The investment model is used to predict customer responses to defensive value‐added and value‐recovery strategies. The two strategies were manipulated under different competitive environments with airline services scenarios in a controlled experiment. Hypotheses were affirmed as value‐added and value‐recovery strategies influenced customer satisfaction and loyalty with varying sensitivities to the competitive environment and different mechanisms consistent with prediction derived from the investment model. Regardless of value‐added strategy and competitive environment, value‐recovery strategy strongly and positively influenced customer satisfaction, situational loyalty, and enduring loyalty. Value‐added strategy also had a positive effect on customer satisfaction and loyalty, but these effects emerged primarily when a value‐recovery strategy was already present, and under conditions of less intense competition. Satisfaction was found to mediate strategic effects on loyalty, with more pronounced effects observed for value‐recovery strategy and situational loyalty. © 1998 John Wiley & Sons, Inc.
Psychology & Marketing – Wiley
Published: Dec 1, 1998
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