Service Marketing

Sustaining loyal customers are always an issues in marketing field (XXXX). In banking industry, maintaining customer loyalty is very important since the competition among banking companies show a tight competition. Gremler and Brown (1996:171) define customer loyalty as the degree to which a customer exhibits repeat purchasing behavior from a service provider, possesses a positive attitudinal disposition toward the provider, and considers using only this provider when the need for this service exists. Based on that definition, the importance of customer loyalty is customer will give great benefits to the institution such as, minimize the cost to get new customers, more efficient operation cost of institution, institution may deduct the psychological and social cost, and loyal customers will defend the institution even attract and recommends the institution to other people.
Service quality plays important role in maintaining loyal customer, by affecting customer satisfaction and creates customer loyalty. Pollack (2009) explains that service quality has a positive effect on customer satisfaction, and further influences loyalty positively. It means that a business organization offering high quality service will increase customer loyalty through customer satisfaction.
According to Lovelock and Wirtz (2007:15), quality service will have an effect on customer satisfaction. Customer satisfaction over the company can be achieved by providing excellent service quality. Highly satisfied or even delighted customers are more likely to become loyal customers of a firm; those customers will make repeat purchasing on one supplier, and spreads positive word of mouth. Dissatisfaction, in the contrary, causes customer away; it is the key factor of switching behavior. Satisfied customers buy again and tell others about their good experiences. Dissatisfied customers often switch to competitors and disparage the product to others.

Service quality also influences corporate image. Alfin et al. (2013) in research journal find the significant effect of service quality on corporate image. It means that the lower quality of the service results in lower image of the company. In addition, according to previous research by Huei and Easvaralingam (2011), it demonstrates that corporate image is a full mediator in the relationship between service quality and loyalty.
Based on the research background, this study aims to investigate the effect of service quality, corporate image and customer satisfaction on customer loyaty. Furthermore, this study also would like to examine the indirect effect of service quality on customer loyalty through corporate image and customer satisfaction. Upon satisfying these two research objectives, this study contributes to both theoretical and academic perspectives. For theoretical perspective, this study would examine the relationships among important marketing variables namely service quality, corporate image, customer satisfaction and customer loyalty especially in Indonesia banking industry. In addition, this study would explore the mediating role of corporate image and customer satisfaction in the relationship between service quality and customer loyalty. In practical perspective, this study would be a guideline for banking companies in sustaining their customers.

Literature Review
Service Marketing

A Service is any act or performance that one can offer to another that is essentially intangible and does not result in the ownership of anything (Kotler and Keller, 2009:789). Further, according to Zeithaml, Bitner and Gremler (2009:4) service includes 'all economic activities whose output is not a physical product or construction, is generally consumed at the time it is produced and provides added value in forms (such as convenient, amusement, timelines, comfort, or health) that are essentially tangible concerns of its first purchaser.
Service marketing is a sub field of marketing, which can be split into two main areas of goods marketing (which includes the marketing of fast moving consumer goods (FMCG) and durables) and service marketing. Service marketing typically refers to both businesses to consumer (B2C) and business to business (B2B) services.
Service marketing refers to the marketing of services as against tangible products. As already discussed, services are inherently intangible, consumed simultaneously at the time of their production, and cannot be stored, saved or resold once they have been used; in addition, service offerings are unique and cannot be exactly repeated even by the same service provider. Good services firms use marketing to position themselves strongly in chosen target market. However, because services differ from tangible products, they often require additional marketing approaches (Kotler & Armstrong, 2009:253).

Service Quality
Quality is one of the things that consumers look for in an offer, which service happens to be one (Solomon, 2009:413). Quality can also be defined as the totality of features and characteristics of a product or services that bear on its ability to satisfy stated or implied needs (Kotler and Keller, 2012:153). It is evident that quality is also related to the value of an offer, which could generate satisfaction or dissatisfaction on the part of the user.
Service quality in the management and marketing literature is the extent to which customers' perceptions of service meet and/or exceed their expectations as defined by Zeithaml et al. (1990), cited in Bowen & David, 2005:340). Thus, service quality can intend to be the way in which customers are served in an organization which could be good or poor. Parasuraman defines service quality as 'the differences between customer expectations and perceptions of service' (Parasuraman, 1988). They argued that measuring service quality as the difference between perceived and expected service was a valid way and could make management to identify gaps to what they offer as services.
The aim of providing quality services is to satisfy customers. Measuring service quality is a better way to dictate whether the services are good or bad and whether the customers will be or are satisfied with it. The service quality scale is designed to measure the gap between customers' expectations of service and their perception of the actual delivered service. According to Parasuraman et al., (1988), there are five dimensions of service quality. They are tangibility, reliability, responsiveness, assurance and empathy.

