Abstract:

The study in hand attempts to investigate the intervening role of satisfaction on service quality and reputation relationship with brand loyalty in the hotel industry of Pakistan. The sample of the current research was customers of the hotels operated in Khyber-Pakhtunkhwa. Based on convenience sampling, a total of 400 respondents were selected. A total of 356 questionnaires were received back, from which 345 were usable. Data were collected from the targeting customers through a structured questionnaire. The instrument validity and reliability were checked. The study found that reputation and service quality are significantly related to brand loyalty. The relationship between service quality and brand loyalty is did not mediated by satisfaction. Based on these results, the study recommended that the hotel industry give due importance to service quality, including physical environment, location, and staff behaviour, and reputation, to gain customer loyalty. In the end, we also recommend future directions to explore the phenomena further.

Key Words:

Satisfaction, Service Quality, Brand Loyalty, Reputation, Hoteling Industry

Background of the Study

There are two essential concepts in the hoteling industries: Brand loyalty (BL) and service quality (SQ), which has received momentous consideration in earlier studies. Significance of the service quality stems from his outcome on the loyalty of brand (Prentice, 2013; Gursoy et al., 2014), educating revisit intents, growing inclination for higher price payment (Zemke et al., 2015), dropping the possibility of hotels failures by improving the satisfaction (S) of customers and its significance, increasing customer 

of company identifications, reducing operational expenses (Fida et al., 2020; Molina-Azorin et al., 2015) as well as improving the image of the whole business (Mehta, 2020).

Consequently, trailing service quality has an important component for a hotel aiming to stay alive and competitive. Likewise, in the latest literature, specific responsiveness has remained waged to the conception of BL in the hotel's industry (Mehta, 2020; Fida et al., 2020; Alam and Noor, 2020; Bowen & Mc-Cain, 2015) since its generates profit for the organization (Kandampully et al., 2015) in addition as it signifies a significant element of consumers-built equity of brand (Xu & Chan, 2010: Seric et al., 2014).

Although a remarkable numeral of research has examined service quality and loyalty association, little consideration has paid to an emotional role in this association (Han & Jeong, 2013). So, to addresses this space, some efforts have done in recent times to integrate emotional components in service quality and loyalty association to extend understanding of conception (Jani & Han, 2015; Su et al., 2015; Lin & Liang, 2011: Namkung & Jang, 2010: Han & Jeong, 2013). The research emphasises the roles of the service quality in impelling conditions of customer emotion (negative or positive) related to consumption within the context of services transfer.  

Though even though these researches have a progressive understanding and the roles of emotion in services experience, they have never inspected different, precise and more profound practices of the customer's emotions, and they have never tested the degree to which service quality adds to increasing feelings concerning to the service brands. In this specific phase, the new paradigm has developed in marketing contexts known as emotional brand attachments (EBA), which blows intensely into an effective dominion and emphases different and specific emotional procedures as the cause of the development of the brands' loyalty. The emotional brand attachment (EBA) captures the strengths and deepens emotional links between customers and brands. 

In view of the past studies, it is founded that there exists a considerable research gap to find the combined effect of SQ and R on BL (Jane & Ibrahim, 2016). Past research shows the relationship between customer’s perceptions about quality and linking it with loyalty, but this linkage is mediated by other factors requiring systematic investigation. Hence the present study will investigate the combined impact of the factors such as SQ, R, and customer satisfaction on BL in the Pakistani hotel industry. The study in hand also check the actual variations caused due to the combined impact of the mentioned variables on brand loyalty. Besides this, the study in hand also checks the effect of the emotional brand attachment variable, namely reputation, on BL. 

Literature Review

Service quality characterizes customers’ valuation and aggregated differentiation of the particular service or perceived evaluation (Grönroos, 1984). The perception may be split into two different concepts in service quality, which may be the US perspective and the Nordic perspective (Parasuraman et al., 1988). The first US perspective depicts the SERVQUAL model (commonly recognized); the model composes different five dimensions such as reliability, empathy, tangibles, assurance, and responsiveness (Pizam et al., 2016). It’s worth mentioning to note the point that scholars adapted and forwarded their remarks as propositions about the diversity of the SERVQUAL model. Moreover, the various segments of the model were also proposed for other literature to be taken into account. The model has widely been lying spread over the existing literature; however, two points of criticism have been added to the literature based on the contradiction to its content.

