Marketing Intelligence & Planning

Managing relationship marketing in the food service industry

Abdullah Firdaus Agnes Kanyan
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Abdullah Firdaus Agnes Kanyan , (2014),"Managing relationship marketing in the food service industry",
Marketing Intelligence & Planning, Vol. 32 Iss 3 pp. 293 - 310
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Managing
Managing relationship marketing relationship
in the food service industry marketing
Abdullah Firdaus and Agnes Kanyan
Faculty of Business Management, Universiti Teknologi MARA,
Kota Samarahan, Malaysia
293
Received 23 October 2012
Abstract Revised 22 March 2013
14 June 2013
Purpose – The purpose of this paper is to propos a new measuring instrument for relationship 27 August 2013
marketing which is uniquely designed for the foodservice industry. In particular, the underlying Accepted 19 November 2013
dimensions of relationship marketing as perceived by customers are identified, and strategies for the
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enhancement of relationship marketing program are put forward.

Design/methodology/approach – The proposed 31-item instrument has been empirically tested for
unidimensionality, reliability and validity using both exploratory and confirmatory factor analysis
Findings – A factorial analysis suggests that relationship marketing is a multidimensional construct
consisting of four key dimensions namely communication, trust, empathy and commitment.
Practical implications – Communication emphasizes the necessity to communicate in
understandable way; trust refers to the ability to inspire confidence; empathy stresses on the
importance of exhibiting sympathy and reassurance; and commitment describes the desire to provide
excellent service. A subsequent multiple regression analysis reveals that all the dimensions are
positively correlated with customer loyalty and trust was the most important dimension.
Originality/value – Building strong relationships with customers to gain competitive advantage and
customer loyalty is crucial for survival and success in today’s business environment. As competition is
becoming more intense, customers are increasingly demanding and price sensitive. Although the
relationship marketing discipline is relatively well researched, the measuring instrument is limited
and practically non-existent in the foodservice industry.
Keywords Commitment, Relationship marketing, Communication, Trust, Empathy,
Food service industry
Paper type Research paper

Background of study
Customer loyalty is largely regarded as a key to success in business regardless
of a firm’s nature and size. This lies in the fact that loyal customers are less likely to
switch to a competitor merely because of price, and tend to be actively engaged in a
positive word of mouth and to provide referrals to others (Bowen and Shoemaker,
1998). Loyal customers provide more repeat business and were less likely to shop
around for the best deals than non-loyal customers (Bowen and Chen, 2001) and this
will contribute to the profitability of the firm (Kandampully and Suhartanto, 2000). The
literature has highlighted the importance of relationship marketing as an effective and
powerful strategy for gaining, retaining and promoting customer loyalty (Payne et al.,
1995; Colgate and Danaher, 2000; Lacey and Morgan, 2009). Morris et al. (1999)
indicated that the key to successful adoption of relationship marketing lies in the
building of client loyalty in a dynamic business environment. The success of
relationship marketing activities can be translated into a good relationship quality
between the customer and the service provider (Hennig-Thurau et al., 2002), which
leads to customer loyalty. Ndubisi (2007) argued that the underpinnings of relationship Marketing Intelligence & Planning
Vol. 32 No. 3, 2014
marketing namely trust, commitment, communication and conflict handling have pp. 293-310
r Emerald Group Publishing Limited
a positive impact on customer loyalty. He concluded that customer loyalty can be 0263-4503
created, reinforced and retained through marketing plans aimed at building trust, DOI 10.1108/MIP-10-2012-0116
 MIP demonstrating commitment to service, communicating with customers in a timely,
32,3 reliable and proactive fashion and handling conflict efficiently.
Although numerous studies have validated that relationship marketing orientation
has positive and significant effect on customer loyalty (Colgate and Danaher, 2000;
Ndubisi, 2007), to date very few studies have explored the influence of such
relationship in the context of foodservice industry. An analysis of research papers by
294 industry indicates that only 4 percent of relationship marketing studies have been done
in the context of the foodservice industry (Das, 2009) and most of these studies were
conceptual papers and case studies (Selnes, 1998; Lindgreen and Crawford, 1999;
Lindgreen, 2001; Rashid, 2003). The foodservice industry is considered to be one of the
fastest growth industries in the global market (Gu and Kim, 2002) and it has undergone
significant changes over the last decades. As the foodservice landscape evolves and
competition intensifies, foodservice operators are facing greater challenges in
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sustaining their competitive position and retaining existing beneficial customers. In

