Sung, Yoon Tea
Hutchinson, Susan R.
College of Natural and Health Sciences; School of Sport and Exercise Science, Sport Administration
University of Northern Colorado
Type of Resources
Place of Publication
University of Northern Colorado
Ouyang, Lei. An Empirical Study of the Determinants of Consumer Price Sensitivity forthe Health and Fitness Club Industry. Published Doctor of Philosophydissertation, University of Northern Colorado, 2020. The primary purpose of this study was to propose and test a general model todescribe the extent to which customer price sensitivity is influenced by perceived value, service quality, customer satisfaction, customer loyalty, and switching costs. Additionally, the study also sought to examine if there is a significant difference in consumer price sensitivity among gender and household income groups. Finally, the study was designed to examine the congruency of the hypothesized model and to test the invariance of the model across male and female groups. There were 507 participants in the study. A convenient sampling approach was used to recruit members from five health and fitness clubs in Colorado and West Virginia. The participants’ age ranged from18 to 79 years (M = 36, SD = 13.9). The sample consisted of slightly more males (54.2% males compared to 45.5% females). The majority of the participants were Caucasian (64.5%) and had a membership length less than one year (71.1%). The significant research findings obtained from the data analysis included the following: 1. The results of structural equation modeling (SEM) analysis revealed that thehypothesized model provided a reasonably well fit to the health and fitness club member sample. 2. The results of the SEM analysis also demonstrated that ten of the 13 hypotheses were supported. Switching cost (β = -.91, p < .01), customer satisfaction (β = -.85, p < .01), perceived value (γ = -.58, p < .01), and service quality (γ = -.42, p < .01) were significant predictors of consumer price sensitivity. However, customer loyalty had a non-significant impact on price sensitivity. The SEM results also indicated that switching cost (β=.21, p<.01) and customer satisfaction (β=.63, p<.01) had a significant positive impact on customer loyalty. Service quality and perceived value positively influence switching costs (γ=.31, p<.01; γ=.49, p<.01) and customer satisfaction (γ=.51, p<.01; γ=.49, p<.01). 3. The results of the two-group SEM analysis revealed that the baseline model showed a good fit for both female and male participants. The results of invariance tests of the price sensitivity model indicated that it had configural and scalar invariance, but not metric invariance (partial invariance) across male and female groups. 4. The results of ANOVA analysis showed that the interaction effect between gender and household income groups did not reach statistical significance. The main effect for both gender and household income were statistically significant. Male members reported significantly lower price sensitivity levels compared to female counterparts. Low-household income members reported a significant higher price sensitivity level than middle-household income and high- household income members. Middle- household income members also reported a significant higher price sensitivity level than high- household income members. In summary, this study not only contributed to future theoretical research, but also guides practitioners in the development of marketing strategies. Through empirical study, the research results can help fitness and health club managers to better understand factors that associate with customer price sensitivity, which would allow them to develop more efficient marketing strategies. The theoretical contribution of this paper was the proposition of an integrated theoretical framework, and the use of survey data to validate effects of service quality, customer loyalty, switching costs, consumer participation, and customer satisfaction on consumers’ price sensitivity.
Copyright is held by the author.