Relationship quality factors influencing behavioural intention at a luxury motor vehicle dealership

Abstract

The luxury motor vehicle industry in South Africa is highly competitive. Significant opportunities have been created through globalisation, and customers today have access to a wide variety of luxury motor vehicle brands. The luxury motor vehicle segment in South Africa is also relatively small, and customers buying luxury motor vehicle brands tend to be highly demanding and difficult to satisfy. To succeed in this competitive environment, luxury motor vehicle dealerships are challenged to do more than just differentiating themselves on the basis of product attributes, such as brand, performance, speed, power and handling. Essentially, all luxury motor vehicle dealerships are selling similar product offerings, and it is relatively easy for one luxury motor vehicle brand to imitate the product qualities of another luxury motor vehicle brand. A literature investigation has further revealed that about 60% of a luxury motor vehicle dealership’s profit is made in the post-purchase service and repair department. Therefore, to maintain a competitive advantage, it may be more beneficial for luxury motor vehicle dealerships to focus on building high quality relationships with customers who take their luxury motor vehicles for a service or repair. While many factors may contribute to the establishment of quality relationships with customers, it appears that customers who are satisfied with the service provided, who trust the dealership and who are committed towards the dealership may be more inclined to demonstrate favourable behavioural intentions in the form of, for example, positive word-of-mouth and repeat visits to the dealership. Of further importance is that commitment is also believed to play a crucial role in strengthening the relationship between customer satisfaction and behavioural intention as well as between trust and behavioural intention. Despite the potential value of these variables to relationship marketing, though, there appears to be a lack of research on their applicability to luxury motor vehicle dealerships in South Africa. It seems that no studies have been conducted specifically to examine the interrelationships among these variables and their impact on the behavioural intention of customers who have had their luxury motor vehicles serviced or repaired at a given luxury motor vehicle dealership. Accordingly, it was the primary research objective of this study to address the research gap and investigate relationship quality factors influencing behavioural intention at a luxury motor vehicle dealership. Following an in-depth literature investigation, a number of secondary objectives and research hypotheses were formulated to assist in addressing the primary objective of the study. In the empirical part of the study a descriptive research design was followed, and self-administered questionnaires were distributed to the respondents via email. A list was obtained from a luxury motor vehicle dealership in Gauteng that accurately reflected those customers who had had their luxury motor vehicles serviced or repaired in the past 24 months. The list contained a total of 1 800 prospective respondents and it was possible to conduct a census of the study population. A total of 301 questionnaires were ultimately analysed. The data analysis strategy included calculating frequencies and descriptive statistics, assessing the reliability and validity of the scales, and lastly performing structural equation modelling (SEM) to test the theoretical model of the study. From the empirical findings it became evident that the majority of respondents who took part in the study selected Mercedes-Benz and BMW most often as their second vehicle driven or owned. The respondents were mostly male, self-employed, married and 42 years of age or older. The respondents agreed most that their experience with the dealership had been enjoyable and that they were satisfied overall with the service provided. With regard to their level of trust towards the luxury motor vehicle dealership, respondents agreed most that they believed the dealership was trustworthy and had high integrity. Pertaining to respondents’ level of commitment towards the luxury motor vehicle dealership, they agreed most that their relationship with the dealership was very important to them and was something they really cared about. Finally, with regard to their level of behavioural intention towards the luxury motor vehicle dealership, respondents agreed most that they would service their motor vehicles at the dealership again and that they would select the same dealership to service or repair their luxury motor vehicles. The measurement scales for the constructs of customer satisfaction, trust, commitment and behavioural intention all showed very good internal consistency and reliability. It was also possible to establish the content validity, convergent validity, discriminant validity and ultimately construct validity of the measurement model. During the assessment of the structural model, the fit indices confirmed an acceptable model fit. Ultimately, the empirical results obtained from this research study led to the conclusion that customer satisfaction has a significant positive direct effect on both behavioural intention and commitment; commitment has a significant positive direct effect on behavioural intention; and trust has a significant positive direct effect on commitment. Only one mediation relationship realised a large indirect effect, with commitment as the mediator between customer satisfaction and behavioural intention. No indirect effect was realised with commitment as mediator between trust and behavioural intention. Trust also does not have a positive and significant relationship with behavioural intention. The recommendations of this research study focus mainly on marketing strategies for improving quality relationships with customers at a luxury motor vehicle dealership. More specifically, strategies are recommended that have the potential to foster greater customer satisfaction, trust and commitment towards a luxury motor vehicle dealership, and that may ultimately lead to behavioural intention initiatives in favour of the dealership. Budget, time, and regional constraints were the main limitations encountered by the researcher. Recommendations for future research include conducting a longitudinal study to identify fluctuations over time in the levels of customer satisfaction, trust, commitment and behavioural intention. A further recommendation is to conduct a comparison study between the luxury motor vehicle segment and the more affordable motor vehicle segment, and to extend this research study to the rest of South Africa. Ultimately, this study could add value to a luxury motor vehicle dealership and assist the dealership in creating and maintaining a competitive advantage in a global business environment that is characterised by fierce competition and highly demanding customers. Although limited in scope, the study also contributes to relationship marketing theory and provides more insight into the importance and application of relationship quality factors in the luxury motor vehicle environment.