Research Paper

Customer Perceived Values associated with Automobile and Brand

Loyalty
Muhammad Yousif Moosa

School of Accounting and Business Management

FTMS College, Malaysia
myousif@rocketmail.com

Zubair Hassan

School of Accounting and Business Management

FTMS College, Malaysia
Zubai7@gmail.com

Abstract
The purpose of this study is identifying the customer perceived value associated with automobile
and examining its impact on customer satisfaction and brand loyalty. A sample size of 198
respondents was chosen from various points in Jeddah, Saudi-Arabia using convenient sampling. A
multi-factor CPV questionnaire with a Likert-Scale from 1-5 was used to collected the data to
determine customer perceived value associated with automobile and its impact on customer
satisfaction and brand loyalty. To ensure reliability and validity of the data set, sample size only
includes respondents who have been using/driving an automobile for a year. Descriptive statistics
shows that the most significant perceived value associated with automobile is functional value
followed by emotional value and epistemic value. Social value was the least reason that
respondents purchase an automobile. In terms of correlations, this study found that overall
customer perceived value associated with automobile is highly correlated with customer
satisfaction and brand loyalty. Bivariate multiple regression analysis shows that there is a
significant and positive impact of FV and CV on customer satisfaction. We do not find any
significant influence of EV, EPV and SV on customer satisfaction. However we found that there is a
significant and positive impact of EV, FV and CV on customer brand loyalty. Again we did not find
any significant impact of SV and EPV on brand loyalty. The current study contributes to the body of
research by investigating the combined impacts of customer perceived value on automobiles using
one instrument on cross-sectional setting. This research shows that customer perceived value
associated with automobile is crucial in increasing customer satisfaction and brand loyalty. Future
research should be undertaken on different context or by increasing the sample size by widening
the research context to ensure validity and reliability of the results.
Key Terms:

1.

Customer Perceived Value, Emotional Values, Social Values, Conditional Values,

Epistemic Values, Functional Values and Customer loyalty, Automobile

Introduction

Page 1

In past many researches were done on this topic in various parts of the world. Most of
the studies were conducted on developed countries compared to developing countries. Among
these studies most of the researches were done on U.S.A ( Sheth, 1991; Chi 2011; Yang 2009).
Among these studies most of them were focus on European countries such as UK, Spain, Italy,
Portuguese, Norway, and France (Lasley 2011; Christine 2011; Desmet 2014). However
handfuls of researches were done on developing countries. Among these studies most of the
studies were done on developing countries such as Taiwan, Malaysia, Indonesia, china, Saudi
Arabia, United Arab Emirates, Korea, and South Korea Pakistan (Abu Bakar, 2014; Hallet 2013;
Yu Wu 2014;Yusuf 2013). In terms of customer perceived value there were very limited
researches, particularly in Saudi Arabian context there were shortage of literature on this field
(Abu Bakar,2014; Eid, 2011; Abu Bakar, 2013; Jamil,2014). Most of the past studies were taken
place on retail, tourism, IT, food, online, airline, bank and automobile industries. (Park, 2014;
Chi, 2011; En-Chi, 2013; Vera, 2013; Joon ,2011). Limited research were done on education,
tobacco, furniture, mobile. (Sheth,1991; Lasley, 2011; Marketla, 2012). In terms of studies done
on Middle Eastern countries, in particular Saudia Arabia, it seems there is no research done on
to identify the impact of CPV on brand loyalty in automobile industry.
In past the key themes that were emphasis on measuring CPV includes quality,
emotional value, brand image, social value and price (Lasley, 2011; Markus, 2013; Sandra,
2012). One of the most popular and cited theoretical framework was Sheth et al. (1991)s
proposed five values (Sheth, 1991). As this research intended to conduct on Saudi Arabia,
quality, price, design, privacy and satisfaction were identified as most commonly cited variables
used to measure customer perceived value. (Abu Bakar, 2014; Eid, 2011; Abu Bakar, 2013;
Jamil, 2014). As this research investigates the key issues such as retention, loyalty, satisfaction
and repeat purchase associated with CPV. Most of the research shows CPV has a positive
impact on brand loyalty. Also CPV has a positive impact on retention, satisfaction and repeat
purchase (Yang, 2009 ). There are many factors which impact positively on CPV such as, Price
which is considered the most powerful factor for customer retention for an organization.
Emotional value also considered one the factor which has positively impact on CPV (Vera,
2013). Customers emotionally satisfied from service or products are enabling to repeat in
purchase. Most researches show that quality has positive impact on CPV, whereby the customer
become more loyal toward the organization (Yu Wu, 2014). If the customer are not satisfied
there is chance to lose the market-share. Some of the research shows that purchase intension is
influences by CPV (Calabuig, 2013; Yusuf, 2013). If the requirements of customers are not
fulfilled there are many negative impacts for the organization to have risk for having bad word
of mouth from their customers, the image of an organization will be affected negatively (Sandra,
2012).
As there were no research done on automobile industry on examining the impact of
customer perceived value on brand loyalty, particularly in Saudi Arabian automobile industry,
this research intends to fill the research gap on CPV impact brand loyalty of Saudi Arabian
automobile industry. Therefore the following key objectives are formulated for this research
To examine the impact of customer perceived values on customer satisfaction
To examine the impact of customer perceived values on brand loyalty
To examine the impact of customer satisfaction on brand loyalty
This paper is organised as follows: first part is discussed above. Second part is the
theoretical framework and research hypothesis development. Third part discusses the research
design and methodology, data collection procedures and process. Fourth part presents the
results and discussion. Final part is conclusion and recommendation, and implication for further
research
2.

