How Quality of Services Offered by Community Pharmacy Retain their Customers? The Mediating Role of Sales Promotional Tools. A Cross-Sectional Study of the Pharmaceutical Sector of Thailand

Abstract

The aim of this study was to estimate how community pharmacy customers are retained by considering the quality of services in Thailand and how the sales promotional tools mediate this relationship. For this purpose, the data was collected through the questionnaire designed by the self-administering approach. Community pharmacy chain stores were selected on a random sampling basis from larger cities of Thailand and 720 responses were collected from the customer visiting the sampled community pharmacy store. The dependent variable of this study was pharmacy customer’s retention while the independent variable was quality of service measured by reliability, responsiveness, assurance, empathy and tangibility. To estimate the mediation interaction between the dependent and independent variables, sales promotional tools like price cuts, free samples and buy-one-get-one-free were used. Structural equation modelling technique was used to analyze this study using SmartPLS software. The estimation of this research investigation involved respondent’s demography, estimations of outer loadings, estimation of the outer model, construct reliability and validity analysis, discriminant validity analysis, estimation of SEM model and estimation of the inner model. The direct effects of the study show that reliability and tangibility as the dimensions of quality of service strongly enhances customer retention in the community pharmacy chains of Thailand. On the other hand, responsiveness is enhancing customer retention with insignificant value. The direct effect further indicates that service quality dimensions like reliability, responsiveness and tangibility are depicting positive and highly significant relationship with sales promotional tools. The specific indirect effects show that sales promotion coupled with reliability, responsiveness and tangibility strongly mediate customer retention positively. It is recommended to the policymakers of community pharmaceutical sector of Thailand that customer retention in this sector can be enhanced by reliability and tangibility most importantly. In addition, customer retention can be more enhanced by considering the promotional techniques like price discounts and free samples. Future research in this domain may be considered for other sectors by carefully analyzing the literature.