other words, loyal customers are hard to maintain. Therefore, it is crucial for the
foodservice operators to respond to the changing market needs and find more creative
and flexible means for driving competition in this rapidly changing and dynamic
market. Doney and Joseph (1997) suggest one of the best ways to cope with these
challenges is by establishing collaborative relationships with customers and suppliers.
By developing a closer relationship with customers, food service operators may
gain a competitive advantage and through increased switching costs, may be able
to defend it.
Thus, developing a measuring instrument of relationship marketing is crucial in
order to better understand its essential antecedents and ultimately establish methods
for enhancing customer relationships for attaining competitive advantage and gaining
customer loyalty. Several studies have proposed measuring instruments in relationship
marketing (e.g. Yau et al., 2000; Sin et al., 2005; Pervan et al., 2009; Shi et al., 2009).
However, most of the scales were designed in the context of business to business (B2B)
relationships and some are industry specific. It is critical to ask whether the current
measuring instruments can be effective in the context of business to customer
(B2C) relationships and applicable to other service industries, particularly the
foodservice industry. As such, it may be inappropriate to replicate the existing
measuring instruments; instead, developing a scale that is exclusively designed for
a particular industry seems to be a more viable research strategy.
Likewise, an understanding of relationship marketing would be incomplete without
first determining its dimensions or attributes. A comprehensive understanding of
the key dimensions is particularly critical because without this information it will be
inadequate to persuade both practitioners and researchers that relationship marketing
is the key to successful marketing (Sin et al., 2002). In fact, the need for further research
into the fundamental constructs of relationship marketing has been apparent since
its inception (Berry, 1983; Gummesson, 1994; Sheth and Parvatiyar, 1995). An
extensive review of marketing literature reveals numerous dimensions of relationship
marketing that have been proposed and tested, such as trust, commitment, co-operation,
communication, shared values, conflict handling, power, non-opportunistic behavior,
bonding, empathy, interdependence, satisfaction and many more as a key variables for
relationship success (e.g. Anderson and Narus, 1990; Morgan and Hunt, 1994; Sin et al.,
2002, 2005). However, most of the dimensions of relationship marketing were validated
in the western context and it is likely that the cultural difference of consumers will
influence its applicability in different setting.
 Thus, this study aims to develop and validate a new relationship marketing Managing
measuring instrument uniquely designed for the foodservice industry that uses both relationship
qualitative and quantitative measures. The new instrument was empirically tested
for multi-dimensionality, reliability and validity using both exploratory and marketing
confirmatory factor analysis. Ultimately, the study aims to identify the key
dimensions of relationship marketing from the customer’s perspective for the
foodservice industry. The study also adds value to the literature by linking the four 295
dimensions of relationship marketing, namely trust, communication, empathy and
commitment, to the dependent variable, customer loyalty. The study is expected to
provide useful information to the foodservice industry in managing more effective
relationship marketing programes.
The paper is organized as follows. The first section of the paper offers a review of
related literature in the field. Second section provides a detailed description of the
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research methods and data collection procedures followed in furthering the research
objectives of the study. Fourth section covers the findings and discussion of the study
which provide elaboration and analysis of the information that were collected from the
actual survey. Fifth section is mainly for conclusions and recommendation. Sixth
section focusses on the managerial and theoretical implications of the study and the
final section addresses the limitations of the study.

