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I N T E R N A T I O N E L L A H A N D E L S H G S K O L A N HGSKOLAN I JNKPING
Service Tangibi l i t y andCustomer Loyalty:
Is there a relat ionship?
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J N K P I N G I N T E R N A T I O N A L B U S I N E S S S C H O O L $%
Service Tangibi l i t y andCustomer Loyalty:
Is there a relat ionship?
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Masters Thesis within Business Administration
Title: Service Tangibility and Customer Loyalty: Is there arelationship?
Author: Joanna Magnusson & Elin Sundin
Tutor: Karl Erik Gustafsson
Date
Subject terms: Service marketing, tangibility, customer loyalty.
Abstract
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Table of Content
1 Introduction .......................................................................... 41.1 Background................................................................................... 41.2
Problem discussion ....................................................................... 5
1.3 Purpose......................................................................................... 51.4 Previous Research........................................................................ 51.5 Definition of a Service Firm ........................................................... 61.6 Delimitations.................................................................................. 71.7 Disposition..................................................................................... 8
2 Frame of Reference .............................................................. 92.1 Service Definition .......................................................................... 9
2.1.1 Service Classification.......................................................... 92.1.2 Service Characteristics ..................................................... 10
2.2 The Tangibility Continuum........................................................... 112.3 Tangibility of Services ................................................................. 122.4 Service Quality ............................................................................ 132.5 Service Quality Model ................................................................. 142.6 Customer Loyalty ........................................................................ 15
2.6.1 The Service Profit Chain................................................... 162.6.2 Customer Satisfaction and Customer Loyalty................... 172.6.3 Customer Loyalty and Profitability .................................... 18
2.7 Theory Summary......................................................................... 183 Methodology ....................................................................... 20
3.1 Positivism and Interpretivism....................................................... 203.2 Method for data gathering ........................................................... 21
3.2.1 Survey Method.................................................................. 213.2.2 Questionnaire Design ....................................................... 22
3.3 Sampling ..................................................................................... 233.4 Non Response ............................................................................ 253.5 Data handling .............................................................................. 263.6 Validity and Reliability ................................................................. 273.7 Criticism against used method .................................................... 28
4 Empirical Findings and Analysis....................................... 294.1 Method of Analysis...................................................................... 294.2 Restaurants................................................................................. 30
4.2.1 Tangibility ......................................................................... 304.2.2 Loyalty .............................................................................. 31
4.3 Hairdressers................................................................................ 334.3.1 Tangibility ......................................................................... 334.3.2 Loyalty .............................................................................. 34
4.4 Travel Agencies........................................................................... 354.4.1 Tangibility ......................................................................... 354.4.2 Loyalty .............................................................................. 36
4.5 Dentistry ...................................................................................... 374.5.1 Tangibility ......................................................................... 374.5.2 Loyalty .............................................................................. 38
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4.6 Banks .......................................................................................... 404.6.1 Tangibility ......................................................................... 404.6.2 Loyalty .............................................................................. 41
4.7 The Swedish Employment Agency.............................................. 434.7.1 Tangibility ......................................................................... 434.7.2 Loyalty .............................................................................. 444.8 Overall Service Analysis.............................................................. 464.8.1 Loyalty and Intangibility Graph ......................................... 464.8.2 Tangibility Continuum ....................................................... 48