Literature Review
Page 2

2.1.

Definitions of Key Concepts

Basic definitions of CPV are overall assessment of the utility of a product based on
perception of what is received and what is given (Ulaga, 2000). Some defined CPV as direct
determinant of behavioral intensions and consumer loyalty (Peterson, 2004). While others
argue that consumption values explained why consumer chooses to buy or not to buy a specific
product (Sheth, 1991). Also some defined CPV as overall economic perspective assessment of
product effectiveness by the consumers (ziethmal, 1988). Satisfaction or dissatisfaction has
direct effect on consumers assessment of service quality and value. (Bolton, 1991).
2.3.

Review of key theories

Monroe (1985) Price Quality Model was widely adopted and discussed model in
measuring CPV. This framework focused on the categorization and analysis of price-quality
relationship. Monroe (1985) proposed that perceived value is an important factor for customers
or consumers purchase decision process and they will buy a product with high perceived value.
According to Monroe (1985) that consumers will assess what they give and what they received
in their personal perception when they are buying a product/ service. This framework consist
only price as its variable to measure the customer perceived value, meanwhile it has shortfall of
many variables in order to measure customer perceived value in particular associated with
automobile.
Another pioneering model is Trade-off model introduced by Zeithmal(1988). This is
one of the uni-dimensional models to measure perceived value which applies quality and price
as key factors to measure the customer perception toward the products and services (Ziethmal,
1988). Ziethmal (1988), identified four different dimension in terms of customer values such
as, value as low price, value as whatever the consumer wants in product, value as quality obtained
from the price paid and lastly value as what consumer gets for what he or she paid. Further it
was explained as trade-off between what is paid and what is received. This suggested that this
approach of measuring perceive value is uni-dimensional. This indicated that many shortfalls of
this theory in measuring customer perceived value associated with products characteristics, in
particular automobiles. Ziethmal (1988) states the perceived quality as benefits and perceived
price as sacrifices for a particular product or service. The limitations of this model is much
attributed to the service experiences rather than nature of service experiences as multidimensional model build with traditional functional dimension such as; quality, benefit and
price, perceived risk (Robinson, 2010).
Also Typology for Consumer Value introduced by Holbrook (1999) is one of the key
theoretical framework use to measure CPV associated with products. This framework contains
eight variables for measure the customer perceived value. The variables are efficiency, play,
excellence, aesthetics, status, ethics, esteem and spirituality (Holbrook, 1999). The concept of
this framework is referring to the value of product which includes the services and goods. This
framework is based on three- dimensional paradigms which are those, consumer value can be
either extrinsic vs. intrinsic, active vs. reactive and self-oriented or other oriented (Holbrook,
1999). This model is considered to be one of the suitable frameworks to measure CPV
associated with automobile such as cars. However this model is less useful in case if customer
changes their value preferences overtime.
The Value Hierarchy Model developed by Woodruff (1997) was widely adopted to
measure CPV associated with services , especially in banking industry. This multi-dimensional
framework of Woodruff (1997) to measure customer perceived value is the trade-off between
desirable attributes compared with sacrifices attributes. Woodruff (1997) hierarchy model
includes consumption goals, consequences and attributes. This is measurement framework to
Page 3

