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Chapter one

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1.1 Introduction

The Market is continuing a period of dynamic change. To achieve a change in its business

environment, each party in supply chain need to understand customer requirements. This is

critical point to establishing and maintaining a competitive advantage in the market place.

Thus, Retailers are considered one of the most important customers in the supply chain, it's

important to determine their needs and how to deal with them, there are a number of

challenges that face retail management such as retaining customer responsiveness keeping

in touch and supplier relationships (Dawson, 2001) every service experience is a new

interaction with customers. For the customer, it is the people who are delivering the

services who are usually thought of as the “supply company”. Every service depends on

the context in which is delivered – time and place. All these aspects are subject to

changeability leads to inconsistent in the service that received by customers. The particular

nature of service organizations deals with the influences of the dimensions of perceived

quality, this research will measure the impact of logistics service quality dimensions

provided by supplier's retailers relationship quality based on (Palmer, 2003).

1.2 Historical background about Retailing

The retail industry is the last step in the process of getting products to customers

efficiently, and should not be confused with the wholesale activities which come first.

Wholesale establishments play an important role for retail establishments, as they generally

provide retailers with the resources they need to run their business in addition to the goods

and products they sell. The history of retail Industry began in the early 18th century in the

United States which was limited to general stores only, while specialty stores were located

only in areas with more than 5,000 populations. After the World War II, supermarkets

started to open in US and Canada. Currently, retail business has been growing fast all over

the world; the retail industry has changed greatly in the last two decades. it is increasingly

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more common to see people doing their shopping in large mass merchandise stores,

specialty stores, or online.1 It used to be comprised of a wealth of small, often family-

operated shops, department stores, and shopping malls.2

For the producers the role of the retailer grew since the 70's, from a simple distributor to a

partner (Zentes, Janz, Morschett, 2005). Due to the transformation of production markets

to customer demand markets, (Omar 1999) defined Retail as “any business that directs its

marketing efforts towards satisfying the final consumer based upon the organisation of

selling goods and services as a means of distribution”.Marketing is consider the first reason

that retailing appearance ,retailing is a part from marketing that support customer needs ,to

make them satisfy, there are many functions that retailers will not be able to accomplished

their jobs without supporting from marketing (Collect information, Make operational

decisions, Implement operational strategy, Manage store operations, Manage human

resource and Manage store-level resources),the conclusion of the relationship between

marketing and retailing is that Retailing is selling the products and services from one

particular point and marketing is creating the demand for the products and services and

then selling them in the market. (Omar 1999) ,the role of retailers in the relationship

between the industry/ the producers and its final consumers gained importance. New

technological developments, such as scanner or computerized customer loyalty programs

allow retailers to obtain more and more information about the customers, their needs,

habits and preferences (Zentes, Janz, Morschett, 2005,). So retailers know their customers

and have a greater influence on them as producers do, for they are in direct contact with the

final consumers. Customer consider the second reason for appears the retail management.

New ways in retailing like raised competition and risk of takeovers, have generated press

on retailers to correct both inventory turnover and consumer service. Ellram(1999).A

1 www.economywatch.com

2 globaledge.msn.edu

4

sustainable competitive advantage is a advantage ever competition that can be continued

over a lot of time. Creating a competitive advantage means that a retailer constructs a

barrier around its site in a retail market. This barrier makes it hard for opponents outside

the barrier get in take customers in the retailer’s market. If the retailer has built a wall

around a good market, opponents will try to smash the wall. Over time, but by built high,

big barriers, retailers can maintain their advantage, minimize competitor pressure, and

increase output for a longer time. Therefore, creating a maintainable rival advantage is the

most important factor to keep customers in these barriers (Levy 2001). Customer service is

critical point for retailers. While consumer satisfaction results of meeting consumer

anticipation at a retail level, consumer service is considered as a part from upstream

channel connections. Customer service may be identified as a process for provided that

important outputs to give chain in cost effective way. Customer service involves such

items as order completeness, performance consistency, response to faults, exceptional

requests ,services, and data requests (Ellram1999). Distribution Channel, Manufacturer,

Wholesaler, Retailer and Consumer. Wholesalers buy products from manufacturers and

sell them to retailers while retailers take the product from wholesalers to the consumers.

While the wholesalers try to satisfy the retailers, the retailers make all the effort in

satisfying the needs of the consumers. Retailing has become an basic part of our everyday

lives and this has been evident with the nations that have enjoyed the greatest economic

and social progress have been those with a strong retail sector.(hemanth 2011).

1.3 The Importance of Retailing

The retailer is an intermediary in the marketing channel because it is a chain for both

marketer and customer, who sells to the end user to consume .he, is specialist who

maintains contact with the customers and the producers; and is an important connecting

link in a complex mechanism of marketing. Though producers may sell directly to

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consumers, such method of distributing goods to final users is inconvenient, expansive and

time consuming as compared to the job performed by a specialist in the liner. Therefore,

frequently the manufactures depend on the retailers to sell their products to the final

consumers, the retailers, who is able to provide appropriate facilities without high prices of

goods is rewarded by larger or more loyal investment. .(hemanth 2011) Retail sales have

shown strong increase over the past ten years, the growth ranged between 5-15%.

Increasing spending power, and branded goods, and progressing economic development

have increased grocery sales figures. Retailing is one of the largest sectors in the global

economy. It employees almost 23million people in United States alone, generating about

$3 trillion in sales annually. About 50 organizations in the retail sector. Retail is one

among the fastest growing industry. Consider Wal-Mart, the biggest retailer in the world

with approximately $250 billion Growth in retail sales over the next few years is

predictable to increase progressively. This will be supported by an improving economy,

controlled inflation, and an increasing arrival of Western products, which is expected to

fuel consumer spending.(yehya 2010) this vital sector for the economy accounts for

approximately two or thirds of all economic activity around the world. In 2012, the

National Retail Federation (NRF)—the world’s largest retail trade association—reported

that retail sales around the world is growing up ,it's expected to be number one of all

economics activity in 2020. (Binkley2003)

1.4 The Retailing in Egypt

Egypt is the largest market in the Arab world. it is ranked 13th in terms of the most

attractive retail market worldwide. It is one of the most promising and fastest expanding

markets in its region. In 2009 Egypt was ranked 15th in global retailing (Consumer survey

reveals Egyptian retail purchasing habits, 2010). A population of more than 84 million

citizens makes Egypt a profitable market in the Middle East. About 42% of the population

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is under the age of twenty (Cairo Festival City hopes to capitalize on Egyptian retail sector,

2008). Cairo, Egypt’s capital has about 17 million residents. Alexandria, the second largest

city, has over 4 million people. Egypt Retail Report forecasts the country’s retail sales to

grow from (US$30.30bn) in 2011 to (US$48.30bn) by 2015 (Egypt Retail Report

2010).According to the Al-Futtaim Group, there will be an increase in per capita income

by 9.7%) between 2009-2016. This will lead to an increase in demand for luxury products

and necessitates more modern retail technology. This shift will attract the attention of

international brands for the Egyptian retailing market. Egypt’s GDP was US $226 Billion

in 2010. Between 2010 and 2016, GDP per capita, is predicted to rise by 63.9% to U.S.

$4,463 Billion.3

Food retail sales, expected as mentioned increase , is dominated by private micro retail

enterprises (which employ less than five employees), which make up about 99% of total

retailers, although growth in the industry is driven by mass grocery retailers (MGRs),

which grew by 15.3% in 2012 and constitute about 2% of local market share. Metro

Market is the largest grocery retailer in Egypt with 90 outlets and a market share of just

under 1%. The grocer is in the latter stages of a deal in which French-based Carrefour

(managed by Dubai’s Majid Al Futtaim) will buy the grocer including the Kheir Zaman

division; this would increase Carrefour’s overall market share by 60%. Carrefour is

currently the largest hypermarket operating in Egypt, in terms of floor space and stores,

with six hypermarkets in greater Cairo and Alexandria, and 10 smaller grocery outlets in

various locations. Lebanon-based Spinneys is the country’s second largest hypermarket

operator offering higher end and imported brands at its four locations across greater Cairo.

Hyper One is the largest domestic hypermarket operator; it expects 15-20% annual sales

growth going forward, with two locations around Cairo and one planned in Alexandria. as

3 http://wwww.oxfordbusinessgroup.com

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shown in figure 1.1, Generally speaking mass grocery retail sales are expected to increase

by two and a half-fold by 2015. (Service Sectors 2013)

Source: (Economist Intelligence Unit 2013)

Non-food retail sales chop slightly in 2012. The non-food segment, like the rest of the

retail sector is highly fragmented but is experiencing consolidation in the midst of an

arrival of malls and other types of modern retail space. Modern retail space is currently

undersupplied with 773,000 square meters in greater Cairo; this is expected to increase

92.5% by 2015. The existing malls in greater Cairo include Mall of Arabia, Dandy Mall,

Maadi City Centre, Sun City Mall, Golf City Mall, and City Stars. Other retail space under

development includes Emerald Mall, Dolphin Mall, Cairo Festival City, and Mall of Egypt.

The appearance of modern retail space has facilitated the market entry of various foreign

retailers. The Mall of Arabia, developed by Saudi-based Al Hokair Group, will be the

largest mall in the country at 180,000 square meters of gross leasable area (GLA) and

housing 900 brands when complete. It is located in Sixth of October City, a western suburb

of Cairo. Currently the mall is operating 70,000 square meters in the first phase of

operations, housing numerous international retailers such as Nine West, Tommy Hilfiger,

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Nike, Gap, Levi’s, Zara, Spinneys, Virgin Megastore, Hallmark, and Samsonite, to name a

few. City Stars is currently the largest mall in Egypt, located in the eastern suburb of Nasr

City. It has been a shopping landmark since its beginning in 2005, operating with 150,000

square meters of GLA. The mix-use complex, which is part of a larger facility with hotels,

entertainment, and business facilities, houses over 640 stores including international brands

such as H&M, Marks & Spencer, Timberland, Radio Shack, Panasonic, Sony, Samsung,

Crocs, Aldo Shoes, Adidas, Puma, The Body Shop, Montblanc, and Eastpak, to name just

a few. Future supply of modern retail space will be driven in large part by the Mall of

Egypt and Cairo Festival City. The Mall of Egypt, a development of the Dubai-based

Majid Al Futtaim Properties, is expected to be completed by June 2016 and will include

380 stores, covering 163,000 square meters; it is located in Sixth of October City. Cairo

Festival City, another mix-use project that will include retail facilities, housing,

entertainment, and business amenities, is expected to launch its retail component in June

2013. The project, developed by Dubai-based Al Futtaim Group Real Estate, will include

168,000 square meters of GLA, which will house 17 international flagship stores,

including 34,000 square meters for the Swedish-origin Ikea, and over 310 shops and

restaurants. Other developments include Almaza City Center, in Heliopolis, a 66,000

square meter facility expected to open in 2013 and Damac’s Park Avenue mall located on

the Cairo-Alexandria Desert Road, which will include 657 retail units on over 120,000

square meters of developed land. (Service Sectors 2013)

1.5 Research problem

Many customers, in particular the retailers, have recently been expressing dissatisfaction

with the services on offer (Meczes, 2002).The main problems identified by the customers

are poor service, poor communications and not being customer-facing.The new studies

show the powerful effect of customer loyalty and customer satisfaction on improving the

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financial performance of firms. Since then, marketing researchers began to focus on loyalty

and satisfaction researches as it became clear that the more a company can keep its

customers the more successfully it can activate. Some researchers established that

profitability is achieved through the building up of a loyal customer and customer

satisfaction base (Reichheld, 1993). In addition, a number of researchers explained the use

of relationship quality approach (Dorsch et al, 1998,S) as one of the most promising

approaches that can achieve customer loyalty (Hennig-Tburau et al, 2002). Other academic

studies established that a quality relationship could be established (Clihstopher and Peck,

2004) through efficient and effective customer service programs that are built upon

logistics capability. Most studies have concentrated neither on service quality (Brady and

Cronin, 2001) not relationship quality ( Dorsch et al, 1998). An exception is the work of

Christopher and Peck (2004), who openly theories the positive effects from logistics

capability on long term profitability that work through customer satisfaction, relationship

quality and customer retention. This study Investigates the influence of logistics service

quality dimensions (LSQ) on supplier's retailer satisfaction. While highlighting the

importance of relationship quality with retailers satisfaction on improving the performance

on suppliers – retailers relationship.

1.6 Research questions

The research problem is subdivided into two research questions The aim of the research is

looking for answering the following questions:

RQ1: Do Logistics Service Quality Dimensions positively affect retailer Satisfaction?

RQ2: Does retailer satisfaction lead to high relationship quality?

1.7 Research Aim

Recently, logistics research focuses on the ability of logistics to deliver a quality service

and generate greater satisfaction with the delivered service. Therefore, the aim of this

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research is to analyze the "logistics service quality", "satisfaction" on "Relationship

Quality" according to the logistic service delivery context.

1.8 Research methodology

First, approach used the conceptual approach by reviewing previous studies. Second

primary data collection from the retailers in Alexandria. The data was collected through

using self administered questionnaires filled by retailers located in Alexandria. The

questionnaire items were formulated based on different scales adopted from (Logistics

service Quality, Relationship Quality scales)(Jaafar 2006)

1.8 Proposed Model and Hypotheses

Figuer 1.1 Proposed Model

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The Research Hypotheses

H1: Logistics service quality dimensions has a positive effect on retailers' Satisfaction

H2: A higher level of retailer satisfaction leads to high relationship quality

1.10 Research objectives

The main objective of research highlights the importance and improves the retailers

relationships with their suppliers through enhancing the logistics Service quality.

1- Improving the Logistics Service Quality that presented to retailers.

2- Develop the relationship quality through the Logistics Service Quality.

3- Reflect the development in relationships on end users.

1.11 Research importance

Through the years retailing has evolved, competition has got hard and therefore marketing

has become more essential in the direct selling of wars. The methods by which stores are

getting their products into the hands of customers are developing. Because customers have

more choices, stores have to reach them through advertising, and effective promotions. So

retailing became more important around the world. According to previous studies done in

this field it was clear that a strategic business goal is a top tool to satisfaction, and

considered not sufficient enough to produce loyal customers, The need for such study

become obvious as the business competition turns out to be more strong due to the

complexity and huge growth of the suppliers in Egypt. Accordingly, this study aims to

fulfill the gap existing between LSQ dimensions factors and supplier' retailers relationship

quality in Egypt. . In addition, from academic prospective, this research contributes to

Logistics literature by addressing its research problem.

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1.12 Samples and Data Collection

The population of this research are retailers dealing with suppliers companies in

Alexandria .A self – administrated questionnaire distributed for retailers that having special

characteristics mentioned in Chapter three.

1.13 Thesis outline

This research is divided to 5 chapters

1.13.1 Chapter 1(Introduction)

This chapter highlights a brief introduction and background about the research planning,

the aim and the importance of this research. It also Overviews of the conceptual model,

methodology, and the outlining of the thesis.

1.13.2 Chapter 2 (literature review)

This chapter discusses the theoretical framework of the study. It also reviews the literature

on supply chain management, satisfaction and service quality in logistics. It introduces

various studies measuring logistics service performance , highlights previous studies

adopted Logistics Service Quality (LSQ) model, finally discusses the relationship quality

(RQ) and the variables of this model.

1.13.3 Chapter 3 (Research design)

This Chapter provides details of the specific methodologies for each phases of the study; it

also presents the hypothesized research model and hypotheses, introducing conceptual and

operational definitions of research variables and describes the methodology and the

process of generating and testing the measurement items,

1.13.4 Chapter 4 (Analysis and Results)

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This Chapter presents the empirical results of the study, and the analysis related to testing

the hypotheses according Logistics Service Quality model and Relationship Quality model

based on quantitative data that were collected through using questionnaires.

1.13.5 Chapter 5 (Discussion and Conclusions)

This Chapter discusses the research findings conclusions, including limitations and areas

for future research.

Figure 1.3 Structure of the Research

1. Introduction to

the Research

2. Supply chain

Management, Distribution

channels, and Retailing

2. Relationship quality in

Logistics

3. Research Methodology

4. Data Collection and

Analysis

5. Discussion and

Conclusion

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1.14 Summary

This chapter introduced the research problem and research questions, presented the outline

of the research, the next chapter presents the literature review for Logistics service Quality

and Relationship Quality.

