The Effects of Perceived Value of Mobile Phones on User Satisfaction, Brand Trust, and Loyalty

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1 , pp The Effects of Perceived Value of Mobile Phones on User Satisfaction, Brand Trust, and Loyalty Kihan Chung 1, Jaesin Oh 1, Wonjong Kim 1, and Gwijeong Park 1 1 Dept. of Business Administration, Graduate School, Gyeongsang National Univ. 501, Jinju-daero, Jinju City, Gyeongsangnam-do, 52828, South Korea {khchung; jsoh}@gnu.ac.kr; @hanmail.net; jca_jay@jcaedu.com Abstract. Understanding the that customers perceive in an offer, creating for them and then managing it over, have been recognized as essential elements of firm s business strategies. Determining what customers seek from services also helps a firm to formulate its proposition. However, there is little research about the influences of perceived on user satisfaction, brand trust, and loyalty in the mobile phone context. This paper is aiming to extend this line of research to consider user satisfaction, brand trust, as mediating variables in the context of using mobile phone, which is related to customer and brand loyalty. Thus, this study investigates the importance of subdimensions of perceived and brand loyalty. The main findings show that the positive linkage between satisfaction, brand trust, and brand loyalty in users is substantiated. Keywords: Perceived Value, User Satisfaction, Brand Trust, Brand Loyalty, Mobile Phone 1 Introduction Effective marketing requires good knowledge of the underlying needs and perceptions of the specific user segments. Measuring customer perceived is essential in assessing current services and for the development of further ones, because customer segments may have different motives to use services and thus perceive different in them [1]. Customer is regarded as a critical strategic tool to attract and retain customers. Moreover, perceived is recognized as being an important indicator in predicting certain consumer behaviors [2]. Therefore, marketers should understand how individuals perceive the of their mobile phones through the ways that it is contextually situated in their lives. On the other hand, the concept of customer satisfaction has received much research attention in recent years. Previous empirical research has focused primarily on satisfaction, trust, and loyalty as the key ingredients for successful long-term customer relationships. In this sense, this paper aims to extend this line of research to consider user satisfaction, brand trust, as mediating variables in the context of using mobile phone that relate customer and behavioral and attitudinal loyal intentions. ISSN: ASTL Copyright 2015 SERSC

2 2 Literature review and hypothesis development Sheth et al. [3] framework was used as a foundation for this study, as it contains both the utilitarian and hedonic view of consumption by including goal oriented consumption in functional as well as the emotional aspects of hedonic consumption. These dimensions include functional, social, emotional, and epistemic. And guarantee is employed additionally in this study, especially in utilitarian. Chen and Chang [4], moreover, suggested there is a positive relationship between perceived and customer trust, since high level of perceived can increase post-purchase confidence of the product. Consequently, the following hypotheses are established: H1a: Utilitarian will have a positive effect on user satisfaction. H1b: Hedonic will have a positive effect on user satisfaction. H2a: Utilitarian will have a positive effect on brand trust. H2b: Hedonic will have a positive effect on brand trust. H3: User satisfaction with the brand will have a positive effect on brand trust. The positive linkage between perceived and brand loyalty has been approved empirically in many studies. Moreover, satisfaction is widely regarded as an antecedent of purchase intention and brand loyalty, as well as word-of-mouth [5]. Many researchers have also suggested brand trust develops positive attitudes that increase brand loyalty [6]. Hence, the following hypotheses are proposed: H4a: Utilitarian will have a positive effect on brand Loyalty. H4b: Hedonic will have a positive effect on brand Loyalty. H5: User satisfaction with the brand will have a positive effect on brand Loyalty. H6: Brand trust of mobile phone will have a positive effect on brand Loyalty. 3 Research methodology The survey was conducted to university students who have experienced using mobile phones from March 10 to 14, 2014 in Gyeongnam province. A total of 383 questionnaires were returned within 5 days. After screening the data and eliminating the respondents with missing s, the analysis was performed with an effective sample size of 367 respondents of 32.8% of male (n=130) and 67.2% of female (n=266). Major manufacture brands were as follows: SAMSUNG (n=232, 58.5%; such as Galaxy S-Series (n=105), Note-Series (n=93) etc.), LG (n=145, 36.6%; such as G-Seires (n=74), View-Series (n=25) etc.), APPLE (n=19, 4.8%; such as 5S (n=13), 5(n=5), etc.). Also, they are mostly found to be using SNSs (n=293, 74%) and Internet search (n=65, 16.4%). The constructs in the study were measured by multi-item scales mostly adapted from the existing literature. All involved constructs were measured using five-point Likert scales (1 = strongly disagree, 5 = strongly agree). Copyright 2015 SERSC 11

3 4 Results 4.1 Reliability and validity of measures In the table 1, significant t-s of each item s estimated path coefficient on its posited latent construct and high squared multiple correlations for the individual items indicated convergent validity. Also, the results of the composite reliability test showed the s of all constructs exceeded the minimum requirement of 0.70 point, indicating multiple items were highly reliable for measuring each construct [7]. Table 1. Convergent Validity and Reliability Construct variable Estimate Std. estimate S.E. C.R. Utilitarian FuV a GuV b b EmV Hedonic a EpV SoV Brand AtL loyalty a BeL b Composite Reliability AVE FuV Functional FuV2 b FuV GuV Guarantee GuV3 b GuV EmV Emotional EmV2 b EmV EpV Epistemic EpV2 b EpV SoV Social SoV2 b SoV US User US satisfaction US4 b Brand BT trust BT4 b Attitudinal AtL loyalty AtL3 b Behavioral BeL loyalty BeL3 b Notes: χ 2 =531.57, d.f.=235, p=0.000, GFI=0.905, AGFI=0.862, RMR=0.048, TLI= 0.940, CFI=0.955, RMSEA=0.063 a: Second-order factor, b: Reference variable 12 Copyright 2015 SERSC