5 Conclusions and Final Discussion.................................... 505.1 Conclusions................................................................................. 505.2 Final Discussion .......................................................................... 505.3 Suggestions for further studies.................................................... 51
6 List of references................................................................ 53Appendices .............................................................................. 57
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FiguresFigure 1-1 Disposition. ................................................................................... 8Figure 2-1 The tangibility continuum and customer evaluation (Rushton &
Carson, 1989).................................................................................. 12Figure 2-2 Total perceived quality (Grnroos, 2000).................................... 14Figure 2-3 A remodelled service-profit chain (Heskett et al., 1994).............. 16Figure 4-1 Restaurants loyalty and intangibility rate.................................... 30Figure 4-2 Hairdressers loyalty and intangibility rate................................... 33Figure 4-3 Travel agencies loyalty and intangibility rate.............................. 35Figure 4-4 Dentists loyalty and intangibility rate. ......................................... 37Figure 4-5 Banks loyalty and intangibility rate. ............................................ 40Figure 4-6 The Swedish Employment agencys loyalty and intangibility rate.43Figure 4-7 Loyalty and Intangibility Graph.................................................... 46Figure 4-8 Tangibility Continuum. ................................................................ 48
AppendicesAppendix 1 Survey Swedish version ......................................................... 57Appendix 2 Survey English version........................................................... 59Appendix 3 Correlation Outputs ................................................................... 61
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4.3 Hairdressers
Intangibility rate
6543210
Loyalty
12
10
8
6
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2
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Intangibility rate
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Loyalty
12
10
8
6
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4.5 Dentistry
Intangibility rate
6543210
Loyalty
10
9
8
7
6
5
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4.6 Banks
Intangibility rate
6543210
Loyalty
12
10
8
6
4
2
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4.7 The Swedish Employment Agency
Intangibility rate
6543210
Loyalty
12
10
8
6
4
2
H -CF & ' (
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4.8 Overall Service Analysis
4.8.1 Loyalty and Intangibility Graph
Loyalty-Intangibility graph
5
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7,5
8
1,5 1,6 1,7 1,8 1,9 2 2,1 2,2 2,3 2,4
Intangibility
Loyalty
Employment agency
RestaurantsBanks
Dentistries
Travel agencies
Hairdressers
H -C: 1 +' (
' & ' % %& %) &&
% ' & ( % 0 -C:4) & ' &% &*( A%) ' ' (
1 & % ' & ' & & ' 0/%) 23334( && 0!"""4) & ' & % & ' & ( + %) % ' F(2 :(:( & &% ( A & :(!( ) % & & & & '& ' % (
) & ') & %& %% 0A () 233-= ) !""54( + &) >&0233:4 & *& ( & & & ' & %&%( A%) %& & ( & % % ) & ' & * ' ( + & ' ') ) % & % ' ' &% '
%(
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& H
-:
1 % &% ' & ' * ' && ' %& ,) & 0) !"""4( + % & %& , ' *& & 0) !"""4( 9 & &% , & & ( 6%)
*& ) & ' *&( & && '&%( ) % ' '' % (
%& ' &&& ' %&( ' & ' > ( 0233F4 .= ) &%& &( . & & & %&( + ) & && ' %&( +'L' % ' 2(: !(5) & ' '(
& ' %& ' *& % & & ) & %& &( %& *& % & &% ' & % !(5( 2(< 2(3 & ' & ' % & % &(
&B 0233"4 ' ' & &( &) & & E' ' ' & %&( %& & ' &( 1 * % &) &
%& & ' E & &(
&% && ' 'L' % %& %) & (
%) & % ' ) & *( % & 0 -C:4( & ' %& % % & *& ( + &% E' & %&) % (
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& H
- 9 023
2):A)
%
&
2)() ? &) .(( 0!""#4( 0 2 - 1& A(
) (@() H) >(.() ? ) (( 0233-4( B% & %& ( , 7 , -)024) !2C-
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1 &
#-
) 1(() ? @C.) H( 023334(. ( BC (
%EP) >( 0233F4( A ( 1 (
) .(6() ) () ? ) +( 0233#4( 2 - 0 B ? C6 X .& A(
) 9( 0233&B) (A(() ? ) B(@( 0233"4( ' %& &% &%( 7 - I0-4) !:C-"(
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1 &
##
) X(1(> 0!""!4( & ' %&(7 - E8054)!#3C!:-(
/%) >(1( 023354( && %& , %& &&' ) &&( . -
-!) F#C(1( 023334( @& & G7 -& ) 55C-#(
.) ( 023354( = - 1 .& A(
.) 1( 0!""#) H' !F4( % C IQ* % C( 1 >% !F) !""#) LL(%(LL%LY3!!##""((
>) (9() ) (B() ? &) ( 023354( 'D ' %& ( 7 - J054) 25C2:(
>&) H( H( 0233:4( 1(= = EI0F4) 23(
>&) H( H() ) >( () ? A) 9( 0!"""4( & Z ' ( = 0 7 E*054) 25-C253(
>) (() ? 9) B( ( 023) () ? &) 6( 0233& >& .&(6 - 2B . , 7 E024) :C2-(
) ( 0!""!4( H ' ' %& , & & ' & %& % %&(- # E*0#4) !3!C5"!(
) () 1) .() ? ) ( 0!""54( 2 - 0 *. & 1(
) ( 0!""54( 1 " ( A' &(
) >() ? B) 9(1( 0233F4( 9 %& & &%( 7 - EK0F4) 55C--(
() 0!""#4( ( >% !""#C"!C23 LL((LL&L&H&YYYY5:2"(*(
) 1( 0!""24(6 - 0 - D 6 X .%(
) ( 0!""24(=L( 1 (
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1 &
#F
@) (9() ? ) (( 0!""24( 2 - /* /*$% .(
M) I(() ) 1(1() ? .) ( 023
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&
#:
Appendices
Appendix 1 Survey Swedish version
! "# $ % %"&
'# / ( / 2< Z 5!
/ % / 55 Z -:
/ -< Z F-
/ F# Z
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&
#