Effect of Jit and Tqm Strategies on Service Quality and Brand Loyalty

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1 Effect of Jit and Tqm Strategies on Service Quality and Brand Loyalty Tungsheng Kuo 1, Chun Hsiung Lan 2, Shuhui Chen 3, Shih Hsien Lin 4 1 Department of Business Administration, Nanhua University, Chiayi, P.R.C. 2 Department of Business Administration, Hsing Wu College, LinKou Township, Taipei, P.R.C. 3 Department of Business Administration, Nanhua University, Chiayi, P.R.C. 4 Department of Business Administration, Nan Jeon Institute of Technology, Tainan, P.R.C. 1 tskuo2@yahoo.com; @mail.hwc.edu.tw; 3 a22172@yahoo.com.tw; 4 ea033@ms28.hinet.net Abstract- Numerous marketing researchers and practitioners emphasize the importance of the information technology (IT) in service quality. This investigation examines the relationships among information technology, total quality management (TQM) strategy, knowledge management (KM), service quality and brand loyalty, and analyzes the steps that are involved in knowledge management that supports the quality of service in a hospital. The final section of this investigation proposes that managers evaluate and improve service quality and brand loyalty. Relationships among the factors of interest suggest that hospitals are successful in implementing TQM strategy and knowledge management only if they can manage their information technology effectively. Keywords- Information Technology; TQM Strategy; Know-ledge Management; Service Quality; Brand Loyalty I. INTRODUCTION Brand loyalty is topic that is currently attracting substantial field of branding in all instances [1]. Empirical studies have indicated that in Korea, brand equity derives from hospital patients with respect to trust of customer relationship management, customer satisfaction, brand loyalty and other similar factors. Only by maintaining good relationships with customers can hospitals create brand equity and a favorable atmosphere. Hospitals can build brand awareness through marketing communications to help the public understand their strengths and expertise. With respect to customer relationships, doing so improves patient service satisfaction, potentially increasing customer loyalty [2]. In particular, hospital service networks that involve digital databases, interactive systems, query systems, FAQ systems, complaints systems, and primary community-based care networks (PCCNs) have been established. Information technology has become extremely important to enterprises, hospitals, and government [3]. The deployment and utilization of total quality management (TQM) is regarded as a strategic response of a manufacturing system to environmental demands for efficiency, effectiveness and customer responsiveness [4]. Accordingly, both information technology (IT) and TQM strategies are utilized in manufacturing to increase productivity. The literature also emphasizes the relationship between service quality and brand loyalty [5]. Therefore, as well as establishes the link between high service quality and brand loyalty, this investigation develops a set of applications of information technology to ensure effective total quality management and knowledge management, to provide hospitals. II. LITERATURE REVIEW A. Importance of IT and TQM Information technology (IT) is crucial to the management of information in organizations. It refers to both hardware and software. The way in which information is managed in organizations is very important. The management of information technology should be an integral part of any information management (IM) plan. IT facilitates the efficient and effective creation, acquisition, organization, storage, distribution and use of information [6]. Considerable evidence already indicates that health information technology can improve patient safety in various areas [7], and that information technology can be expected substantially to improve the effectiveness of TQM. TQM can involve the use of teams to reduce inefficiencies in manufacturing processes. Competitive advantage is the outcome of a strategy that generates more value for a firm than is generated by its competition, and sustainability is present if the increased value remains when competitors try to imitate the advantage. The purpose of TQM is to improve product quality, which is defined as the capacity of a product to satisfy customer needs and be free of deficiencies. Brand loyalty results from a focus on the customer, internal/external cooperation, continuous improvement, leadership, the satisfaction of employees, learning and process management. For instance, related studies have demonstrated that TQM positively affects hotel performance in China, when external environmental factors involving greater changes help to foster customer relations, enhance both hotel performance and the likelihood of a hotel s survival [8]

