1. Ki-Han Chung1, , Deok-Jae Choi1, Yu-Hui Dong1, Myeong-Guk Choi1,
Advanced Science and Technology Letters Vol.70 (Business 2014), pp.24-27
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 , South Korea {khchung, *: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: ASTL Copyright © 2014 SERSC

2. 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 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.
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3. 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= (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= (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
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4. 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
chi-square difference test: A χ2(1)=6.053**
χ2(390)=
χ2(391)=
H8-2
CI→CS
chi-square difference test: A χ2(1)=1.034(n.s.)
χ2(391)=
H8-3
CO→CS
chi-square difference test: A χ2(1)=0.700(n.s.)
χ2(391)=
H8-4
SI→CL
chi-square difference test: A χ2(1)=0.975(n.s.)
χ2(391)=
H8-5
CI→CL
chi-square difference test: A χ2(1)=7.524***
χ2(391)=
H8-6
CO→CL
χ2(391)=
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
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