Literature review
The concept of customer loyalty has long been an area of interest for academics and
practitioners. An in-depth understanding of the concept reveals the need for a balance
of value between customers and the firm and the need to develop customer loyalty as
a long-term investment. According to Oliver (1999, p. 34) customer loyalty is “[y] a
deeply held commitment to rebuy or repatronize a preferred product/service
consistently in the future, thereby causing repetitive same-brand or same brand set
purchasing, despite situational influences and marketing efforts having the potential to
cause switching behavior.” Relationship marketing is widely acknowledged in the
marketing literature as an important tool of gaining and increasing customer loyalty
(e.g. Berry, 1983). Indeed, the fundamental goal of relationship marketing is to build
strong relationships and to transform indifferent customers into loyal ones (Berry and
Parasuraman, 1991). It is considered an effective strategy, not only for promoting
loyalty and retaining customers, but is also crucial in moving target customers up the
ladder of loyalty (Payne et al., 1995). This is due to fact that relationship marketing
brings stability and decreases uncertainty to the company by acting as a barrier to
competitor entry and by keeping a stable and solid base of customers (Alexander and
Colgate, 2000).
Literature revealed that several authors have attempted to develop measuring
scales of relationship marketing (e.g. Sin et al., 2002, 2005, Shi et al., 2009). Sin et al.
(2002) for instance developed and validated a measurement scale to capture the
dimensions of RMO in the context of service firms. The study reveals that RMO is a
multidimensional construct consisting of six dimensions namely trust, bonding,
communication, shared value, empathy and reciprocity. Lages et al. (2005) developed a
measurement scale (the RELQUAL scale) to assess the degree of relationship quality
between the exporting firm and the importer. Whereas Sin et al. (2005) developed
and validated a measuring scale to measure the four dimensions of CRM: key customer
focus, CRM organization, knowledge management and technology-based CRM in
Hong Kong financial firms. Lages et al. (2008) further developed a new measure of
 MIP relationship performance between two firms, the B2B relationship performance
32,3 (B2B-RELPERF) scale.
These measuring instruments have undoubtedly contributed to the growing body
of relationship marketing literature. However, most of the instruments were developed
and validated for the B2B relationships, therefore literature still lacks an appropriate
measurement scale in the context of B2C relationships. Besides that, most of the
296 existing measuring instruments also specifically designed for a particular industry
and may not be applicable to other industries and cultures. Palmer (1997, p. 321)
cautioned that “relationship marketing means different things in different cultures”
Thus, the validity of the relationship marketing scale and its application across every
industry has yet to be determined as previous studies on the scale reported different
findings on the dimensions. The dimensionality of the scale is still questionable at this
point as the results from the previous studies have produced several limitations. Some
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of the previous studies generated the items purely based on published literature.
Although the literature is a reliable source for generating item, focus group or survey
form could be employed in the process of constructing a scale to obtain more complete
picture of the instrument.
An understanding of relationship marketing would be incomplete without first
determining its dimensions or attributes. Several authors have highlighted the
importance of identifying and understanding the dimensions of relationship marketing
for the success of relationships (Rosen and Surprenant, 1998; Sin et al., 2002; Theron
and Terblanche, 2010). A substantial number of empirical studies have sought to
identify and theorize the dimensions of relationship marketing such as trust,
commitment, communication, empathy, reciprocity, shared values, conflict handling,
co-operation, non-opportunistic behavior, interdependence and satisfaction (e.g.
Anderson and Narus, 1990; Morgan and Hunt, 1994; Sin et al., 2005; Theron and
Terblanche, 2010). Despite a considerable number of relationships marketing
dimensions have been produced and validated in the literature, to date there is still
no consensus concerning a generic set. Therefore, there is little agreement among
researchers as to which individual or composite relational mediator best captures
the key aspects of a relationship that most affects outcomes (Palmatier et al., 2009).
Nonetheless, overwhelming support was found in the literature for the idea that trust,
commitment, communication and empathy are central dimensions for successful
relationship marketing and consistently used in most relational exchanges
studies, which seems applicable to a wide variety of industries and any type of
relational approach.
Trust is regarded as one of the most prominent dimensions of relationship
marketing and the inclusion of trust as a central variable in a relationship exchange
has been widely examined in the marketing literature both in the context of B2B and
B2C relational exchanges. Moorman et al. (1993, p. 82) defines trust as a “[y]
willingness to rely on an exchange partner in whom one has confidence.” Whereas
Callaghan et al. (1995, p. 238) describe trust as “the belief of confidence in, or reliance
on, the truth, goodness, character, power and ability of someone or something.” Berry
(1995) claims trust is a single most powerful relationship-based marketing tool and
Lindgreen (2001) includes trust in his comprehensive model of relationship marketing,
together with commitment, cooperation, communication, shared values, conflict,
power and non-opportunistic behavior. Several authors argue that trust is an
essential ingredient in the creation, development and maintenance of long-term
relationships between buyers and suppliers (Anderson and Narus, 1990; Ganesan, 1994;
 Chen et al., 2008). Similarly, in services, trust is regarded as a central construct to the Managing
development of successful relationships (Eisingerich and Bell, 2007). A number of relationship
empirical studies have revealed that the dimension of trust has positive impact on
customer loyalty (Alrubaiee and Al-Nazer, 2010; Ndubisi, 2007). marketing
Generally, trust is pairs with commitment in the relationship literature with very
few researchers discussing one without the other. Commitment appears to be
frequently cited variable in the literature after trust and very crucial in any 297
relationships. As Berry and Parasuraman (1991, p. 139) rightfully point out
“Relationships are built on the foundation of mutual commitment.” Moorman et al.
(1992, p. 316) define relationship commitment as “an enduring desire to maintain a
valued relationship.” Commitment is essential for the development of long-term
relationships (Anderson and Narus, 1990), and is an important indicator of both
objective and relationship performance (Roberts et al., 2003). Various researchers have
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elaborated upon the dependence of commitment on a successful relationship and

