Why do satisfied customers switch? Focus on the restaurant patron variety-seeking orientation and purchase decision involvement

International Journal of Hospitality Management 31 (2012) 875–884

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International Journal of Hospitality Management journal homepage: www.elsevier.com/locate/ijhosman

Why do satisfied customers switch? Focus on the restaurant patron variety-seeking orientation and purchase decision involvement Hyo Sun Jung 1 , Hye Hyun Yoon ∗ Department of Culinary Service Management, College of Hotel & Tourism Management, Kyung Hee University, 1 Hoegi-dong, Dongdaemun-gu, Seoul 130-701, Republic of Korea

a r t i c l e

i n f o

Keywords: Customer satisfaction Loyalty Switching intent Variety-seeking orientation Purchase decision involvement Family restaurant

a b s t r a c t Company efforts to make customers switch from competitive brands to their own or induce them to repurchase their own brands are very important in their marketing activities and in this regard studies of customer variety-seeking orientation and level of involvement in decision making play a crucial role in explaining customers’ product selection activities. The purpose of this study intends to examine interrelationships among customer satisfaction, loyalty, and switching intent in family restaurants and verify the moderating effect of customer variety-seeking orientation and purchase decision involvement. A total of 305 patrons in Korea participated. The results showed a positive relationship between customer satisfaction and loyalty. Participants expressing a high level of satisfaction were more likely to switch restaurants. Whether customers feel loyalty determines their switching intent. There were moderating effects related to customer variety-seeking orientation in the causal relationships between customer loyalty and switching intent. Limitations and future research directions are also discussed. © 2011 Elsevier Ltd. All rights reserved.

1. Introduction Under the current circumstances, where there are more customers loyal to multiple brands than those loyal to a single brand, customer satisfaction alone does not guarantee loyalty and switching intent is unpredictable. The reason is that customer satisfaction, loyalty, and switching intent are closely related, but their relationship is not linear (Jones and Sasser, 1995; Finn, 2005; Homburg et al., 2005) and enhanced satisfaction does not necessarily lead to increased loyalty and reduced switching intent. Satisfied customers may still engage in switching behaviors. This happens because customers feel different levels of satisfaction due to the schema they form from their knowledge, experiences, and disposition (Kahneman and Snell, 1992). This study was motivated by a question – why satisfied customers make switching behaviors. Of course, customer satisfaction is the most important antecedent factor in loyalty and switching intent, but that there are still those who switch despite their increased satisfaction. Literature suggests that diverse variables play moderating roles in the relationship between customer satisfaction, loyalty, and switching intent. Studies considering these variables should be conducted. If such studies concluded that satisfied customers switch and if the reasons are customers’ personal traits, such as pursuit of diver-

∗ Corresponding author. Tel.: +82 2 961 9403; fax: +82 2 964 2537. E-mail addresses: [email protected] (H.S. Jung), [email protected] (H.H. Yoon). 1 Tel.: +82 2 961 2321; fax: +82 2 964 2537. 0278-4319/$ – see front matter © 2011 Elsevier Ltd. All rights reserved. doi:10.1016/j.ijhm.2011.10.006

sity or the level of involvement in decision making, they would present good suggestions for corporate-level marketing to maintain existing customers. Customers who pursue diversity and are deeply involved in decision making in their process of searching for services are less likely to have their former purchase behaviors lead to repurchase and their loyalty is negatively affected by such personal traits (Kahn et al., 1986). In customer purchase behaviors, their pursuit of diversity or level of involvement in purchase decision making are related to their will to make choices different from past, consistent behaviors and are considered to have important meanings in the causation between their satisfaction, loyalty, and switching intent. As competition in the restaurant industry is becoming very fierce and as maintenance of existing customers is a crucial basis for obtaining continuous competitive advantage over other businesses, the significance of defensive marketing strategies as opposed to aggressive marketing strategies for attracting new customers is growing (Kim, 2009). Reichheld and Sasser (1990) noted that a 5% reduction in customer defection resulted in a 25% increase in earning rates, and Griddin (1995) said that maintaining existing customers led to a reduction of costs more than five times as much as attracting new customers, suggesting that preventing switching behaviors is important. So far, studies have consistently adhered to the position that satisfied customers had high loyalty and intent to revisit; the suggestion has been that companies should concentrate on creating customers that have a high degree of satisfaction and loyalty (Bolton and Lemon, 1999; Ganesh et al., 2000). Other studies have

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the company should maintain customers’ loyalty and keep a longterm relationship with them in order to enhance their satisfaction. Gustafsson et al. (2005) and Lin and Wang (2006) assumed a positive linear relationship between customer satisfaction and loyalty. Many other studies (Oliver, 1997; Reynolds and Beatty, 1999; Bolton et al., 2000; Lee, 2003; Sui and Baloglu, 2003; Chiou and Shen, 2006) noted that customer satisfaction was an antecedent variable to induce customer loyalty. Based on the results of these previous studies, this study assumed that customer satisfaction would positively influence customer loyalty and established the following hypothesis: Hypothesis 1. alty.