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Chapter Two

Literature review

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2.1 Introduction:

This Chapter focuses on the relationships between retailers and suppliers through

adopting Logistics service quality between the two parties and its effect on

relationship quality. The literature review is divided into 3 sections the first section

will explain Supply chain management , different distribution channels, and the

retailing, The second one will explain Logistics, service quality and how logistics and

service quality were integrated, while last part explains the relation marketing and its

effect on relationship quality.

2.2 Supply Chain Management (SCM):

Today’s organizations are faced by serious levels of international competition,

customers requirements and new competitors, reduction of the product life cycles, and

decreasing acceptable response times. Competition in many industries has been based

mainly upon strategic assets (investments in scale, scope, brand equity) and based on

the ability to organize and handle these assets. However, competition is now based

upon capabilities, or “complex group of skills and accumulated knowledge, operated

through organizational processes” (Day, 1994,p 38). The importance of effective

supply chain management (SCM) has become more and more clear in recent years.

Businesses continue to identify the role of SCM in creating and maintaining a

strategic competitive advantage through close customer relationship, increased

satisfaction and improved business profitability (Mentzer, 2001). An essential aspect

of SCM is reliable, high-quality logistics services. Logistics services need to design

and implement the operations of inter organizational systems that allow goods to

remove time and space constraints (Daskin, 1985).These reasons encourage

companies to use supply chain management (SCM) as guide for their industries

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because the basic objective of supply chain management is to optimize performance

of the chain to add as much as value for cutting costs and to satisfy customers ,In

other words, it aims at linking all supply chain parties together to cooperate within

the firm as a way to maximize productivity and deliver the most benefits to all related

parties (Finch, 2006).

2.3 Supply chain management framework:

Mentzer et al., (2001) proposed a supply chain as a “set of three or more parties

directly involved in the upstream and downstream flow of products, services,

finances, and information from a source to the customer” with a clear importance on

management of flows. While Fleischmann et al., (2002) divided the supply chain into

four main stages or processes and described their purpose. Procurement involves the

operations of providing the raw material and resources necessary for production.

Production is the next process in the chain in which the raw materials are converted

into intermediary to finished products. Then, distribution includes the logistics to

move the products either to companies for further processing the product or to

distribution centers, and finally to point of sales figure (2.1) shows all stages of supply

chain management. All demand planning issues including customer or market

selection, forecasting, pricing strategy and order promising policies are part of the

sales process.

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Figure (2.1) Supply chain Stages

Source: Tom McGuffog, Nick Wadsley, (1999) "The general principles of value chain management", Supply Chain Management: An International Journal, Vol. 4, pp.218 – 225.

The goal of running the supply chain is to get income growth and cost reduction, at

the same time. This mean integration between all members in supply chain working

relationships is required. SCM may require that all firms in the supply chain share

sensitive and proprietary information about customers, actual demand, point-of-sale

transactions, and corporate strategic plans, Figure 2.2 clear the key elements of supply

chain management and highlights the important integration that must take place

among a variety of business functions and across several different organizations in the

supply chain. This means a balance between the goals of customer service level and

the goals of low costs. In practice these are hard to be achieved. Low costs are

achievable for processes designed for serving customers with stable and different

needs. High customer service levels often require both product and process

flexibility.(Lambert 1999).

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figure (2.2): The key elements of supply chain management

Source : Karl B. Mandrodt, Mary Collins Holcomb, and Richard H. Thompson

(1997) “What’s Missing in Supply Chain Management?” Supply Chain Management

Review p. 81.)

2.4 Supply Chain Management Goals

The most important goals for supply chain waste reduction and enhanced supply chain

performance come only when there are both internal and external functional

integration, sharing, and cooperation, So each firm in the supply chain must break the

barriers within its organization and promote right coordination and integration of

marketing, production, procurement, sales, and logistics. To reach to the targeted

point in supply chain, firms should follow and apply four main goals for supply chain,

Supply chain management is implemented to achieve four main goals: waste

reduction time compression, flexible response, and unit cost reduction. (Brewer 2000)

2.4.1 Waste Reduction

Firms at all levels in the supply chain often trying to maintain inventories. The most

suitable way to maintain inventories is reducing waste by minimizing duplication;

second, avoid doing the same operations between all members in supply chain it

makes all member focused on their core business and to get a high quality of products.

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2.4.2 Time Compression

Each member in supply chain seek to deliver and finish its job in the right time ,and

make a lead time less in all operations ,when that happened all entities in the supply

chain are able to operate more efficiently, this result will effect directly on inventories

and customer satisfaction whether internal customer or final customer.

2.4.3 Flexible Response

Flexible response in order handling, including how orders are handled, product

variety, order design, order size, and many things that finally affect on customer

satisfaction , a firm that has flexibly can respond all kinds of demand any time ,it will

be flexible to deal with this demand.

2.4.4 Unit Cost Reduction

The last goal in supply chain management is to run the chain by the way that reduce

cost per unit for the final customer, "The business marketer should carefully review

the balance between level of cost and the degree of service provided", The goal is to

give an suitable value for the customer, that’s mean that cost in some cases will be

higher for significant enhancements in service. So the firms try as much as they

balance between reduce cost and to achieve their business goals

2.5 The Evolution of Supply Chain Management (SCM)

Firms can no longer effectively compete in isolation of their suppliers and other

entities in the supply chain. Awareness about supply chain concept has progressively

increased since 1950s and 1960s; most manufacturers emphasized mass production to

minimize unit production cost as the primary operations strategy, with little product or

process flexibility. In the 1970s, Material Requirements Planning (MRP) was

developed and managers realized the impact of huge Work in Process (WIP)

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inventories on manufacturing cost, quality, product development, and delivery lead-

time. In 1980s companies were considering benefits of collaborative relationships

within and beyond their own organization and the global competition forced world-

class organizations to offer low-cost, high-quality, and reliable products with greater

design flexibility (Farmer, 1997) Table (2-1):shows evolution eras of supply chain

management. Manufacturers utilized Just-In-Time (JIT) and other management

programs to improve manufacturing efficiency and cycle time. The evolution of

(SCM) continued into the 1990s as organizations further extended best practices in

managing corporate resources to include strategic suppliers and the logistics function.

Many manufacturers and retailers are adopting the concept of (SCM) to improve

efficiency and effectiveness across the supply chain. (Jain et al., 2010).

Table (2-1): Evolution eras of supply chain management

Era

Description

1

Cost Era

In the 1950s and 1960s, most manufacturers emphasized

mass production to minimize unit production cost as the

primary operations strategy, with little product or

process flexibility. New product development was slow

and relied exclusively on in-house technology and

Capacity. (Farmer, 1997).

2

Quality Era

In the 1970s, Manufacturing Resource Planning was

introduced and managers realized the impact of huge

WIP on manufacturing cost, quality, new product

development and delivery lead-time

3

Creation Era

The term supply chain management was first coined by

an American industry consultant in the early 1980s.

However the concept of supply chain in management,

was of great importance long before in the early 20th

century, especially by the creation of the assembly line.

4

Integration Era

This era of supply chain management studies was

highlighted with the development of Electronic Data

Interchange (EDI) systems in the 1960s and developed

through the 1990s by the introduction of Enterprise

Resource Planning (ERP) systems. This era is characterized by the globalization of supply

22

5

Globalization Era

chain management in organizations with the goal of

increasing competitive advantage, creating more value-

added, and reducing costs through global sourcing

6

Specialization Era

Phase One-Outsourced

Manufacturing&

Distribution

In the 1990s industries began to focus on “core

competencies” and adopted a specialization model.

Companies abandoned vertical integration, sold off non-

core operations, and outsourced those functions to other

companies.

7

Specialization Era

Phase Two - Supply

Chain Management as

A Service

Specialization within the supply chain began in the

1980s with the inception of transportation brokerages,

warehouse management, and non asset based carriers

and has matured beyond transportation and logistics into

aspects of supply planning, collaboration, execution and

performance management

8

Supply Chain

Management

The coordination and collaboration of all supply

activities of an organization to increase creativity,

information sharing from its suppliers and partners to its

customers.

Source : Jain et al. (2010)" Supply Chain Management: Literature Review and Some Issues", Journal of Studies on Manufacturing ,Vol.1, pp. 11-25.

2.6 Definitions of Supply Chain Management (SCM):

In the literature there are a number of definitions are proposed and the idea is

discussed from many perspectives. However (Cousins et al., 2006) defined the

concept, principals, nature, and development of SCM and pointed out that there is a

strong research being conducted around the world in this field they critically assessed

developments in the theory and practice of supply management.

Scott and Brook, (1991) defined SCM as a chain linking each element of the

manufacturing and supply process from raw materials to the end user, including

several organizational boundaries. According to Ganeshan and Harrison (1995) SCM

is a network of facilities and distribution options that performs the functions of

procurement of materials, transformation of these materials into intermediate and

finished products, and the distribution of these finished products to customers. These

definitions highlighted the significance of coordination among the members in supply

chain. Jayashankar et al, (1996) stated that supply chain is a network of autonomous

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or semi-autonomous business entities collectively responsible for procurement,

manufacturing, and distribution activities associated with one or more families of

related products. He highlighted the importance of coordination and attempts to show

usual functions of supply chain. Christopher (1998) defined the supply chain as the

network of organizations that are involved, through upstream and downstream

linkages, in the different processes and activities that produce value in the form of

products and services in the hands of the ultimate customer. These three definitions

key points are related to coordination in supply chain. On the other hand Christopher

added the value that should present to the customer. Croxton et al., (2001) extended

the scope of SCM to the integration of key business processes from end user through

original suppliers that provides products, services, and information that add value for

customers and other stakeholders. He moved on from level of coordination to

integration among all parties in supply chain. In the same line Mentzer et al., (2001)

defined SCM as The systemic, strategic coordination of the usual business functions

and the plans across these business functions within particular firms and across

businesses within the supply chain, for the purposes of improving the long-term

performance of the individual firms and the supply chain as a whole. Mentzer et al

observed that the long term relationship is a perfect solution for integration in supply

chain and also cleared the role of supply chain to serve the customer. A similar

definition from (Chan and Lee, 2005) defined SCM as the efficient management of

the end-to-end process of designing, development, anticipating and sourcing though

complex supplier networks, manufacturing, and distributing products from raw

material to the final customer, and the final disposal of the product by the customer.

They added anticipating as a part from supply chain .Although from 1991 to 2005

there is a development happened in supply chain but Ganeshan and Harrison (2006)

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didn’t mention something new except a distribution system as a part from SCM, they

defined SCM as a network of facilities that procure raw materials, transform them into

intermediate goods and then final products, and deliver the products to customers

through a distribution system. According to the Council of Supply Chain Management

Professionals (CSCMP) (2009) Supply chain management include the planning and

organization of all activities involved in sourcing and procurement, exchange, and all

logistics management activities. Significantly, it also includes coordination and

collaboration with channel partners, which can be suppliers, intermediaries, third-

party service providers, and customers. In the core of supply chain management

integrates supply and demand management within and across companies.

Accordingly, many researches defined SCM from many perspective highlighting the

importance of (coordination, integration, collaboration, long term relationship, and

more about linking among all parties in supply chain, so supply chain management

can be defined – according to these definitions – as the entire value chain that can

transferred to the end users via integrated business organizations based on the

anticipating and forecasting. According to the literature are many functions in supply

chain existed to achieve supply chain's goals such as customer response, inventory

planning and management, supply, transportation, warehousing and distribution, This

research will explore different types of distribution channels, and will pointed out

their importance.

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2.6.1 The Supply Chain Management and the Distribution Channels

Distribution channel one of the most important part in supply chain, The growing

awareness of the vital impact of supply chain management (SCM) on organization's

competitiveness, productivity and strategic advantage has made supply chain a truly

strategic issue and it has received increased emphasis everywhere, Supply chain

includes many main functions such as Korpela et al., (2001):

Korpela et al., (2001) determined the main fuctions of SCM as follows

Procurement of raw material

Production planning and inventory control process and;

Distribution and logistics process.

The role of distribution is to provide to a company the accomplishment of the task of

delivering the product in the right time at right place, and quantity at a minimum cost

(Bucklin, 1966). Distribution channel is defined as a combination of functions which

provides the right transfer of goods and services, from the producers to the customers,

the distribution includes along with the goods and commodity flow transactional,

informational, financial, monetary, risks flows. (Rosenbloom, 2004).According to

(Ostrow, 2009, p 59 ( "Distribution channels is The route along which goods and

services travel from producer/manufacturer through marketing intermediaries (such as

wholesalers, distributors, and retailers) to the final user. Channels of distribution

provide downstream value by bringing finished products to end users. This flow may

involve the physical movement of the product or simply the transfer of title to it. Also

known as a distribution channel, a distribution chain, a distribution pipeline, a supply

chain, a marketing channel, a market channel, and a trade channel."

Distribution has an active role in the sufficient performance of the flows involved in

the supply just in time of necessary products or services and it is an activity

26

particularly complex and heterogeneous by the diversity of intermediaries, of

operations.

Figure (2.3) Numbers of Distribution Channel Levels Source: (Coughlan et al., 2001) :

Each layer of marketing intermediaries that performs some work in bringing the

product to its final buyer is called "channel level". The figure (2.1) shows some

examples of channel levels for consumer marketing channels (Coughlan et al., 2001) :

Channel 1 is called a "direct-marketing" channel, it hasn’t intermediary levels.

In this case the manufacturer sells directly to customers.

Channel 2 contains one intermediary. In consumer markets, this is a retailer.

(Indirect-marketing channels).

Channel 3 contains two intermediary levels - a wholesaler and a retailer. The

retailers are receiving the goods from the wholesaler. (Indirect-marketing

channels).

Channel 4 contains three intermediary levels- a wholesaler, jobber and a

retailer in this one the wholesaler uses jobber to distribute their products to all

retailers (indirect-marketing channels).

This research will focus on channel 2 or 3 or 4 explain that retailers is the core of

this research and it’s a backbone in supply chain for any company, retailers more and

more taking the essential role in supply chain, as they are considered the key of

connection between producers and consumers and no longer distributors but it has a

27

critical role and ability to influence demand and drive efficiencies in the supply

system, The relationships between retailers and suppliers are important to consider for

understanding the determinants of quality, variety and prices (Dobson, 2005).

2.6.2The Distribution Channels and Retailing

The properties of the retail sector in markets may present themselves as either barriers

or opportunities for the internationalizing consumer goods manufacturer. Modern and

capable retail partner may be an essential cornerstone of success for the whole supply

chain; Retail can be defined as the various processes which help the customers to

procure the desired merchandise from the retail stores for their end use refer to retail

management. Retail includes all the steps required to bring the customers into the

store and fulfill their buying needs.4

"Retailing 2015 confirms that the retail industry is becoming more complex and

changing at an ever-increasing speed. the industry quickly adjust and modify existing

models, approaches and processes to satisfy the needs of future customers in order to

be successful and profitable. Retailing will become an industry that realizes, more and

more, that it must adapt its offerings to select customers, in order to win over

customers and promote greater customer loyalty".5 From a traditional marketing

viewpoint, the retailer is one of many possible organizations through which goods

produced by the manufacturer flow on their way to their consumer destiny. These

organizations perform various roles by being a member of a distribution channel.

Channel members, or marketing intermediaries as they are sometimes referred to,

take on activities that a manufacturer does not have the resources to perform, such as

4 http://managementstudyguide.com

5 http://www.scribd.com

28

displaying the product alongside related or alternative items in a location that is

convenient for a consumer to access during shopping Intermediaries facilitate the

distribution process by providing points where deliveries of merchandise are altered

in their physical state (such as being broken down into smaller quantities, or being

repackaged) and are made available to customers in convenient or cost-effective

locations.(Krafft M 2010)

In the retailers introducing ranges of own-branded goods (private labels) and

developing shopping environments that produce loyalty to an outlet rather than

loyalty to a product. This shift in power from the manufacturer to the retailer has been

further enhanced by information technology that has enabled retailers to gain a greater

understanding of their customers' purchasing patterns and preferences.(Krafft M

2010)

Davidson et al (2000) explain retailing as the last part of the marketing process in

which the different functions of the seller, usually a store or service establishment,

and the buyer, an individual consumer are primarily oriented to accomplishing the

exchange of economic goods and services, for purposes of personal, family or

household use. Although retailing deals mainly with the final consumer, it must be

recognized that the retail store is only one of several alternative means by which

consumers can obtain the products and services they desire. Increasingly, consumer

expenditures that might have traditionally gone through the retailing structure are

being diverted to other types of consumption markets which are being forcefully

served by a variety of both private and public enterprises. Berkowitz et al. (2000)

describe retail marketing as all activities involved in selling, renting, and providing

services to final customers for personal, business or non-business use. In the channel

of distribution, retailing is where the customer meets the product. It is through

29

retailing that exchange occurs. In terms of method of operation, retailing includes

store and direct marketing operations. Outlets also differ in terms of the breadth and

depth of their merchandise lines. Breadth here refers to the number of different items

carried, and depth refers to the assortment of each item offered. In assessing their

competitive position, retail outlets should consider their position in terms of breadth

of merchandise line and the amount of value added, which is the service level and

method of operation (Berkowitz et al., 2000).