claimed it is a key for achieving customer loyalty. Conway and Swift (2000) feel that
the level of commitment a partner feels toward that relationship is of great importance
in developing relationships. Whereas Morgan and Hunt (1994) posit it is a useful
construct for measuring the likelihood of customer loyalty and predicting future
purchase frequency. Although commitment is found to influence on customer loyalty
(Ndubisi, 2007), Alrubaiee and Al-Nazer (2010) discovered that commitment has no
significant impact on customer loyalty.
Communication is another important dimension of relationship marketing. Ndubisi
(2007, p. 100) defines communication as “keeping in touch with valued customers,
providing timely and trustworthy information on service and service changes,
and communicating proactively if a delivery problem occurs.” Anderson and Narus
(1990) stress the crucial role communication plays in the formation of cooperation
and trust in partnerships. In marketing relationships, communication plays a central
role in providing an understanding of the exchange partner’s intentions and
capabilities, thus forming the ground work for building trust among exchange
partners. Selnes (1998) asserts that communication is not only an important element in
its own right, but also has the propensity to influence levels of trust between buyers
and sellers. Similarly, Sin et al. (2002) claim that communication fosters trust by
assisting in solving disputes and aligning perceptions and expectations. Ndubisi (2007)
argues that effective, reliable and timely communications is crucial in creating and
increasing customer loyalty. Despite the importance of communication in the
establishment of business relationships, it is a variable that is often assumed or taken
for granted and consequently overlooked as a component of relationship development
(Andersen, 2001).
Although empathy regularly appears in B2B relationship studies (e.g. Sin et al. 2005;
Chattananon and Trimetsoontorn, 2009), it is increasingly receiving attention in
relationship marketing studies on customer relations (e.g. Rashid, 2003; Bojei and
Alwie, 2010). Sin et al. (2002, p. 661) and Sin et al. (2005, p. 187) define empathy as
“seeking to understand the desires and goals of somebody else.” In other words,
empathy is the component of a business relationship that enables the two parties to see
the situation from each other’s perspective. Rashid (2003, p. 744) states that “Empathy
is about seeing someone else’s point of view. It may be concerned with liking someone
or some organization.” He argues that in the initial stages of relationship marketing
it is important that the seller empathizes with the buyer but as the relationship
develops, empathy from both parties becomes increasingly important. Empathy has
 MIP also been found to be positively correlated with business performance (Sin et al., 2005;
32,3 Olotu et al., 2010).
Morgan and Hunt (1994) were among the pioneer researchers who identified two
dimensions of relationship marketing comprising trust and commitment. When both
commitment and trust are present they produce outcomes that promote efficiency,
productivity and effectiveness. The study by Sin et al. (2005) hypothesize that
298 relationship marketing orientation is a one-dimensional construct consisting of six
components: trust, bonding, communication, shared value, empathy and reciprocity in
the context of service firms in Hong Kong and China. The study revealed that all the
six components were positively and significantly correlated with business
performance (sales growth, customer retention, return on investment and market
share). On the other hand, Ndubisi (2007) argued that the four dimensions of
relationship marketing (trust, commitment, communication and conflict handling)
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have a significant impact on customer loyalty in the context of the Malaysian banking
industry. Trust is found to be the most important dimension in predicting customer
loyalty followed by communication, commitment and conflict handling. Another recent
study by Alrubaiee and Al-Nazer (2010) confirmed that relationship marketing is
a multidimensional construct consisting of five dimensions, namely trust, commitment,
communication, bonding and satisfaction, in the Jordanian banking industry. The
study provided evidence that relationship marketing has a positive impact on customer
loyalty. However, only four out five relationship dimensions (bonding, trust,
communication, satisfaction) demonstrated a positive and significant association
with customer loyalty.

Research methodology
The first step involved in-depth searching of the literature in order to identify the
dimensions of relationship marketing and subsequently to generate items to be
included in the draft questionnaire. An extensive literature review reveals that
numerous dimensions have been cited such as trust, commitment, communication,
empathy, bonding, conflict handling, reciprocity, power, interdependence and others.
Once the dimensions of relationship marketing had been identified from the literature,
the next step was to generate items for inclusion in a draft questionnaire.
In an attempt to generate items that explain relationship marketing in the
foodservice industry from the customer’s perspective, a survey form was used to
obtain relevant aspects of relationship marketing evaluation criteria. A total of 150
survey forms were distributed to selected customers of various types of foodservice
outlets. In total 102 completed forms were received, yielding a satisfactory response
rate of 68.0 percent. The results from the survey form suggested a series of relevant
relationship marketing evaluation criteria. A content analytic approach was employed
to code the qualitative data obtained which is similar to prior studies (Brady and
Cronin, 2001; Richins, 1997). A total of 167 initial items were generated from six
questions of a survey form.
A literature review together with the survey form provided the basis for generating
items for inclusion in the draft questionnaire. A total of 35 items were finally generated
from the literature as well as survey form. The items were measured on a five-point
Likert-type scale that varied from 1 ¼ strongly disagree to 5 ¼ strongly agree. Section
A contained seven questions pertaining to the respondent’s profile, whereas Section B
contained 35 items of customer relationships. In addition to the main scale addressing
individual items, respondents were asked in Section C to provide information about
 their loyalty. Item was measured on a five-point Likert-type scale that varied from Managing
1 ¼ not at all to 5 ¼ very frequent. There were also three open-ended questions in relationship
Section D allowing respondents to give their personal views on how any aspects of the
customer relationship could be improved. marketing
The draft questionnaire was piloted to 100 representative patrons from four
different types of food outlets (fine dining restaurants, fast food restaurants, coffee
shops and food courts). Respondents were asked to answer the questionnaire and 299
provide comments or suggestions on any perceived ambiguities, omission or errors
concerning the draft questionnaire, and consequently changes would be made
accordingly. The pilot test resulted in 91 questionnaires returned yielding a response
rate of 90 percent. Only 85 completed questionnaires were usable whereas another six
were rejected due to incomplete responses.
The results from the pilot test were analyzed using statistical package for
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social study (SPSS Version 17 Software) and a series of tests were undertaken to
determine the reliability of the measure or instrument. Reliability refers to the extent
to which a scale produces consistent results if repeated measurements are made.
In other words, the reliability of a measure indicates the stability and consistency with
which the instrument measures the concept. In this study, two internal consistency
estimates of reliability, namely coefficient a (Cronbach a) and the split-half
coefficient expressed as the Spearman-Brown corrected correlation were computed
for the 35 items. The overall Cronbach’s a for the variables in the draft questionnaire
is 0.960 which indicated high and strong internal consistency among the 35
items and was greater than 0.70, which is the threshold as suggested by Nunnally
(1978).
The variables were also checked for the multicollinearity problem, a condition
where there is a possibility that one variable is a linear function of the other.
Multicollinearity of the variables has been diagnosed through variable inflation factors
(VIF) and the analysis of inter-item correlations. A VIF in excess of ten should be
considered as an indication of harmful multicollinearity (Neter and Kutner, 1989).
In this study, the largest VIF was observed in one item at 7.2 which showed no support
for the existence of multicollinearity.
The draft questionnaire was subsequently submitted to five experts for feedback,
however, majority of them viewed that the draft questionnaire corresponded with the
relevant issues of the study, albeit some modifications were needed. The target
population of this study is defined as customers of various types of foodservice outlets.
Multistage sampling was used for the study where the foodservice outlets were
stratified based on their geographical location (11 divisions of Sarawak), followed by
type of outlets (dine in restaurants, coffee shops, fast-food restaurants and food courts/
hawker center) and the respondents’ gender, and care was taken to randomize the
data collection.
Data were collected using the personal contact approach as suggested by
Sureshchandar et al. (2002) whereby respondents were approached personally
by the researcher/enumerator and the survey was explained in detail. Out of 2,500
questionnaires, 1,594 were returned yielding a response rate of 62.8 percent, with
only 1,569 being completed (usable questionnaires). The high-response rate
was due to the “personal contact” approach used followed by frequent follow-ups
with the “contact persons.” The usable sample size of 1,569 was in line with the
generalized scientific guideline for sample size decisions as proposed by Krejcie and
Morgan (1970).
 MIP Data analysis and interpretation
32,3 Multivariate test of normality
The role played by the assumption of normality which underlies most methods of
multivariate analysis is overwhelmingly crucial in this study. The Mahalanobis
distances, denoted by D2 is the index used in checking multivariate normality of the
data, and there are two ways of computing D2. In both methods, a non-linear pattern
300 indicates departure from multivariate normality. The fit for both methods is good
R2 ¼ 0.911 and R2 ¼ 0.909, respectively, and the plot is almost linear thus implying the
data is multivariate normal.