Fig. 1. A proposed model of customer satisfaction, loyalty, and switching intent.

focused on analyzing the effect of customer variety-seeking orientation and the degree of involvement in their decision making on brand selection, the last stage of purchase decision making (Menon and Kahn, 1995; Mitra, 1995; Mitra and Lyunch, 1995). None have examined the moderating effect of customer varietyseeking orientation and degree of involvement in decision making on causation between customer satisfaction, loyalty, and switching intent, as reasons for nonlinearity of the causation. Studies have been confined to those on retailers selling ordinary goods and it is time to study restaurants. The reason is that the organic causation between customer satisfaction, loyalty, and switching intent may vary according to structures of industries (Jones and Sasser, 1995) or types of industries (Fullerton and Taylor, 2002). This study intends to examine the organic causation between customer satisfaction, loyalty, and switching intent in family restaurants and verify the moderating effect of customer variety-seeking orientation and level of involvement in purchase decision making on such causation (Fig. 1). 2. Literature review and conceptual model 2.1. Relationship between customer satisfaction and loyalty Customer satisfaction is a buyer’s estimation, based on purchase of products and related experiences (Howard and Sheth, 1969). Customer loyalty is a buyer’s attachment or deep commitment to a product, service, brand, or organization (Oliver, 1999). When customers feel satisfied with goods or services provided by service providers, the higher their degree of satisfaction is, the higher the possibility they will have an economic exchange or mutual relationship with a certain company (Dwyer et al., 1987). The reason is that customers tend to maintain continuous relationships with companies that provide a high level of satisfaction (Kasper, 1988); satisfied customers repetitively purchase the same goods or services and have a propensity for resisting competitive goods (Cronin and Taylor, 1992; Anderson and Sullivan, 1993). Satisfied customers try to maintain a close relationship with their preferred companies and become loyal to them; customer satisfaction is an important factor in customer loyalty (Dick and Basu, 1994; Fornell et al., 1994). Reichheld and Sasser (1990) concluded that a company’s profitability was determined by customer loyalty and customer satisfaction was a key factor in maintaining customers, and that companies should provide goods and services of high quality. Bloemer and Ruyter (1998) said that customer loyalty was most greatly influenced by customer satisfaction and Reichheld and Schefter (2000) emphasized that for a service provider, customer switching costs were low and customer defection occurred easily, and therefore

Customer satisfaction is positively related to loy-

2.2. Relationship between customer satisfaction and switching intent Customer switching intent means the possibility of transferring their existing transactions with a company to a competitor (Dekimpe et al., 1997). While customer payment intent increases when they feel a certain level of satisfaction (Lind and Tyler, 1988), dissatisfied customers’ intent to maintain payment decreases, which ultimately leads to switching intent (Homburg et al., 2005). Oliver (1981), and Bearden and Teel (1983) said that customer satisfaction and switching intent had a negative relationship; Keaveney (1995) noted that customer dissatisfaction was the most essential factor for switching of service providers (Ganesh et al., 2000), and Han et al. (2011) noted that satisfied customers always had low switching intent, stressing the negative relationship between customer satisfaction and switching intent (Anderson and Sullivan, 1993). Steenkamp and Baumgartner (1992) showed a contrasting viewpoint, in that customers did not switch stores due to their dissatisfaction, but rather they switched behaviors to try new things; switching behaviors may happen despite their satisfaction. Reichheld (1993) said that customer satisfaction did not always lead to customer maintenance and even satisfied customers continuously switched brands (Bitner, 1990) and did complaint behaviors (Halstead and Page, 1992). Fullerton and Taylor (2002) noted that customer switching intent decreased only after customer satisfaction reached a certain threshold and they may have switching intent before their satisfaction reached the threshold. Yoon and Bae (2010) examined the nonlinear relationship between customer satisfaction and defection intent and Durukan et al. (2011) concluded that customer satisfaction and switching intent had a significant positive relationship. Even satisfied customers may switch companies, and based on these results, this study assumed that customer satisfaction would positively affect customer switching intent and established the following hypothesis: Hypothesis 2. Customer satisfaction is positively related to the switching intent. 2.3. Relationship between customer loyalty and switching intent Mittal and Lassar (1998) suggested that customer loyalty and switching intent were two-sided concepts and low switching intent meant high loyalty. Lattin and McAlister (1985) stated that customer loyalty and switching intent should be understood as having a complementary relationship. Bansal and Taylor (1999) said that customers that were not satisfied with a certain company and had low loyalty were very likely to switch companies. Kotler and Gertner (2002) stated that loyal customers did not have any switching intent, and Lee and Murphy (2006) asserted that customer loyalty resulted from customer satisfaction and customers with high loyalty had reduced switching intent. In consequence, when customers become loyal to a certain company, they spend