Today, retailers place a lot of emphasis on customer service which is defined as the

sum of acts and elements that allow consumers to receive what they need or desire

from your retail establishment.(Krafft 2010),the interaction between the retailers and

their customer wouldn't be good without a good service presented to the retailers ,this

service exist in Logistics service quality that presented from suppliers to the retailers,

logistics service quality is a key that can measure the relationship between retailers

and suppliers, in a new line the following section will explain what's Service Quality,

Logistics and how its extended to be Logistics Service Quality (LSQ)

2.7 Service Quality

Service quality became a major field that the researcher start to focus on in their

studies , because it has an essential and great influence on business performance,

lower costs, customer satisfaction, customer loyalty and profitability (Guru, 2003).

Many researchers have conducted studies in measuring service quality in the past

twenty years. , McCleary and Weaver, (1982) indicated that good service is defined

on the basis of identification of measurement behaviors that are important to

customers. Zemke and Albrecht, (1985) suggested that service quality plays a vital

role in defining a firm’s competitive strategies and identified systems and strategies

for managing service. According to Parasuraman et al., (1988) "service quality" is a

30

general tool to measure perceived service quality that clear the degree of difference

between consumers’ perceptions and expectations. Thus, service quality as perceived

by consumers, comes from an evaluation of what they think service providers, provide

according to their consumers' perceptions of the service providers performance. The

high quality in products and service is the main tool in market place and this quality in

service will reflect on the performance that does produce considerable benefits in

incomes, cost savings, and market share (Anderson et al., 1994). Researchers also

indicated that service quality is the main factor to make any business successful

Parasuraman et al., (1988). The topic of measuring service quality has been studied

extensively in the past fifteen years. In (1988), Parasuraman, Zeithaml and Berry

developed a many attribute scale .The service quality (SERVQUAL) scale operations

and measures service quality along five distinct dimensions that can be viewed as

indicators of the construct of perceived service quality.

2.7.1 Service Quality Framework

While there has been significant progress with regard to how to measure the quality of

service, Researchers generally adopted two perspectives these perspectives are the

“Nordic perspective” and the “American perspective” (Brady and Cronin, 2001). The

“Nordic perspective” was proposed by Gronroos (1984) and the “American

perspective” was proposed by Parasuraman et al. (1985). The “Nordic perspective” of

service quality was the first to be published in Scholastic literature. However, the first

program dedicated to researching seriously to answer the questions, "What is the best

way to determine the quality of service?" and "What is the best way to measure it?”

was launched by Parasuraman et al., (1988) Schneider and White, (2004). This

program developed the “American perspective” of service quality. Parasuraman et al

(1985) proposed service quality to be a function of pre-purchase customer

31

expectations, perceived process quality, and perceived output quality. The researchers

found that consumers evaluate the procedure as well as the result of the service

received. In the same line, the waiting time, the smile, and the manner of the workers

are as important as the support of the results. et al. (1985) built up a 22 item service

quality scale comprising 5 dimensions (reliability, responsiveness, competence,

access, courtesy, communication credibility, security, understanding/knowing the

customer and tangibles).The following section by Parasuraman et al. (1988) resulted

in the service quality measurement scale with 22-items on 5 dimensions. The

dimensions reliability, responsiveness and tangibles were retained as identified in

(1985) whereas communication, competence, credibility, courtesy and security

merged as a new dimension “assurance”. Access and understanding knowing the

customer merged to form the dimension “empathy” as indicated in figure 2.4. (Table

2.2) shows each dimension with specific criteria that customers use Parasuraman et

al., (1988) explained this scale as SERVQUAL and defined its 5 dimensions as:

2.7.2 Service Quality Dimensions

1) Reliability is the ability to perform the promised service in a dependable and

accurate manner. The service is performed correctly on the first occasion, the

accounting is correct, records are up to date and schedules are kept.

2) Assurance feelings of trust and confidence in dealing with the organization.

this reflects the workers' knowledge and experience and their ability to build

self-confidence as well as confidence in the customers themselves.

3) Tangibles are the physical evidence of the service, for instance, the appearance

of the physical facilities, tools and equipment used to provide the service; the

32

appearance of personnel and communication materials and the presence of

other customers in the service facility.

4) Empathy the caring individualized attention that a firm provides its customers.

5) Responsiveness refers to the willingness of employees to help customers and

to provide a prompt timely service, for example, mailing a transaction slip

immediately or setting up appointments quickly.

(Table2.2) the dimensions of service quality

Source: Parasuraman, A., V.A Zeithaml, and L.L. Berry (1988) "SERVQUAL: A Multiple-Item Scale

for Measuring Customer Perceptions of Service Quality". Journal of Retailing, Vol 64, pp12-40.

Dimension

Refers to

Specific criteria that customers use

RELIABILITY

Delivering on

Promises

one's ability to perform the

promised service

dependably and

Accurately

Timeliness

Consistency/Regularity

Accuracy

ASSURANCE

Inspiring trust and

Confidence

The knowledge and

courtesy of staff; their

ability to inspire trust

and confidence

Staff competence

Respect for stakeholders

Credibility

Probity and confidentiality

Safety and security

TANGIBLES

Representing the service

physically

The physical

representations or images

of your service

Physical facilities

Equipment

Technology

Employees

Communication materials

EMPATHY

Treating customers as

individuals

The caring individualized

attention you provide your

stakeholders

Access (to staff, services,

information)

Communication (clear, appropriate,

timely)

Understanding the stakeholder

Individualized attention

RESPONSIVENESS

Being willing to help

Your willingness to help

customers and to provide prompt

service

Willingness to help

Prompt attention to requests, questions

Problem resolution

Complaint handling

Flexibility

33

Figure 2.4 Conceptual model of service quality

Source : Parasuraman, A., V.A Zeithaml, and L.L. Berry (1988) "SERVQUAL: A Multiple-Item Scale

for Measuring Customer Perceptions of Service Quality". Journal of Retailing, Vol 64,pp12-40.

Figure (2.5) SERVQUAL model created and developed by Parasuraman et al. (1985)

Source: Okumufi, A., & Duygun, A. (2008). "Service quality measurement on education service

marketing and relationship between perceived service quality and student satisfaction". Anadolu

University Journal of Social Science, Vol 8, p.p17-38.

While there is no universal consensus that either "Nordic perspective " or "American

perspective" are considered the most appropriate approach, but still the "American

perspective" controls on the researcher's literature (Schneider and White, 2004).

(Parasuraman et al., 1988) claimed that the 5 dimensions and 22 items proposed in

their “American perspective” are of a general nature and apply to all service

organizations. However, the service quality measurement scale developed by

(Parasuraman et al., 1988) has been the subject of criticism since its development

(Johnston, 1995). (Buttle 1996) provides a detailed analysis of the issues surrounding

the 5 dimensions of the (Parasuraman et al., 1988) service quality scale, mostly on the

basis of number of dimensions and contextual stability. (Carman 1990) found that the

34

5 dimensions of service quality measurement scale proposed by (Parasuraman et al.,

1988) are not so general that users should add new dimensions they believe are

important. (Parasuraman et al., 1988) suggested that the number of service quality

dimensions is dependent on the service being offered.

2.7.3 Functional and Technical Quality

Gronroos (1978) first proposed that customers’ overall evaluations of service quality

were a result of their assessment of two dimensions, which he termed functional and

technical service quality, and of the impact of an organization’s image. He proposed

that customers compared their expectations to their experience of service quality in

forming their judgments (Gronroos, 1984), it has been the work of Parasuraman et al

(1985) in developing a technology for measuring and managing service quality

SERVQUAL which has received the most attention Gronroos (1983a) as in Figure 2.6

identified the keys determinants of service quality .

Gronroos (1984, p36) identified 2 dimensions of service quality which were (technical

quality and functional quality). He defined technical quality as “what the consumer

receives as a result of interactions with a service firm” and identified employees

technical skill, employees knowing, technical solutions, technology systems and

machine quality as its 5 attributes. Gronroos (1984, p39) defined functional quality as

“the way in which the technical quality is transferred”, The functional service quality

dimension of seven attributes consists behavior, attitude, accessibility, appearance,

customer contact, internal relationships, service mindedness as its 7 attributes. The

technical dimension consists of five output attributes: ability, employees’ knowledge,

technical solutions, computerized systems, and machine quality (Gronroos, 1982;

1983). He concluded that the technical and functional quality of service built up the

35

corporate reputation of the company. Image is described by Gronroos (1982) as the

customers’ general perception of the supplier.

Figure (2.6) Managing perceived service quality

Source: Gronroos, C. (1984). "A Service Quality Model and Its Marketing Implications". European

Journal of Marketing, Vol 18,p.p 36-44.

2.7.3 SERVPERF

Cronin and Taylor (1992) in their empirical work controverter the framework of

Parasuraman, Zeithaml and Berry (1985, 1988) with respect to conceptualization and

measurement of service quality, and shown a performance-based measure of service

quality called ‘SERVPERF’ explain that service quality is a form of consumer

attitude. They argued that SERVPERF was an enhanced means of measuring the

service quality construct. Their study was later simulated and findings suggest that

little if any theoretical or empirical evidence supports the significance of the E-P=

quality gap as the basis for measuring service quality. Cronin and Taylor (1994) clear

36

that the SERVQUAL and SERVPERF scales are tools designed for the long-term

performance-based attitude measurement of service quality. They suggested that the

SERVPERF scale appears the most suitable tool available for operate service quality

by satisfying in the gap to activate SERVQUAL operation. In the same line, Brand et

al (1995) in their research give an empirical study that identifies the significance of

the recreational service sector to service marketers and practitioners, and assesses the

efficiency of the SERVPERF versus SERVQUAL scales in recreational services for

the purposes of service quality measurement. The results suggest that differing

recreational services appear to have unique properties that say whether SERVPERF or

importance-weighted SERVPERF should be used.

2.7.4 Servicescapes

Service performance should be recognized either as customer only, employee only or

as customer and employee. Relation level of involvement of customers and employees

determines whose needs should be consulted in the design of environment. Employees

and customers have special needs and requirements for their physical life, but

companies do not discriminate needs and desires specifically to any particular

individual. Most firms have tried to give the best in the eyes of the customers.

Moher et al (1990) mentioned that close examination of the scale items for each

dimension clear that a majority of all the items relate directly to the human interaction

element of service delivery by referring to Parasuraman et al (1988). Bitner (1992)

clarified how these servicescapes influence both employees and customers in

physiological, sociological, cognitive and emotional ways.

Although there have been many dimensions of performance in the literature extended

from marketing to strategic management, but this research focuses on logistic

37

performance of the relationship between suppliers and retailers in this study and it

shall discuss the literature based upon the fundamental understanding of logistic

related aspect of performance. According to the literature the following section will

introduce logistics definitions, logistics service quality and its dimensions.

2.8 Logistics

Logistics deals with the scheduling and control of material flows and related

information in organizations, both in the public and private sectors. Generally, its

mission is to get the right materials to the right place at the right time, while

optimizing a given performance measure, and satisfying a given set of constraints. In

the military context, logistics is concerned with the supply of troops with food,

weapons, ammunitions and extra parts, as well as the transport of troops themselves.

In civil organizations, logistics issues are encountered in firms producing and

distributing physical goods. The key issue is to decide how and when raw materials,

semi-finished and finished goods should be needed, moved and stored. Logistics

problems also rise in firms and public organizations producing services (Ghiani et al.,

2004). Logistics excellence has become a powerful source of competitive

differentiation within diverse marketing offerings of world-class firms. Although

researchers have suggested that logistics competencies complement marketing effort,

efforts, empirical evidence is lacking on what logistics service quality means to

customers and whether it has different meanings for separate customer segments.

(Shet et al., 2006).

38

2.9 The Definitions of Logistics

According to Council of Logistics Management (1991) defined Logistics as a Part of

the supply chain process that plans, implements, and controls the efficient, effective

forward and reverse flow and storage of goods, services, and related information

between the point of origin and the point of consumption in order to meet customers’

requirements. (Tilanus, 1997) stated that the process of forecasting customer

requirements and desires; owning the capital, materials, people, technologies, and

information necessary to satisfy their requirements and desires; optimizing the goods-

or service-producing network to carry out customer requests; and utilizing the

network to fulfill customer requests in the right time. A similar definition by

(Handfield, 2002) define logistics as a Process of moving and handling goods and

materials, from the start to the end of production, sale procedure and waste disposal,

to make customers satisfied and attain a competitive advantage. According to

(Waters, 2003) Logistics is complete process of materials and products moving into,

through, and out of firm. Inbound logistics covers the progress of material received

from suppliers. Materials management describes the movement of materials and

components within a firm. Physical distribution refers to the movement of goods

outward from the end of the assembly line to the customer. Finally, supply-chain

management is somewhat larger than logistics, and it links logistics more directly

with the users’ total communications network and with the firm’s engineering staff.

Based on the previous definitions for logistics and service quality logistics is

considered the most essential part to make customer satisfied. SERVQUAL is the tool

used to support logistics activities, and to present the service in a right way, both

definitions support customer needs, so the integration between logistics and service

39

quality will achieve customer benefits. The following section explains how the

concepts of service quality were expanded to the logistics service quality context.

2.10 Logistics service quality

By taking into consideration SERVQUAL and other service quality research in

marketing, (Mentzer et.,al 1999) extended the use of the service quality concept into

the logistics context. SERVQUAL components include marketing customer service

components that were developed in line with traditional service quality research in

marketing, which was based on the idea that logistics services involve people who

often take orders and deliver products and procedures for placing orders and handling

discrepancies. The interactions that the customers have with these people and

procedures should affect their perceptions of overall logistics services. Perreault and

(Russ, 1976 proved that logistics activities, create time, place, and form utility, and

accordingly enhance product value. This confirmation was additional proved by

(Coyle et al., 1992) in describing the seven Rs of value creation by logistics services:

delivering the right product, right amount, at the right place, in the right condition, at

the right time, with the right information, and at the right price. (Bienstock et al.,

1997) developed a suitable and reliable scale for measuring physical distribution

service quality, which was the first of its nature effort to start an integration of the

logistics and marketing service quality research streams. As a part of this effort, they

examined the marketing service quality measurement literature, particularly the

development of logistic service scale and subsequent actions aimed at application of

these logistic service dimensions in industrial service contexts.

The idea of Logistics Service Quality (LSQ) has been studied from two different

perspectives: objective and subjective quality. The first approach related to quality

40

with use the service to be service provider defined specifications. This business view

of service considers quality as a true evaluation of all the levels and operations

essential to deliver the service that of manufacturing a product. This can be reached

through considering the service as a physical object which can be noticed and with

criteria that can be evaluated (Garvin, 1984). The second approach is subjective

quality that can convey evaluation of quality to the customer (Parasuraman et al

1988).

There are number of researches have been done in Logistics service quality:

Valuable contribution to the area of LSQ based on Mentzer and other researchers

Mentzer, Gomes, and Krapfel (1989), Mentzer, Flint, and Kent (1999), Mentzer,

Bienstock, and Kahn (1993), Bienstock, Sharma, Ballou, Grewal and Levy (1995)

Christopher, Bienstock ,Mentzer, and Bird (1997), Emerson and Grimm (1998),

Christopher, Moraes and Lacombe ,Flint and Kent, Elram, Lalonde and Weber

(1999), Mentzer et.al (2001), CEL (2003), Forslun, Gustafsson (2003) Mentzer et al

(2004),Jaafar (2006); Davied and mentzer (2006) Richey et al., (2007); Ruth

Banomyong and Nucharee Supatn, (2011) Bouzaabia(2013). Most of the studies

focusing on LSQ were examined using the operational measurements whereas the

customer perspective was used a little comparing with operational perspective .

