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discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/233293384

Consumer Perceived Value and Consumer Loyalty

in the Healthcare Sector
Article in Journal of Relationship Marketing April 2011
DOI: 10.1080/15332667.2011.577729

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Consumer Perceived Value and Consumer Loyalty in Health

Care Sector

Dr Hardeep Chahal
(Associate Professor, Dept. of Commerce, University of Jammu)
chahalhardeep@rediffmail.com
Ms Neetu Kumari
(Research Scholar, Dept. of Commerce, University of Jammu)
neetu.patyal@rediffmail.com

Abstract
Purpose: This study provides conceptual as well as empirical investigation of consumerperceived value (CPV) and consumer loyalty (CL) measures in healthcare sector. It also offers
an insight regarding the role of CPV in influencing the consumer loyalty (CL).

Methodology: The data is collected from 515 hospitalized patients of two tertiary hospitals
namely Government Medical College and Hospital (public) and ASCOMS (private) sector
operating in Jammu, North India, during July 2009 to October 2009. The exploratory factor
analysis ( SPSS) and confirmatory factor analysis ( AMOS) are used to analyse CPV and CL.

Results : The results suggest that CPV is a function of acquisition value (AV), transaction value
(TV), efficiency value (EV), esthetic value (ESV), social interaction value (SI) and self
gratification value (SG). Similarly CL is related to preference loyalty (i.e. using provider again
for services (UPAS), using provider again for different services (UPAD)), recommending
provider to others (RP), price indifference loyalty and dissatisfaction response (DR). The study
confirms that delivering superior consumer value enables service provider to associate
consumers for long term through their favourable behavioural intentions or loyalty.

Value: The study underscores significant dimensions of consumer value and consumer loyalty
and validates the relationship between value and loyalty in healthcare service sector.
.
Implications: The CPV and CL instruments include important aspects of patients perceptions
of healthcare services. The scales are psychometrically adequate and

recommended for

evaluating patients experiences of the quality of healthcare services. With proper focus on
value and loyalty dimensions, service providers can strengthen relationship with patients and
sustain competitive advantage.

Limitations: The study is theoretically limited to assess relationship between CPV and CL.
Their relationship with other measures such as consumer experiences, quality, satisfaction,
service dominant logic, and image need to be assessed in further works.
Key words: Consumer Perceived Value (CPV), Consumer Loyalty (CL),
Healthcare Services
2

INTRODUCTION
During the last decade, the interest of both marketing practitioners and scholars regarding the
notion of consumer value has increased (Cronin, Brady and Hult, 2000). The researchers
acknowledge the importance of superior consumer value and consumer loyalty as an important
factor for companys success to improve customer relationship (Day, 1994) and to achieve
sustainable competitive performance ( Grnroos, 1994; Zeithaml et al., 1996; Parasuraman,
1997) Specifically, studies on value and satisfaction relationship (Lovelock 2006; Sweeney,
Soutar and Johnson 1999; Sweeney and Soutar, 2001; Parasuraman 1997; Gallarza and Saura
2004) are available in the literature but studies on value and loyalty (Parasuraman and Grewal
2000, Zeithaml 1988, Rust and Oliver 1994) are rare and relationship between the two is yet to
be explored. Further, the conceptualization of the notion of consumer perceived value also
remains quite divergent and unclear in the literature. The lack of empirical investigation
impedes the comprehension of the relationship between the value the company offers to its
consumers and the relational outcomes, such as consumer loyalty, that is, subsequent consumer
behavioural intentions. Thus, the purpose of this study is to build and empirically test an
integrated framework between consumer perceived value, and consumer loyalty, in addition to
focussing on significant dimensions of the value and loyalty in healthcare sector.

The paper is organized as follows. First we present the conceptual framework underpinning our
study. Then we discuss and develop research hypotheses based on the reviewed literature. Next,
we present the methodology of research we followed to conduct the study. This is followed by
data analysis and testing of the hypotheses. And finally results, limitations of the study and
suggestions for future research are discussed.

RESEARCH GAP AND JUSTIFICATION OF STUDY

The studies reviewed highlight the need to work on the relationship between Consumer
Perceived Value and Consumer Loyalty ( Choi et. al. 2004;Cronin, Brady and Hult, 2000;
Gallarza, Martina and Saura, 2004; Gounaris, Tzempelikos and Chatzipanagiotou, 2007; Lam,
Shakar and Murthy, 2004). Most of the studies are focused on limited relationship strengths, for
instance service quality and loyalty (Parasuraman, Zeithaml and Berry, 1988; Cronin and
Taylor, 1994; Choi et.al. 2004, Gross 2003, Sweeney, Soutar and Johnson, 1999 and Vyas and
Thakkar, 2005), satisfaction and loyalty (Corbin et. al., 2001 and Ruyter et. al., 1998), service
quality and value (Choi et.al. 2004, Cronin et. Al. 1997, and Sweeney, Soutar and Johnson,
3

1999). Further few studies such as Cronin, Brady and Hult (2000), Ruyter and Bloemer (1999)
and Gounaris, Tzempelikos, and Chatzipanagiotou, (2007), Sweeney and Soutar (2001),
Parasuraman (1997) and Gallarza and Saura (2004) although worked on value, satisfaction and
loyalty relationship but direct relationship between value and loyalty are assessed by very rare
(Parasuraman and Grewal 2000, Zeithaml 1988, and Rust and Oliver 1994). There are few
published instruments for evaluating the CPV and CL in healthcare sector but cannot be used
because consumer value and loyalty are context specific concepts and perceptions of consumers
may vary from place to place and time to time. Hence our research proposes mult-dimensional
concept to measure consumer perceived value and loyalty in health care sector to fill the
research gap.

