X customers. 50% of customers within this
group have had a Company X car previously. In terms of interests, customers within
this group statistically more often claim interest in pop music, tennis and soccer. Mid
size car owners focus more often on pleasure and comfort of driving than customers
within remaining segments.
4. Full size and large cars owners – prestige segment. Customers within this segment
are almost only men (90%), in the age of 39 to 58 years old – within this group there is
lowest percentage of youngest (below 29 years old) and oldest (above 59 years old)
respondents. Full size car owners are in majority managers and their income is the
highest among Company X customers. They also have larger families than average
Company X customer – four persons within the household. Car owners within this
group have largest experience with the Company X cars – 78% of them have had
Company X car before. Customers within this group statistically more often than other
segments declare, that they are interested in travelling, tennis, water sports and golf.
They are also those most experienced owners of Company X and are searching for
pleasure of car driving and prestige of car ownership. Furthermore, they more often
than other customers believe that the car shall reflect their social status and that it shall
attract others attention.

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5. STRUCTURAL EQUATION MODELING AND PARTIAL LEAST SQUARES

Partial Least Squares approach is one of the data analysis techniques that is applied to
similar problems as Structural Equation Modeling. PLS has been mainly developed by
Herman Wold (Wold, 1985), Jan-Bernd Lohmöller (1984, 1989) and by Wynne W. Chin
(1998, 1999, 2001). Some researchers claim that PLS is not one of the SEM methods due
to different estimation procedures and objectives of the methods as well as different
strengths and weaknesses of both techniques. On the other hand beside many differences
both methods can be grouped under one set of techniques used to analyze similar
problems with conceptually continuous latent constructs.

5.1. Structural Equation Modeling – covariance-based approach

Many researchers identify SEM mainly with covariance-based approaches represented by

such computer software programs as for example LISREL. This kind of approach is an
evaluation of sample covariance or correlation matrix consistence with a theoretical model
specified by the researcher. Therefore it concentrates on maximizing fit between sample
correlations matrix and parameter estimates meaning that the estimating procedure
changes the estimates to improve the fit function until no improvement is possible. The
covariance-based techniques optimize parameters by maximizing fit but not variance
explained. Therefore estimated models can have very good fit to sample data set which is
crucial to interpretation however with low explanatory power. One of important
limitations of this methodology is the assumption that the observations are independent
and all indicators follow normal distribution which in most customer satisfaction studies is
not fulfilled due to strong negative skewness of satisfaction scores. Furthermore SEM
does not allow to predict value of latent variables specified in the structure of the model.
This property is of high importance especially in customer satisfaction researches where
calculation of latent scores is essential to further interpretation of the subject.
To sum up covariance-based approaches are very demanding if it comes to distribution of
the sample data set plus they concentrate on explaining covariation of all used indicators
to prove the theory lying behind the research while not allowing for calculation of latent
variable scores. Therefore if created structure of the model is proper in terms of explaining
covariation structure of all manifest variables the SEM techniques produce optimal
parameters. However there is certain amount of risk involved in the covariance-based

61
technique as under conditions of small sample size or data set violating assumptions about
distribution incorrect solutions can result. Furthermore latent variable values are never
calculated at the same time eliminating the possibility to predict observed variables.

5.2. Partial Least Squares

On the other hand researchers can use PLS technique which is definitely less demanding
in terms of assumptions about data distribution, measurement scales and size of sample.
Parameter estimates are obtained by minimizing the variance of dependent variables
therefore producing the best fit of collected sample data set to defined model structure
proved by theory or research assumptions. PLS is aimed at obtaining determinate values
of all unobservable constructs that are approximated by their respective set of manifest
variables thus avoiding factor indeterminacy. Weighting scheme for each latent variable
depends on the kind of relationship assumed between the construct and its indicators. It
can be either reflective or formative while other SEM techniques allow only for reflective
mode – the modes will be explained further in this chapter. Therefore having all the above
mentioned arguments in hand the researchers can view PLS technique more suitable in
cases where properties of sample data do not meet assumptions of multivariate normal
distribution, where sample size is relatively small, where there is a certain amount of
uncertainty between theory and data creating need for theory confirmation or where
project requires calculation of scores for unobservable factors defined in the structure of
the model for predictive purposes.

5.2.1. Specification of the model

Before explaining PLS estimation technique some background on possible model

structures as well as names of constructs used in this technique is needed. Let’s consider
Figure 5.1. Circles named A and B represent latent (not observable) constructs.
Rectangles named ax, ay and bx, by represent manifest variables (observable indicators)
that form latent constructs A and B respectively. Arrow scheme represents inner relations
of the model (relationships between latent variables) and outer relations (relationships
between latent constructs and their respective indicators). Figure 5.1 represents one inner
relation of A influencing B and two sets of outer relations – reflective mode of connection

62
between A and its respective manifest variables ax, ay and formative mode of connection
between B and its respective indicators bx, by.

In the reflective mode indicators measure the same unobservable phenomenon in a way
that if the level of the latent construct changes than all observable variables should also
change in the same direction. The strength of change is dependent on how strong is the

Figure 5.1. Structure of latent blocks model with formative and reflective modes

A B

xa ya xb yb

relationship between the indicator and the latent construct. The strength in the reflective
mode is represented by loading (the amount of variance in the indicator that the respective
latent phenomenon accounts for). Loadings of manifest variables on their latent construct
represent the correlation between them.

The question whether researcher should use reflective mode depends on several
considerations:
- theory behind the measurement model – if researcher conceptualizes latent construct
as a phenomenon influencing responses to the indicators scores the reflective mode
should be used
- objective of the study – reflective specification should be used if the objective of the
study is to explain and predict the observed variables (maximize variance of
indicators)

63
- empirical conditions – reflective mode assures stable estimates in situations where
either sample size is small or there is suspicion about multicollinearity among
indicators.

The weights in the reflective specification are calculated in order to create LV that
explains as much variance as possible in all its observed indicators.

In the formative mode indicators do not represent the same unobserved factor and they
are also not correlated to each other. The latter condition arises from the fact that in case
of significant correlation of formative indicators the problem of multicollinearity may
cause unstable estimates of multivariate regression of latent construct on its manifest
variables. Therefore formative variables provide some kind of conditions under which the
LV is being created. The aim of formative mode is to maximize the variance explained at
the LV level. Therefore all indicators are weighted with the aim to maximize correlations
in the inner structure of the model.

The decision as to whether researcher should use the formative specification depends on
the same 3 considerations as in reflective mode: knowledge on investigated theory,
purpose of the research and empirical conditions. If the sample size is large enough, the
indicators are not related to each other (no multicollinearity) and are conceptualized as the
ones that form the latent construct meaning that the change in the level of latent
phenomenon does not necessarily means changes in the same direction for all its
indicators the formative mode should be used. Furthermore if the aim of the researcher is
to maximize the variance explained in the latent abstracts level not the outer part of the
model and there is a substantive theory confirming formative relationships the choice of
formative specification is well-grounded.

5.2.2. Estimation

PLS estimation procedure consists of 3 stages. In the first stage each block of indicators
is assigned some weights to obtain latent variable estimates by performing iterations of
simple and/or multiple regressions (outside approximation). Then the proxies for each
latent construct are created based on its relations to other LVs (inside approximation).
With the proxy estimates the regressions specified by the structure of the model are

64
performed in order to calculate new weights. For formative indicators the multivariate
regression with their latent construct is performed opposed to individual regressions for
reflective mode. The regressions’ estimates form a base for new weights to start another
outside approximation. The whole procedure stops when next iteration does not produce
better estimates according to applied stopping rule meaning that the percentage change in
all estimated weights is for example less than 0,001.

Therefore PLS iteratively performs estimation of latent variable scores in two ways. One
mode is an outside approximation which calculates LVs by weighting their respective
indicators. When researcher is operating on a set of observed measures representing
unobservable construct without additional information it is advised to start approximation
of LV by summation of its indicators. Next part of PLS estimation procedure is an inside
approximation that concentrates on calculating LV scores by combining LVs most closely
related to the LV in question. The inner weights can be calculated according to three
schemes: the centroid scheme, the path weighting scheme and the factor weighting
scheme. Assume that Ai and Aj are the estimated standardized latent variables
representing real latent constructs Ei and Ej in the outside approximation and wij are the
inner weights. The centroid scheme assumes that wij have the same signs as the correlation
coefficient between Ai and Aj. The factor weighting scheme calculates inner weights wij as
correlation coefficients between Ai and Aj. In the path weighting scheme the latent
constructs are divided into predecessors of Ej meaning latent variables explaining Ej and
successors of Ej , latent variables explained by Ej . For a predecessor Ei the inner weight
wij is the regression coefficient of Ai from the regression of Aj on all Ai’s influencing
predecessors of Ej. For a successor Ei the inner weight wij is equal to the correlation
coefficient of Ai and Aj.

To sum up the estimation procedure PLS operates and uses the information at both levels
to estimate the next possible score of LV while maximizing variance explained of all
dependent variables. PLS minimizes residual variance for a set of estimated parameters
given fixed estimates or proxies for other parameters being estimated. Therefore it is
partial in this sense that only part of the model is estimated in each iteration.

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Sample size requirements

One important advantage of PLS modeling is small to medium sample size required for
estimation. Taking a close look at all three stages of estimation procedure the
requirements for sample size appears to be obvious and clear. PLS consists of simple and
multiple regressions depending on the specification of latent constructs (formative vs.
reflective) and inner relations of the model. As it has been mentioned before PLS is a
partial procedure meaning that only part of the model is estimated at one time. Therefore
the requirement of sample size for overall model comes down to the requirement for the
sample size of the largest multiple regression. Therefore assuming that model consists of
formative and reflective indicators the researchers has to find the biggest of the two
possibilities:
a) the latent phenomenon with the largest number of formative indicators
b) the dependent latent construct with the largest number of independent other latent
variables influencing it.

Assuming well known rule for regression sample size requirements of ten cases for
predicted variable the researcher has to make sure that ten times a) or b) cases are
gathered (choosing greater value). If the model consists of only reflective indicators the
sample size requirement is then limited to condition b).

Standardization of manifest variables

Lohmöller designed METRIC parameter for standardization of variables. It has 4 variants

depending on 3 conditions put on the data:
Condition 1: Comparability of the manifest variables’ scales. For example Satisfaction
scores measured on the same scale 1-10 are comparable however height and weight are
not comparable.
Condition 2: Interpretability of the means of the manifest variables.
Condition 3: The variances of the manifest variables reflect their importance.

If variable scales are not comparable, meaning that condition 1 does not hold (METRIC 1)
than standardization of variables is necessary (mean=0 with variance = 1). Standardization
is also obligatory if scales are comparable but the other conditions do not hold (METRIC

66
2). In this case after standardization for the estimation phase the manifest variables are
then rescaled to the original means and variances. If conditions number 1 and 2 hold but
not condition 3 (METRIC 3) than the variables have to be standardized to unit variance
but are not centered to the same mean equal to 0 for the estimation phase. After that the
variables are rescaled to their original variances. In the last case of METRIC all
conditions hold (METRIC 4). In this case the original values of variables are used in the
whole process of estimation.

5.2.3. Validation of model

In order to evaluate model estimated by PLS method researchers have to apply an

approach which is consistent with assumptions of PLS estimation such as no distributional
demands and prediction oriented specification. Therefore traditional parametric statistical
tests are not appropriate for PLS model validation. Traditional R-square, the Stone Geisser
test (Stone, 1974, Geiser, 1975) , average variance extracted measure (AVE) assesses
predictiveness while bootstrapping and jackknifing validate the stability of estimates.

R-square

The R-square can be used as a first indicator of predictive power of specified model. Its
interpretation is the same as in traditional regression. The indicator measures how much
variance of dependent variable is explained by its predictors. It is possible to calculate R
square for latent variables due to their determinacy during PLS estimation.

Stone Geisser Q2

The technique is a combination of function fitting and cross-validation. It assumes that

prediction of observed measures used in the estimation is of more importance than the
artificial constructs’ parameters estimation. The cornerstone of the methodology is the
blindfolding procedure that estimates parameters without part of the data for a particular
set of manifest variables and then uses estimated parameters for estimating the omitted
block. Such iteration is repeated until every data point has been withdrew and estimated.
Let’s consider a data set and assume that N and K are omission numbers for cases and
indicators respectively, and D is an omission distance. Wold (1982) suggests that D

67
should be an integer between K and N. Blindfolding procedure takes out NxK data points
starting with first point and omitting every other D data point moving across all columns
and rows until the end of matrix. All missing values are then replaced using pairwise
deletion, mean replacement or procedure of imputation. The sum of squares for
prediction error E is calculated and the withdrawn data points are predicted. The sum of
squares errors based on the mean for prediction O is also calculated. The whole process is
being repeated by returning omitted data points to the matrix and moving to the next data
point - case 1 and indicator 2 – as a beginning of new round of withdrawal. During this
iterative procedure D sets of Es and Os are calculated. The Stone-Geisser measure is
defined as follows:

Q2 = 1 – (ΣDED) / (ΣDOD) (1)

Therefore Q2 represents a measure of how ell the specified model is able to reproduce the
observable variables. If Q2 > 0 than the model is predictive and opposite when Q2 < 0.

Jackknifing

Jackknifing is a procedure that allows researchers to evaluate stability of particular

statistic by measuring variability of data set used for calculations instead of using
parametric assumptions. The technique provides estimates as well as confidence intervals
for the estimates. Contrary to the blindfolding procedure it uses the algorithm of deleting
n cases while estimating parameters in each iteration. Finally it examines variation of all
obtained estimates. Detailed description of Jackknife procedure is for example described
in Chin W.W. (1998).

Bootstrapping

Bootstrapping is the more advanced methodology. It is also the nonparametric approach

that measures the stability of parameter estimates. Jackknifing is usually treated as an
approximation to bootstrapping which is in most cases more efficient. Bootstrapping is
aimed at obtaining N estimates for every parameter by creating N sample sets. By
sampling with replacement from the original data set the N samples are created. The
higher the number of resamples the more reasonable standard error estimates can be

68
usually obtained. The default number of bootstrap runs is usually 100, (Tenehaus et. al.
2005) however, the t-values obtained with a bootstrap of 500 runs tend to be quite similar
each time the bootstrap is performed. Only rarely does the significance-level of an
estimate change in between different bootstrap runs with 500 iterations. The literature also
suggests choosing the bootstrap sample size equal to the number of cases in the dataset,
because the standard error estimates are dependent upon the number of observations in
each replication. Significance is determined against an ordinary t-statistic table, using the
number of bootstrap runs as the degrees of freedom (df=500). For a typical one-sided test,
the following t-values correspond to a given level of significance (df=500):

3.107 ~ p<0.001
2.334 ~ p<0.010
1.648 ~ p<0.050
1.283 ~ p<0.100

Generally the methodology is more time consuming than the jackknife procedure under
the assumption that the number of resamples for bootstrapping is greater.

Composite Reliability

Composite reliability is a measure of internal consistency applicable only to reflective

indicators which has been developed by Werts, Linn and Jöreskog (1974). It is similar in
interpretation to Cronbach’s alpha which is usually lower estimate of composite reliability
under the assumptions of parameter accuracy. The property is due to the fact that the
composite reliability does not assume all indicators to be equally weighted.

AVE –Average Variance Extracted

Fornell and Larcker (1981) developed another measure applicable only to reflective
specification called AVE. It represents the amount of variance that the latent construct in
question captures from its manifest, observable variables. It is advised that AVE is greater
than 50% meaning that the particular latent construct captures more than 50% of variance
of its indicators. It is also suggested that AVE of each LV should be greater than the

69
square of correlations between LVs confirming that more variance is shared between
chosen LV and its respective manifest variables than with another latent phenomenon.

Cross-Loadings

Another measure for validating latent constructs and the structure of the model specified
by researcher is the test of cross-loadings. It is obtained by calculating correlation
coefficients between every set of indicators and every latent construct used in the model.
Each block of indicators is expected to load higher on its respective latent component. If
the condition is not met than the researcher should reconsider the structure of relationships
between the set of manifest variables and latent components.

Summary

To sum-up PLS avoids serious problems with data distribution and sample size
requirements which are crucial in covariance-based approaches. Furthermore its
determinate nature allowing for calculation of unobservable components gives PLS the
predictive sense and power and avoids parameter identification problems that may occur
for covariance-based approaches. Finally PLS does not limit specification of models only
to reflective mode allowing for formative specification where weights of indicators are
estimated in order to maximize prediction of particular LV. All the arguments and
advantages presented above prove PLS as the most suitable method for estimating
Customer Satisfaction models such as Brand Satisfaction Model designed for Company X
in Poland.

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6. MEASURING CUSTOMER SATISFACTION AT COMPANY X IN POLAND

Until the Brand Satisfaction Model based on PLS methodology has been introduced at
Company X in Poland as a complete measurement of customer satisfaction and loyalty
there have been two unified approaches to exploring satisfaction of its customers. First
one, Sales Service Quality CSI concentrates on measuring satisfaction with the sales
service quality while the second one – After Sales Service CSI - measures satisfaction
with after-sales service. These are two separate researches deeply investigating all aspects
connected with the two areas which are the main responsibility of sales companies in
different countries. While for example product quality is the sole responsibility of
headquarter, the sales and after-sales service constitute the core business of the company
locally. Therefore based on the Company X Global Board of Directors’ decision, the two
above mentioned studies have been approved as the main measures of sales companies
performance in particular markets. The methodology has been unified on every market
meaning that research questionnaire is the same in all countries. Thus each sales company
in every market is using sales service quality CSI and after-sales service quality CSI
researches. Both measures has become extremely important for the whole company and
became part of upper-level management bonus system in order to make sure that all
respective employees are devoted to achieve the best possible score in both areas.
Based on all the information written above it seems there has been no place for additional
research investigating customers satisfaction beyond sales and after-sales service.
Especially bearing in mind the fact that the CSI has been introduced as a global,
obligatory project. However the authors realized that although both existing measurement
methods are necessary and important for the organization, they do not allow for creating a
local and complete picture of Company X customers’ feelings about the brand with regard
to all the areas of their experience with the vehicle. Therefore the authors decided to
propose the Brand Satisfaction Model methodology to the Board of Directors in Poland as
the unique, complete measurement method for receiving comprehensive picture of
Company X customers’ needs, wants and satisfaction. The comprehensive picture means
not only investigating satisfaction in other areas of customer experience with vehicle such
as: product quality, image, ownership costs etc. but also measuring importance of
particular areas in generating satisfaction and loyalty. By introducing the new research
the company could gain knowledge of the strength of particular areas influence on

71
satisfaction and loyalty and thus would be able to make better sales, marketing and PR
decisions.
To better understand the advantages of BSM over CSI researches used currently at
Company X, it is necessary to familiarize with assumptions and structure of both
methodologies.

6.1. Customer Satisfaction Index at Company X – Sales Service Quality

The main objective of the research is to deliver better knowledge about customers’
satisfaction with the process of purchase of the vehicle. Core aspects under investigation
are: purchase situation process, quality of sales personnel, timing of vehicle delivery,
vehicle reception by the customer and general satisfaction with the service provided by
the dealer. Over 2 000 questionnaires are being sent to the customers twice a year by mail.
The effective rate is around 20-30%. The study covers only those customers who bought
the vehicle not earlier than 3 months before the research is actually conducted and at the
same time not later than 4 years of vehicle usage. Structure consists of scaled, non-scaled
as well as sociodemographic questions. Description of purchasing process, choice factors,
willingness of next purchase and recommendation are the non-scaled parameters.
Sociodemographic part is standard as in every other study. The most important part of the
research is of course the one that measures satisfaction of customers with different
elements constituting every-day business for sales companies in different countries. In
case of CSI it is the section with scaled questions. It consists of inquires about:

- Satisfaction with overall dealer service

o Satisfaction with visit to the dealer
o Credibility of the dealer
o Honesty and reliability of the dealer
o Time spend during vehicle purchase
o Ability to agree on vehicle pick-up based on customer needs and schedule

- Showroom atmosphere
o Overall satisfaction with the showroom (design and atmosphere)
o Completeness of customers’ care (coffee, tea, resting sofas etc.)
o Availability of sales materials

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- Telephone contact
o Possibility of receiving trading information through the telephone
- Sales representative
o Easiness in dealing with purchase situations
o Honesty
o Clarity of information given to the customer
o Customers’ time respectfulness
o Knowledge about product offer
o Helpfulness in choosing the right vehicle
o Service provided between contract conclusion and vehicle delivery
o Frequency of salesman contact
o Behaviour of sales representative
o Explanation of vehicle or leasing price
o Credibility of salesman promises during purchase of the vehicle
o Helpfulness of salesman in dealing with formalities.

- Test drives
o Availability of test drives

- Timing of delivery and basic instruction

o Satisfaction with timing of delivery
o Explanation of warranty conditions
o Explanation of after-sales service conditions
o Information given on principles of vehicle usage

- Overall condition of the vehicle during receipt

o Cleanliness of interior
o Cleanliness of exterior

- After purchase contact

o Thankfulness expression after purchase
o Contact of salesman after purchase and receipt of the vehicle

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- Complaints handling
o Overall dealing with complaints

- Loyalty
o Willingness to recommend the dealer
o Willingness to purchase a vehicle at the same dealer
o Evaluation of the dealer comparing to other brands’ dealers

6.2. Customer Satisfaction Index at Company X – After - Sales Service Quality

The main purpose of the CSI-after-sales research is to measure performance of each after-
sales service point in Poland. It concentrates on such areas as customers’ first contact with
the reception and services advisor, quality of facility operation and infrastructure,
competence of service advisor, transparency of service provided, timing, general vehicle
reception process and overall quality of service provided. Over 2 000 questionnaires are
being sent to the customers twice a year by mail. The effective rate is around 15-25%. The
questionnaires are sent only to those customers who bought the vehicle not earlier than 3
months before the research and at the same time have not used the vehicle longer than 4
years. Below is the description of the areas under investigation:

- Booking in process
o Schedule service within reasonable time
o Effort to help you maintain normal schedule
o Amount of time spent waiting to speak to someone

- Facilities
o Convenience of opening days and hours
o Convenience of location
o Ease of parking
o Provision of comfortable waiting area
o Overall cleanliness of waiting area
o Amenities available

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- Service advisor
o Provision of advice with regard to service needs
o Courtesy and respectfulness of service staff against customers
o Honesty of service staff
o Display of knowledge and expertise
o Attentiveness to your inquiries
o Extent to which they clarified your needs
o Degree to which they understood problems with your car
o Extent to which they kept their promises

- Vehicles reception process

o Promptness in having car ready when promised
o Explanation of work performed on your car
o Explaining charges for work performed
o Process of paying for the service
o Cleanliness and appearance of car
o Amount of time for payment and collection of the vehicle

- Quality of after-sales service

o Amount of time spent waiting for service
o Ability to diagnose problems
o Quality of work performed
o Thoroughness in fulfilling your requests
o Availability of parts required
o Extent to which they stand behind service

6.3. Brand Satisfaction Model at Company X in Poland – history, underpinnings and

structure

The need for more complete approach to measuring customer satisfaction and loyalty
arisen together with the need of product management, marketing and PR departments of
Company X in Poland for better knowledge about clients behavior and their way of
thinking and making purchasing decisions. So far the two existing CSI studies offered a

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limited amount of knowledge, which covered two areas: sales service quality and after-
sales service quality. Until the Brand Satisfaction Model has been introduced there has
been no official representative information on how Polish customers perceive Company X
in terms of product quality, image, design, expectations, costs of ownership, comfort and
functionality, value/price ratio etc. There was also no measurement of customers’ loyalty
against dealers, against brand or their willingness for recommendation.

But defining the areas of clients’ feelings about a particular brand is not that complex and
is in fact easy to possess. The sales and marketing staff of each automotive company is
definitely well experienced to define all the areas which should be investigated and those
defined constructs can then be verified by focus groups or individual interviews with
customers giving them a chance to add those important elements that are not covered in
the research. After such process, researcher can be sure that his study covers all the
important elements creating overall picture of customers’ brand perception.

However there is also one more and very important aspect of knowledge about your
customers. The sole satisfaction scores for all significant areas creating overall satisfaction
and loyalty of the end-users have limited power for practical application in real business
life unless the importance of all the elements is calculated. Computation of each element’s
weight is crucial for creating complete picture of customers’ perception and the way they
evaluate the brand performance. If the whole process ensures that (1) satisfaction areas
definition is properly conducted internally in the company, (2) then the structure is
verified and supplemented by the sample of customers and (3) the importance scores for
all attributes are calculated, then it is guaranteed, that the whole approach is complete and
offers number of advantages which help better understand the clients.

