Relationship Marketing in Tertiary Education: Empirical Study of Relationship Commitment and Student Loyalty in Hong Kong

Abstract

This study attempts to investigate the applicability of relationship marketing concepts in the private tertiary education industry. With the rapid growth of tertiary education and new academic structure in Hong Kong, it is interesting to investigate the relationship between relationship commitment and student loyalty, and the key determinants of relationship commitment, in a leading private tertiary education institution in Hong Kong. Questionnaires were designed to collect data, and structural equation modeling approach was adopted to evaluate the explanatory power and casual links of the model. The results indicate that relationship commitment is a driver of student loyalty. Relationship benefits and trust are found to have positive influence on relationship commitment. Relationship termination costs and shared values are found to have non-significant roles in determining relationship commitment in private tertiary education environment, while shared value has a significant positive impact on trust. The research provides new insights to the management of private tertiary education providers in building relationship with students and resources allocation. The study discusses the implications of the findings and suggests areas for future research.

The Effect of University Partners' Satisfaction and Trust in Relationship Commitment

“…Second, shared value is important in interpersonal and organizational relations of partnership collaboration (Abosag & Lee, 2013;Ahmady, 2012;Morgan & Hunt, 1994). A partner who benefits from a special relationship will maintain the partnership (Ahmady, 2012;Dagger & O'Brien, 2010;Morgan & Hunt, 1994;Wong, Wong, & Leung, 2018). Third, trust one's willingness to rely on others by believing that without supervision, the appointed person can act accordingly to meet the respective party's interest (Morgan & Hunt, 1994).…”

“…Shared value is created by redefining productivity in the value chain that focuses on improving internal operations that increase costs, access to inputs, quality, and productivity achieved through environmental improvements, better utilization of resources, investment in employees, supplier capabilities, and other fields (Porter et al, 2012). Shared value has a significant and positive direct effect on trust (Hessling et al, 2018;Korathad & Boonpattarakan, 2017;Wang, 2009;Wong et al, 2018) Hypothesis 3: Shared value has a significant and positive effect on trust. Phelps and Campbell (2011) found that the most influential factors in trust and relationship commitment were relationship benefits, shared value, and communication.…”

“…Trust and commitment are the main factors in building relationships (Morgan & Hunt, 1998). Relationship benefit is a determinant that significantly influences relationship commitment (Ahmady, 2012;Wong et al, 2018). Joint communication variables, relationship benefits, transfer costs, and relationship skills are related to relationship commitment (Chen et al, 2003).…”

“…The result shows that shared value has a positive and significant effect on trust, with a beta coefficient score of 0.346 and t-statistics of 3.39. Furthermore, it indicates that shared value improvement in IPB collaboration service shall increase partners' trust level in IPB (Hessling et al, 2018;Korathad & Boonpattarakan, 2017;Phelps & Campbell, 2011;Wang, 2009;Wong et al, 2018).…”

“…The result shows that relationship benefit positively and significantly affects relationship commitment with a beta coefficient score of 0.318 and t-statistics of 5.13. Furthermore, it indicates that improving relationship benefits with IPB shall increase partners' commitment level to IPB University (Ahmady, 2012;Chen et al, 2003;Dagger & O'Brien, 2010;Wong et al, 2018).…”