1. University of the Philippines Manila; avashanayukongdi06@gmail.com
2. University of the Philippines Manila; poudyalvimolwan8@gmail.com

*             Correspondence: avashanayukongdi06@gmail.com

Keywords: brand image, brand loyalty, service quality, Philippines

1. INTRODUCTION

The intensification of competition has resulted in a greater level of difficulty in maintaining the loyalty of current customers and acquiring new customers. In the realm of telecommunication services, establishing a connection between the customer and a particular operator’s telecommunication network holds significant value. Sustaining a long-term relationship with said network is crucial for the overall success of the company [1]. In order to effectively navigate the intensifying landscape of competition, businesses must prioritize the development and nurturing of enduring customer relationships. The telecommunication industry is undergoing rapid evolution and emerging as a prominent sector that offers comprehensive services to various industries. The mobile market in the Philippines is exhibiting signs of significant progress towards achieving a state of maturity. The maintenance of a customer base characterized by loyalty is a fundamental component of successful marketing strategies. The significance of sustaining relationships with current customers stems from the notion of advantages linked to this practice [2]. The definition of “customer satisfaction” has been refined by the American Marketing Association to denote the circumstance wherein consumers consistently opt for a specific product or service from a single manufacturer, rather than procuring from various suppliers within the same category [3]. Customer loyalty can be defined as a steadfast dedication to repurchasing or frequently acquiring a particular product or service in subsequent instances. The quality of the service maintains the customers, and maintaining them leads customers from being satisfied to being loyal. Loyalty can be defined as either the conscious behavior or attitude of a customer. The strategic and operational vision was provided by the concentration on maintaining customer loyalty [4]. According to one piece of research, having satisfied and loyal customers makes an organization more powerful in negotiations. The satisfaction of customers is an extremely vital component of the service industry, in particular for those businesses that compete in dynamic environments and deliver services with only minute differences. [5]. After conducting research into the telecommunications industry, the authors came to the conclusion that protecting customers based on their service commitments was a necessary prerequisite for maintaining customer loyalty [6]. A company’s beliefs and attitudes towards itself are what make up its corporate image. “The perception of the organization” is one definition that can be used to describe “corporate image” [7]. The concept of “corporate image” is defined as “the mental picture of the corporation, which includes value judgments of the attributes of the organization.” According to one piece of research, the concept of “corporate image” refers to “the general estimation in which a company is held by its components through the perceptual representation of an organization’s past actions and future prospects when compared with another leading competitor” [8]. The corporate image encompasses both informational content and underlying assumptions regarding the company’s various roles, including those as a customer, supplier, employee, corporate citizen, and employer. The development of a positive corporate image is influenced by increasing levels of customer satisfaction as they result in the generation of favorable word of mouth [9]. While a positive association has been observed between corporate image and customer loyalty, it is important to note that no definitive connection has been established between customer satisfaction and customer loyalty [10]. The report provides a definition of service quality as the discrepancy between the anticipated level of service from providers and the actual level of service delivered by them. The service provider’s estimation is derived from an evaluation of the disparity between the desired service quality and the actual service quality [11]. This contradicts the commonly held notion that service quality is determined solely by the customer’s biased perception, rather than the intended purpose of the estimation. The four primary dimensions of customer perceived value, as outlined by functional performance, are social value for money, emotional value for money, and functional value for money. According to the individual’s perspective, the realm of telecommunications is influenced by economic and social values, as well as emotions [12]. The assessment of value that a customer perceives is the primary determinant of prospective purchases. The perceived value of a service, as assessed by a customer, is contingent upon a comprehensive evaluation of the benefits and sacrifices associated with said service. The customer’s perception of the value of a product can be understood as the overall consumer assessment of the utility of the product, which is based on the perception of what is received and what is given, as defined. If a specific service successfully meets the demands of customers, it is likely that those customers will engage in repeated purchases of said service [13].

