Perceived price and service quality as mediators between price fairness and perceived value in business banking relationships

Abstract

Purpose-To test perceived price and service quality as mediators between price fairness and perceived value in service encounters between micro-enterprises and their banks. Design/methodology/approach-The study is based on a self-administered and internetbased questionnaire conducted in the banking industry. The sample consists of 381 microenterprises in South Africa that employ one or two staff members. Findings-Provides evidence for both theory and practice that perceived price and service quality influence the relationship between business banking customers' perception of price fairness and the value of the service offered. Research limitations/implications-The measurement and structural properties reported are satisfactory. Confirms the hypothesized relationships in the tested research model, and rejects a tested rival model. Limitations are reported, and suggestions for further research are provided. Managerial implications-Offers banking executives guidance in managing the pricing structure of their services, and highlights the value of offering greater transparency with regards to service charges and interest rates. Originality/value-Contributes to insights into the mediating effects of perceived price and service quality between price fairness and perceived value in business relationships between micro-enterprises and their banks.

Customer loyalty to Islamic banks: Evidence from Indonesia

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