Determinants of Customer Satisfaction

Although researchers have used different definitions for CS, they agree that CS is determined by a number of inter-related variables. These key variables are expectation or expected performance, perceived performance and quality, disconfirmation, perceived customer value, image and attitude. Figure 3.5 portrays how these variables are interrelated and whether they affect CS directly or indirectly. In the following paragraphs, these variables will be briefly described.

Figure 3.5: Determinants of Customer Satisfaction based on prior research

Source: Adopted from (Churchill Jr and Surprenant 1982; Anderson and Sullivan 1993)

Expectations or expected performance reflects customers’ beliefs or attitudes of what “will” happen and/or what “should” happen in their next

purchase. Expectations are formulated through prior experience with the product. They can also be formulated prior to the purchase from knowledge acquired through word of mouth, publicity, opinion leaders, and through all elements of the product’s marketing mix (Oliver 1980; Boulding, Kalra et al.

1993). Most researchers agree that expectations have an indirect influence on CS, and that this relationship can be either positive or negative. It can be positive because by increasing expectations, we also increase the perceived product performance and through that we achieve higher CS. On the other hand, it can be negative because by increasing expectations we may increase

Expectation or Expected Performance Perceived Performance & Quality Comparison Perceived Customer Value Customer Satisfaction Negative Disconfirmation Positive Disconfirmation Image Attitude

disconfirmation with a negative impact on CS (Yi 1990; Spreng and Mackoy 1996). Moreover, few researchers identified a direct influence of expectations on satisfaction levels (Oliver and DeSarbo 1988).

Perceived performance and quality is another variable that has both a direct and an indirect influence of CS. Perceived quality is defined as the consumer’s judgment about a product’s overall excellence or superiority

(Zeithaml 1988). Researchers have found a direct positive relationship between perceived performance and CS (Churchill Jr and Surprenant 1982; Cronin Jr and Taylor 1992; Selnes 1993; Sivadas and Baker-Prewitt 2000; Gomez, McLaughlin et al. 2004). In Sweden, Anderson, Fornell et al. (1994) found that both perceived quality and expectations have a positive impact on CS with quality having a greater impact. Perceived performance and quality also has an indirect effect on CS through its influence on disconfirmation (Oliver 1980; Anderson and Sullivan 1993). Perceived quality is positively affected by expectations and this is indicated in Figure 3.6 (Anderson 1973).

Disconfirmation occurs only after customers have tried the product or service and is the outcome of the comparison between expectations and perceived performance. The outcome of this comparison can be (a) confirmation of an individual’s expectations, when a product performs as expected and thus has no influence on CS or (b) negative disconfirmation of an individual’s

expectations, when product performance is below the expectations and thus has a negative influence on CS or (c) positive disconfirmation, when product performance exceeds expectations and thus has a positive influence on CS. So,

the disconfirmation variable predicts that CS will increase as perceived performance increases, and will decrease as expectations become higher (Oliver 1980; Oliver and DeSarbo 1988; Yi 1990; Anderson and Sullivan 1993; Spreng and Mackoy 1996). There is an agreement among researchers that disconfirmation has a direct influence on CS. Some claim that this is the single most important variable in the process since it produces the greatest impact on satisfaction (Oliver 1980; Churchill Jr and Surprenant 1982; Szymanski and Henard 2001). Others find disconfirmation and perceived quality to have a stronger impact on satisfaction than expectations (Oliver and DeSarbo 1988).

Regarding the relationship between perceived customer value and satisfaction there is disagreement among researchers upon the direction of this relationship. Some believe that CS is a determinant of customer value (Bolton and Drew 1991) whilst others argue that customer value determines CS (Jones and Sasser Jr 1995; Fornell, Johnson et al. 1996; Cronin Jr, Brady et al. 2000; Gomez, McLaughlin et al. 2004). Perceived customer value is defined as the difference between the prospective customer’s evaluation of all the benefits

derived from a product and all the costs of acquiring those benefits (Kotler and Keller 2006). Perceived customer value differs among consumers. Zeithaml (1988) grouped the patterns of responses provided by consumers into four “meanings” of value: value is low price; value is whatever I want in a product;

value is the quality I get for the price I pay; and value is what I get for what I give. Considering these diverse meanings of value, he defined perceived customer value as “the consumer’s overall evaluation assessment of the utility of a product

based on perceptions of what is received and what is given”. Furthermore, he indicated that perceived customer value affects perceived quality (Zeithaml, 1988). However, from the above discussion, we can infer that a product with high-perceived quality will not necessarily provide high customer value and vice versa - low perceived quality will not necessarily provide low customer value. This is because not all consumers want to buy the highest quality product in every category. It was indicated though that perceived customer value affects the relationship between perceived quality and purchase intention. However, CS mediates this relationship (Zeithaml 1988; Wahyuningsih and Tanamal 2008).

Considering all these determinants of satisfaction there are some questions that need to be answered: are there any differences among consumers? Do satisfaction ratings vary on the basis of consumer characteristics? It was found that not all consumers respond equally to increases in satisfaction and that consumers with different characteristics have different thresholds. So, for the same rated level of satisfaction their responses might be different or consumers may provide different ratings. For instance, women tend to designate higher satisfaction ratings than men, along with older people. This possibly means that different consumers are using different standards for comparison or that some consumers are easier to please than others (Peterson and Wilson 1992; Bryant and Cha 1996; Mittal and Kamakura 2001).

Other questions are related to the type of variables and the level of importance attached to each variable. So, is customer satisfaction being determined by the same variables across different product categories? Do all

variables have the same weight? Churchill and Surprenant (1982) and Yi (1990) indicated that the determinants of satisfaction are different for different product classes. Specifically, they found that satisfaction in durables and in high involvement products is determined by product performance. While in non- durables a combination of expectations, disconfirmation and performance explains variations in satisfaction. A few years later, Yi (1993) stated that the CS process is different across product categories and that product ambiguity affects the contribution of the above-mentioned variables to satisfaction. He indicated that when products are difficult to evaluate (ambiguous) consumer expectation has a higher effect on CS than perceived performance, in contrast when products are easy to evaluate (unambiguous) perceived performance has a higher effect on CS than expectation.