The effect of customer satisfaction on customer loyalty in the motor industry

• Lim Ka Bian, Ahasanul Haque Department of Business Administration, Faculty of Economics and Management Sciences, International Islamic University Malaysia, Box No. 10, 50728 Kuala Lumpur
• Saoda Wok Department of Communication, Faculty of Islamic Revealed Knowledge, International Islamic University Malaysia, Box No. 10, 50728 Kuala Lumpur
• Arun Kumar Tarofder Faculty of Business Management and Professional Studies, Management and Science University, 40100, Shah Alam, Selangor, Malaysia

Abstract

This study aims to determine the effects of three exogenous variables, namely, service quality, price fairness and Shari’ah compliance on customer loyalty through customer satisfaction as the mediator. Applying the theory of customer satisfaction, a structural equation model was developed and tested on 322 motor Takaful participants from the Klang Valley, Malaysia. The findings suggest that customer satisfaction partially mediates the effects of Shari’ah compliance and price fairness on customer loyalty. In conclusion, participants of motor Takaful are not concerned about the service quality; they are mainly influenced by the price fairness and Shari’ah compliance of the products /services.