The Impact Of Price Perception On Customer Loyalty In The Airline Context

Abstract

It is a generally acknowledged in marketing literature that pricing is a critical strategy that influences product/service demand and company profitability. Consequently, price plays an important role in influencing customers’ decisions in choosing and developing loyalty with a particular product or service. Moreover, consumers are becoming more value conscious, focusing on price and value as the primary reason when purchasing product and service. Thus, the influence of the multi-dimensions of perceived value on customer loyalty in the airline context was examined. In addition, the moderating effect of consumers’ price perception was also investigated in explaining service loyalty. The empirical findings strongly supported the significant impact of quality/emotional response/reputation, behavioral price on brand affect and brand trust. But no support was found for the hypothesized relationships between monetary price and brand affect and brand trust. Moreover, brand trust was found to significantly predict both attitudinal loyalty and behavioral loyalty, as hypothesized. Contrary to expectations, brand affect exerted no impact on both loyalty constructs. The moderating effect of price perception was significantly apparent solely on the relationship between brand affect and loyalty constructs.