ISM UNIVERSITY OF MANAGEMENT AND ECONOMICS

INTERNATIONAL MARKETING AND MANAGEMENT PROGRAMME

II year student
Egl Mackeviit ..............................

2013 05 13 (signature)

CUSTOMER PERCEIVED VALUE IMPACT ON CUSTOMER

SATISFACTION AND LOYALTY: CASE OF BAKERY AND
CONFECTIONERY B2B MARKET IN LITHUANIA

MASTER THESIS

Thesis advisor:
Prof. Dr. Vida kudien

KAUNAS, 2013
ABSTRACT

Mackeviit, E. Customer perceived value impact on customer satisfaction and loyalty: case of
bakery and confectionery B2B market in Lithuania [Manuscript]: Master Thesis: management and
business administration. Kaunas, ISM University of Management and Economics, 2013.

The recent marketing shift from goods-dominant, based on tangible or operand resources,
towards the service-centred, based on intangible or operant resources has led organizations to
rethink the customer value creation processes. Customer focus and customer value have become the
core concepts in B2B marketing. The customer perceived value and its dimensions are gaining
increasing attention of authors. Nevertheless, it is still vaguely known which factors are perceived
as valuable by customers and effect customer satisfaction and loyalty. Therefore, this study aims to
assess the impact of customer perceived value dimensions on customer satisfaction and loyalty. The
empirical study explored the core product value, service value and relationship value as the
customer perceived value dimensions. The research has been conducted in B2B bakery and
confectionery market in Lithuania where 204 respondents were surveyed with the structured
questionnaire. The collected data was processed and analysed using SPSS statistical data analysis
package. The findings have shown the perceived core product to be positively related with both
customer satisfaction and loyalty. The findings on perceived service value have provided
unexpected results. Its relationship with customer satisfaction was only partially confirmed whereas
relationship with customer loyalty was rejected. The perceived relationship value was found to be
positively and strongly related to customer satisfaction and loyalty. Moreover, the perceived
relationship value was found to have the largest effect on customer satisfaction and loyalty
compared to the effect of perceived core product and service value. Finally, the strong positive
relationship was found between customer satisfaction and customer loyalty. The findings of this
study suggest companies in B2B segment to develop and enhance the relationship value for the
customers as it was found to be the most effective way in increasing customer satisfaction and
loyalty. The results on the perceived service value relationship with customer satisfaction and
loyalty contradict to the existing findings and therefore require further investigation of this
relationship. The study contributes to the current state of knowledge on customer perceived value
dimensions and their effect on customer satisfaction and loyalty in B2B segment. Moreover, the
findings of this research support the theory by Vargo and Lusch (2004) suggesting that operant or
intangible resources become more important in customer value creation than operand or tangible
resources.

The keywords: operand and operand resources, customer perceived value, customer satsifaction,
customer loyalty

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SANTRAUKA

Mackeviit, E. Kliento suvokiamos verts taka klient pasitenkinimui ir lojalumui: kepykl bei
konditerijos verslas-verslui moni rinkos atvejis Lietuvoje [Rankratis]: magistro baigiamasis
darbas: vadyba ir verslo administravimas. Kaunas, ISM Vadybos ir ekonomikos universitetas, 2013.

Paskutiniu metu pastebtas esminis pokytis rinkodaroje. Prie tai rinkodaros dmesio centru
buvus produkt, paremt materialiais, operandiniais itekliais po truput keiia paslaugos, paremtos
nematerialiais, operantiniais itekliais. i rinkodaros permaina paskatino organizacijas persvarstyti
klientui kuriamos verts procesus. Orientacija klient ir vert klientui tapo pagrindinmis verslas-
verslui rinkodaros svokomis. Kliento suvokiama vert susilaukia vis daugiau autori dmesio.
Nepaisant to, vis dar nra aikiai inoma, kaip klientai suvokia vert, kurie faktoriai yra suvokiami
kaip vertingi ir nulemia j pasitenkinim bei lojalum. Todl is tyrimas siekia vertinti, kok
poveik kliento suvokiamos verts dimensijos turi klient pasitenkinimui ir lojalumui. Empiriniame
tyrime kliento suvokiama vert buvo matuojama pagrindinio produkto verte, paslaug verte ir
santyki verte. Tyrimas buvo atliktas verslas-verslui kepykl bei konditerijos moni rinkoje
Lietuvoje. Struktruotu klausimynu buvo apklausti 204 respondentai. Tyrimo metu gauti duomenys
buvo apdoroti ir analizuoti naudojantis SPSS statistins analizs ir duomen apdorojimo paketu.
Tyrimu nustatytas teigiamas ryys tarp suvokiamos pagrindinio produkto verts ir klient
pasitenkinimo bei lojalumo. Suvokiamos paslaug verts rezultatai buvo netikti. Suvokiamos
paslaug verts ryys su klient pasitenkinimu buvo tik i dalies patvirtintas, tuo tarpu ryys su
klient lojalumu buvo paneigtas. Nepaisant to, buvo rastas teigiamas ir stiprus ryys tarp
suvokiamos santyki verts ir klient pasitenkinimo bei lojalumo. Be to, tyrimo duomen analiz
patvirtino, kad suvokiama santyki vert turi didiausi poveik klient pasitenkinimui ir lojalumui,
lyginant su kitomis kliento suvokiamos verts dimensijomis. Galiausiai, tyrimo rezultatai patvirtino
stipr teigiam ry tarp klient pasitenkinimo ir klient lojalumo. Remiantis io tyrimo gautomis
ivadomis, kompanijoms verslas-verslui segmente turt bti rekomenduojama vystyti ir didinti
santyki vert klientams, kadangi io tyrimo duomenimis tai yra efektyviausias bdas norint
padidinti klient pasitenkinim bei lojalum. Abejotinas ryys, rastas tarp suvokiamos paslaug
verts ir klient pasitenkinimo bei lojalumo, prietarauja kit autori ivadoms ir todl reikalauja
tolimesni tyrim. is darbas papildo dabartines inias apie kliento verts dimensijas, kurios klient
yra suvokiamos kaip vertingos, ir apie j tak klient pasitenkinimui bei lojalumui verslas-verslui
segmente. Be to, io tyrimo rezultatai patvirtina Vargo ir Lusch (2004) teorij, tvirtinani, kad
kuriant vert klientams, neapiuopiami arba operantiniai itekliai tampa svarbesni u apiuopiamus
arba operandinius.

Reikminiai odiai: Operandiniai ir operantiniai itekliai, kliento suvokiama vert, klient

pasitenkinimas, klient lojalumas

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TABLE OF CONTENTS

INTRODUCTION ....................................................................................................................... 6
1. LITERATURE REVIEW ......................................................................................................... 8
1.1. Customer perceived value ...................................................................................................... 8
1.2. Approaches to customer value creation................................................................................. 10
1.2.1. Operand resources: Core product value ............................................................................. 11
1.2.2. Operant resources: service and relationship value .............................................................. 12
1.3. Customer satisfaction........................................................................................................... 17
1.4. Customer loyalty ................................................................................................................. 18
1.5. Customer perceived value dimensions relationship with satisfaction and loyalty .................... 19
1.5.1. Core product value relationship with customer satisfaction and loyalty ............................... 19
1.5.2. Service value relationship with customer satisfaction and loyalty ....................................... 20
1.5.3. Relationship value relationship with customer satisfaction and loyalty ............................... 22
1.6. B2B bakery and confectionery market .................................................................................. 23
1.6.1. B2B bakery and confectionery market in Lithuania ............................................................ 24
2. RESEARCH PROBLEM DEFINITION ................................................................................. 27
3. METHODOLOGICAL APPROACH ...................................................................................... 29
3.1. Research design, aim and objectives..................................................................................... 29
3.2. The Instrument .................................................................................................................... 29
3.2.1. Reliability: Cronbachs .................................................................................................. 30
3.3. Sample and data collection................................................................................................... 31
3.4. Data analysis methods ......................................................................................................... 32
4. EMPIRICAL RESEARCH RESULTS .................................................................................... 34
4.1. Main characteristics ............................................................................................................. 34
4.2. Correlations......................................................................................................................... 36
4.3. Regression analysis ............................................................................................................. 38
5. DISCUSSION ........................................................................................................................ 41
5.1. Discussion of findings ......................................................................................................... 41
5.2. Research limitations and implications for further research..................................................... 47
5.3. Practical implications........................................................................................................... 47
CONCLUSIONS ....................................................................................................................... 49
LIST OF REFERENCES............................................................................................................ 51
LIST OF APPENDIXES ............................................................................................................ 57

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LIST OF FIGURES

Figure 1. Operant and operand resources relation to customer perceived value dimensions............11
Figure 2. The core product value dimensions....................................................................................12
Figure 3. Service value dimensions...................................................................................................13
Figure 4. The research model..................................................................................................27
Figure 5. Years of cooperation with the supplier indicated by customers.......................................34
Figure 6. The means of the research variables.............................................................................35
Figure 7. The linear regression relationship model.......................................................................40

LIST OF TABLES

Table 1. Cronbachs coefficients..............................................................................................31

Table 2. Correlation coefficient and correlation strength.............................................................32
Table 3. The operationalization of the research instrument...........................................................33
Table 4. Descriptive statistics...................................................................................................35
Table 5. Spearman correlation coefficients between variables.....................................................36
Table 6. Linear Regression. The relationship between independent variables and customer
satisfaction..............................................................................................................................38
Table 7. Linear Regression. The relationship between independent variables and customer
loyalty....................................................................................................................................39

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INTRODUCTION

Driven by more demanding customers and global competition organizations try to

distinguish themselves from others. Companies search for new ways to increase customer value and
achieve competitive advantage. Recently marketing has moved from a goods-dominant view, in
which tangible or operand resources were central, to a service-dominant view, in which operant or
intangible resources, dynamic exchange processes, and relationships are central (Vargo & Lusch,
2004). The customer-orientation, creating and increasing customer perceived value became the 21st
century cornerstone of business-to-business (B2B) marketing where companies strive to provide a
better value to the customer than their competitors (Hutt & Speh, 2007). Therefore, organizations
are looking for the ways of offering more than just core value to the customers but also additional
value in order to satisfy them and make them loyal. Nevertheless, it is vaguely known what factors
are effective, perceived as valuable by customers and determine customer satisfaction and loyalty
and which do not bring the desired effect. The empirical literature in B2B context exploring the
effect of different customer perceived value dimensions on customer satisfaction and loyalty is
sparse. Moreover, the factors that determine customer perceived value differ greatly from one
industry to another. When focusing on customer-oriented strategy it is extremely important for a
company to know which of the offered value components are effective in the industry, increase
customer satisfaction and loyalty.
Considering the bakery and confectionery market specifics, core product value, service
value and relationship value were chosen as the customer perceived value dimensions in this study.
Addressing the research gaps, the main problem of this paper is defined: How do customer
perceived value dimensions effect customer satisfaction and loyalty in B2B bakery and
confectionery market in Lithuania segment? Thesis aim is to assess the impact of customer
perceived value dimensions on customer satisfaction and loyalty in B2B bakery and confectionery
market in Lithuania.
Objectives of the research are the following:
1. Define the concepts of customer perceived value and its dimensions, customer satisfaction
and customer loyalty.
2. Provide the theoretical background of the customer perceived value relationship with
customer satisfaction and customer loyalty.
3. Develop a conceptual model of customer perceived value dimensions impact on customer
satisfaction and loyalty for bakery and confectionery B2B market in Lithuania.
4. Research empirically customer perceived value expression in bakery and confectionery B2B
market in Lithuania and its influence on customer satisfaction and loyalty.
5. Analyse the manifestation of customer perceived value dimensions effect on customer
satisfaction and loyalty in bakery and confectionery B2B market in Lithuania.
Research design and data collection methods. The empirical research is going to be
conducted by surveying customers of the international company Minordija which is a food
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ingredient supplier for bakeries and confectioneries in Lithuania. Quantitative research design is
going to be employed to measure customer perceived value dimensions, customer satisfaction and
loyalty.
In order to reach the aim and objectives of the empirical research, the data collection was
organised by surveying customers with the structured questionnaire. The designed questionnaire
consists of separate parts measuring each research variable separately: core product value, service
value, relationship value, satisfaction and loyalty.
The data collected during the survey will be coded, processed and analysed using SPSS for
Windows 19.0 (Statistical Package for the Social Sciences).
The thesis is structured in the following manner:
The first part consists of literature review and definition of the main concepts of variables:
customer perceived value and its dimensions, customer satisfaction and loyalty. Then the
theoretical analysis of the relationships between the variables is discussed and hypotheses
presented. Further on, B2B bakery and confectionery market and its peculiarities are
discussed.
The second part consists of the problem definition.
The third part presents the methodological approach. The main steps and research methods
leading to the problem solving are described.
The fourth part presents the findings of empirical research.
The fifth part involves discussion of significant empirical findings.
The final part presents conclusions of the research, its limitations and directions for future
research.