Another perception unfolds the dimensions of service quality in overall expressions, and those consists of two different components, the technical quality and functional quality (Grönroos, 1984). Attendance support advocates the perception of the perspective having the view of its validity, standing parallel to the design when it applies to numerable industries in general and hospitality industries (Loureiro et al., 2014: Ekinci et al., 2008; Nam et al., 2011). Nordic school of thoughts (Nam et al..,2011) recommends two dimensions as employee’s behaviors and physical quality, to order the concept of SQ. The physical quality is defined as the good, material, design, and features of a particular hotel. However, the hotel crew may reflect the image in the form of responsiveness, competence, friendliness, and how to help their customers (Nam et al., 2011). Service quality as a dimension for measuring the variable has been adopted by followed Ekince et al. (2008).

Customers’ loyalty and repeat purchase were intermixed as similar concepts (Cunningham, 1956). Nevertheless, the behavioral dimension in the account of purchase behavior was severely criticized by researchers in general and by Day (1969). The purchase decision was demarcated into two different dimensions as attitudinal and behavioral. A positive attitude can lead a customer to make a favourable decision for purchases. 

Nonetheless, the customers’ purchase decision approach was criticized with a rational yielding that repeat purchase and attitudinal bases are difficult to comprehend. Though, Day (1969), an advocate of repeat purchases and attitudinal decisions, states that repeat purchases make the concept of purchase frequency and further build a measurement mechanism. Concurrently, Oliver (1993, 1999) depicts and supports the argument of Day (1969) and adds the concept of behavioral intention. Oliver (1999) defines customers’ satisfaction as customers assessing the brand experience with their expectations from the particular brand. Furthermore, service quality is elaborated as responsiveness, the performance to the service, Customers’ expectations regarding specific service builds on referrals, words of mouth, and experiences over the times and frequency one visits the service provider to take the service (Jacoby & Kyner,1973).

Customers’ satisfaction may be the milestone for a business entity to take the heavy half of the market. This increases the customers’ purchase frequency and recommendations to other customers, thus increasing profitability over business’ entity age. As the level of customer satisfaction goes up, customer loyalty towards the particular service or brand goes up and otherwise (Oliver, 1999). Furthermore, it boasts up the number of customers too, thus the market. Thusspreads with the passing time. Customers’ satisfaction is referred to the interactions made with them by staff in banking organizations. The interactions and experiences make their image and position. 

The providers of services such as the banking sector require in keeping extended relations to guarantee customer loyalty. This happens once perceived the value of the service by the customers giving a higher competitive advantage over other competitors present in the market (Roig et al. 2006). The valued perceived have gained high significance as a critical factor in forecasting re-purchasing purpose (Gursoy et al., 2014). The perceived value has complicated and composite perceptions, always have definite distinctly via numerous scholars (Hubler et al., 2001). 

Conferring to Zeithaml (1988), the perceived value of the products is utility valuation which customers received founded on customer’s perception which he would receive by thinking it. The study of Woodruff (1997) defines the perceived value of a customer as the assessment done of products attribute and feature performance with expectations and the goals customers in his thoughts while Roig et al. (2006) suggest the perceived value come as a tradeoff amongst perceived benefit and the perceived cost. Therefore, these definitions propose that customers’ value relies on the perception of customers rather than of suppliers or another stakeholder (Nam et al., 2011).

Proposed Hypotheses

Method Research Philosophy

The research philosophy deals with the source nature and improvement of knowledge. Though the knowledge idea creation may seem to be profound, we are engaged in the creation of knowledge; as part of concluding our dissertations, we will gather secondary data and involved in the analysis of data to respond to the study questions, and the solution marks the formation of new knowledge. Choosing an appropriate research study philosophy is an essential part of research methodology. The current study will adopt a positivism research philosophy because the researcher will collect the quantitative data through a structured questionnaire. The methodology which essentials to be adopted here is highly designed, involving the hypotheses testing and the statistical tools a quantitative method.  

Population, Sampling Technique and Sample Size

The population of the study was the customers of the hotel industry of Pakistan. The sampling frame consists of customers of the hotel industry operating in Khyber Pakhtoonkhwa and Islamabad. The present study used a convenient sampling technique. The sample size for a multivariate analysis should be ten times greater than the numbers of antecedents of the research study (Sekaran, 2013). Further scholars claimed that the size of the sample more significant than 30 and lesser than 500 is acceptable also (Field, 2013), (Khattak et al., 2016), (Imran & Khattak, 2019). In view of the recommendations, this research study plan to select a sample of the 400 customers to administer survey questionnaires. 