One important aspect is the computation of importance weights. The question arises
whether the weights should be calculated by asking customers straight questions about the
importance of particular attributes or they should be computed statistically. Many
researches proved that the latter one is a better approach as it is resistant to one important
disadvantage of the first approach. Usually in case of having customers declare the
importance of the areas of their satisfaction the distribution of answers is for most areas
strongly negatively skewed meaning that all the elements are equally and very important.
Such methodology in most cases creates a picture of equal importance of the elements by

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 limiting the distinction of the ones that are really important and that create the most
significant part of customers’ satisfaction and loyalty from those which are not important
and can be almost eliminated from the research. By statistical computation the importance
weights are more reliable and less biased by human factor. Moreover, statistical
computation allows for segmenting the results in satisfaction – importance matrix, as the
weight are spread wider as opposed to importance weights declared by respondents. The
satisfaction – importance matrix is presented in Figure 6.1.

Figure 6.1. Segmentation of satisfaction with attributes according to their importance.

Satisfaction
High

Potential for savings

Needs improvement
Low

Attribute’s importance

Low High Importance

The figure divides all attributes into four groups. Taking into account the importance
declaration, all the elements would be almost equally important and as a result all of them
would lie close to the middle of Importance axis. Thus the distinction of the real drivers of
customers’ satisfaction would not be possible. On the other hand statistical computation of
real importance scores of all areas included in the customer satisfaction study by using for
example PLS approach offers the researcher practical ability to discover elements that
need improvement and those where company can save some money. The most important

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field in the matrix presented in Figure 6.1. is the one with low satisfaction and high
importance attributes. This quarter of the matrix is the starting point of every analysis as
improvement of the areas which lie in this field has the biggest influence on overall
satisfaction score improvement. The field, where company can save some money, is the
one containing high satisfaction and low importance attributes meaning that customers
evaluation of these areas is too high relative to their importance. In general, for business
to be most effective, all measured variables should lie close to the diagonal - with some
tolerance which is calculated by confidence intervals.

This kind of satisfaction/importance analysis can be conducted for both overall

satisfaction and customers’ loyalty. Thus first figure would present all attributes
satisfaction scores and their influence (importance) on the overall satisfaction score while
the second one would present the influence of these elements on customers’ loyalty. The
two steps analysis is crucial for practical interpretation of the results. Although overall
customers satisfaction plays an important role in every company strategy it may be useless
if it does not create loyal customers. Loyal customers are the source of company’s higher
incomes and form the strong and stable base for sales performance. Therefore company
with quite satisfied but not loyal customers is definitely exposed for higher risk of loosing
business and has to constantly seek for other customers, explore new segments by for
example introducing new products which is extremely costly and may be successful only
in a short term as the number of market opportunities is usually limited.

One important aspect here is the definition of areas of responsibility for a company.
Global companies operate with a structure led by headquarter and represented by sales
companies or agents in different countries. In case of automotive sector the headquarter is
usually responsible for inventing, designing and producing a certain product with very
limited influence of sales companies on this process. Therefore such areas as product
quality, comfort and functionality of vehicle are not dependent on sales companies’
performance locally in different countries. On the other hand, it is sales company that
creates particular level of sales and after-sales service quality for customers in particular
country. In this case, the headquarter has very limited influence on what level of service is
provided beside producing some guidelines and pushing for their implementation.
Therefore some areas lie mainly in the responsibility of the headquarter while sales
companies are responsible for the other areas. Thus when conducting importance vs.

78
satisfaction analysis the researcher needs to remember about the aim of the study whether
its objective is to analyze and improve total business or local performance of a brand.

To sum up Brand Satisfaction Model has been designed in order to create a complete
measurement method that would not only explore all the areas of customers satisfaction
but would also measure their influence on customers’ satisfaction and loyalty. This kind
of approach allows for confirmation and verification of different theories on customer
satisfaction in the automotive market by understanding customers perception of Company
X brand locally in Poland. It also forms a solid base for making practical
recommendations useful for making tactical, operational and strategic decisions in sales,
marketing and PR departments. Thus BSM is an universal tool that offers significant
amount of knowledge with limited amount of effort. It would have more advantages when
applied to most of the automotive producers selling new vehicles in Poland. This would
allow for comparisons between satisfaction and loyalty scores between different
companies as well as for comparisons of different brands’ customer profiles.

6.3.1. Questionnaire development

In order to create a proper questionnaire exploring all areas of customers satisfaction with
a brand, a 3 steps approach was applied.

First a project group has been set at Company X in Poland. The group consisted of sales
representatives from the dealer network and headquarter employees responsible for sales
planning, product management, marketing, PR, customer relationship management
including Customer Service employees that have frequent telephone contact with clients.
The aim and preliminary structure of the research was presented in front of the project
group. All the members were asked to give their input into definition of all the areas of
clients satisfaction with a brand in order to build a complete measurement tool covering
all aspects of the research. All in all, 3 meetings were held and finally the first official
structure of the questionnaire was developed.

In the second phase the research agency was contacted in order to give its input into
development of the tool. The agency was presented the assumptions of the study as well
as the questionnaire created during first phase of the research. It combined all its

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experience in conducting customer satisfaction studies, analyzed the research objectives
and suggested some changes in the questionnaire. Therefore the second version of the
questionnaire arisen.

In the third phase 10 individual interviews with Company X customers were carried out in
order to verify the completeness of the questionnaire as well as to make it comprehensible
and understandable. In this phase clients were firstly asked to state their definition of
satisfaction with an automotive brand and then all the areas from the second version of the
questionnaire were verified with respect to their clarity and completeness.

Ultimately the third and final version of the research tool has been developed. It consists
of questions defined by not only people working in sales and marketing, PR and CRM
departments at Company X in Poland but also sales representatives who have day-to-day
contact with clients. What is most important, it has been verified by customers with
respect to its completeness and clarity. Below is the description of all the elements
included in the final version of the questionnaire. It consists of 3 parts. First is the
definition of the respondent, second is the main part of the questionnaire that consists of
questions defining Brand Satisfaction Model (measured on a scale from 1 to 10 where 1 is
the absolutely negative score and 10 is definitely positive score) and the third part is the
demographic one.

I. Definition of the respondent

1. Gender of a respondent
2. Definition of the concrete model that the respondent is driving (8 models that cover
95% of the total sales volume have been specified)
3. Definition of the type of the engine (petrol/diesel)
4. The date of the vehicle reception after purchase
5. Specification of the dealer where the vehicle was purchased

II. Main part of the questionnaire

1. Expectations at the purchase of the vehicle

a. Overall expectation of quality

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 b. Expectation of how well the product fits the requirements
c. Expectation of reliability/How often things could go wrong

2. Overall Satisfaction
a. Overall satisfaction with usage of the vehicle
b. Overall satisfaction with the vehicle compared to an ideal vehicle
c. Overall satisfaction with the vehicle compared to expectations at the purchase.

3. Image
a. Overall satisfaction with image of a brand
b. Assurance of safety when driving
c. Stable position of a brand on the market
d. Technological leadership of a brand
e. Brand involvement in customers’ satisfaction improvement
f. Brand involvement in social actions
g. Brand involvement in promotional events (trades, advertising campaigns,
sponsoring etc.)
h. Brand involvement in environmental protection
i. Brand involvement in making drivers’ lives easier

4. Sales service quality

a. Overall satisfaction with sales service quality
b. Professionalism of the sales representative
c. Kindness and good manners of the sales representative
d. Sales rep willingness to inform customer
e. Contact renewal after customers visit in the dealership
f. Ease of contact with the sales rep
g. Atmosphere in the showroom
h. Wide product offer
i. Availability of additional services (financing, test drives etc.)
j. Promptitude of service realization
k. Abidance of timing of the service

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5. Quality of the vehicle
a. Overall satisfaction with the quality of the vehicle
b. Reliability of the vehicle
c. Quality of exterior painting
d. Quality of interior materials and finishing
e. Quality of the upholstery
f. Driving quality (driving and steering systems)
g. Suspension quality
h. Breaking quality

6. Design of the vehicle

a. Overall satisfaction with the design of the vehicle
b. Exterior design
c. Interior design
d. Modernity of design
e. Uniqueness of design

7. Comfort and functionality of the vehicle

a. Overall satisfaction with comfort and functionality
b. Seats comfort
c. Visibility from driver’s seat
d. Functionality of steering elements
e. Interior space
f. Possibilities of interior space management (folding, removing seats etc.)
g. Boot capacity
h. Communication systems (radio, navigation etc.)
i. Air-conditioning/ventilating systems

8. Costs of ownership
a. Overall satisfaction with costs of ownership
b. Fuel usage
c. Insurance costs
d. After-sales service costs
e. Repairing costs

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 f. Spare parts exchange costs

9. After-sales service quality

a. Overall satisfaction with after-sales service quality
b. Professionalism of the after-sales representative
c. Sales rep willingness to inform customer
d. Atmosphere in the after-sales showroom
e. Availability of substitute vehicle
f. Availability of spare parts
g. Promptitude of service realization
h. Abidance of timing of the service

10. Value for money

a. Evaluation of the quality with respect to the price of the vehicle
b. Evaluation of the price with respect to the quality of the vehicle

11. Loyalty
a. Willingness to recommend the brand
b. Willingness to recommend the dealer where the vehicle was purchased
c. Willingness to purchase a vehicle of the same brand
If the answer is negative than the customer is asked to tick out the reasons:
i. Bad quality of the vehicle
ii. Bad quality of service received at the dealership
iii. Design of the vehicle
iv. Reliability of the vehicle
v. Comfort
vi. Too high price of the vehicle
vii. Attractiveness of other brands
viii. Too high ownership costs
ix. The vehicle does not meet the expectations
x. Other brands offer same quality vehicles with lower price
xi. Other reasons
d. Willingness to purchase a vehicle at the same dealership
If the answer is negative than the customer is asked to tick out the reasons:

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 i. Poor quality of service
ii. Inconvenient location
iii. To high prices of after-sales service
iv. Incompetent staff
v. Poor quality of repairing
vi. Negative experience with vehicle delivery
vii. Timing/Promptitude of service
viii. Poor atmosphere at the dealership
ix. Poor availability of additional services such as for example substitute
vehicle, financing etc.
x. Other reasons

III. Demographic questions

1. Age of the respondent

2. Education of the respondent
3. Number of family members living with the respondent
4. Profession/Occupation of the respondent
5. Number of habitants in the city of respondent
6. Voyevodship/Province/County of the respondent
7. Earnings of the respondent

6.3.2. Computer software for Partial Least Squares models

The authors of this paper have conducted significant research on all the computer
programs that could handle Partial Least Squares calculations and produce necessary
output. Unfortunately not many programs support this methodology. Furthermore some
programs supporting PLS calculations are not user friendly not allowing for graphical
definition and representation of the model. However there are two programs with
graphical interfaces helping researchers easily build the structure of relationships for
particular study. These are: PLS Graph and Smart PLS. Ultimately the authors have
chosen the latter one as the most complete, professional and at the same time easiest and
most user friendly tool for performing PLS on BSM. The Smart PLS software has been

84
created by a group of developers sited at the University of Hamburg (Germany) and is so
far available as a freeware for all academic users.

6.3.3. Working out the structure of the model

The objective of the research was to build an industry specific model of customer
satisfaction and loyalty which would completely cover all aspects of brand performance
perception. The ACSI and ECSI models are the cornerstones of the structure for Brand
Satisfaction Model. However the two models have been developed in order to serve as a
universal tool for measuring satisfaction of different industries’ clients. Therefore a
certain portion of generality have been applied in both American and European
methodology.

The Brand Satisfaction Model was designed as an automotive industry specific

measurement method with strong attention to details. Thus the BSM had to cover more
areas of customer satisfaction as well as some of the areas had to be divided into more
detailed ones. The ACSI model consists of Perceived Quality, Perceived Value, Customer
Expectations, Customer Satisfaction Index, Customer Complaints and Customer Loyalty
scores. The ECSI model adds Image factor and divides Perceived Quality into “software”
and “hardware” areas. According to all the research done during preparation of BSM
structure and based on Company X employees experience as well as customers’ definition
of satisfaction concept, the structure of the study had to be modified versus ACSI and
ECSI models. If we take the ECSI methodology as a starting point than in order to create
BSM structure the authors added 3 factors: Comfort and Functionality, Vehicle Design
and Costs of Ownership. These 3 elements have been defined during first phase of study
preparation as important elements of customer satisfaction and are rather specific for
automotive industry. Furthermore Perceived quality of “software” and “hardware” has
been divided into Product Quality, Sales Service Quality and After-Sales Service Quality.
This distinction is justified by the fact that these 3 elements are clearly recognized by
customers of passenger cars because in vast amount of cases there are 3 separate units
responsible for each of the areas: Producer, After-Sales Service department of the
dealership and Sales Service department of the dealer point. Furthermore The Customer
complaints area has been replaced/covered by the After-Sales Service Quality factor. All

85
these changes modified the ECSI model to make it more automotive industry specific as
well as to make it more useful for management of Company X in Poland.

Ultimately the structure of relationships between all latent variables had to be also altered
and adjusted to the defined structure of Brand Satisfaction Model. This has not been an
easy task due to higher number of variables included into specification. First attempt of
the authors was to make the structure of relationships as much similar to ECSI as possible.
Figure 6.2 presents the first structure of Brand Satisfaction Model with similar
relationships as in ECSI methodology.

Figure 6.2. First version of Brand Satisfaction Model based on ECSI

methodology.

The latent variables not included in ECSI such as: Comfort and Functionality, Costs of
Ownership and Vehicle Design have been connected to Value for Money and Customer
Satisfaction Index variables, what was done based on theoretical knowledge and
assumptions.
However after validation of the model it appeared that the structure had to be significantly
altered. Although Cross Loadings and AVE test confirmed proper specification of latent

86
variables, the Bootstrapping algorithm (with 346 cases, 500 samples, construct level
changes and mean replacement algorithm) which results are presented in Figure 6.3,
confirmed that most of relationships are not significant therefore the arrows between such
variables should be deleted from the model.

Figure 6.3. Results of Bootstrapping algorithm for first version of Brand Satisfaction
Model

After this failure the authors decided to apply different algorithm for defining structure
relationships for industry specific model called Brand Satisfaction Model.
The authors decided to firstly investigate the correlation matrix for all latent variables
received from performing PLS on the first version of Brand Satisfaction Model (The
matrix is attached in Appendix 1.).
Furthermore an expert advisory had to be applied in order to build a model that could be
justified by satisfaction theories and practical knowledge. Therefore some arrows were
specified in order to confirm some theoretical assumptions of researchers although the
correlation score did not necessarily justify the relationship. While creating new structure

87
of models that have not been confirmed before by any kind of studies the researchers have
to bear in mind that the model has to be proven not only by statistical tests but also by the
theory lying behind the study. Therefore after many trials, the authors worked out the final
structure of Brand Satisfaction Model which can be justified by model validation
techniques and complies with the satisfaction theories as well as practical experience. The
complete model is presented below in Figure 6.4. The detailed results of PLS algorithm
application are attached in Appendix 3.

Figure 6.4. Final structure of Brand Satisfaction Model for Company X in Poland

Figure 6.5 presents results of application of Bootstrapping algorithm to the final

specification of BSM. Detailed Bootstrapping algorithm results are attached in Appendix
2. It confirms all relationships in a very significant manner. According to t-values
received all path coefficients are significant (df = 500) with a confidence level of at least
99%. Thus this structure can represent a complete picture of how customers of Company
X in Poland evaluate its brand performance. As the bootstrapping algorithm proves all the
relationship in a very strong manner it would be worth verifying if the model could be
also applied to other automotive brands in Poland but this topic would be touched upon in
further course of this paper.

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Figure 6.5. Results of Bootstrapping algorithm for final version of Brand Satisfaction
Model

6.3.4. Discussion on BSM structure

To justify the structure and all the relationships of the Brand Satisfaction Model not only
statistical tests or measures such as bootstrapping, AVE, Cronbach’s alpha or Cross
Loadings have to prove the model. Beside statistical confirmation the theoretical and
practical knowledge also has to stand behind the structure. Therefore the aim of this part
of the chapter will be to explain what has already been confirmed by statistics.

Some clarification regarding applied modes for latent constructs is needed. Firstly all the
latent constructs are created in a reflective way due to the fact that they reflect particular
feelings of customers regarding some aspect of their satisfaction i.e. Vehicle quality etc.
Secondly the manifest variables in all cases do not completely define and form the latent

89
construct to which they are related. Furthermore all latent constructs include one manifest
variable that evaluates general satisfaction of customers with a specific latent construct
thus forcing somehow the reflective mode. Finally all sets of manifest variables that form
each specific construct are usually correlated to each other thus making it impossible for
applying formative specification.

Let’s move on to analysis of structure of inner relationships.

Let’s take a closer look at Comfort and Functionality variable. It is the only latent
construct related to the Vehicle Quality meaning that satisfaction of customers with
comfort and functionality of driving the vehicle influences their opinion about vehicle
quality. It can be reasonably explained because when the vehicle offers good comfort and
is functional it creates better opinion about the product itself. When the customer has
positively evaluated the vehicle in terms of comfort he/she also has a positive attitude for
evaluating quality of a vehicle. The strength of the relationship should be quite strong as
both latent constructs reflect practical elements of product evaluation.

Moving on to Costs of ownership, this latent construct is related only to after-sales service
quality variable as it partly reflects costs of service, spare-parts and repairs. However it
does not prove any direct influence on value for money concept. It only has an indirect
influence on the construct through the quality of after-sales service. This can be justified
by the fact that the Costs of ownership construct does not include any evaluation of price
of the vehicle or its quality which are the cornerstones of the Value for money factor.

When analyzing Vehicle design concept the only proven relationship binds it to Image
variable. This relationship can easily be proven as the exterior and interior outlook,
modernity and innovativeness of a design create the image of the brand. If the design is
modern and the exterior as well as interior catch the eye of customer, the evaluation of
brand image performance should be higher than in the opposite case.

Vehicle quality construct shows positive influence on Value for money, Overall
Satisfaction and Image. The first two relationships have already been proven by for
example ECSI methodology. The positive connection with Image concept confirms the

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theory that reliable, good quality vehicles such as i.e. Toyota have better perceived image
than the ones from the lower part of the quality ranking.

Image variable influences Value for Money and Expectations factors. The first
relationship is also proven by i.e. ECSI model. The connection to expectations can be
explained by the fact that the evaluation of brand Image has a positive influence on what
customers will expect from the vehicle and the brand itself. If a brand is perceived as
being environmental friendly, reliable, safe, involved in customers satisfaction
improvement as well as strongly involved in communication campaigns than the
customers will expect such attitudes when they decide to buy the vehicle of a particular
brand.

The expectations on the other hand are connected only to Sales service quality.
Unfortunately no relationship between Expectations and Value for money, Vehicle
Quality, Overall Satisfaction or Loyalty has been statistically proven. The only path
approved by bootstrapping with stable parameter estimate is the path to Sales service
quality. The reason for this kind of result is first of all the fact that in ACSI, ECSI and
other customer satisfaction models usually the customer expectations have rather low
influence on overall satisfaction and loyalty of customers. It seems that in the automotive
industry in Poland in case of a premium brand like Company X the expectations have no
direct influence on the 3 most important elements of the BSM: Value for Money, Overall
Satisfaction and Loyalty. However they have a positive influence on Satisfaction with
sales service quality. Such outcome can be explained in a way that when customers have
some specific expectations about the brand and they consider buying the vehicle of this
brand they first go to the showroom meaning that the first thing they evaluate is the sales
service quality. Those customers in such process verify their expectations about the brand
by direct contact with a dealer (representing brand) and the product itself (showroom and
test drives). After buying a vehicle the expectations have no influence on customers’
evaluation of Perceived Value of the vehicle or their overall satisfaction with the car as
customers begin to care more about real attributes of the product and soft elements of the
service they receive than about the expectations they had before the purchase of the
vehicle. The expectations have an indirect influence on loyalty through the sales service
quality variable.

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Sales service quality opposite to perceived quality of “software” in ECSI model does not
show any positive influence on Value for money or Overall satisfaction of clients. SSQ is
only connected to Loyalty construct. This relationship can be justified as follows.
Customers have direct contact with sales service quality usually when they aim to buy a
vehicle. While actually using a vehicle they have no contact to sales representatives
meaning that it should not influence their evaluation of their satisfaction with vehicle
usage. Next contact with sales service is most often when a customer decides whether to
buy a vehicle of the same brand at the same dealer or not. If the service received will be
positively evaluated than it may also positively influence their decision whether to buy the
vehicle of the same brand again. Therefore the above presented reasoning confirms the
sole path connecting SSQ and Loyalty.

After-sales service quality as the third part of Perceived quality construct in ACSI is
related to Value for money factor which is the same as in ECSI and to Loyalty which can
be explained similar to relationship between SSQ and Loyalty. If a client is well treated
during each and every visit at the workshop than he/she will be more loyal against the
dealer as well as the brand itself.

The Value for money concept is related only to Overall Customer Satisfaction variable
which is related only to Loyalty construct. This structure of relationships is no different to
ACSI or ECSI and needs no explanation.

6.3.5. Quality criteria evaluation

As discussed earlier the bootstrapping algorithm proved the structure of inner relations
between all latent constructs used in the model. The three tables included in Appendix 2:
Outer Model T-statistics, Path coefficients T-statistics, Total Effects T-statistics present
the results of bootstrapping algorithm application to Brand Satisfaction Model. The results
generally confirm inner and outer relations used in the structure applying the rule of t-
statistic greater than 2. The are some inner relations (path coefficients and total effects)
with t-statistic values between 1 and 2 meaning that the parameter estimate are not quite
stable however the relations are proved by underlying theory of customer satisfaction
therefore the authors decided to maintain the original structure of BSM. The problem of
low t-statistic values exists mainly in bootstrapping algorithm of total effects and applies

92
mainly to indirect relations with usually low parameter estimates. Thus such relationships
are rather harmless to the whole structure of the model as they have low influence on the
interpretation of the results but on the other hand explain all the theoretical correlations of
particular latent constructs.

In order to evaluate the appropriateness of specification some other quality criteria

described in PLS theory part of the thesis have to be analyzed. All the information on
quality criteria is included in Appendix 3.

The overview of quality criteria presents values for AVE, communality, composite
reliability, Cronbachs Alpha and R square.

In general AVE and communality values should be greater than 0,5 as well as greater than
the square of correlations between all Latent Variables used in the model (Tenenhaus et al.
2005). Such condition is met with two exceptions of Comfort and Functionality and Image
variables where the AVE values are equal to 0,48 and 0,49 respectively. This kind of
deviation can be easily omitted as the value is very close to the minimum.

In case of composite reliability and Cronbachs Alpha both statistics should be higher than
0,7 (Tenenhaus et al. 2005). All the values for latent constructs used in the Brand
Satisfaction Model are greater than 0,84 further confirming the reliability of the outer
structure.

Analyzing the R-square values the only important variables in terms of predictive power
of the model are Overall Satisfaction, Loyalty and Value for money. Other variables for
which R-square was calculated serve as the connectors of indirect relations for other latent
constructs and are not main elements in terms of predictive properties of the model.
Therefore considering the three main variables in question all R-square values are high
enough in order to give significant predictive power for the model. In general the
minimum value is 0,5 (Rossiter 2002) therefore the Loyalty 0,6 value, the Overall
Satisfaction 0,72 value and Value for money 0,69 value offer strong base for further
analysis.

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The analysis of cross-loadings confirms the validity of the latent constructs and their
respective indicators meaning that the appropriate indicators build up the latent constructs.
The general rule is that the indicators should load higher on its respective latent construct
and that the values of cross loadings for particular latent construct should be higher than
0,7. This conditions are met in most cases with some minor exceptions when cross-
loadings values are between 0,55 and 0,7. However this is a small scale problem which
can be definitely omitted especially when the number of variables is so high and the
number of cross-loadings parameters is equal to 528. Therefore in general the values of
cross-loadings prove the outer structure of the model.

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7. RESULTS OF BRAND SATISFACTION MODEL FOR COMPANY X

7.1. Sample description

Before any analysis, the detailed check of gathered data was applied. The database was
checked for possible outliers as well as with regard to its consistency and possible logical
mistakes. After data import to the software programs, the consistency of data with the
original base was also investigated in order to assure the highest possible data validity and
quality.

Sample for the Brand Satisfaction Model study has been carefully selected in order to
reflect the structure of Company X customers in Poland. The whole database of all the
clients as well as the sales volume segmentation have been analyzed. Based on the
analysis the sample of all the customers that purchased a vehicle one to four years before
the research was extracted. The number of customers of particular vehicle models
reflected the structure of sales volume as well as regionalization of sales with respect to
dealerships shares in sales. The factors that have also been taken into account while
creating sample database are gender, age group, education, occupation and earnings. From
the total number of over 10 000 customers the database including 2 030 clients that meet
the assumptions of the research was created. Firstly the mailing with the information
about possible individual interview was sent out to all 2 030 customers. Finally the
requested number of 346 responses was gathered which gives a reasonable response rate
of 17%. The responses were collected through the individual interviews with the clients -
the method that assures customers about importance of the research by rising its prestige.
It also offers lower possibility of collecting not proper responses through eye to eye
contact what gives confidence that the appropriate person is responding to the
questionnaire.

