Logistics service quality: a new
way to loyalty
Irene Gil Saura
Departamento de Comercializacio
´
n e Investigacio
´
n de Mercados,
Facultad de Economı
´
a, Universidad de Valencia, Valencia, Spain
David Servera France
´
s
Facultad de Estudios de la Empresa,
Universidad Cato
´
lica de Valencia San Vicente Ma
´
rtir, Valencia, Spain
Gloria Berenguer Contrı
´
Departamento de Comercializacio
´
n e Investigacio
´
n de Mercados,
Facultad de Economı
´
a, Universidad de Valencia, Valencia, Spain, and
Marı
´
a Fuentes Blasco
Facultad de Ciencias Empresariales, Universidad Pablo de Olavide,
Sevilla, Spain
Abstract
Purpose – Now-a-days, logistics research focuses on the ability of logistics to deliver a quality
service and generate greater satisfaction with the delivered service. Therefore, the aim of this work is to
analyze the quality, satisfaction, and loyalty sequence in the logistic service delivery context, with the
purpose of considering the role of information and communication technologies (ICT) in this chain of
effects.
Design/methodology/approach – After reviewing the different approaches given by the literature,
SEM analysis is used to contrast the hypotheses for the analyzed constructs in the presence of
high/low ICT level. A questionnaire based on personal survey was conducted among manufacturers.
The study collected data from 194 companies. Structural equation modeling was applied to these data
to test relationships among the variables in the study.
Findings – The reliability and validity tests show satisfactory results. The conclusions confirm this
chain of consequences, and emphasize the incidence of ICT in the description and intensity of these
relations.
Research limitations/implications – As non-probabilistic sampling methods have been used, in
subsequent research, it would be useful to obtain a more representative population sample. In future,
works relations between the variables proposed would be analyzed contemplating the sectoral nature
of the sample, accepting that relationship intensity may be modified according to the company’s sector
of activity.
Originality/value – This paper describes a framework to explore the relationships between service
quality, customer satisfaction and loyalty in the supply chain from the perspective of ICT.
Keywords Communication technologies, Distribution management, Service levels, Customer loyalty,
Customer satisfaction
Paper type Research paper
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0263-5577.htm
The authors are grateful to the Spanish Ministry of Science and Technology for financial support
for this work (I þ D del Plan Nacional SEJ2004-05988).
IMDS
108,5
650
Received 5 July 2007
Revised 5 February 2008
Accepted 28 February 2008
Industrial Management & Data
Systems
Vol. 108 No. 5, 2008
pp. 650-668
q Emerald Group Publishing Limited
0263-5577
DOI 10.1108/02635570810876778
1. Introduction
The inclusion of concepts such as service quality and relationship marketing has
significantly changed both the academic study and business practice of logistics.
Logistics has traditionally been considered necessary for connecting production and
consumption. From this perspective, a company’s logistics function was seen only as a
generator of costs with no capacity for differentiation (Ballou, 2004). This began to
change in the mid-1990s as logistics research based on marketing principles began
to analyze the capacity of logistics to deliver quality and thus generate greater
customer satisfaction and loyalty (Mentzer et al., 2004; Richey et al., 2007). The logistics
industry today is a classical example of service-based industry development (Chapman
et al., 2003) and more in-depth studies of logistics are needed from the perspective of
supply channel relationships (Lambert et al., 2004; Knemeyer and Murphy, 2004, 2005;
Foggin et al., 2004). In addition, the generalized use of information and communication
technologies (ICT) has brought far reaching transformations to different business
areas and logistics is no exception. Stock and order management, warehousing and
transport are logistics activities which can benefit from the new opportunities
offered by the technologies to organize new forms of supply chain relationships. Given
the relatively recent application of ICT to logistics management, however, there is
yet no clear understanding of how ICT are applied or of their impact (Feng and
Yuan, 2006).
This work presents an in-depth study, in an inter-organizational context, of the
relationship between logistics service quality (LSQ), with a particular emphasis on its
defining factors and customer satisfaction and loyalty. We also propose to determine
how logistics ICT influences this consequence chain. Our objective therefore, is to
examine the moderator effect of ICT intensity on said variables, in other words, we
want to analyze the influence of high levels of ICT in comparison to low levels of ICT
on the perception of LSQ and how this can affect satisfaction and in the final instance,
loyalty.
The study is divided into three parts. First, through a literature review we define the
theoretical framework for examining the different consequence chain variables.
Secondly, we establish the methodology used in the empirical research and evaluate
the results obtained. Finally, we report the most significant conclusions which can be
drawn from this study.