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1. LITERATURE REVIEW

1.1. Customer perceived value

This chapter will review the concept of customer perceived value defined from different
authors perspective. Then the dimensions of customer perceived value offered by various authors
will be discussed. Finally, the discussion will lead to customer value creation approaches.
Almost three decades ago it was noted by Porter (1985) that a competitive advantage of a
firm comes from its capability to create value for its customers that exceeds the companys costs of
creating it. This perception has not changed up to now as superior customer value delivery is still
seen as a key to achieve and maintain competitive advantage (Landroguez, Castro & Cepeda-
Carrin, 2011). This had led to an increased interest of researchers to analyze customer value
creation process and how customers perceive value.
Kotler and Keller (2012) define customer perceived value as the difference between
customers evaluation of all the benefits and all the costs of an offering and the perceived
alternatives. They extend the concept by describing customer perceived value as the proportion
between total customer value (a bundle of economic, functional and psychological benefits such as
product, services, personnel, image value) and total customer costs (monetary, time, energy, psychic
costs) (Kotler & Keller, 2012). According to Hutt and Speh (2007), customer value is the
customers perception and evaluation of how useful the relationship with a supplier is in terms of
benefits received and sacrifices made. Furthermore, Hutt and Speh (2007) distinguish two types of
benefits: core benefits that are core requirements for a customer-supplier relationship and add-on
benefits reflecting attributes that are typically not required but create added value in a customer-
supplier relationship. In line with previous definitions, other authors define customer value as a
comparison of weighted get and give attributes or as a ratio of perceived benefits received and
perceived sacrifices. Authors highlight the word perceived because both benefits and sacrifices
are subjective to a certain level (Christopher, Payne, & Ballantyne, 2008; Heskett, Iones, Loveman,
& Sasser, 1994). According to all the definitions above, it is obvious that customer perceived value
can be described as the difference between customers perception of the benefits they believe they
will derive from a purchase compared to the costs they will have to pay.
Despite the homogeneity of customer perceived value definitions, the dimensions of
customer perceived value offered by authors are very diverse.
Naumann (1995) has suggested that customers perceived value consist of 5 components:
price, product quality, service quality, image and relationship between a customer and a vendor.
According to Sheth, Newman and Gross (1991), five basic types of value exist that are derived from
customers needs:
Functional value which is understood as perceived utility derived from ability to perform its
functional, practical or physical purposes.
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 Social value represents perceived advantage deriving from its image and symbolism the
product/service provides.
Emotional value which is described as ability to arouse feelings such as security, pleasure,
enthusiasm, romance, passion fear or guilt.
Epistemic value is the ability of a product or service to make a person curious or satisfy his
desire for knowledge or novelty.
Conditional value is a perceived benefit acquired in the specific situation or some particular
social or physical context.
Sweeney and Soutar (2001) have narrowed down customer value dimensions to three:
Social value which reflects the enhancement of social self-concept.
Emotional value described as the utility derived from feelings generated by the product.
Functional value which reflects the advantage obtained from products quality, performance
and price/value received for the money.
One of the most recent studies by Smith and Colgate (2007) has proposed the following four
customer value dimensions:
Functional/ instrumental value reflects how much a product is useful, has characteristics or
functions that were expected.
Symbolic/ expressive value describes the degree to which customers give product some
psychological meaning (e.g. self-concept or self-worth)
Experiential/ hedonistic value is associated with the extent to which a product evokes some
particular emotions, feelings and experiences for the customer.
Cost/ sacrifice value is concerned with the expenses and other sacrifices that might be
associated with buying or using a product.
Differently from other authors, Ulaga (2003) has focused on customer value in specific
contexts and defined eight customer value categories: the quality of a product, delivery, time to
market, price of a product, costs of processing, personal communication, the expertise of a supplier
and service support.
Woodall (2003) has suggested a distinct typology consisting of five forms of value for the
customer:
Net value which is described as the balance between sacrifices and benefits.
Derived value reflects the outcomes of use/experience.
Marketing value defines product attributes as perceived from a customer perspective.
Sale value defines value as a reduction of sacrifice or cost.
Rational value which is the evaluation of fairness in the balance of benefit and sacrifice.
It is obvious that customer value can be categorised by different dimensions. It also depends
a lot on the market which typology is going to be applied. B2C markets and customer values differ

9
drastically from B2B markets. Moreover, the industry specifics must also be considered when
evaluating what customers perceive as valuable.
B2B bakery and confectionery market is very unique from a customers value perspective.
The core benefits or basic requirements for supplier are more or less similar in all B2B industries.
But the add-on benefits are very specific for each industry. As it was said by Hutt and Speh (2007),
companies should focus more on providing unique added value rather than modifying core benefits
in order to enhance customer value and loyalty.
It is essential for suppliers in B2B bakery and confectionery industry to know what their
customers expect, how they perceive value and what add-on benefits could be offered to them. Next
chapter will review the components that authors perceive as adding value and what are considered
to be valuable for the customers in B2B bakery and confectionery market.

1.2. Approaches to customer value creation

The customer value creation has long been considered as a central marketing concept and
the source of competitive advantage (Woodruff, 1997; Smith & Colgate, 2007). Nevertheless,
customer value and its creation differ substantially in each industry. Therefore, Kotler and Keller
(2012) suggest firstly starting with the value exploration process to gain understanding what
customer thinks about, wants, does, and worries about. Only then they propose to proceed with
value creation process utilizing all the resources and competencies available.
The companys resources or assets used to create customer value are usually divided by
authors to tangible (physical) and intangible (intellectual) dimensions (Allee, 2009; Kaplan, 2004).
Vargo and Lusch (2004) have introduced the operand and operant concepts to describe companys
resources. They define operand resources as tangible and static goods offered to customer that the
goods-centred model of exchange is based on. Whereas service-centred model of exchange is based
on operant resources that are invisible and intangible assets such as core competences or
organizational processes. Operant resources are seen as dynamic and infinite, opposite to operand
resources that are usually static and limited (Vargo & Lusch, 2004).
Authors agree that there is an obvious trend of business market view moving from goods-
dominant to a service-dominant view (Kaplan, 2004; Vargo & Lusch, 2004). According to Kaplan
(2004), product-driven economy, based on tangible assets, is moving towards a service and
knowledge economy, based on intangible assets that are the ultimate source of sustainable value
creation. Vargo & Lusch (2004) have also noticed the thought leaders in marketing moving away
from tangible goods with embedded value focusing on activities directed at static transactions. In
turn, authors notice the trend to focus on active exchange relationships where value is co-created
with the consumer by sharing knowledge, skills and/or services. According to Vargo and Lusch
(2004), the worldview changes from a focus on resources on which an operation or act is
performed (operand resources) to resources that produce effects (operant resources).
The concepts of operand and operant resources introduced by Vargo and Lusch (2004) are
going to be used in this paper to describe and categorise the customer perceived value dimensions

10
(see Figure 1). Therefore, the next chapters will expand on the operant and operand resources that
are used to create value for customers.

Figure 1. Operant and operand resources relation to customer perceived value dimensions

1.2.1. Operand resources: Core product value

This chapter will elaborate on the operand resources concept suggesting the core product as
the resource to create value for customers. The core product definition and its dimensions are to be
discussed. Moreover, this chapter includes the review of industry specifics regarding the core
product.
As it was mentioned above, operand resources are tangible or physical goods delivered by a
company to create customer value (Vargo & Lusch, 2004). Usually authors use the term core
product to describe the value created for the customer by delivering the physical or tangible goods.
Core product can be viewed as the product in its most basic form. The concept of core product has
already been defined by Levitt (1983) who suggested four levels of product offer: core or generic
product, expected product, augmented product and potential product. According to Levitt (1983),
the generic or core product is a material or physical product. The expected product is the core or
generic product but supplemented with minimal purchase conditions. At the augmented product
level a company has an opportunity to gain its competitive advantage by offering additional services
and benefits that are preferred and perceived as valuable by target customers. Finally, the potential
product refers to the development that the product is likely to go through in the future over time.
Kotler (1994) describes the five different levels of a product that are almost identical to the ones
described by Levitt (1983). The only difference is that Kotler (1994) emphasizes the difference
between the core benefit which is explained as the advantage the buyer actually wants and the
generic product which represents the actual physical product. Brassington and Pettit (2006) see the
core product as the essence of a product, the main reason it exists and is purchased. Consistently

11
with others, Gronroos (1997) claims that the physical good is a basic element in the offering since it
is an essential condition for a customer to perceive the offered value successfully.
The core product and its created value are very industry specific. Therefore, the dimensions
of core product also differ greatly from one industry to another, for instance in specific banking
sector, core product dimensions would also be specific such as speed in delivery, accuracy of
transactions, bank facilities and honesty of staff (Alfansi & Sargeant, 2000).
Despite the industry differences, some authors distinguish the most basic and general
dimensions of a core or physical product in general. Alfansi and Sargeant (2000) distinguish
quality, on time delivery and price as the main dimensions of the base level of product.
Consistently, Smith (1993) describes core product features, quality, design and packaging as the
main aspects of physical or tangible product. According to Prahalad and Hamel (1990), cost and
quality are the standard product attributes. From the discussion above it is seen that quality and
price as the main core product dimensions were mentioned by the majority of the authors.
Nevertheless, as it was mentioned earlier, the industry specifics also have to be considered
when evaluating the core product and its dimensions. The bakery and confectionery industry that is
going to be researched in this paper also has its product specifics. The core product offered by
suppliers in this market is usually food ingredients for bakeries and confectioneries. Therefore, food
ingredients will be measured as a core product in this research. Considering the discussion on the
core product dimensions above and the specificity of bakery and confectionery market products, the
quality and price dimensions are going to be used in the research to measure the core product value
(Figure 2).

Figure 2. The core product value dimensions

1.2.2. Operant resources: service and relationship value

This chapter will elaborate on the operant resources concept and the ways operant resources
are used to create customer value. Two customer perceived value dimensions - service value and
relationship value and going to be defined and their dimensions discussed. Both dimensions will
be then reviewed from the perspective of industry characteristics.

As it was mentioned above, operant resources are not material or physical assets but
invisible and intangible processes of a company (Vargo & Lusch, 2004). According to Constantin
12
and Lusch (1994), operant resources are resources that produce effects such as customer value
creation. According to the dominant service-centred view, based on operant resources, companies
should identify and develop their core competences, expertise, substantial skills and knowledge and
cultivate relationships with customers that involve them in customizing and developing the value
propositions according to their specific needs (Vargo & Lusch, 2004). Therefore, the next chapters
will review service value and relationship value constructs as the customer perceived value
dimensions created by employing operant resources.

1.2.2.1. Service value

The service value has been, and will continue to be, a key construct of interest to marketers.
The importance of service value emerges from consumer decision processes that are usually based
on service value (Cronin, Brady, Brand, Hightower & Shemwell, 1997). Service is now considered
to be even more important than the product itself and the marketing shift from goods-dominant
view to service-dominant view confirms that (Vargo & Lusch, 2004). Therefore, this chapter will
concentrate on service value and the components that constitute customer service: basic service,
competence and complementary service (Figure 3).

Figure 3. Service value dimensions

According to Capon (2009), service is any act, performance, or information that enhances
the firms core product. Pride and Ferrell (2010) define customer service as the value adding
attempts, activities and practices that complement the core product provided by a company. Authors
agree that service, in general, is intangible or operant resource that adds value or enhances the core
product of a company (Capon, 2009; Pride & Ferrell, 2010; Vargo & Lusch, 2004).
However, components that constitute service are defined differently by various authors.
According to Kotler and Keller (2012), the main service differentiators are ordering ease, delivery,
installation, customer training, customer consulting, maintenance and repair. Kotler, Tybout and
Calder (2010) define the components as service outputs that include loading the goods, spatial
convenience, the lead time and delivery time, assortment and its variety and basic customer service.
Nevertheless, all the factors that constitute service are very situation specific. Therefore, the
industry characteristics must be taken into consideration when defining service components.
Considering bakery and confectionery market context in this paper, the service provided by
13
suppliers will be grouped in three sections: basic customer service, competence and complementary
service.
Basic customer service can be described as the synergy of all the determinants affecting the
procedures of making products available to the customer (Brassington & Pettitt, 2006). Some
authors emphasize delivery, financing arrangements, convenient hours of operation as the main
customer service constituents (Pride & Ferrell, 2010). Bittner (1995) emphasizes three most
important encounters with customers in delivering service: order taking, delivery and billing.
According to Brassington and Pettitt (2006), the most important factors in customer service are
inventory availability, delivery and its reliability, ease of order administration, order convenience,
invoicing procedure and order cycle time. From the discussion above it is apparent that delivery,
order administration and billing or invoicing are seen as the most important customer service
constituents by several authors.
Considering authors opinions on customer service and the specifics of bakery and
confectionery market context, the term basic service in this paper is going to be used to describe
customer service processes such as delivery, ordering ease, invoicing and specification issuing
procedures. Delivery refers to the proper product delivery in terms of speed and accuracy of the
delivery process. Ordering ease reflects the ease for a customer to place an order with a company
(Kotler & Keller, 2012). Invoicing and specification issuing procedures refer to fast and precise
documentation according to requirements (Brassington & Pettitt, 2006).
The second service value constituent described in this paper is competence. Despite the
various terms existing in literature (e.g. competence, core competences, distinctive competencies,
etc.), this study will employ the general term competence.
Capon (2009) defines competences as skills, knowledge and other capabilities the firm
possesses. Kotler & Keller (2012) understand core competencies as areas of special technical and
production expertise. According to Coyne, Hall and Clifford (1997), core competence is a
connection of skills, expertise and knowledge of the employees that enables the company to
perform their tasks and accomplish results at a high standard. In line with other authors, Hutt and
Speh (2007) describe core competencies as the superior technical and organizational skills of the
organization with a focus on what creates value from the customers perspective. According to
Prahalad and Hammel (1990), a core competency is the companys communal learning about the
management of different production knowledge and skills. Christensen (2010) has used the term
distinctive competences and emphasized it as one of the important inputs in creating value for the
customers and gaining competitive advantage. With reference to all the definitions above,
competence can be described as skills, knowledge or expertise of the organization that are used to
create service value for customers.
Nevertheless, competence and its constituents differ greatly from one industry to another.
According to Cravens, Grant, Ingram, Laforge & Young (1992), competence of a supplier
comprises of technical suppliers know-how of products and production processes, and awareness
of the customers organization, competitors, markets and industry. Considering the descriptions of
competence and specifics of bakery and confectionery market, suppliers competence as one of the
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service value constituents in this paper will include sharing product knowledge and skills with
customers, providing them technical support, consultant services, practical help and seminars.
As mentioned above, the third component of service value in this paper is complementary
service. Little academic examination in the literature is found on the concept of complementary
service, especially in B2B context, although it has been extensively used across a range of
industries. The concept of complementary service has been characterized using various terms,
including complementary selling, companion selling, complementarities, complementary product or
augmented product offering (Polonsky et al. 2000). Steinfield, Bouwman and Adelaar (2001)
describe complementary service as a way for a company to differentiate itself and enhance customer
value by expanding inventory with complementary products. Mai, Yang and Chen (2011) used the
term complementary product explaining it as a product that increases the value of a core product
when both of them are used together by consumers. Amit and Zott (2001) have employed the term
complementarities to describe complementary products and services offered by a company, or the
extension of companys product range with complementary products that are directly related to a
core product of a company and create customer value. The term augmented product offering was
widely used by many authors to describe the total offering of a company or a package of core
product complemented by surrounding, peripheral services or goods (Ravald and Grnroos, 1996;
Kotler and Keller, 2012; Riel, Lemmink, Streukens & Liljander, 2004). Polonsky et al. (2000) has
employed the companion selling concept and defined it as a process of selling the customers an item
that largely supplements their purchased product.
Complementary service in this paper adopts the notion that it is a type of individual
customer service reminding, informing and selling customers the additional products that they
might need that broadly complement the core product they are buying (Polonsky et al. 2000). In
case of bakery and confectionery market, the complementary to food ingredient supply service is
offering the extended range of products that customers need in a production, presentation and
selling processes. The range might vary from the equipment and tools used in a production process
to product presentation, decoration and packaging materials. The food ingredient suppliers in
bakery and confectionery B2B market in Lithuania used the terms service articles and decorations
to describe the complementary product categories offered next to the core product. The customer
are familiar with service articles and decorations terms, therefore, they are going to be used in this
paper to research the complementary services offered by food ingredient suppliers.