Mentzer's’ study give more importance for the customer perspective rather than the

operational dimension of the service. Deriving from the work of (Gronross 1984) in

the service quality area where technical quality refers to the service outcomes and

functional quality refers to the process of service delivery, they associated the

physical distribution aspects as the technical service parameter and customer service

aspects as the functional service parameter leading to the development of an

instrument to measure the Physical Distribution Service Quality (PDSQ) (Bienstock,

41

Mentzer, and Bird 1997). Further studies broadened the scope of physical distribution

to a component of logistics leading to the development of LSQ scale LSQ (Mentzer,

Flint, and Hult (2001) Mentzer, Flint, and Kent 1999).

Mentzer, Flint, and Kent (1999) from now referred as MFK developed and validated

their Logistics Service Quality (LSQ) scale using a single large logistics services

provider firm in the United States, namely the DLA, which provides logistics services

to internal customers. MFK proposed nine constructs for evaluating logistics service

quality by expanding the concept of service quality into logistics context. The

methodology used by Bienstock, Mentzer, and Bird (1997) to develop PDSQ scale

was used by them. The constructs conceptualized from the customers’ viewpoint are

information quality, ordering procedures, order release quantities, timeliness, order

accuracy, order quality, order condition, order discrepancy handling, and personnel

contact quality. Collier and Bienstock (2006) ,Shet et al., (2006), Chin and Lui

(2007), Richey et al. ( 2007). Jaafar, (2007) and Saura, Fraces, Contri, and Blasco

(2008) used the LSQ dimensions model for different purposes.

This research reports the testing and validation of the LSQ instruments in the

relationship quality in business to business field

The nine dimensions constructs for evaluating logistics service quality are:

information quality, ordering procedures, order release quantities, personnel contact

quality, order quality, order condition, order accuracy, order discrepancy handling and

timeliness. Mentzer et al., (2001) .The nine dimensions of LSQ are discussed below:

42

2.10.1 The nine dimensions of Logistics Service Quality (LSQ)

2.10.1.1 Personnel Contact Quality

Personnel contact quality refers to the customer direction of the supplier's logistics

contact people (Mentzer et al, 2001). Having considered the fact that logistics services

involve personnel who often receive orders and deliver products, and are involved in

procedures for placing orders and handling conflicts, Personnel contact quality

becomes one of the most critical variables in delivering service. (Mentzer et al., 2001)

highlighted the positive influence of personnel contact quality on perceptions of

timeliness in all four segments (general, textiles, electronics and construction). Most

researchers recognized that customers care more about whether customer service

personnel are knowledgeable, empathies with their situation, and help them resolve

their problems . (Parasuraman et al 1985) argue that in most service encounters,

quality perceptions are shaped during the service delivery. Similarly, (Suprenant and

Solomon, 1987) suggest service quality perceptions are joined more to the service

process, which involves personnel contact, than to the resulting service outcome.

Accordingly, personnel contact quality is considered an important aspect of the

employee-customer interface.

2.10.1.2 Order Release Quantities

Order release quantities are related to the concept of product accessibility, which

means suppliers companies have the flexibility to deliver certain order sizes (Mentzer

et ., 2001). The importance of product availability has long been realized as a key

component of logistics excellence (Mentzer et al. 2001). Customers are most satisfied

when they are able to obtain their required quantities. Failure to deliver the required

quantities leads to stock-outs followed by financial losses due to insufficient materials

for production leading to dissatisfied and disloyal customers. ( Keebler et al. 1999).

43

2.10.1.3 Information Quality

The way customers perceive the information given by the suppliers with and the

diversity of products customers may select and form the information quality that they

built. The quality of the information especially in terms of sufficiency and availability

of the products is very important to customers so that they are able to use the

information to create decisions (Mentzer et al. 2001).

2.10.1.4 Ordering Procedures

Many researchers found that customers are worried about effective and simple

procedures provided by the suppliers or service providers (Mentzer et al. 2001) Thus,

they analysis ordering procedures as efficient and effective procedures of ordering

products according to suppliers or service providers.

2.10.1.5 Order Accuracy

Customers are concerned about order accuracy, order condition and order quality

when they assess orders as complete. However, (Mentzer et al. 2001) highlighted that

these three elements are different to each other. Order accuracy refers to the ability of

the suppliers or service providers to deliver the right item at the required number as

ordered and none of the orders being replaced with other items (Bienstock et al.

1997).

2.10.1.6 Order Condition

Order condition addresses the damage levels of the products due to handling

throughout the transportation process. Damaged products are unusable to the

customers. Customers have to go through certain procedures to obtain the replacement

of the damaged products from the suppliers or service providers depending on the

44

source and level of damage. Specifically it refers to the lack of damage of the orders

(Mentzer et al. 2001).

2.10.1.7 Order Quality

Order quality addresses the damage levels of the products ordered from the suppliers

or service providers due to manufacturing of the products as opposed to damage due

to handling. It reflects the level to which the products provided by the suppliers or

service providers meet the product specifications set by the customers (Novack et al,

994).

2.10.1.8 Order Discrepancy Handling

The degree to which the suppliers or service providers deal with any discrepancies

upon the arrival of orders reflects the order discrepancy-handling dimension. When

the orders received from the suppliers or service providers are not correct, in a poor

condition, or of poor quality, customers have to go through certain procedures to

approve the orders. Thus, the way the suppliers or service providers handle these

problems forms customer perceptions on the quality of services provided. (Novack et

al, 1994).

2.10.1.9 Timelines

Customers care most that the orders must arrive as promised. In a broader perspective,

it refers to the length of time between order placement and receipt (Hult et al., 2000).

These situations are represented by the timeliness dimension. This delivery time can

be affected by the problems during transportation that may delay the transportation

time. It could also be influenced by back-order time when products ordered are not

available in stock (Mentzer et al., 2001).

45

2.10.1.10 Satisfaction

Customer satisfaction is becoming a strong point and the backbone for companies

with a rising the effect on its economic success .A high level of customer satisfaction

creates customer Loyalty. This is a target for any company to attract customers and

make them satisfied (Bruhn ,(2001). Satisfaction is to assess the consumption of

perceived quality relative to the expected quality satisfaction result happens when

they meet or exceed client-expected results and the actual outcome. Satisfaction and

dissatisfaction is often seen as opposite ends of a continuum, with identification to act

as a result of the comparison between expectations and results (Oliver, 1980). In the

LSQ process model, satisfaction was the outcome variable of the model, ( Mentzer et

al., 2001). The relationship between retailers and providers is a business-to-business

relationship in which the retailer is the consumer and the provider is the supplier. For

this reason, retailer satisfaction is a kind of customer satisfaction in business-to-

business marketing. The difference between end user and the retailer satisfaction is

the number of the decision makers. End-user satisfaction depends only on the people

who are involved in buying a product and often affecting. On the other hand the

retailer satisfaction depends on the satisfaction of the group involved in the

purchasing process. For this reason, the retailer satisfaction is more reasonable.

2.10.2 Logistics service quality in B2B

Most of researchers applied Logistics service quality on end user (B2C), (Bienstock et

al., 997) confirmed that the troubles faced in applying this field to an industrial

service context were based on the relative importance of technical versus functional

dimensions that play a very important role in consumer versus industrial service

dealings. Technical quality determines whether the service delivers the core benefit,

at the same time as functional quality addresses the process of service delivery

46

(Parasuraman et al., 1988). The logistic service dimensions are oriented toward the

functional aspects of service quality.

The activation of the dimensions of service quality is not an easy mission. According

to (Ganesan, 1994) the long term relationships are advantages for the organizations

that they have a responsibility on developing and maintaining these long term

relationships.

2.11 What is Relationship Marketing (RM)?

Database marketing, direct marketing, one-to-one marketing, key account

management, and building and maintaining customer networks have all been used to

indicate and explain business relationships or "Relation Marketing" (RM) (Tapp,

2005). Some marketers think a relationship to start when customer information is

collected and used in a database, or when any form of switch over of goods or

services takes place. More fully described establishing, maintaining and enhancing

customer relationships from the service provider’s perspective (Grönroos, 1990):

Establishing a relationship involves giving promises;

Maintaining a relationship is based on fulfillment of promises; and finally,

Enhancing a relationship means that a new set of promises are given with the

fulfillment of earlier promises as a prerequisite.

Relationships can be multifaceted and are considered as a point along a transactional-

relational scale, with one extreme including ongoing, long-term business and social

connections, and the other end-point viewed as simple one-time single transactions

(Grönroos, 1995). Two main types of relationships exist in the business literature;

business-to-business (B2B) and business-to-consumer (B2C). (Harker, 1999)

undertook a extensive literature review and uncovered 26 definitions of RM currently

47

used in the RM research literature. Although these different conceptualizations make

it difficult to communicate a shared understanding of RM theory and development,

commonalities have appeared. For example, trust and commitment are consistently

highlighted as elements central to proper relationship development and enhancement

Grönroos defined RM based on the results and key conceptualizations from his study

According to (Grönroos 1996,P.13) Relationship marketing is:

"To identify, establish, maintain, and enhance relationships with customers and other

stakeholders, at a profit, so that the objectives of all parties involved are met; and ‘this

is done by a mutual exchange and fulfillment of promises"

2.11.1 Importance of Relationship Marketing

RM theory assumed that benefits to the firm build up in the form of protecting the

customer base, by creating product differentiation and barriers to switching, and

improving profits (Berry, 1995) (Low, 1996). suggested that customers find RM

attractive because it's potential to decrease risk, enhance recognition and inform

prestige. An added advantage to both parties is the chance for the supplier to know

more about customer requests therefore having the ability to customize and know

solutions to customer needs. (Kalwani and Narayandas, 1995) they made a research

about the importance of RM, They compared two groups of firms, long-term

relationship group with the transactional group, and they concluded that long-term

relationships support the long-term competitive advantage without low in profits.

Perhaps more significantly the advantages of knowing and understanding to customer

needs went beyond simple manufacturing efficiency gains but also led to higher

profitability. The most common factors viewed as reflecting the value of RM and

influencing relationship development, maintenance and strength include (Berry,

1995):

48

Trust

Commitment

Communication

Satisfaction

Power

Cooperation

Performance

Repurchase intention

Many studies investigated value on relationship marketing; these studies generally

find in turn some direct or indirect link to trust commitment and repurchase intention

Sabol, (2002). These studies displayed that the importance of trust, commitment

quality to relationship development.

(Table 2.4) lists some of the previous studies found to influence the trust, commitment

and repurchase intention in the relationship marketing research and the effect on

relationship outcomes. This table shows and demonstrates the potential difficulty of

relationship research.

49

(Table 2.4) The link between previous studies to Influence Key Constructs of

Relationship Quality

Source: Richard, James (2008) "The Impact of Customer Relationship Management (CRM) Technology on Business-to-Business Customer Relationships", PHD, NewIsland .

Trust and commitment has been identified as a primary factors affecting on

relationship development and performance. This set of previous researchers and

constructs is similar for both business customers and consumers (Brodie, 2001).

2.11.2 B2B relationship

Effective business to business relationships are of core importance for organizations

to enhance their own ability to be more competitive in the marketplace. Academics

Previous studies Construct

Experience (Dwyer et al., 1987)

Organizational characteristics; Individual characteristics (Moorman, Deshpandé, & Zaltman, 1993)

Shared values; Cooperation; Communication; Opportunistic behavior (-ve); Use of power (-ve) (Iacobucci & Ostrom, 1996)

Investment (Morgan & Hunt, 1994)

Duration (-ve) (Doney & Cannon, 1997)

Competence (Sirdeshmukh et al., 2002)

Performance (Narayandas & Rangan, 2004)

Satisfaction (Verhoef, 2003)

TRUST

(Crosby and Stephens 1987)

(Reichheld, 1996),

(Gounaris et al., 2008),

(Lacey and Morgan,

2009), (Hennig-Thurau and Klee 1997)

(Bartet al. 2005),

(Jarvenpaa et al., 2000).

(Ha et al. 2008).

Repurchase intention

Communication; Trust; Cooperation; Investment (Morgan & Hunt, 1994)

Performance (Narayandas & Rangan, 2004)

(J. C. Anderson & Narus, 1990)

Satisfaction; Price (Verhoef, 2003)

Dependency (Ganesan, 1994)

Loyalty (Garbarino & Johnson, 1999)

COMMITMENT

50

and practitioners commonly agree that a firm’s ability to survive in a competitive

market is to some extent based on its business relationships and their combined

resourcefulness in creating sustainable competitive advantage. It is no longer

organizations that compete on their own strength but supply chains that compete with

each other (Christopher and Jutner, 2000).

2.11.3 Relationship Marketing in Retailing Management

The major center of relationship marketing is towards structure closer relationships

with customers as a strategy to overcome problems such as obtaining global

competitive advantage, coping with quickly changing technologies and reducing

delivering products to markets (Wel 2009). Relationship marketing is attracting,

maintaining and –in many service organizations- expand of customer relationship,

Servicing and selling existing customers is examined to be just as significant to long-

term marketing success as getting new customers. Good service is necessary to keep

the relationship. Good selling is necessary to enhance it. The marketing mind "set is

that the attraction of new customers is truly the first step in the marketing process.

Supporting the relationship, transforming indifferent customers into loyal ones,

servicing customers as clients" this is marketing too (Berry 2002). Relationship

marketing has established vital attention since the 1990s as consumers have become

more difficult in their exchanges with firms and competition has sharp. Marketers

have become interested in the potential of relationship marketing activities to deliver

enlarged value to the customer over and above the firm’s product or service offering.

Building strong customer relationships offers a significant competitive advantage due

to the difficulty of direct fake products by competitors. (Sherrell 2007).

51

2.11.4 Relationship Quality (RQ):

One of the roles of marketing is to establish, enhance and extend relationships with

customers. The quality of business relationships between suppliers and customers has

been investigated and measured in many ways (Hausman, 2001; Morgan and Hunt,

1994; Odekerken et al., 2003). The general opinion is that strong relationships provide

significant benefits to both parties (Grönroos, 1996). Although, previous studies of

relationship quality (Crosby et al., 1990; Bejou, Wray and Ingram, 1996; Kumar et

al.,1995; Storbacka et al., 1994;Hennig Thurau and Klee, 1997 ;Dorsch et al., 1998;;

de Wulf et al., 2001;Walter et al., 2003; Lages et al. 2005; Ivens and pardo 2007;

Palmatier 2008; Ashnai et al., 2009; Walsh et al., 2010; Vesel and Zabkar, 2010;Liu

et al., 2011;Song et al 2012; Ghzaiel and Akrout 2012; Pepur et al 2013; Gabriela

2013) has discussed and measured the concept of relationship quality in a different

research contexts, the definition of relationship quality contrast different from

research to another. However, these authors have the same opinion that the concept of

relationship quality is a higher-order construct consisting of several distinct and it has

related components or dimensions (Dorsch et al. 1998). customer orientation Palmer

and Bejou, 1994; Dorsch et al., 1998, conflict (Kumar et al., 1995), trust (Dwyer and

Oh, 1987; Bejou, Gronroos 1990; Moorman et al.,1992; Wray et al.,

1994;Kumar et al.,1995;Wray and Ingram, 1996; Hennig-Thurau and Klee 1997;

Dorsch et al. 1998;), satisfaction (Crosby et al., 1990; Dwyer and Oh., 1987; Lagace

et al., 1991), and commitment (Moorman et al.,1993; Kumar et al., 1995; Hennig-

Thurau and Klee, 1997; Dorsch et al., 1998).

52

(Table 2.5) Relationship Quality Research Summary

Source: Gabriela (2013)"Effect of Relationship Quality and Cost to Serve on Customer Value in

Business Market". Master thesis.USA.

Other researchers have developed models of relationship quality based on linking

service quality, customer satisfaction, relationship strength, relationship longevity and

relationship profitability (Storbacka et al., 1994). Given that relationship quality and

relationship strength have been researched as synonymous constructs, Table (2-4)

Shows Relationship Quality Research Summary.

Study Relationship quality Outcomes

Crosby et al. (1990) Trust and satisfaction

(performance)(with salesperson)

Anticipation of future interaction

and sales effectiveness

Storbacka,

Strandvik, &

Grönroos (1994)

Service quality, customer satisfaction,

commitment, bonds

Relationship strength, customer

profitability

Dorsch et al. (1998) Trust, satisfaction, commitment,

opportunism, customer orientation,

ethical profile

Association between

relationship quality and vendor

status

Hausman (2001) Trust, commitment Perceived performance,

relationship satisfaction and

continuance

Wong and Sohal

(2002)

Single-item scale, trust and commitment

as antecedents

Salesperson trust impacts overall

RQ. Commitment is significant

influence.

