Effects of Perceived Service Quality on Customer Loyalty and Repurchase Intentions. The Mediating Role of Customer Satisfaction

The primary objective of this study is to gauge the effect of perceived service quality on customer loyalty and repurchase intentions through customer satisfaction in Lahore, Pakistan. Therefore, the significance of customer satisfaction for customer loyalty and repurchase intentions is explained. Customer satisfactions play a mediating role between perceived service qualities, customer loyalty and repurchase intentions. The population of the research is constituted of the potential customers of Lahore and the sample size amounts to 230.

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Chapter 2. Literature Review:
Perceived service quality:
Service quality was defined in past as the disparity between the expectation and perception of service which is received or to be received by the customers (Gronroos, 2001). Parasuraman et al., (1985) has explained that perceived service quality is the comparison of what services are being offered by the service provider and what they actually should be.[...].
There are a few features of the services which were identified by Mudie and Pirrie (2006) which are discussed below:
Intangibility: It is one of the main features of service. Service does not have a tangible identity that means that it cannot be touched, counted, tested, verified or measured as in the case of sale of goods. This is one of the main reasons that most of the companies and organizations find it very hard to evaluate their services or the quality of their services.
Inseparability (simultaneous production and consumption): This is again a quality that hugely differentiates the physical goods from services. Services are produced, sold and consumed at the same time whereas the tangible products or goods are first produced than sold and consumed at the end.
Variability (heterogeneity): Variability and heterogeneity is also one of the important features of services. As services are provided by different people and all have different temperament and way of thinking therefore the services they provide are also unique in their respect. The quality however may vary depending upon the person who is providing these services and it also very much depends upon how these services are provided.
Perishability: Services are also perishable in nature as they cannot be stored because they are performances. We cannot store the services with an intention of using them at a later stage as they are consumed at the time they are produced.
In today's competitive competition that is going on in the business world service quality is considered as the major tool that helps the organizations gain competitive advantage over other organizations. This also is the major differentiator that differentiates the two service organizations. Some past references of the different studies say that service quality fulfills the need and expectations of the customers (Dotchin & Oakland, 1994). Parasuraman et al., (1985) highlighted that "the judgment on service quality is a reflection of the degree and direction of discrepancy between consumer's perception and expectations." By providing good service quality; organizations can achieve customer satisfaction, customer loyalty, and repurchase intentions (Hackl, Scharitzer & Zuba, 2000). [...].
Customer loyalty:
Loyalty is defined by Gremler and Brown (1996) as "the degree to which a customer exhibits purchasing behavior from a service Provider, processes a positive attitudinal disposition toward the provider, and considers using only this provider when a need for this service arises".
Loyalty is the willingness of the customer to utilize the same services provider/service company consistently, that maybe preferred among other alternatives, thus in compliance of actual behavioral outcome and favorable attitudes, regardless of marketing efforts and situational influences which are made to stimulate switching behavior(Caruana, 1999; Gremler & Brown, 1996). Zeithaml (1996) argues the dimensions of loyalty in his study, such as willingness to pay more and loyalty under increased pricing which have mostly been left out in past researches. Furthermore, loyalty has often been devised in positive terms; however, variables which predict the positive outcomes may be related to those variables that predict the disloyalty of the customers (Zeithaml, 1996). Perceived service quality is often viewed as a key antecedent of service loyalty (Dick & Basu, 1994). Oliver (1999) has conceptualized that firstly customer should be at the stage of "cognitive loyalty", in which customer become loyal b