4 For discriminant validity test, Hair et al. [7] suggested that the square root of AVE should be greater than the correlation between every construct. Table 2 shows that all AVEs exceeded the minimum criteria (above 0.5), and all AVEs are higher than squared inter-construct correlations. This result provides evidence of discriminant validity. Therefore, Utilitarian, hedonic, user satisfaction, brand trust, and brand loyalty are treated as separate constructs in the further analysis. Table 2. Correlations and squared of AVE Construct Mean Std. D Utilitarian Hedonic ** User satisfaction *** *** Brand trust *** *** Brand loyalty *** *** *** *** Notes : ** p<0.05, *** p<0.01, Correlations are below diagonal, squared correlations are above the diagonal, and AVE estimates are presented on the diagonal. 4.2 Structural analysis and hypothesis testing The structural model created indicated acceptable goodness-of-fit-measures (χ 2 =542.99, d.f.=236, p=0.000, GFI=0.902, AGFI=0.859, RMR=0.046, TLI= 0.939, CFI=0.954, RMSEA=0.064). Utilitarian and hedonic has the strongest effect on user satisfaction, supporting H1a and H1b. And utilitarian has a significant positive effect on brand trust supporting H2a. The path between hedonic and brand trust, however, is not significant rejecting H2b. User satisfaction has a significant positive effect on brand trust accepting H3. Lastly, utilitarian and hedonic, user satisfaction, and brand trust have an effect on brand loyalty supporting H4a, H4b, H5, and H6 as in the Table 3. Table 3. Path Analysis Hypothesis Path Std. Estimate S.E. C.R. Result H1a Utilitarian User satisfaction ** Accept H1b Hedonic User satisfaction ** Accept H2a Utilitarian Brand trust * Accept H2b Hedonic Brand trust Reject H3 User satisfaction Brand trust ** Accept H4a Utilitarian Brand loyalty * Accept H4b Hedonic Brand loyalty * Accept H5 User satisfaction Brand loyalty ** Accept H6 Brand trust Brand loyalty ** Accept Notes: UV-utilitarian, HV-hedonic, US-user satisfaction, BT-brand trust, BLbrand loyalty; * p<0.05, ** p<0.01 Copyright 2015 SERSC 13

5 5 Discussion and Conclusion One of the main purposes of the study is to find out the linkage between perceived, brand trust, and brand loyalty. In the theoretical section of the paper, five dimensions of perceived s of mobile phone are identified. The results show that utilitarian and hedonic are positively related to user satisfaction and brand loyalty. In other words, perceived plays a crucial role to enhance customer satisfaction and brand loyalty. Thus, marketers should focus on developing customer in the perspective of customer. Utilitarian has a significant positive effect on brand trust, but hedonic does not. The findings demonstrate utilitarian is more important than hedonic in establishing brand trust. Thus, marketers should encourage attributes of utilitarian including function and guarantee. In addition, the positive linkage among satisfaction, brand trust, and brand loyalty is substantiated, meaning to say user satisfaction has a stronger influence on brand trust and loyalty. Thus, marketers should concentrate their efforts on user satisfaction to enhance brand trust and loyalty. Some choices made during this research may limit the generalizability of the findings. First, since this research concentrated on the mobile phone market, the results may not be applicable to different industries. Second, the fact that the data were gathered on a non-random sample of university students for a specific brand may affect the findings. In addition, the participants were from Gyeongnam province. To generalize the findings, more diversified random samples across region and age are suggested. There are also some methodological limitations that have to be taken into consideration when evaluating the results of this study. Utilitarian, hedonic, and brand loyalty constructs are truly second-order factor or not, thus encouraging future research on the topic. References 1. Pura, M.: Linking Perceived Value and Loyalty in Location-based Mobile Services, Managing Service Quality, Vol. 15, No. 6, pp (2005) 2. Sabiote, C. M., Fries, D. M., Castaneda, J. A.: The Moderating Effect of Uncertainty- Avoidance on Overall Perceived Value of a Service Purchased Online, Internet Research, Vol. 22, No. 2, pp (2012) 3. Sheth, J. N., Newman, B. I., Gross, B. L.: Why We Buy What We Buy: A Theory of Consumption Values, Journal of Business Research, Vol. 22, No. 2, pp (1991) 4. Chen, Y. S., Chang, C. H.: Enhance Green Purchase Intentions: The Roles of Green Perceived Value, Green Perceived Risk, and Green Trust, Management Decision, Vol. 50, No. 3, pp (2012) 5. Jin, B., Park, J. Y., Kim, J.: Joint Influence of Online Store Attributes and Offline Operations on Performance of Multichannel Retailers, Behaviour & Information Technology, Vol. 29, No. 1, pp (2010) 6. Phan, K. N., Ghantous, N.: Managing Brand Associations to Drive Customers' Trust and loyalty in Vietnamese banking, International Journal of Bank Marketing, Vol. 31, No. 6, pp (2013) 7. Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E.: Multivariate Data Analysis, 7th ed., Englewood Cliffs: Prentice-Hall (2010) 14 Copyright 2015 SERSC

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