Lang and Colgate

(2003)

Antecedents = commitment,

trust, satisfaction, social bonding,

conflict,

Customer IT expectation and use

influences RQ. Social bonding not

significant.

K. Roberts et al.

(2003)

Trust (credibility and

benevolence), commitment, satisfaction,

conflict

Significantly influences loyalty

Lages et al. (2005) Information sharing,

communication quality, long term

relationship orientation, satisfaction

Quality of relationship has a

positive impact on export

performance

Ivens and pardo

(2007)

Trust ,Commitment ,Satisfaction None

Palmatier (2008) Trust, Commitment, exchange

efficiency

Customer Value (measured as

"commissions" as an indicator)

53

According to Klee (1997, P.751) defines relationship quality as the "point of

suitability of a relationship to satisfy the requirements of the customer associated with

the relationship’. Therefore, relationship quality captures the nature of a relationship,

which in turn provides positive benefits to the customer. Trust and commitment

results from previous successful suppliers/customers interactions. Researchers have

been done before in this field, the results cleared that, trust and commitment provides

short term and increasing long term benefits to both participants, as an outcome of

being in the relationship.

2.11.4.1 Trust

Creating trust has been mostly related with the development of interest in relationship

marketing in general and particularly in the context of B2B markets (Blois, 1999).

The knowing of the nature of trust and the significance of its role to loyalty will leave

a major impact on how B2B relationships are developed and managed. Several

researchers use trust as a central construct to the development of successful service

relationships in B2B markets and for getting customer loyalty. (Parasuraman et al.,

1985) introduced trust as a vital factor in successful service relationships. The authors

suggest that customers need to feel safe in dealings with suppliers and need to make

sure that their interaction is confidential in that they are able to trust their suppliers.

(Berry, 1995, P.238) suggests that “relationship marketing is built on the foundation

of trust”. Trust has been defined, used and studied broadly in the area of relationship

start, development and maintenance (Berry, 1995). Elements of trust are considered to

play a major role in these elements, and it's considering a central to the concept of RQ

(K. Roberts et al., 2003). (Doney and Cannon, 1997,P.36) emphasizes the significance

of this definition in an industrial buying context due to some degree of risk in a

purchase situation indicating the customer's trust in provider firm as well as its contact

54

person. Trust in relationships is thinking that a party's word is dependable and that a

party will fulfill its requirement and commitment in an exchange (Spekman and Mohr

1994). According to Barney and Hansen (1994) it refers to the confidence that a

partner will not use the weakness of the other. Trust provides a potential partner with

confidence that the other’s actions will be helpful rather than harmful to it (Child

1998). A more complete definition of trust in the context of business alliances is

offered by (Zaheer et al. 1998) who emphasize trustee characteristics and define trust

as: “the expectation that an actor:

Can be relied on to fulfill obligations,

Will dealing in a predictable way, and

Will act and negotiate fairly when the possibility of opportunism is present.

2.11.4.2 Commitment

Commitment is considered essential for continuance of relationship, to keep customer

retention, and to positively affect relationships. The construct of commitment has also

been shown to be an important dimension of relationship quality this is because

commitment represents a long-term orientation toward the channel relationship

(Doney and Cannon 1997) Moreover, (Dwyer et al., 1987) emphasized a relationship

as a method that evolves over time characterized by five levels of relationship life

cycle, (awareness exploration, expansion, commitment and dissolution). The life

cycle begins with realize that first party is serious to exchange with another partner

(awareness). After then followed by the search or most appropriated relational

exchange partner (exploration) in this stage, the probable exchange partners have to

consider implementations, advantages and burdens and, the possibility of exchange

before entering to the third level. In the third level (expansion), trust starts to appear

55

as the benefits gained from the relational and interdependence increases. If a high

level of input is provided to the association and both partners believe that the future

exchange is going to be effective, Commitment will then be established Dwyer et al.

(1987) According to Dwyer et al.(1987,P.19) Commitment is defined as "an implicit

or explicit pledge of relational continuity between exchange partners".

2.11.4.3 Repurchase intention

In the marketing literature, there is large agreement on the vital role of repurchase

intention as the key behavioral result for relationship marketing success Reichheld,

(1996). Customers’ repurchase intention depends on the value obtained in their

transactions that have been done before Kaynak, (2003): Bolton et al. (2000) such as:

suitable performance criteria (the benefits that the party got from dealing with another

party), competition, and cost considerations Kumar, (2002). Repurchase intention also

refers to the individual’s opinion about buying again a chosen service from the same

company, taking in consideration his current condition and likely circumstances

Lacey and Morgan, (2009). Overall, customers evaluate future purchase intentions

based on the value obtained from previous contacts, with relationship benefits being

an alternative for expectations of future benefits.

2.12 Conclusion

This research is aimed to measure the impact of Logistics service quality on relation

quality in business to business field; this research selected the relation between

retailers and suppliers due to the great value that are presented to the customer, This

chapter showed how service quality concepts are evolving and developing in logistics

and how it's extended to be Logistics service quality, dimensions of service quality

and logistics service quality were highlighted. Moreover different differentiation of

56

supply chain management were introduced based on the literature, the importance of

logistics LSQ process model in measuring customer satisfaction was highlighted.

Finally "Relation Marketing" (RM) and "Relation Quality" (RQ) in relation marketing

were highlighted besides previous studies on "Relation Quality" where presented.

57

Chapter Three

Research Methodology

58

3.1 Introduction

Based on the literature reviewed in chapter Two, This chapter presents the

hypothesized model for "Logistics Service Quality" and "Relationship Quality".

variables of the study and introducing the proposed model formulated in the first

chapter, as well as it explains research methods used in examinations of relationships

between Logistics Service Quality (independent variables) and relationship Quality

(dependent variables), mediating effect of satisfaction on customer perceived Quality

and other relationship Quality variables. This chapter also presents the research

design, the tools that chosen for this research.

3.2 Research design

Deductive approach is adopted in this study … “A deductive approach is concerned with

developing hypotheses based on existing theory, and then designing a research strategy to test

the hypothesis” (Wilson, 2010, p.7). Theories in the literature were studied carefully

and investigated empirically. The existing concept and theoretical model are the

foundation references when selecting information, putting research instruments and

methods that relate the analysis result to theories.

The empirical part will be based on primary and secondary data, Secondary data

comes from the various sources such as the case studies, reports, or different related

sources while primary data will be collected and supported by quantitative evidence

through a questionnaire adopted from literature review based on previous related

studies.

59

3.3 Research questions

RQ1: Do Logistics Service Quality Dimensions have a positive effect on Retailer

Satisfaction?

RQ2: Does Retailer Satisfaction lead to high Relationship Quality?

3.4 Research Hypotheses Development

The development of hypotheses was based on literature review and derived from the

theoretical framework combining concept of Logistics Service Quality and

Relationship Quality (Ruben, 2007) The following hypotheses were formulated form

empirical studies analysis for determining correlations and predictors effect between

independent variables and dependent variables using multiple ways, total effect

analysis of Logistics Service Quality dimensions with Satisfaction, and finally,

examine the mediating role of satisfaction in the whole model of framework.

The set of independent and dependent variables defined is based on previous studies

in (chapter 2) .Figure (3.1) shows the Theoretical framework used in the study

This figure presents the proposed model. This model was developed based on the

previous studies (refer to Figure 1.2 in Chapter One). Both technical and functional

character of Logistics Service is integrated in the Logistics Service Quality model

(Mentzer et al, 2001). They are used by nine constructs discussed in Chapter Two,

this dimensions are as follows: personnel contact Quality, order release quantity,

information Quality, ordering procedures, order accuracy, order condition, order

Quality, timeliness and satisfaction. and the relationship Quality dimensions ( trust,

commitment and repurchase intention).

60

3.5 Research Hypotheses

Based on the model that shown above, the research is divided into two sections, first

one about Logistics Service Quality (LSQ) and Satisfaction, Second one Satisfaction

and Relationship Quality (RQ).

3.5.1 Logistics Service Quality (LSQ) and Satisfaction Hypotheses:

This research aim at testing the impact of logistics service quality on satisfaction, and

the effect of retailer satisfaction on LSQ and RQ

Mentzer et al, (2001) investigated whether different groups of customers of a

particular organization with multiple market segments might place varying degrees of

importance on LSQ components, study Mentzer's study determine the degree of

importance of each LSQ component in the four customer segments of a large

logistics organization in third party organization., Jafaar (2007) tested LSQ across

industrial sectors in the UK and measured the impact of LSQ on RQ in the Business

field . Jafaar study investigated the effects of relationships among logistics service

quality, customer satisfaction and relationship quality The following hypothesis are

derived from LSQ literature with some modifications to be suitable for this research .

H1: Logistics service quality dimensions has a positive effect on retailers'

Satisfaction

(H1a) Personnel Contact Quality Positively affect Retailer Satisfaction.

(H1b)Order release quantities positively affect Retailer Satisfaction.

(H1c) Information Quality Positively affects Retailer Satisfaction.

(H1d)Order Procedures Positively affects Retailer Satisfaction.

(H1e) Order accuracy positively affects Retailer Satisfaction.

(H1f) Order Condition Positively affects Retailer Satisfaction.

(H1h) Order Quality Positively affects Retailer Satisfaction.

(H1i) Timeliness positively affects Retailer Satisfaction.

(H1J) Order Discrepancy Handling positively affects Retailer Satisfaction

61

3.5.2 Relationship Hypotheses

Jafaar (2007) measured the effect of industrial Satisfaction with Logistics Service

Quality on Relationship Quality, It is cleared that satisfaction with service quality

may have some effects on relationship quality dimensions in business to business

field. This study investigates the impact of satisfaction with LSQ on relationship

quality based on the result from Logistics Service Quality on Retailer Satisfaction.

H2: A higher level of retailer satisfaction leads to high relationship quality

The hypotheses that shown below are derived from the main one:

(H2a): A higher Level of Retailer Satisfaction Leads to Higher Level of Trust.

(H2b): A higher Level of Trust Leads to Higher Level of Commitment.

(H2c): A higher Level of Trust Leads to Higher Level of Repurchase Intention.

62

(Figure 3.1): Proposed Model in the study

Personnel Quality Contact

Order release quantities

Information Quality

Order Procedures

Order accuracy

Order Condition

Order Discrepancy

Handling

Order Quality

Timeliness

Satisfaction Trust

Commitment

Repurchase

intention

H1

H2a

H2b

H2c

H1h

H1g

H1f

H1e

H1d

H1c

H1b

H1a

H2

H1i

63

3.6 Sampling procedures

3.6.1 Definition of the sampling technique

Sampling techniques save a big range of methods that enable researcher to reduce the

amount of data needed for a study by considering only the main and important data

rather than all possible elements (Saunders et al., 2009). The purpose of sampling is

To draw conclusions about populations from samples, it must use statistics result

which enables us to determine a population`s characteristics by directly observing

only a sample of the population. Obtaining sample rather than a complete people of

the population for many reasons. Clearly, it is cheaper to observe a part rather than the

full ,

In this study non-probability sampling technique called Snowball was used .This type

of sampling was engaged for quantitative results. "Snowball" is used in those rare

cases when the population of interest cannot be identified other than by someone who

knows that a certain person has the necessary experience or characteristics to be

included” (MacNealy 1999,p 175). Snowball sampling includes previously identified

group members to recognize others who may distribute the same factors as the group

already in field (Henry 1990).The most common benefit of snow ball is no way of

knowing whether the sample is representative of the population, as for the

disadvantage of snow ball sampling techniques is the possibility to include members

of groups where no lists or particular clusters even exist (e.g., drug abusers, criminals)

(Black 1999).

3.6.2 Proposed sampling characteristics

The proposed sampling characteristics of this study that developed by the researcher

according to the Egyptian chambers of commerce is the retailers in Alexandria who

64

use over 50 % of the floor space for unbranded grocery items such as spices, sugar,

pulses, rice and flour. These shops also store some branded and packaged items like

dairy products, personal care products, and traditional fast food. They arrange space

from 100 to 8000 square meters in dimension; they have at least 5 shelves to branded

and packaged category grocery items. They have at least 2 workers and the average

sales per month shouldn’t be less than 50000.

3.7 Pilot Study

Pilot study can be defined as a trial study carried out before a research design is

finalized to assist in defining the research question or to test the reliability and validity

of the proposed study design.6This study was completed and applied on 40 samples of

retailers to test reliability and validity of the questionnaire, in order to avoid

uncertainty questions and to reformulate questions. (Konhauser 2007).The external

validity is clarified in the statements in the questionnaire that have been modified and

deleted based on expert opinions in retailing field (names) in addition to deleting 2

statements and modifying most of the questionnaire for translating the questionnaire

from English to Arabic and back translation to make sure that the meaning of the

statements didn’t change and in order to be able to distribute the last version to the

targeted retailers. Joppe (2000 p. 1) defined reliability as "The extent to which results

are consistent over time and of an accurate representation of the total population

under study and if the results of a study can be reproduced under a similar

methodology, then the research instrument is considered to be reliable". If he

reliability factor (Alpha) for the independent variables ranged from 0.55 – 0.80

(approved and accepted) and the reliability factor (Alpha) for the dependent variables

6(http://www.cirem.co.uk/definitions.html)

65

ranged from 0.70 to 0.95 (approved and accepted) the reliability of overall model is

accepted and approved .

3.8 Variables of the study

Table (3.1) Conceptual and Operational definitions of research variables

NO. Variables Conceptual Operational

1-

Personnel

Contact quality

Personnel contact quality refers to

the customer orientation of the

supplier's logistics contact people.

Specifically, customers care about

whether customer service personnel

are knowledgeable, empathize with

their situation, and help them resolve

their problems. (Bitner 1990)

A four-point Likert scale developed

by (Mentzer et al., 2001) was used to

measure the quality of the personal

that retailers are dealing with, the

four points Likert response scale

used in the current study ranged from

(1)"Strongly Agree” to (4)

“Strongly Disagree”.

2-

Information

quality

Information quality refers to

customers' perceptions of the

information provided by the supplier

regarding products from which

customers may choose (Mentzer,

Flint. and Kent 1999).

A four-point Likert scale developed

by (Mentzer et al., 2001) was used to

measure the quality of the

information that retailers received

from suppliers, the four points Likert

response scale used in the current

study ranged from from

(1)"Strongly Agree” to (4) “Strongly

Disagree”.

3-

Order Release

Quantities

is able to met request promptly.

Product availability. The

organization can challenge

customers' requests to ascertain the

need behind their volume requests(

(Mentzer 1989)

A four-point Likert scale developed

by (Mentzer et al., 2001) was used to

measure the quantity of release order

for retailers, the four points Likert

response scale used in the current

study ranged from from

(1)"Strongly Agree” to (4) “Strongly

Disagree”.

Order quality refers to how well

products work (Novack Rinehart.

A four-point Likert scale developed

by (Mentzer et al., 2001) was used to

measure the quality of the order that

66

4-

Order quality

and Langley 1994).

retailers received, the four points

Likert response scale used in the

current study ranged from from

(1)"Strongly Agree” to (4) “Strongly

Disagree”.

5-

Timeliness

Refers to the length of time between

order placement and receipt (Hult et

al. 2000).

A four-point Likert scale developed

by (Mentzer et al., 2001) was used to

measure the time between make the

order and receive it, the four points

Likert response scale used in the

current study ranged from from

(1)"Strongly Agree” to (4) “Strongly

Disagree”.

6-

Ordering

Procedures

Refer to the efficiency and

effectiveness of the procedures

followed by the supplier (Bird 1997).

A four-point Likert scale developed

by (Mentzer et al., 2001) was used to

measure the procedures that used to

make an order , the four points

Likert response scale used in the

current study ranged from from

(1)"Strongly Agree” to (4) “Strongly

Disagree”.

7-

Order condition

Refers to how closely Goods match

customers' orders upon arrival

(Wagenheim 1989).

A four-point Likert scale developed

by (Mentzer et al., 2001) was used to

measure the condition of the order

that retailers received , the four

points Likert response scale used in

the current study ranged from from

(1)"Strongly Agree” to (4) “Strongly

Disagree”.