1.2.2.2. Relationship value

The previous chapter reviewed the service value as one of the ways to create customer
value. This chapter will concentrate on relationship value as a customer perceived value dimension
created by employing operant resources in a company. Customer relationship management, its
dimensions and industry characteristics are going to be discussed.
The marketing shift from goods-dominant to service-dominant and thereby from tangible to
intangible resources made the relationships, interactivity and connectivity with customers central
processes of a company. According to Vargo and Lusch (2004), companies should develop and
15
cultivate relationships with customers by involving them in developing personalized, competitively
compelling value propositions to meet their particular needs. One of the tools that is most often
used to create relationship value for customers particularly in business-to-business marketing is
customer relationship management (Christopher et al., 2008).
The customer relationship management (CRM) concept is being used to reflect a number of
different perspectives. From the marketing and management perspective CRM can be viewed as a
tool helping in identification, selection, acquisition, development and retention of increasingly loyal
and profitable customers. From the informational industry perspective CRM is seen as a software or
customer database that helps a company to administer customer relationships in an organized way
(Cuthberston & Laine, 2004). In this paper CRM will be analysed from the marketing perspective.
Hutt and Speh (2007) define CRM as a cross-functional process helping to achieve a
continuous communication with customers via all the contact and access points available including
the customized treatment of the most valuable customers ensuring the marketing efforts success and
customer retention. Christopher et al. (2008) describe CRM as a strategic plan to improve
shareholder value through long-term profitable relationships delivery for customers by uniting IT
and relationship marketing strategies. According to Christopher et al. (2008), CRM gives the unique
opportunity to better understand customers and implement relationship marketing strategies by
using gathered information and data. Landroguez et al. (2011) perceive CRM as the companys
actions that are focused on creation and maintenance of long-term relationship with customers in
order to gain their satisfaction and loyalty. Consistently with other authors, Barosso and Martin
(1999) believe that CRM is about creating and maintaining long-lasting relationships with
customers in order to evolve continuous improvement in customer value delivery.
Authors have characterized a great deal of CRM capabilities and dimensions. Cuthberston
and Laine (2004) have emphasized customer knowledge reflecting individual customer
requirements, the data collection process and customer contact as the most important CRM
capabilities. Hirschowitz (2002) believes that interaction with customer and customer insight are the
most valuable outcomes of CRM. According to Sin, Tse, Heung and Yim (2005), one of the CRM
components is key customer focus which allows customer-centred marketing, identification of
customer lifetime value, personalization and interactive co-creation marketing. Zinnbauer and Eberl
(2005) state that CRM enables interaction between the company and customer, creation of
personalised customer offers and customer perceived consistency of the interaction with a company.
According to Yim, Anderson and Swaminathan (2004), companies using CRM are focusing on key
customers, organizing entire company around CRM, managing customer knowledge throughout
organisation and implementing technology based on CRM.
Despite its wide capabilities and described dimensions, CRM has to be adjusted to industry
and its specifics in every case. Therefore, it is important to discuss the most applicable CRM
dimensions that enable suppliers creating relationship value in B2B bakery and confectionery
market. One of the most crucial capabilities of CRM in this specific market is the knowledge and
insight of customers and their profiles that enables a better understanding of customers and their
requirements (Cuthberston & Laine, 2004; Lin & Su, 2003; Hirschowitz, 2002). Moreover, the
16
knowledge of customers requirements allows a supplier to create customer-specific tailored
solutions according to their needs (Sin et al., 2005; Kundisch, 2001). One more CRM capacity that
is important in B2B bakery and confectionery market is a close and frequent interaction with
customers which allows quick suppliers response to their requests (Hirschowitz, 2002; Hayes,
2008).
Considering the most important CRM dimensions agreed by authors and the specifics of
B2B bakery and confectionery market, the dimensions discussed above are going to be analyzed in
this study.

1.3. Customer satisfaction

Previous chapters have reviewed the independent variables, whereas this chapter will focus
on one of the dependent variables of this study satisfaction. Firstly, the definitions of customer
satisfaction by various authors are going to be reviewed. Then the dimensions and measures of
customer satisfaction are going to be discussed from the industry perspective.
According to Kotler and Keller (2012), satisfaction is a persons feelings of pleasure or
disappointment resulting from comparing perceived products performance (or outcome) in relation
to his or her expectations. Authors elaborate that customer is dissatisfied if expectations are not
fulfilled by the performance; satisfied in case the performance matches customers expectations;
and delighted or highly satisfied if his expectations are exceeded by the performance (Kotler and
Keller, 2012). In line with Kotler and Keller (2012), Woodroof (1997) defines satisfaction as the
customers feelings in response to evaluations of his/her experience with a product. Perreault and
McCarthy (2002) perceive customer satisfaction as the extent to which a company fulfils the needs,
desires and expectations of customers.
According to Kotler and Keller (2012), customer satisfaction can be measured by a number
of methods. Customer satisfaction can be tracked directly by periodic surveys. Monitoring the
customer loss rate is also one of the methods that could be done effectively by contacting customers
who have stopped buying or switched to another supplier to learn the reasons. Finally, mystery
shoppers could be hired by a company to pretend potential buyers and give a feedback on their
experience, advantages and disadvantages in buying the product from a company and competitors
(Kotler & Keller, 2012).
Despite the variety of customer satisfaction methods, this study will use the customer survey
to measure customer satisfaction. Asking the right question is essential in customer satisfaction
surveys (Reichheld, 2003), therefore industry characteristics must be taken into account to achieve
the most relevant results. Considering B2B bakery and confectionery market specifics and authors
discussion on customer satisfaction, this study will apply the most widely used customer
satisfaction measures on the survey: general satisfaction with the provided services (Caruana, 2002;
Lam, Venkatesh, Erramilli, & Murthy, 2004), meeting customers expectations with the provided
services (Kotler & Keller, 2012; Lam et al., 2004) and satisfaction with the collaboration with a
supplier (Lam et al., 2004).

17
1.4. Customer loyalty
This chapter will review the literature on loyalty concept that is the second dependent
variable of this study. Firstly, loyalty concept will be defined. Then the dimensions and
measurements of loyalty offered by various authors will be discussed. Finally, loyalty will be
reviewed from the industry characteristics perspective.
Although there is no universally agreed definition, customer loyalty can be defined as a
customers engagement with a company and willingness to continue doing business with a company
permanently (Zineldin, 2006). According to Oliver (1999), loyalty is a deeply held commitment to
rebuy or repatronize a preferred product or service in the future despite situational differences and
marketing efforts having the potential to cause switching behaviour.
Mostly in literature loyalty is viewed as a multiple construct consisting of three dimensions:
behavioural loyalty, attitudinal loyalty, and cognitive loyalty.
Behavioural loyalty is interpreted as the type of customer behaviour such as repeat or
continuous purchasing from the same supplier or the act of recommendation (Yi, 1990).
Behavioural was the first and mostly used dimension of loyalty by researchers. Even though current
definition of loyalty includes more than just a behavioural dimension, some researchers still focus
only on behavioural dimension of loyalty (Gremler & Brown, 1996). The study by Rauyruen and
Miller (2007) has suggested that behavioural loyalty could be maintained by companys efforts to
enhance customer satisfaction and design excellent service systems.
Attitudinal loyalty is described by Fournier and Yao (1994) as different feelings that create a
general attachment to a product, service, or organization (Gremler & Brown, 1996). The criticism of
behavioural loyalty by Day (1969), arguing that loyalty develops as a result of a conscious effort to
evaluate competing brands, has led to the increased attention to attitudinal loyalty by authors and
became an important loyalty dimension (Gremler & Brown, 1996). Attitudinal loyalty can be
created and maintained by focusing on relationship building and creating customers trust,
commitment and again providing excellent service systems (Rauyruen & Miller, 2007).
In addition to behavioural and attitudinal loyalty, some researchers define the cognitive
dimension of loyalty. It is explained as the first choice of a customer among alternatives or as the
first brand, store or supplier that comes up to customers mind when they make a purchase decision
(Ostrowski, O'Brien & Gordon, 1993; Newman & Werbel, 1973). This suggests that a truly loyal
customer will not consider or actively seek for alternative firms to purchase from (Gremler &
Brown, 1996).
According to Gremler and Brown (1996), these three loyalty dimensions define a loyal
customer as the regular user of one service provider or supplier, who has positive feelings toward
the organisation and does not consider using alternative provider.

The three loyalty dimensions are usually used when measuring customer loyalty.
Considering the B2B bakery and confectionery market characteristics and the three loyalty
dimensions discussed, loyalty in this study will be measured using four factors that reflect all three
18
loyalty dimensions discussed above (Zeithaml, Berry, & Parasuraman, 1996): continue doing
business with the supplier, considering the company to be the first choice to buy services,
recommending the company to others, and having positive feelings about the supplier.

1.5. Customer perceived value dimensions relationship with satisfaction and

loyalty
The previous chapters have discussed the independent variables (core product value, service
value and relationship value) and dependent variables (satisfaction and loyalty) of this study. The
following chapter will review the literature on relationship between independent and dependent
variables. Firstly, the perceived core product value relationship with customer satisfaction and
customer loyalty is going to be discussed. Then the perceived service value relationship with
customer satisfaction and loyalty is going to be analysed. Finally, the relationship between
perceived relationship value and customer satisfaction and loyalty is going to be reviewed.

1.5.1. Core product value relationship with customer satisfaction and loyalty
There is a significant literature gap regarding the core product relationship with customer
satisfaction and loyalty. Even though it was noted by authors that physical or core product quality
has the same importance to customer satisfaction as the service quality (Zeithaml et al., 1996),
previous empirical researches tend to focus more on service that rather than on the core product
itself (Bei & Chiao, 2001). Nevertheless, several studies have examined this relationship. The study
by Bei and Chiao (2001) has researched the relationship between the perceived core product value
and customer satisfaction and loyalty. The most important dimensions of core product quality and
price were measured. Authors have found that perceived product quality and perceived price
fairness are both positively related to customer satisfaction which they explain by product quality
and price being the essential concerns to customers and therefore effecting their satisfaction (Bei &
Chiao, 2001). Anderson, Fornell and Lehmann (1994) have also found a positive relationship
between product price and customer satisfaction. The findings are consistent with Zeithaml and
Bittner (1996) indication that the factors influencing customer satisfaction are product quality,
service quality, price, situation and personal factors.
There is a significant lack of research exploring the relationship between a core product and
customer loyalty. Nevertheless, Bei and Chiao (2001) have found that perceived core product
quality and perceived price fairness have both direct and indirect (through satisfaction) effects on
customer loyalty.
The research gap and the discussion above have led me to propose the following hypotheses:
H1: The positive relationship exists between the perceived core product value and customer
satisfaction.
H2: The positive relationship exists between the perceived core product value and customer loyalty.

19
1.5.2. Service value relationship with customer satisfaction and loyalty
As it was defined previously, service value concept in this paper consists of the basic
service, competences and complementary service. Therefore, the relationship of all three
constituents with customer satisfaction and loyalty are going to be discussed separately and
emerging hypotheses are going to be proposed.