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more money than less loyal customers and their switching intent decreases. Based on the results of these previous studies, this study assumed that customer loyalty would negatively affect customer switching intent and established the following hypothesis: Hypothesis 3. Customer loyalty is negatively related to the switching intent. 2.4. Moderating effects of customer variety-seeking orientation and purchase decision involvement Regarding the behaviors of switching brands or stores, customer variety-seeking orientation means that the possibility of purchasing a specific brand reduces the possibility of buying the same brand in future consumption situations (Kahn, 1995; Ratneshwar and Mick, 2005). The reason why customers pursue diversity in a consumption situation is that they want to experience something new or their hedonic motive is stronger than their motive for benefits (Holbrook and Hirschman, 1982). Meanwhile, the customer level of involvement in purchase decision making refers to the feeling of personal relevance to an object or level of interest in it (Zaichkowsky, 1985; Peter and Olson, 1996). When customer involvement in purchasing a certain product is high, they show much interest in their decision making process and seek a lot of information on the product; as a result, such a high level of involvement greatly influences their future behaviors (Homburg and Giering, 2001). Hirschman (1970) noted that in a consumption situation, customer variety-seeking orientation was a motive for seeking newness, Hoyer and Ridgway (1984) explained that a varietyseeking orientation was a crucial factor in purchase behaviors. In a study with similar concepts, Simonson (1990) asserted that diversity crucially affected customer switching behaviors. Steenkamp and Baumgartner (1992) noted that because customers showed switching behaviors to attempt something new, switching behaviors may occur in satisfied customers as well, suggesting that their variety-seeking orientation played a moderating role in the relationship between customer satisfaction, loyalty, and switching intent. Kim (2009) agreed that although the more customers were satisfied with a service, the more likely they revisited the service provider, customers who had a high variety-seeking orientation tended to seek new stimuli and they were apt to switch service providers. The above results suggest that in customers with low variety-seeking orientation, their satisfaction with a product or a service leads to their intent to revisit a provider. In a consumption situation, customers’ level of involvement in their purchase decision making affects their behaviors, just like satisfaction and loyalty (Novak et al., 2000). Kokkinaki (1999) said that the higher the customer level of involvement, the more detailed information on a product or service they wanted and the more effort they made in selecting a product, resulting in positive satisfaction. Homburg and Giering (2001) said that the relationship between customer satisfaction and loyalty was moderated by their level of involvement and, compared to those with high level of involvement, customers with low level of involvement showed a close relationship between their satisfaction and loyalty. Suh and Yi (2006) argued that causation between customer satisfaction and loyalty was moderated by their level of involvement, and Tuu and Olsen (2010) verified that customer level of involvement had a positive moderating effect on causation between satisfaction, intent of repurchase, and loyalty. Based on the results of these previous studies, this study assumed that in a restaurant, causation between customer satisfaction, loyalty, and switching intent would be moderated by variety-seeking orientation and level of involvement in purchase decision making, and established the following hypotheses

877

Hypothesis 4. The links among customer satisfaction, loyalty, and switching intent in customer variety-seeking orientations are different. Hypothesis 5. The links among customer satisfaction, loyalty, and switching intent in customer purchase decision involvements are different. 3. Research methodology 3.1. Sample and data collection The data used for the current study were collected from customers in family restaurants in Seoul, the capital of Korea, in 2011. To comply with our objectives and test our research hypotheses, we designed a study based on a personal survey of family restaurant customers. Five ranked family restaurants were chosen by sales in 2010. A pilot test using 50 customers at family restaurants was conducted to ensure the reliability of the scales, and several modifications were made based on feedback from the pilot test. The final questionnaire instrument included 27 items divided into six parts. The data collection was carried out in the period from 10 to 30 March 2011. Many discussions were conducted with the mangers of the selected family restaurants on what was necessary to perform this study (such as research topics and feedback on research performance). With the cooperation of the mangers of the family restaurants involved, a questionnaire survey was conducted in customers waiting for their dessert. For smooth implementation of the questionnaire, drinks were provided free of charge to customers who participated in the questionnaire and dining fees were granted to the managers of the family restaurants. A total of 500 questionnaires were distributed to visitors of these family restaurants, 442 were returned (88.40%). After eliminating the unusable responses among the completed questionnaires, 305 responses were coded for data analysis (61.00% response rate). 3.2. Instrument development The survey instrument for this study was composed of six parts. The first five parts pertained to customer satisfaction, customer loyalty, switching intent, customer variety-seeking orientation, and customer purchase decision involvement includes a sevenpoint scale: “How much do you agree or disagree with these statements?”(1: strongly disagree to 7: strongly agree). The measurement items for the study constructs are presented in Appendix A. Part six contained questions about participant demographic information (e.g., age, gender, education level, and visiting frequency in a month). 3.2.1. Customer satisfaction Customer satisfaction was measured using four items based on Fornell et al. (1996), Spreng et al. (1996) and Yuksel and Yuksel (2003). Customer satisfaction items included “I am pleased to visit this restaurant,” and “Overall, I am satisfied with my experience at this restaurant.” 3.2.2. Customer loyalty Customer loyalty was also measured using four items developed by Fishbein and Ajzen (1975), Putrevu and Lord (1994), and Kressmann et al. (2006). The customer loyalty items included “I will keep an ongoing relationship with the brand,” and “The brand of this restaurant would be my first choice over another restaurant.” 3.2.3. Switching intent Switching intent was measured using three items adapted from Hirschman (1970), Dekimpe et al. (1997) and Anton et al. (2007).