Below are the figures describing the sample data set in detail presenting the main
characteristics of the respondent group. The figures prove and are in line with the profile
of Company X consumers.

Respondents are mainly male according to profile of Company X customers.

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Figure 7.1. Gender of respondents

77%

80%
70%
60%
50%
23%
40%
30%
20%
10%
0%
Man Woman

The model range has been split into three categories: Compact, Mid-Size, Full-size and
Large. Under compact category there are customers of two models: Compact vehicle and
Compact MPV. Mid-size category is also represented by two vehicles which fall into a
Mid-size sedans and Mid-size Specialty Coupes segments of passenger vehicles
segmentation. Full-size and Large category is built up of 4 models: Full-size sedan, Large-
size sedan, Full-size Off-road and Luxury Specialty Coupes.

Figure 7.2. Model range

41%
45%
40%
29% 29%
35%
30%
25%
20%
15%
10%
5%
0%
Compact Mid-size Large

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Figure 7.3. Engine type

100%

80% 52%
48%
60%

40%

20%

0%
diesel petrol

The shares of fuel types also are in line with actual state of vehicles sold to customers
although the trend is strongly changing to diesel engines. Furthermore, the split would be
different for different models as for example all sport-type vehicles as coupes or roadsters
are sold mainly with petrol engines while at the same time all off-road vehicles are
equipped mainly with diesel engines. Compact and limousine type vehicles sedan as well
as estate wagons so far have a split of 60% diesel to 40% petrol engines with a moderate
trend towards diesel.

The figure presenting age of Company X customers in Poland confirms the fact that the
majority of clients falls into 40 to 60 years old category. The group of 30 to 39 years old
customers is already significant category with high potential for growth due to
development of Polish economy which forces the growth of earnings especially for young
people.

Analyzing education of the customers there are two groups that cover over 90% of the
total number. The biggest category consists of clients with higher/university type
education. The other significant group is the one with only secondary education (38%).
The group consists mainly of company owners that started their businesses and at the
same time decided not to continue education. We have to bear in mind that those people

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attended schools 15-30 years ago when the number of schools offering higher education
was significantly lower. This proportion changes at a high pace towards higher education
category.

Figure 7.4. Age groups

40% 35%
33%
35%
30%
25% 19%
20%
15% 10%

10%
3%
5%
0%
18 to 29 30 to 39 40 to 49 50 to 60 over 60

Figure 7.5. Education

60% 53%

50%
38%
40%

30%

20%
5% 4%
10% 1%

0%
preliminary secondary secondary bachelors masters
technical general

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Occupation of Company X customers in Poland is dominated by two categories: owners
of the companies and upper-level managers what is in line with clients’ profile. There are
also 3 interesting categories with equal 5% share in the total sample: Pensioners, Highly
qualified specialists and people with free occupation such as for example Artists and
Farmers. While the first and the latter groups have rather stable share in the total number
of customers the group consisting of highly qualified specialists is the one with extremely
high potential for growth which is also connected with economy development and Poland
accession to EU which in long term will significantly increase salaries.

Figure 7.6. Occupation/Position

70% 64%

60%

50%

40%

30%

20%
14%

10% 5% 5%
5%
2% 2% 1% 2%
0% 0%
0%
occupation/Artist/Agriculture
Highly qualified specialist
Not qualified physical worker

Qualified physical worker

Qualified technical worker

Unemployed

Manager position

Owner of the company

Public clerk
Pensioner

Buerau clerk

Free

The total income of households doesn’t need any comment as this is clear that biggest
group of Company X customers is of course the one that has the highest earnings and the
trend will maintain as it is now.

Figures 7.8 and 7.9 present the regional split of customers divided into the size of cities
and name of voyevodship. Naturally the strongest demand for vehicles from Premium
segment is visible in biggest cities. Analysts predict that in a long term there will be
negative migration to the largest agglomerations which means that more and more

99
wealthy people will move to smaller cities. Thus a higher share of customers living in
cities with 50 to 200 thousands inhabitants shall be observed in future.

Figure 7.7. Total household income (in PLN)

78%
80%

70%

60%

50%

40%

30%

20%
7% 7%
4%
10% 4%

0%
below 4000 4000 - 6000 6000 - 8000 8000 - 10 000 over 10 000

Figure 7.8. Size of the city (in thousands of inhabitants)

49%
50%
45%
40%
35%
30% 23%
25%
20%
15% 9% 8% 10%
10%
5%
0%
village city up to 10city 10 to 50 city 50 to city over 200
200

100
There are 5 strongest sales regions in Poland when it comes to analysis of customers
divided into voyevodships. The biggest voyevodship regarding sales of new vehicles is
Mazowieckie with its capital – Warsaw. The second biggest region is Slaskie (Katowice)
and Dolnoslaskie (Wroclaw) on the south of Poland which, when summed together, have
the same share as Mazowieckie (23%). Moving to northern part of Poland there are three
significant regions with high demand potential: Wielkopolskie (Poznan),
Zachodnipomorskie (Szczecin) and Pomorskie (Gdansk) with 8%, 8% and 6% share
respectively.

Figure 7.9. Region/Voyevodships

25%
23%

20%

15%
15%

10% 8% 8% 8%

6% 6%
5%
5% 4%
3% 2% 3% 3%
1% 2%
1%
0%
Zachodniopomorskie
Wielkopolskie
Dolnoslaskie

Mazowieckie

Swietokrzyskie
Podkarpackie

Pomorskie
Malopolskie

Warminskie
Kujawskie

Lodzkie

Opolskie

Podlaskie
Lubelskie

Lubuskie

Slaskie

7.2. Estimation results for Brand Satisfaction Model – Total Brand

The parameter estimates for inner model as well as R square values for all dependent
variables are presented in Figure 7.10. To actually analyze the strength of impact of
particular constructs on Satisfaction and Loyalty measures the total effects were calculated
and are presented in Figure 7.11.

101
Figure 7.10. Results of PLS algorithm application on final version of BSM.

Looking at differences of importance of particular latent constructs regarding satisfaction

and loyalty it is obvious that satisfaction does not always mean loyalty. Even if the
customer is satisfied he/she does not have to purchase or recommend a vehicle of the
same brand until certain conditions are met. There are 2 elements Vehicle Quality and
Comfort and Functionality that generate 75% of customers satisfaction while at the same
time creating only 31% of customers loyalty. This example shows how different are both
concepts and that company sole orientation on satisfying its customers is not enough to be
successful. In order to make customers loyal an automotive company has to take care of
many areas that altogether have strong influence on loyalty. Beside Vehicle Quality and
Comfort and Functionality it is Overall Satisfaction, Sales Service Quality and After Sales
Service quality that all together generate 79% of customers loyalty. The moderate
influence on Loyalty (6% each) have cost/price variables: Costs of ownership and Value
for money. Expectations, Image of a brand as well as Vehicle Design present rather low
influence on both customers satisfaction and loyalty. The comparison of importance
scores for each latent construct with regard to its influence on satisfaction and loyalty
clears out the direction into which the strategy of Company X in Poland should be
heading. To have satisfied and loyal customers, the headquarter of Company X has to
produce good quality products that offer proper driving comfort and are functional, while

102
at the same time the sales company in Poland needs to take care mainly of the quality of
sales service and after sales service. The sales company can not forget and disregard price
positioning of the vehicles with respect to the value they represent in comparison to
competition. The level of costs of vehicle ownership is also quite important and needs to
be monitored and eventually adjusted to those offered by competitors. This general
implications for the total brand might be different if applied to the 3 model groups -
Compact vehicles, Mid-size sedans and coupes and Full-size and Large premium
vehicles. The possible differences will be investigated in further analysis.

Figure 7.11. Comparison of relative Total Effects on Overall Satisfaction and Loyalty.

50%
45% 43%
40%
35%
32%
30%
25% 21%
20% 16%
13% 14% 18%
15% 13%
10% 6% 6%
5% 3% 1%
5% 1%
3% 0% 3% 0% 0% 1%
0%
e

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ua
m

ac
ua

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D
ta

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Co

Q
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f
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le
ow

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ce
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fo
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eh
r-s

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V
s ts
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V
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A

Sa

Overall satisfaction Loyalty

In order to discover the areas where improvement is absolutely necessary, the importance
versus satisfaction analysis has to be conducted. Table 1. presents the latent variable
scores received from Brand Satisfaction model estimation by PLS procedure.

In general for the total brand the score of 78% in overall satisfaction and 83% in loyalty
was received. It is difficult to set the minimum value for both indices as there is no direct
comparison to previous studies. However comparing BSM to CSI scores and in order to
force some improvement of satisfaction and loyalty the authors decided that the minimum

103
score for all investigated areas is 85%. Therefore all variables that rank below 85% should
be deeply investigated for improvement plan.

Table 1. Latent constructs’ scores (rescaled to 0-100).

Latent Variable Score

Expectations 93%
Vehicle Design 91%
Sales Service Quality 89%
Comfort 87%
Vehicle quality 86%
Loyalty 83%
Image 82%
Overall satisfaction 78%
After-sales quality 75%
Value for money 75%
Costs of ownership 68%

The highest two scores were noted for the two area, which have very low influence on
customers’ satisfaction and loyalty: expectations at the time of purchase and design of the
vehicle, which scored 93% and 91% respectively. Two highest scores are followed by 3
very important areas for company’s overall performance which are: Sales Service Quality
(89%), Comfort and Functionality (87%) and Vehicle Quality (86%). These 3 constructs
have the strongest influence on customer satisfaction and as they received scores above
86%, there is no negative signal for improvement within those 3 areas. Below the
minimum score there are 4 quite important areas: Image 82%, After-Sales service quality
75%, Value for Money 75%, Costs of ownership 68%. The company definitely needs to
concentrate on these areas in order to improve the overall satisfaction and loyalty of
customers.

In order to discover what needs to be done to improve evaluation of Company X, the

analysis needs to be divided into two approaches. One would be headquarters’ while the
other one would be local sales companies’ responsibilities. Such distinction is necessary
as headquarter and sales companies are responsible for a bit different areas included in the
study. The headquarter is designing and inventing vehicles meaning that it is solely
responsible for the vehicle quality, design and the comfort and functionality they provide.
At the same time sales companies have very limited influence on the product
characteristics - what vehicles are being produced and what quality they provide. On the

104
other hand it is sales company in every country that is responsible for sales and after-sales
service quality, costs of ownership. Furthermore, local sales companies in a large part
create image of a brand, as well as they offer certain value for money to the consumer by
applying certain pricing strategy. As the BSM is conducted on sales company level, the
authors decided to split the analysis into:
1. presentation of all results for satisfaction and importance on one Figure 7.12 as an
overall picture of Company X performance and importance of particular areas
2. the presentation of only those areas that are under strict or indirect supervision of
sales companies as an analysis of local performance – Figure 7.13.

Figure 7.12. Satisfaction scores vs. satisfaction importance analysis – overall

95%
Vehicle design
90% Comfort/Functionality
Satisfaction Score

85%
Image Vehicle quality
80%
After-Sales Quality
75% Value for money

70%
Costs of ownership
65%
60%
0% 10% 20% 30% 40% 50%
Satisfaction Importance

Referring to the figure 7.12, the red line draws the minimum value score for all the areas.
Therefore all the areas below this line should be pushed up in order to improve the overall
satisfaction score. Looking at the figure it is obvious that among all constructs below the
red line the highest influence on satisfaction is given by Value for money (16%) variable
and than by After-Sales quality (3%) and Image (3%).

Moving on to local sales company performance the spectrum of areas in question is

smaller. There are 5 areas, on which performance sales company has some kind of
influence. Among them only Sales Service quality is above the red line with unfortunately

105
no influence on customers overall satisfaction. Therefore there are 4 remaining areas
which need improvement: Value for money, After Sales service quality, Image and Costs
of ownership. They all have different priorities: 69%, 13%, 12% and 6% respectively.
However as the responsibility of local sales company, they should all be taken care of.

Figure 7.13. Satisfaction scores vs. satisfaction importance analysis – sales company

95%

90% Sales service quality

85%
Satisfaction Score

Image
80%

75% After-Sales Quality

Value for money
70%
Costs of ownership

65%

60%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Satisfaction Importance

In order to discover detailed areas for improvement the importance versus satisfaction
analysis have to be performed for each construct on a manifest variables level. Before this
detailed approach is implemented, Loyalty concept and the areas that have the highest
influence on Loyalty shall be explored. Here the two steps approach have also been
applied – overall and sales company specific.

As can be seen in Figure 7.14 there are repeating areas such as After-Sales Service
Quality, Costs of Ownership, Value for Money and Image that lower the overall loyalty of
Company X clients and therefore need improvement. Furthermore the Overall Satisfaction
score is also not satisfying enough and has to be improved. If the above mentioned factors
are improved, the overall satisfaction score will increase as well, as there are links
between the satisfaction and the mentioned areas.

106
Figure 7.14. Satisfaction scores vs. loyalty importance analysis - overall

95%
Expectations
Sales service quality
90%
Vehicle design
Comfort and functionality Vehicle quality
85%
Satisfaction Score

80% Image

Value for money

Overall Satisfaction
75%
After-Sales Quality

70%
Costs of ownership
65%

60%
0% 5% 10% 15% 20% 25%
Loyalty Importance

Figure 7.15. Satisfaction scores vs. loyalty importance analysis – sales company

95%
Sales service quality
90%

85%
Satisfaction Score

Image
80%
After-Sales Quality
75% Value for money

70%
Costs of ownership
65%

60%
0% 5% 10% 15% 20% 25% 30% 35% 40%
Loyalty Importance

107
Moving on to Figure 7.15, local sales company performance on factors that have influence
on Company X customers’ loyalty can be analyzed. Again it is After Sales service
Quality, Value for Money, Costs of Ownership and Image Variables that negatively
influence the level of clients’ loyalty. The only positive sign here is the performance of
sales service at dealerships. It definitely pushes the loyalty score above average.

After the general analysis of different areas performance and their influence on overall
satisfaction and loyalty of Company X customers in Poland, detailed satisfaction vs.
importance analysis of areas that need improvement shall be conducted. However there is
a strong argument to stop here and make the summary of general analysis.

The Brand Satisfaction Model has been designed as a tool for measuring and improving
Company X customers’ satisfaction and loyalty in order to create better image of the
brand, increase brand sales and its general position on Polish automotive market.
Therefore BSM includes areas that are under strict supervision of company’s headquarter,
on which sales companies have very poor influence such as vehicle quality, comfort and
functionality of the vehicle as well as its design. BSM includes also areas which are either
sole responsibility of sales companies or which performance can be improved by local
sales companies. Within those areas there is Sales service quality, After-Sales service
quality, Value for Money of the vehicle in terms of its pricing strategy, Costs of vehicle
ownership and Image of a Brand. Although all the areas have very different weight in
terms of generating higher overall satisfaction or loyalty of Company X customers, they
should all be taken care of if their score is not satisfactory enough (below 85%). The
priorities should be definitely accepted and respected but unless it doesn’t require too
much effort from the sales company, all the negatively scoring areas should be analyzed,
monitored and improved. Such methodology is not fully consistent with satisfaction vs.
importance analysis however due to responsibility split between headquarter and sales
company, it is much easier and effective to take care of more areas than the satisfaction
vs. importance analysis would suggest.

7.3. Estimation results – Total brand - detailed analysis of performance

Having in hand all the areas that need a reparation program, which were discovered in the
general analysis of latent constructs performance and importance, the detailed analysis of

108
those areas can be implemented. The performance of headquarter in terms of providing
good quality products which offer good design, are comfortable and functional in use is
generally well enough. This means that these areas do not need any reparation program
but definitely have to be monitored in order to assure at least the same level of customers
satisfaction with those areas.

What definitely has to be implemented is the program for Company X Polish customers in
terms of their satisfaction with work of sales company as well as dealerships representing
the brand in Poland. Four areas have been recognized as those that need improvement and
the vast amount of responsibility for customers satisfaction with these areas lies in hands
of sales company employees as well as the dealer network. The analysis of performance
of manifest variables that create After Sales Service Quality, Value for Money, Costs of
Ownership and Image will be now presented.

The loyalty of customers creates higher value for the company than satisfaction, therefore
the analysis will be conducted according to the strength of areas influence on customers’
loyalty (After Sales service quality 30%, Value for Money 15%, Costs of ownership 15%,
Image 7% – relative local influence).

Taking into consideration the after sales service quality, Company X customers evaluated
all factors creating the overall perception of after sales service below 79% - as presented
in the Figure 7.16. This creates a significant room for improvement in this area meaning
that satisfaction with all elements creating perception of service during customers visits in
the workshop is not satisfactory and significantly decreases customers satisfaction and
loyalty. All manifest variables generating after sales service latent construct have an
importance level of between 9 and 14%. The least significant element according to the
research is the availability of substitute car when customer’s vehicle is being serviced. At
the same time it has very negative evaluation. The recommendation is that Company X
does not have to necessarily take care of this part of post purchase service as its influence
on overall satisfaction with after sales service is at the bottom of the list.

Than in the middle of importance scale we have availability of spare parts with a bit
higher evaluation than in case of substitute car. The logistics issue in terms of proper stock

109
management in the logistics center as well as faster delivery of required spare parts should
be monitored but not considered as one of the most important factors.

The most important elements of service that should definitely be improved as they have
the highest influence on customers satisfaction and loyalty and at the same time do not
meet customers requirements and expectations are: willingness to properly inform
customer about required service, professionalism of after-sales representative,
promptitude and timing abidance of service, overall service quality and after-sales service
reception atmosphere. It seems that soft skills training for after sales representatives
having direct contact with customers is needed. The reps should be trained in order to
know what kind of attitude they shall represent in front of the customer meaning that they
should serve as a credible source of information. When having contact with customer the
rep should concentrate on providing as much information as necessary to make sure that
the client knows what needs to be done with his vehicle, how long it will last and how
much it shall cost.

Furthermore the after sales representatives should be trained with respect to their
professional knowledge about technical issues in order to behave professionally when
serving a customer.

The next important factor strongly affecting customers satisfaction and loyalty is the
promptitude of service in terms of quickness of service. This negative evaluation can be
connected to shorts of staff in particular after sales service workshops which cause longer
waiting lines or to the availability of spare parts which has been negatively evaluated by
customers. The whole service logistics process needs to be investigated and parts of the
process which extend the service time have to be either eliminated or accelerated.
Timing abidance is also a significant element in terms of its influence on satisfaction with
after sales service. This can be partly connected to the promptitude of service but in a
large part it is the pressure of customers who during the time when vehicle is in the
service, do not want to wait too long time and force the after sales rep to declare the
earlier vehicle pick up time. In some cases shorts of service staff can also cause the
negative evaluation of this area. To summarize, improvement of promptitude of service
factor requires that employee count is evaluated and discussed with the staff, but also soft

110
skills training could also be valuable in order to train after sales reps to be assertive and to
communicate rather longer than shorter service deadlines.
The atmosphere in the workshop reception room needs improvement too as it is one of the
most important elements of customers service. The client has to feel as someone special
and needs to be treated well. Furthermore if customers like the atmosphere of the
workshop reception it improves their evaluation of the image of the brand meaning that
they feel as someone unique while using the vehicle of the brand.
The overall service quality was evaluated negatively meaning that the quality of service
provided needs to be improved as customers are definitely not satisfied with what is being
done with their vehicles and how well they are served.

Figure 7.16. Satisfaction scores vs. loyalty importance – after sales service quality

79
Atmosphere
78
77 Timing abidance
Willingness to inform
76 Professionalism of rep
Satisfaction score

75 Availability of spare parts

74 Promptitude of service

73 Overall service quality

72
71
70 Availability of substitute car
69
68
9% 10% 11% 12% 13% 14%
Loyalty importance

The value for money construct (figure 7.17) is built out of two elements: price and quality
received. As vehicle quality is a separated from value for money latent construct in the
analysis therefore value for money factor can be simplified to the pricing strategy of
Company X in Poland with respect to the quality of vehicle and service provided. The
area was evaluated close to 75% which is definitely too low score and it needs to be
improved. It is difficult to judge whether the prices of vehicles should be drastically
decreased. However the pricing list modification is required in order to make the price

111
positioning against main competitors more acceptable for Company X customers.
Probably customers do not see such a big difference between Company X and other
brands in terms of vehicle quality, sales and after sales service, comfort and functionality
of the vehicles etc. but they see the difference in price positioning. Improvement of this
element could definitely increase customers satisfaction and loyalty against the brand.
However the sales company has to be careful at the same time as price is also the
antecedent of value of the vehicle provided that it offers proper quality and comfort of
usage. Therefore too low pricing can deteriorate value of a brand in eyes of its clients.

Figure 7.17. Satisfaction scores vs. loyalty importance – Value for money

76
Vehicle quality with respect to its price
75

75
Price of the vehicle with respect to its quality
Satisfaction Score

74

74

73

73

72

72

71
49,0% 50,0% 51,0%
Loyalty Importance

Analyzing evaluation of costs of ownership (figure 7.18) it seems that the lowest score is
given in the areas of after-sales service responsibility and costs of vehicle insurance.
Insurance is the least important factor among the others however the difference in the
importance levels is not that big to definitely ignore this element. Insurance can serve as
first of all attractive sales incentive for customers as well as advertising keyword to attract
customers to the showrooms.

112
Coming back to satisfaction with costs of after sales service it seems like Company X in
Poland has quite a problem with general perception of workshop service. It is not only
expensive but at the same time not satisfactory enough. Again the pricing strategy needs
to be revised in order to make brands of Company X more competitive and maybe some
promotional events decreasing costs of Company X vehicle usage such as free service for
winter and summer holidays could also be introduced.

Figure 7.18. Satisfaction scores vs. loyalty importance – Costs of ownership

80
78
Costs of fuel Overall costs of vehicle usage
76
74
Satisfaction Score

72
70
68 Costs of regular service

66
Costs of repairs
Costs of insurance
64 Costs of spare parts

62
60
13% 14% 15% 16% 17% 18% 19%
Loyalty Importance

Costs of fuel are not that important comparing to the costs of after sales service however
some inexpensive improvement in this area could also be implemented. Fuel card with a
limit of e.g. 3% of a price of the vehicle given with each car sold may be a good mean for
improving customers satisfaction with costs of ownership. Next idea is to offer a fully
tanked vehicle after each visit to a workshop which costs exceeds e.g. 100 PLN.

Image of a brand (figure 7.19) is also in large portion a responsibility of sales company
locally in particular country. In this case Company X in Poland should definitely increase
its involvement in customers’ satisfaction improvement by e.g. allowing customers to

113
express their opinion about the quality that they receive. The researches such as Brand
Satisfaction Model give the possibility for each customer to speak up and evaluate the
brand in terms of soft service and vehicle quality and comfort that they receive. It gives
the strong feeling to the customers that the brand takes care about them and wants to listen
to their opinions in order to improve its performance and at the same time its clients
satisfaction.

Figure 7.19. Satisfaction scores vs. loyalty importance – Image

93

Safety assurance
88
Stable market position of a brand
Satisfaction Score

83 Technological leadership

Environmental care Overall image

Making drivers' lives easier
78
Brand involvement
in improvement
of customers satisfaction
73 Promotional Visibility
(motorshows, sponsoring, advertising)
Involvement in social actions
68
8,5% 9,5% 10,5% 11,5% 12,5% 13,5%
Loyalty Importance

Technological leadership is on the edge of 85% bottom line. Such position can be a result
of the fact that either the competition is quite close to Company X in terms of
technological advancements or Company X customers are not aware of its brand
advantage over competitors. The best solution here is surely better communication of all
most important advantages of Company X vehicles in terms of modern technology used in
them.

The area called “making drivers’ lives easier” also has to be improved and it may be
definitely connected with the above mentioned factor which is technological advantage
over its main competitors.

114
Factors that increase customers evaluation of a brand with regard to its image are: safety
assurance and its stable market position. This areas improve overall score meaning that
Company X vehicles are definitely safe in the eyes of clients, the position of a brand is
very stable on the market and is not deteriorating.

The elements that are of lower importance are environmental care, company’s
involvement in social actions and promotional visibility of a brand in terms of its presence
on motor shows, in advertising campaigns and sponsoring. As the difference in
importance levels is not that significant these above mentioned areas could also be
improved in order to increase the score of overall image perception especially having in
mind that they are some basic factors of company’s presence on particular market.

7.4. Estimation results for Brand Satisfaction Model – 3 segments of customers

The analysis presented in previous chapter is applied to total brand, meaning Company X
customers in general. However there are different groups of customers with different
profiles depending on what vehicle they buy. Different customers have various
demographic characteristics and needs which impact their requirements towards vehicles
they drive. Therefore the authors decided to perform 3 separate analysis based on
different customer groups: Compact vehicles owners, Mid-size vehicles owners and Full-
Size and Large vehicles owners. The aim of the study is to discover main differences
between customer groups which have different requirements for the vehicle they drive as
well as different demographic characteristics and the amount of income they want to
spend on vehicle.