2. Theory development and hypotheses
2.1 Logistics service quality
Since the mid-1980s, service quality has been a priority theme in both marketing and
logistics research, running parallel to the interest in quality, quality management and
satisfaction in companies (Fisk et al., 1993; Shet et al., 2006; Richey et al., 2007).
Research by Millen et al. (1999) identifies significantly improved customer satisfaction
as a key benefit of LSQ. On these lines, research in Spain by Va
´
zquez Casielles et al.
(2002, p. 40) confirms that quality in supplier physical distribution activities has the
greatest influence on customer satisfaction.
The notion of LSQ has been studied from two different perspectives: objective and
subjective quality. The first approach relates quality with adapting the service
to service provider defined specifications (Crosby, 1991). This industrial view of service
sees quality as an accurate evaluation of all the stages and operations necessary to
LSQ: a new way
to loyalty
651
deliver the service, likening the process to that of manufacturing a product by
considering the service as a physical object which can be observed and with attributes
that can be evaluated (Garvin, 1984). The second approach transfers evaluation of
quality to the customer, that is subjective quality. From this perspective, service
quality is “a global judgment or attitude, concerning the superior nature of the service”
(Parasuraman et al., 1988, p. 16).
In the sphere of logistics service, the contribution from Bienstock et al. (1997),
includes this development by identifying objective variables measured through
customers’ perceptions in relation to their expectations (subjective components) as the
main components of LSQ. More recent studies (Millen and Maggard, 1997; Sohal et al.,
1999; Mentzer et al., 2001), contribute to this line by considering LSQ as the difference
between the expected and the perceived service. This subjective character makes
quality highly relative and volatile in nature as it varies in time and space (Holbrock
and Corfman, 1985).
In terms of modeling and measurement proposals, there are two schools in the
literature, the Nordic and the American. The former differentiates two components in
service quality (Gro
¨
nroos, 1982):
(1) technical quality expressed as the service being technically acceptable and
leading to a concrete result; and
(2) functional quality which includes the way the customer is treated during the
service provision process.
Later work by Rust and Oliver (1994) adds a third component: the service environment.
The American school has predominantly used the SERVQUAL scale to measure and
dimension service quality. This multi-item scale evaluates five quality dimensions
from a global perspective (Parasuraman et al., 1988):
(1) reliability;
(2) reactivity;
(3) guarantee/safety;
(4) empathy; and
(5) tangible elements.
According to this model, perceived quality is measured by the imbalance between
two separate scales, one measuring expectations and the other the perception of the
result. Later revisions of the scale, however, led Cronin and Taylor (1994) to reject
measurement of expectations and consider only the result measurement scale
(SERVPERF). The debate is ongoing, although in the sphere of logistics specific
measurement models are being developed on the basis of the above models, but
adapted to the special features of logistics service. These features include in particular
the fact that the people object of the service are replaced by “things” (objects, materials,
products, ...) and the physical separation of customer and supplier. We would
underline two important contributions from Bienstock et al. (1997) and Mentzer et al.
(1999). The former developed a specific model known as physical distribution
service quality, based on result, rather than on functional or process dimensions.
Mentzer et al. (1999) carried out a study to confirm the accuracy of the model developed
by Bienstock et al. (1997) with an integral logistics focus. This revision and validation
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provided a new multidimensional model which they called LSQ. Analysis of these and
other significant contributions (Novack et al., 1994; Anderson et al., 1994; Rutner
and Langley, 2000; Stank et al., 2003; Richey et al., 2007; Rafid and Jaafar, 2007)
has allowed us to identify a set of dimensions for measuring LSQ (timeliness, condition
and accuracy of the order, quality of information, availability and quality of contact
personnel). Of all these dimensions, timeliness has the greatest influence (La Londe and
Zinszer, 1991; Perrault and Russ, 1974; Novack et al., 1994; Bienstock et al., 1997;
Mentzer et al., 2001), and is understood to mean reception of the order placed by the
customer at the agreed moment (Mentzer et al., 2001). A more recent study (Rahman,
2006) confirms these results, showing that the most important component is “on time
delivery.”
