Font: An application of the ECSI model as a predictor of satisfaction and loyalty for backpacker hostels Ignasi Cabañas Text analysis Consumer's Behaviour and Segmentation MDPT AN APPLICATION OF THE ECSI MODEL AS A PREDICTOR OF SATISFAC

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Font: An application of the ECSI model as a predictor of satisfaction and loyalty for backpacker hostels Ignasi Cabañas Text analysis Consumer's Behaviour and Segmentation MDPT AN APPLICATION OF THE ECSI MODEL AS A PREDICTOR OF SATISFACTION AND

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  Font:  An application of the ECSI model as a predictor of satisfaction and loyalty for backpacker hostels   Ignasi Cabañas Text analysis Consumer’s  Behaviour and Segmentation MDPT A N APPLICATION OF THE ECSI MODEL AS A PREDICTOR OF SATISFACTION AND LOYALTY FOR BACKPACKER HOSTELS   The research study  An application of the ECSI model as a predictor of satisfaction and loyalty for backpacker hostels identify and examine the key attributes that determine backpackers’ perceived value of backpacker hostels in Australia; the relationships between perceived value and backpackers satisfaction and ultimately, their loyalty to backpacker hostels. In order to detect these factors and its influences, the study uses the European Customer Satisfaction Index (ECSI) model that it is a conceptual framework of customer satisfaction that includes the independent variables of technical and functional dimensions, image, and price. Also, it is based on an assumed relationship between perceived value and customer satisfaction. Further, specifically for the application of this study , backpackers’ loyalty to a hostel, based on word -of-mouth referrals and their won repeat-purchase intentions, is the posited outcome of satisfaction. This network of causal factors forms the main focus of the study. The analysis of this study consisted of two major steps, starting with first validating the measurements of each shown in Figure 1 and then examining the hypothesized relationships shown. Figura 1. Conceptual framework of customer loyalty.  In this study are finding out the importance of the image in the framework of backpackers loyalty. An image is a customer’s pe rception based on the perceived benefits, the physical attributes and the H1. Image has a direct impact on a customer’s perception of the value of a backpacker hostel’s service.  H2. A customer’s perception of the value of a backpacker hostel’s service is influenced by technical dimensions of the service performance. H3. A customer’s perception of the value of a backpacker hostel’s service is influenced by functional dimensions of the service performance. H4. A customer’s perception of the value of a backpacker hostel’s service is influenced by price.  H5. Customer satisfaction is a direct effect of a customer’s perception of the value of backpacker hostels. H6. Customer loyalty is a direct consequence of customer satisfaction   with the service performance of backpacker/youth hostels.  branding. In this case, it reflects the history of backpacker hostels and is as much a consumer perception of how well they can satisfy needs and wants as it is the result of previous service encounters. For this reason, image can be considered to be an external product signal related to the service product (Olson and Jacoby, 1972). For backpacker hostels, that signal provides consumers with better predictive value for consumers because the internal signals associated with the service are difficult to evaluate before experiencing it. The process of image building is not an impartial exercise, because it consists of both cognitive and affective impressions of service transactions that have been selectively filtered, stored in the memory, and then retrieved when the need arises. Thus, image can diff  erentiate one “brand” of hostel from others offering comparable accommodation services, and influence loyalty. On the other hand, f  rom the backpackers’ perspective, the image of the hostels can serve to reduce the complexity of the decision making processes and its associated risks, by selecting accommodation which has few evaluative intrinsic attributes. Andreassen and Lindestad (1998, p. 88) have suggested that corporate image has a significant impact on customer loyalty, while the results of research into the behaviour of hotel guests conducted by Bowen and Chen (2001) indicate that, as customer satisfaction increased, loyalty indices more than doubled. This suggests that there is a greater probability of building backpac kers’ loyalty when they are completely satisfied, and that merely satisfying their accommodation needs will not automatically lead to long-term customer loyalty. About the technical (or outcome) dimensions of a service encounter are the tangible objects that remain after the completion of the service production process, when interactions between providers and their customers have ceased (Morgan and Piercy, 1992). In order to backpacker services we can define it as the physical facilities (parking spaces, clean and comfortable accommodation, kitchen areas, etc.). How this technical dimension of a service experience influen ce backpackers’ perceived value of the services performed by backpacker hostels it’s one of the objective of this study. The functional dimension of the service process, also described as “process quality” dictates how the service and its concurrent production and consumption process are received and experienced by customers.   Some specific functional dimensions in the context of backpacker hostels could be the behaviour of the staff. Unlike for marketers the technical dimension, which can be objectively evaluated because the functional dimension is intangible and subjectively determined by customers. For this reason, it plays an important role in determining customer satisfaction.   Price is the cost incurred in making a purchase (Tse, 2001) which, together with service quality, influences perceptions of value. It affects spending behaviour because consumers’ discretionary spending limits will determine what is to be bought on the basis of the price (Monroe, 1990). How  much they are willing to pay differs because their readiness depends on their needs, and the importance of the service to them at a given time and place (Heskett et al., 1997). Price is believed to have an impact on perceived quality because high-quality products and services normally cost more than low-quality equivalents (Curry and Riesz, 1988).   