7.4.1. General estimation results for 3 customer segments

The parameter estimates for inner model as well as R square values for all dependent
variables are presented in Figure 7.20, 7.21 and 7.22 for three model groups respectively.
We can see quite different parameter estimates for three vehicles groups. In order to
analyze differences between the customer segments we should firstly take a look at the
comparison of satisfaction scores presented in Table 1.

115
Table 1. Latent constructs’ scores for 3 model groups (rescaled to 0-100).
Full-size and
Variable Compact Mid-size
Large
Expectations 92% 92% 95%
Vehicle Design 89% 90% 92%
Sales quality 88% 89% 88%
Comfort 86% 86% 88%
Vehicle quality 85% 88% 85%
Loyalty 83% 86% 81%
Image 82% 83% 82%
Overall satisfaction 77% 81% 77%
After-sales quality 75% 78% 74%
Value for money 74% 77% 73%
Costs of ownership 67% 67% 70%

Generally, with minor exceptions, the overall evaluation of particular latent areas is
similar concerning the hierarchy of scores meaning that the highest scores for all customer
groups are given to expectations and vehicle design and than to sales service quality,
comfort and functionality, vehicle quality followed by loyalty, image, overall satisfaction,
after sales service quality, value for money and costs of ownership.

Figure 7.20. Results of PLS algorithm application on BSM – Compact vehicles.

116
Figure 7.21. Results of PLS algorithm application on BSM – Mid-size vehicles.

Figure 7.22. Results of PLS algorithm application on BSM – Full-size and Large
vehicles.

117
However looking at the Table 1 in more detail, significant differences between evaluation
of particular latent constructs are discovered. First of all some trends are visible if we
compare scores of one variable for all model groups. Rising expectations moving towards
Full-size and Large vehicles customer group are observed what is understandable having
in mind the fact that these clients are wealthiest segment and spend more money on their
vehicles at the same time expecting more from quality and service they will receive.
Secondly, the evaluation of vehicle design is also rising moving from Compact to Large
vehicles group. This also does not require very deep investigation as simply the vehicle
design of more expensive, more luxurious vehicles catches the eyes of most customers.
Finally, similar relationship can be found for all model groups regarding comfort and
functionality of the cars. Larger vehicles are usually more comfortable, better equipped
and because they are usually more expensive they use modern technology what increases
their functionality. In case of costs of ownership the wealthier the customer segment, the
higher the satisfaction with costs of vehicle usage what is natural and does not require any
comment.

Two variables have almost constant satisfaction scores for all groups of customers. Image
scores between 82 and 83 while sales service quality is evaluated at the level of 88 to 89%
which positions this area at the top of the list. Regarding the sales service quality it can be
argued as natural state however in real life its sometimes difficult to train the sales staff in
order to maintain the same and high level of service provided for all customer groups. In
case of Company X this is really a success that the sales staff does not prioritize the
customers who are wealthier and able to spend more money which in the end reach
pockets of sales representatives. The more expensive the vehicle the more money goes to
the person that sold it to the customer. Naturally sales staff would like to earn more
money thus providing better service for those customers who are wiling to buy more
expensive vehicle. Therefore it is a big value of Company X dealer network responsible
for sales service quality which offers high and at the same time similar level of service no
matter how wealthy the customer is.

Analyzing other variables we can also see a strong trend although it does not depend on
the size and price of the vehicle. For vehicle quality, after-sales service quality, value for
money and overall satisfaction as well as loyalty, one group stands out of the crowd. It is a
group of mid-size vehicles customers that on average in all the above mentioned areas

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scores better than other model groups. This means that these vehicles offer higher quality
in terms of dependability, driving quality etc. therefore creating higher value for money
for mid-size vehicles owners. Surprising is the fact that the after sales service quality
received by this group of customers is also higher than for compact cars and large vehicles
owners. Maybe the number of visits to the workshop was lower for the group which could
go in line with higher vehicle quality evaluation meaning that mid-size vehicles customers
were not able to receive so much not satisfactory service from after-sales service
department. Because the score on vehicle quality, value for money and after sales service
quality is higher than in other groups the overall satisfaction as well as loyalty of mid-size
vehicles owners scores also above other model groups.

7.4.2. Total effects analysis – 3 customer segments

Let’s compare the strength of influence of all latent constructs on satisfaction and loyalty
between all customer groups included in the study.

Figure 7.23 presents the influence of every latent variable on overall satisfaction scores
divided into customer segments. It can be observed that in terms of overall satisfaction
generation the customers are quite unanimous. There are 3 exceptions from the rule. First
of all image of a brand is much more important for compact vehicles users than for mid-
size or full-size cars owners, what is in line with customer profile research results. It
seems that customers that buy the least expensive vehicle in Company X portfolio very
much appreciate the image that the brand acquired during its presence on the market. On
the other hand brand image is of little importance for premium customers who buy
expensive vehicles. For these customers the other factors count when it comes to creation
of their overall satisfaction. They are satisfied not due to brand image, but because the
vehicle offers high quality and comfort that also generates higher perceived value.

If value for money factor is analyzed, it can be observed that it is of highest importance
for compact vehicles users and the lowest important for mid-size cars users. Generally
customers who buy compact vehicles of Company X brand expect decent value for money
that they have to pay. This is understandable as, referring to the results of customer profile
study, clients with lowest income are more price sensitive and they require more for what
they pay. On the other hand, value for money factor is of lowest importance for

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satisfaction of owners of mid-size cars, while it is more important for full size and large
cars owners. Mid-size vehicles clients break out of the pattern probably because their
evaluation of vehicle quality is better than in case of other clients. That is why the value
for money factor is not as important for mid size cars owners as for other customer
segments, because they perceive quality as more important driver of their satisfaction than
other customer segments do.

Figure 7.23. Influence of latent constructs on overall satisfaction – comparison between

different customers’ groups

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50%

40%

30%

20%

10%

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Compact Mid-size Full-size and Large

Moving to vehicle quality, comfort and functionality it seems that customers that pay
more for their vehicles require higher dependability and quality as well as comfort of the
car they drive. The importance of this latent constructs is almost equal for mid-size, full-
size and large vehicles clients (46-49% - vehicle quality, 35% comfort and functionality)
while compact cars users pay less attention to both factors (36% and 30% respectively).
This may be easily explained by the fact that wealthier customers expect higher values in
their products what means that they have to be of good quality and offer decent

120
functionality as well as comfort of driving. On the other hand compact vehicles users pay
more attention to the value for money that is offered by their products as well as image of
the brand. Due to premium character of a brand the “compact” customers pay more for the
Company X vehicles comparing to direct competition thus expecting higher perceived
value and proper image of the brand they represent. .

Let’s now move on to analysis of different satisfaction areas influence on customers

loyalty. Taking a closer look at Figure 7.24 it seems that loyalty construct is definitely
much more complicated than satisfaction and requires deeper insight.
Among all factors, only vehicle design and overall satisfaction are the areas which have
similar importance level for all customer groups.

Analyzing the importance of after sales service quality we discover that the more
customers pay for their vehicles the less they require from after sales service in order to
become loyal to the brand and dealer. For ”mid-size”, “full-size” and “large” clients there
are 2 other factors that they pay special attention too – vehicle quality and comfort and
functionality. Costs of vehicle ownership and usage are of course more important for
“compact” customers than for “mid-size” clients and the least important for those clients
who pay the most for their cars. This can be easily explained by different income levels
for the 3 analyzed clients’ groups, what was also observed in customer profile research.

Moving to expectations it seems obvious that higher segments clients demand more from
the vehicle and the brand what was confirmed by the Brand Satisfaction Model study. The
importance of Image against Loyalty goes in line with Image importance against Overall
Satisfaction and can be explained in the same manner.

There is a big gap between strength of influence of sales service quality on customers
loyalty between customers of compact vehicles and the rest. “Mid-size”, “full-size” and
“large” customers demand much more from sales service quality and position this factor
as the second important for their loyalty towards a brand. At the same time compact cars
users diminish the importance of this factor placing it behind vehicle quality, comfort and
functionality, after-sales service quality and value for money. This discrepancy gives the
marketers quite important message that the “mid-size” and “full-size and large” customers

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need to receive extraordinary sales service in order to make them loyal to the Company X
brand.

Figure 7.24. Influence of latent constructs on loyalty – comparison between different

customers’ groups

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15%

10%

5%

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Compact Mid-size Full-size and Large

Finishing the loyalty importance analysis it is discovered that value for money is
definitely of highest importance for “compact” clients but at the same time it is the least
important for “mid-size” customers. Clients of higher segments place the importance of
this element somewhere in between the scores for two other groups. Again the lowest
importance of this area for mid-size vehicle users can be explained by the highest quality
level of vehicles they drive comparing to the rest of model groups.

To sum up we discovered definitely different profiles of the three analyzed groups of

clients. They differ not so much in terms of their definition of overall satisfaction however
differences with regard to loyalty generation are significant in many aspects of customers
satisfaction. We can in some part merge the mid-size, full-size and large vehicles’ clients
but the “compact” customers differ a lot from the others. While “compact” clients are

122
more price sensitive and pay a lot of attention to value for money of their vehicle as well
as to the after-sales service quality they receive in the workshop, the remaining two
customer segments require more from vehicle quality and especially from sales service
quality. These findings are in line with customer profile research which revealed, than
compact car customers are more price sensitive and more often than other customer
segments search for vehicles, which are functional and economical.

7.4.3. Satisfaction vs. importance analysis - 3 clients segments - inner model

Let’s analyze differences between the 3 model groups on a satisfaction vs. importance
analysis figures. As discussed earlier we discovered 4 areas that definitely need
improvement with regard to total brand. It will be good to know whether the same rule
applies to all customers or there are some differences in approach to increase satisfaction
and loyalty of customers. There might be either one strategy which could be applied to all
customers segments or more strategies may arise in order to better serve needs of
customers who, depending on the segment, may have different requirements against the
brand performance. This part of analysis will help understand the differences between
customers of Company X in Poland not only through comparison of the scores of
satisfaction for specified areas but also by discovering different priorities lists for all the
elements included in the study.

The graphical representation of satisfaction versus importance analysis will not include
the division of matrix into important and not important areas due to the fact that not all of
the areas are under direct supervision of neither the headquarter nor sales company.
Therefore further analysis will have to be adjusted to either sales company or headquarter
perspective. The authors concentrate on performance of sales company thus such analysis
should include only those factors that are directly controlled by Company X in Poland.

Figures 7.25 to 7.30 present satisfaction scores for all latent variables versus their
influence on either satisfaction or loyalty and are divided into 3 customers segments:
Compact , Mid-size and Full-size and large vehicles owners. The analysis will allow for
distinguishing important areas creating satisfaction and loyalty of customers in 3
segments.

123
Figure 7.25. Satisfaction scores vs. satisfaction importance analysis – Compact vehicles

100%

95%
Expectations

90% Vehicle design Comfort and functionality

Sales service quality Vehicle quality
Satisfaction Score

85%
Image
80%

75% After sales service quality Value for money

70%
Costs of ownership
65%

60%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Satisfaction Importance

Figure 7.26. Satisfaction scores vs. loyalty importance analysis – Compact vehicles

100%

95%
Expectations

90% Vehicle design Sales service quality

Comfort and functionality
Vehicle quality
Satisfaction Score

85%
Image
80%
Overall satisfaction

75% Value for money

After sales service quality

70% Costs of ownership

65%

60%
0% 5% 10% 15% 20% 25%
Loyalty Importance

124
Figure 7.27. Satisfaction scores vs. satisfaction importance analysis – Mid-size vehicles

100%

95%
Expectations
90% Vehicle design
Vehicle quality
Sales service quality Comfort and functionality
Satisfaction Score

85%
Image

80% After sales service quality

Value for money
75%

70%
Costs of ownership
65%

60%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Satisfaction Importance

Figure 7.28. Satisfaction scores vs. loyalty importance analysis – Mid-size vehicles

100%

95%
Expectations

90% Vehicle design

Vehicle quality
Comfort and functionality
Satisfaction Score

Sales service quality

85%
Image
80%
After sales service quality Overall satisfaction
Value for money
75%

70%
Costs of ownership
65%

60%
0% 5% 10% 15% 20% 25%
Loyalty Importance

125
Figure 7.29. Satisfaction scores vs. satisfaction importance analysis – Full-size and large
vehicles

100%

95% Expectations
Vehicle design
90%
Satisfaction Score

Sales service quality

Comfort and functionality Vehicle quality
85%
Image
80%

75% After sales service quality

Value for money
70% Costs of ownership

65%

60%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Satisfaction Importance

Figure 7.30. Satisfaction scores vs. loyalty importance analysis – Full-size and large
vehicles

100%

95% Expectations

90% Vehicle design Comfort and functionality Sales service quality

Satisfaction Score

Vehicle quality
85%
Image
80% Overall satisfaction

75% Value for money After sales service quality

70% Costs of ownership

65%

60%
0% 5% 10% 15% 20% 25%

Loyalty Importance

Division of the analysis into different customer segments does not significantly change the
overall picture. Again the most important is loyalty but the loyalty is in a large part
created by overall satisfaction. Fortunately outcome from satisfaction importance and
loyalty importance analysis is the same. There are definitely four areas that score much

126
below the minimum level of 85%. After sales service quality, value for money, costs of
ownership and image need to be taken care of in order to improve overall satisfaction and
loyalty of Company X customers in Poland. The strength of influence on satisfaction and
loyalty generation is not that significant compared to e.g. vehicle quality or comfort and
functionality however as discussed earlier this is the scope of responsibility for sales
company in Poland.

The other factors beside sales service quality (where score is high enough and positively
influences satisfaction and loyalty) are beside the direct responsibility of sales company
representing brand in Poland. Furthermore the score on those factors lies above the red
line of 85% thus the improvement of brand performance in this respect is definitely more
difficult to achieve.

The segmentation of customers does not produce different results in terms of which areas
score the lowest and have quite strong influence on satisfaction and loyalty creation. The
only difference is prioritization of the four areas. For all groups of customers analyzed in
the study between the four analyzed areas for improvement action the most important is
the quality of after-sales service. Value for money is the second important element with
exception of mid-size vehicles customers that place this element at the end of the list.
Very close to value for money factor with regard to its strength of influence lies the costs
of ownership variable. The least important element is the image of a brand.

7.4.4. Satisfaction vs. importance analysis - 3 customer segments –outer model

In order to roll out some action plan the detailed analysis needs to be performed
analogically to the one carried out for the total brand.

Analyzing after sales service quality, for all customer groups professionalism of sales
representatives, willingness to properly inform customers, overall service quality,
promptitude of service and timing abidance are the most important elements generating
the largest part of overall after-sales service satisfaction. For mid-size vehicles customers
the atmosphere of showroom is placed at the 6th position of importance list while for the
two other model groups it is one of the most important elements. Availability of spare
parts is in the middle range of strength of influence for all customers. At the bottom of

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the list for after sales service quality is the availability of substitute vehicle. It is the least
important area and at the same time it scores the lowest for mid-size and full-size vehicles
clients which is understandable as the more customers spend on their vehicle the more
service they require if their car visits the workshop.

If it comes to evaluation of customers satisfaction with particular elements of after-sales

service it occurs that all of them score much below the minimum level of 85% which
means that they all need to be taken care of however with different prioritization list for
different model ranges. The most satisfied customers with after-sales service are the ones
who drive the mid-size vehicles. However the score is not satisfactory enough to resign
from reparation program. Therefore the action plan needs to be invented in order to
improve customers’ satisfaction with service offered by after-sales department at the
dealerships with accordance to the presented priorities list. It seems that a small
“revolution” is needed in order fix all the problems as there is no positive sign of service
which is satisfactory for the clients.

Figure 7.31. Satisfaction score vs. loyalty importance – After sales service– Compact
vehicles

83,0%
81,0%
Satisfaction Score

79,0% Atmosphere
Timing abidance
77,0%
Availability of spare parts
75,0% Willingness to inform
Availability of substitute car Professionalism of rep
73,0% Promptitude of service

71,0% Overall service quality

69,0%
8,0% 9,0% 10,0% 11,0% 12,0% 13,0% 14,0%
Loyalty Importance

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Figure 7.32. Satisfaction score vs. loyalty importance – After sales service – Mid-size
vehicles

83%
Timing abidance Professionalism of rep
81%
79% Availability of spare parts Promptitude of service
Willingness to inform
Satisfaction Score

77% Atmosphere
Overall service quality
75%
73%
71%
69%
67%
Availability of substitute car
65%
63%
8,0% 9,0% 10,0% 11,0% 12,0% 13,0% 14,0% 15,0%
Loyalty Importance

Figure 7.33. Satisfaction score vs. loyalty importance – After sales service – Full-size and
large vehicles

83,0%
81,0%
Satisfaction Score

79,0% Atmosphere

77,0% Willingness to inform

75,0% Professionalism of rep

Availability of spare parts
73,0% Timing abidance Overall service quality

71,0% Availability of substitute car Promptitude of service

69,0%
8,0% 9,0% 10,0% 11,0% 12,0% 13,0% 14,0%
Loyalty Importance

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Moving on to value for money evaluation there are two elements that create it. It is
generally perceived product quality with regard to its price. As the perception of product
quality itself and its comfort and functionality is good enough the only element that needs
improvement is the level of price. Generally customers perceive Company X vehicles as
being too expensive with regard to the overall quality they offer. Therefore some re-
pricing program might be useful in order to improve the perceived value of cars. This
element might be also dangerous as too much intervention into pricing policy may
diminish the value of particular brand vehicles. Price is also the factor that creates value of
the car thus it needs to be carefully tailored to each model against competition. The value
for money score is the lowest for full-size and large vehicles owners than for compact cars
and the highest for mid-size range. Therefore it seems that pricing policy has to be
definitely adjusted for the least and the most expensive vehicles and only slightly for the
middle sized cars.

Figure 7.34. Satisfaction score vs. loyalty importance – Value for money– Compact, Mid-
size, Full-size and large vehicles

Vehicle quality with respect to its price - Mid-size

78%
Price of the vehicle with respect to its quality - Mid-size
77%
Satisfaction Score

76%

75% Vehicle quality with respect to its price - Compact

74% Price of the vehicle with respect to its quality - Compact

Vehicle quality with respect to its price - Full-size and large
73%
Price of the vehicle with respect to its quality - Full-size and large
72%
48,0% 49,0% 50,0% 51,0% 52,0%
Loyalty Importance

Moving to detailed analysis of costs of ownership, it is apparent that comparing to results

for the total brand there are not many differences. For all model groups the highest
importance and at the same time the lowest scores are given for costs of regular service,

130
costs of spare parts and repairs. After sales service pricing list needs to be adjusted in
order to improve customers perception of this area and at the end their loyalty.

Figure 7.35. Satisfaction score vs. loyalty importance – Costs of ownership – Compact
vehicles

Overall costs of vehicle usage

78,0%
76,0% Costs of fuel
74,0%
Satisfaction Score

72,0%
70,0%
68,0% Costs of regular service
66,0%
Costs of insurance
64,0% Costs of spare parts
62,0% Costs of repairs
60,0%
12,0% 13,0% 14,0% 15,0% 16,0% 17,0% 18,0% 19,0% 20,0%
Loyalty Importance

Figure 7.36. Satisfaction score vs. loyalty importance – Costs of ownership – Mid-size
vehicles

76% Costs of fuel Overall costs of vehicle usage

74%
72%
Satisfaction Score

70% Costs of regular service

68%
66%
64% Costs of repairs
Costs of insurance
62%
Costs of spare parts
60%
12,0% 14,0% 16,0% 18,0% 20,0%
Loyalty Importance

131
Furthermore costs of fuel are the least important for clients of full-size and large vehicles
which is understandable. The strength of their importance rises while moving towards less
expensive segments of cars. Costs of insurance are the least important for compact and
mid-size vehicles customers and move one position up in the list for full-size and large
vehicles owners.

To sum up general evaluation of costs of ownership it seems that first thing that should be
improved is the pricing policy of after sales service department. This result proves
negative evaluation of this area in total. Next elements that could improve customers
satisfaction and loyalty lie in the area of responsibility of sales department. Costs of fuel
or insurance may be decreased by incentive campaigns where i.e. fuel card with particular
limit or free insurance could be given to customers at the purchase of the vehicle.

Figure 7.37. Satisfaction score vs. loyalty importance – Costs of ownership – Full-size
and large vehicles

85%
Costs of fuel
80% Overall costs of vehicle usage
Satisfaction Score

75%

70%

Costs of regular service

65% Costs of insurance
Costs of repairs
Costs of spare parts
60%
12,0% 13,0% 14,0% 15,0% 16,0% 17,0% 18,0% 19,0% 20,0%
Loyalty Importance

In terms of image, the company involvement in improvement of customers satisfaction

definitely needs to be increased. Such researches as brand satisfaction model give clients
the possibility to speak up and express their opinion about the brand and the offered
products. This area is not evaluated as satisfactory enough and for all model groups lies at
the top of the importance list. Customers evaluation of sales company involvement in

132
actions that make the driver’s lives easier scores also below 85% and is one of the most
important elements creating brand image. As the area is not precise it needs to be
investigated in more details by maybe a small, one time conversation with the group of
customers.

Stable market position and safety and technological leadership are also important
elements for all model groups however their score lies above minimum level of 85% thus
they need no improvement.

Figure 7.38. Satisfaction score vs. loyalty importance – Image – Compact vehicles

95,0%
Safety assurance
90,0% Stable market
position of a brand
Satisfaction Score

Technological leadership
85,0%
Environmental care Overall image
Making drivers' lives easier
80,0%
Promotional Visibility Brand involvement
75,0% (motorshows, sponsoring, advertising) in improvement
of customers satisfaction
Involvement in social actions
70,0%

65,0%
8,0% 9,0% 10,0% 11,0% 12,0% 13,0%
Loyalty Importance

Safety assurance gives very interesting field for analysis. The score for each model range
is one of the highest and also does not need any reparation action. However for compact
vehicles owners it is one of the most important factors, while for mid-size vehicles clients
is the least important one and for full-size and large vehicles customers is placed in the
middle of importance scale. These findings are in-line with customer profile research,
which pointed out that safety is much more important factor for compact cars owners,
than for remaining customer segments. Environmental care is not that much important for
“compact” clients while it moves to the middle importance for the two other model
groups. As it scores below 85% in each case it requires some action to be taken. One of

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the actions suggested would be more news about ecological properties of Company X
vehicles given to press and media in order to improve brand image in this respect.

Figure 7.39. Satisfaction score vs. loyalty importance – Image – Mid-size vehicles

95%
Safety assurance
Stable market
90% position of a brand
Satisfaction Score

Technological leadership
Overall image
85%
Making drivers' lives easier
80% Environmental care Brand involvement
in improvement
Involvement in social actions
75% of customers satisfaction

Promotional Visibility
70%
(motorshows, sponsoring, advertising)

65%
8,0% 9,0% 10,0% 11,0% 12,0% 13,0% 14,0%
Loyalty Importance

Figure 7.40. Satisfaction score vs. loyalty importance – Image – Full-size and large
vehicles

95%
Safety assurance
90%
Satisfaction Score

Stable market position of a brand Technological leadership

85%
Environmental care
80% Making drivers' lives easier
Overall image
Promotional Visibility
75%
(motorshows, sponsoring, advertising)
Brand involvement
in improvement
70% Involvement in social actions
of customers satisfaction

65%
8,0% 9,0% 10,0% 11,0% 12,0% 13,0% 14,0%
Loyalty Importance

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Involvement in social actions is evaluated as the worst element of brand image however
its importance is the lowest for all models. The company may think about some action
plan in this area provided that all other elements that have higher priority are taken care
of.

Generally promotional visibility of a brand is of middle importance for lower segments

customers and is the least important for full-size and large vehicles owners. As its score is
below 85% in each case the company may introduce some program that will improve
brand visibility in media, press and outdoor visuals especially in the two lowest segments.

To sum up the analysis of image it seems that beside safety assurance, customers
evaluation of brand stability and technological leadership, the company needs to take care
of all the other elements that create brand image. The priority list is a bit different for
different model ranges however it can be merged in order to save resources and achieve a
goal of image improvement.

7.4.5. Summary of analysis for 3 customer segments

The three analyzed groups of customers present a bit different approach to purchasing and
using a vehicle. While their satisfaction is generated in quite similar manner, the loyalty
generation is much more complicated. The owners of compact vehicles place more
importance in Value for Money and Costs of Ownership meaning that they are simply
more price/costs sensitive. Such result is definitely understandable as limited amount of
resources forces the more cost saving approach while deciding on vehicle purchase.
Furthermore After-sales service is the most important element for compact cars users. The
other two groups of customers place less importance in this area.
Mid-size, Full-size and Large vehicles owners are more similar to each other compared to
the compact cars customers. Instead of placing more importance to after-sales service
quality, costs of ownership and Value for money, their loyalty is in a larger part generated
by better sales service quality, vehicle quality as well as comfort and functionality.