8-

Order accuracy

refers to how closely shipments

match customers' orders upon arrival

(, Mentzer, 1997)

A four-point Likert scale developed

by (Mentzer et al., 2001) was used to

measure the accuracy of the order

that retailers received, the four points

Likert response scale used in the

current study ranged from from

(1)"Strongly Agree” to (4) “Strongly

Disagree”.

Order

Discrepancy

Order discrepancy handling refers to

how well the receiver handles any discrepancies in orders after the orders

A four-point Likert scale developed

by (Mentzer et al., 2001) was used to

67

Handling arrive.(Langley 1994) measure the handling of discrepancy

that retailers found in the goods, the

four points Likert response scale

used in the current study ranged from

1 “Strongly Disagree” to 4"Strongly

Agree”. The two statements used to

measure Order Accuracy on

satisfaction mentioned on table of

questionnaire.

9-

Satisfaction

Is a measure of how products and

services supplied by a company meet

or surpass customer expectation its

defined by the number of customers,

or percentage of total customers,

whose reported experience with a

firm, its products, or its services

(ratings) exceeds specified

satisfaction goals. (Johnson 2001)

A four-point Likert scale developed

by \Andaleeb’s(1996) was used to

measure the the satisfaction of the

retailers as a result of receiving a

service from supplier, the four points

Likert response scale used in the

current study ranged from from

(1)"Strongly Agree” to and (4)

“Strongly Disagree”.

10-

Trust

is just as important in the

online environment, affecting

customer’s perceptions and

willingness to participate and

establish relationships with suppliers

online (Gefen et al., 2003)

A four point Likert scale developed

by (Doney and Cannon 1997) was

adapted and used to measure the

customer’s perception of trust with

the supplier, the eight statements

used to measure a level of

Satisfaction on Trust mentioned on

table of questionnaire.

11-

Commitment

defined as “an exchange partner

believingthat an ongoing relationship

with another is so important as to

warrant maximum efforts at

maintaining it; that is, the committed

party believes the relationship is

worth working on to ensure that it

endures indefinitely ( Dwyer et al.

1987)

A four point Likert scale developed

by Kumar el al,1995 was adapted

and used to measure the customer’s

perception of commitment with the

supplier, from (1)"Strongly Agree”

to (4) “Strongly Disagree”.

68

12-

Repurchase

Intention

refers to the individual’s opinion

about buying again a chosen service

from the same company, taking in

consideration his current condition

and likely circumstances (Lacey and

Morgan, 2009)

The four point Likert scale

developed by (Bartet et al, 2005),

was adapted and used to measure the

customer’s perception of

commitment with the supplier, the

three statements used to measure

Trust on Repurchase intention

mentioned on table of questionnaire.

69

CHAPTER FOUR

Data Collection and Analysis

70

4.1 Introduction

The purpose of this chapter is outlining the empirical results of the hypothesized

Logistics Service Quality, and Relationship Quality Model that has been explained in

Chapter 3 based on quantitative data that were collected through a self administered

questionnaire. This chapter will present the analysis and the result of this research.

4.2 Sample presentation of targeted Retailers

The following table represents the gender classification of the respondents to the

questionnaire held. As indicated, all the samples that responded on the questionnaire

were a male 100%:

The activity of the retailers that was chosen for this research was based on 3 groups

the first group included sellers and distributor, the second group included producers,

distributors and sellers ,as for the third group it is included producers, distributors ,

sellers besides activities , the participate of the first group got the huge quote from the

questionnaire response, this group response 132 questionnaire by (92.3%) , due to the

traditional nature of the retailers' sector in Egypt, the second group response 8

questionnaire which presents (5.8%) of the sample, and the third group response 3

applications by which presents (2.1%).

71

X47 = the Activity of retailers

Figure: 4.1 Respondents’ activity of retailer

Table: 4.1 Respondents’ activity of retailer

x47

Frequency Percent Valid Percent

Cumulative

Percent

Valid distribution and selling 132 92.3 92.3 92.3

production , distribution and

selling

8 5.6 5.6 97.9

production ,distribution

,selling and "other"

3 2.1 2.1 100.0

Total 143 100.0 100.0

72

The average sales for the retailers is divided into four sections, the first one ranged

from 50000 to 100000 LE, the second one ranged from 100000 to 500000 LE, the

third one ranged from 500000 to 1000000 LE, the last one more than 1000000, as

shown below, the second group got the most response by 44.8 %, then next ,the first

one got 26.6% , then followed by the third group of average sales by 25.6, and the last

group of respondents more than 1000000LE with 2.8 %.

Table: 4.2 Respondents’ average sales

Figure 4.2 Respondents’ average sales

X48 =the average sales

x48

Frequency Percent

Valid 50000 - 100000 38 26.6

100000 - 500000 64 44.8

500000 - 1000000 37 25.9

more than 1000000 4 2.8

Total 143 100.0

73

The experience of the retailers in the markets playing a vital role in the relationship

between the retailers and their suppliers, this point is classified into five groups; these

groups represent the experience of the retailers who responded to the questionnaire,

The highest group of respondents was from 5 – 10 years by total 60 applications gets

(42 %) , then followed by the second group from 11 – 15 years by total of 36

applications (25.2%) , the third group from 16 – 20 years with a total of 26

applications with(18.2%) , followed by fourth group less than 5 years by total 15

applications with (10.5%) ,the last one more than 20 years by total 6 applications gets

(4.2%) .

Table: 4.3 Respondents’ retailers experience

Figure 4.3 Respondents’ retailers experience

X49 = the experience of the retailers

x49

Frequency Percent

Valid less than 5 years 15 10.5

5 – 10 60 42.0

11 – 15 36 25.2

16 – 20 26 18.2

more than 20 6 4.2

Total 143 100.0

74

Finally, the duration of dealing with the suppliers, as indicated in the following table

4.4 below the number of years that the targeted retailers still dealing with their

suppliers.

Table: 4.4 Respondents’ duration with the suppliers

X50 = The duration with the suppliers

x50

Frequency Percent

Valid 1 1 .7

2 6 4.2

3 11 7.7

4 16 11.2

5 13 9.1

6 1 .7

6 11 7.7

7 12 8.4

8 11 7.7

9 9 6.3

10 12 8.4

11 7 4.9

12 6 4.2

13 5 3.5

14 3 2.1

15 8 5.6

16 2 1.4

17 3 2.1

18 1 .7

19 2 1.4

20 1 .7

28 1 .7

45 1 .7

Total 143 100.0

75

Figure 4.4 Respondents’ duration with the suppliers

4.3 Data analysis

The Quantitative analysis that used in this study was presented through the

questionnaire, There are two main purposes of questionnaire formula related to data

quality: first, to decrease non-response, and second, to cut or avoid measurement error

(Alreck & Settle, 2004). Several researchers suggest that it is the most productive

method in obtaining in data (Churchifl, 1999). The questionnaire is used to study the

degree of relationship between retailers and suppliers, the questionnaire distributed in

Arabic as it is the main language of the Egyptian retailers. 200 copies distributed to

potential and targeted retailers who have classifications and specifications that were

mentioned in chapter3, at the 143 responses were distributed in 3 months which

represents 71.5% response rate of the distributed questionnaire. The questionnaire

included fifteen questions divided into three sections all included at the end of the

research in. The statements of the questionnaire are related to variables under study.

76

4.4 Assessment of the study measurement model

4.4.1 Reliability Measurement

The reliability of the research is presenting in the test of the reliability for each

variable, Cronbach’s alpha is the method that used to measure, and the measuring of

these variables was accepted ranged from .970 to 0.979 for the Logistics Service

Quality variable measured by 25 items, for Satisfaction was measured by 4 items

(0.973) Relationship Quality measured by 15 items (.970), and the overall

questionnaire reliability is .979. Bagozzi and Yi's (1988) stated that all the reliability

values exceeded the usually threshold value for acceptable reliability of .70 and the

minimum values of .60, Therefore, it is concluded that all constructs have high

reliabilities.

4.4.2 Validity Measurement

Reliability is necessary but not sufficient for construct validity, the The questionnaire

was design based on previous studies in the same field. Construct validity is the extent

to which items of the questionnaire make measures what it should measure .Validity

is important because theoretical constructs are not observable, and relationships

among unobservable constructs are tested indirectly via observed variables

(Goreskog, 1993), validity reflects how well the calculation reflects its unobservable

construct. It is recognized using relationships between observed variables and their

unobserved variable, and observed variables' relationships with other sets of observed

variables (Goreskog, 1993), a valid measure is using normally convergent and

discriminate validity (Heeler and Ray, 1972)

77

4.4.2.1 Convergent Validity

Convergent validity refers to the degree in which the measures of a construct are

highly correlated to each other (Mentzer and Flint,1997).

4.4.2.2 Discriminate validity

A stronger test of discriminate validity suggested by (Fornell and Larcker 1981) is the

average variance extracted for each construct should be higher than .50, which the

variance accounted for by each items is greater than the variance accounted for by

measurement error (Hair et al, 1998). All constructs met the standard level range from

.67 to 0.93 as shown in Table (4.7)

4.4.3 Correlation

Correlation is a measure of the strength of the relationship between two variables. The

correlation coefficient takes on values ranging between +1 and -1. Zero indicates no

relationship, +1 indicates a perfect positive relationship if one variable increases in its

values, the other variable also increases in its values, -1 indicates a perfect negative

linear relationship if one variable increases in its values, the other variable decreases

in its values, as indicated in table 4.7 the correlations between variables ranged from

.533 to .670 , the .690 between Personnel contact Quality and Satisfaction , 533

between timeliness and satisfaction , 561 between Satisfaction and trust , .641

between Trust and Commitment ,finally .670 between Trust and Repurchase

intention , we can say that a good relationship between the variables

78

(a) Standard factor loading. (b) Critical Ratio. (c) Squared Multiple Correlation. (d) Composite Reliability. (e)

Average variance extracted, (f) Cronbach Alpha.

7 Composite reliability is calculated by the square of summation of factor loadings (SMC values)/

[(Square of summation of factor loadings) + (summation of error variances)]. According to Fornell and

Larker (1981), a value of .80 or greater suggests evidence of strong composite reliability. 8 Average Variance Extracted (AVE), It could be calculated by

(summation of squared factor loadings)/ [(summation of squared factor loadings) +(summation of error

variances)]. It has been suggested that AVE should be greater than 0.50 to demonstrate significant

variance captured by the measurement model (Fornell and Larker, 1981).

Table (4.5 ) Convergent validity, discriminate validity and Reliability

Latent variables & its

Observed items Item SFLa C.R.b SMCc C R

7d AVE

8e α f

PQ

x16 0.929 Fixed 0.863 0.9569 0.88109 .941

x15 0.929 20.016 0.862

x14 0.899 18.15 0.809

Time

x25 0.518 Fixed 0.269 0.8541 0.67158

.782 x22 0.869 6.427 0.755

x21 0.855 5.909 0.731

SAF

x26 0.923 Fixed 0.852

0.9783 0.91871 .973

x27 0.966 23.726 0.934

x28 0.948 21.86 0.898

x29 0.96 22.993 0.921

Trust

x30 0.876 Fixed 0.767

0.9453 0.68968 .942

x31 0.572 7.659 0.327

x32 0.891 15.614 0.794

x33 0.929 17.308 0.863

x34 0.901 15.922 0.812

x35 0.92 16.741 0.847

x36 0.864 14.634 0.746

x37 0.589 7.935 0.347

ReI

x43 0.974 Fixed 0.949 0.9757 0.93064

.968 x44 0.981 36.921 0.961

x45 0.909 22.846 0.826

Com

x38 0.517 Fixed 0.267

0.9370 0.75596 .915 x39 0.957 6.957 0.916

x40 0.968 6.947 0.936

x41 0.859 6.653 0.738

x42 0.782 6.406 0.611

79

4.5 Assessment of the Study’s Structural Model

The hypothesized structural model was tested using AMOS 18,the first evaluation of

the structural model indicated that there is weak relationship between some variables

that have been tested to be directed relationship on satisfaction ,figure 4.8 shows the

proposed Model that has been tested .Figure 4.9 shows the actual model after analysis.

Figure 4.5 Hypothesized Model

Source: AMOS Output

OrQs= Order release quantities, ORA= Order accuracy, OrQu= Order Quality,

OrP= Order Procedures, OrC=Order Condition, PQ = Personnel Quality Contact,

InQ=Information Quality, Time= Timeliness, OrHD= Order Handling Discrepancy,

SAF =Satisfaction, Com= Commitment, ReI =Repurchase Intention

Table ( 4.6 ) Correlation matrix for measured models and AVE

PQC TL SF TR RI COMM PQC 0.881097

TL .193 0.67158

SF .476 .284 0.918713

TR .344 .152 .315 0.689689

RI .377 .298 .329 .449 0.930643

COMM .241 .226 .227 .411 .423 0.755968

Note: The values on the diagonal line (the shadowed parts) are the Average

Variance Extracted (AVE). The remaining values are the squared of the study

variables correlation coefficients.

80

Results: in order to determine the capabilities for the variable to explain the variance

for another variable, there are two ways first P (Probability) indicates significant

regression path when (P<.001), Second the path is considered as significant when the

C.R.(Critical Ratio) is at 0.5 level or more, Maximum Likelihood (ML) was used to

test the study’s proposed model As a result, findings revealed that "order release

quantities" didn’t explain the variance in "Satisfaction" (P<..944, C.R =.70). In the

same line, "Order Accuracy" didn't explain the variance in the "Satisfaction"

(P<..126, C.R =1.529),"order quality" considered a weak predictor to explain the

variance of "Satisfaction" (P<.684, C.R =.407)As for "order Procedures" had a weak

contributions to explain the variance of "satisfaction", (P<.256, C.R =1.135), In

contrast, "order condition" turned out to have a negative effect on "Satisfaction"(P

<0.005, C.R.=-.461),"Personnel Contact Quality" figured as a high and strong

predictor to explain the variance of "satisfaction"(P<.001, C.R =6.088).Moreover the

capability of "information quality" to explain the variance in the "Satisfaction" is very

low(P<.680, C.R =.412),"Timeliness" significantly explain the variance of

"satisfaction" (P<.094, C.R =1.301), "satisfaction" was examined as a predictor for

the "Trust" construct in which it played a major role in explaining the variance in the

"Trust" (P<.001, C.R =11.387), On the other hand, "Trust" construct was examined as

a predictor for the two variables "commitment and repurchase intention" the results

showed that these variables played a major role in explaining the variance

"commitment (P<.001, C.R =6.492), and repurchase intention"(P<.001, C.R =15.511)

constructs. as Figure 4.8 shows the Hypothesized Model that used in this study Based

on the results that, there are some variables eliminated and neglected from the model

to be fitted, as shown in Figure (4.9)some important modifications were done to

enhance the goodness of fit for the proposed model.

81

Figure 4.6 Hypothesized Modified Model

Source: AMOS Outpu

Results: There were some modifications done in the model to be fitted for this study,

Order release quantities ,Order Quality, Order condition, information quality , and

Order handling discrepancy ,were removed to make the model fit, "Personnel Contact

Quality" figured as a high and strong predictor to explain the variance of

"satisfaction"(P<.001, C.R =6.088).In the same line, "Timeliness" significantly

contributes to explaining the variance of "satisfaction" (P<.094, C.R =1.301),

"satisfaction" was examined as a predictor for the "Trust" construct in which it played

a major role in explaining the variance in the "Trust" construct (P<.001, C.R

=11.387), On the other hand, "Trust" construct was examined as a predictor for the

two variables "commitment and repurchase intention" the results show that these

variables played a major role in explaining the variance "commitment (P<.001, C.R

=6.492), and repurchase intention"(P<.001, C.R =15.511) constructs.

82

4.5.1 Model Goodness of Fit

In order to determine the goodness of a model fit, some measures need to be

highlighted; Chi-square is the traditional measure for evaluating overall model fit

,another statistical measures to prove that the fitting of the model CFI, CMIN, TLI

and RMSEA.

As indicated in Table (4), the Chi-square is to 716.631 which present good fit of the

model and P value indicates significant regression path when (P<.001), also the path

is considered as significant when the C.R. is at 0.5 level or more.