1.5.2.1. Basic service relationship with customer satisfaction and loyalty

The literature review above has led me to propose that basic service consists of delivery,
ordering ease, invoicing and specification issuing procedures. Several authors have found a positive
relationship between the basic customer service and customer satisfaction.
Pride and Ferrell (2010) claim that the level of customer service provided by a company can
greatly affect customer satisfaction. The study by Oliva, Oliver and MacMillan (1992) has also
confirmed that the level of customer service directly effects customer satisfaction. According to
Bitner (1995), the most important factor determining customer satisfaction or dissatisfaction is the
the experience of customers during the service encounters. In line with other authors, Pitt, Watson
and Kavan (1995) agree that customer satisfaction is influenced by service in general and
particularly by the quality of service. All the authors reviewed agree on that basic customer service
influences customer satisfaction.
Despite the vast literature on customer service and satisfaction relationship, very few
authors have explored the relationship between customer service and loyalty. Usually, the ones who
did, researched the indirect relationship via satisfaction because satisfaction is thought to be an
immediate antecedent to loyalty (Oliva et al., 1992). For instance, Bitner (1995) believes that the
service encounter occuring each time a customer interacts with an organization influences the
overall satisfaction of a customer and, in turn, to loyalty. Addressing the literature gap, this study
will give the opportunity to explore the direct basic customer value relationship with customer
satisfaction and loyalty.

1.5.2.2. Competence relationship with customer satisfaction and loyalty

With reference to the literature review, competence can be described as intangible assets of
the organization such as skills, knowledge or expertise which are used to create value for customers
(Kotler & Keller, 2012; Coyne et al., 1997).
The increased authors attention and emphasis on competence as a way to create customer
value has resulted in numerous studies researching the companys competence relationship with
customer satisfaction and loyalty. Selnes (1998) explains the relationship between companys
competence and customer satisfaction based on the notion that satisfaction is achieved by meeting
or exceeding customers expectations. According to the author, buyers have expectations not only
towards the core product, but also towards the competence of a supplier that are in turn likely to
affect their satisfaction. Gallon, Stillman and Coates (1995) believe that competences in a company
should be translated into customer-perceived value which should then lead to customer satisfaction.

20
According to Roth and Amoroso (1993), companies should firstly invest and build core
competencies, then link them with innovative products or services to satisfy customers needs
which should consequentially lead to customer satisfaction. In line with other authors, the study by
Liu and Leach (2001) in B2B context has shown that high degree of expertise or competence leads
to higher customer trust and satisfaction. Moreover, the findings of Liu and Leach (2001) study in
B2B context indicate that buyers' satisfaction with a supplier derived from suppliers competence is
positively related to their loyalty behaviours such as customers intention for future business contact
with that supplier. Prahalad and Hamel (1990) have also emphasized the role of core competencies
in building customer loyalty. Nevertheless, there is still scarce of research on the relationship
between competence and customer loyalty.
With reference to the discussion above, this study will address the research gap and
elaborate on the customer perceived competence value relationship with customer satisfaction and
loyalty.

1.5.2.3. Complementary service relationship with customer satisfaction and

loyalty
Complementary service in this paper it is a type of customer service that offers additional
products that broadly complement the core product that customers are buying (Polonsky et al.
2000). Complementary service is thought to be convenient and valuable for customers (Kotler &
Keller, 2012; Elrod et al., 2002; Riel et al., 2004). Therefore, the complementary service
relationships with customer satisfaction and loyalty have been investigated by authors.
Ravald and Gronroos (1996) have found the direct complementary service relationship with
customer satisfaction and indirect relationship with customer loyalty. They believe that by adding
more value to the core product, such as supporting services, companies attempt to enhance customer
satisfaction so that the customer loyalty is achieved (Ravald & Gronroos, 1996). Riel et al. (2004)
also see customer satisfaction as an intermediary variable between the augmented product and
customer loyalty. Their study has shown that additional services or augmented product offering
increase customer satisfaction which then leads to higher customer loyalty. According to Payne and
Holt (2001), total offering or complementary product concepts include additional elements beyond
the product itself and have a great impact on the customer perceived value and, consequentially, on
customer satisfaction. In line with other authors, Evans and Berman (2001) claim that customer
satisfaction is achieved when some services or products above basic are being offered. According to
the study by Matzler and Sauerwein (2002), complementary service or augmented product offering
is found to enhance customer satisfaction if delivered but does not cause dissatisfaction if missing.
From the discussion on complementary service relationship with customer satisfaction and
loyalty, the positive relationship between the constructs is noticed. Nevertheless, there is still scarce
of studies exploring these relationships and particularly the direct relationship between
complementary service and loyalty.

21
 After reviewing the literature on service value components and their relationships with
customer satisfaction and loyalty, it could be concluded that most of the authors have found positive
relationship between these variables. With reference to the discussion above and addressing the
research gap, the following hypotheses will be examined in this study:
H3: The positive relationship exists between the perceived service value and customer satisfaction.
H4: The positive relationship exists between the perceived service value and customer loyalty.

1.5.3. Relationship value relationship with customer satisfaction and loyalty

Relationship development, cultivation, interactivity and connectivity with customers are
central concepts in todays service-dominant marketing (Vargo & Lusch, 2004). As discussed
above, the relationship value for customers is usually created using customer relationship
management (CRM) which gives the unique opportunity to better understand customers and
implement relationship marketing strategies by gathering information and data (Christopher et al.,
2008). Authors have become particularly interested whether CRM brings the desired results in
creating relationship value and widely researched this topic. Therefore, this chapter will review the
studies that have investigated CRM relationship with customer satisfaction and loyalty.
The existing literature on the CRM application effect on customer satisfaction is quite
controversial. Many authors have found a positive CRM effect on customer satisfaction. The effects
of CRM initiatives were investigated by Mithas, Krishnan and Fornell (2005) who have found that
CRM efforts increase customer satisfaction and loyalty due to improved companys knowledge of
their customers and more effective management of customer relationship. The study by Verma and
Chaudhuri (2009) which explored the level of customer satisfaction with CRM enabled companies
found that CRM system helps to develop service and products for customer satisfaction and create
loyal customers. According to Kundisch (2001), appropriately applied CRM strategy should result
in increased customer satisfaction, loyalty, and trust. Lin and Su (2003) also believe that CRM
strategy formulation can increase customer value and enhance customer satisfaction (Verma &
Chaudhuri, 2009). The empirical researches conducted in B2B context by Hadzagas (2011) and Ata
and Toker (2012) have also indicated significant positive effect of CRM adoption on customer
satisfaction.
Nevertheless, despite the huge investments to CRM implementation system, the
effectiveness and positive results are not always achieved. The study of Verma and Chaudhuri
(2009) showed that service sector companies with implemented CRM in India are still missing
desired customer satisfaction level.
The CRM relationship with customer loyalty is also still debatable. The notion that customer
loyalty can be increased by CRM relies on the research conducted by Bentley (1999), Dekimpe,
Steenkamp, Mellens and Abeele (1997) and Lee-Kelley, Gilbert and Mannicom (2003). Moreover,
Hutt and Speh (2007) believe that CRM aligns customer strategy with business processes in order to
improve customer loyalty. In line with other authors, Zineldin (2006) argues that CRM is one of the

22
ways to create and deliver added value to the customers which consequentially leads to customer
loyalty.
Nevertheless, the positive relationship between CRM and customer loyalty is not always
found. The study by Hadzagas (2011) has shown that CRM system does not seem to significantly
influence customers loyalty.
However, the discussion above shows that CRM relationship with customer satisfaction and
loyalty is still controversial and needs further investigation. As it was mentioned above, CRM
reflects the relationship value in this study. Therefore, the relationship value and its effect on
customer satisfaction and loyalty is going to be examined in this research with the following
hypothesis derived from the literature review:
H5: The positive relationship exists between the perceived relationship value and customer
satisfaction.
H6: The positive relationship exists between the perceived relationship value and customer loyalty.

1.6. B2B bakery and confectionery market

The food industry is considered to be one of the biggest and most prevalent industries in the
world. It covers every single business that cultivates or produces food, distributes food ingredients
and sells food (Euromonitor International, 2013). One of the food industry branches bakery and
confectionery market has not been researched widely yet.
The work by Regmi and Gehlhar (2005) exploring global food markets directions indicates
that the worlds the top five purchased product categories are bakery, dairy, confectionery,
carbonated drinks, and chilled foods. Bakery and confectionery products are bought and consumed
daily. Even the mantra of bakers emphasizes the category immunity to economic shocks because
people will still have to eat bread.
Despite globalisation of the food industry across all countries food markets are increasingly
responding to consumer preferences at a local level and supplying specific demands in each market.
According to Regmi and Gehlhar (2005), food producers are adding value, customizing and
differentiating their products to meet consumer demands. Therefore, it is essential for a food
ingredient supplier to know the directions and preferences of food producers, to be flexible and to
offer them products and ideas satisfying their needs and helping them to satisfy the needs of the
final consumer. Moreover, the analysis of Romania bakery industry has shown that bakers try to
distinguish themselves from competitors by personalised and innovative supply, both from the
product point of view and from the packaging and communication point of view. The bakery
industry demand is now moving towards more sophisticated products, their design and packaging
(Manole, Oancea & Isac, 2010).
Thereby, food ingredient suppliers have to follow the market trends and act accordingly.
The customer-oriented companies in B2B markets operate according to the principle give the
customers what they need. It seems logical but the needs of customers are not always obvious.
Finding out what customers perceive as valuable is already an achievement as the needs of
23
customers differ greatly due to industry specifics. If the preferences and demand of the final
consumer change, so do the needs and demand of producers bakery and confectionery companies.
Suppliers might offer food ingredients and products needed by customer (the core product value)
but usually it is not enough for achieving the competitive advantage. Together with a recent
marketing shift from a goods-dominant view to a service-dominant view, in which intangible
resources, dynamic exchange processes, and relationships are central (Vargo & Lusch, 2004), B2B
bakery and confectionery market has also moved from offering only the core product value towards
offering service value and relationship value to the customers. The customer-orientation, creating
and increasing customer perceived value became the 21st century cornerstone of business-to-
business (B2B) bakery and confectionery market and a way for a supplier to distinguish itself and
achieve competitive advantage.

1.6.1. B2B bakery and confectionery market in Lithuania

The main food ingredient suppliers and their market share in current B2B bakery and
confectionery market in Lithuania are the following (Minordija, 2012): Sirmulis (28%), Leipurin
(19%), Minordija (18%), Baltic supply (8%), Kartagena (7%), Dasita (6%), and others (14%).
The biggest food ingredient suppliers for bakeries and confectioneries in Lithuania compete
by offering low prices of food ingredients (e.g. Sirmulis), or by offering higher than the core
product value to their customers (e.g. Leipurin, Minordija, Kartagena, Dasita). Customer
preferences, shifts in demand and changes in value perception are quite frequent in this market so
suppliers have to follow the trends and act accordingly. As an illustration, the recent 5 year analysis
of baked goods market in Lithuania (Euromonitor International, 2013) has shown the shift of
customer preferences from the cheapest products towards more differentiated ones that tasted better,
looked better and offered some health benefits. Therefore, knowing the factors that are perceived as
valuable by bakery and confectionery companies becomes crucial in seeking competitive advantage.
Core product value. The core product in B2B bakery and confectionery market is food
ingredients. The core product value is offered to customers by all the suppliers in this industry.
Undoubtedly, the price and quality of the products differ from one supplier to another, but more or
less the same core product categories are offered by all the suppliers. Therefore, core product-wise
suppliers can compete only in price and quality.
Service value. The basic service in extremely important for customers in B2B bakery and
confectionery market. The basic customer service procedures such as delivery, placing orders,
invoicing and specification issuing are essential part of bakery and confectionery companies. Since
the companies are producers, they have production cycles, therefore, on-time delivery of food
ingredients is substantial and demanded by customers. The ease of placing the order with a supplier
is also important for customers as they avoid time consuming processes. Invoicing and specification
issuing procedures are crucial for producers in bakery and confectionery market in Lithuania.
Producers are required by European food safety authority (EFSA) and Food and Veterinary control
to have proper documentation according to the requirements. Therefore, suppliers are expected to
provide all the required documents when delivering food ingredients.

24
 Since bakery and confectionery industry involves production process, the competence and
technical support offered by a supplier play an important role. The customer survey conducted by
one of the suppliers in Lithuania has revealed that technical support and ability to solve problems
were among the most important criteria when judging on supplier (Minordija, 2011). The case study
of food ingredient supplier conducted in Denmark B2B bakery and confectionery market shows the
trend of customers becoming more concerned with industry-specific technological capabilities of
their suppliers (Meyer, 2006). Therefore, this study will test whether customers of B2B bakery and
confectionery market in Lithuania perceive competence as a valuable factor.
The full product offering or the complementary service is also one of the ways to offer
higher value for the customers in B2B bakery and confectionery market. In order to remain
competitive and attract consumers, bakers and confectioners tend to seek for innovations: new
ingredients, new ideas, new products. This is the place and time for suppliers to show their
capabilities and competencies. Suppliers might generate new ideas of final products and offer the
full package of everything that is needed for producing them: food ingredients, recipes, consultant
service, tools and equipment or even the packaging for a new product. In that case customer
receives everything he needs from one supplier.
Therefore, one of the ways for a supplier to create added value for customers is by offering
complementary service or total offering: not only food ingredients (core product) but also related
and needed products (complementary service). One of the additional products that could be offered
by a food-ingredient supplier is packaging. To illustrate my point, B2B market analysis in Denmark
by Meyer (2006) has described companies strengthening their core business in food ingredients by
operating in a packaging market for the food industry as it is seen as related to food ingredients as
both serve the same customers. Moreover, packaging was found to be perceived as valuable by
customers in the analysis of baked goods market in Lithuania. Companies seem to stick to their
practices of paying close attention to the packaging (Euromonitor International, 2013). Moreover,
decorations and all the materials needed for product presentation can be offered for customers to
achieve the full concept of the product.
No studies have yet been conducted on the perceived service value in bakery and
confectionery market in Lithuania. Therefore, this study will examine the perceived service value
and how it effects customer satisfaction and loyalty.
Relationship value. B2B context involves a lot of communication between a supplier and
customer, the relationship is crucial to the success. Knowing the profile of a customer, realizing his
needs, problems and acting accordingly creates collaborative relationship between a supplier and
customer. The findings of a customer survey in B2B bakery and confection market in Lithuania
have indicated a customer-supplier relationship as one of the most important criteria for customers
when judging the supplier (Minordija, 2011). In order to generate effective and mutually-beneficial
relationship with the customers, companies tend to apply tools helping to monitor the entire
customer base such as customer relationship management systems. According to the latest data,
CRM systems in 2012 have been used in 17,7 percent of Lithuanian enterprises (Lietuvos statistikos

25
departamentas, 2013). It is also indicated that CRM systems are more frequently implemented in
bigger organizations compared to small-medium enterprises.
Even though CRM effects on customer satisfaction and loyalty has been researched in
Lithuania, no studies have examines this relationship in B2B bakery and confectionery market in
Lithuania. Therefore, this study is going to examine the relationship in this specific industry.

