Effect of customer heterogeneity on the relationship satisfaction–loyalty

Abstract

The need to study the differences among consumers due to their behavioural heterogeneity and the highly competitive consumer markets is recognized. In this paper, we analyse the potential heterogeneous shopping assessment in retail and how that experience may influence on consequent customer loyalty in a different way. The effects of satisfaction on attitudinal and behavioural loyalty and positive word of mouth are estimated by a finite-mixture structural equation model, and unobserved heterogeneity is analysed simultaneously. The results show that there are three latent segments where the strength of causal relationships differs which mean that there is an overestimation of the impact of customer on loyalty when heterogeneity is ignored.