The Effects of Service Quality and Relationship Benefits on Relationship Commitment and Customer Loyalty in Membership Fitness Club

Abstract

Relationship marketing is not a new phenomenon, but is now one of the most important topics in marketing academia and the business community. For marketing practitioners, greater benefits may arise by perceiving relationship marketing as an underlying philosophy of caring for customers. In the Academy, many scholars have suggested a new marketing paradigm based on relationship marketing. The rationale behind relationship marketing is to create, enhance, and maintain relationships with customers. Increasing and securing loyalty is central to many corporate strategies because obtaining new customer is costly and customer retention is connected to long-term profitability. Commitment is recognized as the key component in the relationship marketing paradigm and social exchange theory. The health care industry is one of the world's largest and fastest-growing industries. The modern health care sector is divided into many sub-sectors, and depends on interdisciplinary teams of trained professionals and paraprofessionals to meet health needs of individuals and populations. The objective of this paper is to establish a theoretical basis for evaluating a strategic increase in customers' perceptions of service quality (technical quality and functional quality) and relationship benefits—specifically in terms of an increase in relationship commitment and customer loyalty in membership fitness club and to test this theoretical basis empirically. The present study focuses on relationship commitment. Also this study identifies antecedents and consequences of relationship commitment. In so doing, the aim is to underline the effect that service quality and relationship benefits have on relationship commitment and customer loyalty. The present study empirically tests the formulated model—to establish the effects of service quality and relationship benefits on relationship commitment and customer loyalty in membership fitness service setting. Research model was tested sub-sector of health care industry. The basic objective of the empirical part is to test the model among users of the services of gym, health and fitness. More specifically we chose the users of two membership fitness clubs, located in Daegu (Korea). Research fitness clubs operate fitness and recreational sports facilities featuring exercise and other active physical fitness conditioning or recreational sports activities, such as swimming, racquet sports and golf. Firms are also involved in facilities management and fitness instruction. The selection of the sample was random, a random route in each fitness club being established for each of the interviewers. The average duration of the interviews was ten minutes. Finally, 254 usable responses were gained. To test the hypotheses in this study, we estimated the fit and parameters of the models through covariance structural analysis. The parameters of the overall model used maximum likelihood estimation, and the fit of the model resulted as χ2 (94 d.f)= 329.52(p=.000), GFI=.94, AGFI=.93, RMR=.022, NFI=.92, CFI=.94. Compared to general evaluation standards, this failed to meet the χ2 value. But it's enough to explain the relations among variables since GFI, NFI, CFI turned out to be .95, .92, and .94, respectively. All hypotheses are supported by the data. They suggest that technical quality, functional quality, and relationship benefits significantly influence relationship commitment toward using fitness club. Relationship benefits directly influence relationship commitment and customer loyalty, and indirectly influence customer loyalty through mediator of relationship commitment. Also, the empirical results confirmed that relationship commitment plays a strong, central role in determining customer loyalty. Sound expertise performance (technical quality) is a necessary but not sufficient condition to retain customer. Because of the general lack of knowledge among customers, the service provider needs to recognize that all service provider-customer interaction takes on added significance and value to customer. For such services the traditional marketing functions can only operate at the strategic level—the people operating at the boundary between the firm and the external environment are the ones who must re-mix the service in interaction with customer. Their technical capabilities and interpersonal skills are the source of service differentiation, satisfaction and ultimately, customer retention. Next, regular and effective communications with customer is essential in order to reduce perceived risk and uncertainty, shape expectations, educate the customer, resolve any misunderstandings and explain the options in a jargon-free way. Given the pivotal role of functional quality in impacting on relationship commitment, intensive training in interpersonal and communications skills would seem warranted. Finally, it needs to be appreciated that effective interpersonal communication has the potential to, over time, result in strong social and emotional bonds between adviser and client, and thereby increase the switching barriers to exiting the relationship. A reciprocal influence may exist between relationship strength and relationship benefits. A long-term relationship results in certain relationship benefits that strengthen the ties and results in a continued relationship. There are some limitations of this research that should be considered when interpreting its findings. Our model does not take into account personal characteristics (e.g., attractiveness of alternatives, length of patronage, skill level and experience) that also may have an impact. Thus, expanding the scope of antecedents is an important next step toward our understanding of the factors that enhance membership service area. Future research could also address the moderating role of the length of the relationship and how it influences the connection between relational benefits, service quality, and loyalty. Other moderator variables can also affect such relationships, such as income, age, gender, and customer experience.