PREDICTING THE EFFECT OF SERVITIZATION ON CUSTOMER LOYALTY: EMPIRICAL EVIDENCE FROM EMERGING ECONOMY CONTEXT

Abstract

The tangible and imitable nature of products has led to the commoditization of most manufactured goods. Manufacturing companies have recognized servitization as a strategic solution to avoid falling into the trap of product commoditization. This study examines the relationship between servitization and customer loyalty in indigenous cable manufacturing firms in Anambra State. Four hypotheses and research questions, formulated in line with the research objective, guide the study. A survey research design was adopted, and the primary instrument for data collection was a structured questionnaire. Data were collected from 270 customers across three cable manufacturing firms in Southeast Nigeria. The collected data were sorted, coded, and analyzed using the Statistical Package for Social Sciences (SPSS) version 25, and the study hypotheses were tested using multiple regression analysis. The study found a significant positive effect for advanced services, while basic services had a significant negative effect. However, the effect of intermediate services was not significant. It is concluded that servitization can increase customer loyalty, although its contribution is minimal. Furthermore, the study demonstrates that advanced services have the highest positive impact on customer loyalty. Based on the findings, the study recommends, among other things, that firms seeking to servitize should provide advanced services to customers to increase loyalty. Additionally, they should offer product support and consulting services, as well as provide technical training and seminars to help customers achieve their goals while using their products.