LITERATURE REVIEW AND RESEARCH HYPOTHESES

CONSUMER PERCEIVED VALUE
Consumer value in literature refers to consumers overall assessment based on benefits and
sacrifices, about product /services utility (Zeithaml, 1988). This aspect has been well accepted
by number of researchers such as Fernandez and Bonillo (2007), Ekrem (2007), Rust and
Oliver (1994), Caruana and Berthon (2000). This concept of value is also well accepted for
health care services. Ekrem (2007), Choi et al. (2004) and Corbin et al. (2001) consider value
as a difference between benefits and sacrifices. Benefits in the healthcare sector are primarily
the outcome of good service quality ( i.e. CV, satisfaction, loyalty, and image) (Choi et al.
2004). On the other side, both non - monetary cost such as time spent, mental and physical
stress, and monetary cost are elements of sacrifice component of perceived quality. Besides
cost-benefit analysis concept so discussed, CPV has been defined from different perspectives.
For instance Gronroos (1997) considers value in terms of emotional and cognitive features.
Sweeney and Soutar (2001) emphasized on emotional, social, quality, performance and price/
value for money dimensions to define CPV. Grewal et al. (1988) and Dodds, Monroe and
Grewal (1991) consider transaction and acquisition values to conceptualize perceived value.
According to Sheth, Newman and Gross (1991) CPV is a function of social, emotional,
functional, epistemic and emotional value. Later Arnold and Reynolds (2003) added aesthetic
as another important driver to enhance the perceived value of customer. Burnis (1993) has
considered CPV dimensions in terms of product value, value in use, possession value and
overall value. Ruyter et al. (1997) use emotional, functional and logical dimensions of CPV.
Mathwick, Malhotra and Rigdeon (2002) and Gallarza and Saura (2004) consider CPV quite
4

comprehensively. For instance, Mathwick, Malhotra and Rigdeon (2002) identify economic,
efficiency, enjoyment, escapism, entertainment, visual appeal and service excellence
dimensions to explain. Gallarza and Saura (2004), on the other hand, use efficiency, service
quality, social value, play, aesthetics, perceived monetary cost, perceived ride, time and effort
spent to define CPV. However, Sweeney, Soutar and Johnson (1999), Sweeney and Soutar
(2001) and Sanchez et al. (2006) find value as a compound of three dimensions namely,
functional value, social value and emotional value. Ekrem (2007) support these dimensions for
healthcare services. More recently Gounaris, Tzempelikos and Chatzipanagiotouslim, (2007)
consider CPV as a function of six elements, namely product value, procedural value, personnel
value, emotional value, social value and perceived sacrifice.

Since different scholars define CPV from different aspects, we consider CPV in healthcare
sector to be function of six latent dimensions namely transaction value, efficiency value,
aesthetic, social value, self gratification value and acquisition value. Acquisition value refers to
the perceived net gains accrued when products or services are acquired, which is commonly
referred to as the trade off between benefits and sacrifices (Mathwick et. al., 2002). Past
acquisition value based model (Zeithaml, 1988) considers CPV as the perceived net gains
associated with the products or services acquired. That is, the perceived acquisition value of the
product is positively influenced by the benefits patients believe they are getting by acquiring
and using the services of hospital and negatively influenced by the money given up to acquire
the service. The transaction value, relates to psychological satisfaction or pleasure or relief
gained from getting a services performed (Grewal et al. 1998 and Parasuraman and Grewal
2000). The service users assess the value of a deal by comparing the selling value to internal
reference prices (Grewal, Monroe and Krishnan 1998). For example, in healthcare setting
transaction value for a patient is feeling safe in hand of doctors, post- medical treatment,
personal care and good medical advice. Therefore, a patient on examining the financial
transaction the price offer, might perceive additional value beyond provided by acquisition
value. Hence, perceived transaction value is the perception of psychological satisfaction or
obtained from taking advantage of the financial transaction of the price deal (Grewal, Monroe
and Krishnan, 1998). Efficiency value refers to how efficiently and effectively the treatment
process is completed (Mathwick et al. 2002). Keeping other things controlled, consumer,
selects the hospital ( i.e. is, public or private) which is best or efficient in comparison to other.
Since the consumer is not from medical background, he judges service delivery process based
5

on interaction with service provider to know the efficiency value. The evaluation may relate
with things such as staff is well equipped with necessary training, doctors explain reasons for
tests, they always diagnose the medical problem accurately, technical supporting staff are
careful while making tests, administering injections etc., nurses regularly discharge their duties
relating to dressing, drips, administering injections and giving medicine. Further, aesthetic
value refers to visual appeal that is driven by the design, physical attractiveness and beauty
inherent in the hospital setting (Arnold and Reynold 2003). The conducive internal
environment, neat and clean wards and corridors, hygienically clean clothing, clean and
functional bathroom and proper ventilation in wards etc. contribute to aesthetic value of the
hospital. The social interaction value refers to patients interaction with friends, family, staff as
well as with other patients during hospitalization (Sweeney et al. 2001). Social interaction
theory focuses on people being altruistic, cohesive and seeking acceptance and affection in
interpersonal relationships. The last dimension that is, self gratification refers to improvement
of personal well being, relief from stress, alleviation of negative mood, elimination of
loneliness and giving oneself a special treat (Arnold and Reynolds 2003). The gratification
dimension suggests that human is motivated to act in such a way so as to reduce tension,
thereby maintaining inner equilibrium and returning the self to a state of homeostasis. .In the
present study treatment is acknowledged as a form of emotional focused coping in response
to stressful events or simply to get ones mind off a problem.