Research Instrument

Using the existing scales developed by past researchers mentioned below are used in this study. All instruments are modified according to the study context. A five-point Likert scale ranging from 1= strongly disagree to 5= strongly agree used to measure the instruments. To measure reputation, a scale developed by Petrick (2002) was adapted and used. To measure satisfaction, a questionnaire adopted from the study of Oliver (1993) was used. To measure brand loyalty, a scale developed by Haris and Goode (2004) was adapted and used to collect the data. 




Empirical Results Table 1. Instrument Reliability

S. No	Variable	Cronbach’s Alpha	No. of Items
1	BL	.931	8
2	SQ	.947	10
3	R	.901	8
4	S	.913	10

 




Table 1 reports the Cronbach alpha values of the selected variables. As reported, all alpha values are near to 1 and greater than 0.7, thus, the scale used for this study is highly reliable.

 

 

Instrument Validity

To check the scale validity exploratory factor analysis (EFA) was conducted. In EFA we check the KMO and Bartlett’s test to confirm about the sample adequacy and to know whether the null hypothesis is accepted or rejected. 

Table 2. KMO and BTS

Variable	KMO	BTS Chi-Sq                      df                     Sig
BL	.756	2832.82	28	.000
SQ	.790	4493.12	45	.000
R	.682	2567.67	28	.000
S	.762	2840.32	45	.000

 




KMO and BTS values of the selected variables are reported in the above table. As shown, all the KMO values of all variables is above 0.6, thus, confirm the appropriateness of sample size. The values of BTS for all variables are highly significant which confirm the association among the study variables, and the alternative hypotheses of the study are accepted.

Table 3. Component Matrix

Items	Component	Items	Component
BL1	.828	R1	.809
BL2	.868	R2	.780
BL3	.860	R3	.787
BL4	.838	R4	.637
BL5	.713	R5	.831
BL6	.779	R6	.802
BL7	.846	R7	.704
BL8	.831	R8	.811
SQ1	.798	S1	.754
SQ2	.869	S2	.783
SQ3	.894	S3	.770
SQ4	.698	S4	.750
SQ5	.757	S5	.619
SQ6	.806	S6	.825
SQ7	.858	S7	.793
SQ8	.880	S8	.781
SQ9	.834	S9	.755
SQ10	.836	S10	.670

 




The factor loading values of all the items of the study variables are reported in table 3. As depicted, all items have a good factor loading values. All values are above 0.5, which indicate that no item should be removed from the scale. Thus, the instrument used to collect the data is valid. 

Table 4. Correlation Matrix

	BL	SQ	R	S
BL	1
SQ	.641**	1
R	.518**	.323**	1
S	.014	.024	.503**	1

 

The table highlighted above shows correlation matrix of the study variables. As depicted, both independent variables namely SQ and R are significantly correlated with dependent variable BL. It also confirms that there is no multicollinearity in the study variables as the correlation between independent variables is less than 0.7.

Table 5. Model Summary

Model	R	R-Square	Adjusted R-Square	St. Error of the Estimate	Durbin-Watson
1	.720	.519	.516	.733	2.219

IV: SQ, R

DV: BL

 


Table 5 reports the value of R² which is 0.519 which means that our independent variables SQ and R explain 52% variation in the dependent variable BL. The value of Durbin-Watson is 2.219 which means that there is autocorrelation in the data.

Table 6. Coefficient

Model	Unstandardized Coefficient		Standardized Coefficient	t	Sig
	B	Std. Error	Beta
Constant	.288	.177		1.633	.103
SQ	.560	.042	.529	13.36	.00
R	.391	.045	.347	8.76	.00

Dependent Variable: BL


The regression coefficient of the study variables is reported in the above table. The t values and p values show that both SQ and R is significantly related with BL. Thus, both of our hypotheses regarding the direct link between independent variables and dependent variable are accepted.

Mediating Effect of Satisfaction

To check the mediating effect of satisfaction on the relationship of R and SQ with BL, the study used Preacher and Hayes (2013) methodology called PROCESS. This method has numerous benefits over the old Barron and Kanny (1986) method.  