Factor analysis
In this study both exploratory and confirmatory factor analyses were used to assess
the dimensionality of the relationship marketing measure in the food service industry.
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One critical assumption underlying the appropriateness of factor analysis is that

the data matrix has sufficient correlations to justify its application. Inspection of the
correlation matrix reveals that the correlations are significant at the 0.01 level. All
correlations are above 0.30, which is considered substantial for factor analysis (Hair
et al., 1995). The next step involves assessing the overall significance of the correlation
matrix with the Bartlett test of sphericity. The results were significant at po0.01,
w2(31, n ¼ 1,569) which further confirmed that the data were suitable for factor
analysis. Finally, the Kaiser-Meyer-Olkin measure of sampling adequacy was
computed to quantify the degree of intercorrelations among the variables and the
results indicate an index of 0.97, a “marvelous” sign of adequacy for factor analysis
(Kaiser, 1974). As for the adequacy of the sample size, there is a 50-1 ratio of
observations to variables in this study. According to Nunnally (1978), the ratio for
adequate sample size should be at least 10:1 which, in this case falls well within the
acceptable limits.

Exploratory factor analysis

All the 31 items of the questionnaire were subjected to factor analysis, utilizing
the maximum likelihood procedure which was followed by a varimax rotation. The
decision to include a variable in a factor was based on factor loadings greater than
70.40 (Hair et al., 1995), and all factors whose eigenvalues was greater than 1.0 were
retained in the factor solution (Tabachnick and Fidell, 1989).
Table I shows the results of the factor analysis in terms of factor name, the variables
loading on each factor and the variance explained by each factor.
Factor 1: communication. This dimension emphasizes the necessity to communicate
in understandable ways, give clear explanations, provide helpful advice to customers
and recognize how to appreciate customers. This dimension also suggests the
importance for the foodservice providers to value and use customer feedback in
improving service delivery and frequently ask for customers’ opinions and
suggestions.
Factor 2: trust. This dimension stresses the importance of customer confidence with
the service provided by the food outlet. This dimension is also concerned with the
ability of food service providers to fulfill their obligations in relationships and show
their respect to customers.
Factor 3: empathy. This dimension relates to the ability of service personnel to
exhibit sympathy and reassurance when dealing with customers. It suggests the
importance of employees displaying pleasant, courteous and friendly behavior in
 Downloaded by MAHIDOL UNIVERSITY At 09:57 15 February 2015 (PT)