2 An enterprise always attempts to increase efficiency, in which TQM allows enterprises to improve their customer focus, leadership, continuous improvement, process management and employee training, as well as to enable managers to identify areas in which TQM is necessary for investment or improvement. However, IT systems have increasingly grown to serve in the capacity of achieving greater integration. B. Knowledge Management Methods of knowledge management must be selected according to the purpose of the knowledge that is being managed. Knowledge management involves simplifying and improving the processes of sharing, distributing, creating, capturing and interpreting knowledge, and depends on officer-to-technology systems, officer-to-officer systems, officer-to-information systems, and officer-to-application systems [9], which are described as follows. (1) Officer-to-technology systems: tools for end users are made available to knowledge workers; (2) officer-to-officer systems: information about who knows what is made available to all employees and to selected outside partners; (3) officer-to-information systems: knowledge is coded for management purposes; (4) officer-to-application systems: information systems for solving knowledge-related problems are provided to knowledge workers and solution seekers, and an IT system that is specifically designed to solve such knowledge problems is utilized. C. Enhance Service Quality and Brand Loyalty Service quality is critical to the development of strong dominant brands because it enhances the perceived superiority of a brand and helps to differentiate it in a competitive market. In particular, due to improved service quality, increasing a brand's identity for customers arises from its positive image, subsequently enabling consumers to perceive the brand value and increasing consumer satisfaction and brand loyalty [10]. Marketing researchers and practitioners heavily focus on brand loyalty. Previous research suggests that although loyal customers spend more than non-loyal customers do, customers purchase products not only for the utilitarian benefits but also for brand benefits. Some enterprises concentrate on consumer perception of brand value with product differences. A study on small businesses demonstrated that the attitude of brand loyalty can affect consumer behavior, A consumer with the attitude of loyalty can enhance purchasing behavior [11]. Brand loyalty is generally measured by evaluating the positivity of words of mouth of customers, intentions to repurchase, and recommendations by customers in this investigation. in the context of hospitals, professionalism, social responsibility, available information are used in developed linear models to elucidate their effects on brand loyalty, as well as the effects of IT and TQM strategies on service quality. III. HYPOTHESIS AND MODEL This investigation establishes a theoretical causal model, shown in Fig. 1, to analyze the relationships among the use of IT, the use of TQM strategies, knowledge management, service quality and brand loyalty. The following hypotheses are tested. H1: IT significantly affects TQM strategy. H2: IT significantly affects brand loyalty. H3: TQM strategy significantly affects KM. H4: TQM strategy significantly affects brand loyalty. H5: KM significantly affects service quality. H6: KM significantly affects brand loyalty. H7: Service quality significantly affects brand loyalty. TQM Strategy H1 Information Technology H2 Brand Loyalty H7 H4 H6 Knowledge H3 Management Service Quality H5 Figure 1 Theoretical model and hypothesis IV. EMPIRICAL RESEARCH A. Data Collection A questionnaire-based survey and interviews were utilized to collect data. This investigation covers populations in northern, central, southern, and eastern Taiwan. The sample size was 919. The elimination of incomplete responses left 800 for analysis

3 The ratio of valid responses to questionnaires was 87.05%. The reliability of the questionnaire items used in this study was indicated by a Cronbach's alpha of 0.856, which falls in the satisfactory range 0.8 to 0.9. B. Analysis of Impact of IT and TQM Strategies on Service Quality and Brand Loyalty Regression analysis was conducted to elucidate the causal relationships among information technology, TQM strategy, knowledge management (KM), service quality and brand loyalty. Table I shows that IT significantly affected TQM strategy and brand loyalty (F= , , p<0.001) with adjusted R2 values of and 0.165, respectively, indicating that IT explained 64.2% and 16.5% of the variation in these metrics, and significantly affected both TQM strategy and brand loyalty (p<0.001). Accordingly, Hypotheses 1 and 2 were accepted. TABLE I EFFECT OF INFORMATION TECHNOLOGY (IT) *** TQM strategy Brand loyalty *** Table II shows that TQM strategy significantly affected KM and brand loyalty (F= , , p <0.001) with adjusted R2 values of and 0.427, indicating that the TQM strategy explained 59.4%, 42.7% of the variation in these metrics, and TQM strategy significantly affected both KM and brand loyalty (p<0.001). Accordingly, Hypotheses 3 and 4 were accepted. TABLE II EFFECT OF TQM STRATEGY 3 KM *** 4 Brand loyalty *** Table III shows that KM significantly affected service quality and brand loyalty (F= , , p <0.001) with adjusted R2 values of and 0.212, indicating that the KM explained 17.7%, 21.2% of the variation in these metrics, and KM significantly affected both service quality and brand loyalty (p<0.001). Accordingly, Hypotheses 5 and 6 were accepted. TABLE III EFFECT OF KNOWLEDGE MANAGEMENT (KM) 5 Service quality Brand loyalty *** *** Table IV shows that service quality significantly affected brand loyalty (F= , p <0.001) with an adjusted R2 of 0.187; service quality explained 18.7% of the variation of this metric, and significantly affected brand loyalty (p<0.001). Accordingly, Hypothesis 7 was accepted. TABLE IV EFFECT OF SERVICE QUALITY *** Brand loyalty Based on the results herein, information technology and TQM strategies at a hospital contribute positively to knowledge management, service quality and brand loyalty. C. of Service Managerial System Knowledge management is a critical service management. Not only the satisfaction of customers, but also their loyalty to the hospital s brand must be improved. The following four factors, shown in Fig. 2, are considered

