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Investigating drivers of bank loyalty: the complex relationship between image, service quality and satisfaction.

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Abstract

[ 276 ] International Journal of Bank Marketing 16/7 [1998] 276–286 © MCB University Press [ISSN 0265-2323] Investigating drivers of bank loyalty: the complex relationship between image, service quality and satisfaction Josée Bloemer Associate Professor of Marketing, Department of Applied Economics, Limburg University Centre, Diepenbeek, Belgium Ko de Ruyter Associate Professor of Marketing, Faculty of Economics and Business Administration, Maastricht University, Maastricht, The Netherlands Pascal Peeters Research Assistant, Faculty of Economics and Business Administration, Maastricht University, Maastricht, The Netherlands This article investigates how image, perceived service quality and satisfaction deter- mine loyalty in a retail bank setting at the global construct level, as well as the level of construct dimensions. At the global level the results of a large-scale empirical study reveal that image is indirectly related to bank loyalty via perceived quality. In turn, service quality is both directly and indirectly related to bank loyalty via satisfaction. The latter has a direct effect on bank loyalty. At the level of the dimensions underlying aforementioned constructs, it becomes clear that reliability (a quality dimension) and position in the market (an image dimension) are rela- tively important drivers of retail bank loyalty. Introduction During the past decade, the financial services sector has undergone drastic changes, result- ing in a market place which is characterised by intense competition, little growth in pri- mary demand and increased deregulation. In the new market place, the occurrence of com- mitted and often inherited relationships between a customer and his or her bank is becoming increasingly scarce (Levesque and McDougall, 1996). Several strategies have been attempted to retain customers. In order to increase customer loyalty, many banks have introduced innovative products and services (Meidan, 1996). However, as such innovations are frequently followe

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