Service Quality, Customer Satisfaction, Perceived Value and Brand Loyalty: A Critical Review of the Literature

Abstract

In increasing competitive markets, retaining actual customers and gaining new ones is the main aim of businesses. Businesses choose different ways for achieving customers and profits. One strategy businesses should adopt is building loyalty. Brand loyalty is seen as a successful mean of achieving market share and competitive advantages. While a lot of research exists to physically tangible products in their branding, little study has been given to branding in the services area. Given the significance of services to the global economy, this absence is worthy of further investigation. The main objective of this paper is to examine brand loyalty and some of its determinants in the service area. It uses secondary data from the existing literature to describe the importance of service quality, perceived value and customer satisfaction to brand loyalty. The findings demonstrate that customer satisfaction, perceived value and service quality are important constructs that determine brand loyalty. But research shows different scale of contribution of the single constructs to brand loyalty. These constructs must be studied interlinked with each other and with brand loyalty. Most of the research is done in developed countries. There is a need for further research according these constructs in developing countries, in different service settings and in different developing cultures.