26
2. RESEARCH PROBLEM DEFINITION

The existing literature indicates the evident movement in marketing from goods-centred
approach, based on tangible or operand resources, to service-centred approach, based on intangible
or operant resources. Customer focus and customer value have become the core concepts in B2B
context and have been widely analysed by authors. Recent studies show a great importance of
customer perceived value to customer satisfaction and loyalty. Therefore, companies are striving to
offer more than just the core value to the customers to increase customer perceived value and
achieve their satisfaction and loyalty. Nevertheless, there is still limited literature on the customer
perceived value factors that determine customer satisfaction and loyalty. These factors differ in each
industry so the literature on the customer perceived value dimensions is rather scattered. Moreover,
there is a significant lack of studies on direct relationship between customer perceived value
dimensions and loyalty as usually the indirect relationship via satisfaction is being researched.
Meanwhile, it is extremely important for organizations to find out which efforts that they use to
create customer value are considered as valuable by customers and increase their satisfaction and
loyalty. Therefore, further examination of customer perceived value dimensions and their effect on
customer satisfaction and loyalty is required.
After reviewing the relevant literature, it becomes clear that the research problem, raised in
the introduction part, was not fully answered by existing research: How do customer perceived
value dimensions effect customer satisfaction and loyalty in B2B segment?
Moreover, no research has yet been conducted in B2B bakery and confectionery market to
measure customer perceived value components and their relationship with customer satisfaction and
loyalty. Therefore, research studies core product value, service value and relationship value as the
customer perceived value dimensions created by operand and operant resources and their influence
on customer satisfaction and loyalty in B2B bakery and confectionery market. Research model is
presented in Figure 4.
Figure 4. The research model

27
 Addressing the missing gaps in the current state of knowledge, the following hypotheses are
going to be tested by this study:
H1: The positive relationship exists between the perceived core product value and customer
satisfaction.
H2: The positive relationship exists between the perceived core product value and customer loyalty.
H3: The positive relationship exists between the perceived service value and customer satisfaction.
H4: The positive relationship exists between the perceived service value and customer loyalty.
H5: The positive relationship exists between the perceived relationship value and customer
satisfaction.
H6: The positive relationship exists between the perceived relationship value and customer loyalty.

This research will have a significant value not only for B2B bakery and confectionery
market in Lithuania, but for B2B segment in general. This study will contribute to the current
knowledge of customer value in business markets literature by researching customer value
components perceived as valuable by customers and examining their relationship with customer
satisfaction and loyalty. The findings of this work could also have practical applications in business.
It is crucial for customer-oriented companies to be aware of their customer preferences and create
value accordingly in order to obtain customer satisfaction and loyalty. Therefore, the study aims to
provide managers with a guide to improving customer value and achieving customer satisfaction
and loyalty. Companies in B2B market might have the capabilities needed to improve their
competitive advantage that they are not aware of or might be using ineffective methods that are
perceived as not valuable by customers. Therefore, the findings of this study can help companies
improve and reallocate their current resources and activities in creating value for their customers.

28
3. METHODOLOGICAL APPROACH

This part of Thesis will cover the explanation and justification of methodological approach
selected for this study which is closely related to the Thesis problems and aims that were raised in
the previous chapters. The overview of methodology includes discussion of the empirical research
aims and objectives, research instrument selection and the procedures that were used in order to
verify the hypotheses raised in the Introduction part.
The empirical research process consists of three main stages: research planning, research
implementation, and research reporting (Morais, Martins & Kansikas, 2009). According to Morais
et al. (2009), the empirical research methods should be selected only after defining the research
design, raising research aim and objectives.

3.1. Research design, aim and objectives

The empirical research aims to test empirically the impact of customer perceived value
determinants on customer satisfaction and loyalty. Addressing the aim of the empirical research, the
following objectives were formulated:
To research empirically customer perceived value determinants in bakery and confectionery
B2B market in Lithuania and their influence on customer satisfaction and loyalty.
To analyse the manifestation of customer perceived value determinants effect on customer
satisfaction and loyalty in bakery and confectionery B2B market in Lithuania.
The quantitative research has been selected for this study for several reasons (Lipsey &
Wilson, 2001; Malthotra, 2008). Firstly, the quantitative method is usually used for deductive
reasoning where the hypotheses on relationships are tested; while quantitative research is more
suitable for inductive reasoning when new theories are originated from the data gathered. Therefore,
quantitative method enables to find causal relationships among variables in this study. Secondly,
quantitative research allows surveying a large number of respondents which would be difficult to do
with quantitative research. Thirdly, the fixed-response questions used in quantitative research
reduce the variability in the results that may be caused by differences in interviews (quantitative
research). Moreover, Pranulis and Dickius (2012) claim that quantitative research is most widely
used method in marketing research.

3.2. The Instrument

In order to meet the aim and objectives of the research, the customer questionnaire was
selected as the instrument for obtaining information.
The structured questionnaire was designed (see Appendix 1) according to the general
instrument design requirements (Bernard, 2012). The separate questionnaire parts measure each
research variable separately:
Questions 1-4: Core product value

29
 Questions 5-12: Service value
Questions 13-16: Relationship value
Questions 17-19: Customer satisfaction
Questions 20-23: Customer loyalty
The research questionnaire consists of three main parts:
Introductory part
Cooperation term indication part
The main questionnaire part with empirical measures
The introductory part includes short explanation of the essence and purpose of the study,
information on respondents anonymity and questionnaire filling instruction.
The introduction is followed by the cooperation term question which asks a customer to
indicate the duration of cooperation with the supplier.
The main questionnaire part includes only closed questions measuring the research
variables. The Likert scale is used in questionnaire to obtain respondents degree of agreement with
a statement. Respondents are asked to indicate their level of agreement with a given statement by
marking the answer on a 7-point scale ranging from 1 Strongly Disagree to 7 Strongly Agree.
The structured questionnaire is designed in a way to evaluate the main variables of this
research:
Independent variables: customer perceived value determinants
Dependent variables: customer satisfaction and customer loyalty
All these constructs are the conceptual variables of research that are going to be measured
and have to be operationalized in order to avoid the limitations of conceptual definitions (Bernard,
2012). The instrument operationalization procedure is used to define accurately every variable of
this research. Conceptual definitions are transformed into empirical measures that ensure the
validity and reliability of the research instrument. The operationalization of the research instrument
is presented in the Table 3 below with the customer perceived value empirical measures and
references to the authors who have already used these measures.

3.2.1. Reliability: Cronbachs

The Cronbachs coefficient was calculated to ensure the reliability of the instrument by
assessing the degree of internal consistency among a set of questionnaire items.
The alpha coefficient for the whole questionnaire is 0,874, suggesting that the items have a
relatively high level of internal consistency. The Cronbachs coefficient was calculated for each
variable separately (see Table 1).

30
Table 1. Cronbachs coefficients

Variables coefficient
Core product value 0,700
Service value 0,841
Relationship value 0,798
Customer satisfaction 0,912
Customer loyalty 0,874

The Cronbachs coefficients for all the constructs measured in the research are ranging
from acceptable ( = 0,700) to excellent ( = 0,912). It indicates that items measuring each variable
have high intercorrelations and measure the same construct. The alpha coefficients suggest that core
product value ( = 0,700) and relationship value ( = 0,798) variables have acceptable level of
internal consistency. The service value ( = 0,841) and loyalty ( = 0,874) variables have a good
level whereas satisfaction ( = 0,912) an excellent level of internal consistency. In general, the high
internal consistency level indicates the high reliability of test scores.

3.3. Sample and data collection

To measure the customer perceived value impact on customer satisfaction and loyalty in a
specific B2B bakery and confectionery market in Lithuania, the sample was selected accordingly.
The population selected for the research were bakery and confectionery production companies in
Lithuania that are customers of food ingredient supplier Minordija. The sample consisted of 204
respondents. Respondents were representatives of customer companies who had direct continuous
contact with Minordija.
The customers of this particular food ingredient supplier (Minordija) were chosen for
several reasons. Firstly, Minordija is one of the market leaders in food ingredient supply for
bakeries and confectioneries in Lithuania; therefore, the customer base is large and diverse enough.
Secondly, the study aims to measure core product, service and relationship value constructs and
Minordija is one of few food ingredient suppliers in Lithuania offering these values to its
customers. The optimal customer accessibility was also one of the reasons for selecting the
customer base of Minordija.
Data collection was organised by surveying customers with the questionnaire constructed.
The questionnaire was translated and presented to all respondents in Lithuanian as the research was
conducted in Lithuania. Paper questionnaires were delivered to respondents by salespeople of
Minordija during their visits. Respondents were asked to fill in the questionnaire in two weeks,
put it in the envelope to ensure anonymity and send it back to Minordija. The postal expenses
were paid in advance to enhance the number of returned questionnaires. The questionnaires were
distributed to 310 customers, 204 of which were filled and returned.

31
3.4. Data analysis methods
The data analysis methods listed below were chosen according to the aims of the study and
the hypotheses raised. The data collected during the survey was coded, processed and analysed
using SPSS for Windows 19.0 (Statistical Package for the Social Sciences). All the data collected is
quantitative, therefore, the following quantitative data analysis methods have been applied:
Descriptive statistics used to determine the means of examined variables and define the
frequencies;
Cronbachs - to test the internal consistency and reliability of the instrument;
Spearman correlation to check the presence and strength of the relationship between
customer perceived value determinants and customer satisfaction and customer loyalty;
Regression analysis used to determine the effect of customer perceived value determinants
on customer satisfaction and customer loyalty.
Spearman correlation analysis was applied to test and evaluate the strength of existing
relationships between variables. The correlation coefficients were evaluated referring to the criteria
presented in the Table 2 below (Cohen et al., 2003):

Table 2. Correlation coefficient and correlation strength

Correlation coefficient Correlation strength Relationship strength

0.90-1.00 Very high correlation Very strong relationship

0.70-0.89 High correlation Strong relationship

0.40-0.69 Moderate correlation Significant relationship

0.20-0.39 Low correlation Weak relationship

0.00-0.19 Insignificant correlation Insignificant relationship

32
Table 3. The operationalization of the research instrument
Customer perceived value
Empirical research measures Authors
determinants

The product quality is good

Operand Core product Quality The product quality is consistent over time Prahalad & Hammel (1990)
resources value The product packaging quality is good
Price The product prices are reasonable
The customer service (placing orders, receiving invoices and product specifications) is
Brassington and Pettitt (2006)
Basic service easy and convenient
The delivery of products is always on time Alfansi & Sargeant (2000)
The supplier shares its technological expertise, skills and knowledge regarding
products
Prahalad & Hammel (1990),
The supplier provides technical support and consulting on practical applicability issues
Hutt & Speh (2007)
Competence of their products
Service value The supplier provides technological and practical seminars that are valuable for my
company
The supplier offers new ideas of final products that are valuable for my company Brassington and Pettitt (2006)
Operant It is convenient buying service articles and/or decorations from the same supplier Kotler & Keller (2012),
resources Complementary Elrod et. al (2002),
I find it valuable that the supplier offers not only food ingredients but the full-package
service (new ideas, recipes, food ingredients, tools and equipment) needed to realize the Riel et al. (2004)
product
Cuthberston & Laine (2004), Lin &
The supplier has a great understanding of my companys business model and
Su (2003),
requirements
Hirschowitz (2001)
Relationship CRM Kundisch (2001),
The supplier offers products and ideas customized according to our needs
value Sin et al. (2005)
The supplier promptly responds to my company requests and requirements Hayes (2008)
My company gets exclusive benefits and proposals (e.g. promotions, discounts) from
Cuthbertson & Laine (2004)
cooperation with this supplier
Caruana (2002),
In general, my company is very satisfied with the services offered by the supplier
Lam et. al (2004)
Satisfaction The service of the supplier comes up to my companys expectations
Lam et. al (2004)
Overall, the supplier is a good company to do business with
Behavioural My company intends to continue doing business with this supplier Zeithaml et al. (1996),
Cognitive My company considers the supplier as the first choice for purchasing food ingredients Caruana (2002),
Loyalty Reichheld (2003),
I would recommend this supplier to a friend or colleague
Attitudinal Lam et al. (2004)
Overall, I have positive feelings about the supplier Gremler & Brown (1996)

33
4. EMPIRICAL RESEARCH RESULTS

4.1. Main characteristics

In this chapter the results of the empirical research conducted on 204 respondents are
reported and analysed. The empirical research report is structured in the following manner. Firstly,
the general variable overview, descriptive statistics and correlations between variables are
presented. Secondly, the Cronbachs is calculated for the instrument to ensure its reliability.
Finally, the empirical research on relationship model with regard to the hypotheses raised in
literature review part is presented.
204 customers of the supplier Minordija have taken part in this survey. At the beginning
of the questionnaire customers were asked to indicate the duration of cooperation with the supplier.
The Figure 5 presents the respondent distribution according to the indicated number of cooperation
years with the supplier. The results show that the biggest part of respondents (57,35%) are long-
term customers cooperating 5-10 years with the supplier. It seems logical as the company has been
working for 10 years and the customer base has never been changing drastically due to the
relatively stable and limited size of bakery and confectionery market in Lithuania. Nevertheless, the
large proportion of long-term customers suggests that their answers are even more reliable as they
have a long experience of cooperation with the supplier and have had enough time to experience
and evaluate the value they receive from the supplier.
Figure 5. Years of cooperation with the supplier indicated by customers

34
 Before performing statistical analysis it is important to make an overview of the research
data. The Table 4 presents the descriptive statistics of the variables that were measured in this
research.

