Chia-Ming Liu

The purpose of this paper is to characterize the relationship between quality differentiation, income distribution and product line design. According to the findings, the author can explain the trend of quality differentiation and the phenomenon of extreme product diversity in different conditions of income distribution. When the middle class of consumers reach a certain critical few number, the quality for them will descend. Only the high-end and low-end quality left for this extreme condition; that is, the product quality spectrum will shrink. The product quality for middle and low class will gradually get worse and worse, even lower than original quality. The product line design will be reconsidered to the opposite extremes.

Since the government opened to the establishment of new private banks in 1990s, the competition in banking industry has become fierce in Taiwan. Especially, the establishment of financial holding companies after 2000s has resulted in the merge among financial institutions. The competition in banking industry becomes even fiercer. The price war of interest rate among banks gradually shortens the deposit and lending rate difference in banking industry that banks could no longer survive with the traditional business of deposit and lending rate differences. Banks have to attract customers with different service quality, satisfy customer needs, and create new profits for banking industry. Generally speaking, service quality is related to customer satisfaction after receiving service, and satisfaction becomes the internal assessment indicator of financial industry for customers. A lot of excellent foreign businesses or national financial institutions present brilliant competitiveness in the field of finance by the specialty and service quality. Taking Land Bank of Taiwan as the research subject, this study aims to discuss the effect of service quality on customer loyalty and corporate performance in financial industry.
It is discovered in this study that an enterprise enhancing the service quality through the mediation effect of customer loyalty could effectively promote the corporate performance. For this reason, the relationship between customer loyalty and service quality, corporate performance are established in this study, and the results of the analysis could be the reference for banking industry in Taiwan.