Examine the Effects of Customer Satisfaction on Customer Loyalty: An Empirical Study in the Healthcare Insurance Industry in Hong Kong

Abstract

Aims: Customer loyalty, which is affected by satisfaction, brand preference and switching costs, is 17 an important concept in service industries as it is known to increases market share and revenue 18 while bringing down the cost of acquiring and retaining customers. Healthcare insurance is one 19 such service industry and it is currently the focus of attention in Hong Kong due to the introduction of 20 an insurance-based healthcare plan for its citizens. In the past decade, a number of empirical 21 studies related to healthcare have been conducted in Western countries. However, in order to 22 acquire a better understanding of customer loyalty in the context of healthcare insurance in Hong 23 Kong it was considered essential to conduct an in-depth study in that special administrative region of 24 China. The objectives of the research were to determine the following: the direct effects of customer 25 satisfaction on customer loyalty; the direct effects of customer satisfaction on brand preference; the 26 direct effects of brand preference on customer loyalty; the direct effects of customer satisfaction on 27 switching costs; the direct effects of switching costs on customer loyalty; the direct effects of 28 switching costs on brand preference; the mediating effects of brand preference on the causal 29 relationship between customer satisfaction and customer loyalty; the mediating effects of switching 30 costs on the causal relationship between customer satisfaction and customer loyalty; and the 31 mediating effects of brand preference on the causal relationship between switching costs and 32 customer loyalty. 33 Study Design: This study employed positivism paradigm, cross-sectional and quantitative study. 34 Place and Duration of Study: The study was taken in Hong Kong between June 2011 and June 35 2012