Table 4. Descriptive statistics

Std.
Variables Valid N Minimum Maximum Mean
Deviation

Core product value 198 4,25 7,00 5,9129 0,65371

Service value 195 3,25 7,00 6,2500 0,78909
Relationship value 195 3,50 7,00 6,0192 0,92360
Customer satisfaction 195 4,00 7,00 6,0564 0,89590
Customer loyalty 201 4,00 7,00 6,1953 0,85080

The descriptive statistics indicate the varying number of respondents per scale (valid N
ranging from 195 to 201) which is due to missing respondents answers to some questions.
The respondents, i.e. customers of the company Minordija, were researched using the
questionnaire with Likert-scale ranging from 1 meaning Strongly disagree to 7 Strongly agree.
The mean scores for each research variable were calculated by averaging the scores of questions
measuring each variable. From the Figure 6 below it is apparent that almost all variables were
evaluated high on scale as the means of the variables range above 6.

Figure 6. The means of the research variables

However, only the mean of the perceived core product value is lower compared to other
variables but still close to 6 (mean = 5,9129). The perceived core product value in this research
comprises of product quality and price, therefore, these particular variable measures have to be
considered. From the Appendix 3 it is obvious that the reason for a lower mean of the perceived
core product value is a relatively low product price evaluation (mean = 4,7576) which was
35
measured by asking customers to evaluate the statement: The product prices of Minordija are
reasonable. Meanwhile, the second perceived core product value constituent - product quality -
was evaluated relatively high (mean = 6,2941).
Moreover, the more detailed perceived service value analysis also show the mean of
complementary service evaluations lower than 6 (mean = 5,8744). The complementary service
together with basic service and competence constitute the service value. Nevertheless, the lower
complementary service mean does not distort the mean of perceived service value (mean = 6,2500)
due to the higher evaluations of basic service (mean = 6,5900) and competence (mean = 6,1515).
In general, all the variables were evaluated relatively high considering the 1 to 7 scale.

4.2. Correlations
The Table 5 provides correlations between all the research variables. Spearman correlation
coefficient was chosen to test the relationship between variables due to the non-normal distribution
of variables (see Appendix 2, Shapiro-Wilk test, p<0.05). All the correlations between variables are
significant and supported at the p < 0.01 level (see Table 4). The absolute values of the correlations
range from moderate (R = 0,571) to high (R = 0,807) suggesting that relationships between
variables vary from significant to strong (see Table 2; Cohen et al., 2003).

Table 5. Spearman correlation coefficients between variables

Core product Service Relationship Customer Customer

Variables
value value value satisfaction loyalty

Core product value 1

Service value 0,580** 1

Relationship value 0,602** 0,769** 1

Customer satisfaction 0,571** 0,700** 0,807** 1

Customer loyalty 0,627** 0,704** 0,745** 0,735** 1

** - Correlation is significant at the 0.01 level

The correlations found between variables will firstly be overviewed from the perspective of
dependent variables: customer satisfaction and loyalty.
Customer satisfaction was found to be in high correlation with the perceived relationship
value (R = 0,807) and perceived service value (R = 0,700) which indicates strong relationship
between these variables. It is important to notice that the perceived relationship value and customer
satisfaction correlation is the highest compared to all the other correlations tested by this study.
Whereas the correlation between customer satisfaction and perceived core product value (R =
0,571) is moderate in this research which suggest significant but not strong relationship between
variables. This could be explained by the moderate customer satisfaction correlation with
constituents of the core product value in this study (see Appendix 5): product quality (R = 0,418)
and price (R = 0,532).
36
 Loyalty has been found to correlate highly and have strong relationship with the perceived
relationship value (R = 0,745) and service value (R = 0,704). Loyalty was also found to be in
moderate correlation with the perceived core product value (R = 0,627). However, the more detailed
correlation analysis of the service value components reveals unexpected results (see Appendix 5).
Despite the high correlation of customer loyalty and service value in general, the correlation
between basic service and customer loyalty was found to be low (R = 0,392) whereas competence
(R = 0,623) and complementary service (R = 0,697) were found in moderate correlation with
customer loyalty.
An interesting observation to be made here is the significantly high correlation between both
dependent variables: customer satisfaction was found to be highly correlating and therefore in
strong relationship with customer loyalty (R = 0,735). This finding leads to a new hypothesis that
was not raised in this study but has been widely discussed among authors the positive relationship
exists between customer satisfaction and loyalty. This relationship will be discussed in more detail
at the Discussion part.
Moreover, it is important to notice the high correlation (R = 0,769) indicating strong
relationship between independent variables the perceived relationship value and service value.
The possibility of multicollinearity occurs when high correlations are found between predictor
variables. However, the collinearity statistics has shown the acceptable levels of the variance
inflation factor (VIF) among independent variables (see Appendix 4). According to ekanavicius
and Murauskas (2009), the multicollinearity issues are avoided if the VIF values of independent
variables are below 4. The VIF values of core product value (VIF = 1,437), service value (VIF =
3,047) and relationship value (VIF = 1,437) in this study were found to be acceptable, therefore, the
multicollinearity issue is rejected. A high correlation between perceived relationship value and
service value seems to be logical as the service value provided for the customer (consisting of basic
service, competence and complementary service) is closely related to the customer relationship
building and management. From the more detailed correlation analysis (see Appendix 5) it is seen
that this correlation was mainly caused by high correlation (R = 0,707) between CRM, which
reflects the relationship value in this study, and complementary service, which is one of the service
value constituents. Furthermore, the detailed correlation analysis also indicates the significant and
high correlation between CRM and complementary service (R = 0,707). This strong relationship
between variables seems logical as both of them represent the additional services offered to the
customers next to the core product, only in the different form. Competence is an intangible form of
value created for the customers while complementary service in this study comprises of service
articles and decorations and therefore is a tangible variable (Vargo & Lusch, 2004).
Finally, respondents were asked to indicate the duration of cooperation with the supplier.
Interestingly enough, there was no significant correlation found between number of cooperation
years and other variables in this study (see Appendix 5). The longer years of cooperation could be
expected to correlate with customer satisfaction or loyalty (Bolton, 1998). Nevertheless, this
research did not find the significant cooperation duration relationship neither with satisfaction
(insignificant R = -0,029), nor with loyalty (insignificant R = -0,076).

37
4.3. Regression analysis
The regression analysis was used to determine the relationship between independent
and dependent variables. In case of this research, the effect of customer perceived value dimensions
(independent variables) on customer satisfaction and customer loyalty (dependent variables) was
measured. Therefore, the relationships will be reviewed from the perspective of each dependent
variable.
The Table 6 presents the relationship model between independent variables and customer
satisfaction. The relatively high R2 value (R2 = 0,630) indicates how much of the dependent
variable, satisfaction, can be explained by the independent variables, core product value, service
value and relationship value. In this case, 63% can be explained, which is relatively large.
The Table 6 also shows the B coefficient and significance level of each independent
variable. The B coefficient indicates the relative contribution of each independent variable in
explaining the variance and the effect that independent variables have on the dependent variable.

Table 6. Linear Regression. The relationship between independent variables and customer
satisfaction

Significance
Dependent variable Independent variables B coefficient
(p-value)

Satisfaction Core product value 0,264 0,000**

2
R = 0,630
2 Service value 0,307 0,001**
Adjusted R = 0,623
Sig. (p-value) = 0,000** Relationship value 0,422 0,000**

* - Indicates significance at 0.05 level

** - Indicates significance at 0.01 level

All the independent variables, as seen from the Table 6, have a positive significant effect on
customer satisfaction. In case of this research, the perceived relationship value has the biggest effect
on customer satisfaction (B = 0,422), which indicates that satisfaction is expected to increase by
0,422 when the relationship value increases by one. Similarly to what has been observed in the
correlation analysis, the relationship value plays a significant role in determining customer
satisfaction. The second by the effect size on customer satisfaction is service value (B = 0,307). The
effect that service value has on customer satisfaction is also significant and relatively strong.
However, from the more detailed analysis of service value components (see Appendix 6) it is seen
that only competence out of all service value components has a significant relationship with
customer satisfaction. Basic service and complementary service were not found to have significant
effect on customer satisfaction. Finally, the core product value (B = 0,264) was also found to be
positively related to customer satisfaction, although having relatively weak effect on customer
satisfaction compared to other customer perceived value dimensions. It could be explained by the
components of the core product value quality (B = 0,151) and price (B = 0,103) having a significant
but relatively weak positive relationship with customer satisfaction.

38
 The Table 7 presents the relationship model between independent variables and customer
loyalty.
The R2 value (R2 = 0,616) is relatively high indicating that independent variables - core
product value, service value and relationship value explain 61,6% of the dependent variable
loyalty.

Table 7. Linear Regression. The relationship between independent variables and customer loyalty

Significance
Dependent variable Independent variables B coefficient
(p-value)

Loyalty Core product value 0,355 0,000**

2
R = 0,616
2 Service value 0,082 0,336
Adjusted R = 0,609
Sig. (p-value) = 0,000** Relationship value 0,426 0,000**

* - Indicates significance at 0.05 level

** - Indicates significance at 0.01 level

The Table 7 also indicates the relationship and significance level of each independent
variable and customer loyalty. Not all of the independent variables were found to have a positive
and significant relationship with customer loyalty. Service value was not found to significantly
affect customer loyalty (p-value = 0,336). It could be explained by analysing the components of
service value (see Appendix 7). Competence (p-value = 0,190) and complementary service (p-value
= 0,649) were not found to have significant relationship with customer loyalty. The results indicate
only the basic service having significant but relatively weak relationship with customer loyalty (B =
0,188).
Nevertheless, as it could be expected from the high correlation found, relationship value (B
= 0,426) has the strongest positive relationship with customer loyalty. It means that loyalty is
expected to increase by 0,426 when the relationship value increases by one, holding all the other
independent variables constant. The perceived core product value (B = 0,355) was also found to
have significant and strong relationship with customer loyalty. If the perceived core product value
increased by 1 unit customer loyalty would increase by 0,355. An interesting observation to be
made here is on the core product value components (see Appendix 7). Only quality (B = 0,402) was
found to strongly affect customer loyalty whereas price does not have the significant effect on
customer loyalty (p-value = 0,347).
To sum up, the regression model for customer satisfaction and loyalty is presented in the
Figure 7.

39
Figure 7. The linear regression relationship model

Indicates significant relationship (p < 0,05)

Indicates insignificant relationship (p > 0,05)

Due to the high correlation found between customer satisfaction and loyalty, the linear
regression analysis has been run to test the relationship between variables (see Appendix 8). The
analysis has shown R2 value (R2 = 0,492) to be relatively high indicating that customer satisfaction
explains customer loyalty by 49,2%. The variables were found to be positively related with
satisfaction having a strong effect on loyalty (B = 0,637). This relationship is going to be further
discussed at the Discussion part.

40
5. DISCUSSION

This chapter of the Thesis is based on the more detailed discussion of the results provided in
the Empirical Research Report. Firstly, the findings are compared to the hypotheses raised and
reviewed in the context of existing literature that was provided in the Literature Review part.
Secondly, the research limitations and implications for further research are discussed. Finally, the
Discussion part provides practical implications based on the study findings.

