Service Quality, Customer Satisfaction and Brand Loyalty in the Swedish Subscription Video On Demand- Industry
Abstract
The main objective of this research is to measure the relation between different dimensions, or constructs of service quality with customer satisfaction and brand loyalty; thereby identifying the most important factors of service quality that affect customer satisfaction and brand loyalty, in the context of subscription video on demand (SVOD) services in the Swedish market. This study utilised a mixed methods approach divided into two stages, whereof the first involved multiple focus groups for collecting qualitative data. The second stage consisted of quantitative data collection through online questionnaires from 122 valid respondents, ranging from the age of 18 to 29 by a non- probability sampling method. SPSS was used to analyse the data with three statistical analysis methods: bivariate correlations, for establishing evidence of construct validity; a reliability analysis to test Cronbach alpha for internal consistency; and multiple regression analysis to examine the relationship between independent and dependent variables. The research findings indicate that there is a positive, significant relationship between customer satisfaction and certain constructs of service quality. Also, findings indicate that the statistical relationship between the constructs of service quality and brand loyalty are partially mediated by customer satisfaction. As a result, companies operating in the Swedish SVOD-industry need to focus on improving the significant factors of service quality, as they may increase customer satisfaction of 18 to 29-year-old customers, and further create long-term relationships as a way of gaining competitive advantage.
Keywords: Subscription video on demand (SVOD), Service Quality, Customer Satisfaction, Brand Loyalty.
1. Introduction
About a decade ago, smartphones by the standard as we know them by today did not exist. Three decades earlier, most people did not even own a personal computer. Nowadays, people are spending their time looking at bright screens, whether it is a smartphone screen, a computer screen or a television screen. The progression of technology is moving at a faster pace than ever before and the advances in technology have paved the road for new business opportunities to emerge. During this development, the opportunity to exploit the systems arose, and piracy became increasingly popular by consumers of online entertainment (Poort, Quintais, van der Ende, Yagafarova, amp; Hageraats, 2018). Subjected to many challenges, consumersrsquo; willingness to pay for entertainment decreased, and the danger of piracy harmed businesses worldwide, facing economic losses estimated to over $200 billion in 2005, as a result of counterfeit and pirated goods (Organisation for Economic Co-Operation and Development, 2007). In recent years, rapid advances in technology have enabled users to access increased bandwidth and speed in their internet connections. Such improvements in combination with modern operating systems and optimized personal computers have created new, lucrative business opportunities.
Through several business ideas that have risen, subscription based video on demand streaming is an example of a service that has made its mark on the modern media industry. The phenomenon is more commonly known as subscription video on demand (SVOD). The services include all forms of video services where users have unrestricted access to a frequently updated variety of movies and series, at a fixed monthly rate, and where they have the ability to play, pause, fast forward and rewind the content as they please (Grece, 2014). New industries are argued to be important for economic growth, as they may transform mature industries and drive innovation, which accurately describes what has happened within the entertainment industry (Feldman amp; Tavassoli, 2014). Furthermore, for businesses to flourish, understanding potential customers is of high importance in order to generate a superior offering. Absolute determinants of customer satisfaction and brand loyalty within the industry of SVOD are yet to be established, due to the limited research conducted in the field. The positive relationship between the two concepts, however, has been made apparent by previous research (Oliver, 1999; Ahmed, Chandio, amp; Quresh, 2015).
1.1 Background
Two highly dominant marketing topics of today are customer satisfaction and brand loyalty. The actuality of the topic has led to extensive research in the field, and vast advances for both practice and academia (Schirmer, Ringle, Gudergan, amp; Feistel, 2016). Satisfaction can be defined as a personrsquo;s enjoyment or disappointment resulting from a performance specific expectation, in comparison to the expectancy disconfirmation, which implies diminishment of prior expectations (Oliver, 1980; Kotler, 2000). Also, some researchers argue that disconfirmation of expectations has an effect on perceived quality, together with various other factors, such as product features and attributes (Bolton amp; Drew, 1991; Parasuraman, Zeithaml, amp; Berry, 1988). Perceived quality is also proposed to be similar to attitude, and that the process shaping perceived quality is similar to the journey of attitude creation. (Gotlieb, Grewal, amp; Brown, 1994; Dodds, Monroe, amp; Grewal, 1991; Parasuraman et al., 1988).
Furthermore, brand loyalty is based on the fundamentals of customers seeking the best value, in which customer satisfaction is a predominant driver (Reichheld, 1994; Anderson amp; Sullivan, 1993). The link between satisfaction and loyalty has been evident in previous research, though reports have also indicated that satisfaction alone is not always necessarily a recipe for loyalty (Reichheld amp; Sasse
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