Determinants of Customer Satisfaction: The Moderating Role of Switching Cost towards Customer Loyalty in B2B Packaged Food Retail Setting

Abstract

Loyal customers are committed to repeat patronage, making business referrals, and providing publicity for the business. However, rising customer expectations and price consciousness, advancement of technology, lack of product differentiation, and consumer choices have posted more challenges for customer retention. This paper examines the determinants of customer satisfaction in a business-to-business (B2B) packaged food retail setting, with a particular focus on the moderating role of switching cost towards customer loyalty. Using a survey-based approach, data was collected from 382 respondents who were customers of B2B packaged food retailers in Pakistan. The results of the study indicate that product quality, service quality, and price are significant determinants of customer satisfaction. Furthermore, the study finds that switching cost moderates the relationship between customer satisfaction and customer loyalty. In addition, the results show that switching cost has a significant positive effect on customer loyalty, indicating that customers are more likely to remain loyal to a retailer if the switching cost is higher. The study implies that retailers should focus on providing high-quality products and services at fair prices to enhance customer satisfaction and which leads to customer loyalty. Moreover, retailers should consider implementing switching costs strategies to enhance customer loyalty in the B2B packaged food retail setting. The findings of this study have important implications for the development of effective customer satisfaction and loyalty strategies in the B2B packaged food retail industry.