Based on aforesaid discussion, the study proposed the following hypothesis:

Hypothesis 1: The CPV is significantly affected by transaction value, efficiency value,

esthetic value, social value, self gratification value and acquisition value.

CONSUMER LOYALTY
Consumer loyalty is approached both as an attitudinal and behavioural concept. As an
attitudinal concept, it denotes the degree to which consumers disposition towards a service is
favorably inclined. This is reflected, for instance, in the willingness to recommend a service
provider to other consumers consistently over period. Similarly as behavioural concept, it
reflects consumers commitment to use a preferred service provider despite existence of
financial and location barriers (Ruyter, Wetzels and Bloemer, 1998).
6

Peltier, Boyt and

Sehibrowsky (2000) consider using provider again for same services ( UPAS), using provider
again for different services ( UPAD) and recommending provider to other ( RPO) as three
elements of patient loyalty. On the other hand, Ruyter et al. (1998) recognize preference
loyalty, price indifference loyalty and dissatisfaction response as important determinants of
patient loyalty. The preference loyalty includes UPAS, and UPAD. Dissatisfaction response
(DR) and price indifference loyalty another two elements that relate to loyalty. Hirschman
(1982) argue that a dissatisfied consumer has three options to a negative (service) experience:
communicate dissatisfaction (voice) or continue using services without communicating to the
concerned authority or discontinue the relationship (exit). Consumers who voice dissatisfaction
may complain to the service provider, its employees, or external agencies such as consumer
organizations and may remain with the organization if the problem is solved. In the healthcare
sector especially in public healthcare unit, with regard to dissatisfaction response, it is observed
that the majority of consumers simply remain inactive and do not undertake any action
following a negative service experience (Day 1984). Furthermore, it is argued that actually
responding to dissatisfaction (e.g. complaining directly to the company or complaining to a
third party) is negatively related to the level of service quality (Ruyter, Wetzels and Bloemer,
1998) and also affects later loyalty. Lastly, price indifference loyalty is willingness to pay a
premium price for the service to be availed (Ruyter, Wetzels and Bloemer, 1998). Zeithaml et
al. (1988) report positive relationship between service quality and the willingness to pay a
higher price and the intention to remain loyal in case of a price increase. In the healthcare
sector, particularly, private healthcare organization, price indifference loyalty is preferred for
same hospital over competitors even if fee of medical services/ treatment is high. The four
factor model comprising preference loyalty), price indifference loyalty dissatisfaction response
and recommending provider is used to measure patient loyalty in the present study. The study
as such hypothesized that
Hypothesis 2: Preference loyalty (UPAS and UPAD), price indifference loyalty
dissatisfaction response and recommending provider significantly affects consumer loyalty.

CONSUMER PERCEIVED VALUE AND CONSUMER LOYALTY

The importance of consumer loyalty in achieving business goals and its impact on business
performance is widely acknowledged (Anderson, Fornell and Lehmann 1994). Consumer
loyalty is an outcome of consumer perceived value, and is a fundamental indicator of the firms
past, current, and future performance (Lam, Shakar and Murthy, 2004). which has an impact on
7

development of sustainable competitive edge (Ruyter et

al., 1998). According to the

disconfirmation paradigm, the consumers degree of overall loyalty is a function of the value
the consumer expects in relation to the value actually received (Gounaris, Tzempelikos, and
Chatzipanagiotou, 2007). Although the disconfirmation paradigm is heavily criticized,
particularly when it comes to methodology and measurement issues (Teas, 1993 and Cronin
and Taylor, 1994), its theoretical value and contribution in conceiving the impact of value upon
consumer satisfaction and loyalty remains unquestioned. The consumer first forms specific
expectations regarding the value he wishes and anticipates to receive from the product.
Consumers become satisfied when receiving adequate doses of value from the
products/services they buy. Post-purchase experiences reveal the level of value each individual
accumulates from the choice he made (CPV). When CPV exceeds the individuals expectancy,
the consumer is satisfied (Anderson, Fornell and Lehmann., 1994 and Oliver 1981), the same
over a period of time leads to loyalty (Ravald and Grnroos, 1996). Wang et al., (2004) Gallarza
and Saura, (2004) findings show that satisfaction and loyalty are related to CPV. However, since

CPV comprises elements that carry positive and negative utility for the consumer, it follows
that the former (positive utility elements) will serve as satisfaction drivers, while the latter
(negative utility element) will reduce the overall level of consumers satisfaction with a
product. The study thus hypothesized that
Hypothesis 3: Consumer perceived value directly and positively affect consumer loyalty in
healthcare services..

METHODOLOGY
Scale Development: The reviewed literature helped in the generation of scale items. The
consumer perceived value items ( 32 in number) are spread over of six sub dimensions namely
acquisition value (AV), transaction value (TV), efficiency value (EV), esthetic value (ESV),
social interaction value (SI), self gratification value (SG). Loyalty of the patient ( 21 items) is
gauged using

five sub-dimensions namely preference loyalty (UPAS and UPAD),

recommending provider to others (RP), dissatisfaction response (DR) and price indifference
loyalty (PI).