monitor the customer perceived value in four types of customers, (1) First-time customer, (2)
short-time customer, (3) Long-term customer and (4) defectors (Woodruff, 1997; Parasuraman,
1997). This framework has taken the means-end theory of perceived value and suggested it has
wide- range applicability. This framework proposed to use to determine the strategic goals of
organizations and individual to make them understand the value in a use situation before the
purchase situation rather than only understanding the buyer behavior and decision-making.
According to Halt (n.d) that there is no evidence in literature to suggest that this framework
could not be applied to other groups of customers such as business-to-business customers.
Similarly there is no evidence which can suggest that it could not apply for an organizational
setting as oppose to an individual setting (Halt, n.d). However this framework is less relevant to
measure the perceived value among the consumer-to-consumer market, this framework is more
toward the measure the perceived value for business-to-business market (Hall, n.d). Meanwhile
this study intends to measure customer perceived value of automobile brands from individual
users which is called business-to-consumer. Hence this framework is less relevant to measure
the impact of customer perceived value on brand loyalty among consumers particularly tangible
products(Hall, n.d).
In 1990s, a key multi-dimensional theories that contributed toward customer perceived
value is Seth, Norman and Newman (1991) consumption value framework. This framework
comprises with five variables to measure customer perceived value. These are functional, social,
emotional, epistemic and conditional values (Seth et al, 1991). This framework is very useful in
measuring various attributes of a product using customer perspective. As most of the research
indicated that customer purchase a product based on benefits (Monroe,1985). Monroe (1985)s
proposed model of CPV that depicts benefits versus sacrifices failed in detailing the key sources
of values. Seth et al (1991) overcome this problem and detail-out various aspects of a product
and how these attributes derives function values is very suitable to assess the types of values
that a customer derive before and after they purchase a product, in particular a car. In case of
measuring CPV associated with automobile, four variables such as functional, social, emotional,
and epistemic values seems quite appropriate to measure CPV of a car (Seth et al, 1991).
Further Sheth et al. (1991) framework were tested in three different choices such as, whether
to buy or not to buy specific product, the choice of one type to another, and lastly choice of
brand to another (Gaskill, 2004). Further this model is used to determine the possible reasons
for buying or not buying a particular product or service (Candan, 2013) This framework is
limited to choice by individual and it only addresses choice, which are systematic and voluntary
(Gaskill, 2004, p.27). This model is much suitable for voluntary decisions. However values such
as conditional factor are less relevant in this framework associated with automobile industry,
because conditional value is not easy to understand of customers unless the situation, time and
place which might make conditional factor valid (Canadan, 2013).However it is important to
retain all the values as proposed in the framework.
2.4

Conceptual Framework

Page 4

Figure 1 Conceptual Framework of CPV and its influences on satisfaction and loyalty

3.

Research Design and Methodology

Subjects
A total of 250 questionnaires were distributed and a total of 213 questionnaires were
returned (response rate 85.2%). However, some of these returned questionnaires were
excluded from the sample as some respondents do not complete the questionnaire. This means
the study only used 198 completed questionnaires.
Procedure and data collection
The researchers independently contacted the respondents using non-random sampling
techniques of convenience sampling techniques. Additionally, permission from the each
respondent was obtained by requesting them to sign the Participant Consent Form.
Respondents were given a Participant Information Sheet to indicate the purpose and the
importance of this research. The completed questionnaires were collected by the researchers
and reminded the respondents to inform the researcher if they wish to withdraw from this
study before the data were processed (30 days).
Questionnaire
Questionnaire is designed to gather the data. It consists of three parts 1, 2, and 3.
Part 1:
It deals with personal details such as sex, education, age, etc.
Part 2:
Consists 25 statements to measure the customer perceived value (CPV). Four dimensions such
as function value (FV), social value (SV), emotional value (EV), and epistemic value (EPV),
conditional values (CV).
Part 3:
Consists of 10 statements which are divided into two main variables. 5 statements were used to
measure customer satisfaction and 5 statements to measure customer brand loyalty.

