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An Analysis of Some Moderating Variables on the Value, Brand Trust and Brand
Loyalty Chain

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 J. Basic. Appl. Sci. Res., 3(9)687-693, 2013 ISSN 2090-4304
Journal of Basic and Applied
© 2013, TextRoad Publication
Scientific Research
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The Influence of Brand Trust and Customer Satisfaction on Customer

Loyalty by SEM
Leila Andervazh, Reihaneh Gaskari, Maedeh Shyani Tarakmeh, Shahrbanou Vafazadeh

Department of Business Management, Persian Gulf International Educational Branch, Islamic Azad University,
Khuzestan, Iran

ABSTRACT

The purpose of this research is to investigate the relationship of customer satisfaction and brand trust on
customer loyalty. A total of 320 questionnaires were distributed to Iranian Automobile consumers. The survey
was distributed at Mahshahr and Abadan cities in Iran). 25-items scale was taken into account for brand trust(8-
items), customer satisfaction(8-items)and customer loyalty(9-items).construct with a five likert scale ranging
from1(strongly disagree)to 5(strongly agree).
The proposed relationships have been tested using structural equation Modeling (SEM) with lisrel. The research
results showed that there is positive and significant relationship between customer satisfaction and brand trust
on customer loyalty. The objective of the analysis to find out whether is significant relationship between the
variables. Results from the survey showed that the relationship between brand trust and customer loyalty is
positive and also there is a positive relationship between customer satisfaction and customer loyalty. This study
aims to test the relationship which has never been explored before.
KEYWORDS: Trust, Loyalty, Consumer satisfaction , Structural equation modeling, Marketing management

INTRODUCTION

Marketers have long been interested in the concept of customer loyalty, because loyalty is a measure of the
attachment that a customer has to a brand [1,2].Customer loyalty brings the firm many benefits, including repeat
purchase and recommendations of the brand to friends and relatives.
Trust is conceptualized in these works as a belief, in keeping with the tenets of social psychology research,
as well as willingness or behavioral intention [3].The theoretical stance on trust, specifically, is ambiguous.
Trust draws partly on the processing of past information. However, trust is chiefly a construct focused on the
future, providing a guarantee that partner is motivated not to alter the terms of the exchange. Without trust, there
can be no stable or durable relationship. The consequences of consumer trust in a brand are materialized by
brand commitment [4]. The objective of this study is investigating brand trust and customer satisfaction on
customer loyalty. In the next section, we review the relevant literature and discuss the conceptual framework.
Then we develop several hypotheses to be tested and describe the empirical approach and data collection. The
last section outlines the implications of our findings and discuss for future research.

LITERATURE REVIEW

There are many definitions of both satisfaction and loyalty in the literature; a perusal of these reveals,
however, that they are process definitions. That is, they define what consumers do to become satisfied and/or
loyal. For example, satisfaction has been defined as an "evaluation of the perceived discrepancy between prior
expectations... and the actual performance of the product" [5,6]. Generally, loyalty has been and continues to be
defined in some circles as repeat purchasing frequency or relative volume of same-brand purchasing[5].. Of note
is a definition crafted by some researchers, who defined loyal customers as those who rebought a brand,
considered only that brand, and did no brand-related information seeking[7]. Brand loyalty is a focal point for
many researchers and practitioners[8].All these definitions suffer from the problem that they record what the
consumer does. None taps into the psychological meaning of satisfaction or loyalty .In Oliver (1997),
satisfaction is defined as pleasurable fulfillment. That is, the consumer senses that consumption Fulfills some
need, desire, goal, or so forth and that this fulfillment is pleasurable. Thus. Satisfaction is the consumer's sense
that consumption provides outcomes against a standard of pleasure versus displeasure. For satisfaction affect
loyalty, frequent or cumulative satisfaction is required so that individual satisfaction episodes become
aggregated or blended. As will be argued here, however, more than this is needed for determined loyalty to
occur. The consumer may require movement to a different conceptual plane—in all likelihood, one that
transcends satisfaction. In accord with this distinction, loyalty has been defined quite differently. In a
modification of Oliver's (1997) definition, to include the act of consuming, loyalty is described here as a deeply

Corresponding Author: Leila Andervazh, Department of Business Management, Persian Gulf International Educational
Center, Islamic Azad University, Khoramshahr, Iran. E-mail:[email protected]

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 Andervazh et al.,2013

held commitment to rebuy or repatronizc a preferred product/service consistently in the future, thereby causing
repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having
the potential to cause switching behavior[9]. The literature shows positive effects of customer satisfaction on
such desirable outcomes as repeat purchase, retention loyalty, retailer sales performance [10, 11, 12,13, 14].
Therefore we propose this hypothesis:
H1: customer satisfaction will be positively related to customer loyalty