5.1. Discussion of findings

The results of conducted research provide information about the relationships between
customer perceived value dimensions and customer satisfaction and loyalty. The importance of the
research is immense. It contributes to the current state of knowledge on customer perceived value
dimensions and customer satisfaction and loyalty relationship in B2B market. Moreover, the
findings have practical value as they might be useful for companies in distinguishing which
customer perceived value dimensions are effective and have a strong relation to customer
satisfaction and loyalty and which should be rejected.
Overall, the study results confirmed the positive relationships between most of customer
perceived value dimensions and customer satisfaction and loyalty.
Perceived core product value, service value and relationship value were found to be in a
positive relationship with customer satisfaction.
Perceived core product value and relationship value were identified to be positively related
with customer loyalty.
Perceived service value was not found to be in a positive relationship customer loyalty.
Customer satisfaction and loyalty were found to be highly correlating.
The findings are going to be discussed in more details with reference to the hypotheses
raised.
Firstly, the core product value relation with customer satisfaction is going to be discussed in
the context of initial expectations and existing literature. The research data confirmed the
hypothesis on positive relationship between the perceived core product value and customer
satisfaction. Despite the moderate correlation between variables, the linear regression analysis has
found the perceived core product value to significantly affect customer satisfaction. The findings of
this study go in line with the existing research results on the perceived core product value and
customer satisfaction relationship. The data analysis has found the core product value and its
dimensions - quality and price - to be positively related to customer satisfaction. The results are
consistent with the findings of other authors (Bei & Chiao, 2001; Zeithaml & Bittner, 1996;
Anderson et al., 1994) who indicate the perceived product quality and perceived price fairness to be
positively related to customer satisfaction. Authors explain this relationship by high customers
concern regarding the price and quality of the product and claim that core product quality is equally
important to customers as the service quality provided (Bei & Chiao, 2001; Zeithaml et al., 1996).
41
Nevertheless, the findings of this study cannot support this statement since the core product value in
comparison to other customer perceived value dimensions seems to have the weakest effect on
customer satisfaction. The more detailed linear regression analysis of core product value
constituents explains why the perceived core product value and customer satisfaction relationship is
rather weak. Both quality and price were found to have significant but relatively weak relationship
with customer satisfaction. It could be concluded that the core product value comprising of product
quality and price do affect customer satisfaction in B2B bakery and confectionery market in
Lithuania but not as strongly as other the perceived service value and relationship value do.
The study results have also confirmed the positive and rather strong perceived core product
value relationship with customer loyalty. The correlation strength between the variables was found
to be moderate indicating significant but not strong relationship. Nevertheless, the linear regression
analysis has shown that the perceived core product value positively and quite strongly affects
customer loyalty. Therefore, the perceived core product value is an important predictor of customer
loyalty. However, the more detailed analysis of the perceived core product value components has
disclosed interesting theoretical and practical findings. The core product quality was found to be in
a significantly strong relationship with customer loyalty which is consistent with Bei and Chiao
(2001) findings that the perceived core product quality has effect on customer loyalty. However,
this study did not find a significant relation between the product price and loyalty. It contradicts the
finding of Bei and Chiao (2001) who argue that price fairness also affects customer loyalty. Since
the significant lack of research exists regarding the core product value relationship with customer
loyalty, it is an important implication for further studies to explore the relation between the price of
the core product and customer loyalty. It could be assumed that loyal customers become less price-
sensitive. The conclusion to be made here is that the perceived core product value, namely quality,
affects customer loyalty in B2B bakery and confectionery market in Lithuania.
To conclude, the perceived core product value was found to be positively related with both
customer satisfaction and loyalty. It can be considered as an effective way to increase customer
satisfaction and loyalty in B2B bakery and confectionery market. An interesting observation to be
made is that the perceived core product value was indicated to have stronger effect on customer
loyalty than on customer satisfaction. Further investigation is needed to explore this relationship in
B2B context.
The research findings have only partially confirmed the third hypothesis suggesting the
existence of positive relationship between the perceived service value and customer satisfaction.
The variables were found to be highly correlating and the regression analysis has indicated the
significant service value effect on customer satisfaction showing that the perceived service value is
an important predictor of customer satisfaction. However, the perceived service value components
and their relation to customer satisfaction have revealed interesting results, therefore, the more
detailed overview of this variable is essential. The service value in this study comprises of basic
service, competence and complementary service. From all the components only competence was
found to significantly affect customer satisfaction.

42
 Firstly, the basic service was not found be significantly positively related to customer
satisfaction in this research. The correlation was found to be low and the regression analysis did not
indicate the significant positive relation between variables. This finding contradicts to the findings
of many other authors stating that basic customer service directly and profoundly affects customer
satisfaction (Pride & Ferrell, 2010; Oliva et al., 1992; Pitt et al., 1995). Further research is needed to
explain the absence of this relationship. One of the reasons might be the specifics of B2B bakery
and confectionery market in Lithuania that this study investigated. The basic service in this industry
consists of delivery, ordering, invoicing and specification issuing procedures. The other reason for
not significant basic service and customer satisfaction relationship might be customers
expectations to be provided all the named basic service procedures by a supplier as a natural part of
the purchasing-selling process. Since the basic service is taken for granted, its presence only brings
customers up to neutral but does not affect customer satisfaction (Khalifa, 2004).
Competence, the second perceived service value component, was found to be significantly
positively related to customer satisfaction. In case of this research, competence is the intangible
assets such as skills, knowledge or expertise which organization uses as a way to create customer
value (Kotler & Keller, 2012; Coyne et al., 1997). The finding of this study is consistent with the
other authors findings that companys competence or expertise experienced by customers lead to
higher customer satisfaction (Selnes, 1998; Gallon et al., 1995; Liu & Leach, 2001). Competence of
the supplier in B2B bakery and confectionery market industry is conveyed by sharing technological
expertise, skills and knowledge regarding products, providing technical support, practical seminars
and consulting customers on technological issues. The customer survey conducted in B2B bakery
and confectionery market (Minordija, 2011) has indicated competence as one of the most important
criteria when judging on supplier. Therefore, considering the industry specifics, the positive
competence effect on customer satisfaction found in this study is not surprising.
However, the third service value component complementary service was not found to be in a
significant relation with customer satisfaction. The correlation between variables was found to be
moderate, nevertheless, the regression analysis has shown the relationship to be insignificant.
Complementary service is a customer service offering customers additional products that broadly
complement the core product they are buying (Polonsky et al. 2000). In case of this research
conducted in B2B bakery and confectionery market, complementary service consists of service
articles and decorations offered for customers next to the food ingredients. The absence of
complementary service and customer satisfaction relationship in this study contradicts the findings
of other authors who claim that complementary service is positively related and increases customer
satisfaction (Ravald & Gronroos, 1996; Riel et al., 2004; Payne & Holt, 2001; Evans & Berman,
2001; Matzler & Sauerwein, 2002). The reason for the discrepancy in findings could be the industry
specifics. The complementary service in B2B bakery and confectionery market, i.e. service articles
and decorations offered by a supplier, is relatively narrow and specific product group which could
have caused these particular results. Another reason might be that respondents of this study do not
find the complementary service as convenient and valuable as it was thought by authors (Kotler &
Keller, 2012; Elrod et al., 2002; Riel et al., 2004). However, further research is needed to elaborate
on complementary service and customer satisfaction relation, particularly in B2B context.
43
 To sum up, the positive perceived service value and customer satisfaction relationship can
only be partially supported since only competence has been found to affect customer satisfaction
whereas basic and complementary service have not.
An interesting outcome of the study is the rejection of the fourth hypothesis which has been
suggesting the existence of positive relationship between the perceived service value and customer
loyalty. The discussion of possible reasons for this finding requires the analysis of each of the
components comprising service value in relation to customer loyalty. The first component, basic
service, was found to be significantly positively related to customer loyalty although the results
indicated low correlation between variables. As it was mentioned in the Literature review part, there
is a significant research gap regarding relation between basic customer service and customer
loyalty. The finding of this study only partially supports the existing literature on this relationship.
The very few authors who have investigated this relation measured only the indirect relation via
satisfaction between variables. For instance, Bitner (1995) has found basic customer service
effecting customer satisfaction and in turn effecting customer loyalty. The indirect relationship via
satisfaction suggested in existing literature could not be supported by this study because customer
satisfaction was not found to be significantly affected by basic service. However, considering the
literature gap, this study has examined the direct relationship between variables and confirmed the
positive relationship between basic service and customer loyalty. It could be assumed that the
proper basic service procedures (on-time delivery, ease of ordering, proper invoicing and
specification issuing) are very important for producers of fast moving consumer goods in such
markets as B2B bakery and confectionery market. Therefore, the presence and stability of these
provided procedures might be the factors affecting customers loyalty and willingness to continue
cooperation with a supplier.
Nevertheless, the regression analysis has not found the other two components of the
perceived service value - competence and complementary service - to positively relate to customer
loyalty. The correlation analysis indicates only moderate correlation between these components and
customer loyalty. Moreover, the regression analysis has not found them to significantly affect
customer loyalty. This is assumed to be the reason for the whole construct of service value to not
significantly affect customer loyalty. The research results contradict to the scarce existing findings
on competence and customer loyalty relation which indicate competence having an effect in
building customer loyalty (Prahalad & Hamel, 1990). The study by Liu and Leach (2001) in B2B
context has shown the indirect competence relationship with customer loyalty. According to them,
suppliers competence leads to customer satisfaction and consequently to loyalty (Liu & Leach,
2001). However, this study contradicts this finding as well because only customer satisfaction was
found to be affected by competence but not customer loyalty. It could be assumed that suppliers
competence, sharing skills and knowledge, providing technical support is appreciated by customers
and affect their satisfaction in B2B bakery and confectionery market in Lithuania, but not to the
extent to affect their loyalty. The positive relation has neither been found between complementary
service and customer loyalty in this study. Such results contradict to the existing findings of other
authors who claim complementary service to affect customer loyalty (Ravald & Gronroos, 1996;
Riel et al., 2004). However, they have explored the indirect relationship and indicate customer
44
satisfaction as an intermediary variable between the complementary service and customer loyalty.
They believe that additional or complementary services increase customer satisfaction and lead to
higher customer loyalty (Ravald & Gronroos, 1996; Riel et al., 2004). This study has explored the
direct relationship between variables and found that complementary service does not affect
customer loyalty. The indirect relationship could neither be confirmed since the complementary
service has not been found to affect customer satisfaction in this research. The reasons for the
absence of this relationship could be the B2B bakery and confectionery industry specifics.
Complementary service has a different form and different effect in each industry. It could be
assumed that in some industries such as B2B bakery and confectionery market complementary
service is not that appreciated by customers. The other reason might be the wrong form of
complementary service provided by supplier. Further studies in B2B context are needed to
investigate and compare the complementary service effect on customer satisfaction and loyalty in
different B2B industries.
To conclude, the perceived service value has not been found to affect customer loyalty due
to the insignificant service value components effect on customer loyalty with an exception of basic
service which was found to be positively related to customer loyalty.
Further in this study the relationship between the perceived relationship value and customer
satisfaction has been researched. The hypothesis suggesting the positive relationship between
variables has been confirmed. The correlation analysis found the variables to be strongly
correlating. Moreover, the regression analysis has found this relationship to be the strongest
compared to the relations that other perceived value determinants have with customer satisfaction.
Therefore, the findings of this research support the notion that relationship value highly correlates
and has a positive relatively strong effect on customer satisfaction. It goes in line with most of the
authors opinion that CRM which represents relationship value in this study positively affects and
increases customer satisfaction (Mithas, et al., 2005; Verma & Chaudhuri, 2009; Kundisch, 2001;
Hadzagas, 2011; Ata & Toker, 2012). However, the study contradicts to the Verma and Chaudhuri
(2009) finding that CRM does not always bring the desired customer satisfaction level. This
discrepancy in findings could occur due to the different research context as this study was
conducted in B2B context whereas Verma and Chaudhuri (2009) finding has been done in B2C
context. The CRM and therefore the relationship value in this study involves understanding
customers business model and requirements, providing customized offers, responding to customers
requests and offering exclusive benefits. It can be concluded that the perceived relationship value
delivered to customers via the named practices affects customer satisfaction in B2B bakery and
confectionery market.
The last hypothesis of this study proposing the existence of positive relationship between the
perceived relationship value and customer loyalty has also been supported by the results of the
conducted research. The correlation and effect that the perceived relationship value has on customer
loyalty was found to be direct and relatively strong. The existing literature regarding the relation
between the perceived relationship value and customer loyalty is quite controversial. The positive
relationship between variables found in this study contradicts the finding of Hadzagas (2011) who

45
states that CRM system does not influence customers loyalty significantly. However, the finding of
this study is consistent with the widely acknowledged opinion among authors that CRM increases
customer loyalty either directly or indirectly (Bentley, 1999; Dekimpe et al., 1997; Lee-Kelley et
al., 2003; Zineldin, 2006).
An important observation to be made here is that from all the customer perceived value
dimensions measured in this study the perceived relationship value was found to have the strongest
effect on customer satisfaction and loyalty. These findings broadly complement the theory by Vargo
and Lusch (2004) suggesting that business market is moving away from the goods-centred model
based on operand resources towards the service-centred model based on operant resources. The
authors have noticed tangible, static goods or operand resources becoming not as important as the
intangible or operant resources that are used by a company to create customer value. According to
Vargo and Lusch (2004), the dynamic exchange relationships where supplier and customer co-
create value by sharing their knowledge, skills and performing processes together in order to
produce effect become central in marketing. The findings of this study support the movement from
operand to operant resources by indicating relationship and service value (operant resources)
having a stronger effect on customer satisfaction than the core product value (operand resource) and
relationship value (operant resource) having stronger effect on customer loyalty compared to the
core product value (operand resource).
One of the important findings that was not initially expected or hypothesized in this study is
the relationship between customer satisfaction and loyalty. The correlation between variables was
found to be high indicating their strong relationship. The relationship between customer satisfaction
and loyalty has been widely researched by authors. However, the direction of this relationship still
remains controversial, especially in B2B segment. Many authors agree that this relation is
asymmetric (Oliver, 1999; Rauyruen & Miller, 2007). The most widely accepted opinion is that
customer satisfaction is an antecedent or determinant of customer loyalty (Dick & Basu, 1994;
Oliver, 1999; Heskett et al., 1994; Christopher et al., 2008). Nevertheless, although loyal customers
are likely to be satisfied, satisfaction does not universally lead to loyalty. The study by Lam et al.
(2004) examined the reciprocal relationship between customer loyalty and customer satisfaction
Even thought the study did not find support for the reciprocal relationship, Lam et al. (2004) claim
that it is worth further investigation. With reference to the current state of knowledge, the
relationship between variables has been tested by regression analysis in this study. The findings
have confirmed the positive and strong effect of customer satisfaction on customer loyalty which is
an important theoretical finding for further researches of this relationship.
To sum up the findings from B2B bakery and confectionery market in Lithuania, not all
customer perceived value dimensions were found to be positively related to customer satisfaction
and loyalty. The perceived core product was found to be positively related with both customer
satisfaction and loyalty. The findings on perceived service value have provided unexpected results.
Its relationship with customer satisfaction was only partially confirmed whereas relationship with
customer loyalty was rejected. However, the perceived relationship value has been found to be
significantly related to customer satisfaction and loyalty. Moreover, the perceived relationship value

46
seems to have the largest effect on customer satisfaction and loyalty in this study compared to the
effect that perceived core product and service value have. Finally, the positive relationship has been
found between customer satisfaction and customer loyalty.

