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The link between Service Quality and customer satisfaction

1897 words (8 pages) Essay in Marketing

5/12/16 Marketing Reference this

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Facing ever-increasing of local and international competition, ever decreasing level of customer loyalty, an overindulgence of criticisms from stakeholders and a business world which operates in an environment which is strategically, technologically and legislatively becoming almost impossible to predict, organisations have come to the realization that they simply cannot keep spending more and more money to attract customers. One of the most exciting and essential areas of management that most executives want to explore, and get the better of, is how to keep customers coming back again, again and again. However, the precious time will be here to take into deep consideration of the business term “customer satisfaction”. Customer satisfaction is used to measure how the goods and services provided by an organisation meet or exceed customers’ expectation. Nowadays, the key objective of almost all service firms is to achieve customer satisfaction (Jones and Sasser, 1995). Increase in profits, high reputation, positive word of mouth and lower marketing expenditures are attained by increasing customer satisfaction and retaining customers (Reichheld, 1996; Heskett et al., 1997). Hence, customer satisfaction can be regarded as the essence of success in this competitive world business. In this line, we cannot undervalue the importance of ‘customer satisfaction’ and ‘customer retention’ in strategy development for a market oriented and customer focused firm. As a result, customer satisfaction has more and more become a corporate goal as more companies are prepared to deliver better quality in their products and services (Bitner and Hubbert, 1994). Customer satisfaction is one of the main products of marketing activity which helps us to identify the links between various customer behaviours. If customers are satisfied with the product or service after the delivery, they are likely to repeat their purchase and try line extensions (East, 1997). Customer satisfaction is broadly accepted as the key factor having influencing the formation of customers’ future purchase intension (Taylor and Baker, 1994). In contrast, dissatisfied customers have the tendency to switch brands and advertise negatively regarding the service provider. Moreover, behaviours such as repeat purchase and word of mouth influence directly the profitability and viability of an organisation (Dabholkar et al, 1996). It was confirmed and reinforced that unsatisfactory customer service leads to a downfall in customer satisfaction and willingness of encouraging other friends to use the same service (Levesque and McDougall, 1996).

A Review of literature suggests that the problematic issue lies in our understanding of the relationship between satisfaction results and service quality perception (Taylor and Baker, 1994). However, it has been argued in a number of researches, that customer satisfaction results are contributory backgrounds of the service Quality perceptions (Bitner, 1990; Parasuraman et al, 1988). Others have stated that the causal antecedents of customer satisfaction seem to be service quality (Anderson and Sullivan, 1993; Cronin and Taylor, 1992; Taylor and Baker, 1994; Woodside et al, 1989). Previous services literature also emphasizes on the dimensions of service quality and in doing so, focused on the two of its dominant dimensions. (Levesque and McDougall, 1996; Gronroos, 1984; Levesque and McDougall, 1994; Parasuraman et al, 1991).

Service Quality and customer satisfaction.

Service Quality remains among one of the most leading position of both the marketing literature generally and the services marketing literature specifically (Jensen and Markland, 1992).Practitioners, academics and others tend to measure service quality so as to get a clearer picture of its main antecedents and consequences, thereby implementing suitable methods to gain competitive advantage and build customer loyalty (Palmer and Cole, 1995; Zahorik and Rust, 1992). It has always been found that researches conducted on customer satisfaction are closely related to the measurement of the quality of service delivered (Anderson and Sullivan, 1993; Cronin and Taylor, 1992; Bitner and Hubbert, 1994; Taylor and Baker, 1994; Rust and Oliver, 1994; Levesque and McDougall, 1996). However, customer satisfaction definition implies the feeling or attitude towards a particular good or service after delivery, while service quality is simply “the customers’ overall impression of the relative inferiority/superiority of the organisation and its services” (Bitner and Hubbert, 1994, p.77). Furthermore, some researchers argued that both customer satisfaction and service quality are “Best conceptualized as unique constructs that should not be treated as equivalents in models of consumer decision making” (Taylor and Baker, 1994, p.165). Service quality is always regarded as the basis of creating, as well as maintaining satisfying relationships with the most asset of a business which is its customers. Consequently, these two inter-related words have become a topic of significant and strategic concern (Bolton and Drew, 1991; Cronin and Taylor, 1992; Taylor and Baker, 1994). Generally, research in this area has demonstrated that service quality is an essential sign of customer satisfaction (Spreng and Mackoy, 1996).

Two of the most predominant and widely used models to measure service quality include the SERVQUAL Model (Parasuraman et al, 1988) and the Technical/Functional Framework (Gronroos, 1983, 1990). However, the primary purpose of this research will be to use the SERVQUAL Model to assess the quality of service delivery and ultimately customer satisfaction.

The Dimensions of Service Quality

Underpinning our understanding of service quality is an array of factors or determinants. A number of researchers have provided lists of quality determinants, but the best known determinants emanate from Parasuraman et al, 1985 from a focus group findings, who found ten dimensions of service quality, namely, tangibles, reliability, responsiveness, competence, courtesy, credibility, security, access communication and understanding the customer. The definitions of those dimensions are given in table 1 along with service specific evaluative questions emerging from the focus groups.

