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Service Quality, Trust, Specific Asset Investment, and Expertise: Direct and Indirect Effects in a Satisfaction-Loyalty Framework

National Chengchi University, Taiwan

Cornelia Droge

Michigan State University

This study proposes an integrated framework explaining loyalty responses in high-involvement, high-service luxury product markets. The model is rooted in the traditional (attribute satisfaction)-(overall satisfaction)-(loyalty) chain but explicitly incorporates facility versus interactive service quality, trust, specific asset investment (SAI), and product-market expertise. The authors focus on disentangling the direct versus indirect effects of model constructs on attitudinal versus behavioral loyalty responses. The results support the traditional chain but also show loyalty can be increased by building a trustworthy image and creating exchange-specific assets. The authors found that overall satisfaction is the precursor both to loyalty and to building SAI. Finally, consumers have different costs in reducing adverse selection problems with information, and thus the negative effect of product-market expertise on behavioral loyalty needs to be controlled if the direct versus indirect effects of model constructs on loyalty are to be disentangled.

Key Words: loyalty • specific asset investment • transaction cost analysis • satisfaction • service quality

Journal of the Academy of Marketing Science, Vol. 34, No. 4, 613-627 (2006)
DOI: 10.1177/0092070306286934


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