Pretesting: Pretesting of the scales were conducted on 70 inpatients. At the outset, inter-item
analysis is conducted to identify items that are least correlated with respective value and loyalty
dimensions. Such items were later deleted for final scale. Further, reliability test for the overall
8

scale and sub scales of CPV and CL yielded a high Cronbach alpha score ranging between
0.601 to 0.935, indicating moderate to excellent reliability.

Sample Size: The final sample size for inpatients is identified on the basis of pre - testing
results. The total sample frame including public and private hospitals came out to be 515. The
public hospital sample (280) comprised of 90 patients from medicine, 126 from surgery, 36
from orthopedics and 28 from ophthalmology. The sample size for private hospital (235)
included 72 patients from medicine, 72 from surgery, 72 from orthopedics, and 30 from
ophthalmology.

Data Collection: The data were collected from patients availing services from two big referral
public and private hospitals using personal contact approach from four specialties namely,
medicine, surgery, orthopedics and ophthalmology departments during . Further,
the hospitalized patients willing to participate in the survey and with minimum 4 days stay
were considered for the sample.

Assessment of Measurement Scales: The measurement scale is purified in three stages that is,
exploratory factor analysis (EFA), inter item correlation and confirmatory factor analysis
(CFA). In the first step, EFA using VARIMAX rotation with eigenvalue 1 was applied to
each of the two scales (CPV and CL) under investigation. The main purpose of this step is to
see whether the scale for each construct under investigation is multidimensional as expected.
Items with low factor loadings (< 0.50) and cross loadings items were eliminated because they
did not converge properly with the latent construct they were designed to measure (Hair et al.,
1995). In addition, MSA ( Measure of Sampling Adequacy) (< 0.50) is also considered for
deletion of statements.
After applying EFA next step is to apply additional item analysis in which items having low
item-to-total correlation coefficients (<0.30) were eliminated. Moreover, as a standard for this
preliminary assessment, the scale for each construct must achieve a minimum alpha of 0.70
(Hair et al., 1995). The EFA resulted in five factors namely efficiency, aesthetic, self
gratification, social, transaction and acquisition value as significant dimensions of CPV.
Similarly five factors that is, using provider again for different services, using provider again
for same services, price indifference loyalty, dissatisfaction response and recommending

provider resulted from CL data. Number of items left after EFA and inter-item analysis were
27 in consumer value scale and 12 in consumer loyalty scale.
After scale purification using exploratory factor analysis and inter item analysis, CFA was
conducted on the selected items of the two scales. The factors emerged in EFA were analysed
in CFA to confirm that the structure emerged are perfectly fit or not. To refine all measures for
structural model, measurement model was estimated using maximum likelihood estimation
using AMOS. The unnidimensionality of the factors were initially examined through critical
ratio values above 1.96 at 95% level of significance and regression weights above 0.50 as
criteria ( Hair et. al. 1995). In addition modification indices were also used to fit model.

The CFA run on two scales ( CPV and CL) confirmed the factor structure as obtained under
EFA. All items that is, 27 in consumer value and 12 in consumer loyalty scales were retained.
Reliability
Consumer Perceived Value Scale
Scale Reliability : The internal consistency of the data is examined for overall sample and split
samples using two criteria viz, scale items and respondents. The alpha value ( 0.933) for overall
scale supports the reliability of the data. Further alpha values for split- half sample 1 and splithalf sample 2 were arrived at 0.868 and 916 respectively and indicating high degree of data
reliability. Respondent-wise, alpha values vary between 0.787 to 0.935, which again supported
the same (Table 1).
Composite Reliability : Further, composite reliability of CPV value scale (0.943) and sub scales
were found to be above the threshold value of 0.7 i.e. efficiency value (0.852), aesthetic value
(0.985), self gratification value (0.988), social value (0.922) transaction value (0.931) and
acquisition value (0.890) indicating high degree of composite reliability, which is essential for
pursuing CFA.
Consumer Loyalty Scale
Scale Reliability : The internal consistency of the Consumer Loyalty scale is also examined for
overall sample and split samples using two criteria viz, scale items and respondents. The alpha
value( 0.787) for overall sample supports the reliability of the data. Further alpha values for
split- half sample 1 and split-half 2 scale items were arrived at 0.715 and 0.654 respectively and
thus indicating high degree of data reliability. Respondent-wise, alpha values vary between
0.601 to 0.983, which again support the same (Table 1).
10

Composite

Reliability : Further, composite reliability of CL scale (0.991) with its sub

dimensions using provider again for different services (0.931), using provider again for same
services are also found to be significant (0.869), price indifference loyalty (0.932),
dissatisfaction response (0.879) and recommending provider (0.825) came out to be significant
which indicating reliability of scale.

Validity
Consumer Perceived Value Scale
Face and Content Validity : The face and content validity of consumer perceived value scale
was duly assessed through review of literature and deliberations with the subject experts,
doctors, patients for the selection of items in the questionnaires at the time of pretesting stage.
Average Variance Extracted (Convergent Validity) : In addition the structural equational
modelling is used to determine average variance extracted for the scales. The AVE is a
measure of the amount of variance captured by a construct from each scale. The AVE with
recommended values of 0.50 or higher provides evidence for convergent validity. The AVE
value of consumer perceived value (0.928) and its sub dimension i.e. efficiency value (0.828),
esthetic value (0.934), self gratification value (0.957), social value (0.856) transaction value
(0.866) and acquisition value (0.865).
Construct Validity : The values of KMO measure of sampling adequacy value (0.895), and and
variance explained (62.945 %), checked the construct validity of both scales (Hair et al., 1995).
Further factor loading value ranged between minimum of 0.531 to maximum of 0.947 and
communality value ranged between minimum of 0.585 to maximum of 0.878 indicated the
construct validity of the scale.
Discriminant Validity: Lastly, discriminant validity was examined by comparing AVE values
with squared multiple correlation values. The average variance extracted values came out to be
greater than squared multiple correlation values for CPV scale revealed discriminant validity
of scale (Table 2).