Variables Communication Trust Empathy Commitment

1. Willing to help and ready to respond to customer request 0.431

2. Understand customer-specific needs 0.608
3. Sympathetic and reassuring 0.660
4. Consistently courteous, pleasant and friendly 0.511
5. Makes customer feel special 0.553
6. Caring and paid individual attention 0.627
7. Show respect to customers 0.469
8. Honest and frank 0.529
9. Comfortable in dealing
10. Reliable promises 0.550
11. Customer trust and have confidence with services 0.667
12. Always provides accurate information 0.431
13. Good impression
14. Provides detailed information when there is renewal or change in service 0.472
15. Trustworthy on important things 0.564
16. Gives clear explanation and provides useful advice 0.662
17. Has knowledge and competency in answering questions 0.625
18. Easy talking with as communicate in an understandable way 0.662
19. Gives prompt service 0.491
20. Responsible and fulfills obligations 0.500
21. Products and services fulfill customer’s needs and requirements 0.470
22. Provides service right the first time 0.439
23. Establishes and maintains long-term customer relationships 0.629
24. Committed in providing the best service 0.746
25. Provides excellent products and services at reasonable prices 0.547
26. Values and uses customer feedback to improve service delivery 0.605
27. Knows how to appreciate customers 0.661
28. Resolves conflict effectively 0.571
29. Frequently asks for customer opinions and suggestions 0.585
30. Accept criticisms and complaints 0.535
31. Consistent in providing quality service 0.542
Eigenvalues 5.139 4.063 3.772 3.097
% of variance 16.576 13.107 12.166 9.992
Cumulative % 16.576 29.683 41.849 51.841
relationship
Managing

Results of factor analysis

marketing

301

Table I.
 MIP service delivery so as to instill confidence among customers. The foodservice providers
32,3 are required to care and pay individual attention to customers which makes customers
feel special.
Factor 4: commitment. This dimension describes the commitment and hard work of
foodservice providers to provide the best service and to establish and maintain
long-term customer relationships. In addition, it emphasizes the ability of the
302 foodservice providers to provide excellent products and services at reasonable
prices and to provide service right the first time and to fulfill customer’s needs and
requirements.
The findings of this study reveal that relationship marketing is a multidimensional
construct consisting of four key dimensions, namely communication, trust, empathy
and commitment which is consistent with some previous research (e.g. Sin et al., 2002,
2005; Yau et al., 2007; Alrubaiee and Al-Nazer, 2010; Olotu et al., 2010). This implies
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that communication, trust, empathy and commitment are essential ingredients in

customer-firm relationships in the foodservice industry.
The results presented in Table I are certainly related to the dimensions of
relationship marketing and supported by the existing literature. Communication was
identified as an important dimension of relationship marketing by several researchers
(e.g. Morgan and Hunt, 1994; Ndubisi, 2004; Ndubisi, 2007; Sin et al., 2002, 2005).
While, trust is widely acknowledged as central dimension to relationship success
(e.g. Morgan and Hunt, 1994; Sin et al., 2002, 2005; Ndubisi, 2004; Ndubisi, 2007;
Chattananon and Trimetsoontorn, 2009). Empathy has been extensively discussed by
a number of researchers (e.g. Sin et al., 2002, 2005; Chattananon and Trimetsoontorn,
2009). Commitment on the other hand was proposed as crucial variable for business
relationships (e.g. Morgan and Hunt, 1994; Sin et al., 2002, 2005; Ndubisi, 2007;
Chattananon and Trimetsoontorn, 2009).

Confirmatory factor analysis

The confirmatory approach to assessing unidimensionality was adopted and implemented
within the LISREL framework ( Joreskog and Sorbom, 1978). A four-factor
measurement model was specified for each construct and the model parameters
were estimated using LISREL 8.8 (Scientific Software International Inc, Copyright
2006). Table II shows the fit indices using w2 test, GFI, AGFI, comparative fit index
(CFI), non-normed fit index (NNFI), IFI and root mean square error of approximation
(RMSEA). Although the overall w2 test was reported, reliance on the w2 test as the sole
measure of fit in a structural equation model is not recommended due to its sensitivity
to sample size, especially for cases in which sample size exceeds 200 respondents
(Hair et al., 1995). Hence, other model fit measure such as GFI, AGFI, CFI, NNFI, IFI

Dimension Fit indices

w2 ( p ¼ 0.01)
Degree of freedom (df ) ¼ 371 2,532.59
Goodness-of-fit index (GFI) 0.90
Adjusted goodness-of-fit index (AGFI) 0.88
Comparative fit index (CFI) 0.98
Non-normed fit index (NNFI) 0.98
Table II. Incremental fit index (IFI) 0.98
Unidimensionality test Root mean squared error of approximation (RMSEA) 0.06
 were employed to assess the “goodness of fit” of the measurement model (Byrne, 2001). Managing
The goodness-of-fit statistic (GFI) was created by Joreskog and Sorbom as an relationship
alternative to the w2 test and it is generally considered as the most reliable measure of
absolute fit in most circumstances (Diamantopoulos and Siguaw, 2000). In this model, marketing
the GFI ¼ 0.90 and the AGFI ¼ 0.88 indicating an evidence of unidimensionality for the
scales. The next set of fit measures in this model consisted of relative fit indices,
and this is assessed using the NNFI and the CFI. In the present model, the NNFI value 303
is 0.98, an indication of a good fit, and the CFI value of 0.98 implies that there is a
strong evidence of unidimensionality for the factors (Sureshchandar et al., 2001).
RMSEA is generally regarded as one of the most informative fit indices. The RMSEA
value for the three-factor model was 0.06, evidence of reasonable fit to the data.
Therefore, it was concluded that the four-factor relationship marketing model fits
reasonably well and represents a close approximation to the population.
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Reliability analysis
In this study, two internal consistency estimates of reliability namely coefficient a and
split-half coefficient expressed as the Spearman-Brown corrected correlation were
computed for the four relationship marketing dimensions. The values for both the
coefficient a and split-half coefficient for all the relationship marketing dimensions are
shown in Table III. All the values meet the required prerequisite of 0.70, thereby
demonstrating that all the four dimensions are internally consistent and have
satisfactory reliability values in their original form.
Average variance extracted (AVE) was also performed to test the reliability of the
scale. AVE refers “the amount of variance that is captured by the construct in relation
to the amount of variance due to measurement error” (Fornell and Larcker, 1981, p. 45).
Table IV shows the result of AVE exceeded the cut-off of 0.5 recommended by Fornell
and Larcker (1981) thus provide further evidence of construct internal consistency.