Trust is defined as the expectation of the parties in a transaction and the risk associated with assuming and
acting on such expectations [15].Brand trust is basically the emotional commitment of the customers with brand.
Marketers are now days very much interested in trust because mostly it is observed that higher trust ratings are
positively related to loyalty [16, 17]. Studies elaborated that trust plays an important role in customer repeated
purchase decision and long term customer satisfaction [18,16]. Trust in brand management is regarded as one of
the key ingredients required to create loyal customers [19,20 ,21], if customers trust a brand they will
recommend it ,use more of its products and services, or look to it first for the things they need illustrate the
difficulty in gaining trust in business relationships, [22,23,24] and the ease with which it can be lost again[25].
An individual has trust in the occurrence of an event if he or she expects its occurrence. Trust is the willingness
to rely on another party in the face of risks .This willingness stems from an understanding of the other party
based on past experience. It also involves an expectation that the other party will cause a positive outcome,
despite the possibility that the action many cause a negative outcome[26].Survey such as conducted by Theng
and Lee(1999)have shown that there is positive relationship between brand trust and customer loyalty. Previous
studies have reported that underlying loyalty is always trust, a willingness to act without calculating immediate
costs and benefits. Hence loyalty to a brand involves trusting it [27]. In summation, the previous literature
implies the following hypothesis:

H2: brand trust will be positively related to customer loyalty

The research model depicted in Figure 1.

Customer

Satisfaction Brand

Loyalty
Brand
Figure1: Research Model
Trust

METHODOLOGY

-Measurement Instrument
In this section, the researchers focus on factors affecting of customer loyalty.
Specifically, the researcher's focus brand trust and customer satisfaction as factors influencing on customer
loyalty.
To measure the effects of brand trust and customer satisfaction on customer loyalty, in the research was
used the 25-items questionnaire developed by Oliver, 1997;Chaudhuri and Holbrook, 2001; Pritchard et al.,
1999; Sirdeshmukh et al., 2002,Kiyani et al,2012 That shown in Appendix(1).25-items scale was taken into
account for brand trust(8-items),customer satisfaction(8-items)and customer loyalty(9-items).construct with a
five likert scale ranging from1(strongly disagree)to 5(strongly agree).for internal reliability ,cronbach's alpha
coefficients were calculated for all items of each construct. Results indicated that all the scales were considered
to be reliable (cronbach's alphas).For determining reliability and validity of the questionnaire in this research
used cronbach's alpha .cronbach's alpha for constructs are: brand trust0.973, customer satisfaction0.946,
customer loyalty0.962 so the questionnaire reliability is acceptable. These results depicted in table1.

Table 1.cronbach's alpha measures

Variables Cronbach's Alpha
Brand trust 0.973
Customer satisfaction 0.946
Customer loyalty 0.962

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 J. Basic. Appl. Sci. Res., 3(9)687-693, 2013

RESULTS

Each constructions of the research are measured using the correlation between research items are depicted
In table 2.The mean of research items above the central limit value, is the measured scale. Correlations between
items related to brand trust and customer satisfaction on customer loyalty items are positive and meaningful.
Pearson correlation values indicate that each of the indices have normal distribution.

Table2.correlation of latent variables

variables Brand trust Customer satisfaction Customer loyalty
Brand trust 1.00
Customer satisfaction 0.982 1.00
Customer loyalty 0.970 0.970 1.00

The proposed hypotheses were tested using structural equation modeling (SEM) via Lisrel .As said the
relationship between brand trust, customer satisfaction and customer loyalty. To determine whether the
hypotheses were supported each structural path coefficient was examined displayed reasonably good fit to the
data. In table 5 we depicted these results.
The findings revealed that brand trust and customer satisfaction have positive relationships with customer
loyalty. These results depicted in table5.In this table β=0.87 and T-value=6.46 these measures shows that brand
trust have significant and positive relationship with customer loyalty. According to R2=0.069 thus brand trust
and customer satisfaction have been able to predict 69 percent of customer loyalty. As it can be seen in table3,all
factor loadings are above .50 since the overall fit of the model is acceptable. The reliability of the construct can
be assessed based on Cranach's alpha, composite reliability and average variance extracted (AVE).Discriminant
validity was determined by the variance extracted value. Also discriminant validity of constructs is larger than
0.6 that indicates the reliability of the items α- Choronbach and composite validity supports the validity of items
for each constructs. These results are depicted in table 3. The results of Fit-Index depicted in table3.

Table3: Reliability and overall measurement model

measurement items Factor

Item loading t-value R² COMPOSITE α AVE
RELIABILITY AVERAGE
VARIANCE
EXTRACTED
Brand trust Q1 0.64 9.60 0.41 0.973 0.875 0.749
Q2 0.66 10.00 0.43
Q3 0.68 10.54 0.46
Q4 0.78 12.56 0.61
Q5 0.81 13.27 0.65
Q6 0.79 12.52 0.63
Q7 0.71 11.5 0.51
Q8 0.54 7.81 0.29
Q9 0.59 7.44 0.35 0.946 0.835 0.711
Customer Q10 0.52 7.44 0.27
Q11 0.57 8.29 0.32
Satisfaction Q12 0.74 11.60 0.54
Q13 0.67 10.16 0.45
Q14 0.61 8.96 0.37
Q15 0.65 9.84 0.43
Q16 0.57 8.31 0.32
0.59 8.56 0.35
Q17 0.57 10.24 0.32 0.962 0.849 0.737
Customer Loyalty Q18 0.67 7.19 0.45
Q19 0.66 6.66 0.43
Q20 0.59 7.15 0.35
Q21 0.65 8.86 0.43
Q22 0.75 7.56 0.56
Q23 0.71 7.96 0.51
Q24 0.76 6.09 0.57
Q25 0.52 0.27

