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Evaluating the impact of marketing strategy on customer satisfaction through game theory: A mathematical model and empirical research
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ABSTRACT
This study attempts to develop a theoretical model and associated method for researching the impact
of marketing strategy on customer satisfaction. It also examines the indirect effects of a marketing
strategy on consumer satisfaction via the price and service quality. To clarify, it employs the concept of
natural logarithms and the Lagrange function to develop a conceptual model and form an optimal
marketing strategy. In addition, the study develops a model based on the conception of game theory to
identify the global marketing strategy in a competitive environment. In order to illustrate the viability
and contributions of the mathematical model; the empirical research employs the structural equation
modeling to test the interrelationships among research constructs. The mathematical and empirical
results offer an optimal guideline for a global marketing strategy to provide direction for allocating
strategic resources in a competitive environment. The results of the structural equation model support
the intermediary roles of price and service quality in the relationship between marketing strategy and
customer satisfaction. A coordination-integration strategy can reduce price, and both standardization
and coordination-integration strategies can reduce price and enhance service quality and then enhance
customer satisfaction in the global service market.
INTRODUCTION
The relationship between customer satisfaction and the
financial performance of a firm has been illustrated by
many previous studies (Dabholkar and Abston, 2008; de
Jager et al., 2010; Kotler and Lane, 2009; Neilson and
Chadha, 2008; Oliver and Shor, 2003; Pancras and
Sudhir, 2007). Previous studies have also revealed that
price and service quality are closely related to customer
satisfaction with service providers and have examined
the direct impacts of price and service quality on a firm’s
profits and market share and on consumer purchasing
behavior (Zeithaml, 2000).
THEORETICAL HYPOTHESES CONSIDERATIONS
Current literature has expressed strong interest in global
strategy. Numerous studies proposed that a firm’s global
strategy has a positive effect on its global performance
(Craig and Douglas, 2000; Zou and Cavusgil, 2002). In
the context of global marketing, Zou and Cavusgil (2002)
developed a broad conceptual model to integrate three
major perspectives of global marketing strategy: standar-
dization, configuration-coordination and integration. The
standardization perspective suggests that, to acquire
economic of scales and to maximize cost efficiency, a
firm should provide a standardized marketing mix across
different countries, including product offering, promotional
mix, price, and channel structure (Kotler and Lane, 2009;
Zou and Cavusgil, 2002). Zou and Cavusgil (2002)
further suggested that the ability to standardize and
produce high-quality and low-price products is a key way
to gain the competitive advantage. In addition, the
integration of marketing activities is regarded as another
competitive strategy to move across major global markets
(Birkinshaw et al., 1995; Kotler and Lane, 2009). Nume-
rous studies proposed that, to gain more performance
and competitive leverage, a global company must be able
to integrate its competitive moves and resources across
the major global markets (Zou and Cavusgil, 2002). To
clarify, Zou and Cavusgil (2002) stated that the integral
strategy of global marketing is concerned with how a
firm’s competitive battles are planned and executed
across country markets.
Mathematical model
Shugan (2002) argued that mathematics, as the lan-
guage of science, allows interplay between empirical and
theoretical research. To analyze the model simply, some
assumptions are needed. First, consider the law of
diminishing marginal utility, U '> 0 and U ' ' < 0 . This
study assumes that the impact of price and service
quality on customer satisfaction, as well as the combined
effect of the impacts of a global marketing strategy, a
standardization strategy (ST) and a coordination-
integration strategy (CI), on price and service quality will
be close to that suggested by the law of diminishing
marginal utility. To clarify, this study employs the concept
of natural logarithms and the Lagrange function to
develop a conceptual model and form an optimal external
marketing strategy.
Measurement of the constructs
Previous research related to research constructs was reviewed to
develop the empirical measures for the study. The items were
selected and filtered according to the definitions of constructs. The
survey questionnaire items were developed in the following stages.
First, the integration of previous studies and theories was done to
formulate the key components of marketing strategy in an inter-
national market. To integrate the constructs of a marketing strategy,
this study used standardization strategy, coordination-integration
strategy, price, quality, and customer satisfaction as its variables.
Second, the participants were asked to rate the relevance of each
item to their company for five research constructs on a seven-point
Likert scale, anchored from “strongly disagree” to “strongly agree”.