week 9

Question 1

define customer satisfaction

Answer 1

– A consumer’s post-purchase evaluation of the overall service experience (processes and outcomes). It is an effective (emotion) state or feeling reaction in which the consumer’s needs, desires and expectations during the coarse of the service experience have been met or exceeded

Question 2

BENEFITS OF CUSTOMER SATISFACTION

Answer 2

INSULATES customers from competitors
can create sustainable advantage
reduce failure costs 
encourage repeat patronage and loyalty
promotes positive WOM
lowerers costs of attracting new customers

Question 3

satisfaction drivers

Answer 3

price
core service quality
customer service 
brand
= cumulative satisfaction
see whole diagram

Question 4

link between value, satisfaction and renention

Answer 4

service quality leads to higher customer perceived value, leads greater loyalty and customer satisfaction

Question 5

components of perceived value

Answer 5

o Performance (quality) value: core service quality
o Social value: enhancement of customer’s social self-concept (e.g. highly regarded brand name)
o Emotional value: positive affective states that the brand generates
o Interaction value: derived from helpful, smiling staff
o Price: financial sacrifice

Question 6

Alternative view of customer satisfaction: satisfiers and dissatisfies:

Answer 6

• Satisfaction and dissatisfaction are not opposites on a bipolar continuum (different variables)
• They are two independent and separate constructs, therefore, different factors account for each
• Motivator factors lead to satisfaction, while dissatisfaction is caused by hygiene factors
• Hygiene factors must be present to avoid dissatisfaction
• (e.g., adequate parking and security at Deakin University), however, they will not lead to satisfaction unless dimensions that act as motivating factors are also present (e.g., helpful staff, real-world relevance)

Other influences on Satisfaction:
o prior attitudes towards the brand

Question 7

explain Attribution Theory:

Answer 7

Casual: Who is to blame for satisfaction or dissatisfaction

Control: Is the cause of dissatisfaction in the control of the company

Stability: Is the satisfaction or dissatisfaction likely to recur

Question 8

explain the disconfirmation of expectations model

Answer 8

comparisons process from:
1. perceived performance

2. expectations:
experience
wow
marketing
awareness of competing brands

outcomes:
negative disconfirmation = dissatisfaction

confirmation = mere satisfaction

positive disconfirmation = delight (above and beyond expectations)

Question 9

define expectations

Answer 9

Expectations – Provide a standard of comparison – this may be purely subjective, or based on collective previous experiences

Question 10

define desired expectations

Answer 10

Desired (or ideal) expectations – Concern the optimum level of performance from a brand, i.e. what could happen in the best circumstances

Question 11

define equitable or deserved expectations

Answer 11

– Develops from the client’s feelings about what they should receive

Question 12

define predictive expectatoins

Answer 12

Usually combine an ideal standard with the reality of past experiences to form a realistic and acceptable level of expectation

Question 13

define Adequate (minimum tolerable) expectations

Answer 13

Relate to the lowest level of service that would be tolerated

Question 14

Formation of expectations

Answer 14

o Past experience
o WOM
o Advertising and other promotion
o General attitude towards the brand

Question 15

explain the zone of indifference

Answer 15

o The extent to which customers are willing to accept some degree of variation is referred to as the ‘zone of indifference’ (ZOI)
o The ZOI is the difference between a consumer’s desired and just adequate (minimum) expectations
o ‘Assimilation–contrast theory’ shows that when a performance is in the ‘Zone’, differences between expectations and performance will be assimilated and viewed favorably i.e., consumers adjust their perceptions of performance to expectations or expectations to performance to avoid cognitive dissonance

*look at diagram

Question 16

Customer satisfaction theory suggests that the confirmation/disconfirmation of pre-consumption expectations is the essential determinant of satisfaction. This theory is reflected in the disconfirmation of expectations model. Demonstrate your understanding of the disconfirmation of expectations model using a service of your choice as an example.

Answer 16

Satisfaction is a consumer’s post-purchase evaluation of the overall service experience (processes and outcome). It is an affective (emotion) state or feeling reaction in which the consumer’s needs, desires and expectations during the course of the service experience have been met or exceeded

Use ONE service throughout in your answer.

The major model in satisfaction research is the disconfirmation of expectations paradigm - illustrated in Figure 12.5. Here, satisfaction is related to the variation between a customer’s pre-purchase expectations and perception of service performance. If service performance is much better than (pre-purchase) expectations then high satisfaction (delight) will occur. When the service experience is much as the customer expected then the customer is (merely) satisfied. If service performance is worse than expectations, dissatisfaction will occur. Interestingly, even if service performance is poor, customers may still be satisfied provided their pre-purchase expectations were sufficiently low.

Provide examples as to when negative disconfirmation, confirmation and positive disconfirmation will likely occur and relate each of these to the relevant satisfaction state, e.g., dissatisfaction, mere satisfaction.

Marketers need to be aware of customer expectations, how these are formed (e.g. past experience, word of mouth, promotion) and have to take steps to manage expectations. Over-promising and under-delivering results in dissatisfaction. Under-promising and over-delivering results in delight, but this is not encouraged ‘generally’.

Provide examples for each of the points above.

