Mediating Variable Analysis Result

Several studies suggested that customer satisfaction is a mediator variable on the relationship of service quality, customer perceived value and customer loyalty (Howat & Assaker, 2013; Kuo et al., 2012; Yu & Ramanathan, 2012). Therefore, the Mediating Variable Analysis was designed to test the effect of the mediating variable (customer satisfaction) on the relationship between the exogenous variables (service quality and customer perceived value) and the endogenous variable (customer loyalty).

A Mediating Variable Analysis starts by testing the direct (and statistically significant) effect of the exogenous variables (eg. service quality and customer perceived Value) on the endogenous variable (customer loyalty). Then, with the mediating variable included in the model,if the direct effect of the exogenous variable on the endogenous variable is reduced and no longer significant, Complete Mediation is present. Alternatively, if the effect is reduced but still significant, Partial Mediation has occurred (Awang, 2012; Meyers et al., 2013). The following sections present the result of this analysis.

5.4.5.1 The Mediating Effect of Customer Satisfaction on the Relationship between

Service Quality and Customer Loyalty

Initially, testing the statistically significant direct effect between the exogenous and endogenous variable found that service quality had a significant direct effect on customer loyalty as the regression weight value was 0.615 which was statistically significant at the 0.001% level (See Table 5.41 or Figure 5.16).

Table 5.41 Standardized Causal Effect of Direct Effect of Service Quality on Customer Loyalty

Outcome Determinant Direct Causal Effects Result

Causal Path Critical Ratio

Customer Loyalty Service Quality .615 12.224*** Significant

Then, the mediator variable customer satisfaction was included the model. The direct effect between service quality and customer loyalty was significantly reduced as the regression weight was reduced from 0.615 to 0.13 and no longer statistically significant. Therefore, customer satisfaction is a complete meditator on the relationship between service quality and customer loyalty (See Table 5.42 or Figure 5.17).

Table 5.42 Standardized Mediating Effect of Customer Satisfaction on the Relationship between Service Quality and Customer Loyalty

Outcome Determinant Direct Causal Effects Result

Causal Path Critical Ratio Customer

Satisfaction Service Quality .778 17.921*** Significant

Customer Loyalty Service Quality .13 1.724 No Significant

Customer Loyalty Customer Satisfaction .619 7.179*** Significant

Figure 5.17 The Mediating Effect of Customer Satisfaction on the Relationship between Service Quality and Customer Loyalty

5.4.5.2 The Mediating Effect of Customer Satisfaction on the Relationship between

Customer Perceived Value and Customer Loyalty

Testing the statistically significant direct effect between the exogenous and endogenous variable, customer perceived value had a significant direct effect on customer loyalty as the regression weight value was 0.529 which was statistically significant at the 0.001% level (See Table 5.43 or Figure 5.18).

Table 5.43 Standardized Causal Effect of Direct Effect of Customer Perceived Value on Customer Loyalty

Outcome Determinant Direct Causal Effects Result

Causal Path Critical Ratio

Figure 5.18 The Direct Effect of Customer Perceived Value on Customer Loyalty

With the mediator variable, customer satisfaction, included the model, the direct effect between customer perceived value and customer loyalty was reduced as the regression weight reduced from 0.529 to 0.107 and was no longer statistically significant. Therefore, customer satisfaction is a complete mediator on the relationship between customer perceived value and customer loyalty (See Table 5.44 or Figure 5.19).

Table 5.44 Standardized Mediating Effect of Customer Satisfaction on the Relationship between Customer Perceived Value and Customer Loyalty

Outcome Determinant Direct Causal Effects Result

Causal Path Critical Ratio Customer

Satisfaction Perceived Value .611 11.318*** Significant

Customer Loyalty Perceived Value .107 .059 No Significant

Customer Loyalty Customer Satisfaction .692 10.623 Significant

Figure 5.19 The Mediating Effect of Customer Satisfaction on the Relationship between Customer Perceived Value and Customer Loyalty