2. LITERATURE REVIEW

Numerous studies have attributed significant importance to the influential role of corporate reputation and image in shaping consumers’ purchasing behavior. The strategic management of corporate image is a crucial and dynamic component in the cultivation and maintenance of customer loyalty [14]. The association between corporate image and the likelihood of customer retention is evident. According to attitude theory, the evaluation of service plays a crucial role in shaping the corporate image. This, in turn, enhances its value and makes it more easily retrievable in memory [15]. Numerous studies have provided empirical evidence regarding the significant influence of a company’s image on customer loyalty. As a result, a subsequent hypothesis is formulated (Reference 16). Customer perceived value encompasses various dimensions, including the perception of quality, social psychology, benefits, and monetary aspects. As a result of the neglect observed in previous research, a group of researchers conducted a study on the influence of value manipulation on customers’ purchasing intentions [17]. Previous studies have elucidated the strong correlation between service quality and perceived value. The promotion of customer loyalty has been widely publicized [18]. The study examined mobile services in Canada and China, respectively, and identified a positive correlation between the two. Likewise, scholarly research has demonstrated a positive correlation between perceived value and customer satisfaction [19], suggesting a favorable connection between these two variables. Multiple studies have also identified a strong correlation between perceived value and both word of mouth and repurchase intention [20]. Service Quality is considered the main significant factor which affects customers’ perception in the direction of in-store service quality. Service Quality goes with satisfaction only. In contrast, it can be taken as a fraction of the store image [21]. The author of this study believes that service quality should be separated and deeply considered in the context of the customer satisfaction paradigm since service has always been noted as a necessary element in determining the performance of the service business [22]. In contrast, prior scholarly discourse has examined the correlation between store image, customer satisfaction, and service quality [23]. It has been suggested that this correlation has the potential to enhance customers’ overall perceptions of the store, as shaped by individual experiences. The extent to which customers are motivated to maintain a relationship with an organization is contingent upon their perception of the benefits derived from a high-quality relationship, their level of satisfaction with the organization, and the value proposition offered by the organization, which entails a continuous provision of valuable offerings [24]. Service quality is a prominent and extensively researched subject within the field of services. The concept of service quality holds significance not only in developed nations but also in developing countries worldwide, serving as a representation of the overall state of the economy. The consequences of service quality arise when customers evaluate the extent to which their expectations of service are met by their perceptions of the actual service received [25]. The primary driver behind labeling the present era of business as the “quality era” is the recognition that the perceived quality of a product holds significant sway as the most influential factor in attracting competition within the business landscape [26]. Consequently, scholars and researchers specializing in the field of service marketing have put forth various explanations for the issues at hand. In line with Berry’s characterization, the rival mace holds significant sway. Quality is a multifaceted concept that encompasses various observable aspects. The attainment of the desired level of service quality using this approach is highly challenging due to its failure to distinguish between critical quality aspects [27]. The discourse surrounding service quality encompasses three distinct dimensions of outcomes. These aspects encompass the degree of technical excellence, the conceptual representation of the organization, and the level of quality in service performance. Lehtinen (28) categorizes the attributes of the service into three distinct dimensions: physical quality, organizational quality, and interaction quality. Although these endeavors were crucial in dissecting service quality into process quality and output quality, there exists a dearth of empirical evidence. Based on the aforementioned, an additional source presents an enumeration of eleven distinct dimensions pertaining to service quality. The preliminary investigations did not discover a substantial correlation between these variables; nevertheless, subsequent investigations revealed such a correlation [29].

As a result, they combined these 10 characteristics and used fivefold dimensions to develop SERVQUAL, which is a method for evaluating service quality. These fivefold dimensions are empathy, assurance, dependability, responsiveness, and tangibles. They highlighted the fact that SERVQUAL is a credible scale for assessing service quality [30], which they found in their research. Service excellence, providing customers with value, and making sure their needs are met are three things that managers of service companies say they provide for their clients. The phrase “customer’s judgment about the excellence of a product” is one definition for “perceived quality,” while the phrase “customer’s overall assessment of the utility of a product based on perceptions of what is received and what is given” is another definition for “perceived value.” Service quality is typically described in terms of how closely it relates to the notion that it is the result of an evaluation that customers carry out regarding their expectations and their perceptions of the way in which a service is performed [31].

H1: Company image has an impact on customer devotion.

H2: Customer perceived value has an impact on customer loyalty.

H3: Service quality moderates the association between corporate image and customer loyalty.

H4: Service quality moderates the association between customer perceived value and customer loyalty.

Figure 01: Theoretical Framework

3. MATERIALS AND METHODS

The present study collected data from individuals with diverse professional backgrounds spanning multiple fields. The results of this study contribute to the advancement of our comprehension regarding the antecedents of customer loyalty within the telecommunications industry in the Philippines. A total of 300 individuals participated in the survey, with 248 questionnaires deemed valid for analysis, resulting in a response rate of 82.6%. The research instrument utilized in this study had been previously developed. The researchers employed a five-point Likert scale. Service quality is assessed using six criteria. The measurement of customer value perception involves the utilization of two items, whereas the assessment of customer loyalty and company image entails the use of five items. The PLS technique is employed for the purpose of conducting this moderation analysis. The perceived value received by customers and the projected image of companies are two distinct independent variables. The independent variable in this study is the level of customer satisfaction, while the moderating factor is service quality.

4. RESULTS AND DISCUSSION

The results and analysis of the study are discussed in this section.

Table 01: Reliability Results

Table 1 shows the reliability analysis. For this, the value of Cronbach Alpha and composite reliability is used to exhibit the reliability of the measurement model. The value of each construct should be greater than 0.7. In our research, all values met the criteria expected value of customer Loyalty’s Cronbach alpha, but composite reliability supports the value, and we consider the reliability of the scale.

