Ki-Han Chung1, , Deok-Jae Choi1, Yu-Hui Dong1, Myeong-Guk Choi1, Advanced Science and Technology Letters Vol.70 (Business 2014), pp.24-27 http://dx.doi.org/10.14257/astl.2014.70.06 Customer Loyalty in the NPS and Impact of Store Image, Charity Image, and Customer Orientation: The Moderating Effect of Trust Ki-Han Chung1, , Deok-Jae Choi1, Yu-Hui Dong1, Myeong-Guk Choi1, Jae-Ik Shin1,*, 1 Department of Business Administration, Gyeongsang National University, 501, Jinju-Daero, Jinju 660-701, South Korea {khchung, sji}@gnu.ac.kr, *:Corresponding author Abstract. We performed a study to determine the influences that store image, charity image, and customer orientation have on customer satisfaction and customer loyalty in the non-profit store (NPS), as well as to examine the moderating role of trust. The results confirmed that store image, charity image, and customer orientation positively affect both customer satisfaction and loyalty. Customer satisfaction positively affects customer loyalty. The moderating effects of trust in the relationships between store image and customer satisfaction, charity image and customer loyalty, and customer orientation and customer loyalty are significant. Keywords: Store image, Charity image, Customer orientation, Trust, Customer satisfaction, Customer loyalty 1 Introduction Ongoing relationships between businesses and their customers could achieve the ultimate goal to increase repeated customer patronage in the non-profit organizations (NPOs) [1]. Customer trust is the essential element in fostering customer relationships and sustainable market share [2]. Accordingly, this study aims to investigate how store image, charity image, and customer orientation influence customer satisfaction and loyalty and to examine the influences of trust in the relationships between the constructs. 2 Literature Review A favorable store image positively affects the perception of customer satisfaction and store loyalty [3]. Images of an outstanding charity organization can differentiate the organization from the others and the effect on consumer's preference of its brand products, and create a halo effect for its activities [4]. ISSN: 2287-1233 ASTL Copyright © 2014 SERSC

Advanced Science and Technology Letters Vol.70 (Business 2014) Customer satisfaction becomes a preceding indicator of an increase in future consumer spending, and its explanatory power is greater than credit, income, or customer opinions [5]. It is expected that store image, charity image, and customer orientation will positively influence customer satisfaction and loyalty. 111 Store image will have a positive effect on customer satisfaction. 112 Charity image will have a positive effect on customer satisfaction. 113 Customer orientation will have a positive effect on customer satisfaction. 114 Store image will have a positive effect on customer loyalty. 115 Charity image will have a positive effect on customer loyalty. 116 Customer orientation will have a positive effect on customer loyalty. 117 Customer satisfaction will have a positive effect on customer loyalty. Even though service providers fail to provide quality service, they still can decrease customers’ perceived risk if they respond in a way that builds customer trust [6]. Thus, we propose that the difference in trust will acts as a moderating effect. 118-1 The relationship between store image and customer satisfaction is moderated by trust. 118-2 The relationship between charity image and customer satisfaction is moderated by trust. 118-3 The relationship between customer orientation and customer satisfaction is moderated by trust. 118-4 The relationship between store image and customer loyalty is moderated by trust. 118-5 The relationship between charity image and customer loyalty is moderated by trust. 118-6 The relationship between customer orientation and customer loyalty is moderated by trust. 3 Methodology The research has five constructs, each having multiple items that are measured using a seven-point Likert-type scale (1 = strongly disagree and 7 = strongly agree). Convenience sampling drew a sample of 250 respondents who have experienced a Beautiful Store in Gyeongnam province of South Korea. For data collection purpose, a personal interview technique was used at Gyeongnam province from 15 January 2013 to 25 February 2013 and of the 250 questionnaires, 33 questionnaires were eliminated due to missing data, resulting in a final sample of 217 respondents. Examination of demographic characteristics indicates that 75.6 percent is female and 47.5 percent is under 40 years of age. Items sold are clothes (47.5 percent), home appliance (10.1 percent), and books (9.2 percent). As such, the results confirmed the dimensionality of the solution and suggested convergent and discriminant validity in Table 1. Copyright © 2014 SERSC 25