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Although measurement of switching behaviors is most precise when such behaviors themselves are measured, behaviors cannot be measured by observing them and they were measured as a concept of intent to switch behaviors instead. The switching intent items included “I have decided to switch to another restaurant that offers better services” and “I have decided to switch to another restaurant that offers a variety of products and services.” 3.2.4. Customer variety-seeking orientation Customer variety-seeking orientation was also measured using six items based on Kahn et al. (1986) and Trijp et al. (1996). Customer variety-seeking orientation items included “I like ‘trying new things’ to ‘doing familiar things’,” and “I want to try the new products.” 3.2.5. Customer purchase decision involvement Customer purchase decision involvement was also measured using six items developed by Traylor and Joseph (1984), Mittal and Lee (1988), and O’Cass (2000). Customer purchase decision involvement items included “I like being involved in making visits of restaurant,” and “Purchases decisions for restaurant are very important to me.”

Table 1 Profiles of sample (N = 305). Characteristics Gender Male Female Age 20–29 30–39 40∼ Education level ∼College University Graduate school Visiting frequency in a month 1 2–3 4∼

N

%

117 188

38.4 61.6

144 108 53

47.2 35.4 17.4

78 144 83

25.6 47.2 27.2

119 118 68

39.0 38.6 22.4

The profiles of the sample are presented in Table 1. Respondents were 38.4% male and 61.6% female. In terms of age, 47.2% of the respondents were 20–29 years old, 35.4% were 30–39, and 17.4% were 40 or older. Most respondents (74.4%) were highly educated, holding at least a university degree. A majority (61.0%) of respondents visited a family restaurant 2–3 times per month.

intent, variety-seeking orientation, and purchase decision involvement. Based on CFA results, we analyzed convergent validity, discriminant validity, and reliability of all the multi-items, following the guidelines in previous research (Nunnally, 1978; Fornell and Larcker, 1981; Anderson and Gerbing, 1988). As shown in Table 2, the level for internal consistency in each construct was acceptable with Cronbach’s alpha estimates, ranging from .856 to.936 (Nunnally, 1978). Composite construct reliability estimates, ranging from .827 to .908 above the recommended cutoff.60 (Fornell and Larcker, 1981), were considered acceptable. Convergent validity was observed since all confirmatory factor loadings exceeded .70 (except for PEI6 ) and were significant at the alpha level of .001. These results were evidence of the convergent validity of the measures (Anderson and Gerbing, 1988). All variance extracted estimates exceeded the recommended .50 threshold (Fornell and Larcker, 1981). These results suggested that the five factors were distinct and unidimensional. The 2 fit statistics showed 548.649 with 213 degrees of freedom (p < .001; 2 /df = 2.576). The Root Mean Square Error Approximation (RMSEA) was .072, less than the recommended .08 threshold. The Normed Fit Index (NFI = .902), Tucker Lewis Index (TLI = .925), Comparative Fit Index (CFI = .937), and the Incremental Fit Index (IFI = .937) values exceeded the recommended .90. All statistics supported the satisfactory measurement quality given the number of indicators. To address the potential concern of common method bias from the use of a survey, we checked for possible common method variance with Harman’s single-factor test (Harman, 1967; Podsakoff et al., 2003). According to this approach, common method variance is present if a single factor accounts for most of the covariance in the dependent and independent variables. An exploratory factor analysis (EFA) of the 23 variables revealed five factors with Eigen values greater than 1.00. No single factor explained most of the variance, suggesting that common method bias was not a threat. Our scale items revealed six factors that explained 76.444% of the variance on our study’s constructs, with the first factor explaining 30.844% and the last factor explaining 6.117% of the total variance. The correlations, means, and standard deviations of the study constructs are presented in Table 3. Results of the correlation analysis provide support for the discriminant validity. Discriminant validity was evident since the variance extracted estimates, ranging from .591 to .761, exceeded all squared correlations for each pair of constructs, ranging from.001 to .451.