Validity test
Given that the questionnaire had been appropriately designed through a comprehensive
review of relevant literature then fine-tuned based on the suggestions from various experts,
both the face and content validity of the instrument were ensured (Bohrnstedt, 1983;

Dimension Cronbach a Split-half coefficient (r)

Communication 0.90 0.92

Trust 0.82 0.81 Table III.
Empathy 0.80 0.82 Reliability for relationship
Commitment 0.84 0.83 marketing dimensions

Dimension AVE

Communication 0.81
Trust 0.81 Table IV.
Empathy 0.76 Result of average
Commitment 0.78 variance extracted
 MIP Kaplan and Sacuzzo, 1993). One method of examining convergent validity is to
32,3 correlate the three dimensions with each other. The correlation coefficient
values range from 0.68 to 0.75 (Table V) and this indicate a moderate positive
relationship between the four dimensions of relationship marketing indicating
evidence of convergent validity.
A w2 difference test was employed to test the scale for discriminant validity. In this
304 test, all the discriminant validity checks on the four relationship marketing dimensions
have been conducted. All the tests were statistically significant at the p ¼ 0.000 level
( po0.01), thus indicating that all the four dimensions are distinct constructs, a strong
indicator of discriminant validity. Discriminant validity was also established using
correlational analysis between the dimensions of relationship marketing and other
external variables. High correlation among the four dimensions and low correlation
with external variables are indicators of discriminant validity. The results provide
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evidence that the correlations between the four dimensions and external variables are
relatively low (the value ranges from 0.56 to 0.59) compared to the correlations within
the four dimensions (the value ranges from 0.68 to 0.75)
Criterion-related validity was established by correlating the constructs scores with
customer loyalty. Table VI indicates that all the constructs have significant positive
correlations with customer loyalty. Hence, criterion-related validity is established for all
the four dimensions.

Multiple regression analysis

The regression model considered customer loyalty as the dependent variable and the
relationship marketing scores for the individual dimensions as the independent
variables. A multiple regression analysis was subsequently conducted to evaluate how
well the four dimensions predicted customer loyalty. The linear combination of the four
dimensions has significantly related to customer loyalty, R ¼ 0.65, R2 ¼ 0.42, adjusted
R2 ¼ 0.41, F(4, 1,564) ¼ 282.81, p ¼ 0.01. The sample multiple correlation coefficient
was 0.65, indicating that approximately 42 percent of the variance of customer loyalty
in the sample can be accounted for by the linear combination of the four dimensions.
According to Hair et al. (1995) regression equation based on 1,000 observations with
about five independent variables requires R2 value at least 2 percent for the

Dimensions Communication Trust Empathy Commitment

Communication 1.00
Trust 0.75 1.00
Table V. Empathy 0.72 0.73 1.00
Convergent validity Commitment 0.75 0.74 0.68 1.00

Dimension Customer loyalty

Communication 0.58
Trust 0.59
Table VI. Empathy 0.56
Criterion validity Commitment 0.57
 relationship to be deemed statistically significant with a power of 0.80 if the Managing
significance level is set at 0.01. The above findings indicated that the dimensions of relationship
relationship marketing are positively associated with customer loyalty.
As for the relative influence, the resultant output had an adjusted R2 of 0.41 marketing
( p ¼ 0.01) and yielded four dimensions contributing significantly toward explaining
the variance in the customer loyalty (Table VII). All the bivariate correlations between
the four dimensions and the customer loyalty were positive, and all the dimensions 305
were statistically significant ( po0.01). Trust is found to be the most important
dimension of relationship marketing in the foodservice industry in determining the
variation in customer loyalty followed by communication, empathy and commitment.

