Relational capital quality and client loyalty: firm-level evidence from pharmaceuticals, Pakistan

Muhammad Shujaat Mubarik · VGR Chandran · Evelyn S. Devadason

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Customer Service Quality and Loyalty Quality and Supply Management Intellectual Capital and Performance Analysis

Abstract

Purpose – This study aims to examine the influence of relational capital quality on client loyalty, comprising both behavioral and attitudinal, in the pharmaceutical industry of Pakistan. Design/methodology/approach – The partial least squares technique is used to test the relationship using a sample of 111 pharmaceutical firms. We applied a non-parametric procedure, the bootstrapping method, to estimate the coefficient path of the relationships. Appropriate construct measures were used based on past studies to measure the dimensions of relational capital quality and client loyalty. Findings – The findings suggest that relational capital quality significantly affects client loyalty. All three dimensions of relational capital quality, commitment, satisfaction and trust, have a significant and positive influence on both attitudinal and behavioral loyalty. However, client satisfaction is found to exert the strongest impact on behavioral and attitudinal loyalty. Practical implications – It is important for the pharmaceutical firms in Pakistan to improve client satisfaction to establish behavioral loyalty and sustain their clientele base. Trust and commitment should be managed independently, depending on the focus of firms, either attitudinal loyalty or behavioral loyalty. Originality/value – This study is among the few that was able to empirically examine the role of various dimensions of relational capital quality in influencing clients’ attitudinal and behavioral loyalty. In addition, the study uses a new firm-level data set, compiled from a survey of the pharmaceutical industry in Pakistan, which is currently facing challenges in terms of customer–supplier sensitivity.

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References

1994The Commitment-Trust Theory of Relationship Marketing 1985A Conceptual Model of Service Quality and Its Implications for Future Research 1998Social Capital, Intellectual Capital, and the Organizational Advantage 1998The partial least squares approach for structural equation modeling.1987Developing Buyer-Seller Relationships 1999Use of partial least squares (PLS) in strategic management research: a review of four recent studies 2001The Chain of Effects from Brand Trust and Brand Affect to Brand Performance: The Role of Brand Loyalty 1991Assessing Construct Validity in Organizational Research

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