Page 5

By including variables, questionnaire is prepared with five points Likert scaling system.
Then analysis is made with appropriate statistical tools, in order to prove the objectives of the
study and to test the causal impact of CPV on customer satisfaction and loyalty. For this study,
following baseline models were established.
Customer Satisfaction = 0 + 1X1 + 2X2 + 3 X3 + 4X4+ 5X5 --------(1)
Brand Loyalty = 0 + 1X1 + 2X2 + 3 X3 + 4X4 + 5X5----------------- (2)
Brand Loyalty= 0 + 1 (Customer Satisfaction) ------------------------ (3)
Where,
X1= Social Values (SV)
X2= Emotional Value (EV)
X3= Epistemic Value (EPV)
X4= Functional Value (FV)
X5= Conditional Values (CV)

4.

Results and Discussion

4.1.

Demographic Analysis

The respondents are grouped in 7 clusters including age group, gender, automobile brand,
occupation, level of education, automobile type, and income level. In terms of respondents
73.2% of respondents are from age 20 to 31 years indicating that most users are young adults.
Only 8.1% of respondents are above 41 years. In terms of gender, 93.9% of respondents are
male and only 6.1% users are female. This significant fewer number of females driving or using
an automobile could be attributed to the strict rules against Muslims women in driving a car in
Saudi-Arabia.
In terms of occupations, most of the car drivers or users are administrative officers
(26.8%), supervisors (15.2%) followed by managers (13.1%). Only 7.6% of respondents are
business owners. 36.9% of respondents completed certificate level studies, followed by
bachelors degree with 28.8% of respondents, and 15.7% of respondents obtained master
degrees. 56% of respondents earns an average income ranged between US$1000-US$1500 per
month indicating that most of the respondents are doing administrative job and also it
correlates with the level of education completed (certificate). 80.8% of respondents earned an
average income ranged from US$1000 to US$2500. Only 17.2% of respondents earned an
average income ranged between US$2600 to US$4500.
In terms of automobile type, 83.4% of respondents drives or uses cars followed by truck
with 11.7% followed by van with 4%. This indicates the most of the car users are young adults.
The users who uses van could have larger families so that they can move around together where
Saudi-Arabia is considered as collectivist society. However due to the changing life style, most
people , especially young adults aged between 20 years to 30 years may prefer to have their
own vehicle such as a car. In terms of brand choice among the users or drivers of automobile,
30.3% respondents drives or uses Toyota brand cars or vehicles followed by Nissan and Honda
with each 9.1%. South Korean Hyundai is among the fourth rank with 8.1%. As most of the
respondents average income ranged between US$1000-2500, this could influence the car brand
choice due to the price and reliability of car. Toyota is considered to be one of the reliable care
with most affordable price around the world.

Page 6

The Table below shows the detail demographic aspects of the respondents.
Variable
Age Group

Gender
Automobile
Brand

Occupation

Level of
Education

Automobile Type

Income Level

Categories

Frequency

Percent

20
21-30
31-40
>41
Female
Male
Toyota
Nissan
Hyundai
Honda
Others
Manager
Own Business
Supervisor
Admin Officer
Office/factory secretory/clerk
Others
PHD
Masters
Bachelors
Diploma
Certificate
Professional Accounting
Car
Truck
Van
US$1000-1500
US$1600-2000
US$2100-2500
US$2600-3500
US$3600-4500
US$4600-5500
>US$5600

29
116
37
16
12
186
60
18
16
18
86
26
15
30
53
20
54
4
31
57
27
73
6
167
23
8
111
33
16
21
13
2
2

14.6
58.6
18.7
8.1
6.1
93.9
30.3
9.1
8.1
9.1
43.4
13.1
7.6
15.2
26.8
10.1
27.2
2
15.7
28.8
13.6
36.9
3
84.3
11.7
4
56
16.7
8.1
10.6
6.6
1
1