In order to implement some action plan the detailed analysis of the four areas that need
improvement presented above in the chapter should be deeply investigated. Some detailed

135
areas score better or lower for different customer groups. Furthermore the importance of
the areas is different for the three analyzed customer segments. All in all, the action plan
for the total brand has to be adjusted according to differences in results achieved in the
analysis. The acquired intelligence about levels of importance should be made well-
known across the whole company in order to prioritize or disregard taken operations.

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CONCLUSIONS AND RECOMMENDATIONS

After detailed analysis of Brand Satisfaction Model results the following conclusions and
recommendations arisen:
- The structure of BSM evolving mainly from ECSI and JD Power methodology for
automotive industry is comprehensive, statistically well grounded and offers a great
portion of knowledge for Company X in Poland. It covers all important aspects of
customer satisfaction as total experience with a brand. The BSM not only covers
evaluation of company’s performance in different areas but, what is most important,
distinguishes the importance of specified areas to overall satisfaction and loyalty
generation.
- The BSM model discovered that there are significant differences in how satisfaction and
loyalty of customers are created. Satisfaction concept in the automotive industry is less
complicated and is based mainly on vehicle quality, comfort and functionality which
generate over 75% of customers satisfaction. On the other hand client’s loyalty is much
more complex. Importance of vehicle quality, comfort and functionality decreases while
at the same time the importance of sales and after sales service quality as well as costs of
ownership drastically increases. Therefore there are not 2 but 5 factors that should be
taken into account when implementing loyalty improvement programs.
- There are different perceptions of satisfaction and loyalty concepts between the 3
specified segments of customers. Compact vehicles users are much more price and costs
sensitive. They also pay stronger attention to the image of a brand and post-purchase
service they receive. Mid-size vehicles users are definitely closer in terms of their profile
to the third group of customers however they are more vehicle comfort and quality
oriented while at the same time do not expect so high value for money as other clients.
The full-size and large vehicles owners are definitely the least price and costs sensitive.
Vehicle quality, comfort and functionality and sales service quality are the most important
elements strongly affecting the level of their loyalty.
- Company X should definitely conduct the Brand Satisfaction Model study at least on a
yearly basis. The knowledge should be regularly spread across the entire organization and
management should make sure that all employees understand their customers according to
BSM findings. Marketing, sales and PR actions should always take into consideration the
recommendations of BSM in order to create more satisfied and loyal customers. The

137
 operations should be adjusted according to different customer profiles analyzed in the
study as clients from different segments have different priorities lists. Therefore all
measures such as incentive actions, communication, improvement of customer service
processes should be targeted at specific wants and needs of particular segment.
- After the Brand Satisfaction Model was conducted, analyzed and the acquired knowledge
was spread out across the whole company, the reparation program for after-sales service
quality has started. First improvements are already visible in higher scores (+2 pp) for CSI
in after-sales service quality. According to BSM findings the prioritization of actions has
been set which helped to concentrate on those areas that have the strongest influence on
quality of after-sales service. This is a short term success which hopefully will turn into
long term trend.
- The next valuable step would be to propose the BSM as a unified tool for measuring
satisfaction and loyalty of customers in the whole automotive sector in Poland. The model
could be proposed to the Board of Directors of Polish Official Association of Automotive
Importers in order to create a comprehensive platform for comparison of different brands
performance in a field of customer satisfaction. Such platform would be not only valuable
for automotive companies present on Polish markets but also for customers which would
benefit from higher level of service provided. This step could ignite the positive
improvement of competitiveness between automotive producers operating in Poland.

138
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141
 APPENDICES

Appendix 1.

Latent Variables Correlation matrix (First Version of BSM)

After- Costs Value Vehic Vehic

Overall Sales
sales Comf of Expect Loyal for le le
Image satisfa qualit
qualit ort owner ations ty mone Desig qualit
ction y
y ship y n y

After-
1,000
sales
000
quality

0,462 1,000
Comfort
303 000

Costs of
0,472 0,540 1,0000
ownersh
885 268 00
ip

Expectat 0,195 0,419 0,2336 1,00000

ions 676 443 57 0

0,467 0,723 0,4962 0,36794 1,0000

Image
905 528 45 3 00

0,577 0,544 0,4430 0,19953 0,6073 1,000

Loyalty
201 896 39 7 74 000

Overall
0,473 0,594 0,4804 0,27064 0,6840 0,665 1,0000
satisfact
978 959 12 4 18 158 00
ion

Sales 0,436 0,541 0,3750 0,32045 0,4818 0,551 0,3487 1,0000

quality 633 961 76 7 02 462 33 00

Value
0,561 0,643 0,5313 0,29853 0,6873 0,655 0,7730 0,4052 1,000
for
808 671 82 7 65 578 88 19 000
money

Vehicle 0,271 0,668 0,3893 0,39787 0,5674 0,400 0,4127 0,4628 0,431 1,000
Design 908 756 03 0 09 030 73 21 422 000

Vehicle 0,507 0,744 0,5183 0,28770 0,7358 0,671 0,8412 0,4224 0,807 0,568 1,000
quality 657 820 36 4 78 108 18 55 373 071 000

142
 Appendix 2.

Results of Bootstrapping algorithm application on the final structure of the Brand

Satisfaction Model (sample size 346, number of iterations 500)

Outer Model T-Statistic

Costs Overa
After- Expec Sales Value
Com of Imag Loyalt ll Vehicle Vehicle
sales tation qualit for
fort owne e y satisf Design quality
quality s y money
rship action

23,3
comfor
479
t
65

30,1
comfor
337
t%a
15

19,4
comfor
628
t%b
46

16,7
comfor
891
t%c
08

9,56
comfor
163
t%d
8

16,0
comfor
563
t%e
96

13,3
comfor
499
t%f
30

10,3
comfor
806
t%g
44

8,81
comfor
846
t%h
2

18,04
costs
5577

costs 12,35
%a 5443

costs 13,25
%b 4982

costs 43,04
%c 7303

costs 41,80
%d 3177

costs 40,78

143
 %e 8004

58,4998
design
48

design 41,3434
%a 76

design 40,3026
%b 58

design 58,7475
%c 64

design 47,2310
%d 27

17,03
image
3243

image 14,58
%a 1061

image 17,07
%b 4691

image 27,02
%c 9983

image 24,12
%d 7112

image 9,084
%e 976

image 9,776
%f 476

image 11,19
%g 7843

image 20,87
%h 3509

loyalty 35,31
1 6365

loyalty 32,05
2 0081

loyalty 28,20
3 4140

loyalty 15,11
4 8128

oczek 23,31
%d 8976

oczek 23,67
%f 6596

oczek 33,34
%g 7890

30,00
sales
9971

sales 26,46

144
 %a 1719

sales 29,92
%b 6009

sales 26,38
%c 0701

sales 33,18
%d 0027

sales 34,55
%e 3519

sales 16,71
%f 1855

sales 15,77
%g 3017

sales 16,19
%h 3364

sales 15,71
%i 6443

sales 12,89
%j 3444

126,7
sat1
03100

124,8
sat1a
51939

148,7
sat1b
10726

69,8193
service
07

service 69,8322
%a 65

service 87,3355
%b 71

service 36,9407
%c 96

service 14,4349
%d 00

service 25,7976
%e 21

service 58,0036
%f 85

service 35,6557
%g 48

472,423
value1
591

489,753
value2
636

vehqua 47,9541

145
 l 61

vehqua 31,6665
l%a 12

vehqua 11,9413
l%b 13

vehqua 10,9076
l%c 35

vehqua 14,5858
l%d 02

vehqua 19,9560
l%e 50

vehqua 20,4257
l%f 33

vehqua 12,2437
l%g 94

Path Coefficients (Mean, STDEV, T-Values)

Standard Standard
Original Sample T Statistics
Deviation Error
Sample (O) Mean (M) (|O/STERR|)
(STDEV) (STERR)

After-sales quality -
0,238271 0,239061 0,072230 0,072230 3,298767
> Loyalty

After-sales quality -
0,187820 0,187318 0,044108 0,044108 4,258204
> Value for money

Comfort -> Vehicle

0,747348 0,747459 0,033822 0,033822 22,096331
quality

Costs of ownership -
0,483602 0,485781 0,044575 0,044575 10,849238
> After-sales quality

Expectations ->
0,325988 0,332319 0,055971 0,055971 5,824281
Sales quality

Image ->
0,369774 0,374751 0,059031 0,059031 6,264093
Expectations

Image -> Value for

0,167117 0,171554 0,054613 0,054613 3,059988
money

Overall satisfaction -
0,447200 0,444217 0,076290 0,076290 5,861885
> Loyalty

Sales quality ->

0,294576 0,299933 0,067905 0,067905 4,338093
Loyalty

Value for money ->

0,297836 0,298635 0,069204 0,069204 4,303737
Overall satisfaction

Vehicle Design ->

0,224727 0,222102 0,061789 0,061789 3,637015
Image

Vehicle quality ->

0,603007 0,602738 0,051742 0,051742 11,654194
Image

146
 Vehicle quality ->
0,591712 0,589664 0,062870 0,062870 9,411712
Overall satisfaction

Vehicle quality ->

0,585819 0,579589 0,060972 0,060972 9,607931
Value for money

Total Effects (Mean, STDEV, T-Values)

Standard Standard
Original Sample T Statistics
Deviation Error
Sample (O) Mean (M) (|O/STERR|)
(STDEV) (STERR)

After-sales quality -
0,263287 0,263663 0,068598 0,068598 3,838100
> Loyalty

After-sales quality -
> Overall 0,055940 0,055355 0,016876 0,016876 3,314835
satisfaction

After-sales quality -
0,187820 0,187318 0,044108 0,044108 4,258204
> Value for money

Comfort ->
0,166641 0,168877 0,031725 0,031725 5,252745
Expectations

Comfort -> Image 0,450656 0,450739 0,045892 0,045892 9,819875

Comfort -> Loyalty 0,282105 0,281160 0,050080 0,050080 5,633063

Comfort -> Overall

0,595041 0,593675 0,032774 0,032774 18,155782
satisfaction

Comfort -> Sales

0,054323 0,056662 0,016462 0,016462 3,299916
quality

Comfort -> Value for

0,513122 0,510928 0,037349 0,037349 13,738612
money

Comfort -> Vehicle

0,747348 0,747459 0,033822 0,033822 22,096331
quality

Costs of ownership -
0,483602 0,485781 0,044575 0,044575 10,849238
> After-sales quality

Costs of ownership -
0,127326 0,128075 0,035859 0,035859 3,550800
> Loyalty

Costs of ownership -
> Overall 0,027052 0,026942 0,008732 0,008732 3,098027
satisfaction

Costs of ownership -
0,090830 0,091187 0,023729 0,023729 3,827742
> Value for money

Expectations ->
0,096028 0,099249 0,026947 0,026947 3,563543
Loyalty

Expectations ->
0,325988 0,332319 0,055971 0,055971 5,824281
Sales quality

Image ->
0,369774 0,374751 0,059031 0,059031 6,264093
Expectations

Image -> Loyalty 0,057767 0,060417 0,015713 0,015713 3,676356

147
 Image -> Overall
0,049773 0,051291 0,020562 0,020562 2,420635
satisfaction

Image -> Sales

0,120542 0,125779 0,033990 0,033990 3,546394
quality

Image -> Value for

0,167117 0,171554 0,054613 0,054613 3,059988
money

Overall satisfaction -
0,447200 0,444217 0,076290 0,076290 5,861885
> Loyalty

Sales quality ->

0,294576 0,299933 0,067905 0,067905 4,338093
Loyalty

Value for money ->

0,133192 0,133208 0,040312 0,040312 3,304033
Loyalty

Value for money ->

0,297836 0,298635 0,069204 0,069204 4,303737
Overall satisfaction

Vehicle Design ->

0,083098 0,082224 0,023415 0,023415 3,548991
Expectations

Vehicle Design ->

0,224727 0,222102 0,061789 0,061789 3,637015
Image

Vehicle Design ->

0,012982 0,013184 0,004496 0,004496 2,887577
Loyalty

Vehicle Design ->

0,011185 0,011109 0,004972 0,004972 2,249745
Overall satisfaction

Vehicle Design ->

0,027089 0,027531 0,009785 0,009785 2,768330
Sales quality

Vehicle Design ->

0,037556 0,037089 0,013870 0,013870 2,707606
Value for money

Vehicle quality ->

0,222977 0,225960 0,041241 0,041241 5,406681
Expectations

Vehicle quality ->

0,603007 0,602738 0,051742 0,051742 11,654194
Image

Vehicle quality ->

0,377475 0,376180 0,064792 0,064792 5,825977
Loyalty

Vehicle quality ->

0,796203 0,794373 0,028609 0,028609 27,830996
Overall satisfaction

Vehicle quality ->

0,072688 0,075799 0,021703 0,021703 3,349242
Sales quality

Vehicle quality ->

0,686592 0,683642 0,040862 0,040862 16,802540
Value for money

148
 Appendix 3.

Results of PLS algorithm application on the final structure of the Brand Satisfaction
Model – Total Brand (Path Weighting Scheme, Mean replacement algorithm for
missing values, Mean 0 and Var 1 data metric, Abort Criterion 1.0E-5, Initial
Weights 1.0)

Quality Criteria

Overview
Composite R Cronbachs
AVE Communality Redundancy
Reliability Square Alpha

After-sales
0,743979 0,958390 0,233871 0,949202 0,743979 0,172559
quality

Comfort 0,482429 0,892422 0,864926 0,482429

Costs of
0,610747 0,902457 0,870282 0,610747
ownership

Expectations 0,690098 0,869728 0,136733 0,776171 0,690098 0,094039

Image 0,495642 0,897251 0,570014 0,872570 0,495642 0,102415

Loyalty 0,677321 0,893289 0,595556 0,840668 0,677320 0,148198

Overall
0,921945 0,972553 0,721920 0,957658 0,921945 0,342770
satisfaction

Sales quality 0,596738 0,941729 0,106268 0,931259 0,596738 0,064057

Value for
0,975887 0,987796 0,690302 0,975291 0,975887 0,171579
money

Vehicle Design 0,808352 0,954709 0,940627 0,808352

Vehicle quality 0,544042 0,904136 0,558528 0,878112 0,544042 0,306066

Cross Loadings
Afte
Overa
r- Costs
Expec ll Sales Value
sale Com of Imag Loyal Vehicle Vehicle
tation satisf qualit for
s fort owne e ty Design quality
s actio y money
qual rship
n
ity

0,41
0,77 0,404 0,328 0,657 0,598 0,626 0,377 0,6422 0,5221
comfort 518 0,728104
0665 223 513 844 381 970 897 43 35
3

0,35
comfort 0,79 0,430 0,322 0,622 0,434 0,518 0,415 0,5663 0,5214
404 0,631213
%a 3244 350 557 905 095 745 753 67 15
7

0,33
comfort 0,71 0,333 0,376 0,507 0,306 0,356 0,473 0,4280 0,4923
293 0,496822
%b 4081 370 840 730 953 747 658 11 00
6

comfort 0,27 0,73 0,295 0,345 0,476 0,347 0,374 0,467 0,4009 0,5675
0,507877
%c 680 4312 233 748 674 658 541 008 78 81

149
 9

0,30
comfort 0,62 0,279 0,257 0,314 0,277 0,330 0,351 0,3536 0,4554
058 0,454317
%d 7962 222 976 571 699 457 621 77 56
0

0,31
comfort 0,72 0,414 0,245 0,499 0,330 0,350 0,311 0,4063 0,4392
130 0,475461
%e 5196 829 186 085 134 544 385 73 08
7

0,25
comfort 0,68 0,398 0,227 0,454 0,327 0,343 0,303 0,3609 0,4386
119 0,460855
%f 7559 984 010 725 627 565 355 40 60
5

0,27
comfort 0,58 0,357 0,228 0,431 0,288 0,322 0,325 0,3306 0,3146
927 0,371115
%g 2573 147 855 754 484 177 045 19 90
4

0,32
comfort 0,58 0,295 0,251 0,451 0,335 0,333 0,343 0,3767 0,3947
927 0,411571
%h 0688 748 586 390 876 032 880 34 46
9

0,34
0,52 0,737 0,207 0,478 0,374 0,437 0,345 0,4629 0,4168
costs 056 0,492386
4954 651 349 685 383 970 899 75 96
6

0,26
costs% 0,45 0,656 0,231 0,411 0,318 0,393 0,335 0,3946 0,3919
469 0,433479
a 2463 791 846 347 954 485 405 96 63
9

0,27
costs% 0,37 0,636 0,176 0,343 0,248 0,279 0,240 0,3923 0,2325
572 0,340275
b 6959 457 097 324 807 896 078 83 66
4

0,49
costs% 0,45 0,867 0,188 0,428 0,397 0,424 0,284 0,4744 0,3047
157 0,450861
c 6671 725 785 528 181 120 023 82 13
4

0,43
costs% 0,34 0,877 0,160 0,324 0,370 0,377 0,271 0,3926 0,2275
300 0,373318
d 8362 533 271 645 097 997 003 83 27
0

0,39
costs% 0,31 0,872 0,131 0,282 0,331 0,290 0,242 0,3367 0,2060
462 0,288161
e 4541 290 860 688 793 175 410 33 15
2

0,22
0,60 0,331 0,363 0,528 0,343 0,406 0,455 0,4107 0,9195
design 923 0,546477
0900 491 685 830 476 151 968 13 60
9

0,19
design 0,57 0,292 0,405 0,457 0,296 0,299 0,411 0,3468 0,8991
872 0,456093
%a 1377 561 965 387 767 219 820 32 03
2

0,29
design 0,61 0,306 0,340 0,517 0,390 0,414 0,443 0,4245 0,8817
149 0,569434
%b 3764 746 915 063 298 257 990 85 53
1

0,23
design 0,62 0,335 0,371 0,535 0,379 0,354 0,399 0,3900 0,9215
451 0,519393
%c 0817 826 381 218 453 769 881 44 50
6

0,26
design 0,60 0,369 0,335 0,523 0,371 0,362 0,363 0,3539 0,8723
288 0,486892
%d 1991 807 811 198 789 871 611 26 76
2

150
 0,39
0,48 0,386 0,218 0,701 0,562 0,780 0,291 0,6336 0,2930
image 755 0,683729
7995 380 654 045 129 180 337 81 73
0

0,28
image 0,59 0,326 0,301 0,704 0,393 0,441 0,328 0,4871 0,4828
387 0,557372
%a 2018 940 642 244 883 665 708 33 71
2

0,35
image 0,55 0,305 0,303 0,731 0,424 0,491 0,333 0,5158 0,4419
377 0,556405
%b 6210 367 942 372 540 362 849 19 12
6

0,33
image 0,60 0,338 0,302 0,798 0,418 0,474 0,349 0,5257 0,4996
725 0,557637
%c 0184 403 684 033 049 734 939 82 44
1

0,42
image 0,56 0,392 0,298 0,801 0,540 0,523 0,347 0,5455 0,4577
835 0,591331
%d 7990 895 147 905 814 949 597 08 48
0

0,21
image 0,35 0,288 0,162 0,571 0,310 0,300 0,287 0,3013 0,2847
328 0,313185
%e 3444 737 197 081 326 137 903 89 67
6

0,26
image 0,36 0,323 0,226 0,589 0,251 0,256 0,335 0,2966 0,3147
468 0,273876
%f 3756 750 507 476 352 501 371 40 30
7

0,27
image 0,44 0,272 0,230 0,641 0,264 0,355 0,350 0,3483 0,3657
957 0,363895
%g 8949 204 241 581 844 340 556 69 22
3

0,33
image 0,51 0,358 0,269 0,757 0,488 0,484 0,426 0,5247 0,4420
343 0,553281
%h 8644 198 058 166 783 440 619 12 51
3

0,48
0,54 0,422 0,165 0,654 0,858 0,730 0,350 0,7088 0,4195
loyalty1 340 0,717310
2229 210 258 117 884 237 103 25 05
5

0,49
0,39 0,360 0,150 0,388 0,849 0,409 0,601 0,4471 0,2846
loyalty2 124 0,443346
3705 559 659 519 768 149 351 47 13
8

0,46
0,48 0,399 0,162 0,597 0,832 0,668 0,302 0,6436 0,3532
loyalty3 243 0,640383
9677 238 518 794 810 537 142 57 62
3

0,46
0,32 0,241 0,160 0,284 0,745 0,320 0,599 0,2996 0,2330
loyalty4 802 0,339920
3256 284 352 187 602 568 213 79 10
3

0,20
oczek% 0,38 0,169 0,819 0,317 0,223 0,281 0,273 0,2789 0,3446
893 0,275686
d 7432 969 162 313 781 840 308 32 53
9

0,12
oczek% 0,29 0,175 0,812 0,288 0,112 0,170 0,214 0,2456 0,2482
499 0,207826
f 2288 901 377 441 014 220 761 70 57
0

0,13
oczek% 0,35 0,213 0,859 0,314 0,142 0,203 0,314 0,2090 0,3973
856 0,229824
g 3935 511 832 003 032 527 813 67 06
3

sales 0,36 0,45 0,252 0,246 0,397 0,528 0,316 0,822 0,3822 0,3493 0,350412

151
 526 5753 875 057 370 009 121 780 28 66
4

0,32
sales% 0,42 0,298 0,287 0,336 0,419 0,248 0,811 0,2955 0,3626
784 0,291633
a 3849 947 025 650 545 279 570 02 91
2

0,32
sales% 0,38 0,208 0,296 0,315 0,357 0,225 0,821 0,2884 0,3517
839 0,277101
b 1770 227 067 855 203 193 681 70 13
3

0,30
sales% 0,39 0,286 0,263 0,321 0,392 0,252 0,815 0,2904 0,3850
504 0,292211
c 9836 708 665 495 029 964 307 97 53
6

0,27
sales% 0,38 0,294 0,261 0,319 0,411 0,206 0,816 0,2367 0,4508
027 0,277261
d 9058 132 081 880 527 702 170 89 88
3

0,27
sales% 0,40 0,271 0,308 0,329 0,383 0,199 0,829 0,2654 0,3792
622 0,281593
e 6462 066 866 426 189 607 765 71 45
9

0,30
0,40 0,212 0,270 0,346 0,417 0,205 0,808 0,2730 0,3770
sales%f 826 0,296421
3858 616 649 995 746 749 609 74 13
0

0,40
sales% 0,47 0,332 0,249 0,450 0,427 0,283 0,695 0,3528 0,3441
436 0,397562
g 2152 306 525 652 141 768 434 68 20
1

0,37
sales% 0,39 0,312 0,201 0,420 0,450 0,303 0,694 0,3146 0,3088
720 0,325406
h 4668 984 336 483 126 961 660 24 30
0

0,36
0,45 0,324 0,197 0,421 0,395 0,316 0,702 0,3562 0,3495
sales%i 587 0,400534
4564 306 376 795 518 973 338 75 71
1

0,33
0,37 0,238 0,180 0,376 0,460 0,339 0,648 0,3238 0,2576
sales%j 059 0,371654
9938 499 078 948 754 650 593 25 65
9

0,41
0,55 0,430 0,227 0,654 0,635 0,958 0,337 0,7367 0,3978
sat1 786 0,801064
6977 503 884 572 319 058 111 71 83
7

0,49
0,57 0,468 0,264 0,639 0,634 0,955 0,315 0,7371 0,4015
sat1a 157 0,777754
0757 881 398 015 799 991 372 37 69
2

0,45
0,57 0,445 0,271 0,654 0,634 0,966 0,334 0,7528 0,3834
sat1b 739 0,814336
1887 007 523 514 422 457 284 72 40
2

0,91
0,39 0,432 0,159 0,418 0,534 0,448 0,361 0,5428 0,2263
service 085 0,459934
7577 903 438 893 221 605 303 32 92
0

0,91
service 0,37 0,430 0,126 0,421 0,540 0,429 0,376 0,5349 0,1971
114 0,449369
%a 6071 566 537 646 981 138 452 53 69
5

service 0,93 0,39 0,415 0,163 0,425 0,551 0,446 0,371 0,5297 0,2359
0,457422
%b 124 9419 085 067 608 151 226 266 04 09

152
 0

0,88
service 0,35 0,362 0,226 0,373 0,499 0,336 0,391 0,4275 0,2081
438 0,362109
%c 9159 684 747 055 078 338 197 78 34
2

0,66
service 0,33 0,371 0,140 0,347 0,413 0,276 0,337 0,3394 0,2177
484 0,309927
%d 8446 706 057 030 316 660 838 94 35
9

0,79
service 0,44 0,433 0,180 0,423 0,448 0,447 0,372 0,4928 0,3119
644 0,485847
%e 1042 435 463 007 083 569 279 49 35
9

0,90
service 0,46 0,495 0,161 0,432 0,494 0,452 0,394 0,5190 0,2643
405 0,498021
%f 7676 106 749 259 987 318 942 78 89
2

0,86
service 0,39 0,384 0,166 0,363 0,489 0,405 0,380 0,4549 0,2165
544 0,439719
%g 4507 298 703 543 400 165 300 30 42
5