4.1 Discriminant Validity

Table 2 shows the outer model factor loading values of each construct’s elements. The threshold value says that the value of an element should be greater than 0.7, which shows that each element is a good measure of its construct.

Table 02: Outer Loading

In our research, all values met the criteria, which shows that questions are a good measure for the constructs.

Table 03: Average Variance Extracted

The average variance shows the variance which actually gives support to our loadings. According to Joseph et al. 2014 the value for each construct should be greater than 0.5. In our findings, all construct values met the minimum value requirement. Hence convergent validity is met-seen.

Table 04: Fornell-Larcker Criteria

Fornell-Larcker is used to check the discriminant validity of constructs. The value for each construct should be maximum with its own construction as compared to its correlation with other constructs. In our research, all constructs met the threshold criteria.

Table 05: Cross Loading

Table 5 show the cross-loading value of items with other as well as with their own constructs, which they are going to measure [32]. The threshold criterion for this is that the value of the item should be higher with its own construct and should lower with other constructs. In our research, all values met the criteria.

Figure 02: Path Coefficient

Table 5 show the cross-loading value of items with other as well as with their own constructs, which they are going to measure [32]. The threshold criterion for this is that the value of the item should be higher with its own construct and should lower with other constructs. In our research, all values met the criteria. The model in Figure 2 shows the inner as well as the outer model. The inner model is basically used to check the impact or relationship between variables, and the outer model shows the factor loading value of each element with its own construct. In our research, we have also checked the moderation impact of service quality [33]. The impact of corporate image on customer loyalty is higher with a beta value of 0.507, which shows if we increase 100 percent corporate image of our company, this will increase customer loyalty by 50.7% or by one unit change in corporate image, the customer loyalty will also change by 0.507 unit in the same direction, and moderation impact also shows significant positive value by 0.165, which shows that impact of moderation is 16.5% positively.  Now coming to the impact of customer perceived value on Customer loyalty, its value is 0.250, which shows the significant value and represents that one unit change in customer perceived value will bring change by 0.250 units in customer loyalty in the same direction [34]. But its moderating impact is too low, which is not have such a significant impact on the association between customer perceived value and customer loyalty.

Table 06: Hypothesis Results

Table 6 shows the path coefficient values for the hypothesis. Here we see T Statistics and P value for hypothesis acceptance or rejection. The criteria for the P value say that its value should be less than 0.05, and the T statistics value should be greater than 1.96. Now coming toward H1, the P value is 0.000, and the T statistics is 7.478; both values met the criteria, so this shows that “Corporate image has an impact on customer loyalty”. The second one is the impact of customer perceived value on customer loyalty. Its P value and T-Statistics are 0.015 and 2.449, which show significant values, and give support to our second hypothesis H2that is “Customer perceived value has an impact on customer loyalty”. The third hypothesis is for the moderation impact of service quality on the association between customer perceived value and customer loyalty it’s both values met the threshold T-Statistics value is 6.828, and the P value is 0.008. Both values met the criteria, so this illustrates that there is a moderating impact of “Service quality on the relationship between customer perceived value and customer loyalty.” This accepts our H3. Lastly, our findings did not support our fourth hypothesis that the value of T-statistics is 0.072, which is lesser than 1.96, which is insignificant; secondly, the P value is 0.943, which is also insignificant. This shows that their service quality did not moderate the relationship between customer perceived value and customer loyalty.

5. CONCLUSIONS

The escalation of competition has led to an increased challenge in retaining the loyalty of existing customers and acquiring new customers. Within the domain of telecommunication services, the establishment of a connection between the customer and a specific operator’s telecommunication network carries substantial importance. Maintaining a durable and enduring relationship with the aforementioned network is imperative for the overall prosperity of the organization. To successfully navigate the increasingly competitive business environment, it is imperative for organizations to prioritize the cultivation and maintenance of long-lasting customer relationships. The telecommunication industry is currently experiencing significant transformation and emerging as a prominent sector that provides comprehensive services to diverse industries. The mobile market in the Philippines is displaying indications of substantial advancement in its journey towards attaining a state of maturity. The establishment and preservation of a customer base distinguished by loyalty is an essential element of effective marketing strategies. The importance of maintaining relationships with existing customers arises from the concept of benefits associated with this strategy. The American Marketing Association has provided a more precise definition for “customer satisfaction,” which refers to the situation where consumers consistently choose a particular product or service from a single manufacturer, rather than obtaining them from multiple suppliers within the same category. Customer loyalty can be characterized as a consistent and unwavering commitment to repeatedly purchasing or regularly acquiring a specific product or service in subsequent occurrences.  The present study was carried out in the Philippines, and its applicability in different contexts can be explored. By implementing it across various contexts, one can gain insights into formulating customer-centric strategies for telecommunications in diverse nations. Additional relevant variables could be incorporated into the study, and further literature pertaining to this research could be included. The constraint was a scarcity of time and inadequate resources. The small sample size was attributed to limited resources.

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