Consumer Loyalty Scale

Face and Content Validity : The face and content validity of the CL scale is assessed through
review of literature and deliberations with the subject experts, doctors and patients.

11

Average Variance Extracted (Convergent Validity):. All average variance extracted values
came to be above the recommended value of 0.50 that is. using provider again for different
services (0.908), using provider again for same services are also found to be significant
(0.813), price indifference loyalty (0.831), dissatisfaction response (0.841) and recommending
provider (0.734) indicating convergent validity of CL scale.
Construct Validity: The values of KMO measure of sampling adequacy value
(0.793), and variance explained ( 65.428 %), checked the construct validity of the scale (Hair
et al., 1995). Further factor loading value ranged between minimum of 0.610 to maximum of
0.999 and communality value ranged between minimum of 0.500 to maximum of 0.952, also
indicated the construct validity of the scale.
Discriminant Validity: Lastly, discriminant validity was examined by comparing AVE values
with squared multiple correlation values. The average variance extracted values came out to be
greater than squared multiple correlation values revealed discriminant validity of CL scale
(Table 2).

Unidimensionality of CPV and CL constructs: The unidimesionality of scales is examined

using three citeria viz CR (>1.98), SRW (>0.5)and SMC (> than AVE) for both the two the two
scales. The CR values and SRW values for all the constructs of the two scales are well above
the threshold value. The SMC values ranged between 0.268 to 0.910 for CPV scale and 0.328
to 0.715 for CL scale . The majority of the values are well within the criterion value. The items
with below .3 SMC values are however retained because of two reasons. Firstly all such items
are found to be significant with CR above 1.98 . Secondly the items contribute significantly to
the respective scales.

ANALYSIS OF CONSUMER PERCEIVED VALUE AND CONSUMER LOYALTY

This section examines individually CPV and CL scales on the basis of dimensions emerged
after the application of EFA using CFA.

12

Consumer Perceived Value

Efficiency Value (Factor 1) - The efficiency value relates to how effectively and efficiently the
service provider delivers health care service product. In health care sector it is found to be
function of 5 items that include well equipped staff with necessary training(SRW = 0.757),
doctors explain reasons for test (C.R =24.552, SRW =0.890 ), doctor always diagnosis
medical problem accurately (C.R = 22.806, SRW =0.847), technical supportive staff are
careful while making tests (C.R =27.289, SRW = 0.954) and nurses regularly discharge their
duties regarding injection, dressing(C.R = 17.051, SRW =0.684 ).
Aesthetic Value (Factor 2) - The application of CFA came with five significant items namely
visual appealing physical facilities (C.R = 21.479, SRW =0.766), neat & clean corridors
(SRW =0.544), clean & functional bathroom (C.R =23.344, SRW =0.805), proper ventilation
in wards( SRW =0.831) and fresh & clean bedding (C.R = 31.040, SRW =0.944) in aesthetic
value.
Self gratification Value (Factor 3) - The third factor self gratification value contains 4
statements, all of them have significant CR and SRW values which include relief from stress (
C.R =17.817 , SRW = 0.662), easing of negative mood (C.R =30.553 , SRW = 0.895),
elimination of pain (C.R = 23.127, SRW =0.775 ) and

personalized attention (SRW

=0.925).
Social Interaction Value (Factor 4) - The social interaction value is important as it is the overall
experience which consumer perceive during interaction during hospitalization. It contains 3
items namely feel relaxed during socializing with other patients (C.R = 25.629, SRW =0.806),
comfort zone with physician interaction (C.R = 33.320, SRW =0.915)

and nursing

interaction (SRW =0.940).

Transaction Value (Factor 5) - The factor 5 namely transaction value contains 6 items with
respect to staff is quick in serving patients ( C.R =10.592, SRW =0.582), post medical
treatment ( C.R =13.207, SRW =0.826), personal care of patients (C.R = 13.643, SRW
=0.890), good medical advice ( C.R = 10.820, SRW =0.600), feel safe in hand of medical
staff ( C.R =8.061, SRW =0.510), psychological satisfaction ( SRW =0.567) all of them
indicate towards the psychological satisfaction gain from service encounter.
Acquisition Value (Factor 6) - The last factor acquisition value that is overall net value
contains 4 statements i.e getting your money worth (C.R = 8.233, SRW =0.506), good
services at reasonable price (C.R =8.685, SRW = 0.550) and availability of latest technology
13

( SRW =0.543) and high quality low price requirement (C.R = 9.764, SRW =0.691) all of
them having significant CR and SRW values.

