Revisiting the Satisfaction-Profit Chain: The Case of Food Industry

Authors

POKORA Jindřich

Year of publication 2014
Type Article in Proceedings
Conference SGEM Conference on Political Sciences, Law, Finance, Economics and Tourism - Conference Proceedings Volume III - Economics and Tourism
MU Faculty or unit

Faculty of Economics and Administration

Citation
Doi http://dx.doi.org/10.5593/sgemsocial2014B23
Field Management and administrative
Keywords satisfaction-profit chain; customer satisfaction; customer retention; profitability; food industry
Description Increase in food quality leading to higher customer satisfaction is not a straightforward objective of the firm whenever an increase in quality is related to an increase in costs. The purpose of this paper is to determine whether providing high quality food products generally yields higher profit for the firm than pursuing the opposite, when university students are the consumers. This paper approaches the relationship between customer satisfaction and firm profitability from the perspective of the satisfaction-profit chain, which here consists of the following measures: quality and value perceived by customers, customer satisfaction, word of mouth, intent to repurchase, and firm profitability. The research focuses on one-year financial data of 80 food-manufacturing firms in the Czech Republic together with 60 to 160 customer responses to products of each firm. Findings based on correlation analysis, where the Pearson product-moment correlation coefficient and the distance correlation are calculated, show a positive relationship between perceived product quality, customer satisfaction, word of mouth, and intent to repurchase. The regression method of ordinary least squares shows intent to repurchase positively linked to firm profitability measured by return on assets considering liquidity and size of the firm as control variables. The method of ordinary least squares further implies that smaller firms tend to be more profitable, when the size is measured by the volume of assets.
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