Cumulative
Percent
14.6
73.2
91.9
100
6.1
100
30.3
39.4
47.5
56.6
100
13.1
20.7
35.9
62.7
72.8
100
2
17.7
46.5
60.1
97
100
84.3
96
100
56
72.7
80.8
91.4
98
99
100

Table 1: Socio-demographic Profile of the Participants

4.3. Reliability and Validity

Before applying statistical tools, testing of the reliability of the scale is very much
important as its shows the extent to which a scale produces consistent result if measurements
are made repeatedly. This is done by determining the association in between scores obtained
from different administrations of the scales. If the association is high, the scale yields consistent
result, thus is reliable. Cronbachs alpha is most widely used method. It may be mentioned that
its value varies from 0 to 1 but, satisfactory value is required to be more than 0.6 for the scale to
be reliable (Malhotra, 2002; Cronbach, 1951). If we compare our reliability value with the
standard value alpha of 0.6 advocated by Cronbach (1951), our scale is highly reliable in most
cases. Nunnally and Bernstein (1994) or with the standard value of 0.6 as recommended by
Bagozzi and Yis (1988) we find that the scales used by us are highly reliable for factor analysis,
except emotional values as it is 0.555 , which is lower than 0.6. However we decided to retain
the variable of emotional value as overall reliability for CPV is 0.869, which exceeds 0.6. The
Cronbach alpha results listed in Table 2 , were based on all the retained items and offered
strong support for reliability in four customer perceived value dimensions.
Variable
Customer Perceived Value

Driver
Social Value
Emotional Value
Epistemic Value
Functional Value
Conditional Value
Overall CPV

Number of items
5
5
5
5
5
25

Cronbach Alpha ()
0.695
0.555
0.743
0.674
0.791
0.869

Page 7

Satisfaction
Brand Loyalty

Satisfaction
Loyalty

5
5

0.747
0.794

Table 2- Reliability Analysis

Factor Analysis
To assess the dimensionality of customer perceived value (social, emotional, epistemic ,
functional and conditional value scale) associated with automobiles among Saudi Arabians,
factor analysis (principal component, varimax rotation) was conducted on the items listed in
Tables 3. The indicators related to customer perceived value were function perceived functional
values, emotional values, social values, and epistemic values. The 25 retained items from 5
variables of CPV.

CV
.827
.802
.770
.674

EPV

EV&SV

Component
EPV&SV

CV4
CV3
CV2
CV5
EPV1
.749
EPV2
.643
EPV4
.634
EPV3
SV1
CV1
SV4
.717
EV1
.637
SV2
.633
EV2
SV3
.745
EPV5
.648
SV5
.633
FV2
FV4
FV5
EV3
FV3
FV1
EV5
EV4
Eigen
6.188
2.93
1.577
1.272
Value
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 10 iterations.

FV

FV&EV

EV

.752
.795
.629

1.247

1.045

.747
.613
1.023

Table 3-Rotated Component Matrixa

The factor analysis further grouped the functional and emotional values as one factor.
An analysis of the Eigen values and the scree plot for customer perceived value suggested that
seven (7) factors exist related to the Customer perceived value (Table 3). The total variances
extracted by the 7 factors were 61.1%. To retain the dimensions, the Eigen value must be 1.0. or
must exceed 1.0. All the components in used in the construct , including customer perceived

Page 8

value associated with automobile is more than 1.0 and cumulative variance for all the items
included in the construct exceeded 60%, we decided to retain all the items falls under each
variable.
Sample Adequacy
After checking the reliability and validity of scale, we tested whether the data so
collected is appropriate for factor analysis or not. The appropriateness of factor analysis is
dependent upon the sample size. A study conducted by MacCallum, Windaman, Zhang and Hong
(1999) have shown that the minimum sample size depends upon other aspects of the design of
the study. According to them, as communalities become lower, the importance of sample size
increases. They have argued that if all communalities are above 0.5, relatively small samples
(less than 300) may be perfectly adequate. It is clear that a sample size of 198 as is used in this
current research is good for a suitable factor solution because all commonalities are 0.5 and
above except for FV2, FV5 and CV1. This suggested to examine the sample adequacy using
Kaiser-Mayer-Olkin (KMO) method.