Summary

This chapter presented the result of the statistical analysis in order to satisfy all three research objectives. First, the EFA and CFA were applied to identify the dimensions of service quality and the order of importance of the service quality dimensions, as perceived by resort hotel customers in Thailand to satisfy the Research Objective One and Two. The result of the EFA (using PCA and VARIMAX rotation) and CFA had reduced the 48 measurable items with 12 dimensions originally proposed to 45 measurable items with 11 dimensions namely: attitude, behaviour, professionalism, décor & Ambience, room quality, design, location & convenience, facility & activity, valence, waiting time and sociability. In addition, the relationships between service quality, perceived value, customer satisfaction, corporate image and customer loyalty were tested using SEM to satisfy Research Objective Three. From the SEM analysis all of hypotheses were confirmed except H: 8 (SQ CL) and H: 13 (CPV CL), nevertheless the Mediation Variable Analysis found that customer satisfaction was a complete mediator on the

relationship between service quality and customer loyalty and of customer perceived value and customer loyalty. The summary of the hypotheses test was presented in Table 5.45.

V CL

Table 5.45 Summary of Hypotheses Testing

Hypotheses Result

H1: There is a significant positive relationship between the sub-dimensions of interaction quality (H1a, H1b, H1c) and the interaction quality primary dimension

Supported, interaction quality is comprised of three sub-dimension (attitude, behaviour, professionalism) H2: There is a significant positive relationship between the

sub-dimensions of physical environment quality (H2a, H2b, H2c, H2d, H2e) and the physical environment quality primary dimension.

Supported, physical environment quality is comprised of five sub-dimension (décor & ambience, room quality, design, location & convenience, facility & activity)

H3: There is a significant positive relationship between the sub-dimensions of outcome quality (H3a, H3b, H3c) and the outcome quality primary dimension.

Supported, outcome quality is comprised of three sub-dimension (valence, waiting time, sociability) H4: There is a significant positive relationship between the

interaction quality primary dimension and customers’ overall perceptions of service quality.

Supported, interaction quality has a significant impact on overall service quality, second-order model. H5: There is a significant positive relationship between the

physical environment quality primary dimension and customers’ overall perceptions of service quality.

Supported, physical environment quality has a significant impact on overall service quality perceptions, second-order model. H6: There is a significant positive relationship between the

outcome quality primary dimension and customers’ overall perceptions of service quality.

Supported, outcome quality has a significant impact on overall service quality perceptions, second-order model.

H:7a Customers will vary in their perceptions of the

importance of each of the sub-dimensions. Supportedsignificant and the most important sub-dimension of , behaviour, room quality and valence are interaction quality, physical environment quality and outcome quality respectively.

H:7b Customers will vary in their perceptions of the

importance of each of the primary dimensions. Supportedthe primary dimensions follows by physical , outcome quality is the most importance of environment quality and interaction quality.

H:8 Higher perceptions of service quality positively affect

customer loyalty. Not Supportedsignificant and direct impact on customer loyalty, but , service quality does not have a it has indirect effect through customer satisfaction. H:9 Higher perceptions of service quality positively affect

customer perceived value. Supportedimpact on customer perceived value. , service quality has a significant and direct H:10 Higher perceptions of service quality positively affect

customer satisfaction. Supportedimpact on customer satisfaction. , service quality has a significant and direct H:11 Higher perceptions of service quality positively affect

corporate image. Supportedimpact on corporate image. , service quality has a significant and direct

H:12 Customer satisfaction mediates the relationship

between service quality and customer loyalty Supported, relationship between service quality and customer customer satisfaction fully mediate the loyalty.

H13: Higher customer perceived value positively affects

customer satisfaction. Supportedand direct impact on customer satisfaction. , customer perceived value has a significant H14: Higher customer perceived value positively affects

customer loyalty. Not Supported, have a significant and direct impact on customer customer perceived value does not loyalty, but it has indirect impact on customer loyalty through customer satisfaction.

H15: Higher customer perceived value positively affects

corporate image. Supportedand direct impact on corporate image. , customer perceived value has a significant H16: Customer satisfaction mediates the relationship

between customer perceived value and customer loyalty. Supported, relationship between customer perceived value and customer satisfaction fully mediate the customer loyalty.

H:17 A higher corporate image positively affects customer

satisfaction Supporteddirect impact on customer satisfaction. , corporate image has a significant and H:18 A higher corporate image positively affects customer

loyalty. Supporteddirect impact on customer loyalty. , corporate image has a significant and

H:19 Higher customer satisfaction positively affects