Table 4.7 Computation of degrees of freedom

Another indicators that measure the goodness of model fit is the CMIN/DF= 2.446,

CFI=.913, TLI=.904 and RMSEA=.101, these indicators indicated that hypothesized

model has a good fit with the sample in the study which was , supported by the chi-

square that indicated that the probability level is significant as shown in the following

table (4.10)

Number of distinct sample moments: 351

Number of distinct parameters to be estimated 58

Degrees of freedom (351 - 58): 293

Chi-square 716.631

Sample Size 143

83

Table (4.8) summarizing the model fit indices

Goodness of

Fit Measure

Explanation

Recommended

Value

Calculated

Value

Chi Square to df

Ratio: ÷2/df

CMIN/DF is the minimum

discrepancy divided by its

degrees of freedom.

Low as 2 or high as

5 (Marsh &

Hocevar, 1985).

2.446

Tucker Lewis

Index or Non-

normed Fit Index

(NNFI)

TL130

The typical range

for TLI lies between

zero and one, but it

is not limited to that

range. TLI values

close to 1 indicate a

very good fit.

(Bentler and Bonett,

(1980)

.904

CFI

Compared fit index:

compares the hypothesized

model with the independent

model

.90

(Myerscough, 2002)

.913

Figure (4.10) Fitted research model

84

4.5.2 Hypotheses Testing

The proposed model of the study develops the following hypotheses:

H1: Logistics Service Quality Dimensions has a Positive Effect on Retailer

Satisfaction

Although hypotheses cannot be proved as true or wrong, hypotheses are statistically

accepted or rejected based on levels of significance and critical ratio (CR). Therefore,

in this study the results were based on critical ratio (C.R) and P (Probability) when

(P<.001),

H1a: Personnel Contact Quality positively affect Retailer Satisfaction. (Supported)

The findings of testing H1a cleared that there is a highly significant relation between

personnel Contact Quality and Retailer Satisfaction the result of the hypothesis also

yields a high significant P value. (P<.001, CR=7.747).

H1b: Order release quantities positively affect Retailer Satisfaction. (Not supported)

Testing the relation between the two variables; Order release quantities and Retailer

Satisfaction achieved unacceptable P value (P <.944, C.R. = .070).

H1c: Information Quality positively affects Retailer Satisfaction. (Not supported)

Testing the relation between information Quality and Retailer Satisfaction, resulted in

a weak relationship (P <.680, C.R. = .412).

H1d: Order Procedures positively affects Retailer Satisfaction. (Not supported)

Personnel Contact

Quality

Timeliness

Satisfaction

Trust

Repurchase

intention

Commitment

85

Examine if there is a positive relation between Order Procedures and Retailer

Satisfaction, the relationship cleared that (P <.256, C.R. = 1.135).

H1e: Order accuracy positively affects Retailer Satisfaction. (Not supported)

The findings for this hypothesis indicated that the relationship between Order

accuracy and Retailer Satisfaction was not strong (P <.126, C.R. = 1.529).

H1f: Order Condition positively affects Retailer Satisfaction. (Not supported)

Testing the relation between Order Condition and Retailer Satisfaction cleared that

there was a weak relationship between the two variables (P <.645, C.R. = -.461).

H1h: Order Quality positively affects Retailer Satisfaction. (Not supported)

Examining the relation between Order Quality and Retailer Satisfaction reflected a

very weak relationship (P <.684, C.R. =.407).

H1i: Timeliness positively affects Retailer Satisfaction. (Supported)

Examine if there is a positive relation between Timeliness and Retailer Satisfaction

this relationship achieve (P <.001, C.R. = 2.694).

H1J: Order Discrepancy Handling positively affects Retailer Satisfaction. (Not

supported)

Examining the relation between Order Discrepancy Handling and Retailer

Satisfaction reflects a very weak relationship (P <.094, C.R. =.1675).

86

The second global hypothesis is :

H2: A higher Level of Retailer satisfaction Leads to High Relationship Quality.

H2a: A higher Level of Retailer Satisfaction Leads to Higher Level of Trust.

(Supported)

Testing H2a revealed that higher Level of Retailer Satisfaction significantly explains

the variance Trust. It reflects a good relationship (P <.001, C.R. = 11.362).

H2b: A higher Level of Trust Leads to Higher Level of Commitment. (Supported)

Testing H2a revealed that a higher Level of Trust had a big role to reach to Higher

Level of Commitment, this relation explained in (P <.001, C.R. = 6.492).

H2c: A higher Level of Trust Leads to Higher Level of Repurchase Intention.

(Supported)

Testing H2c revealed that Trust significantly explained the variance in Repurchase

Intention, this relation explained in (P <.001, C.R. = 15.508).

Table (4.9) Summary of Accepted Hypotheses

Hypothesis (H1a) personnel Contact Quality Positively affect Retailer Satisfaction.

(H1i) Timeliness positively affects Retailer Satisfaction.

(H2a) A higher Level of Retailer Satisfaction Leads to Higher Level of Trust.

(H2b) A higher Level of Trust Leads to Higher Level of Commitment.

(H2c) A higher Level of Trust Leads to Higher Level of Repurchase Intention.

Table (4.10) Summary of rejected Hypotheses

Hypothesis (H1b)Order release quantities positively affect Retailer Satisfaction.

(H1c) information Quality Positively affects Retailer Satisfaction.

(H1d)Order Procedures Positively affects Retailer Satisfaction.

(H1e) Order accuracy positively affects Retailer Satisfaction.

(H1f) Order Condition Positively affects Retailer Satisfaction.

(H1h) Order Quality Positively affects Retailer Satisfaction.

(H1J) Order Discrepancy Handling positively affects Retailer Satisfaction.

87

Table (4.13) Comparison of results between the Current Study and previous

Studies

Most of studies agreed that Personnel Quality contact, Timeliness and order quality

are the major factors that have a big effect on customer satisfactions,and also from

customer satisfaction on Trust , Commitment and Repurshase Intination,Cleared in

these studies Mentzer, Gomes, and Krapfel (1989), Mentzer, Flint, and Kent (1999),

Mentzer, Bienstock, and Kahn (1993), Bienstock, Sharma, Ballou, Grewal and Levy

(1995) Christopher, Bienstock ,Mentzer, and Bird (1997), Emerson and Grimm

(1998), Christopher, Moraes and Lacombe ,Flint and Kent, Elram, Lalonde and

Weber (1999), Mentzer et.al (2001), CEL(2003), Forslun, Gustafsson (2003) Mentzer

et al (2004),Jaafar (2006); Davied and mentzer (2006) Richey et al., (2007); Ruth

Banomyong and Nucharee Supatn, (2011) Bouzaabia(2013).

4.6 Conclusion

This chapter analyzed the sample of the study, the process of measurement

modifications and established measurement validity and reliability, a detailed

statistical analysis was presented to the results of the questionnaire that has been

Hussein 2014 Jaffar 2006 Jessica 2012 Mentzer19

99 Irene et

al 2008

Personnel Quality

Contact Supported Supported Supported Supported Supported

Order release

quantities Not Supported Not Supported Not Supported Supported

Timeliness Supported Supported Supported Supported Supported

Order Procedures Not Supported Supported - Supported - Order accuracy Not Supported Not Supported Supported Supported -

Order Condition Not Supported Supported Supported Supported - Order Quality Not Supported Not Supported - Supported Supported

Information

Quality Not Supported Not Supported - Supported Supported

Trust Supported Supported Supported -

Commitment Supported Supported Supported - Repurchase

intention Supported Supported Supported -

88

provided with highlighting the critical results using tables and figures. This chapter

also presented a structural model and the modifications for model fit, the results for

testing the hypotheses was Five of the eleven hypotheses were accepted and

significant, while six hypotheses were not significant. a new line the next chapter will

explain the conclusions and the recommendations based on the results that explained

in this chapter and discussion to the findings of research.

89

Chapter Five

Discussion and Conclusion

90

The aim of this chapter is to check if the research questions were answered, whether a

research objective was met and if the study has contributions. It begins with a

conclusion, then recommendations, followed by limitations and finally suggested

future research in the end of the chapter.

5.1 Conclusions

The concept of logistics service quality is a significant instrument for delivering a

better logistics service performance (Stock and Lambert, 2001). There many studies

focused on the definitions and descriptions of how logistics creates customer

satisfaction and competitive advantage (jaafer 2006, Mentzer et al, 2001; Novack et

al, 1994; Mentzer and Firman, 1994; Mentzer, 1993; Coyle et al, 1992; Mentzer et al,

1989; Ackerman, 1989; Lambert, 1987; Shapiro and Heskett, 1985; La Londe and

Zinszer, 1976; Perrault and Russ, 1974). The aim of this study was to examine the

Impact of Logistics Service Quality (LSQ) on relationship Quality (RQ) in business to

business (B2B) field, This study used Mentzer et al (2001) LSQ scale for measuring

logistic service quality. relationship elements in the market and the long term

relationships in business to business had a great effect on the retailers helping in

keeping those retailers in the right track , By adding the relationship quality

dimensions into the LSQ process model (Christopher and Peck, 2004; Henniig-

Thurau, 2000;Hennig-Thurau and klee, 1997). This study provides its hypothesized

model, chapter two highlights the definitions and the descriptions of Logistics Service

Quality model and the Relationship quality model, this led to formulate the research

questions via the research objectives , The first question was formulated Do Logistics

Service Quality Dimensions positively effect on Retailer Satisfaction? to answer if

there is a positive effect from Logistics Service Quality on Retailer satisfaction, the

results from chapter four based on the analyses cleared that there are some dimensions

91

that effect Retailer satisfaction, It included the nine dimensions (personnel contact

quality, order release quantities, information quality, ordering procedures, order

accuracy, order condition, order quality, timeliness and order discrepancy handling) ,

The quantitative research is measured by using a questionnaire which has been

distributed on retailers in Alexandria based on the criteria that has been mentioned in

chapter three. The second question Does Retailer Satisfaction lead to high

Relationship Quality? Clears the effect of retailer satisfaction on relationship quality,

This question has been answered on chapter four and shows a high relationship

between the two variables, the results suggested that relationship quality dimensions

prevent customer's intention from exiting from the business relationships. And it helps

to corroborate the deeply relationship between the customers in business field.

The contribution of this research linked satisfaction directly with LSQ dimensions,

Jaafar (2006) built his model based on Mentezer LSQ Model, this research used a

LSQ Model by a different way, and explained the impact of customer satisfaction on

Relationship Quality, most of the previous researches were focusing on the

relationships between business to customer (B2C), This study investigated

relationships in a business to business relationship context viewed from the customers'

perspective.

5.2 Discussions and Recommendations

From global perspective, Retail sales have increased in the last ten years due to the

expansion of international chains, variety of products offers, and increase in the level

of income levels and brand advertising. From customer perspective Egyptian

consumers are beginning to expect cleanliness, quality, and a wider variety of

products. Consumers are currently asking for convenience, and shopping at

supermarkets is becoming a leisure activity, achieve and providing these perspectives

92

consider the backbone of retailers goals , Relationships with suppliers, and the quality

of the products, improve a retailer’s value delivery network and improve customer

satisfaction. Relationships with suppliers, and the quality of these relationships,

increase retailer’s value delivery network and improve customer satisfaction. Because

the Egyptian market is currently fragmented, Egyptian retailers must find ways to

create relationships with their suppliers that help take advantage of economies of

scale, JIT inventory and other Western retailing practices. To compete with retail

chains, independent retailers should collaborate together to form cooperatives to

increase their buying power with suppliers (Runyan and Droge, 2008). Egyptian

retailers must find ways to create relationships with their suppliers these points that

mentioned below recommended to develop the retailers – suppliers relationship:

1- Take the advantage of economies of scale from suppliers.

2- Realizing the meaning of JIT 2 inventory.

3- Dealing with different suppliers whether local or foreign supplier, to make a

wider variety to products.

4- Suppliers must make sure that products are consistently available in the market

in order to build retailer satisfaction.

5- Suppliers should hire a reliable distributor to ensure that products are available

in retailer shelve all times.

6- Realizing the meaning of supply chain and the role of the retailer as a

representative of the company for the consumers, and the supplier as a

representative for the producer for retailers in supply chain.

7- the retailers should collaborate together to form cooperatives to increase their

buying power with suppliers

8- Save facilities in payment between the two parties.

93

Mentzer et al (2001) highlighted the four constructs that were hypothesized to have

direct effects on satisfaction Personnel contact quality (H1a), ordering procedures

(H1d), timeliness (H1i) and order discrepancy handling (H1j), these variables have a

great effect on satisfaction, Jaafar (2006) resulted that the strongest effect on

satisfaction was from personnel contact quality (PQ>SA .305), followed by ordering

procedures (.090) and order discrepancy handling In this study Personnel contact

quality has a strong effect on satisfaction followed by timeliness .on the other hand

most of the researches confirmed that satisfaction positively influences trust, which is

in line with previous conceptual (Crosby et al, 1990; Anderson and Narus,

1990;Storbacka et al, 1994; Ganesan, 1994; Bendapudi and Berry, 1997; Tax et al,

1998; Selnes, 1998;Narayandas and Rangan, 2004;Jaffar 2006) . Strong empirical

support was found for a positive path on trust and commitment, which verifies most

research findings (Anderson and Weitz, 1989; Achrol, 1991Moorman et al, 1992;

Morgan and Hunt, 1994 Garbarino and Johnson, 1999 Geyskens et al, 1996; Ruyter et

al, 2001;Jaffar 2006) .Finally , A strong relationship between Trust and repurchase

intention(Fornell et al., 1987;Oliver, 1993; Anderson and Sullivan 1993) confirmed

the great relationship between these variables .This study is in line with results of

previous studies exist in literature.

5.3 Limitations and Future research:

This research introduced the model of Logistics Service Quality and its effect on

Relationship Quality enhance of logistic performance, this study is presented a sample

from Alexandria city and mostly dependent upon the more general studies conducted

in the past in this field, this research lacks to generalization on Egypt, In this study

the tools used to collect the information from the retailer were mainly encompassing

the delivery and service that present to the other party (retailer dealing with) to

94

measure the logistic performance due to the scope of the research but in the future it is

recommended to test other variables that can determine the relationships between

retailers – suppliers relationship, on the other hand , The research can be expanded to

other product categories to cover the retail sector in general and not just in food

sectors.