Consumer Loyalty
Using Provider Again for Different Services (Factor 1) The factor 1 that is, using provider
again for different services contains three statements, all of which have significant CR and
SRW values i.e nursing care (C.R = 18.888 , SRW = 0.793), cleanliness (SRW = 0.535),
and physician care (C.R = 20.954, SRW =0.802).
Using Provider Again for Same Services (Factor 2) The second factor namely using provider
again for same services includes nursing care (SRW = 0.526), physician care (C.R = 22.142
, SRW = 0.824) and good technical services ( SRW = 0.508).
Price Indifference Loyalty (Factor 3) - The factor 3 namely price indifference loyalty is
preferring service of the hospital over the other. In the present study two statements i.e same
hospital prefer over competitor (C.R = 11.054, SRW = 0.845) and visit other hospital (C.R =
5.767, SRW =0.530) are found to be signicant to predict price indifference loyalty.

Dissatisfaction Response (Factor 4) - The factor 4 namely dissatisfaction response is very

important in services sector because if the problem of the consumer is known to the service
provider it can be taken care at the right time. The two statements that is, prefer to go to
concerned authorities (C.R =16.261, SRW =0.838) and discuss to other consumers ( SRW
=0.647) reflect dissatisfaction response.

Recommendation (Factor 5) - The factor 5 namely recommendation includes 2 statements i.e.

recommend physician (C.R = 6.085, SRW =0.530) and recommend hospital (SRW =
0.637). Recommendation shows the loyalty of the consumer because if patient is referring
physician or hospital to others, it means that consumer is satisfied.

14

Relationship between Consumer Perceived Value and Consumer Loyalty

The relationship between consumer value and consumer loyalty reveals that CPV affect CL
(CR = 11.051, SRW = 0.772) in healthcare sector. Further the relationship is also validated on
public healthcare consumers assessed in public healthcare sector. Similar result came out for
public hospital, consumer loyalty showed positive and significant relationship with loyalty (CR
= 7.223, SRW = 0.556, SMC = 0.352). Same results are also found in private healthcare
organization (CR = 5.000, SRW = 0.724, SMC = 0.524). The result indicate that consumer
value have significant relationship with loyalty in both public health care and private health
care sector. The study contribute to health care literature by considering value as important
antecedent leads to consumer loyalty.

DISCUSSION
The Structural Equational Modeling results indicate that acquisition value (AV), transaction
value (TV), efficiency value (EV), esthetic value (ESV), social interaction value (SI), self
gratification value (SG) are six antecedents of consumer perceived value. The RMSEA value of
0.050 indicates good fit and other measures suggested a well fit model with CFI (0.887), TLI
(0.867), NFI (0.963), RFI (0.941) were all above the desired level. So our first hypothesis is
accepted. The second hypothesis pertains to Loyalty, is that its affected by preference loyalty
(using provider again for services (UPAS), Using provider again for different services
(UPAD)), recommending provider to others (RP) and dissatisfaction response (DR) is also
accepted. The RMSEA value of 0.072 indicates good fit and other measures suggested a well
fit model with CFI (0.800), TLI (0.891), NFI (0.862), RFI (0.820) were all above the desired
level.
Further the relationship between consumer value and consumer loyalty is assessed in health
care sector. In overall data RMSEA value of 0.090 indicates good fit and other measures
suggested a well fit model with CFI (0.929), TLI (0.894), NFI (0.914), RFI (0.872). The
relationship among consumer value and loyalty is also assessed in GMC (RMSEA = 0.103, CFI
= 0.909, TLI 0.868, NFI = 0.883, RFI = 0.673) and ASCOMS (RMSEA = 0.095, CFI = 0.824,
TLI = 0.752, NFI = 0.768, RFI = 0.673). The result indicates that consumer value and loyalty
have significant relationship. The study came out with antecedents of consumer value and
consumer loyalty and in addition the relationship between value and loyalty is also verified
which is less found in literature.
15

MANAGERIAL IMPLICATION
Service performance remains significant research topic for both practitioners and academicians
from last four decades. Since the concepts such as satisfaction, quality, value and loyalty are
context specific, their definition and

measurement remained been an issue of primary

importance in healthcare. The present study helps in understanding patients behaviour and
their needs, which can be used for providing quality of care in healthcare organizations. The
quality in healthcare sector can only be implemented by due focus of service providers on
consumer savvy managerial policy. Theoretically, the study proposes multi-dimension scale of
measuring consumer perceived value (acquisition value, transaction value, efficiency value,
esthetic value, social interaction value, self gratification value) and consumer loyalty
(preference loyalty, indifference loyalty and dissatisfaction response). In addition relationship
between consumers perceived value and consumer loyalty provide new insight into the
healthcare literature. The proper focus on these relationships can help in strengthening the
relationship with patients and through delivering value to retain them vis--vis to achieve
competitive advantage over competitors. Basically, loyalty is an outcome of the process in
which service provider can access the actual performance of the health care services against
their consumer expectation.

FUTURE RESEARCH
The study provides new and broader perspective to measure direct relationship between
consumer perceived value and loyalty measures which provide a roadmap for the future
researcher. Since the study is theoretically limited to assess relationships between loyalty and
value, future research that would replicate the study in different cultural contexts is necessary
before we can generalize the findings of this study. Such type of study at national or global
levels could come with different and useful results Further, the relationships need to be
extended to include quality, satisfaction and image. from both patients and employees
perspectives, to establish theoretical framework. The healthcare sector also pose constraints on
our ability to generalize our findings for the credence services. Hence, future research in
different service areas should be examined to generalize the relationship between consumer
value and consumer loyalty using identified dimensions.