0,56
0,64 0,515 0,284 0,675 0,650 0,757 0,400 0,9878 0,4263
value1 326 0,793564
0399 694 279 551 288 064 800 03 08
5

0,54
0,62 0,506 0,294 0,675 0,637 0,770 0,389 0,9879 0,4223
value2 702 0,793294
2089 996 617 118 679 308 200 37 85
7

0,46
0,59 0,409 0,212 0,677 0,644 0,899 0,351 0,7592 0,4018
vehqual 276 0,863618
2375 694 044 228 525 455 119 66 98
7

0,50
vehqual 0,51 0,459 0,201 0,581 0,589 0,813 0,255 0,7037 0,3258
293 0,812594
%a 5642 355 739 245 465 009 949 83 62
9

0,26
vehqual 0,45 0,314 0,106 0,445 0,287 0,401 0,218 0,4305 0,3602
150 0,600098
%b 1192 975 089 967 377 476 691 03 62
6

0,35
vehqual 0,54 0,327 0,225 0,470 0,393 0,466 0,378 0,4817 0,4524
409 0,659822
%c 9219 104 812 070 356 195 855 96 00
9

0,38
vehqual 0,60 0,351 0,239 0,525 0,409 0,486 0,306 0,5038 0,5124
404 0,710773
%d 6278 052 984 130 600 742 893 18 30
5

0,32
vehqual 0,54 0,314 0,191 0,536 0,497 0,622 0,289 0,6127 0,4180
360 0,769276
%e 2878 562 736 490 961 123 875 21 84
8

0,37
vehqual 0,60 0,371 0,247 0,519 0,537 0,588 0,359 0,6430 0,4497
220 0,767180
%f 5111 688 211 143 681 587 426 92 20
8

0,27
vehqual 0,56 0,382 0,274 0,533 0,464 0,473 0,329 0,5216 0,5364
306 0,682027
%g 8867 380 130 741 865 031 764 26 10
4

153
Total Effects
After Over
Costs
- Expe all Sales Value
Comf of Loyalt Vehicle Vehicle
sales ctatio Image satisf qualit for
ort owne y Design quality
quali ns actio y money
rship
ty n

After-
0,2632 0,055 0,18782
sales
87 940 0
quality

0,166 0,4506 0,2821 0,595 0,054 0,51312 0,74734

Comfort
641 56 05 041 323 2 8

Costs of
0,483 0,1273 0,027 0,09083
ownersh
602 26 052 0
ip

Expectat 0,0960 0,325

ions 28 988

0,369 0,0577 0,049 0,120 0,16711

Image
774 67 773 542 7

Loyalty

Overall
0,4472
satisfact
00
ion

Sales 0,2945
quality 76

Value for 0,1331 0,297

money 92 836

Vehicle 0,083 0,2247 0,0129 0,011 0,027 0,03755

Design 098 27 82 185 089 6

Vehicle 0,222 0,6030 0,3774 0,796 0,072 0,68659

quality 977 07 75 203 688 2

Calculation Results
Outer Loadings
After
Costs Overa Value
- Expec Sales
Comfor of Imag Loyalt ll for Vehicle Vehicle
sales tation qualit
t owne e y satisf mone Design quality
quali s y
rship action y
ty

0,77066
comfort
5

comfort 0,79324
%a 4

comfort 0,71408
%b 1

comfort 0,73431
%c 2

154
comfort 0,62796
%d 2

comfort 0,72519
%e 6

comfort 0,68755
%f 9

comfort 0,58257
%g 3

comfort 0,58068
%h 8

0,737
costs
651

costs% 0,656
a 791

costs% 0,636
b 457

costs% 0,867
c 725

costs% 0,877
d 533

costs% 0,872
e 290

0,91956
design
0

design 0,89910
%a 3

design 0,88175
%b 3

design 0,92155
%c 0

design 0,87237
%d 6

0,701
image
045

image 0,704
%a 244

image 0,731
%b 372

image 0,798
%c 033

image 0,801
%d 905

image 0,571
%e 081

image 0,589
%f 476

155
image 0,641
%g 581

image 0,757
%h 166

0,858
loyalty1
884

0,849
loyalty2
768

0,832
loyalty3
810

0,745
loyalty4
602

oczek% 0,819
d 162

oczek% 0,812
f 377

oczek% 0,859
g 832

0,822
sales
780

sales% 0,811
a 570

sales% 0,821
b 681

sales% 0,815
c 307

sales% 0,816
d 170

sales% 0,829
e 765

sales% 0,808
f 609

sales% 0,695
g 434

sales% 0,694
h 660

0,702
sales%i
338

sales% 0,648
j 593

0,958
sat1
058

0,955
sat1a
991

0,966
sat1b
457

156
 0,910
service
850

service 0,911
%a 145

service 0,931
%b 240

service 0,884
%c 382

service 0,664
%d 849

service 0,796
%e 449

service 0,904
%f 052

service 0,865
%g 445

0,987
value1
803

0,987
value2
937

0,86361
vehqual
8

vehqual 0,81259
%a 4

vehqual 0,60009
%b 8

vehqual 0,65982
%c 2

vehqual 0,71077
%d 3

vehqual 0,76927
%e 6

vehqual 0,76718
%f 0

vehqual 0,68202
%g 7

157
 Outer Weights

After
Costs Value Vehic Vehic
- Overall Sales
Comfo of Expectat Imag Loyal for le le
sales satisfac qualit
rt owners ions e ty mone Desig qualit
quali tion y
hip y n y
ty

0,2281
comfort
24

comfort 0,1977
%a 67

comfort 0,1556
%b 61

comfort 0,1591
%c 24

comfort 0,1423
%d 43

comfort 0,1489
%e 68

comfort 0,1443
%f 92

comfort 0,1162
%g 75

comfort 0,1289
%h 50

0,1944
costs
64

costs% 0,1511
a 44

costs% 0,1574
b 39

costs% 0,2806
c 90

costs% 0,2472
d 44

costs% 0,2253
e 30

0,229
design
616

design 0,198
%a 596

design 0,224
%b 507

design 0,232
%c 390

design 0,227

158
 %d 170

0,192
image
667

image 0,172
%a 659

image 0,174
%b 731

image 0,178
%c 627

image 0,183
%d 037

image 0,100
%e 752

image 0,101
%f 445

image 0,121
%g 345

image 0,173
%h 047

0,338
loyalty1
436

0,296
loyalty2
380

0,309
loyalty3
419

0,267
loyalty4
946

oczek%
0,412285
d

oczek%
0,352844
f

oczek%
0,436863
g

0,139
sales
212

sales% 0,121
a 809

sales% 0,110
b 031

sales% 0,113
c 265

sales% 0,116
d 978

sales% 0,116
e 967

sales% 0,119

159
 f 434

sales% 0,118
g 792

sales% 0,117
h 647

0,105
sales%i
878

0,117
sales%j
243

0,34735
sat1
2

0,34297
sat1a
6

0,35111
sat1b
2

0,15
service
6899

service 0,15
%a 6584

service 0,15
%b 5714

service 0,13
%c 4208

service 0,11
%d 6158

service 0,14
%e 2107

service 0,15
%f 5768

service 0,13
%g 8065

0,504
value1
755

0,507
value2
524

0,217
vehqual
690

vehqual 0,194
%a 552

vehqual 0,127
%b 356

vehqual 0,144
%c 981

vehqual 0,156
%d 144

vehqual 0,171

160
 %e 400

vehqual 0,174
%f 276

vehqual 0,154
%g 366

Path coefficients

After- Costs Value Vehi Vehicl

Overall Sales
sales Comf of Expecta Loyal for cle e
Image satisfac qualit
qualit ort owner tions ty mone Desi qualit
tion y
y ship y gn y

After-
0,238 0,187
sales
271 820
quality

0,747
Comfort
348

Costs of
0,483
ownersh
602
ip

Expectat 0,325
ions 988

0,36977 0,167
Image
4 117

Loyalty

Overall
0,447
satisfact
200
ion

Sales 0,294
quality 576

Value
0,29783
for
6
money

Vehicle 0,2247
Design 27

Vehicle 0,6030 0,59171 0,585

quality 07 2 819

161
Index values
Index Values for Latent Variables
LV Index Values

After-sales quality 7,761776

Comfort 8,816234

Costs of ownership 7,148388

Expectations 9,386072

Image 8,388493

Loyalty 8,490361

Overall satisfaction 8,025636

Sales quality 8,973071

Value for money 7,715634

Vehicle Design 9,150832

Vehicle quality 8,710951

162
 Appendix 4.

Results of PLS algorithm application on the final structure of the Brand Satisfaction
Model – Compact Vehicles (Path Weighting Scheme, Mean replacement algorithm
for missing values, Mean 0 and Var 1 data metric, Abort Criterion 1.0E-5, Initial
Weights 1.0)

