Customer satisfaction as a mediator between causes (trust and communication) and the outcome (customer loyalty) in business-to-business relationship marketing in the South African cement manufacturing industry

Abstract

Customer loyalty has become more relevant in the cement industry since the unbundling of the cartel system in 1994, the entrance of new competitors into the market and the effect of globalization. This study’s literature review reveals that there is limited published research in the Cement Industry, particularly in South Africa, which deals with customer loyalty management. The major objective of the study was to test satisfaction as a mediator between causes and outcome, the causes being trust and communication and the outcome being customer loyalty. The methodological approach followed was a survey and quantitative in nature. Data were collected from 362 major business-to-business cement customers throughout South Africa’s nine provinces using the face-to-face interview technique with self-administered questionnaires. The data collected in the empirical study were analysed using the structural equations modelling (SEM). The results show that in order to maintain customer loyalty, a cement supplier has to focus on strategies to build relationships on the basis of creating customer satisfaction and/or exceeding customer needs and wants. They also need to invest in enhancing customer trust and communication. Another important finding is that trust and communication have no direct effect on loyalty. Customer satisfaction is therefore the most important mediator as it leads to customer loyalty. Customer loyalty is crucial for business success in terms of repeat purchase, referrals (word-of-mouth marketing), retention and long-term profitability. There exists evidence from literature of an outcry for a need for future studies to examine causes and outcomes of satisfaction to specific industries. This study contributes to theory and practice by closing that gap, by providing a framework of causes and outcomes of satisfaction specifically aimed at the cement industry. Another contribution of this study is its examination of the sequential logic of causes and outcomes of satisfaction in business-to-business relationships in the cement industry. This study hopes to make a practical contribution in helping marketing managers of cement companies to come up with marketing strategies of ensuring customer loyalty