Corporate Image
Corporate image is the perception that different audiences have of an organization and results from the audience's interpretation of the hint presented by an organization (Kotler and Keller, 2006:299). Corporate image in service marketing literature was early identified as an important factor in the overall evaluation of the service and the company. Kotler and Armstrong (1990:495) mention that there are five criteria to measure image assessment in service industry customers i.e high integrity, innovative, friendly, knowledgeable, large
As an important construct in marketing field, Gronroos (2001) contends that corporate image has several importance. First of all, corporate image telling hope with external marketing campaign, positive image makes the company easier to communicate and achieve its purpose effectively while negative image is giving bad perception. Second, it is as a sifter that influences the perception on company's activities. Positive image becomes the protectors over small mistakes, technical quality or functional errors while negative image enlarges the mistakes. Third, corporate images as function of customer experience and hope on company service quality, and the last, it has an important in influencing on management or internal effect. Unclear and unreal corporate image affect employees attitude toward company.
Customer Satisfaction
Satisfaction is a person's feelings of pleasure or disappointment resulting from comparing a product's perceived performance (or outcome) in relation to his or her expectations (Kotler and Keller, 2009:164). If the performance falls short of expectations, the customer is dissatisfied. If the performance matches the expectations, the customer is satisfied. If the performance exceeds the expectations, the customer is highly satisfied and delighted.
According to Schiffman and Kanuk (2007:9), customer satisfaction is individual perception on the performances of a product or service in relation to his or her expectation. Ferrel (2008:371) defines customer satisfaction as the degree to which a product meets or exceeds the customer's expectations about the product.
Consumer satisfaction has always been considered as an important business goal because if a consumer is satisfied with a product, service, or brand, then he would be more likely to repurchase it and tell others of their favorable experience with it. According to the Expectancy Disconfirmation Theory, satisfaction has traditionally been considered as the result of a cognitive process (Oliver, 1980:460). This theory is based on the assumption that consumer assesses product satisfaction by comparing their post purchase perception result with their expectation in such way that a result superior to the expectations (positive disconfirmation) will lead to satisfaction while the opposite effect (negative disconfirmation) will result in dissatisfaction. Based on this theory, therefore, consumer perception about the product or service after it is consumed is important in creating consumer satisfaction.
Nowadays, customers always aim to get maximum satisfaction from the products or services they buy. Fully satisfied consumer are less likely to switch to competitors. Satisfied consumers are also more likely to spread positive words about the firm and its product (Ferrell and Hartline, 2008:363).
More companies now recognize the importance of satisfying and retaining customer. Satisfied consumer constitutes the company's customer relationship capital. If the company were to be sold, the acquiring company would have to pay not only for the plant and the equipment and the brand name, but also for the delivered customer base, the number and value of the customers who would do business with the new firm (Kotler and Keller, 2006:161). Moreover, it is a fact that acquiring new customers can cost five times greater than the cost involved in satisfying and retaining existing customers. Normally, an average company loses about 10 percent of its customer each year and just a 5 percent reduction of the consumer defection rate can increase the companies' profits by 25 percent to 85 percent, depending on the industry.
Mentzer et al., (1995: 45-46) state that maximizing customer satisfaction will maximize profitability and market share. It means that customer satisfaction has an important role to increase the customer loyalty and maximize the profit.

Customer Loyalty
Loyalty is a consumer's commitment to continue patronizing a specific firm over an extended period of time(Lovelock and Wirtz, 2011:621).Moreover, Oliver (1997:392) defines customer loyalty as a deeply held commitment to rebury or repatronize a preferred product or service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior.
According to Kotler, Hayes, and Bloom in Mardalis (2005:111), there are six reasons why an institution needs to get customer loyalty. First, loyal customers will give great benefits to the institution. Second, the cost to get new customers is more expensive than to keep and maintain existing customers. Third, the customers who already believe in the institution in an affair will believe also in other things. Fourth, operation cost of institution is
more efficient if it has many loyal customers. Fifth, institution may deduct the psychological and social cost, because an old customer has had many positive experiences with institution. Sixth, loyal customers will defend the institution even attract and recommends the institution to other people.
Customers perceive that they receive several benefits for being a loyal customer. These benefits can include a feeling of optimal satisfaction, a knowledge of what to expect from the service provider, confidence in the provider, friendship with employees, time savings from not having to search for a provider, and various types of special treatment (Glamer and Brown, 1996:176).
Customers are the driving force for profitable growth; and, customer loyalty can lead to profitability (Hayes, 2008:22). Loyal customers are less likely to switch to other competitor and they even make more purchases than non-loyal customers. Therefore, loyal customers are considered to be the most important assets of a company.

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