week 9 Flashcards
define customer satisfaction
– 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
BENEFITS OF CUSTOMER SATISFACTION
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
satisfaction drivers
price core service quality customer service brand = cumulative satisfaction see whole diagram
link between value, satisfaction and renention
service quality leads to higher customer perceived value, leads greater loyalty and customer satisfaction
components of perceived value
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
Alternative view of customer satisfaction: satisfiers and dissatisfies:
- 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
explain Attribution Theory:
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
explain the disconfirmation of expectations model
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)
define expectations
Expectations – Provide a standard of comparison – this may be purely subjective, or based on collective previous experiences
define desired expectations
Desired (or ideal) expectations – Concern the optimum level of performance from a brand, i.e. what could happen in the best circumstances
define equitable or deserved expectations
– Develops from the client’s feelings about what they should receive
define predictive expectatoins
Usually combine an ideal standard with the reality of past experiences to form a realistic and acceptable level of expectation
define Adequate (minimum tolerable) expectations
Relate to the lowest level of service that would be tolerated
Formation of expectations
o Past experience
o WOM
o Advertising and other promotion
o General attitude towards the brand
explain the zone of indifference
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
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.
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.
Factors affecting ‘zone of indifference’
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
explain service quality and productivity
Quality and productivity improvement strategies must be considered jointly rather than in isolation
o Quality focuses on benefits
o Productivity focuses on costs
why improving productivity is important to marketers
- Helps to keep costs down which leads to high profits or the ability to hold down prices e.g. price leader
- Firms with lower costs generate higher margins – retain greater proportion of profits
- Opportunity to secure the firms long-terms future with investments in technology and research (R+D)
- Improving productivity and quality will benefit consumer
measuring productivity
- 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
improving service productivity
- 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
customer driving approaches to improving productivity
- 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
defining quality
- The transcendent view: synonymous with innate excellence, a mark of uncompromising standards and high achievement
- The product-based approach: sees quality as a precise and measurable variable.
Totally objective view - User-based definitions: quality is in the eye of the beholder; these definitions equate quality with maximum satisfaction
Measuring service quality: SERVQUAL
- Diagnostic tool used to determine ‘gap scores’
- SERVQUAL is a 42-item instrument that measures customer expectations and perceptions regarding five service quality dimensions
some components of SERVQUAL
Tangibles (appearance of physical elements)
- Reliability (dependable, accurate performance)
- Responsiveness (promptness and helpfulness)
- Assurance (competence, courtesy, credibility and security)
- Empathy (easy access, good communications and customer understanding)
look at table
explain the gaps model of service quality
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
explain service gaurntees
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
benefits of service gaurntees
• 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
Explain the ‘zone of indifference’. Under what conditions is the zone likely to be widest?
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)
- if customer perceptions of performance lie within this zone any minor variation will be assimilated away
- 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
- Zone can expand or contract depending on circumstance e.g. business verses holiday flight
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.
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