THE EFFECT OF CUSTOMER SATISFACTION ON THE RELATIONSHIP BETWEEN PERCEIVED SERVICE QUALITY AND CUSTOMER LOYALTY AMONG PASSENGERS OF RAILWAY TRANSPORT SERVICES IN KENYA

Abstract

The purpose of this study was to find the effect of customer satisfaction on the relationship
between perceived service quality and customer loyalty among passengers of railway transport
services in Kenya. A descriptive cross-sectional survey design and a pragmatism paradigm were
used. Proportionate stratified random sampling technique was used to pick samples from each
railway service provider. Simple random sampling was used to select a representative sample
size of 357 respondents for the study. The study population comprised all railway customers who
had frequently used Madaraka Express, Nairobi Commuter Rail, Kisumu Safari Train and
Nairobi-Nanyuki Train passenger services in Kenya. Primary data was collected by a selfadministered
semi-structured questionnaire. Data was analyzed using descriptive and inferential
statistics. Stepwise regression analysis was carried out to test the research hypothesis. The results
showed that customer satisfaction significantly and partially mediated the relationship between
perceived service quality and customer loyalty (p-value<0.05, β= 0.400). The study contributes
to the existing literature by revealing the partial mediating influence of customer satisfaction on
the relationship between perceived service quality and customer loyalty. The study recommends
that policy makers should embrace perceived service quality to enhance customer loyalty and
gain competitive advantage. Managers should use the study results to establish perceived service
quality dimensions and customer satisfaction attributes for customer loyalty realization. Future
studies may use longitudinal research design to establish causal relationship between perceived
service quality and customer loyalty over a period of time.
Keywords: Perceived Service Quality, Customer Satisfaction, Customer Loyalty, Railway
Transport Services, Kenya.