Question 17

Factors affecting ‘zone of indifference’

Answer 17

o The importance of the occasion
o The customer’s social and psychological needs
o Customer’s mood state
o Frequency of use
o The importance of the particular service dimension or attribute

Question 18

explain service quality and productivity

Answer 18

Quality and productivity improvement strategies must be considered jointly rather than in isolation
o Quality focuses on benefits
o Productivity focuses on costs

Question 19

why improving productivity is important to marketers

Answer 19

1. Helps to keep costs down which leads to high profits or the ability to hold down prices e.g. price leader
2. Firms with lower costs generate higher margins – retain greater proportion of profits
3. Opportunity to secure the firms long-terms future with investments in technology and research (R+D)
4. Improving productivity and quality will benefit consumer

Question 20

measuring productivity

Answer 20

• Measuring productivity for services can be problematic as output may be difficult to define:
• Number of patients treated per year (or hospital’s census) or average bed occupancy is easy. BUT how do we evaluate differences in outcomes?
• How do we define the output of a bank or consulting firm?
• Easier to measure fast food output

Question 21

improving service productivity

Answer 21

• Control costs
• Reduce waste of materials and labour
• Match productive capacity to average levels of demand rather than peak so workers and equipment aren’t underemployed for long periods
• Multi-skill
• Staff training and use of most efficient equipment and databases

Question 22

customer driving approaches to improving productivity

Answer 22

• Change the timing of customer demand, e.g., encourage consumers to use service outside of peak times
• Encourage use of lower-cost service delivery channels and self-service, e.g., ING
• Ask customers to use third parties, e.g., travel agents

Question 23

defining quality

Answer 23

1. The transcendent view: synonymous with innate excellence, a mark of uncompromising standards and high achievement
2. The product-based approach: sees quality as a precise and measurable variable.
   Totally objective view
3. User-based definitions: quality is in the eye of the beholder; these definitions equate quality with maximum satisfaction

Question 24

Measuring service quality: SERVQUAL

Answer 24

• Diagnostic tool used to determine ‘gap scores’
• SERVQUAL is a 42-item instrument that measures customer expectations and perceptions regarding five service quality dimensions

Question 25

some components of SERVQUAL

Answer 25

Tangibles (appearance of physical elements)

2. Reliability (dependable, accurate performance)
3. Responsiveness (promptness and helpfulness)
4. Assurance (competence, courtesy, credibility and security)
5. Empathy (easy access, good communications and customer understanding)

look at table

Question 26

explain the gaps model of service quality

Answer 26

Gap 1: Not knowing what customers expect. Service design and delivery does not match the expectations of customers
• Not offering wine at Euro Disney
• Pizza Hut not offering lemon pie and brownies
• US tourists wanting to be served quickly in Australian restaurants
• Courier service not offering overnight delivery

Prescription: Learn what customers expect, e.g., complaint analysis, customer panels, foster upward communication

Gap 2: Management fail to design service standards that meet customer expectations
e.g. Courier customers want delivery before 10am, not 12 noon

Prescription: Establish the right service quality standards, e.g., set clear goals, standardise, measure performance, provide training, reward service quality

Question 27

explain service gaurntees

Answer 27

Explicit promises made to customers about the level of service they can expect to receive
o Involve a promise and a payout

Unconditional Gaurntees:
Hampton-Inn
100% Satisfaction guaranteed. We guarantee high quality accommodations, friendly and efficient service, and clean, comfortable surroundings.
If you’re not completely satisfied, we don’t expect you to pay.

LL Bean:
Our products are guaranteed to give you 100% satisfaction in every way. Return anything purchased from us at any time if it proves otherwise. We will replace it, refund your purchase price or credit your credit card. We do not want you to have anything from L.L. Bean that is not completely satisfactory.

Specific attribute guarantees:
• FedEx guarantees package delivery by a certain time
• British Airways advertised ‘Comfort guaranteed or you get 25,000 miles’
• McDonalds advertised a guaranteed maximum waiting time of 60 seconds
• Express Post offers a replacement satchel as a guarantee against service failure
• The ANZ Bank promised to pay customers five dollars if they waited more than five minutes in a queue

Question 28

benefits of service gaurntees

Answer 28

• Force organisations to focus on what customers’ expect
• Set clear standards
• Require the development of systems for generating meaningful customer feedback
• Force firms to understand why they fail and to overcome fail points
Reduce perceived risk and build long-term loyal

Question 29

Explain the ‘zone of indifference’. Under what conditions is the zone likely to be widest?

Answer 29

lies somewhere between desired and adequate levels of expectations

customer circumstances (rushed or relaxed)

individual level factors (importance of occasion, social and psychological needs, customers mood state

service dimension or attributes (core services v supplementary services)

2. if customer perceptions of performance lie within this zone any minor variation will be assimilated away
3. any perceptions of performance that happen to fall outside (either positive or negative) is likely to be exaggerated (contrasted) and result in considerable dissastifaction if the negative direction
4. Zone can expand or contract depending on circumstance e.g. business verses holiday flight

Question 30

Discuss in class and online, the effectiveness of the service quality initiatives implemented in the following four hotels.
The Inn at Sussex4- point policy manual
•4 star rating•
Be proactively friendly
•Always find a way to say “yes”
•When faced with a situation, if you make a decision for the benefit of the guest, 90% of the time you will be right, and management will back you 100% of the time.

Answer 30

:)