4 Findings Table 1. Confirmatory factor analysis Advanced Science and Technology Letters Vol.70 (Business 2014) Table 1. Confirmatory factor analysis Construct Item Standardized Estimate t-value Composite Reliability AVE Store image SI4 .774 - SI5 .843 10.439* .976 .571 SI6 .635 8.700* Charity image CI1 CI2 .820 12.807* CI3 .796 12.360* .991 .621 CI4 .812 12.804* CI5 .801 12.456* CI6 .719 10.953* Customer CO1 .751 orientation CO2 .816 12.667* CO3 .886 13.969* CO4 .933 14.834* .994 .728 CO5 .863 13.641* CO6 .860 13.469* CS1 .901 satisfaction CS2 .902 17.261* .987 .709 CS4 12.263* Customer loyalty CL1 .892 CL2 .931 18.275* .982 .619 CL3 10.225* CL4 .654 10.991* χ2=346.087(df=197, p=.000), CMIN/DF(1.757), RMR(.048), GFI(.872), NFI(.907), TLI(.950), CFI(.957), RMSEA(.059) *: p<0.01 4 Findings Table 2. Results of hypothesis testing Path Standardized estimate t-value p-value Result 111 Store image→Customer satisfaction .213 2.913** .004 support 112 Charity image→Customer satisfaction .206 2.695** .007 113 Customer orientation→Customer satisfaction .328 3.833*** *** 114 Store image→Customer loyalty .218 2.898** 115 Charity image→Customer loyalty .215 2.996** .003 116 Customer orientation→Customer loyalty .191 2.394** .017 117 Customer satisfaction→Customer loyalty .285 3.770*** χ2=362.133(df=198, p=0.000), CMIN/DF(1.829), RMR(.048), GFI(.868), AGFI(.831), NFI(.903), TLI(.945), CFI(.953), RMSEA(.062) **: p<0.01, ***: p<0.001 26 Copyright © 2014 SERSC

5 Conclusions References Table 3. Moderating effect of trust Advanced Science and Technology Letters Vol.70 (Business 2014) Table 3. Moderating effect of trust Path High Group (n = 123) Low Group (n = 94) Free Model Constrained Model Estimate t-value Estimate t-value H8-1 SI→CS .321 2.590 -.114 -.625 chi-square difference test: A χ2(1)=6.053** χ2(390)=525.136 χ2(391)=531.189 H8-2 CI→CS .139 1.190 .005 .027 chi-square difference test: A χ2(1)=1.034(n.s.) χ2(391)=526.170 H8-3 CO→CS .118 1.037 .426 1.880 chi-square difference test: A χ2(1)=0.700(n.s.) χ2(391)=525.836 H8-4 SI→CL .140 1.226 .366 2.310 chi-square difference test: A χ2(1)=0.975(n.s.) χ2(391)=526.111 H8-5 CI→CL -.036 -.335 .608 3.815 chi-square difference test: A χ2(1)=7.524*** χ2(391)=532.660 H8-6 CO→CL .333 2.849 -.140 -.769 χ2(391)=528.881 chi-square difference test: A χ2(1)=3.745* *: p<0.01, **: p<0.05, ***: p<0.01 5 Conclusions The results showed that store image, charity image, and customer orientation positively influence both customer satisfaction and loyalty in the non-profit store. It was identified that customer satisfaction is strongly associated with customer loyalty. Thus, the store should focus on reinforcing marketing activities. The moderating effects of trust in the relationships between store image and customer satisfaction, charity image and customer loyalty, and customer orientation and customer loyalty are significant. Thus, the store should make an effort to enhance its trust. References Ok, C., Back, K. J., Shanklin, C. W.: Modeling Roles of Service Recovery Strategy: a Relationship-Focused View. Journal of Hospitality & Tourism Research. 29(4), 484--507 (2005) Urban, G. L., Sultan, F., Qualls, W. J.: Placing Trust at the Center of Your Internet Strategy. Sloan Management Review. 42(1), 39--48 (2000) Cornelius, B., Natter, M. and Faure, C.: How Storefront Displays Influence Retail Store Image. Journal of Retailing and Consumer Services. 17, 143--151 (2010) Bennett, R.: Competitive Environment, Market Orientation, and the Use of Relational Approaches to the Marketing of Charity Beneficiary Services. Journal of Services Marketing. 19(7), 453--469 (2005) Fornell, C., Rust, R. T., Dekimpe, M. G.: The Effect of Customer Satisfaction on Consumer Spending Growth. Journal of Marketing Research. XLVII, 28--35 (2010) DeWitt, T., Nguyen, D. T., Marshall, R.: Exploring Customer Loyalty Following Service Recovery the Mediating Effects of Trust and Emotions. Journal of Service Research. 10(3), 269--281 (2008) Copyright © 2014 SERSC 27