5.2. Research limitations and implications for further research

The first limitation of this study is related with the generalization of the obtained results.
The study has been researched the customers in bakery and confectionery market in Lithuania. It is
a specific market with specific ways of creating customer value. Therefore, the results of the study
are only representative for B2B bakery and confectionery market in Lithuania. This imposes
limitation on the generalisation of the study results to B2B segment in Lithuania in general. For this
reason, it is recommended for further studies on customer perceived value to be conducted in a
greater variety of industries. Moreover, such research could be conducted in several countries which
would allow generalizing the results for bakery and confectionery market internationally.
Furthermore, the conducted research was anonymous and required respondents to indicate
only the years of cooperation with a supplier. However, more data on companies could have been
investigated and their impact on the relationship between customer perceived value and customer
satisfaction and loyalty measured. The further studies could be recommended to research such
important factors as the specialization (bakery or confectionery), size (small, medium, large,
industrial or supermarket chain) and age of a company.
Finally, this study has not investigated the key account management which could be
considered as one of the relationship value dimensions. The key accounts is the segment of the most
important customers who are treated differently from all the other segments of customers by a
supplier due to the applied key account management system. Usually, the key account segment
comprises of few most important customers, therefore, a qualitative research on this small customer
segment would be required. Further researches could be advised to include the key account
management to their research model as one of the customer perceived relationship value
dimensions.

5.3. Practical implications

Based on the findings discussed above several recommendations could be made for
customer-oriented companies in B2B markets. It is essential for suppliers to know their customer
preferences, ways to create value that are perceived as valuable by customers and increase customer
satisfaction and loyalty. Therefore, the study results provide managers with a guide of the effective
practices that should be implemented or enhanced and ineffective practices that should be improved
or rejected. The findings of this study can help companies to improve and reallocate their current
resources and practices of customer value creation.
The core product value was found to significantly affect customer satisfaction and loyalty.
The core product value in this study consists of the quality and price of product. Therefore, the
companies in B2B market could be suggested to assure the core product quality and its consistency
over time. Moreover, companies should be advised to revise the prices so that they are perceived as
47
reasonable by customers. It could be an effective way to increase the customers perception of the
core product value and, consequentially, to increase customer satisfaction and loyalty.
The service value relationship with customer satisfaction and loyalty is rather doubtful.
Anyway, basic service was found to affect customer loyalty whereas competence was found to
positively affect customer satisfaction. It could be assumed that basic service procedures such as
delivery, ordering, invoice and specification issuing are important for loyal customers and therefore
should be continued to be handled properly. Competence is also perceived as valuable and effect
customer satisfaction therefore the company could be suggested to improve or expand this practice
by sharing skills and knowledge, providing technological support and consulting customers,
organising more practical seminars. It is an effective way to improve customer satisfaction and
should be revised by each company. However, the complementary service was neither found to
effect customer satisfaction, nor loyalty. Anyway, the complementary service should not be rejected
immediately by a company as it was found by many authors to be an effective practice to increase
customer satisfaction and loyalty. Companies should rather revise and find the ways to improve this
service so that it brings the desired effect.
Finally, the relationship value which was measured by CRM in this study was found to have
the strongest effect on both customer satisfaction and loyalty. Such companys practices as
understanding customers business model and requirements, providing customized offers,
responding to customers requests and offering exclusive benefits strongly affect customer
satisfaction and loyalty in B2B bakery and confectionery market and therefore should be employed
by suppliers. Moreover, the marketing shift from goods-dominant to service-dominant makes
customer relationship management the fundamental concept of marketing (Vargo & Lusch, 2004).
Therefore, CRM should be recommended for companies to be implemented, used or improved as an
effective practice to achieve higher customer satisfaction and loyalty. Companies should develop
and work on the relationship with customers trying to achieve continuous dialogue via all the access
points available that would allow gathering information on customer and gaining customer insight.
Understanding the profile, competitive field, specific needs and requirements of a customer is a key
to successful customer-centric marketing which allows offering customized propositions and
continuous improvement of customer value delivery. Moreover, the companies should cultivate
relationship by involving customers to value creation process and developing competitively
compelling personalized value propositions.

48
CONCLUSIONS

The aim of this Thesis was to assess the impact of customer perceived value dimensions on
customer satisfaction and loyalty in B2B bakery and confectionery market in Lithuania. After the
synthesis of existing theoretical knowledge and the findings of conducted empirical research, the
following conclusions are proposed:
1. Evaluation of current theoretical knowledge about customer perceived value and its relation
to customer satisfaction and loyalty has revealed positive results. The concept of customer
perceived value and its dimensions have been widely researched after the recent marketing shift
from a goods-dominant view, based on operand resources, to a service-dominant view, based on
operant resources. Authors have offered very different customer perceived value dimensions that
differ greatly depending on industry. The existing findings of authors most usually confirm the
positive perceived customer value dimensions relationship with customer satisfaction and loyalty,
however, some relationships in B2B segment still remain rather doubtful due to industry specifics.
Moreover, most of the studies have measured the indirect relationship between customer perceived
value dimensions and customer loyalty, therefore, there is a lack of research measuring the direct
relationship. The existing literature gap has encouraged conducting the research to explore the
customer perceived value dimensions created by operand and operant resources and their
relationship with customer satisfaction and loyalty in B2B context.
2. The empirical research which has surveyed 204 companies in B2B bakery and confectionery
market in Lithuania measured the relationship between the dimensions of customer perceived value
and customer satisfaction and loyalty. However, not all hypotheses suggesting the positive
relationship between variables have been supported by this study.
The findings have indicated the perceived core product value to be positively related to
customer satisfaction and loyalty. The core product value constituents product quality and price
were also found to be positively related to customer satisfaction and loyalty except the price which
was not found to be related to customer loyalty.
The initially expected positive perceived service value relationship with customer satisfaction
was only partially supported by this research whereas the perceived service value relationship with
customer loyalty has been rejected. The analysis of the perceived service value dimensions has
revealed the explanation for such findings. From all the service value dimensions only competence
was found to significantly affect customer satisfaction whereas the basic service and
complementary service were not found to be related to customer satisfaction. Regarding the
relationship with loyalty, only basic service was found to be positively related to customer loyalty
while competence and complementary service were not.
The perceived relationship value which was measured by customer relationship management
in this researched has been found to be positively related to customer satisfaction and loyalty.
Moreover, the perceived relationship value was found to have the strongest relationship with

49
customer satisfaction and loyalty in this study compared to the perceived core product and service
value.
The results of this research have revealed the strong relationship existing between customer
satisfaction and customer loyalty.
3. The discussion part has revealed that the most of the findings on customer perceived value
dimensions relationship with customer satisfaction and loyalty have confirmed the accepted opinion
by authors. Firstly, as it was suggested by other authors, the perceived core product value and
relationship value were found to be positively and significantly related with customer satisfaction
and loyalty. Compared to other customer perceived value dimensions, the relationship value was
found to have the strongest relation with customer satisfaction and loyalty which also supports the
existing theories by other authors. However, the study contradicts to the existing findings in
literature regarding the perceived service value. Its relationship with customer satisfaction was only
partially confirmed whereas relationship with customer loyalty was rejected in this study.
Therefore, the perceived service value and its relationship with customer satisfaction and loyalty
still remain doubtful and need further investigation. Finally, the study findings support the widely
accepted opinion in literature that customer satisfaction and customer loyalty are strongly related.
4. Although the study was conducted B2B bakery and confectionery market in Lithuania, the
research findings have a significant value not only for this particular industry. The study contributes
to the current state of knowledge on customer value dimensions that are perceived as valuable by
customers and their effect on customer satisfaction and loyalty in B2B segment. Moreover, the
findings of this research broadly support the theory by Vargo and Lusch (2004) suggesting the
marketing shift from goods-dominant towards service-dominant. According to authors, operant or
intangible resources based on dynamic exchange relationship with customers become more
important in customer value creation than operand or tangible resources reflected by the physical
product. This study findings support the theory by Vargo and Lusch (2004) since the relationship
value was found to have a stronger effect on customer satisfaction and loyalty than the core product
value has.

50
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 LIST OF APPENDIXES

Appendix 1. Empirical research questionnaire

Dear customer of Minordija,

I am a second year student in the Master of Science program at the ISM university of Management and Economics. My Master Thesis reasearch
seeks to explore the customer perceived value relation to customer satisfaction and loyalty in bakery and confectionery market in Lithuania. I
would kindly invite you to participate in this study and be most grateful if you could answer the questions below. Your answers will contribute
significantly in understanding customer needs and enhancing customer value and benefits delivered by suppliers. The questionnaire is completely
anonymous.
My company is the customer of Minordija:
Less than 1 year
From 1 to 3 years
From 3 to 5 years
From 5 to 10 years

Please evaluate the statements below evaluating Minordija as the food ingredient supplier in the scale ranging from 1 Strongly disagree to 7
Strongly agree.
Strongly Strongly
disagree agree
1 2 3 4 5 6 7

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The product quality offered by Minordija is good

The product quality of Minordija is consistent over time

The product packaging quality Minordija is good

The product prices of Minordija are reasonable

The customer service (placing orders, receiving invoices and product specifications) in Minordija is
easy and convenient

Minordija always delivers products on time

Minordija shares its technological expertise, skills and knowledge regarding products

Minordija provides technical support and consulting on practical applicability issues of their products

Minordija provides technological (and practical) seminars that are valuable for my company

Minordija offers new ideas of final products that are valuable for my company

It is convenient for my company buying service articles and/or decorations from the same supplier

It is valuable for my company that Minordija offers not only food ingredients but the full-package (new
ideas, recipes, food ingredients, tools and equipment) needed to realize the product

Minordija has a great understanding of the business model, requirements and needs of my company

Minordija offers products and ideas customized according to my company needs (personalised offers)

Minordija promptly responds to my company requests and requirements

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My company gets exclusive benefits and proposals (e.g. promotions, discounts) from cooperation with
Minordija

In general, my company is very satisfied with the services offered by Minordija

Overall, the service of Minordija comes up to my companys expectations

Overall, Minordija is a good company to do business with

My company intends to continue doing business with Minordija

My company considers Minordija as the first choice for purchasing food ingredients

I would recommend Minordija to a friend or colleague

Overall, I have positive feelings about Minordija

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Appendix 2. Shapiro Wilk test of normality

Shapiro-Wilk test
Variables Significance
Statistic df
(p-value)
Core product value 0,924 170 0,000
Service value 0,819 170 0,000
Relationship value 0,882 170 0,000
Satisfaction 0,866 170 0,000
Loyalty 0,829 170 0,000

Appendix 3. Detailed descriptive statistics

Std.
Variables Valid N Min Max Mean
Deviation
Quality (Q) 204,00 4,33 7,00 6,2941 0,67934
Core product value
Price (P) 198,00 1,00 7,00 4,7576 1,10459
Basic service (BS) 200,00 4,00 7,00 6,5900 0,60100
Service value Competence (C) 198,00 2,50 7,00 6,1515 1,08539
Compl. Service (CS) 195,00 1,00 7,00 5,8744 1,23558
Relationship value CRM 195,00 3,50 7,00 6,0192 0,92360
Satisfaction (S) 195,00 4,00 7,00 6,0564 0,89590
Loyalty (L) 201,00 4,00 7,00 6,1953 0,85080

Appendix 4. Collinearity statistics

Independent variables Tolerance VIF

Core product value 0,679 1,437

Service value 0,328 3,047

Relationship value 0,696 1,437

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Appendix 5. Spearman correlation coefficients between variables

Variables Q P BS C CS CRM S L Y
Q 1
P 0,352** 1
BS 0,145* 0,114 1
C 0,445** 0,437** 0,365** 1
CS 0,469** 0,481** 0,407** 0,679** 1
CRM 0,501** 0,430** 0,411** 0,712** 0,707** 1
S 0,418** 0,532** 0,381** 0,575** 0,664* 0,807* 1
L 0,607** 0,366** 0,392** 0,623** 0,697** 0,745** 0,735** 1
Y -0,066 0,046 0,040 -0,038 0,041 -0,056 -0,029 -0,076 1

* - Correlation is significant at the 0.05 level

** - Correlation is significant at the 0.01 level

Appendix 6. Linear Regression. The relationship between dimensions of independent

variables and customer satisfaction

Significance
Dependent variable Independent variables B coefficient
(p-value)

Quality 0,151 0,028*

Core product value
Price 0,103 0,018*
Satisfaction
2
R = 0,645 Basic service -0,108 0,245
2
Adjusted R = 0,632 Service value Competence 0,229 0,002**
Sig. (p-value) = 0,000**
Complementary service 0,021 0,739
Relationship value CRM 0,463 0,000**

* - Indicates significance at 0.05 level

** - Indicates significance at 0.01 level

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 Appendix 7. Linear Regression. The relationship between dimensions of independent
variables and customer loyalty

Significance
Dependent variable Independent variables B coefficient
(p-value)

Core product value Quality 0,402 0,000**

Price -0,036 0,347

Loyalty
2
R = 0,663 Basic service 0,188 0,018**
2 Service value
Adjusted R = 0,651 Competence 0,084 0,190
Sig. (p-value) = 0,000**
Complementary service -0,025 0,649

Relationship value CRM 0,426 0,000**

** - Indicates significance at 0.01 level

Appendix 8. Linear Regression. The relationship between customer satisfaction and customer
loyalty

Dependent Independent Significance

R Adj. R B coefficient
variable variable (p-value)

Loyalty Satisfaction 0,492 0,489 0,637 0,000**

** - Indicates significance at 0.01 level

62