Quality Criteria
Overview
AVE Composite Reliability R Square Cronbachs Alpha

After-sales quality 0,772868 0,964042 0,321751 0,955294

Comfort 0,615318 0,933864 0,918409

Costs of ownership 0,594624 0,896510 0,860870

Expectations 0,669758 0,858374 0,112756 0,752665

Image 0,530648 0,909568 0,710467 0,888146

Loyalty 0,710878 0,907125 0,526028 0,866536

Overall satisfaction 0,914288 0,969696 0,679328 0,953114

Sales quality 0,603427 0,943242 0,219643 0,933588

Value for money 0,975473 0,987584 0,655323 0,974863

Vehicle Design 0,838080 0,962769 0,951549

Vehicle quality 0,610209 0,925904 0,661250 0,908580

Communality Redundancy

After-sales quality 0,772868 0,246238

Comfort 0,615318

Costs of ownership 0,594624

Expectations 0,669758 0,076245

Image 0,530648 0,106508

Loyalty 0,710877 0,177967

Overall satisfaction 0,914288 0,420520

Sales quality 0,603427 0,127688

Value for money 0,975473 0,169007

Vehicle Design 0,838080

Vehicle quality 0,610209 0,408075

Cross Loadings
After-sales quality Comfort Costs of ownership Expectations

comfort 0,368551 0,908322 0,499223 0,311158

comfort%a 0,327109 0,893459 0,499673 0,257111

comfort%b 0,361751 0,803184 0,460079 0,372541

163
comfort%c 0,302326 0,840362 0,394585 0,317704

comfort%d 0,361084 0,763051 0,354829 0,227643

comfort%e 0,199894 0,749876 0,390077 0,111858

comfort%f 0,186670 0,736981 0,451857 0,160103

comfort%g 0,363920 0,780359 0,514510 0,320726

comfort%h 0,489744 0,516300 0,317839 0,296705

costs 0,323558 0,604837 0,676427 0,161764

costs%a 0,405242 0,577586 0,702207 0,242610

costs%b 0,314904 0,393787 0,633019 0,161419

costs%c 0,578369 0,534594 0,866037 0,216390

costs%d 0,497287 0,255268 0,856442 0,156119

costs%e 0,425561 0,264512 0,856077 0,145133

design 0,287264 0,664686 0,428636 0,250960

design%a 0,300855 0,669477 0,434323 0,337540

design%b 0,411170 0,729221 0,456849 0,335446

design%c 0,305569 0,703783 0,440488 0,314366

design%d 0,285438 0,599688 0,410695 0,229690

image 0,398424 0,526238 0,205550 0,283699

image%a 0,359292 0,743258 0,435439 0,250016

image%b 0,460009 0,537668 0,341913 0,258252

image%c 0,280902 0,666360 0,312323 0,248947

image%d 0,414474 0,582726 0,439095 0,234541

image%e 0,219540 0,380064 0,393251 0,178537

image%f 0,388467 0,459375 0,465197 0,253475

image%g 0,223394 0,425230 0,294965 0,147012

image%h 0,358957 0,540787 0,333553 0,310490

loyalty1 0,458454 0,479358 0,345089 0,128059

loyalty2 0,506714 0,301610 0,311258 0,233225

loyalty3 0,536437 0,508535 0,389942 0,238747

loyalty4 0,519625 0,249811 0,284650 0,237279

oczek%d 0,275680 0,299216 0,202976 0,750044

oczek%f 0,127218 0,287645 0,121946 0,827469

oczek%g 0,257396 0,252971 0,243957 0,872927

sales 0,404769 0,442999 0,237130 0,350181

sales%a 0,381844 0,436183 0,346435 0,352979

sales%b 0,293988 0,366277 0,270342 0,351298

sales%c 0,188020 0,345695 0,203641 0,293284

sales%d 0,301803 0,314968 0,261372 0,329294

164
 sales%e 0,299072 0,380650 0,269954 0,425858

sales%f 0,374332 0,489102 0,354409 0,375734

sales%g 0,444635 0,504594 0,404195 0,473086

sales%h 0,417590 0,383684 0,399467 0,375602

sales%i 0,398822 0,492094 0,310554 0,298625

sales%j 0,336892 0,336203 0,233454 0,306225

sat1 0,504947 0,564225 0,374221 0,292436

sat1a 0,535152 0,555470 0,471571 0,271302

sat1b 0,538631 0,603846 0,417269 0,262348

service 0,924823 0,369664 0,545683 0,237857

service%a 0,939795 0,322607 0,544257 0,171778

service%b 0,955505 0,380540 0,537828 0,240033

service%c 0,942639 0,345214 0,522347 0,272474

service%d 0,614823 0,323734 0,437543 0,276801

service%e 0,804694 0,411014 0,400930 0,209357

service%f 0,931314 0,435218 0,576036 0,203998

service%g 0,866021 0,315132 0,391975 0,290829

value1 0,526192 0,693837 0,444741 0,393231

value2 0,556832 0,662393 0,439332 0,412993

vehqual 0,491381 0,605398 0,433815 0,244930

vehqual%a 0,516622 0,528989 0,436933 0,261298

vehqual%b 0,290631 0,593782 0,451570 0,220136

vehqual%c 0,420471 0,661912 0,439413 0,203009

vehqual%d 0,364674 0,755923 0,457825 0,264613

vehqual%e 0,263166 0,630274 0,336632 0,184753

vehqual%f 0,417013 0,685958 0,330493 0,323697

vehqual%g 0,341722 0,654619 0,376165 0,339362

Image Loyalty Overall satisfaction Sales quality

comfort 0,754672 0,549088 0,647363 0,438249

comfort%a 0,730202 0,493370 0,622558 0,406887

comfort%b 0,583248 0,328100 0,450903 0,467230

comfort%c 0,594069 0,392949 0,478213 0,561639

comfort%d 0,455845 0,391088 0,409851 0,487933

comfort%e 0,507905 0,290753 0,349771 0,378407

comfort%f 0,549891 0,249086 0,358570 0,245879

comfort%g 0,575915 0,286322 0,401313 0,444689

comfort%h 0,469960 0,290676 0,436499 0,337467

165
 costs 0,480153 0,320673 0,490458 0,308860

costs%a 0,561985 0,384154 0,576437 0,390137

costs%b 0,279476 0,085663 0,217221 0,267759

costs%c 0,495916 0,451528 0,395165 0,373683

costs%d 0,233201 0,297785 0,234874 0,278985

costs%e 0,197189 0,233616 0,164818 0,211063

design 0,636785 0,331077 0,458280 0,471075

design%a 0,631628 0,342133 0,428524 0,403599

design%b 0,695114 0,516884 0,560308 0,480789

design%c 0,644403 0,373852 0,415969 0,372850

design%d 0,555452 0,388670 0,377373 0,332598

image 0,775949 0,568405 0,828879 0,296067

image%a 0,775879 0,485195 0,559352 0,387512

image%b 0,799332 0,460316 0,718094 0,269166

image%c 0,777067 0,275709 0,548401 0,182650

image%d 0,804154 0,503103 0,629020 0,201691

image%e 0,611620 0,337185 0,434025 0,229895

image%f 0,636556 0,228182 0,418841 0,272683

image%g 0,604099 0,120880 0,390861 0,238497

image%h 0,733552 0,467777 0,591210 0,450810

loyalty1 0,639892 0,880996 0,753689 0,249019

loyalty2 0,233753 0,825759 0,304632 0,529759

loyalty3 0,643355 0,920330 0,744416 0,348400

loyalty4 0,183991 0,733808 0,247049 0,518657

oczek%d 0,321902 0,270106 0,326801 0,276801

oczek%f 0,250976 0,151076 0,197608 0,384053

oczek%g 0,262132 0,182082 0,200995 0,469960

sales 0,347974 0,427017 0,304894 0,753118

sales%a 0,312176 0,326912 0,255750 0,796759

sales%b 0,186679 0,239523 0,213803 0,803543

sales%c 0,088585 0,156231 0,123442 0,761355

sales%d 0,174630 0,336700 0,152535 0,781378

sales%e 0,206593 0,203987 0,167502 0,848090

sales%f 0,279980 0,381372 0,260731 0,899755

sales%g 0,392661 0,442698 0,381117 0,772912

sales%h 0,391562 0,340626 0,370779 0,643172

sales%i 0,445318 0,364946 0,440641 0,760951

sales%j 0,349042 0,504882 0,430442 0,693442

166
 sat1 0,797655 0,615742 0,954712 0,383589

sat1a 0,745893 0,613281 0,949013 0,336583

sat1b 0,754752 0,650965 0,964760 0,370669

service 0,486682 0,547504 0,579499 0,404216

service%a 0,402038 0,523575 0,462961 0,415584

service%b 0,453194 0,562715 0,484813 0,438358

service%c 0,382281 0,560829 0,463280 0,416586

service%d 0,308607 0,455986 0,295031 0,341641

service%e 0,493007 0,540754 0,553773 0,417783

service%f 0,486378 0,498535 0,532701 0,403423

service%g 0,350801 0,448881 0,456908 0,423829

value1 0,742745 0,549651 0,737279 0,503510

value2 0,735974 0,525044 0,778980 0,476037

vehqual 0,794575 0,607016 0,880075 0,361486

vehqual%a 0,694599 0,580618 0,795334 0,370588

vehqual%b 0,647227 0,409009 0,591498 0,328690

vehqual%c 0,552084 0,422845 0,402185 0,417867

vehqual%d 0,656758 0,462371 0,489199 0,388314

vehqual%e 0,616650 0,401348 0,602246 0,319883

vehqual%f 0,557686 0,502996 0,444612 0,488590

vehqual%g 0,657414 0,438577 0,572402 0,463896

Value for money Vehicle Design Vehicle quality

comfort 0,712730 0,687441 0,794166

comfort%a 0,698607 0,645204 0,805647

comfort%b 0,601338 0,588098 0,637560

comfort%c 0,558592 0,666439 0,666711

comfort%d 0,528462 0,573384 0,592607

comfort%e 0,380165 0,554615 0,553722

comfort%f 0,402825 0,503301 0,538826

comfort%g 0,464557 0,565825 0,587421

comfort%h 0,374374 0,366866 0,465039

costs 0,454806 0,495524 0,582239

costs%a 0,504564 0,548883 0,647319

costs%b 0,330916 0,303975 0,304578

costs%c 0,415018 0,453915 0,503085

costs%d 0,234755 0,231700 0,254675

costs%e 0,187220 0,214586 0,181882

167
 design 0,571507 0,900610 0,681746

design%a 0,578582 0,941631 0,649038

design%b 0,638644 0,904622 0,778274

design%c 0,519481 0,947728 0,672265

design%d 0,418929 0,880969 0,598435

image 0,700385 0,471843 0,726129

image%a 0,582580 0,717619 0,694918

image%b 0,627994 0,522354 0,717465

image%c 0,522483 0,545757 0,595983

image%d 0,548802 0,501566 0,638817

image%e 0,389807 0,374189 0,423211

image%f 0,452090 0,383334 0,485405

image%g 0,395712 0,417817 0,432659

image%h 0,586856 0,558723 0,646043

loyalty1 0,612411 0,462091 0,691900

loyalty2 0,306701 0,258431 0,348208

loyalty3 0,605995 0,453942 0,648796

loyalty4 0,185048 0,198109 0,280320

oczek%d 0,350518 0,244451 0,258087

oczek%f 0,337788 0,271976 0,283668

oczek%g 0,322329 0,276661 0,263122

sales 0,502144 0,364339 0,384655

sales%a 0,428005 0,424800 0,360741

sales%b 0,371157 0,342401 0,294043

sales%c 0,284391 0,265476 0,214434

sales%d 0,200163 0,349407 0,292422

sales%e 0,271003 0,404204 0,318533

sales%f 0,353524 0,413347 0,389772

sales%g 0,476481 0,379817 0,454920

sales%h 0,398824 0,257749 0,412825

sales%i 0,477194 0,356862 0,539603

sales%j 0,362766 0,271507 0,463181

sat1 0,764842 0,507511 0,780181

sat1a 0,718662 0,443496 0,713547

sat1b 0,718588 0,463178 0,747491

service 0,559483 0,291251 0,471896

service%a 0,478728 0,244507 0,396507

service%b 0,490427 0,291477 0,433071

168
service%c 0,454239 0,235901 0,399983

service%d 0,348076 0,288809 0,322507

service%e 0,538369 0,483845 0,565999

service%f 0,494196 0,357989 0,496701

service%g 0,467562 0,270357 0,418240

value1 0,987265 0,603624 0,755166

value2 0,988056 0,583587 0,763376

vehqual 0,731346 0,522453 0,829399

vehqual%a 0,683846 0,413127 0,774443

vehqual%b 0,556052 0,508740 0,755625

vehqual%c 0,503735 0,646114 0,730919

vehqual%d 0,536518 0,685336 0,806023

vehqual%e 0,574611 0,643254 0,816924

vehqual%f 0,585655 0,631184 0,726910

vehqual%g 0,590505 0,640185 0,802099

Total Effects
After-sales quality Comfort Costs of ownership Expectations

After-sales quality

Comfort 0,194786

Costs of ownership 0,567231

Expectations

Image 0,335792

Loyalty

Overall satisfaction

Sales quality

Value for money

Vehicle Design 0,055312

Vehicle quality 0,239539

Image Loyalty Overall satisfaction Sales quality

After-sales quality 0,306112 0,078102

Comfort 0,580080 0,277585 0,591317 0,091289

Costs of ownership 0,173636 0,044302

Expectations 0,076069 0,468661

Image 0,081926 0,126879 0,157373

Loyalty

Overall satisfaction 0,444377

169
 Sales quality 0,162313

Value for money 0,181322 0,408035

Vehicle Design 0,164722 0,013495 0,020900 0,025923

Vehicle quality 0,713354 0,341360 0,727172 0,112262

Value for money Vehicle Design Vehicle quality

After-sales quality 0,191411

Comfort 0,516269 0,813173

Costs of ownership 0,108574

Expectations

Image 0,310951

Loyalty

Overall satisfaction

Sales quality

Value for money

Vehicle Design 0,051221

Vehicle quality 0,634882

Outer Loadings
After-sales quality Comfort Costs of ownership Expectations

comfort 0,908322

comfort%a 0,893459

comfort%b 0,803184

comfort%c 0,840362

comfort%d 0,763051

comfort%e 0,749876

comfort%f 0,736981

comfort%g 0,780359

comfort%h 0,516300

costs 0,676427

costs%a 0,702207

costs%b 0,633019

costs%c 0,866037

costs%d 0,856442

costs%e 0,856077

design

design%a

170
design%b

design%c

design%d

image

image%a

image%b

image%c

image%d

image%e

image%f

image%g

image%h

loyalty1

loyalty2

loyalty3

loyalty4

oczek%d 0,750044

oczek%f 0,827469

oczek%g 0,872927

sales

sales%a

sales%b

sales%c

sales%d

sales%e

sales%f

sales%g

sales%h

sales%i

sales%j

sat1

sat1a

sat1b

service 0,924823

service%a 0,939795

service%b 0,955505

service%c 0,942639

service%d 0,614823

171
service%e 0,804694

service%f 0,931314

service%g 0,866021

value1

value2

vehqual

vehqual%a

vehqual%b

vehqual%c

vehqual%d

vehqual%e

vehqual%f

vehqual%g

Image Loyalty Overall satisfaction Sales quality

comfort

comfort%a

comfort%b

comfort%c

comfort%d

comfort%e

comfort%f

comfort%g

comfort%h

costs

costs%a

costs%b

costs%c

costs%d

costs%e

design

design%a

design%b

design%c

design%d

image 0,775949

image%a 0,775879

image%b 0,799332

172
image%c 0,777067

image%d 0,804154

image%e 0,611620

image%f 0,636556

image%g 0,604099

image%h 0,733552

loyalty1 0,880996

loyalty2 0,825759

loyalty3 0,920330

loyalty4 0,733808

oczek%d

oczek%f

oczek%g

sales 0,753118

sales%a 0,796759

sales%b 0,803543

sales%c 0,761355

sales%d 0,781378

sales%e 0,848090

sales%f 0,899755

sales%g 0,772912

sales%h 0,643172

sales%i 0,760951

sales%j 0,693442

sat1 0,954712

sat1a 0,949013

sat1b 0,964760

service

service%a

service%b

service%c

service%d

service%e

service%f

service%g

value1

value2

vehqual

173
vehqual%a

vehqual%b

vehqual%c

vehqual%d

vehqual%e

vehqual%f

vehqual%g

Value for money Vehicle Design Vehicle quality

comfort

comfort%a

comfort%b

comfort%c

comfort%d

comfort%e

comfort%f

comfort%g

comfort%h

costs

costs%a

costs%b

costs%c

costs%d

costs%e

design 0,900610

design%a 0,941631

design%b 0,904622

design%c 0,947728

design%d 0,880969

image

image%a

image%b

image%c

image%d

image%e

image%f

image%g

image%h

174
 loyalty1

loyalty2

loyalty3

loyalty4

oczek%d

oczek%f

oczek%g

sales

sales%a

sales%b

sales%c

sales%d

sales%e

sales%f

sales%g

sales%h

sales%i

sales%j

sat1

sat1a

sat1b

service

service%a

service%b

service%c

service%d

service%e

service%f

service%g

value1 0,987265

value2 0,988056

vehqual 0,829399

vehqual%a 0,774443

vehqual%b 0,755625

vehqual%c 0,730919

vehqual%d 0,806023

vehqual%e 0,816924

vehqual%f 0,726910

175
vehqual%g 0,802099

Outer Weights
After-sales quality Comfort Costs of ownership Expectations

comfort 0,177406

comfort%a 0,179971

comfort%b 0,142422

comfort%c 0,148934

comfort%d 0,132380

comfort%e 0,123694

comfort%f 0,120367

comfort%g 0,131222

comfort%h 0,103884

costs 0,162277

costs%a 0,203244

costs%b 0,157936

costs%c 0,290074

costs%d 0,249408

costs%e 0,213435

design

design%a

design%b

design%c

design%d

image

image%a

image%b

image%c

image%d

image%e

image%f

image%g

image%h

loyalty1

loyalty2

loyalty3

loyalty4

oczek%d 0,357005

176
 oczek%f 0,396709

oczek%g 0,462771

sales

sales%a

sales%b

sales%c

sales%d

sales%e

sales%f

sales%g

sales%h

sales%i

sales%j

sat1

sat1a

sat1b

service 0,157215

service%a 0,147306

service%b 0,151640

service%c 0,146665

service%d 0,118517

service%e 0,140880

service%f 0,149264

service%g 0,124452

value1

value2

vehqual

vehqual%a

vehqual%b

vehqual%c

vehqual%d

vehqual%e

vehqual%f

vehqual%g

Image Loyalty Overall satisfaction Sales quality

comfort

comfort%a

177
comfort%b

comfort%c

comfort%d

comfort%e

comfort%f

comfort%g

comfort%h

costs

costs%a

costs%b

costs%c

costs%d

costs%e

design

design%a

design%b

design%c

design%d

image 0,185528

image%a 0,173121

image%b 0,176278

image%c 0,151102

image%d 0,156924

image%e 0,109200

image%f 0,127162

image%g 0,110384

image%h 0,167391

loyalty1 0,339297

loyalty2 0,243649

loyalty3 0,361820

loyalty4 0,227432

oczek%d

oczek%f

oczek%g

sales 0,131173

sales%a 0,114939

sales%b 0,100061

sales%c 0,076234

178
 sales%d 0,112523

sales%e 0,106877

sales%f 0,127922

sales%g 0,154808

sales%h 0,121097

sales%i 0,111994

sales%j 0,136657

sat1 0,355462

sat1a 0,338477

sat1b 0,351815

service

service%a

service%b

service%c

service%d

service%e

service%f

service%g

value1

value2

vehqual

vehqual%a

vehqual%b

vehqual%c

vehqual%d

vehqual%e

vehqual%f

vehqual%g

Value for money Vehicle Design Vehicle quality

comfort

comfort%a

comfort%b

comfort%c

comfort%d

comfort%e

comfort%f

comfort%g

179
comfort%h

costs

costs%a

costs%b

costs%c

costs%d

costs%e

design 0,219799

design%a 0,218019

design%b 0,239932

design%c 0,222428

design%d 0,191725

image

image%a

image%b

image%c

image%d

image%e

image%f

image%g

image%h

loyalty1

loyalty2

loyalty3

loyalty4

oczek%d

oczek%f

oczek%g

sales

sales%a

sales%b

sales%c

sales%d

sales%e

sales%f

sales%g

sales%h

sales%i

180
 sales%j

sat1

sat1a

sat1b

service

service%a

service%b

service%c

service%d

service%e

service%f

service%g

value1 0,498178

value2 0,514309

vehqual 0,193525

vehqual%a 0,173547

vehqual%b 0,153884

vehqual%c 0,136810

vehqual%d 0,157488

vehqual%e 0,156039

vehqual%f 0,146490

vehqual%g 0,159477

Index Values

Results
Index Values for Latent Variables
LV Index Values

After-sales quality 7,707890

Comfort 8,739694

Costs of ownership 7,066291

Expectations 9,291980

Image 8,389854

Loyalty 8,469529

Overall satisfaction 7,889300

Sales quality 8,960235

Value for money 7,690175

Vehicle Design 9,006335

Vehicle quality 8,632728

181
 Appendix 5.

Results of PLS algorithm application on the final structure of the Brand Satisfaction
Model – Mid-size vehicles (Path Weighting Scheme, Mean replacement algorithm for
missing values, Mean 0 and Var 1 data metric, Abort Criterion 1.0E-5, Initial
Weights 1.0)

PLS

Quality Criteria

Overview
AVE Composite Reliability R Square Cronbachs Alpha

After-sales quality 0,705925 0,949731 0,207406 0,937509

Comfort 0,477433 0,889969 0,859571

Costs of ownership 0,605441 0,899726 0,867366

Expectations 0,721923 0,886158 0,315686 0,808046

Image 0,435126 0,871934 0,434305 0,838482

Loyalty 0,597603 0,855461 0,629035 0,780341

Overall satisfaction 0,881843 0,957246 0,681052 0,932998

Sales quality 0,539511 0,927087 0,116399 0,912917

Value for money 0,963072 0,981189 0,639334 0,961658

Vehicle Design 0,748316 0,936884 0,915850

Vehicle quality 0,433883 0,856771 0,497074 0,807901

Communality Redundancy

After-sales quality 0,705925 0,143231

Comfort 0,477433

Costs of ownership 0,605441

Expectations 0,721923 0,227853

Image 0,435126 0,097289

Loyalty 0,597602 0,109489

Overall satisfaction 0,881843 0,157824

Sales quality 0,539511 0,062490

Value for money 0,963072 0,204720

Vehicle Design 0,748316

Vehicle quality 0,433883 0,213887

182
Cross Loadings
After-sales quality Comfort Costs of ownership Expectations

comfort 0,308752 0,783414 0,412866 0,429905

comfort%a 0,392647 0,673697 0,492601 0,305820

comfort%b 0,325933 0,576920 0,253288 0,376092

comfort%c 0,324076 0,634751 0,258848 0,373511

comfort%d 0,368962 0,751996 0,428558 0,319650

comfort%e 0,365378 0,821899 0,544734 0,305516

comfort%f 0,217808 0,745449 0,403458 0,226113

comfort%g 0,201183 0,565853 0,306022 0,252304

comfort%h 0,135515 0,613711 0,254531 0,201124

costs 0,327053 0,508553 0,774391 0,226708

costs%a 0,288790 0,471841 0,660889 0,264715

costs%b 0,139414 0,340539 0,556635 0,140856

costs%c 0,429941 0,464214 0,827629 0,200236

costs%d 0,404361 0,443280 0,911505 0,195620

costs%e 0,421943 0,385126 0,877803 0,144413

design 0,258299 0,523393 0,363193 0,411304

design%a 0,126542 0,523524 0,289120 0,383848

design%b 0,323992 0,522699 0,407946 0,284960

design%c 0,235131 0,563868 0,267012 0,408389

design%d 0,265372 0,572632 0,348402 0,330201

image 0,394457 0,436110 0,370251 0,295115

image%a 0,045427 0,400365 0,290620 0,352588

image%b 0,182039 0,498763 0,359325 0,442809

image%c 0,197907 0,520551 0,322750 0,489439

image%d 0,457271 0,503274 0,375328 0,506104

image%e 0,118870 0,259327 0,161160 0,232050

image%f 0,128174 0,313669 0,189707 0,317089

image%g 0,212006 0,373238 0,247957 0,297562

image%h 0,143441 0,360514 0,406030 0,290159

loyalty1 0,449200 0,603369 0,480556 0,221409

loyalty2 0,476286 0,419578 0,295457 0,200192

loyalty3 0,318066 0,399337 0,475625 0,103996

loyalty4 0,364914 0,328934 0,209691 0,114329

oczek%d 0,136680 0,462026 0,196352 0,874321

oczek%f 0,069130 0,268173 0,224955 0,825496

oczek%g 0,031583 0,399661 0,206882 0,848461

183
 sales 0,290037 0,456063 0,276385 0,238430

sales%a 0,206820 0,436130 0,329059 0,298692

sales%b 0,158164 0,325877 0,115696 0,267963

sales%c 0,288450 0,479698 0,407889 0,315613

sales%d 0,218621 0,554479 0,372548 0,333404

sales%e 0,162124 0,443950 0,286325 0,305336

sales%f 0,140842 0,287470 0,156298 0,204494

sales%g 0,275020 0,530494 0,280986 0,262864

sales%h 0,363254 0,401764 0,260901 0,140518

sales%i 0,310068 0,466105 0,345423 0,158220

sales%j 0,148726 0,390157 0,213028 0,179351

sat1 0,429349 0,502421 0,446556 0,201576

sat1a 0,415239 0,613185 0,475102 0,294473

sat1b 0,329843 0,546482 0,436096 0,378687

service 0,934754 0,388721 0,393166 0,091033

service%a 0,901923 0,366785 0,449997 0,099025

service%b 0,938874 0,386548 0,403345 0,089459

service%c 0,769283 0,278074 0,204724 0,114576

service%d 0,610486 0,300189 0,356267 0,021815

service%e 0,751032 0,388057 0,428134 0,071878

service%f 0,894927 0,425357 0,406080 0,095758

service%g 0,865595 0,336381 0,383524 0,026495

value1 0,555860 0,604494 0,565361 0,333318

value2 0,534136 0,570017 0,583718 0,346989

vehqual 0,411798 0,537057 0,361586 0,224805

vehqual%a 0,448304 0,461375 0,481538 0,191582

vehqual%b 0,144237 0,265801 0,206763 0,029286

vehqual%c 0,241615 0,333578 0,111133 0,245830

vehqual%d 0,379203 0,438931 0,361180 0,197741

vehqual%e 0,164634 0,586594 0,318908 0,324709

vehqual%f 0,326688 0,467251 0,527871 0,254507

vehqual%g 0,326000 0,566660 0,637906 0,308630

Image Loyalty Overall satisfaction Sales quality

comfort 0,499146 0,450938 0,493559 0,408250

comfort%a 0,469256 0,383535 0,425850 0,416263

comfort%b 0,442506 0,305192 0,317228 0,444659

comfort%c 0,334085 0,275475 0,424768 0,357509

184
comfort%d 0,426097 0,524615 0,420760 0,488123

comfort%e 0,553928 0,447311 0,382615 0,385671

comfort%f 0,426195 0,479140 0,466926 0,439320

comfort%g 0,411985 0,354294 0,376957 0,338288

comfort%h 0,418178 0,367472 0,340569 0,426516

costs 0,465327 0,457412 0,447024 0,375072

costs%a 0,396150 0,476783 0,445455 0,332420

costs%b 0,251541 0,273421 0,299824 0,164197

costs%c 0,436205 0,372556 0,372110 0,325408

costs%d 0,354102 0,396203 0,397737 0,315469

costs%e 0,332908 0,358656 0,335459 0,284766

design 0,501816 0,369159 0,488219 0,472939

design%a 0,362796 0,348715 0,283510 0,463244

design%b 0,455043 0,405743 0,530696 0,422975

design%c 0,482972 0,437275 0,336702 0,505521

design%d 0,514930 0,405844 0,455662 0,386809

image 0,612705 0,580233 0,738605 0,311307

image%a 0,558133 0,243627 0,224097 0,343926

image%b 0,699180 0,454425 0,431886 0,456570

image%c 0,764794 0,344335 0,378394 0,456332

image%d 0,806129 0,450317 0,396707 0,513104

image%e 0,509472 0,125331 0,137816 0,067978

image%f 0,654318 0,169139 0,211457 0,320316

image%g 0,655640 0,272753 0,342951 0,413105

image%h 0,622939 0,251595 0,217031 0,294143

loyalty1 0,603379 0,830309 0,757562 0,487273

loyalty2 0,334404 0,770412 0,268209 0,601662

loyalty3 0,424506 0,785952 0,671154 0,370646

loyalty4 0,200314 0,699817 0,218398 0,486825

oczek%d 0,460332 0,186505 0,258695 0,350156

oczek%f 0,477104 0,173191 0,302937 0,159021

oczek%g 0,495491 0,181525 0,238027 0,339963

sales 0,471630 0,554155 0,370551 0,818970

sales%a 0,401170 0,537192 0,307661 0,782944

sales%b 0,355684 0,321913 0,223589 0,780680

sales%c 0,470640 0,598582 0,435024 0,821675

sales%d 0,504127 0,472071 0,283816 0,816178

sales%e 0,426730 0,429376 0,207567 0,792365

185
 sales%f 0,229444 0,379938 0,119058 0,672968

sales%g 0,491701 0,355670 0,297747 0,638617

sales%h 0,405922 0,507686 0,376317 0,606046

sales%i 0,445724 0,428493 0,316544 0,701865

sales%j 0,274575 0,271176 0,258624 0,593031

sat1 0,506581 0,627164 0,936009 0,378612

sat1a 0,542748 0,619161 0,944008 0,373638

sat1b 0,557773 0,625754 0,937158 0,389331

service 0,337991 0,501633 0,390205 0,288323

service%a 0,340608 0,460621 0,401281 0,278644

service%b 0,362982 0,525353 0,408137 0,315646

service%c 0,237963 0,408676 0,163748 0,278043

service%d 0,296633 0,346311 0,213807 0,236343

service%e 0,250121 0,356742 0,389503 0,220560

service%f 0,290049 0,470631 0,424604 0,277936

service%g 0,199636 0,389397 0,330235 0,266995

value1 0,637283 0,644650 0,635171 0,370359

value2 0,629540 0,658703 0,674506 0,403114

vehqual 0,524711 0,563923 0,792004 0,432705

vehqual%a 0,443824 0,543471 0,668893 0,160704

vehqual%b 0,245626 0,220350 0,335432 0,094903

vehqual%c 0,369118 0,330209 0,448417 0,356268

vehqual%d 0,379023 0,414369 0,534652 0,275173

vehqual%e 0,347887 0,377637 0,408615 0,349617

vehqual%f 0,339184 0,425700 0,467986 0,289904

vehqual%g 0,518538 0,556644 0,532064 0,355763

Value for money Vehicle Design Vehicle quality

comfort 0,475532 0,472732 0,560491

comfort%a 0,519348 0,382030 0,518859

comfort%b 0,336533 0,371001 0,400768

comfort%c 0,286365 0,431626 0,458778

comfort%d 0,444658 0,615776 0,553677

comfort%e 0,519851 0,485424 0,537796

comfort%f 0,411389 0,447878 0,508234

comfort%g 0,299135 0,255572 0,384356

comfort%h 0,373593 0,369247 0,417634

costs 0,449348 0,422911 0,499244

186
costs%a 0,457795 0,221919 0,458798

costs%b 0,414334 0,086670 0,298991

costs%c 0,536476 0,379086 0,512281

costs%d 0,488924 0,341875 0,506274

costs%e 0,429455 0,267497 0,457530

design 0,356722 0,908290 0,548997

design%a 0,260709 0,813503 0,385783

design%b 0,369991 0,889411 0,597482

design%c 0,291826 0,867795 0,424100

design%d 0,334324 0,843018 0,471438

image 0,668747 0,339963 0,693426

image%a 0,311555 0,318575 0,417938

image%b 0,519289 0,316762 0,480622

image%c 0,449668 0,493586 0,409509

image%d 0,484416 0,519980 0,432793

image%e 0,221357 0,201947 0,166161

image%f 0,242265 0,327241 0,188118

image%g 0,292835 0,321140 0,278872

image%h 0,369763 0,258330 0,286404

loyalty1 0,735828 0,521314 0,731981

loyalty2 0,352228 0,276390 0,327543

loyalty3 0,572570 0,359737 0,631823

loyalty4 0,283854 0,171784 0,279171

oczek%d 0,313367 0,356669 0,312039

oczek%f 0,375863 0,166838 0,297116

oczek%g 0,210968 0,512143 0,270074

sales 0,367428 0,305614 0,393529

sales%a 0,267069 0,350798 0,336866

sales%b 0,166184 0,324944 0,225457

sales%c 0,343287 0,549620 0,473235

sales%d 0,304071 0,647422 0,382309

sales%e 0,283773 0,355637 0,256205

sales%f 0,161354 0,262864 0,185119

sales%g 0,274446 0,311356 0,377426

sales%h 0,364066 0,351201 0,334936

sales%i 0,361275 0,356044 0,331316

sales%j 0,238279 0,258994 0,219035

sat1 0,605676 0,449900 0,769066

187
 sat1a 0,652056 0,479701 0,761919

sat1b 0,622555 0,454056 0,775451

service 0,560380 0,248188 0,458067

service%a 0,564136 0,239262 0,467364

service%b 0,539122 0,262069 0,454964

service%c 0,356811 0,106547 0,238792

service%d 0,303684 0,201607 0,264684

service%e 0,437300 0,307401 0,389073

service%f 0,521502 0,262279 0,484615

service%g 0,360624 0,267513 0,406240

value1 0,981114 0,349506 0,720335

value2 0,981610 0,387951 0,709617

vehqual 0,568566 0,415946 0,784338

vehqual%a 0,591599 0,327433 0,759266

vehqual%b 0,299595 0,203319 0,471343

vehqual%c 0,371766 0,310619 0,541233

vehqual%d 0,491295 0,546857 0,708736

vehqual%e 0,378512 0,362391 0,596198

vehqual%f 0,503552 0,258179 0,629480

vehqual%g 0,552686 0,501805 0,714346

Total Effects
After-sales quality Comfort Costs of ownership Expectations

After-sales quality

Comfort 0,179940

Costs of ownership 0,455418

Expectations

Image 0,561859

Loyalty

Overall satisfaction

Sales quality

Value for money

Vehicle Design 0,160371

Vehicle quality 0,255221

Image Loyalty Overall satisfaction Sales quality

After-sales quality 0,239531 0,037155

188
 Comfort 0,320258 0,256940 0,559518 0,061391

Costs of ownership 0,109087 0,016921

Expectations 0,129261 0,341173

Image 0,091344 0,044817 0,191691

Loyalty

Overall satisfaction 0,417647

Sales quality 0,378873

Value for money 0,063140 0,151180

Vehicle Design 0,285429 0,026072 0,012792 0,054714

Vehicle quality 0,454244 0,364436 0,793604 0,087075

Value for money Vehicle Design Vehicle quality

After-sales quality 0,245768

Comfort 0,396431 0,705034

Costs of ownership 0,111927

Expectations

Image 0,296450

Loyalty

Overall satisfaction

Sales quality

Value for money

Vehicle Design 0,084615

Vehicle quality 0,562286

Outer Loadings
After-sales quality Comfort Costs of ownership Expectations

comfort 0,783414

comfort%a 0,673697

comfort%b 0,576920

comfort%c 0,634751

comfort%d 0,751996

comfort%e 0,821899

comfort%f 0,745449

comfort%g 0,565853

comfort%h 0,613711

costs 0,774391

costs%a 0,660889

costs%b 0,556635

189
costs%c 0,827629

costs%d 0,911505

costs%e 0,877803

design

design%a

design%b

design%c

design%d

image

image%a

image%b

image%c

image%d

image%e

image%f

image%g

image%h

loyalty1

loyalty2

loyalty3

loyalty4

oczek%d 0,874321

oczek%f 0,825496

oczek%g 0,848461

sales

sales%a

sales%b

sales%c

sales%d

sales%e

sales%f

sales%g

sales%h

sales%i

sales%j

sat1

sat1a

sat1b

190
 service 0,934754

service%a 0,901923

service%b 0,938874

service%c 0,769283

service%d 0,610486

service%e 0,751032

service%f 0,894927

service%g 0,865595

value1

value2

vehqual

vehqual%a

vehqual%b

vehqual%c

vehqual%d

vehqual%e

vehqual%f

vehqual%g

Image Loyalty Overall satisfaction Sales quality

comfort

comfort%a

comfort%b

comfort%c

comfort%d

comfort%e

comfort%f

comfort%g

comfort%h

costs

costs%a

costs%b

costs%c

costs%d

costs%e

design

design%a

design%b

191
design%c

design%d

image 0,612705

image%a 0,558133

image%b 0,699180

image%c 0,764794

image%d 0,806129

image%e 0,509472

image%f 0,654318

image%g 0,655640

image%h 0,622939

loyalty1 0,830309

loyalty2 0,770412

loyalty3 0,785952

loyalty4 0,699817

oczek%d

oczek%f

oczek%g

sales 0,818970

sales%a 0,782944

sales%b 0,780680

sales%c 0,821675

sales%d 0,816178

sales%e 0,792365

sales%f 0,672968

sales%g 0,638617

sales%h 0,606046

sales%i 0,701865

sales%j 0,593031

sat1 0,936009

sat1a 0,944008

sat1b 0,937158

service

service%a

service%b

service%c

service%d

service%e

192
service%f

service%g

value1

value2

vehqual

vehqual%a

vehqual%b

vehqual%c

vehqual%d

vehqual%e

vehqual%f

vehqual%g

Value for money Vehicle Design Vehicle quality

comfort

comfort%a

comfort%b

comfort%c

comfort%d

comfort%e

comfort%f

comfort%g

comfort%h

costs

costs%a

costs%b

costs%c

costs%d

costs%e

design 0,908290

design%a 0,813503

design%b 0,889411

design%c 0,867795

design%d 0,843018

image

image%a

image%b

image%c

193
image%d

image%e

image%f

image%g

image%h

loyalty1

loyalty2

loyalty3

loyalty4

oczek%d

oczek%f

oczek%g

sales

sales%a

sales%b

sales%c

sales%d

sales%e

sales%f

sales%g

sales%h

sales%i

sales%j

sat1

sat1a

sat1b

service

service%a

service%b

service%c

service%d

service%e

service%f

service%g

value1 0,981114

value2 0,981610

vehqual 0,784338

vehqual%a 0,759266

194
vehqual%b 0,471343

vehqual%c 0,541233

vehqual%d 0,708736

vehqual%e 0,596198

vehqual%f 0,629480

vehqual%g 0,714346

Path Coefficients
After-sales quality Comfort Costs of ownership Expectations

After-sales quality

Comfort

Costs of ownership 0,455418

Expectations

Image 0,561859

Loyalty

Overall satisfaction

Sales quality

Value for money

Vehicle Design

Vehicle quality

Image Loyalty Overall satisfaction Sales quality

After-sales quality 0,224013

Comfort

Costs of ownership

Expectations 0,341173

Image

Loyalty

Overall satisfaction 0,417647

Sales quality 0,378873

Value for money 0,151180

Vehicle Design 0,285429

Vehicle quality 0,454244 0,708597

Value for money Vehicle Design Vehicle quality

After-sales quality 0,245768

195
 Comfort 0,705034

Costs of ownership

Expectations

Image 0,296450

Loyalty

Overall satisfaction

Sales quality

Value for money

Vehicle Design

Vehicle quality 0,427625

Outer Weights
After-sales quality Comfort Costs of ownership Expectations

comfort 0,185464

comfort%a 0,171688

comfort%b 0,132612

comfort%c 0,151808

comfort%d 0,183209

comfort%e 0,177954

comfort%f 0,168172

comfort%g 0,127182

comfort%h 0,138193

costs 0,202320

costs%a 0,178649

costs%b 0,086243

costs%c 0,265967

costs%d 0,250143

costs%e 0,261020

design

design%a

design%b

design%c

design%d

image

image%a

image%b

image%c

image%d

196
image%e

image%f

image%g

image%h

loyalty1

loyalty2

loyalty3

loyalty4

oczek%d 0,406008

oczek%f 0,346104

oczek%g 0,423485

sales

sales%a

sales%b

sales%c

sales%d

sales%e

sales%f

sales%g

sales%h

sales%i

sales%j

sat1

sat1a

sat1b

service 0,170441

service%a 0,171948

service%b 0,171614

service%c 0,114346

service%d 0,115953

service%e 0,141448

service%f 0,163219

service%g 0,131030

value1

value2

vehqual

vehqual%a

vehqual%b

197
vehqual%c

vehqual%d

vehqual%e

vehqual%f

vehqual%g

Image Loyalty Overall satisfaction Sales quality

comfort

comfort%a

comfort%b

comfort%c

comfort%d

comfort%e

comfort%f

comfort%g

comfort%h

costs

costs%a

costs%b

costs%c

costs%d

costs%e

design

design%a

design%b

design%c

design%d

image 0,231491

image%a 0,155932

image%b 0,204714

image%c 0,204584

image%d 0,216027

image%e 0,093189

image%f 0,117729

image%g 0,131753

image%h 0,138858

loyalty1 0,406386

loyalty2 0,301708

198
 loyalty3 0,332320

loyalty4 0,241415

oczek%d

oczek%f

oczek%g

sales 0,145619

sales%a 0,149058

sales%b 0,099722

sales%c 0,164081

sales%d 0,139278

sales%e 0,126925

sales%f 0,104634

sales%g 0,106300

sales%h 0,124301

sales%i 0,109543

sales%j 0,078584

sat1 0,354658

sat1a 0,353523

sat1b 0,356725

service

service%a

service%b

service%c

service%d

service%e

service%f

service%g

value1

value2

vehqual

vehqual%a

vehqual%b

vehqual%c

vehqual%d

vehqual%e

vehqual%f

vehqual%g

199
 Value for money Vehicle Design Vehicle quality

comfort

comfort%a

comfort%b

comfort%c

comfort%d

comfort%e

comfort%f

comfort%g

comfort%h

costs

costs%a

costs%b

costs%c

costs%d

costs%e

design 0,249801

design%a 0,180597

design%b 0,226517

design%c 0,240420

design%d 0,256329

image

image%a

image%b

image%c

image%d

image%e

image%f

image%g

image%h

loyalty1

loyalty2

loyalty3

loyalty4

oczek%d

oczek%f

oczek%g

sales

200
 sales%a

sales%b

sales%c

sales%d

sales%e

sales%f

sales%g

sales%h

sales%i

sales%j

sat1

sat1a

sat1b

service

service%a

service%b

service%c

service%d

service%e

service%f

service%g

value1 0,506136

value2 0,512854

vehqual 0,245772

vehqual%a 0,219700

vehqual%b 0,115829

vehqual%c 0,153286

vehqual%d 0,186449

vehqual%e 0,172461

vehqual%f 0,179454

vehqual%g 0,216891

201
Index Values
Results
Index Values for Latent Variables
LV Index Values

After-sales quality 8,053256

Comfort 8,736349

Costs of ownership 7,043332

Expectations 9,275809

Image 8,467164

Loyalty 8,736364

Overall satisfaction 8,274511

Sales quality 9,021823

Value for money 7,960828

Vehicle Design 9,138596

Vehicle quality 8,890804

202
 Appendix 6.

Results of PLS algorithm application on the final structure of the Brand Satisfaction
Model – Full-size and large vehicles (Path Weighting Scheme, Mean replacement
algorithm for missing values, Mean 0 and Var 1 data metric, Abort Criterion 1.0E-5,
Initial Weights 1.0)

