Relationship between service quality, satisfaction, motivation and loyalty
Authors: Subrahmanyam Annamdevula 
Published: April 2017

Purpose
This paper aims to identify and test four competing models with the interrelationships between students’ perceived service quality, students’ satisfaction, loyalty and motivation using structural equation modeling (SEM), and to select the best model using chi-square difference (Δχ2) statistic test.

Design/methodology/approach
The study uses survey research design to gather data regarding attitudes of students about quality of services and their level of satisfaction, motivation and loyalty. A total of 1,439 valid questionnaires were collected from four public universities in the state of Andhra Pradesh, India, and the relationships between four variables using SEM are tested.

Findings
The structural model with direct and indirect relationships between the constructs proves as a best among the competing models. The result supported direct effect of students’ perceived service quality on students’ satisfaction and motivation; and indirect effect on students’ loyalty. Implications and research contributions are discussed and directions for further research are indicated.

Research limitations/implications
The study considers the examinations of the simple bivariate relationships between service quality, satisfaction, motivation and loyalty may mask or overstate their true relationships due to omitted variable bias. Structural theory with simultaneous measurement of the direct and indirect relationships between students’ perceived service quality, satisfaction, motivation and loyalty adds a unique contribution to the existing field of knowledge, especially higher education sector.

Practical implications
The results of SEM show that the service quality is a key antecedent to students’ satisfaction, loyalty and motivation. Motivating students for present and future studies with better participation in the process is important to increase quality and efficiency in their output. The best services also make students loyal to the institution. The findings suggested that it would be worthwhile for university’s administration to make proper allocation of resources, to provide better educational services. It is believed that this study has a significant competence for engendering more precise applications related to quality of services, especially concerning students’ satisfaction, loyalty and motivation.

Social implications
The research provides significant insights and demonstrates good understanding of students’ perceived service quality in the context of Indian universities. The changing nature and need of higher education services and increase in competitive intensity necessitates higher performance levels in the realm of Indian higher education (universities). The study identified that students’ perceived service quality is a key antecedent to students’ satisfaction, motivation and loyalty, which conveys that service quality is an important construct.

Originality/value
Several points are addressed based on the models identified in the study. First, there is sufficient evidence of a significant bivariate relationship between service quality, satisfaction, loyalty and motivation. Second, although service quality is an important determinant of loyalty, the exact nature of this relationship remains unresolved. Third, it is evident that very few studies have investigated multiple direct links between service quality, satisfaction, motivation and loyalty. Further, there is no reported investigation of whether any or all of these variables directly and indirectly influence loyalty when the effects of service quality, satisfaction, motivation are simultaneously considered in Indian higher education sector. Therefore, to present a more pragmatic picture of these relationships, the study identified the “collective model” that investigates the underlying relationships that exist among these constructs.