The mediating role of customer satisfaction in customer retention model: A Case of local automobile brands in Malaysia

Koay, Kian Yeik * and Ong, Derek Lai Teik * (2016) The mediating role of customer satisfaction in customer retention model: A Case of local automobile brands in Malaysia. Pertanika Journal Social Sciences & Humanities, 24 (S). pp. 27-40. ISSN 0128-7702

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Abstract

The automobile industry in Malaysia is facing increasing competition from foreign makes.Local automobile manufacturers, namely Perodua and Proton, are thus losing their market share. With such rapid decline in sales, it is important to ascertain the needs of customers in determining the predictors of repurchase intention of vehicles. This research seeks to examine the mediating role of customer satisfaction and to investigate the relationship of perceived service quality, product quality, price fairness, satisfaction, and repurchase intention. Multistage cluster sampling method was employed first in the Klang Valley before extending to a few selected authorized service centres. 200 samples were collected and data was analysed using SMART PLS 2.0 to build and assess the structural equation model of the relationships between the constructs. The results show that perceived service quality has no significant relationship with repurchase intention. However, perceived product quality, perceived price fairness and customer satisfaction are important factors that influence customers’ repurchase intention. Customer satisfaction also mediates the relationship between perceived product quality and perceived price fairness towards repurchase intention.

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