Table 7. Model Summary

Model	R	R-Square	F	p	R	R-Square	F	p
1	.023	.006	.196	.657	.641	.411	119.54	.00

Predictor: (constant), SQ            Predictors: S, SQ

Dependent Variable: S               Dependent Variable: BL

 




The model summary of step 1 and 2 of mediation analysis is reported in the above table. In step 1 the R² value is .006 and the p value is insignificant while in step 2 the R² value is .411 and the p value is significant. 

Table 8. Coefficient

Model	coeff	se	t	p	LLCI	ULCI
Constant	3.34	.179	18.63	.00	2.98	3.69
SQ	.022	.051	.443	.65	-.077	.123

 

The coefficient of the relationship between SQ and S shows that SQ is insignificantly related with S.

Table 9. Coefficient

Model	coeff	se	t	p	LLCI	ULCI
Constant	1.24	.219	5.67	.00	.811	1.67
S	-.001	.046	-.03	.69	-.093	.08
SQ	.678	.044	15.45	.00	.592	.76

Dependent Variable: BL

 


The coefficient of the mediation analysis is reported in the above table. As shown, SQ is significantly related with BL while S has insignificant relation with BL. The direct effect of SQ on BL is .6788 and the indirect effect of SQ on BL through S is .000. The Sobel test have also insignificant value. Thus, the phenomena show that S has no intervening mechanism between SQ and BL relationship.

Table 10. Model Summary

Model	R	R-Square	F	P	R	R-Square	F	p
1	.503	.252	116.42	.00	.591	.349	92.14	.00

Predictor: (constant), R                                                  Predictors: S, R

Dependent Variable: S                                                   Dependent Variable: BL

 


The model summary of step 1 and 2 of mediation analysis is reported in the above table. In step 1 the R² value is 25% and the p value is significant while in step 2 the R² value is 35% and the p value is significant.

Table 11. Coefficient

Model	coeff	se	t	p	LLCI	ULCI
Constant	1.673	.167	10.00	.00	1.344	2.00
R	.505	.047	10.78	.00	.413	.597

Dependent Variable: S

 

The coefficient of the relationship between R and S shows that R is significantly related with S.

Table 12. Coefficient

Model	coeff	se	t	p	LLCI	ULCI
Constant	2.135	.199	10.72	.00	1.74	2.52
S	-.370	.056	-6.55	.00	-.48	- .25
R	.770	.056	13.57	.00	.65	.88

Dependent Variable: BL

 


The coefficient of the mediation analysis is reported in the above table. As shown, R and S are significantly related with BL. The direct effect of R on BL is .7701 and the indirect effect of R on BL through S is -.1870. The Sobel test have also significant value. Thus, the phenomena show that the mediator S mediate the relationship R and BL

Conclusion

Model                      coeff se t p LLCI ULCI

Constant 2.135 .199 10.72 .00 1.74 2.52

S -.370 .056 -6.55 .00 -.48 - .25

R .770 .056 13.57 .00 .65 .88

Dependent Variable: BL

 

The coefficient of the mediation analysis is reported in the above table. As shown, R and S are significantly related with BL. The direct effect of R on BL is .7701 and the indirect effect of R on BL through S is -.1870. The Sobel test have also significant value. Thus, the phenomena show that the mediator S mediate the relationship R and BL

Recommendations

Based on the study's findings in hand, specific recommendations were drawn, like marketing managers must improve SQ to enhance brand loyalty. Similarly, they also give more worth to an organization reputation as they directly link with BL. Managers and sales executives of hoteling organizations may also provide customer satisfaction and gain customer confidence regarding the organization products. Organizations should give different variations based on quality and product design, keeping in views of customer demand to facilitate many customers. 

Limitations and Direction for Future Research

The current research highlights the explored phenomena very well, but there are still some limitations:

1. The study used service quality as a composite variable and did not check the effect of SQ dimensions like staff behavior and physical environment. In the hoteling business, both these factors have a more significant impact on customer satisfaction. So, future researchers must address these factors to explore the phenomena further.

2. The study uses one possible mediator, namely satisfaction; however, other potential mediators like brand trust and the perceived value may also affect the relationship. To further elaborate on the situation, future researchers may also check the mediating effects of these variables.

3. The study in hand was conducted in the hotel industry of Pakistan. Future researchers may replicate the same research in other services organizations where brand loyalty exert substantial influence.

4. This study was conducted in Pakistan. Someone in future may replicate the same study in other culture. 

List of Abbreviations used in this study

S stand for Satisfaction 

SQ stand for Service Quality 

R stand for Reputation 

BL stand for Brand Loyalty  

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