PLS

Quality Criteria

Overview
AVE Composite Reliability R Square Cronbachs Alpha

After-sales quality 0,756338 0,961199 0,220759 0,953577

Comfort 0,417075 0,862975 0,825457

Costs of ownership 0,631850 0,910180 0,882212

Expectations 0,688444 0,868744 0,101650 0,772819

Image 0,515331 0,903972 0,540174 0,881729

Loyalty 0,683263 0,895821 0,668624 0,844064

Overall satisfaction 0,939084 0,978835 0,772297 0,967552

Sales quality 0,631180 0,948994 0,069712 0,939794

Value for money 0,980902 0,990359 0,752208 0,980530

Vehicle Design 0,821036 0,958165 0,945447

Vehicle quality 0,556229 0,906952 0,575419 0,880875

Communality Redundancy

After-sales quality 0,756338 0,165511

Comfort 0,417075

Costs of ownership 0,631850

Expectations 0,688444 0,069946

Image 0,515331 0,094646

Loyalty 0,683262 0,132700

Overall satisfaction 0,939084 0,336551

Sales quality 0,631180 0,044446

Value for money 0,980902 0,159029

Vehicle Design 0,821036

Vehicle quality 0,556229 0,321525

203
Cross Loadings
After-sales quality Comfort Costs of ownership Expectations

comfort 0,486584 0,701444 0,358895 0,302654

comfort%a 0,379716 0,785724 0,348787 0,353190

comfort%b 0,338939 0,714064 0,297551 0,358419

comfort%c 0,236001 0,682580 0,256100 0,385769

comfort%d 0,247213 0,451548 0,142889 0,218285

comfort%e 0,382478 0,659463 0,353861 0,333402

comfort%f 0,366883 0,606493 0,355257 0,245082

comfort%g 0,284473 0,527113 0,322851 0,206239

comfort%h 0,274856 0,619692 0,307845 0,255494

costs 0,386846 0,456552 0,776274 0,233476

costs%a 0,165649 0,309901 0,637468 0,145489

costs%b 0,332093 0,386249 0,678024 0,197377

costs%c 0,469630 0,416694 0,893648 0,193685

costs%d 0,413690 0,377911 0,869240 0,125562

costs%e 0,367094 0,313662 0,876489 0,114905

design 0,172556 0,587421 0,245510 0,438682

design%a 0,145712 0,491685 0,188848 0,531135

design%b 0,174418 0,556224 0,115859 0,410043

design%c 0,180344 0,578444 0,303586 0,389941

design%d 0,261063 0,625606 0,359490 0,428830

image 0,399395 0,535569 0,508721 0,175029

image%a 0,336038 0,550161 0,286933 0,320668

image%b 0,351798 0,621586 0,252952 0,203443

image%c 0,440366 0,603556 0,382295 0,235845

image%d 0,418318 0,641452 0,401432 0,291397

image%e 0,254347 0,425490 0,328220 0,135004

image%f 0,270540 0,356726 0,349798 0,143900

image%g 0,376664 0,533043 0,279515 0,289664

image%h 0,403120 0,599637 0,366024 0,229804

loyalty1 0,512689 0,612642 0,467497 0,195850

loyalty2 0,484392 0,495551 0,440663 0,086442

loyalty3 0,476453 0,562117 0,384430 0,174686

loyalty4 0,464469 0,405859 0,247259 0,150493

oczek%d 0,217163 0,411070 0,122880 0,790053

oczek%f 0,235346 0,323431 0,195756 0,826712

oczek%g 0,153565 0,410431 0,206856 0,870456

204
 sales 0,370460 0,481707 0,265872 0,196862

sales%a 0,368645 0,430058 0,259101 0,233853

sales%b 0,429625 0,436230 0,227805 0,316616

sales%c 0,389417 0,429925 0,281320 0,242127

sales%d 0,283848 0,359523 0,277888 0,158366

sales%e 0,331734 0,418245 0,265890 0,229892

sales%f 0,358292 0,418498 0,159242 0,277565

sales%g 0,425825 0,444385 0,321235 0,136097

sales%h 0,362657 0,443438 0,309245 0,186311

sales%i 0,369058 0,451953 0,334545 0,197408

sales%j 0,403004 0,427782 0,268307 0,112262

sat1 0,356390 0,610812 0,468097 0,221811

sat1a 0,496962 0,581794 0,476182 0,255537

sat1b 0,446464 0,601986 0,487976 0,259751

service 0,891576 0,431957 0,402760 0,176200

service%a 0,894955 0,446260 0,378132 0,148404

service%b 0,912642 0,428400 0,362681 0,182187

service%c 0,900188 0,422797 0,352342 0,294909

service%d 0,784663 0,404870 0,370116 0,180126

service%e 0,812486 0,517402 0,475678 0,265185

service%f 0,885154 0,534140 0,510663 0,217410

service%g 0,867337 0,517744 0,410374 0,235519

value1 0,587218 0,660415 0,555849 0,220129

value2 0,543788 0,656576 0,530888 0,219318

vehqual 0,456868 0,667845 0,444476 0,245849

vehqual%a 0,511586 0,587148 0,484406 0,219857

vehqual%b 0,293151 0,425623 0,280357 0,067521

vehqual%c 0,365287 0,577256 0,374623 0,218713

vehqual%d 0,406049 0,577041 0,279144 0,257162

vehqual%e 0,402442 0,538878 0,339559 0,202613

vehqual%f 0,364311 0,626742 0,344546 0,217115

vehqual%g 0,210936 0,521364 0,276647 0,220795

Image Loyalty Overall satisfaction Sales quality

comfort 0,662560 0,695889 0,655821 0,337419

comfort%a 0,665404 0,483882 0,543719 0,445745

comfort%b 0,508045 0,353709 0,346294 0,531378

comfort%c 0,470020 0,374716 0,291116 0,472384

205
comfort%d 0,198086 0,135793 0,276695 0,200980

comfort%e 0,471679 0,326035 0,362254 0,225314

comfort%f 0,425086 0,387703 0,319339 0,305911

comfort%g 0,383435 0,270345 0,281171 0,274535

comfort%h 0,462597 0,355790 0,260550 0,329058

costs 0,494821 0,430027 0,436368 0,383500

costs%a 0,329866 0,257025 0,285571 0,331358

costs%b 0,458229 0,355972 0,319883 0,264686

costs%c 0,378019 0,374106 0,461891 0,213744

costs%d 0,374292 0,401561 0,450663 0,251026

costs%e 0,315602 0,381746 0,347942 0,242843

design 0,469513 0,392449 0,357143 0,458396

design%a 0,349744 0,276832 0,220791 0,408554

design%b 0,435562 0,347048 0,272388 0,473404

design%c 0,495616 0,396902 0,344947 0,372807

design%d 0,526840 0,395221 0,338722 0,391876

image 0,703457 0,561065 0,774887 0,292171

image%a 0,707365 0,409327 0,459711 0,287959

image%b 0,713735 0,426688 0,367014 0,348544

image%c 0,824082 0,566679 0,469841 0,428460

image%d 0,800597 0,590742 0,503559 0,389015

image%e 0,583350 0,383945 0,296413 0,426618

image%f 0,553195 0,369520 0,218649 0,404790

image%g 0,696339 0,434967 0,362858 0,439194

image%h 0,825874 0,622906 0,529532 0,480704

loyalty1 0,693729 0,858880 0,708885 0,365961

loyalty2 0,525380 0,885788 0,514963 0,649274

loyalty3 0,648846 0,788246 0,631226 0,254410

loyalty4 0,417124 0,767739 0,405118 0,726514

oczek%d 0,254600 0,236988 0,285617 0,241158

oczek%f 0,264277 0,092023 0,116269 0,188079

oczek%g 0,274213 0,120435 0,221913 0,225251

sales 0,416742 0,610626 0,306903 0,876228

sales%a 0,341776 0,456658 0,227086 0,849399

sales%b 0,410572 0,463508 0,231161 0,855927

sales%c 0,414405 0,455673 0,249660 0,850556

sales%d 0,341424 0,458515 0,209312 0,845315

sales%e 0,387441 0,508878 0,228113 0,842762

206
 sales%f 0,482676 0,473198 0,217528 0,823817

sales%g 0,483542 0,439269 0,219931 0,669414

sales%h 0,461684 0,503751 0,251426 0,776448

sales%i 0,408678 0,417268 0,256908 0,664272

sales%j 0,448981 0,521209 0,317422 0,633991

sat1 0,627899 0,667030 0,966102 0,308483

sat1a 0,615213 0,671882 0,964621 0,290163

sat1b 0,629980 0,642692 0,976425 0,309832

service 0,412514 0,540259 0,382202 0,378064

service%a 0,477303 0,572075 0,410383 0,402454

service%b 0,446144 0,554400 0,436812 0,365524

service%c 0,449371 0,487477 0,333232 0,443502

service%d 0,425084 0,480436 0,328529 0,418970

service%e 0,443966 0,423765 0,400220 0,408544

service%f 0,459418 0,489041 0,412027 0,445882

service%g 0,441900 0,520552 0,394840 0,403760

value1 0,659258 0,718975 0,806262 0,358275

value2 0,661473 0,704921 0,800878 0,335814

vehqual 0,661258 0,695790 0,938753 0,332606

vehqual%a 0,564415 0,614300 0,869479 0,239796

vehqual%b 0,359425 0,243625 0,299708 0,204830

vehqual%c 0,476505 0,424111 0,552200 0,373482

vehqual%d 0,509388 0,385121 0,477798 0,275832

vehqual%e 0,561994 0,591955 0,681101 0,269071

vehqual%f 0,569625 0,596753 0,711340 0,317015

vehqual%g 0,465631 0,456070 0,400253 0,246163

Value for money Vehicle Design Vehicle quality

comfort 0,664926 0,444845 0,741440

comfort%a 0,551400 0,519356 0,624199

comfort%b 0,394224 0,482644 0,482133

comfort%c 0,359097 0,564153 0,424692

comfort%d 0,233716 0,260167 0,365169

comfort%e 0,390681 0,315698 0,431073

comfort%f 0,357687 0,333296 0,430835

comfort%g 0,295682 0,245100 0,289719

comfort%h 0,395963 0,433617 0,364341

costs 0,513348 0,330894 0,466261

207
costs%a 0,328155 0,342579 0,312130

costs%b 0,439696 0,263282 0,399437

costs%c 0,480751 0,162574 0,403281

costs%d 0,443364 0,167005 0,408087

costs%e 0,387377 0,169018 0,297152

design 0,340317 0,951949 0,465140

design%a 0,215935 0,901079 0,333651

design%b 0,316908 0,849767 0,411623

design%c 0,368710 0,933445 0,463358

design%d 0,345271 0,890844 0,436989

image 0,585685 0,184422 0,673724

image%a 0,510536 0,336713 0,512497

image%b 0,446873 0,428563 0,473477

image%c 0,562427 0,483582 0,585734

image%d 0,562297 0,451074 0,607668

image%e 0,292138 0,289659 0,314508

image%f 0,263021 0,296337 0,218211

image%g 0,361392 0,345050 0,374045

image%h 0,555650 0,466454 0,593347

loyalty1 0,749828 0,376810 0,730284

loyalty2 0,561475 0,346122 0,538444

loyalty3 0,690450 0,302772 0,640725

loyalty4 0,384183 0,310550 0,395111

oczek%d 0,231454 0,439052 0,301536

oczek%f 0,145876 0,337763 0,162649

oczek%g 0,171937 0,411157 0,227419

sales 0,313214 0,370407 0,315818

sales%a 0,234957 0,316560 0,241437

sales%b 0,281869 0,379559 0,278850

sales%c 0,273477 0,398764 0,277198

sales%d 0,231830 0,407975 0,236709

sales%e 0,266370 0,376516 0,288328

sales%f 0,283630 0,435985 0,292145

sales%g 0,302195 0,364573 0,361965

sales%h 0,247126 0,367063 0,284307

sales%i 0,287436 0,370262 0,355627

sales%j 0,333372 0,255317 0,372273

sat1 0,766175 0,322736 0,827692

208
 sat1a 0,778694 0,353568 0,827803

sat1b 0,813528 0,327862 0,867137

service 0,523042 0,156771 0,439373

service%a 0,555610 0,142634 0,470256

service%b 0,553706 0,168962 0,474773

service%c 0,447946 0,254798 0,387653

service%d 0,388077 0,217009 0,358713

service%e 0,480422 0,173475 0,462421

service%f 0,528232 0,196900 0,498958

service%g 0,471426 0,170463 0,458337

value1 0,990470 0,360181 0,841739

value2 0,990339 0,347947 0,844406

vehqual 0,832742 0,355462 0,907941

vehqual%a 0,750984 0,304548 0,858737

vehqual%b 0,403120 0,298963 0,531512

vehqual%c 0,554009 0,330215 0,691101

vehqual%d 0,499262 0,324846 0,664484

vehqual%e 0,696997 0,344251 0,788866

vehqual%f 0,732261 0,429057 0,837131

vehqual%g 0,471919 0,494689 0,602734

Total Effects
After-sales quality Comfort Costs of ownership Expectations

After-sales quality

Comfort 0,144802

Costs of ownership 0,469850

Expectations

Image 0,318826

Loyalty

Overall satisfaction

Sales quality

Value for money

Vehicle Design 0,072960

Vehicle quality 0,190889

Image Loyalty Overall satisfaction Sales quality

After-sales quality 0,220640 0,043816

Comfort 0,454172 0,318870 0,639516 0,038232

209
Costs of ownership 0,103668 0,020587

Expectations 0,097741 0,264030

Image 0,041322 0,021322 0,084180

Loyalty

Overall satisfaction 0,476481

Sales quality 0,370188

Value for money 0,125661 0,263727

Vehicle Design 0,228841 0,009456 0,004879 0,019264

Vehicle quality 0,598727 0,420360 0,843061 0,050401

Value for money Vehicle Design Vehicle quality

After-sales quality 0,166142

Comfort 0,574451 0,758564

Costs of ownership 0,078062

Expectations

Image 0,080849

Loyalty

Overall satisfaction

Sales quality

Value for money

Vehicle Design 0,018501

Vehicle quality 0,757288

Outer Loadings
After-sales quality Comfort Costs of ownership Expectations

comfort 0,701444

comfort%a 0,785724

comfort%b 0,714064

comfort%c 0,682580

comfort%d 0,451548

comfort%e 0,659463

comfort%f 0,606493

comfort%g 0,527113

comfort%h 0,619692

costs 0,776274

costs%a 0,637468

costs%b 0,678024

costs%c 0,893648

210
costs%d 0,869240

costs%e 0,876489

design

design%a

design%b

design%c

design%d

image

image%a

image%b

image%c

image%d

image%e

image%f

image%g

image%h

loyalty1

loyalty2

loyalty3

loyalty4

oczek%d 0,790053

oczek%f 0,826712

oczek%g 0,870456

sales

sales%a

sales%b

sales%c

sales%d

sales%e

sales%f

sales%g

sales%h

sales%i

sales%j

sat1

sat1a

sat1b

service 0,891576

211
service%a 0,894955

service%b 0,912642

service%c 0,900188

service%d 0,784663

service%e 0,812486

service%f 0,885154

service%g 0,867337

value1

value2

vehqual

vehqual%a

vehqual%b

vehqual%c

vehqual%d

vehqual%e

vehqual%f

vehqual%g

Image Loyalty Overall satisfaction Sales quality

comfort

comfort%a

comfort%b

comfort%c

comfort%d

comfort%e

comfort%f

comfort%g

comfort%h

costs

costs%a

costs%b

costs%c

costs%d

costs%e

design

design%a

design%b

design%c

212
design%d

image 0,703457

image%a 0,707365

image%b 0,713735

image%c 0,824082

image%d 0,800597

image%e 0,583350

image%f 0,553195

image%g 0,696339

image%h 0,825874

loyalty1 0,858880

loyalty2 0,885788

loyalty3 0,788246

loyalty4 0,767739

oczek%d

oczek%f

oczek%g

sales 0,876228

sales%a 0,849399

sales%b 0,855927

sales%c 0,850556

sales%d 0,845315

sales%e 0,842762

sales%f 0,823817

sales%g 0,669414

sales%h 0,776448

sales%i 0,664272

sales%j 0,633991

sat1 0,966102

sat1a 0,964621

sat1b 0,976425

service

service%a

service%b

service%c

service%d

service%e

service%f

213
service%g

value1

value2

vehqual

vehqual%a

vehqual%b

vehqual%c

vehqual%d

vehqual%e

vehqual%f

vehqual%g

Value for money Vehicle Design Vehicle quality

comfort

comfort%a

comfort%b

comfort%c

comfort%d

comfort%e

comfort%f

comfort%g

comfort%h

costs

costs%a

costs%b

costs%c

costs%d

costs%e

design 0,951949

design%a 0,901079

design%b 0,849767

design%c 0,933445

design%d 0,890844

image

image%a

image%b

image%c

image%d

214
image%e

image%f

image%g

image%h

loyalty1

loyalty2

loyalty3

loyalty4

oczek%d

oczek%f

oczek%g

sales

sales%a

sales%b

sales%c

sales%d

sales%e

sales%f

sales%g

sales%h

sales%i

sales%j

sat1

sat1a

sat1b

service

service%a

service%b

service%c

service%d

service%e

service%f

service%g

value1 0,990470

value2 0,990339

vehqual 0,907941

vehqual%a 0,858737

vehqual%b 0,531512

215
vehqual%c 0,691101

vehqual%d 0,664484

vehqual%e 0,788866

vehqual%f 0,837131

vehqual%g 0,602734

Path Coefficients
After-sales quality Comfort Costs of ownership Expectations

After-sales quality

Comfort

Costs of ownership 0,469850

Expectations

Image 0,318826

Loyalty

Overall satisfaction

Sales quality

Value for money

Vehicle Design

Vehicle quality

Image Loyalty Overall satisfaction Sales quality

After-sales quality 0,199762

Comfort

Costs of ownership

Expectations 0,264030

Image

Loyalty

Overall satisfaction 0,476481

Sales quality 0,370188

Value for money 0,263727

Vehicle Design 0,228841

Vehicle quality 0,598727 0,643344

Value for money Vehicle Design Vehicle quality

After-sales quality 0,166142

Comfort 0,758564

Costs of ownership

216
 Expectations

Image 0,080849

Loyalty

Overall satisfaction

Sales quality

Value for money

Vehicle Design

Vehicle quality 0,708882

Outer Weights
After-sales quality Comfort Costs of ownership Expectations

comfort 0,271227

comfort%a 0,228339

comfort%b 0,176370

comfort%c 0,155357

comfort%d 0,133583

comfort%e 0,157692

comfort%f 0,157604

comfort%g 0,105982

comfort%h 0,133280

costs 0,223340

costs%a 0,095635

costs%b 0,191729

costs%c 0,271134

costs%d 0,238838

costs%e 0,211937

design

design%a

design%b

design%c

design%d

image

image%a

image%b

image%c

image%d

image%e

image%f

217
image%g

image%h

loyalty1

loyalty2

loyalty3

loyalty4

oczek%d 0,410311

oczek%f 0,379351

oczek%g 0,416126

sales

sales%a

sales%b

sales%c

sales%d

sales%e

sales%f

sales%g

sales%h

sales%i

sales%j

sat1

sat1a

sat1b

service 0,149729

service%a 0,154507

service%b 0,151026

service%c 0,131583

service%d 0,126007

service%e 0,138867

service%f 0,154127

service%g 0,142760

value1

value2

vehqual

vehqual%a

vehqual%b

vehqual%c

vehqual%d

218
vehqual%e

vehqual%f

vehqual%g

Image Loyalty Overall satisfaction Sales quality

comfort

comfort%a

comfort%b

comfort%c

comfort%d

comfort%e

comfort%f

comfort%g

comfort%h

costs

costs%a

costs%b

costs%c

costs%d

costs%e

design

design%a

design%b

design%c

design%d

image 0,180053

image%a 0,166860

image%b 0,150272

image%c 0,184022

image%d 0,188729

image%e 0,099408

image%f 0,084730

image%g 0,128439

image%h 0,182850

loyalty1 0,315840

loyalty2 0,319585

loyalty3 0,268910

loyalty4 0,304374

219
oczek%d

oczek%f

oczek%g

sales 0,139083

sales%a 0,111480

sales%b 0,119984

sales%c 0,111997

sales%d 0,105346

sales%e 0,121582

sales%f 0,118556

sales%g 0,099577

sales%h 0,116801

sales%i 0,100462

sales%j 0,113910

sat1 0,341292

sat1a 0,343210

sat1b 0,347400

service

service%a

service%b

service%c

service%d

service%e

service%f

service%g

value1

value2

vehqual

vehqual%a

vehqual%b

vehqual%c

vehqual%d

vehqual%e

vehqual%f

vehqual%g

220
 Value for money Vehicle Design Vehicle quality

comfort

comfort%a

comfort%b

comfort%c

comfort%d

comfort%e

comfort%f

comfort%g

comfort%h

costs

costs%a

costs%b

costs%c

costs%d

costs%e

design 0,227457

design%a 0,169434

design%b 0,211009

design%c 0,240102

design%d 0,255229

image

image%a

image%b

image%c

image%d

image%e

image%f

image%g

image%h

loyalty1

loyalty2

loyalty3

loyalty4

oczek%d

oczek%f

oczek%g

sales

221
 sales%a

sales%b

sales%c

sales%d

sales%e

sales%f

sales%g

sales%h

sales%i

sales%j

sat1

sat1a

sat1b

service

service%a

service%b

service%c

service%d

service%e

service%f

service%g

value1 0,506563

value2 0,503125

vehqual 0,220447

vehqual%a 0,197553

vehqual%b 0,104167

vehqual%c 0,152303

vehqual%d 0,144527

vehqual%e 0,175684

vehqual%f 0,187009

vehqual%g 0,130075

222
Index Values
Results
Index Values for Latent Variables
LV Index Values

After-sales quality 7,630681

Comfort 8,952333

Costs of ownership 7,290020

Expectations 9,542902

Image 8,345158

Loyalty 8,331630

Overall satisfaction 7,950921

Sales quality 8,957169

Value for money 7,559792

Vehicle Design 9,264105

Vehicle quality 8,656681

223