Services Marketing Essay

2671 words - 11 pages

Services have special characteristic and service quality can vary. Therefore, satisfaction is harder to achieve and service recovery and customer’s retention is key service management tasks.

ervices have special characteristic and service quality can vary. Therefore, satisfaction is harder to achieve and service recovery and customer’s retention is key service management tasks.
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Abstract:
Customer expectations play a crucial role in shaping satisfaction evaluation. The expectations are formed through past experiences, brand image, word of mouth, ...view middle of the document...

It is hard to achieve this time and time again. Customer satisfaction is the evaluation of the overall experience the customer has had from start to finish of the transaction; it could actually go beyond the finish of the transaction. Customer satisfaction can be broadly classified into dissatisfaction, satisfaction and extreme satisfaction or delight. We all recognise dissatisfied customers will switch suppliers and are prone to spreading negative word of mouth. Merely satisfied customers are more prone to being lured away by competition with better offerings. An extremely satisfied customer is more likely to remain loyal despite attractive offerings from competition, spreading positive word of mouth.
Customer satisfaction is intricately linked to market share, it goes without saying to achieve higher market share you will need more extremely satisfied customers. Customer satisfaction plays a pivotal role in the financial performance of the firm. Firstly, satisfied customers spread positive word of mouth, which has two positive outcomes, reduces advertising costs and brings in new customers. Second, long term satisfied customers are more forgiving to occasional slip-ups. Research has found that there is a positive correlation between customer satisfaction and financial performance of the company as well as share value of the company.
The relationship between service qualities, customer perceived value, satisfaction and loyalty are not a simple one. Customer perceived value is the main driver for customer satisfaction and also has a great impact on customer loyalty. There are several components for customer perceived value, which are:
Performance value: core service quality
Social value: high value brand e.g., Nike, Sony etc
Emotional Value: feelings and affective states the service generates
Interaction value: emotions generated through the actual transaction process
Price: financial sacrifice
The relationship between satisfaction and loyalty is not linear one as might me expected, this can be seen from the work of Oliva and colleagues. When satisfaction is met we have increase in loyal customers, but they are at risk f defecting if the come across better offer. When satisfaction is exceeded we actually have increase in loyal customers who are evangelist.
The dominant model in satisfaction research is the disconfirmation of expectation paradigm. Disconfirmation is the difference between what the customer expects and what the customer actually experiences. When the expectation is met the customer is merely satisfied, when its not met dissatisfaction occurs while when it’s exceeded it results in delight. It must be noted that this model also implies that the customer might be satisfied even if the service was poor because there wasn’t much expectation in the first place. Some public sector services can be a good example for this phenomenon.
Customer satisfaction is as pointed out earlier, post purchase evaluation of the overall service...

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