16

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20

Table 1
Cronbach alpha value and Split half Reliability of Consumer Perceived Value and
Consumer Loyalty Scale

Overall
Split half 1
Split half 2
Overall
Split half 1
Split half 2

Consumer Perceived Value

Scale-items
Respondent - Wise
Respondent 1
Respondent 2
(1 - 257)
(258 - 515)
0.933
0.935
0.848
0.868
0.871
0.787
0.916
0.921
0.808
Consumer Loyalty
0.787
0.677
0.635
0.715
0.678
0.683
0.654
0.601
0.683

Table 2
Convergent Validity & Variance Extracted Values of Consumer Perceived Value and
Consumer Loyalty Scales
Average
Squared
Composite Inter - item
Variance
Multiple
Reliability Correlation KMO &
Extracted
Correlation
Sig.
Value
0.928
0.943
1.000
0.884
Efficiency Value
0.828
0.603
0.852
0.739
.000
Esthetic Value
0.934
0.496
0.985
0.764
.000
Self -Gratification
0.957
0.368
0.988
0.831
.000
Value
Social Value
0.856
0.415
0.922
0.753
.000
Transaction Value
0.866
0.662
0.931
0.782
.000
Acquisition Value
0.865
0.597
0.890
0.655
.000
Loyalty
0.846
0.991
1.000
0.793
Using provider
0.908
0.444
0.931
0.768
.000
again for different
services
Using provider
0.813
0.416
0.869
0.674
.000
again for same
services
Price indifference
0.831
0.547
0.932
0.704
.000
loyalty
Dissatisfaction
0.841
0.533
0.879
0.511
.000
Response
Recommending
0.734
0.328
0.825
0.708
.000
Provider
21

Table 3
Critical Ratio, Standardised Regression Weight, Squared Mulitiple Correlation Values
with Hospital wise Mean Scores of Consumer Perceived Value Scale
Statements
AV <- Value
TV <-Value
SG <- Value
ESV <- Value
EV <-Value
SI <-Value
well equipped staff with necessary training <- EV
doctors explain reasons for test <- EV
doctor always diagnosis accurately <- EV
technical supportive staff are efficient <- EV
nurses regularly discharge their duties <- EV
proper ventilation in wards <- ESV
fresh & clean bedding <- ESV
clean & functional bathroom <- ESV
neat & clean corridors <- ESV
visual appealing physical facilities <- ESV
personalized attention <- SG
elimination of pain <- SG
easing of negative mood <- SG
relief from stress <- SG
nursing interaction < SI
comfort zone with physician interaction <- SI
feel relaxed during socializing with others < - SI
psychological satisfaction <- TV
feel safe in hand of medical staff <- TV
good medical advice < - TV
personal care of patients < - TV
post medical treatment < - TV
staff is quick in serving patients < - TV
availability of latest technology < AV
high quality low price requirement < AV
good services at reasonable price < AV
getting your money worth < AV
Model Fit
22

C.R
9.821
11.498
ref
ref
ref
13.807
ref
24.552
22.806
27.289
17.051
ref
31.040
23.344
ref
21.479
ref
23.127
30.553
17.817
ref
33.320
25.629
ref
8.061
10.820
13.643
13.207
10.592
ref
9.764
8.685
8.233

SRW
0.773
0.813
0.606
0.704
0.776
0.644
0.757
0.890
0.847
0.954
0.684
0.831
0.944
0.805
0.544
0.766
0.925
0.775
0.895
0.662
0.940
0.915
0.806
0.567
0.410
0.600
0.890
0.826
0.582
0.543
0.691
0.550
0.506

SMC
0.597
0.662
0.368
0.496
0.603
0.415
0.573
0.791
0.717
0.910
0.468
0.690
0.891
0.649
0.396
0.587
0.856
0.600
0.802
0.438
0.884
0.837
0.649
0.321
0.268
0.360
0.792
0.682
0.339
0.395
0.477
0.302
0.356

CMIN/DF=3.625

NFI= 0.963

RFI= 0.941

TLI= 0.867

CFI= 0.887

RMSEA= 0.050

Note: EV = Efficiency Value, ESV = Esthetic Value, SG = Self Gratification Value, SI = Social Interaction
Value, TV = Transaction Value, AV = Acquisition Value

Table 4
Critical Ratio, Standardised Regression Weight, Squared Mulitiple Correlation Values
with Hospital wise Mean Scores of Consumer Loyalty Scale
Statements
UPAD < Consumer Loyalty
UPAS < - Consumer Loyalty
PI < Consumer Loyalty
DR < Consumer Loyalty
RP < - Consumer Loyalty
C leanliness < UPAD
physician care < UPAD
nursing care < UPAD
cleanliness < UPAS
physician care < UPAS
nursing care < UPAS
Visit other hospital < PI
same hospital prefer over competitor < PI
discuss to other consumers < DR
prefer to go to concerned authorities < DR
recommend hospital < RP
recommend physician < RP
CMIN/DF=5.624

NFI= 0.862

C.R
ref
ref
ref
ref
ref
ref
20.954
18.888
ref
22.142
ref
5.767
11.054
ref
16.261
ref
6.085
Model Fit
RFI= 0.820 TLI= 0.891

SRW
0.667
0.645
0.739
0.730
0.573
0.535
0.802
0.793
0.508
0.824
0.526
0.430
0.845
0.647
0.838
0.637
0.530
CFI= 0.800

S MC
0.444
0.416
0.547
0.533
0.328
0.386
0.643
0.629
0.358
0.679
0.376
0.514
0.715
0.418
0.702
0.406
0.380
RMSEA= 0.072

Note: UPAD = Using provider again for different services , UPAS = using provider again for same services, PI =
Price indifference loyalty, DR = Dissatisfaction Response , RP = Recommending Provider