4 (1) IT System : TQM strategy and IT involve hardware, digital databases, interactive systems, query systems, FAQ systems, complaints systems, and PCCNs systems. In the future, hospitals will be able to focus on product strategy, purchasing new health care equipment, improving the professional abilities of its physicians and developing health care monitoring plans, which is representative of a community of regional building medical services. (2) Message integration: KM activities help user gain health information convenience, and internal/external information for hospitals. The method is used to improve information available both inside and outside the hospital. The internet and health information management activities should be included in IT System planning to promote access to local public health information. (3) Process-Oriented integration: Managers must consider not only the hardware in a hospital, but also the professional quality, social responsibility and information to improve hospital's performance. (4) Loyalty programs: Loyalty programs that involve credits, privileges, free health information seminars and VIP treatment must be planned and executed with caution. Such programs are more than just material incentives to stimulate repurchase behavior. Many channels, including the media, networking, events and industrial cooperation, can be adopted to improve the operations and management of a hospital. Customer focus Internal/external Officer-to- Technology End-user-tools Professional Quality Positive word of mouth IT Improvement Leadership Employee fulfillment Officer-to-Officer Who-knows-what Officer-to- Information What-they-know Social Responsibility Repurchase intention Learning Process-management Officer-to-Application How-they-think Information Content Recommendation IT System Message Process-oriented Loyalty programs Figure 2 Integrated service management system TQM strategy and IT are becoming increasingly important, increasing the quality of service provided by hospitals. Improved KM method and service quality enhance brand loyalty. V. CONCLUSION Three main conclusions are drawn regarding the managerial activities of hospital managers. First, TQM strategy and information technology not only improve knowledge management, but also increase the convenience of using knowledge. They are particularly important to increase brand loyalty. Second, service quality depends on the effect of knowledge management on the satisfaction of patients. Finally, improving service quality can support the loyalty to a hospital brand, and establishment of the brand can improve words of mouth about the hospital. Managers should efficiently undertake which activities to increase brand equity at very low cost. Information technology may be the foundation of brand loyalty because judgments about brands and choices are made heuristically. ACKNOWLEDGEMENTS The authors would like to thank the participants in the study, the interviewers who collected the data, and Dr. Yang, Chun- Hsiang for his constructive comments. Ted Knoy is appreciated for his editorial assistance. REFERENCES [1] S. H. Lee, B. Sparks. Cultural influences on travel lifestyle: a comparison of Korea Australians and Korean in Korea, Tour manage, Vol. 28, pp , (2007). [2] D. J. Kim, D.L. Ferrin, and H.R. Rao. A Trust-Based Consumer Decision-Making Model in Electronic Commerce: The Role of Trust, Perceived Risk, and Their Antecedents, Decision Support Systems, Vol. 44, pp , (2008). [3] T. S. Kuo, C. H. Lan, S. H. Chen, and S. H. Lin. Enhancement of quality management and knowledge management initiatives by using novel process systems frameworks, The 2nd International Conference on Electrical and Control Engineering, ICECE2011, pp , (2011)

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