The effect of service quality on perceived value, brand reputation and loyalty: a study on traveling industry

Nowadays, the living standards of people are improving and they spend more time and money on leisure activities. Of all the activities, traveling is one of the top choices of people. Therefore, it is necessary to study the factors that would influence the choices of people and what will make them loyal. Recently, researchers gained a lot of interest toward the relationships of service quality with brand reputation, perceived value and loyalty. However, there are few researches that concentrate on explaining the effect of service quality toward perceived value, brand reputation and loyalty in the traveling industry. The aim of this research is to find out the relationship between service quality, perceived value and loyalty. Their relationships can, then, help formulate a more effective strategy to retain loyal customers. This study adopts visitors participated group travels as subjects and collects 151 valid questionnaires. The Partial Least Squares (PLS) method is applied. Analytical results indicate that service quality has positive effect on perceived value and brand reputation, but not on loyalty.