The moderating effect of competitive status on the relationship between customer satisfaction and retention

The purpose of this paper is to explore the relationships among customer satisfaction of the 7Ps marketing mix, loyalty, customer retention, and market competitive status. This paper applies structural equation modelling to measure the satisfaction level of service quality by analysing the 7Ps service marketing mix to include the variables of product, pricing, place, promotion, physical evidence, process, and people in the Taiwan mobile market. The data are assessed and analysed based on 620 valid questionnaires via face-to-face interviews with subscribers of five operators. The results indicate that customer loyalty mediates the relationship between customer satisfaction and retention. The competitive status of market first-movers or followers moderates the relationships among customer satisfaction, loyalty, and retention. A firm's competitive status moderates the direct effect of customer satisfaction on retention, and the first-mover group is superior to the follower group for this effect. A firm's competitive status moderates the indirect effect between customer satisfaction and retention through loyalty, and the follower group is superior to the first-mover group for this effect. The findings provide management insights about the effects of satisfaction on retention and the effects of a customer's cognitive framework on the firm's competitive strategies.