4.2. Measurement model

4.3. Structural equation modeling (SEM)

Following Anderson and Gerbing’s (1988) two-step approach, a CFA was first undertaken to assess the fit of the five-factor model, which was comprised of customer satisfaction, loyalty, switching

Structural equation modeling was conducted to test the validity of the proposed model and the hypotheses. The structural parameter estimates are presented in Table 4. The chi-square statistic

3.3. Data analysis Descriptive statistics were performed to profile the respondent demographic questions. Following the two-step approach recommended by Anderson and Gerbing (1988), a confirmatory factor analysis (CFA) with maximum likelihood was first performed to estimate the measurement model, which determined whether the manifest variables reflected the hypothesized latent variables. Once the measure was validated, a structural equation model (SEM) was used to determine the cause-and-effect relationships among customer satisfaction, customer loyalty, and switching intent. Additionally, in order to test the moderating effects of customer variety-seeking orientation and purchase decision involvement on customer satisfaction, loyalty, and switching intent, based on a multi-group approach, 2 differences with two degrees of freedom were used to compare the two models (unconstrained and constrained) for each of the three path coefficients, consecutively. The 2 value of the unconstrained model (freely estimated) was subtracted from the 2 value of the constrained model (constrained to be equal) (Baron and Kenny, 1986; Frazier et al., 2004). In addition, the customers’ variety-seeking orientation (3.59 ± 1.24) and purchase decision involvement (4.70 ± .99) were recoded by being divided into high group and low group with variety-seeking orientation and purchase decision involvement based on the mean value. This was used in analyzing the moderating effect. 4. Results 4.1. Profiles of the sample

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Table 2 Reliabilities and confirmatory factor analysis. Construct

Standardized loadings

t-Value

Customer satisfaction .776 CS1 .790 CS2 CS3 .868 .823 CS4 Loyalty .890 LT1 .890 LT2 .845 LT3 LT4 .866 Switching intent .721 SI1 .887 SI2 .845 SI3 Variety-seeking orientation .744 VSO1 .860 VSO2 .814 VSO3 VSO4 .775 .940 VSO5 VSO6 .867 Purchase decision involvement .818 PEI1 .759 PEI2 .811 PEI3 PEI4 .727 .803 PEI5 PEI6 .690

CCRa

AVE

.856

.664

Item-to-total correlation

Fixed 18.815*** 15.281*** 14.624***

Cronbach’s alpha .864

.677 .624 .738 .762 .908

.761

Fixed 21.993*** 19.534*** 20.572***

.931 .843 .834 .834 .844

.827

.673

Fixed 13.608*** 13.493***

.856 .666 .784 .741

.875

.698

Fixed 15.572*** 14.571*** 13.850*** 17.127*** 15.716***

.936 .722 .880 .822 .743 .884 .848

.858

.591

Fixed 13.911*** 15.309*** 13.380*** 15.048*** 12.355***

.905 .759 .775 .794 .690 .770 .650

2 = 548.649 (df = 213), p < .001; 2 /df = 2.576; Goodness of Fit Index (GFI) = .873; Normed Fit Index (NFI) = .902; Tucker Lewis Index (TLI) = .925; Comparative Fit Index (CFI) = .937; Incremental Fit Index (IFI) = .937; Root Square Error of Approximation (RMSEA) = .072. a CCR: composite construct reliability; AVE: average variance extracted. ***

p < .001.

Table 3 Correlations, means, and standard deviations. M ± SD 1. Customer satisfaction 2. Loyalty 3. Switching intent 4. Variety-seeking orientation 5. Purchase decision involvement * **

4.50 4.15 4.86 3.59 4.70

± ± ± ± ±

1 1.03 1.03 1.00 1.24 .99

1 .672** −.147* −.243** .178**

2

3

1 −.067 −.203** .240**

1 −.010 .261**

4

5

1 −.246**

1

p < .05 (two-tailed). p < .01 (two-tailed).

indicated that the model did not fit the data well (2 = 125.341; df = 39; p < .001). Given the sensitivity of the chi-square statistics to sample size (Bentler and Bonett, 1980; Hair et al., 2006), other fit indexes were also examined. Other goodness-of-fit indexes proved that the structural model fit the data reasonably well (GFI = .931; NFI = .948; CFI = .964; RMSEA = .085). The model’s fit, as indicated by these indexes, was deemed satisfactory; thus, it provided a good

basis for testing the hypothesized paths. The parameter estimates of the structural model exhibited the direct effects of one construct on the other. A significant coefficient at a certain level of alpha reveals a significant causal relationship between latent constructs (Fig. 2). To examine how customer satisfaction affects customer loyalty, Hypothesis 1 was verified and, as a result, supported (ˇ = .639;