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

Approx. Chi-Square
Bartlett's Test of Sphericity
df
Sig.

.815
1644.115
300
.000

Table 4-KMO and Bartlett's Test

Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy is still another useful method

to show the appropriateness of data for factor analysis. The KMO statistics varies between 0 and
1. Kasier (1974) recommends that values greater than 0.5 are acceptable. Between 0.5 and 0.7
are mediocre, between 0.7 and 0.8 are good, between 0.8 and 0.9 are superb (Field, 2000). In
this study, the value of KMO for customer perceived value or the whole construct is 0.815
suggesting that the factor analysis is good and statistically significant (Kaiser-Meyer- Olkin =
0.815, Bartletts test of Sphericity was significant at p = 0.000 level). Therefore this suggests to
retain all the variables proposed initially in the scale construct.
Descriptive Statistics
N

Statistic

Minimu

Maximu

Statistic

Statistic

Mean

Std.

Skewness

Kurtosis

Deviation
Statistic

Statistic

Statistic

Std.

Statistic

Error

Std.
Error

SV

198

1.60

5.00

3.4798

.85656

-.088

.173

-.995

.344

EV

198

1.20

5.00

3.7747

.69015

-.551

.173

.349

.344

EPV

198

1.60

5.00

3.7677

.80944

-.374

.173

-.796

.344

FV

198

2.20

5.00

4.0828

.67441

-.648

.173

-.320

.344

CV

198

1.40

5.00

3.6313

.97545

-.308

.173

-.846

.344

SATIS

198

2.20

5.00

4.0788

.71351

-.458

.173

-.685

.344

LOYALTY

198

1.20

5.00

3.8879

.79117

-.824

.173

.565

.344

Valid N

198

(listwise)

Page 9

Table 5-Descriptive Statistics

Looking into Table 5, it shows that distribution of data is normal as it satisfies the
skewness and kurtosis rules. The general rule is that the skewness should of the curve should
not exceed more than 1 or less than -1. Similar rules apply to kurtosis. This means the peak
value of the curve should not exceed 1 and the flatness of the curve should not go below -1.
In terms of the CPV, functional value is mostly associated with automobile compared to
all other CPV (M=4.08, SD=0.674). Emotional value is the second most important CPV associated
with automobiles with a mean value of 3.77 (SD=0.690). The least CPV associated with
automobile is social value (M=3.4798, SD=0.857). Most of the respondents seems very satisfied
with their automobile with the highest mean score (M=4.078, SD=0.714) compared to brand
loyalty.

Correlation
Factor

Correlation
Satisfaction

Social values
Emotional values
Epistemic values
Functional values
Conditional Values

0.202**
0.308**
0.341**
0.576**
0.250**

P <0.05
Significant
Significant
Significant
Significant
Significant

Customer Satisfaction
1
**. Correlation is significant at the 0.01 level (2-tailed).

Correlation
with Brand
Loyalty
0.308**
0.397**
0.197**
0.319**
0.383**

P <0.05
Significant
Significant
Significant
Significant
Significant

0.484**

Significant

Table 6- Correlation between customers perceived value and brand loyalty

With reference to the above Table 6 the result shows that all the customer perceived
value has a positive and significant relation with the customer satisfaction and brand loyalty.
Also this study found that customer satisfaction is significant and positively correlated with
brand loyalty.
Multi-Co Linearity
Two major methods were utilized in order to determine the presence of multi co
linearity among independent variables in this study. These methodologies involved calculation
of both a Tolerance test and Variance Inflation Factor VIF (Kleinbaum, 1988 and
Velnampy,2011). The results of this analysis are presented in Table 7.
Variable
Social value
Emotional value
Epistemic value
Functional value
Conditional value

Satisfaction
Tolerance
VIF
0.555
1.803
0.606
1.649
0.587
1.704
0.671
1.491
0.747
1.340

Brand Loyalty
Tolerance
VIF
0.555
1.803
0.606
1.649
0.587
1.704
0.671
1.491
0.747
1.340