95

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Appendix A: Arabic Questionnaire

,عزيزي المستقصي منه

والتااي عتق ااص بعالااك عمعااتم ماا اا مااع ,اسااة ا اتساات ا ت الت لاااا برجاا ا التماارل بم اا

(.الخ.............,و جا اتلتزال ,جع ة االدا اوامر الشراا)عتق م عت مقه من ن حاا

ثاا اتج بااا ع اال اتسااة ا ,لاا ا نرجااع التماارل ب اتااا احااد ا اا المااع ين الاا ين عتقاا م عت مق اا

.بشف فاا

و ت جمااا ال ا ناا ص عتصااك , باا ت اج باا عم عااىثر ع اال نتاا ا الد اسااا اتجم لاااا برجاا ا الق اا

وساانعافام بنتاا ا ال اا بقااد ,ب لسااريا الت مااا ولاان عسااتيدل ات فااي اارام ال اا الق مااي

.اعم مه

شمرا لمس عدعم ؛

م مع احمد حسان :اتس

03000100010:المعب يل

ahmed.hussein14scm@yahoo.com:اتيمال

106

في ا القس نقعل بقا س مدي جع ه اليدم ص ال عجاستاا المقدما لشركتم من األولالقس

ع ل المع

ت اوافص بشده ت اوافص اوافص اوافص بشده

0 1 0 3 اجد القعبا في االدا امر الل ب لمماا المل عبا من ا المع ت 3

0 1 0 3 ي ي ا المع امر ط كما ص اض فاا وت اي مقعع ص 0

0 1 0 3 يستجا ا المع تمر عيفاض المماا وت اي مشم ا 1

0 1 0 3 فا مر عب ع ي االن ف ار من ا المع ن ا م ع تعي الل اا 0

0 1 0 3 ي تزل ا المع بتع يد اتالن ف المل عبا ولاست ال دي ا ل 5

0 1 0 3 يفي ا المع بتع يد ب لمما ص المل عبا وت اال ا 6

0 1 0 3 ح لا جاده يالمع عمعت ف ا من المست مال ض ا 7

0 1 0 3 المل عبا المع عل بص المعاالف ص ا ال ض المرس ا من 0

0 1 0 3 هو ماسر هس ل ا المع اجراااص استصدا امر التع يد 9

0 1 0 3 من ا المع عند االدا امر عع ياد جديد من المع هت ععجد اجراااص مققد 30

0 1 0 3 يقعل ا المع ب ل ف ظ ع ي ال ض في مي زنه و عس ام ب لا جاده 33

0 1 0 3 ال ض التي نست م من ا المع م شرة ت يعجد ب ع فا ص 30

0 1 0 3 ن ا م ع دث ع فا ص عند نقل ال ض من ا المع بس وسا ا النقل 31

0 1 0 3 يظ ر ا المع عد ا ك ارا من ال رص ع ي ا ض ن 30

0 1 0 3 مقه ع ي حل المش كل بلريقه عم اا يقمل ا المع ال ي نتق مل 35

0 1 0 3 ا المع ال ي نتق مل مقه ع ي عد ك ار من الي رة و المقرفا 36

0 1 0 3 يعفر ا المع المق عم ص المل عبا الععت المن س 037

0 1 0 3 المق عم ص التي ن صل ع ا من ا المع عمعت عاقا 30

0 1 0 3 المق عم ص التي ن صل ع ا من ا المع عمعت ك م ا 39

0 1 0 3 المق عم ص التي ن صل ع ا من ا المع عمعت ال عا 00

0 1 0 3 ي تزل ا المع بمعاعاد التس ا المتفص ع ا 03

0 1 0 3 و اتستمل من س من ا المع الععت بان استصدا امر التع يد 00

0 1 0 3 اجراااص عقدي شمعى ل ا المع بس الى في ال ض المست ما عت بشمل ماسر 01

0 1 0 3 استج با ا المع لتص اح الى في ال ض المست ما عت بشمل من س 00

0 1 0 3 عنف في وعت عصار من ا المع اجراااص عم اا المرعجق ص 05

0 1 0 3 ب لمع ال ي اعق مل مقهان اضي عن عمعتي 06

0 1 0 3 عمعتن م ا المع عقمس نعع من ال جا و السق ة بانن 07

0 1 0 3 القمعا ايج باا بانن و بان ا المع 00

0 1 0 3 شركتن اضاا ض ا ع م ب لتق مل م ا المع 09

107

في ا القس نقعل بقا س مدي جع ه اليدم ص ال عجاستاا المقدما لشركتم : ث نيالقس ال

ع ي جع ة القمعا بان الشركا و المع

ت اوافص بشده ت اوافص اوافص اوافص بشده

0 1 0 3 مع الشركا بععع ه التي يقعل بإبرام م الشركا يفي ا 10

0 1 0 3 يتصك ا المع بقدل اتم نا مقن ب لتق مل 13

0 1 0 3 ن ن ا م نمعت ع ي ثقا في المق عم ص التي يمدن ب ا المع 10

0 1 0 3 ي ت ا المع بنج ح شركتن 11

0 1 0 3 عند اعي ذ عرا م يدعمن ا المع في اعي ذه كم لع انه شريك 10

0 1 0 3 ألنه يقعل ب ت تم ل بىعم لن بشمل مستمر:ن ن نثص في ا المع 15

0 1 0 3 يتصك ا المع ب لثقا الت ما 16

0 1 0 3 نتق مل م ا المع ب 17

0 1 0 3 م مع ين جد من سا سا المنظما التق مل 10

0 1 0 3 ن ن حق ن التق مل م ا المع ألنن ع ي عمعا جاده به 19

0 1 0 3 احس سن اتيج بي عج ه ا المع من القعامل التي عدععن لمستمرا مقه 00

0 1 0 3 المع ا م عمعتن ان ا ل غ يا مم ك سامعت 03

0 1 0 3 ألنن ت يعجد لدين اا اص ااري المع ا م عمعتن نعاالل 00

0 1 0 3 لدي الناا ل شراا مره ااري من ا المع 01

0 1 0 3 من العاضح انني سعف اععل ب لشراا من ا المع مره ااري 00

0 1 0 3 سعف اوعك التق مل م ا المع في المستق ل 05

108

ال ا ن ص المتق قا ب لشركا و المستقصي منه:ث ل الالقس

:النعع

ذكر

انثي

:نعع النش ط التي عقعل الشركا به

ععزي و با فقط

انت ج و ععزي و با منتج ص الشركا فقط

انت ج و ععزي و با منتج ص الشركا ب إلض فا الي ععزي منتج ص الغار

ااري

:حج الم اق ص المتعع لشركتم امل ش ر متعسط

300000الي 50000بان

500000ال 300000بان

3000000الي 500000بان

3000000اكثر من

:الي رة القم اا لسا عم

سنعاص 5اعل من

سنعاص 30 يلاسنعاص 5من

سنه 35الي 33من

سنه 00الي 36من

فىكثر سنه 00 من

:فترة وال القمعا م المع

شهر...........سنه ...........

109

Appendix B: English Questionnaire

Strongly

disagree

Disagree agree Strongly

agree

Statement

NO.

Requisition quantities are not challenged. 1

Difficulties never occur due to maximum release

quantities.

2

Difficulties never occur due to minimum release

quantities.

3

Shipments rarely contain the wrong items 4

Shipments rarely contain an incorrect quantity 5

Shipments rarely contain substituted items. 6

Substituted items sent by provider work fine 7

Products ordered from/via the provide meet technical

requirements

8

Requisitioning procedures are effective. 9

Requisitioning procedures are easy to use. 10

The designated key contact personnel make an effort to

understand the situation

11

Problems resolved by the designated key contact

personnel

12

The knowledge experience f the key contact personnel

adequate

13

Material received from provider depots is undamaged. 14

Material received direct from vendors is undamaged. 15

Damage rarely occurs as a result of the transport

mode or carrier

16

The information communicated by this provider s

timely

17

T he information communicated by this provider s

accurate timely

18

The information communicated by this provider s

complete

19

The information communicated by this provider s

credible timely

20

Deliveries arrive on the date promised 21

Time between placing requisition and receiving

delivery is short

22

Correction of delivered quality discrepancies is

satisfactory.

23

Response to quality discrepancy reports is satisfactory. 24

The amount of time a requisitions on backorder is short 25

Our business relationship with this suppler is strong. 26

The relationship between my company and this supplier

reflects a happy situation. 27

The relationship between the two companies is very

positive. 28

My company is very satisfied with this supplier. 29

110

No. Statement Strongly

agree

Agree disagree Strongly

disagree

30 This provider keeps promises it makes to our firm

31 This provider not always honest with us.

32 We believe the information that this provider provides

us

33 This provider is genuinely concerned that our business

succeeds

34 We find it necessary to be cautious with this provider.

35 We trust this; provider keeps our best interests in

mind.

36 This provider is trustworthy

37 Even if we could, we would not drop this provider

because we like being associated with them.

38 We want to remain a customer of this provider

because we genuinely enjoy our relationship with

them.

39 Our positive feelings towards this provider are the

major reason we continue working with them.

40 It would be too expensive to terminate our relationship

with this provider.

41 We continue our relationship with this provider

because we have no other viable options.

42 I have intention to repurchase from this provider.

43 It is likely that I will repurchase from this provider

44 I expect repurchase from this provider in the future

111

General Information about you and your company

You Gender: Male Female

Type of industry in which your firm involved

Selling and distribution

Selling, distribution and production your firm products.

Selling, distribution and production your firm products in addition to

distributing other companies.

Other

Your firms' average sales volume per month

Between 50000 to 100000

Between 100000 to 500000

Between 500000 to 1000000

Greater than 1000000

You Full-time work experience:

Less than 5 years

Between 5 to 10

Between 11 to 15

Between 15 to 20

Greater than 20

Length of relationship with this supplier

Month………… Year ………..

112

(Appendix C )Model of the study

Analysis Summary

Date and Time

Date: 11 3102, نوفمبر

Time: 12:22:34 م

Title

Ahmed hussin last trail: 11 م 03:33 3102, نوفمبر

Groups

Group number 1 (Group number 1)

Notes for Group (Group number 1)

The model is recursive.

Sample size = 143

Variable Summary (Group number 1)

Your model contains the following variables (Group number 1)

Observed, endogenous variables

x16

x15

x14

x25

x22

x21

x26

x27

x28

x29

x30

x31

x32

x33

x34

x35

x36

x37

x43

x44

x45

x38

x39

x40

x41

113

x42

Unobserved, endogenous variables

SAF

Trust

ReI

Com

Unobserved, exogenous variables

PQ

e16

e15

e14

Time

e25

e22

e21

e26

e27

e28

e29

e30

e31

e32

e33

e34

e35

e36

e37

e43

e44

e45

e38

e39

e40

e41

e42

e50

e51

e52

e53

Variable counts (Group number 1)

Number of variables in your model: 62

Number of observed variables: 26

Number of unobserved variables: 36

Number of exogenous variables: 32

Number of endogenous variables: 30

Parameter summary (Group number 1)

114

Weights Covariances Variances Means Intercepts Total

Fixed 36 0 0 0 0 36

Labeled 0 0 0 0 0 0

Unlabeled 25 1 32 0 0 58

Total 61 1 32 0 0 94

Models

Default model (Default model)

Notes for Model (Default model)

Computation of degrees of freedom (Default model)

Number of distinct sample moments: 351

Number of distinct parameters to be estimated: 58

Degrees of freedom (351 - 58): 293

Result (Default model)

Minimum was achieved

Chi-square = 716.631

Degrees of freedom = 293

Probability level = .000

Group number 1 (Group number 1 - Default model)

Estimates (Group number 1 - Default model)

Scalar Estimates (Group number 1 - Default model)

Maximum Likelihood Estimates

Regression Weights: (Group number 1 - Default model)

Estimate S.E. C.R. P Label

SAF <--- PQ .747 .096 7.747 *** par_21

SAF <--- Time .493 .183 2.694 .007 par_22

Trust <--- SAF .852 .075 11.362 *** par_23

Com <--- Trust .454 .070 6.492 *** par_24

ReI <--- Trust .878 .057 15.508 *** par_25

x16 <--- PQ 1.000

x15 <--- PQ 1.083 .054 20.016 *** par_1

x14 <--- PQ .991 .055 18.150 *** par_2

x25 <--- Time 1.000

x22 <--- Time 1.662 .259 6.427 *** par_3

x21 <--- Time 1.770 .300 5.909 *** par_4

x26 <--- SAF 1.000

x27 <--- SAF 1.100 .046 23.726 *** par_5

115

Estimate S.E. C.R. P Label

x28 <--- SAF 1.015 .046 21.860 *** par_6

x29 <--- SAF 1.033 .045 22.993 *** par_7

x30 <--- Trust 1.000

x31 <--- Trust .689 .090 7.659 *** par_8

x32 <--- Trust .999 .064 15.614 *** par_9

x34 <--- Trust 1.004 .063 15.922 *** par_10

x35 <--- Trust 1.017 .061 16.741 *** par_11

x36 <--- Trust 1.025 .070 14.634 *** par_12

x37 <--- Trust .596 .075 7.935 *** par_13

x43 <--- ReI 1.000

x44 <--- ReI 1.078 .029 36.921 *** par_14

x45 <--- ReI .927 .041 22.846 *** par_15

x38 <--- Com 1.000

x39 <--- Com 2.065 .297 6.957 *** par_16

x40 <--- Com 1.945 .280 6.947 *** par_17

x41 <--- Com 1.641 .247 6.653 *** par_18

x42 <--- Com 1.538 .240 6.406 *** par_19

x33 <--- Trust 1.082 .063 17.308 *** par_20

Standardized Regression Weights: (Group number 1 - Default model)

Estimate

SAF <--- PQ .696

SAF <--- Time .253

Trust <--- SAF .797

Com <--- Trust .918

ReI <--- Trust .912

x16 <--- PQ .929

x15 <--- PQ .929

x14 <--- PQ .899

x25 <--- Time .518

x22 <--- Time .869

x21 <--- Time .855

x26 <--- SAF .923

x27 <--- SAF .966

x28 <--- SAF .948

x29 <--- SAF .960

x30 <--- Trust .876

x31 <--- Trust .572

x32 <--- Trust .891

x34 <--- Trust .901

x35 <--- Trust .920

x36 <--- Trust .864

x37 <--- Trust .589

x43 <--- ReI .974

116

Estimate

x44 <--- ReI .981

x45 <--- ReI .909

x38 <--- Com .517

x39 <--- Com .957

x40 <--- Com .968

x41 <--- Com .859

x42 <--- Com .782

x33 <--- Trust .929

Variances: (Group number 1 - Default model)

Estimate S.E. C.R. P Label

PQ

.593 .082 7.260 *** par_27

Time

.180 .059 3.067 .002 par_28

e50

.116 .021 5.619 *** par_29

e51

.284 .046 6.227 *** par_30

e52

.030 .010 3.042 .002 par_31

e53

.122 .019 6.268 *** par_32

e16

.094 .016 5.731 *** par_33

e15

.111 .019 5.743 *** par_34

e14

.137 .021 6.606 *** par_35

e25

.490 .062 7.864 *** par_36

e22

.161 .036 4.513 *** par_37

e21

.207 .041 5.082 *** par_38

e26

.119 .016 7.339 *** par_39

e27

.058 .010 5.651 *** par_40

e28

.080 .012 6.698 *** par_41

e29

.062 .010 6.137 *** par_42

e30

.237 .031 7.609 *** par_43

e31

.763 .092 8.313 *** par_44

e32

.202 .027 7.547 *** par_45

e33

.144 .021 6.753 *** par_46

e34

.183 .025 7.233 *** par_47

e35

.146 .021 7.010 *** par_48

e36

.279 .036 7.738 *** par_49

e37

.522 .063 8.288 *** par_50

e43

.039 .008 4.709 *** par_51

e44

.034 .009 3.823 *** par_52

e45

.131 .017 7.630 *** par_53

e38

.525 .063 8.316 *** par_54

e39

.075 .013 5.602 *** par_55

e40

.049 .010 4.702 *** par_56

e41

.183 .024 7.702 *** par_57

e42

.288 .036 8.008 *** par_58

117

Squared Multiple Correlations: (Group number 1 - Default model)

Estimate

SAF

.831

Trust

.636

Com

.843

ReI

.831

x42

.611

x41

.738

x40

.936

x39

.916

x38

.267

x45

.826

x44

.961

x43

.949

x37

.347

x36

.746

x35

.847

x34

.812

x33

.863

x32

.794

x31

.327

x30

.767

x29

.921

x28

.898

x27

.934

x26

.852

x21

.731

x22

.755

x25

.269

x14

.809

x15

.862

x16

.863

CMIN

Model NPAR CMIN DF P CMIN/DF

Default model 58 716.631 293 .000 2.446

118

Model NPAR CMIN DF P CMIN/DF

Saturated model 351 .000 0

Independence model 26 5217.870 325 .000 16.055

RMR, GFI

Model RMR GFI AGFI PGFI

Default model .053 .723 .668 .604

Saturated model .000 1.000

Independence model .524 .088 .015 .081

Baseline Comparisons

Model NFI

Delta1

RFI

rho1

IFI

Delta2

TLI

rho2 CFI

Default model .863 .848 .914 .904 .913

Saturated model 1.000

1.000

1.000

Independence model .000 .000 .000 .000 .000

Parsimony-Adjusted Measures

Model PRATIO PNFI PCFI

Default model .902 .778 .823

Saturated model .000 .000 .000

Independence model 1.000 .000 .000

NCP

Model NCP LO 90 HI 90

Default model 423.631 348.891 506.060

Saturated model .000 .000 .000

Independence model 4892.870 4662.188 5129.967

FMIN

Model FMIN F0 LO 90 HI 90

Default model 5.047 2.983 2.457 3.564

Saturated model .000 .000 .000 .000

Independence model 36.746 34.457 32.832 36.127

RMSEA

Model RMSEA LO 90 HI 90 PCLOSE

Default model .101 .092 .110 .000

Independence model .326 .318 .333 .000

AIC

119

Model AIC BCC BIC CAIC

Default model 832.631 859.866 1004.476 1062.476

Saturated model 702.000 866.817 1741.958 2092.958

Independence model 5269.870 5282.079 5346.904 5372.904

ECVI

Model ECVI LO 90 HI 90 MECVI

Default model 5.864 5.337 6.444 6.055

Saturated model 4.944 4.944 4.944 6.104

Independence model 37.112 35.487 38.781 37.198

HOELTER

Model HOELTER

.05

HOELTER

.01

Default model 67 70

Independence model 11 11

Execution time summary

Minimization: .047

Miscellaneous: .905

Bootstrap: .000

Total: .952