Perceived value of a service has been defined by McDougall and Levesque (2000) as the benefits customers believe they receive relative to the costs associated with its consumption, so customers’ perceptions of what is received at what cost. According to this definition, value includes not only quality, but also price and therefore a service may be of excellent quality but still be rated as poor value by customers if the price is too high. So, we can understand that perceived value is the result of the interactions of all the independent variables. Therefore, their proposition that the value of a service to customers determines customer satisfaction and loyalty the technical and functional dimensions of service delivery, as well as price, are important to backpackers in choosing backpackers hostels. Satisfaction is a response that occurs when consumers experience a pleasurable level of consumption-related realisation when evaluating a product or service. According to McGuire (1999) the level of satisfaction or dissatisfaction reflects perceptions and attitudes formed from previous service experiences, and influences repurchase intentions. In addition, customer satisfaction is an important element in service delivery because understanding and satisfying customers’ needs a nd wants can generate increased market share from repeat custom and referrals (Barsky, 1992). It therefore has a significant effect on future purchase intentions and on the formation of customer loyalty. When perceived value increases, the probability that customers will stay loyal is expected to increase, while a decrease in value will result in customers being more rece ptive to competitors’ marketing communications (Grönroos, 2000). Even though, the increase of satisfaction and loyalty are not symmetric because there are other factors as social expectations that play an important role in the purchase intentions. In reference to the customer loyalty, there are two possible ways to conceptualize it: behavioural, which is based on repeat-purchase behaviour, and attitudinal, which reflects the inherent affective and cognitive components of loyalty. There is a significant difference between satisfaction, the result of past service encounters, and loyalty, an on-going relationship with a specific service provider and, in consequence, a rejection of other service providers on the grounds that theirs are inferior to the preferred brand. In order to identify the links between perceived value, satisfaction and loyalty in this study, satisfaction is defined as a customer’s post -consumption evaluation of a service, which includes  cognitive and affective components, while loy alty is treated as a customer’s commitment to a service provider, which develops from satisfaction and includes the cognitive, affective and conative (intention) components that lead to repeat purchase. In addition, the perceived value influences customer satisfaction and, subsequently, loyalty. Loyalty is the dependent variable in the current research, and can be examined from two perspectives: “psychological” and “behavioural”  (Chaudhuri, 1999; Fournier and Yao, 1997). Backpackers may develop loyalty towards backpacker hostels if they have a positive perception of value associated with the service, and are satisfied with the level of service they receive. The psychological element consists of brand attitudes, while the behavioural component refers to habitual behaviour. The current research examines the strength and direction of the link between customer satisfaction and customer loyalty for backpacker hostels, as well as assessing whether the model is an effective instrument to measure the two constructs in that context. In order to evaluate simultaneously the hypothetical relationships shown in Figure 1, and to evaluate the measurement properties of the important factors in the model so that the findings of the study could more widely applied, it was decided to conduct confirmatory factor analysis (CFA) using AMOS 4.01 (Arbuckle and Wothe, 1997). This is a useful means to assess the extent to which a proposed measurement model reflects reality (the data) in terms of validity and reliability, and can also be used to examine a number of hypothesized paths, or relationships, between important marketing variables  –  in this case, price, perceived value, satisfaction and loyalty. The structural equation model highlighted some unexpected relationships. Functional dimension was found to be a determinant of satisfaction; image was found to be a predictor of satisfaction; and perceived value was found not only to predict satisfaction but also to indicate the degree of loyalty. In addition, the findings of the current research support the role of perceived value in mediating the relationship between antecedent functional dimension (the service processes) and satisfaction. That is, the “functional dimension” has an  indirect influence on customer loyalty through satisfaction, which suggests that customer loyalty is not a static outcome but rather one part of a dynamic service process. Figura 2. The structural equation model for backpacker hostels Font:  An application of the ECSI model as a predictor of satisfaction and loyalty for backpacker hostels    In order to build a competitive advantage, the managers of backpacker hostels, should note that customer loyalty is a construct that develops over time and therefore requires continuous monitoring and evaluation. The results finally suggest that they should design marketing strategies that take a brand identity corresponding with the brand image held by their target market, which will be in part at least derived from their beliefs about the benefits and value that the brand can offer. The image associated with the branding could be used to exert maximum influence on customer satisfaction via perceived value, and further build long-term loyalty to the brand. The study reported here has indicated that, in general, image influences perceived value, satisfaction and loyalty, in the context of backpackers market. In order to that, the measurement of loyalty must include both the customer satisfaction and image variables because while satisfaction relates to the service processes and outcomes, image has a significant impact on longer term loyalty. The general image of backpacker hostels is determined by what backpackers see, and includes their perceptions of the brand based on the functional aspects of the services provided by each individual hostel.
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