Effects of Service Quality on Customer Loyalty-A Case of Taiwanese Watson’s Personal Care Stores

This study is primarily intended to verify the effects of service quality on the customer loyalty using the customer satisfaction as a mediator. Focus on the population of Taiwan's Watsons Personal Care Stores, a total of 395, to adopt a Stratified Random Sampling for sampling with totally sending out 850 copies of mailed questionnaires with a receipt of 228 copies valid response questionnaires for a 26.82% effective response rate, and applying a Structural Equation Modeling (SEM) to verify whether the goodness-of-fit of Overall Model, Structural Model and Measurement Model can be established in this study. The results have been found: (1) Making positive effects on the customer satisfaction; (2) Customer satisfaction making significant and positive effects on the customer loyalty; and (3) Excellent service quality making positive but not significant effects on the customer loyalty. Based on the results, the customer satisfaction has an approximately complete mediating effect. Additionally, the study results can not only provide businesses with the knowledge about the significance and generated benefits of service quality and customer satisfaction, but also make a reference for relevant business decision-making. Briefly, it is expected that the study results will provide businesses with effective applications of the service quality and customer satisfaction to enhance the customer loyalty increasing customers' repurchase intention.