Table 7- Test of Co Linearity

Page 10

As can be seen from this data, none of the Tolerance level is < or equal to 1; and all VIF
values are well below 10. Thus, the measures selected for assessing independent variables in
this study do not reach level indicated of multi co linearity as shown in Table 8.
Variable
Satisfaction
Brand Loyalty

Durbin-Watson
1.4848
2.196

Table 8-Test of Durbin-Watson

The acceptable Durbin Watson range is between 1.5 and 2.5. In this analysis Durbin
Watson values for supervisor is 2.190 which is highest score. There was no auto correlation
problems in the data used in the research. Thus, the measures selected for assessing dependent
variables in this study do not reach level indicate of multi co linearity.
Regression Analysis
For this study, regression analysis was performed to predict the level of student
satisfaction based on five independent factors. The five independent factors/dimensions of TL
are idealized attributes, idealized behavior, intellectual stimulations, inspirational motivation
and individual consideration.
Model
1

R Square

Adjusted R Square

0.606a

0.367

0.350

Std. Error of the

Estimate
0.57512

Table 9-Model Summary in predicting Customer Satisfaction

The Table 9 shows that R is 0.606, R square is 0.367 and adjusted R square is 0.350. This
indicates that 35% of the variance in customer satisfaction can be explained by the changes in
independent variables of CPV. However as a general rule, this model is considered as a poor fit
as this multiple regression model fails to explain 60% of variance in dependent variable
(customer satisfaction).
Model

Unstandardized Coefficients

B
(Constant)
1.202
SV
-.118
EV
.127
1
EPV
.004
FV
.582
CV
.115
Dependent variable: Customer Satisfaction

Std. Error
.296
.064
.076
.066
.074
.049

Standardized
Coefficients
Beta
-.141
.122
.004
.550
.158

Sig.

4.062
-1.830
1.659
.054
7.844
2.372

.000
.069
.099
.957
.000
.019

Table 10-Regression model for customer satisfaction

The result of regression analysis shows that out of the five indicators of CPV in
influencing customer satisfactions, only two are significant as shown in Table 9. The two
significant factors are functional value (FV) with P value =0.000 (P<0.05), conditional value(CV)
with a P value=0.019 (P<0.05). The other three variables are not significant in influencing
customer satisfaction. However the constant is significant.
Therefore the model can be written as:
Customer Satisfaction = 0.550 (FV) + 0.158 (CV) + 1.202

Page 11

This model suggest that when the most significant two factors of CPV is not associated
with automobile of the preferred brand, customer satisfaction is still positive and by associating
any of the two CPV with the preferred brand, the empirical model can increase the level of
satisfaction when other things remain constant. The model above suggested that the changes in
functional value(FV) can have the biggest influence on level of customer satisfaction as its Beta
coefficient is the most significant and highest.
Model

R Square

0.509a

Adjusted R Square

Std. Error of the

Estimate

0.259

0.240

0.68994

Table 11-Model Summary in predicting Brand Loyalty

The second model is about brand loyalty. The Table 11 shows that R is 0.509, R square is
0.259, and adjusted R square is 0.240. This shows that only 24% of the variance in brand loyalty
can be explained by the changes in CPV. Also as a general rule, this model is considered as a
poor fit. This is because the adjusted R square is less than 60%.
Based on the Table 12 below, it shows that three CPV are significant and positive in
influencing brand loyalty. These are emotional value (EV) with Beta Coefficient of 0.235
(P=0.04), where P<0.05 is significant, functional value (FV) with Beta Coefficient of 0.250
(P=0.001) where P<0.05, and conditional values with Beta Coefficient of 0.278 (P=0.000) where
P<0.05. However we found that social and epistemic values are not significant in influencing
customer brand loyalty.
Therefore the empirical model is written as follows
Brand Loyalty = 0.235(EV)+0.0.250 (FV) + 0.278 (CV) + 1.305
This model suggest that when the most significant three factors of CPV is not associated
with automobile, customer brand loyalty is still positive and if any of the three CPV is associated
with the automobile it can increase the level of brand loyalty among the care users or drivers
when other things remain constant. The model above suggested that the changes in conditional
value(CV) can have the biggest influence on level of customer satisfaction as its Beta coefficient
is the most significant and highest.
Model

Unstandardized Coefficients
B
1.305
.024
.269
-.141
.293
.225

(Constant)
SV
EV
EPV
FV
CV

Std. Error
.355
.077
.091
.079
.089
.058

Standardized
Coefficients
Beta
.026
.235
-.144
.250
.278

Sig.