The proposed hypotheses were tested using structural equation modeling (SEM) via Lisrel .As said the
relationship between brand trust, customer satisfaction and customer loyalty. To determine whether the
hypotheses were supported each structural path coefficient was examined displayed reasonably good fit to the
data. In table 4we depicted these results.

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Table4.Fit-Indices Model
Fit indices Results
IFI 0.96
NFI 0.92
CFI 0.96
GFI 0.9
AGFI 0.91
RMSEA 0.065
RMR 0.021

The analysis of SEM on the proposal model has generated results which are illustrated in figure2.

Figure2.structural model

The model tested subsumed the specified relationships proposed in the hypotheses. The overall Fit indices for
the structural model revealed a chi-square of 858.57 with 266 degrees of freedom. For this model
RMSEA=0.065 and RMR=.021 both within the acceptable level. The goodness-of-Fit index (GFI)=.9,NFI=.92
all accept for GFI which are acceptable.

Conclusion

The main objective of the research was to investigate the impact of factors of customer loyalty on
Automobile user's behavior in Iran.

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 J. Basic. Appl. Sci. Res., 3(9)687-693, 2013

The findings provide evidence that a relationship exists between these variables. The results of this study
have important implications for both marketers and managers , since evidence shows brand trust and customer
loyalty affects on customer loyalty .
This research has provided insights into Automobile users behavior in Iran.
Customer loyalty is important for an organization to ensure that its product is kept in the minds of consumers
and prevent them from switching to other brands. From the analysis of this study, it was shown that there are two
factors of customer loyalty that were appropriate in Iran which are, brand trust and customer loyalty.
The findings revealed that brand trust and customer satisfaction have positive relationships with customer
loyalty. These results are depicted in table5.

Table 5.path estimate for proposed model

path path coefficients(β) t-value R2
Customer satisfaction 0.81
Customer loyalty 6.40
Brand trust 0.87 6.46 0.069
Brand loyalty

Limitation and future research

The limitation of this study is location, as we analyzed a very particular area and it would be important to
carry out research in other places to confirm the results obtained in this study. It is highly recommended for
future research to expand the span of attributes that affects on customer loyalty as well as to study more
products and services in order to get an in depth and more clear picture about real relationship between the
different product/service attributes customer loyalty.

REFERENCES

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[14].Finn.A,(2011)," Investigating the non-linear effects of e-service quality dimensions on customer

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APPENDIX 1

The study measures (all items involve five-item Likert-type scale items) Brand trust (Lasser et al., 1995;
Chaudhuri and Holbrook, 2001)

1. I trust the manufacturer of the automobile I am evaluating.

2. I rely on the manufacturer of the automobile I am evaluating.
3. The manufacturer of automobile I am evaluating is a dependable.
4. The manufacturer of automobile I am evaluating is honest.
5. The manufacturer of automobile I am evaluating is a safe company with which to conduct business.
6. I consider the manufacturer of the automobile I am evaluating to be generally trustworthy.
7. I believe the manufacturer of the automobile I am evaluating does not take advantage of its customers.
8. I consider the company and people who stand behind the automobile I am evaluating to be trustworthy.
Satisfaction (Oliver, 1997; Sirdeshmukh et al., 2002)
1. The automobile has exceeded my highest expectations.
2. The automobile is among the best I could have bought or leased.
3. The automobile is exactly what I needed.
4. My choice to buy or lease this piece of automobile was a wise one.
5. I am satisfied with my decision to buy or lease the piece of automobile.
6. I am sure that it was the right thing to do to buy or lease the automobile.
7. Using this automobile has been a good experience.
8. I. have been delighted with the automobile I am evaluating.

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Customer Loyalty (Chaudhuri and Holbrook, 2001; Oliver, 1997; Pritchard et al., 1999; Sirdeshmukh et
al., 2002)
1. I use automobile from the company I am evaluating because it is the best choice for me.
2. I consider myself to be a loyal patron of the manufacturer of automobile I am evaluating.
3. I am committed to the manufacturer of automobile I am evaluating.
4. In the future, I would be willing to pay a higher price for automobile from the manufacturer I am evaluating
over competitive offerings.
5. I consider the manufacturer I am evaluating my first choice when buying/leasing automobile.
6. If I had it to do all over again, I’d buy or lease automobile from a different company.
7. I intend to keep buying the automobile I am evaluating.
8. I would not switch to a competitor, even if I had a problem with the products/services of the automobile I am
evaluating.
9. I intend to purchase automobile from the manufacturer of the automobile I am evaluating in the future

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