Table 4 Structural parameter estimates. Hypothesized path

Standardized coefficients

t-Value

Results

Hypothesis 1: Customer satisfaction → Loyalty Hypothesis 2: Customer satisfaction → Switching intent Hypothesis 3: Loyalty → Switching intent

.639 .189 −.193

10.155*** 2.091* −2.183*

Supported Supported Supported

Goodness-of-fit statistics

239 = 125.341 (p < .001) 2 /df = 3.214 GFI = .931 NFI = .948 CFI = .964 RMSEA = .085

Note: GFI: Goodness of Fit Index; NFI: Normed Fit Index; CFI: Comparative Fit Index; RMSEA: Root Mean Square Error of Approximation. * p < .05. *** p < .001.

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has a more negative effect on their switching intent. Therefore, Hypothesis 4 was partially supported. The results of the moderating effects of customer purchase decision involvement are shown in Table 6. The unconstrained model for tenure showed a good fit to the data (2 = 264.129; df = 80; p < .001; GFI = .87; NFI = .89; CFI = .92; RMSEA = .08). The link between customer satisfaction, loyalty, and switching intent, the difference in 2 between the constrained model and the unconstrained model, was not significant. Therefore, Hypothesis 5 was not supported. Despite such non-significant differences, customers with high levels of involvement in purchase decision making had a stronger influence on the causation between their satisfaction, loyalty, and switching intent than those with low levels of involvement. Fig. 2. Structural equation model with parameter estimates. (—) Statistically significant (***p < .001, *p < .05).

5. Discussion 5.1. Conclusion

t = 10.155; p < .001). When customers are satisfied with products or services provided by a certain restaurant, their level of loyalty increases. Hypothesis 2, which predicted a positive relationship between customer satisfaction and switching intent, was supported (ˇ = .189; t = 2.091; p < .05). This result suggests that customer satisfaction does not necessarily reduce their switching intent and even satisfied customers continue to make switching behaviors. As predicted by Hypothesis 3, loyalty had significant negative effects on switching intent (ˇ = −.193; t = –2.183; p < .001). This result indicated that as customer loyalty decreased, so did their chances of switching.

4.4. The moderating effect of customer variety-seeking orientation and purchase decision involvement The results of the moderating effects of customer varietyseeking orientation are shown in Table 5 and Fig. 3. The unconstrained model for tenure showed a good fit to the data (2 = 294.154; df = 80; p < .001; GFI = .86; NFI = .89; CFI = .91; RMSEA = .09). The link between customer satisfaction and loyalty, the difference in 2 between the constrained model and the unconstrained model, was not significant (Customer satisfaction → Loyalty; 2df=1 = 0.034; p > .05). In the relationship between customer satisfaction and switching intent, there was no significant difference between the constrained and unconstrained models (Customer satisfaction → Switching intent; 2df=1 = 0.016; p > .05). The results showed that customer varietyseeking orientation had no moderating effects on the link between customer satisfaction and loyalty, or between customer satisfaction and switching intent. Although the moderating effects were not significant, customers with higher levels of variety-seeking orientation more greatly influenced the causation than those with lower level of variety-seeking orientation. As for the link between customer loyalty and switching intent, statistically significant group differences were detected based on the 2 differences between the two models (Loyalty → Switching intent; 2df=1 = 5.024; p < .05). The results showed that the effects of customer loyalty on switching intent was significantly stronger in the low-variety-seeking orientation group (ˇ = −.421; p < .001) than in the low-variety-seeking orientation group (ˇ = −.019; p > .05). In customers with low levels of variety-seeking orientation, the effect of their loyalty on switching intent is much greater relative to customers with a high level of variety-seeking orientation. In other words, in a restaurant, customers with low levels of variety-seeking orientation are more absorbed in their previous goods and services than those with high level of such orientation and are afraid of change and their loyalty

