The study examines issues related to service quality and customer loyalty in the commercial airline industry. The results of an empirical study, using data collected on two air carriers, indicate that current levels of perceived service quality are below potential and that customer loyalty to airlines is low. A significant relationship was found to exist between service quality (carrier image) and retained preference, a measure of customer loyalty.

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IntroductionThe last century has been one of major changes within most sectors of society. Technological advances, increased customer service requirements, and the globalization of the marketplace are but a few of the factors that have contributed to greatly intensified business competition. For organizations competing in today's rapidly evolving business environment, information has become a critical resource. Indeed, market intelligence has become the cornerstone of any successful marketing plan (Suidan, 1994).A company must be able to keep a close strategic fit with its environment. Current knowledge about the external environment is essential for a firm to stay competitive. This knowledge must be accumulated, structured, and organized efficiently and effectively as the base for marketing decision making. Toward this end, a marketing information system (MKIS) is an essential tool for translating raw data into useful information.A recurrent but disturbing finding in the business and systems literature is that marketing information systems have not worked as well as expected. Marketing practitioners and academic researchers alike are finding that too frequently MKISs fall far short of their promise and that usage often correlates negatively with satisfaction (Bergeron and Berube, 1988; Eisenhart, 1990; Roughton, 1992). In a recent study of consumer goods companies, Cespedes (1993) found that information systems currently in place often hinder information flows between functional units, and that there is a lack of relevant information available for decision makers concerning customers and channels, leading to difficulties in allocating resources effectively. These outcomes are unacceptable, given the widely acknowledged imperative to pursue aggressively information for competitive advantage (Keen, 1988; O'Brien, 1990; Porter and Millar, 1985). Indeed, according to Sisodia (1992):Knowledge represents the currency, as well as the scorecard, of the information age.[Only] companies with deep knowledge about their customers, competitors, and operations will be winners in this age (p. 63).

This article examines the hierarchy of effects description of consumer decision making using cross-lagged correlations, a recently developed technique for establishing causal relations among variables over time. Data are from a five-month panel of housewives reporting on two brands of a convenience food, and results tend to confirm the hierarchy of effects.

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