INSERT TABLE 1

However, in 1988, these ten components were broken down into five dimensions namely, tangibles, reliability, responsiveness, assurance, and empathy as defined in table 2.Tangibles, reliability and responsiveness remained the same, but the remaining seven components were broken down into two dimensions that is assurance and empathy. Moreover, referring to these five raters, a 22 item instrument was developed by Parasuraman et al so as to measure customers’ expectation and perception.

Table 2 (modify)

SERVQUAL.

Ultimately, the best known determinants emanated from Parasuraman and colleagues from the USA, who found five dimensions of service quality, namely, tangibles, reliability, responsiveness, assurance and empathy and used these as the basis for their service quality measurement instrument, SERVQUAL (Parasuraman et al., 1988; Zeithaml et al., 1990). The result was the development of the SERVQUAL instrument, based on the gap model. Parasuraman et al, 1985 stated that “Service quality is a function of pre-purchased customer expectations, perceived process quality and perceived output quality”. In addition, they stated that service quality is the “gap between customers’ expectation service and their perception after service experience”. And finally, the SERVQUAL Instrument was derived which was meant to use as a survey instrument (Parasuraman et al. 1988). The central idea in this model is that service quality is a function of the difference scores or gaps between expectations and perceptions. The original SERVQUAL Model consists of a 22 item sections which tend to measure customers’ expectations for a particular service and their perceptions towards the service which they have actually received from the service organisation (Parasuraman et al, 1988). In short, the SERVQUAL Model is based on the Gap Theory (Parasuraman et al, 1985).Additionally, Cronin and Taylor (1992) stated that “a consumer’s perception of service quality is a function of the difference between his/her expectation about the performance of the general class of service providers and his/her assessment of the actual performance of a specific firm within the class”.

An important advantage of the SERVQUAL instrument is that it has been proven valid and reliable across a large range of service contexts. The SERVQUAL Instrument has broadly been used by both managers (Parasuraman et al. 1991) and academics (Babakus and Boller, 1992; Carman, 1990; Crompton and Mackay, 1989; Cronin and Taylor, 1992; Johnson et al, 1988; Webster, 1989; Woodside et al, 1989) to assess the perceptions of customers for a wide range of services. (E.g. Banks, Credit Card Companies, repair and maintenance companies and long distance telephone companies). However, while the SERVQUAL instrument has been widely used, it has been subjected to certain criticisms as well. The argument that service quality consists of five basic dimensions (Parasuraman et al., 1988) is according to some researchers

Questionable, and they have suggested that SERVQUAL’s dimensions are contextual and not universally applicable (Ekinci & Riley, 1999; Brown et al., 1993; Cronin & Taylor, 1992; Teas, 1993; Bouman & Van der Wiele, 1992; Gagliano & Hathcote, 1994, Kang and James, 2004; Lee, 2005; Fowdar, 2007). Instead, the number and composition of the service quality dimensions are probably dependent on the service setting (Brown et al., 1993; Carman, 1990). It has been suggested that for some services the SERVQUAL instrument needs considerable adaptation (Dabholkar et al., 1996) and that items used to measure Service quality should reflect the specific service setting under investigation, and that it is necessary in this regard to modify some of the items and add or delete items as required (Carman, 1990). Moreover, research suggests that culture may play a fundamental role in determining how customers perceive what constitutes service quality. In a nutshell, there are still issues and varying opinions about the dimensionality of service quality and the universality of the five dimensions, (Rust and Oliver, 1994). These are of interest to and significant for users of SERVQUAL and for all those who wish to understand better the concept of service quality. Hence there is still a need for fundamental research into the dimensionality of service quality bearing in mind the contextual circumstances, the specific industry and the specific service setting. However due to its limitations, researchers have recently started to implement other measures, taking into consideration the SERVQUAL Dimensions, so as to improve the explanatory power of the Model.

The Gap Analysis

Parasuraman, Zeithaml and Berry (1985) have developed a model of service quality, which claims that the customer evaluates the quality of service experience as the outcome of the difference (gap) between expected and perceived quality. This is provided in the diagram below.

Consumer perceptions are the difference between what consumers expect from the service and what they actually perceive of it. The need for managers to access customers’ expectations and their perceptions of the quality provided should be emphasized here. Such as assessment should be constant or, at least, periodic. It should encompass the totality of the service offering, i.e. including every moment of truth, and it should be done for each of the strategic quality dimensions.

Gap 1 is the distance between what customers expect and what managers think they expect.

Gap 2 is between management perception and the actual specification of the customer experience – Managers need to make sure the organization is defining the level of service they believe is needed.

Gap 3 is from the experience specification to the delivery of the experience – Managers need to audit the customer experience that their organization currently delivers in order to make sure it lives up to the expectation.

Gap 4 is the gap between the delivery of the customer experience and what is communicated to customers – All too often organizations exaggerate what will be provided to customers, or discuss the best case rather than the likely case, raising customer expectations and harming customer perceptions.

Finally, Gap 5 is the gap between a customer’s perception of the experience and the customer’s expectation of the service – Customers’ expectations have been shaped by word of mouth, their personal needs and their own past experiences. Routine transactional surveys after delivering the customer experience are important for an organization to measure customer perceptions of service.

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