This study attempted to look into the effect of customer satisfaction on loyalty and switching intent. This study found that customer satisfaction in a family restaurant had a significant, positive effect on loyalty. These findings support previous work (Fornell et al., 1994; Bloemer and Ruyter, 1998; Reichheld and Schefter, 2000; Sui and Baloglu, 2003; Gustafsson et al., 2005; Lin and Wang, 2006). In consequence, if customers are satisfied, they have special behaviors favorable to relevant companies, such as recommending them to others (Reichheld and Sasser, 1990) or loyal behaviors such as positive oral transmission (Sirohi et al., 1998) or voluntary expression of intent of maintenance (Dick and Basu, 1994). When they are satisfied, they are likely to repetitively visit the business and are very loyal to them (Valle et al., 2006). The influence of customer satisfaction on switching intent was significant. This finding supported earlier work (Halstead and Page, 1992; Reichheld, 1993; Fullerton and Taylor, 2002). However, even satisfied customers may have switching intent, and although companies may enhance performance by increasing customer satisfaction, it may not discourage switching intent and may not prevent existing customer switching behaviors. Another finding is that customer loyalty-triggered customer satisfaction had a significant impact on switching intent. These findings support previous work (Mittal and Lassar, 1998; Bansal and Taylor, 1999; Kotler and Gertner, 2002). From these findings that customer satisfaction did not positively affect switching intent, but customer loyalty negatively affected switching intent, it is proved that customer loyalty is a more absorbed behavior than customer satisfaction. In consequence, it was verified that switching intent of customers loyal to a specific company decreases and desirable customers from a company’s perspective are those that are loyal rather than those that are satisfied. Finally, as for the moderating effect of customer variety-seeking orientation on causation between customer satisfaction, loyalty, and switching intent, it was verified that there is a significant moderating effect on the relationship between customer loyalty and switching intent. In more detail, where customers have a low level of variety-seeking orientation, their loyalty has a significant negative effect on switching intent, while customers with a high level of variety-seeking orientation, their loyalty does not significantly affect switching intent. In a restaurant, customers who seek variety are not significantly influenced by their loyalty in deciding their switching intent. In customers with a low level of variety-seeking orientation, their loyalty negatively affects switching intent, which means that their switching intent is determined by their loyalty. These results are similar to those by Hoyer and Ridgway (1984) and

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Table 5 Moderating effects of variety-seeking orientation (Hypothesis 4). Low-VSO (N = 172)

Hypothesis 1 Hypothesis 2 Hypothesis 3

High-VSO (N = 133)

Standardized coefficients

t-Value

Standardized coefficients

t-Value

.602 .244 −.421

7.720*** 2.215* −3.661***

.568 .124 −.019

5.921*** 1.004 .872

Unconstrained model 2 (df = 80)

Constrained model 2 (df = 81)

2 (df = 1)

294.154 294.154 294.154

294.494 294.314 299.178

.034 .016 5.024*

Note: VSO: variety-seeking orientation; 2 /df = 3.677; GFI = .86; NFI = .89; CFI = .91; RMSEA = .09. * p < .05. *** p < .001.

Fig. 3. Structural equation model with parameter estimates for variety-seeking orientation. (—) Statistically significant (***p < .001, *p < .05); (· · ·) statistically not significant.

Simonson (1990) who observed that customer variety-seeking orientation acted as an important factor switching intent, and those by Steenkamp and Baumgartner (1992) who asserted that causation between customer loyalty and switching intent was moderated by their variety-seeking orientation. There have been no studies that examined the moderating effect of customer level of involvement in purchase decision making on causation between customer satisfaction, loyalty, and switching intent.

5.2. Managerial implications From a company’s perspective, the most important variable that can strengthen customer loyalty and decrease switching intent is customer satisfaction, but in a modern, competitive society it is very hard to enhance customer satisfaction through differentiation of product quality. The reason is that customers select goods or services that can provide them with the most benefits among various alternatives and their standard of evaluating them or desire continuously changes, resulting in changes in customer satisfaction or loyalty (Keaveney, 1995). A major reason for this behavioral

mechanism is that humans become easily bored and they seek diversity in stimuli (Suk and Lee, 2010). To date, studies have examined only simple causation between customer satisfaction, loyalty, and switching intent in ordinary retailers and there was none that verified the moderating effects under the premise of non-linearity in their relationship. At this point, this study is of an exploratory nature, focusing on the relationship between many research concepts in customer satisfaction, and it is useful as a basic study on restaurants that examines organic causation between customer satisfaction, loyalty, and switching intent. This study notes that restaurant customer satisfaction, loyalty, and switching intent had organic causation. It also verified that whereas satisfied customers became loyal and loyal customer switching intent decreased, satisfied customer switching intent increased. Enhancing customer satisfaction for performance improvement is crucial, but even satisfied customers may make switching behaviors and companies should make more of an effort to maintain loyal customers rather than satisfied customers. To this end, companies need to perform diverse relationship marketing strategies such as cementing customer membership and issuing coupons and discount tickets,

Table 6 Moderating effects of purchase decision involvement (Hypothesis 5). Low-PDI (N = 116)

Hypothesis 1 Hypothesis 2 Hypothesis 3

High-PDI (N = 189)

Standardized coefficients

t-Value

Standardized coefficients

t-Value

.530 .005 −.103

5.140*** .037 −.813

.616 .213 −.281

8.264*** 1.948* −2.552*

Note: PDI: purchase decision involvement; 2 /df = 3.302; GFI = .87; NFI = .89; CFI = .92; RMSEA = .08. * p < .05. *** p < .001.