23

Table 4

Table 5
Critical Ratio, Standardised Regression Weight, Squared Mulitiple Correlation Values of
Consumer Value and Loyalty

Loy <- Val

AV< - Val

Overall
CR
SRW
11.051
.772
Ref
.545

SMC
.622

CR
7.223

.402

TV <- Val
SI <- Val
SG <- Val
ESV < - Val
EV < - Val
UPAD < - Loy
UPAS < - Loy
PI < - Loy
DR < - Loy
RP <- Loy

13.613
10.001
11.999
10.739
10.876
Ref
12.575
10.523
8.119
13.345

.131
.250
.357
.696
.447
.461
.667
.367
.634
.341

.795
.599
.818
.659
.671
.884
.597
.558
.424
.616

Ref

GMC
SRW
.556
.578

SMC
.352
.083

CR
5.000
Ref

11.648
10.006
9.767
9.196
10.044
Ref
6.818
4.113
0.619
3.966

.646
.754
.810
.678
.860
.785
.654
.210
.043
.287

.002
.044
.427
.571
.740
.460
.656
.569
.417
.409

7.192
4.166
5.930
5.085
1.389
Ref
4.814
4.711
4.669
3.077

ASCOMS
SRW
SMC
.724
.524
.532
.077
.988
.293
.449
.370
.092
.480
.404
.509
.498
.278

Model Fit
CMIN/DF
NFI
RFI
TLI
CFI
RMSEA

5.195
.914
.872
.894
.929
.090

3.944
.883
.831
.868
.909
.103

3.132
.768
.673
.752
.824
.095

Note : VAL = Value, EV = Efficiency Value , ESV = Esthetic Value, SG = Self Gratification Value, SI =
Social Interaction Value, TV = Transaction Value, AV =Acquisition Value , Loy = Loyalty, UPAD = Using
provider again for different services, UPAS = Using provider again for Same services, PI = Price indifference
loyalty, DR = Dissatisfaction Response, RP = Recommending Provider

24

.248
.259
.163
.231
.009
.137
.202
.086
.977
.283

Figure 1 -Overall Model of Value Scale

0,

0,

eev1

0,

0,
1

0,

eev2

eev3

EV2

EV3

EV4

EV5

ESV2

eesv2

0.8

0,
1

1
0

efac1

Fac1

Fac2

ESV3

eesv3

0,

efac2

0,
1

0,
eev5

EV1

1
ESV1

eesv1

0,
eev4

0,
1

0.9
ESV4 1

eesv4

0.8

0,
1

0,
0,

ESV5

eesv5

0,

efac3

1
SG1

esg 1

SG2

esg 2

0,
1

0,

Fac3
SG3

esg 3

0,
1
esg 4

VAL
0.7

1
0

0,
1

0,
0,

efac4

efac5

1
0

SG4

efac6

1
0

Fac4

Fac6

Fac5
1

SI1

1
0,
esi1

SI2

1
0,
esi2

SI3

1
0,

TV1

1
0,

TV2

1
0,

TV3

TV4

1
0,

1
0,

TV5

1
0,

TV7

1
0,

esi3
etv1

etv2

etv3

etv4

25

etv5

etv7

AV1

1
0,
eav1

AV2

1
eav2

0,

AV3

0,

eav3

AV4

0,

eav4

Note: Fac1 (EV) = Efficiency Value, Fac 2 (ESV) = Esthetic Value, Fac 3 (SG) = Self Gratification Value,
Fac 4 (SI) = Social Interaction Value, Fac 5 (TV) = Transaction Value, Fac 6 (AV) = Acquisition Value

Figure 2 - Overall Model of Loyalty Scale

26

0, 0.5
0,
1
upad1

eupad1

0, 0.5
1

efac1

Fac1

upad2

eupad2

0,

1
1

0.90

0, 0.5

upad4

eupad4

0,
efac2

0,
1
upas1

eupas1

0, 0.5
1

LOY

0.85

Fac2

upas2

eupas2

0.85

0,

1
1
upas5

eupas5

0.80

0.75

0.70

0,

0,
1

Fac3

efac3

0,

efac4

Fac4

Fac5

efac5

PI2
DR1different
DR2 services, Fac2 (UPAS) RP1
Note : Loy = Loyalty, PI1
Fac1 (UPAD)
= Using provider again for
= UsingRP2
provider
1

0,
0,
0, 5
0.5 4 (DR)
0,
again for Same services, 0,
Fac 3 (PI)
= Price indifference loyalty, 0,Fac
= Dissatisfaction Response,
Fac
epi1

epi2

edr1

(RP) = Recommending Provider

edr2

Figure 3 Relationship Between Value and Loyalty

27

erp1

erp2

0,

eev

0,
1

EV

0,

eloy

0,

eesv

ESV

0,

esi

LOYALTY

eav

PI

DR
TV

epi
0,

edr
0,

0,
1

eupas

SI

0,

etv

UPAS

0,

VALUE

0,
1

SG

0,
1

eupad

0,

esg

1
UPAD

RP

erp

AV

Note: EV = Efficiency Value, ESV = Esthetic Value, SG = Self Gratification Value, SI = Social Interaction
Value, TV = Transaction Value, AV = Acquisition Value, UPAD = Using provider again for different services,
UPAS = Using provider again for Same services, PI = Price indifference loyalty, DR = Dissatisfaction Response,
RP = Recommending Provider

28