An integrated model of price, satisfaction and loyalty: an empirical analysis in the service sector

Abstract

Purpose: The purpose of this paper is to investigate the effects of customer satisfaction both directly and indirectly (through loyalty) on price acceptance. In addition, price fairness is considered as an antecedent of customer satisfaction and loyalty. Design/methodology/approach: Based on a theoretical discussion regarding the relationship among price fairness, customer satisfaction, loyalty, and price acceptance, empirical research was conducted to test the proposed relationships. Multiple‐item indicators from previous studies were employed to measure the constructs. Findings: The results from the study provide empirical support, suggesting that perceived price fairness influences customer satisfaction and loyalty. The analysis also suggests that customer satisfaction and loyalty are two important antecedents of price acceptance. Research limitations/implications: The study ponders the relationship between customer satisfaction and loyalty and price acceptance, while other factors that have an influence on price acceptance are not considered. Practical implications: The research results suggest that perceived price fairness in service industries can be viewed as a threshold factor in order to maintain satisfied and loyal customers. Additionally, managers should consider that price acceptance depends on the level of satisfaction and loyalty. Originality/value: The present study provides useful information on the relationship among price fairness, customer satisfaction, loyalty, and price acceptance in service industries.