Unconstrained model 2 (df = 80)

Constrained model 2 (df = 81)

2 (df = 1)

264.129 264.129 264.129

264.452 265.773 265.462

.323 1.644 1.333

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thereby strengthening customer loyalty and minimizing switching intent. This study is meaningful in that it verified that customer personal characteristics played a moderating role. The study showed that there are moderating effects of customer variety-seeking orientation on causation between customer loyalty and switching intent, and this presents various marketing opportunities for managers. First of all, after a certain period passes, foodservice companies will have to redesign exteriors or interiors of stores so that customers can satisfy their desire for diversity within stores and prevent them from switching brands through a variety of menus, special events, and gift providing events. Then, in order to maintain existing customers, foodservice companies should figure out causes of their complaints, thereby reducing risk factors that trigger switching behaviors and establish marketing strategies to enhance their goods’ stability through advertisements differentiating their goods from competitive ones. In addition, it is regarded that there will be a need of developing even a display strategy within a store available for satisfying diversity, and of delivering information through advertising new menu and event. It is judged that there will be a need of seeking continuous and relational effort for customers in establishing and driving a marketing strategy and customer satisfaction management by forming individual and close relationship with customers through this. This study examined organic causation between customer satisfaction, loyalty, and switching intent and verified the moderating effects of customers’ variety-seeking orientation and level of involvement on such causation in family restaurants, thereby presenting a useful result for managers, based on which family restaurants can effectively seek for measures to discourage customers’ switching intent. It is judged that this study result may be used as a practical, basic material in companies’ deriving efficient and strategic marketing methods by presenting a direction for customer satisfaction management in consideration of family restaurants’ characteristics providing both tangible goods and intangible services at the same time. In practice, this study is considered to contribute to customer satisfaction management and enhancement of effectiveness of marketing strategies by foodservice companies which make continuous efforts to maintain customers.

Appendix A. Customer satisfaction (Fornell et al., 1996; Spreng et al., 1996; Yuksel and Yuksel, 2003) This restaurant exceeded my expectations CS1 I am pleased to visit this restaurant CS2 I really enjoyed myself at the restaurant CS3 Overall, I am satisfied with my experience at this CS4 restaurant. Customer loyalty (Fishbein and Ajzen, 1975; Putrevu and Lord, 1994; Kressmann et al., 2006) CL1 I will keep an ongoing relationship with the brand I will spread positive word-of-mouth about the brand CL2 The brand of this restaurant would be my first choice over CL3 another restaurant I will recommend the brand to my friends and others CL4 Switching intent (Hirschman, 1970; Dekimpe et al., 1997; Anton et al., 2007) I have decided to switch to another restaurant that offers SI1 better services SI2 I have decided to switch to another restaurant that offers a variety of products and services SI3 I have considered changing another restaurant Customer variety-seeking orientation (Kahn et al., 1986; Trijp et al., 1996) I like trying new things to doing familiar things VSO1 I want to try the new products VSO2 I enjoy taking chances in buying unfamiliar brands just to VSO3 get some variety in my purchases. VSO4 When I go to a restaurant, I feel it is safer to order dishes I am familiar with ® I would rather stick with a brand I usually buy than try VSO5 something I am not very sure of ® I am very cautious in trying new or different products ® VSO6 Customer purchase decision involvement (Traylor and Joseph, 1984; Mittal and Lee, 1988; O’Cass, 2000) I like being involved in making visits of restaurant PDI1 Purchases decisions for restaurant are very important to PDI2 me I attach great importance to visiting family restaurant PDI3 I place great value in making the right decision when it PDI4 comes to family restaurant selection PDI5 Making purchase decisions for family restaurant selection is significant to me I think a lot about my choices when it comes to family PDI6 restaurant selection

References 5.3. Limitations and future research Despite its several contributions, this research also has a few limitations that future research may address. First, the sample consists of customers at family restaurants, as a part of the foodservice industry. The generalizability of the results may be limited to customers in those particular categories. Also, the use of convenience sampling can introduce unknown systematic and variable errors. In addition, there was no research at all that was performed targeting foodservice companies in the questionnaire items, which were used in customers’ variety-seeking orientation and purchase decision involvement. Thus, this study used by extracting it from a research that was carried out targeting general companies. It is likely unreasonable to analyze by expanding these results into the whole of the foodservice industry. Studies on other industries are necessary to compare them with restaurants, thereby ascertaining differences in accordance with each industry’s traits. This study verified only the moderating effects of customer variety-seeking orientation and level of involvement in purchase decision making as general propensities in a consumption situation, but future studies will provide meaningful results by examining other diverse characteristics of individual customers that can affect their loyalty and switching intent.

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