2.2 Satisfaction and loyalty in inter-company relationships
We now proceed to analyze the main consequences of quality delivery which are
satisfaction and loyalty. There is a long research tradition into both these concepts
which gives different nuances to their conceptualization. Satisfaction has been
studied with a dual process-result focus and is defined by some authors (Hunt, 1977;
Westbrook, 1980) as a process of evaluating or measuring a purchase experience where
expectations are compared with the result. Other authors relate satisfaction to process
result, in other words to the response or state of the customer considering consumption
of the product. This response may be cognitive (Howard and Sheth, 1969; Churchill and
Surprenant, 1982; Day, 1984), with satisfaction as the result of a consumption
experience in which the consumer cognitively evaluates the variables (expectations
and results, effort and reward) or satisfaction may be affective (Woodruff and Gardial,
1996; Giese and Cote, 2000; Vanhamme and Snelders, 2001; Eggert and Ulaga, 2002)
and reflect the feelings of the consumer or the company (Anderson and Narus, 1984) in
terms of product enjoyment. The most useful theoretical basis for explaining the
process which leads to judgments of satisfaction has proved to be the disconfirmation
of expectations paradigm based on evaluating or measuring certain variables, mainly
the perception of the results (performance) and certain comparison standards. Analysis
of the most recent contributions shows a certain convergence towards understanding
satisfaction as a phenomenon linked to cognitive judgments and affective responses
(Oliver et al., 1997; Phillips and Baumgartner, 2002; Wirtz and Bateson, 1999). Some
studies share this dual focus, assuming that satisfaction is an affective response
arising from a cognitive judgment (Halstead et al., 1994; Giese and Cote, 2000; Yu and
Dean, 2001).
Satisfaction can also be interpreted from the point of view of a specific transaction
or from an accumulative view (Boulding et al., 1993). Most approaches in the literature
use the first perspective (Giese and Cote, 2000), although proposals like those by
Fornell et al. (1996) and Anderson et al. (1994) consider satisfaction as a global
evaluation based on consumption experience over time or on a set of similar
experiences. More recent contributions adopt this last approach in the wide sense
supporting the idea of satisfaction as “a global measurement of a set of satisfactions
with specific prior experiences” (Yu and Dean, 2001, p. 235). According to Jones and
Suh (2000), satisfaction defined from this point of view would explain behavioral
intentions better.
Finally, the consequence chain closes with loyalty. The literature coincides in
pointing to loyalty as the “sine qua non of an effective business strategy” (Heskett,
LSQ: a new way
to loyalty
653
2002, p. 355), pointing out that delivering quality and achieving satisfaction can be the
basis for developing said relationship (Rauyruen and Miller, 2007), so that it is
possible to speak of a conceptual quality-satisfaction-loyalty network. The link
between the last two items, however, is asymmetric so that although consumers are
normally satisfied, satisfaction does not universally translate into loyalty (Oliver,
1999). It is true though, that while satisfaction influences loyalty, there are other
determining factors and predictors of loyalty which are not included in the conceptual
structure of satisfaction.
The literature review allowed us to identify two different approaches to the
conceptual definition of loyalty. One view is that loyalty is simply another word for
expressing customer retention: “a customer who continues to buy is a loyal customer”
(Buttle and Burton, 2002, p. 218). Another view is that customer loyalty has an affective
component where feelings are important. Research into loyalty has thus developed
from the perspective of effective, evident behavior which implies repeat
purchase/consumption or from the perspective of attitude (Dick and Basu, 1994;
de Ruyter et al., 1998; Oliver, 1999). These two perspectives can be reconciled through
the definition offered by Gremler and Brown (1996, p. 173):
[...] loyalty is the degree to which a customer shows repeat purchase behavior towards a
supplier, is positively disposed towards the supplier and considers using only this supplier
when he needs that service.
These conceptual differences have given rise to different measurements for loyalty.
Behaviorally, loyalty is understood to be the degree of customer repeat purchase from a
service provider and some typical measurements used are repurchase rate, purchase
behavior in a period of time and so on (Martı
´
nez-Ribes et al., 1999); measurements with
more affinity to the affective perspective are based on intention to frequent a service
supplier, continuing to purchase the same type of service or brand in the future,
recommendation, and so on. The latter approach to measuring loyalty has been widely
accepted after the proposal by Zeithaml et al. (1996). Specifically, in the logistics
context, different contributions clearly show the importance (Innis and La Londe, 1994;
Daugherty et al., 1998; Stank et al., 2003) and direct, positive influence of satisfaction on
loyalty.
2.3 Logistics function and ICT
Finally, we have study the influence of ICT on the consequence chain described
above. The use of ICT in logistics has been truly revolutionary (Christopher,
1992; Novack et al., 1992; Closs and Xu, 2000; Ballou, 2004), especially in terms of
improving LSQ for the customer. Rather than merely evolving, the concept of
logistics has been revolutionised, especially in terms of inter-company relationships
(Parasuraman and Grewal, 2000; Chen and Dwivedi, 2007), to the extent that the
conceptual structure has been redesigned to include information technologies which
facilitate information gathering, processing and distribution so that decision taking
can be improved both internally (Lewis and Talalayevsky, 1997) and in the supply
chain (Angeles, 2000).
This very recent relevance of ICT, has led us to include them in this study in order
to verify any moderator effect they may have on the quality-satisfaction-loyalty
consequence chain.
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