Conclusions and recommendations

The major contribution of this study to both marketing academic work and practice is
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the identification of relationship marketing dimensions from the customer’s

perspective within the foodservice industry. As the foodservice operators desiring to
implement a relationship marketing approach to date have no specific guidance
regarding precisely what are the dimensions of the relationship marketing orientation.
A factorial analysis using both exploratory and confirmatory suggest that relationship
marketing is a multidimensional construct consisting of four key dimensions namely
communication, trust, empathy and commitment, which are distinct, yet related and
conceptually clear.
This study has also attempted to contribute further to the existing body of
knowledge by developing and validating a new measuring instrument in relationship
marketing, which consists of a 31-item questionnaire that is exclusively designed to fit
the foodservice industry. The marketing practitioners could use this valid and reliable
measuring scale as a diagnostic tool in assessing and improving their relationship with
customers. The findings from the study are critical since most previous studies have
developed relationship marketing for B2B relationships, which is inadequate to assess
B2C relationships. Thus, the present study captured customer’s evaluations of
relationship marketing in a 31-item questionnaire uniquely adapted to fit the unique
setting of the foodservice industry
Additionally, the results of multiple regression analysis provide significant evidence
that the dimensions of relationship marketing are influencing and positively correlated
to customer loyalty. Therefore, the foodservice operators must place greater emphasis
on the issues of communication, empathy, commitment and ultimately trust in order to
foster and increase customer loyalty. The trust dimension is found to have a greater
impact on customer loyalty among the four dimensions of relationship marketing.
Trust which refers to the ability of the foodservice operators to inspire confidence in
the customers, make reliable promises, be trustworthy on important things and be
responsible has significantly influenced customer loyalty. In other words, customers

Dimension Standardized coefficients (b) Rank

Trust 0.213 1
Communication 0.177 2
Empathy 0.169 3
Commitment 0.168 4
Table VII.
Note: Customer loyalty as dependent variable Relative importance
 MIP perceived trust to be more important than other dimensions in determining their
32,3 loyalty toward the foodservice operators. Therefore, the foodservice operators should
strive to win a customer’s trust and confidence toward them. However, as findings
have suggested, the foodservice operators should not focus merely on the trust
dimension but also should place emphasis on the other three important dimensions of
relationship marketing (communication, empathy and commitment).
306
Managerial and theoretical implications
Findings from this study are crucial because very few studies focussed on identifying
the dimensions of relationship marketing within the foodservice industry and
practically none in the context of Malaysia. Therefore, the major contribution of the
study is the identification of four key dimensions of relationship marketing namely
communication, trust, empathy and commitment from the customer’s perspective
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within the foodservice industry. Identifying and understanding the dimensions

of relationship marketing is critical for the success of foodservice operators. Therefore,
foodservice operators should be able to identify critical dimensions of relationship
marketing in enhancing customer relationships and subsequently creating competitive
advantage and gaining customer loyalty. Additionally, knowing the strengths and
weaknesses of these dimensions and their relative influence would result in a stronger
customer relationship.
The study contributes further to the fast growing relationship marketing literature
by developing and validating a new measuring tool for relationship marketing, which
consists of a 31-item questionnaire exclusively designed for the food service industry.
The development of this new measuring instrument is crucial since most of previous
studies have developed scales for B2B relationship which were totally inadequate to
assess relationship marketing in a B2C context. The new instrument was developed
through a systematic process and empirically tested for unidimensionality, reliability
and validity. The foodservice operators could use such a valid and reliable measuring
scale as a diagnostic tool to identify areas where specific improvements are needed.
This study also adds value to the current relationship marketing literature by
providing empirical evidence to the correlations between the four dimensions customer
loyalty. The results of multiple regression analysis reveal that these dimensions
are positively correlated to customer loyalty. Findings validate the long-held belief that
relationship marketing is an important tool in gaining customer loyalty. It indicates
that the more customers trust the food service provider, the more effectively it
communicates, and the higher level of food service provider commitment, the more
loyal customers will tend to be. Therefore, the foodservice providers must emphasize
the issues of trust, communication, empathy and commitment in order to increase
customer loyalty.

Limitations
Although this study has provided relevant and interesting insights to the
understanding of relationship marketing and customer loyalty with the development
of a new measuring scale, there are some limitations. Addressing these limitations is
important because they could provide suggestions for future research on relationship
marketing. First, since the present study is focussed merely on one service industry
(foodservice), it is thus difficult to generalize the results across other service industries,
but interestingly such a technique also eliminates problems associated with the effects
of industry differences. Nonetheless it would be useful to assess the generalizability of
 the scales developed in previous studies to other contexts, such as the relationships Managing
between manufacturers and distributors, retailers and consumers, as well as between relationship
manufacturers and suppliers (Sin et al., 2005)
Second, due to cultural and environmental differences, the results of this study are marketing
also difficult to generalize across countries because it was conducted in single country.
Palmer (1997, p. 321) cautioned that “relationship marketing means different things
in different cultures” and Sin et al. (2002, p. 672) also has rightfully pointed out that 307
“respondent’s perceptions, attitudes and behavior are influenced by their own inherent
cultures.” Thus, further research on relationship marketing could be extended by
conducting a cross-cultural or regional study which could increase the generalizability
of the findings.
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Corresponding author
Associate Professor Abdullah Firdaus can be contacted at: dr_firdausabdullah@yahoo.com

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