3.676
.316
2.939
-1.776
3.291
3.863

.000
.753
.004
.077
.001
.000

Dependent variable: Brand Loyalty

Table 12- Regression model for customer brand loyalty

Model

R Square

.484a

.235

Adjusted R
Square
.231

Std. Error of the

Estimate
.69391

a. Predictors: (Constant), SATIS

Table 13-Model Summary of brand loyalty

The second model is about brand loyalty. The Table 13 shows that R is 0.484, R square is
0.235, and adjusted R square is 0.231. This shows that only 23.1% of the variance in brand
Page 12

loyalty can be explained by the changes in customer satisfaction. Also as a general rule, this
model is considered as a poor fit. This is because the adjusted R square is less than 60%.
Model

(Constant)
SATIS

Unstandardized Coefficients
B
1.697
.537

Std. Error
.287
.069

Standardized
Coefficients
Beta
.484

Sig.

5.915
7.752

.000
.000

a. Dependent Variable: LOYALTY

Table 14-Regression model for customer brand loyalty

Based on the Table 14 above, it shows that customer satisfaction is significant and
positive in influencing brand loyalty (adjusted R square =0.484, p=0.000). Therefore the
empirical model is written as follows
Brand Loyalty = 0.484(SATIS) +1.697
This model suggest that when customer satisfaction is improved while other things
remain constant, customer brand loyalty will improve.

5.

Discussions and Conclusion

In recent years numerous theories on customer perceived values (CPV) have emerged in
various countries (Vera, 2013; Marketla, 2012; Abu-Bakar, 2014; Jamil, 2014). Also CPV in have
been examined in many sectors (Chen, 2012; Wu, 2014; Vera, 2013; Orel, 2014; Yusuf, 2013).
However, there appears to be little research available on CPV in relation to customer
satisfaction and loyalty in developing countries, particularly in Saudi-Arabia. Therefore, in this
particular research, we attempted to shed light on the dimensions of CPV and its impact on
customer satisfaction and brand loyalty in automobile industry in Saudi Arabi. However,
because of the small sample size due to the limited coverage (only Jeddah), therefore it will be
appropriate to repeat this research with a large sample size covering the whole Saudi Arabia,
especially all the key sectors. By conducting research on these areas, we can re-examine the
impact of CPV on brand loyalty to ensure the validity and reliability of the results. Moreover,
future research should continue to address specific business sectors (national cars and foreign
cars). As this study attempted to cover some of the demographic factors, a future study could
examine how each of these factors could affect the way customer perceived value in relation to
services and products.
Overall, we found that this research fulfilled its purposes by identifying the degree of CPV
associated with automobile and its impact on customer satisfaction and loyalty. In short the
conclusions are
Functional value(FV) positively influences customer satisfaction and loyalty. Also it is
important to note that FV is considered as one of the most important values that
perceived by customer when they purchase a car, van or a truck.
Conditional value (CV) is the second most important value that are perceived by
customer when they made a purchasing decision of an automobile. Similarly, CV is
significant and positively influence customer satisfaction and loyalty.
Emotional value can increase brand loyalty and also it is considered as one of the key
CPV associated with automobile.
Page 13

 It is important to note that improved customer satisfaction due to CPV has a significant
and positive influence on customer brand loyalty
Implications for practice: Based on the findings, it is evident that
improving
functional, emotional and conditional values would improve customer satisfaction and brand
loyalty. Therefore it is important to emphasis on improving functional aspects of automobile.
Perhaps engine reliability, fuel consumption and design along with recognized brand of the
automobile could increase customer satisfaction and loyalty. This could result increase in sales.

Further Research Direction: Since this study was conducted only on Jeddah, Saudi
Arabia, it may not be able to generalize the finding. However by conducting this research on
wider context of a particular country could confirm the findings and maybe a significant
contribution to this field of study.

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