Free Essay

The Influence of Service Recovery Strategies on Word of Mouth

In:

Submitted By maria67
Words 7405
Pages 30
IJCSI International Journal of Computer Science Issues, Vol. 9, Issue 3, No 2, May 2012 ISSN (Online): 1694-0814 www.IJCSI.org

99

The Influence of Service Recovery Strategies on Word Of Mouth: Views of Mobile Phone Users
Samsudin Wahab and Nor Sabrina Norizan Center of Applied Management Studies Faculty of Business Management, Universiti Teknologi MARA 42300 Puncak Alam, Selangor

Abstract
This study explores the relationship between perceived customer dimensions of justice and word of mouth among the selected university students in mobile phone usage. The respondent used for this study was 500 business students of Malaysian university students located in Kelang Valley. Out of 327 questionnaires distributed, there were 181 complainants. Dimensions of justice act as an independent variable consisted of procedural, interactional and distributional justice. In order to determine the relationship between dimensions of justice and customer satisfaction the researcher used multiple regressions. The result showed that distributional justice and interactional justice as a significant unique contribution to the prediction of customer word of mouth. Further research should be carried out to identify the other factors of service recovery strategies that will help in increasing the customer satisfaction towards the organization. As this research was conducted in the telecommunication sector, it would be appropriate if further research can investigate if customers from the other sectors can display similar behavior. It is because different sectors will come out with different outcomes, thus it can help the organization to know the differences between the sectors and then take appropriate actions. Keywords: Service Recovery Strategy, Word of Mouth, Mobile Phone Users

1. Introduction Throughout the last decade, service failure and recovery issues have been the focus of many researches. Even though many service failure recovery researches have been conducted, still there are many gaps found (Nibkin, Ismail, Marimuthu and Abu-Jarad, 2011) for example, most of the research found is only focusing on the company reputation in the aspect of service failure and service recovery without considering the effect of the company’s reputation on customer’s outcomes (Hess and Story, 2005). In

addition, according to Bhandari, Tsarenko and Polonsky (2007) there are only one or two outcomes in evaluating service encounters and recovery activities, and it was found that the outcomes do not measure the overall customer responses. This means that more researches need to be undertaken to examine how organizational and employee recovery actions cause impacts on a cross set of customer outcomes that vary. By changing one of the service recovery aspects, compensations may decrease and the customer intends to switch sides, for instance, however it will not help to reduce the negative word of mouth made by the customer. Here, organizations that focus on one outcome and single recovery activity will overlook the other important outcomes, or in other words, a recovery strategy that is considered to be successful using one outcome measure may be less successful or fail completely in terms of another outcome measure. Lapidus and Pinkerton (1995) have investigated the relationships between the equity theory and the behavioral intentions, but they are only focusing on one theory, which is the distributional theory and it was suggested that the current research should include the other two theories that are the procedural and the interactional theory (Ruyter & Wetzel, 2000). In addition, Nibkin et al., (2011) had conducted a research in the airline sector. They stated that it is good if future researchers can enlarge their research to the others sectors or countries

Copyright (c) 2012 International Journal of Computer Science Issues. All Rights Reserved.

IJCSI International Journal of Computer Science Issues, Vol. 9, Issue 3, No 2, May 2012 ISSN (Online): 1694-0814 www.IJCSI.org

100

because it would be better to investigate customers from the other services as consumer reactions to service failure and service recovery might differ because of the level of involvement, in a particular service. Finally, the researcher found that there are a few researches being conducted involving both the service recovery strategies and the customer satisfaction outcomes in the Malaysian telecommunications sector and it is clearly stated that there are gaps in the previous researches that need to be fulfilled and to be investigated. Based on the problems stated above, in order to assist the organizations to find the answers and solutions in solving those problems, this study was meant to achieve the following objective is to investigate the influence of service recovery strategies on customer’s wordof mouth.
2. Literature Review
Major headings are to be column centered in a bold font without underline. They need be numbered. "2. Headings and Footnotes" at the top of this paragraph is a major heading.

facing some difficulties but when the organization use service recovery it will help them to prevent customers from making complaints before or after the problem has occurred. In a service failure perspective, service recovery can be considered as a second service encounter where the customers recognize a problem in relation to the service or service provider and hence if their expectations are not met, then another set of expectations – service recovery expectations – becomes active (Lewis & Spyrakopoulos, 2001). Therefore, one way in achieving customer loyalty in the organization is by having a good service recovery strategy (Andreassen, 2001; Tax & Brown, 2000) whereby it helps the organization to maintain its customers for a long time (Stauss & Friege, 1999). Successful recovery strategies are essential for customer retention resulting from a service failure (Strauss, 2002) and many researchers have clearly proven that by providing effective service recovery strategies it will help to enhance the dissatisfaction related with service failure and also to save the cost related to replace dissatisfied customers (Maxham, 2001; Bitner, Booms & Tetreault, 1990). However, most of the companies do not pay enough attention to manage customer complaints efficiently (Homburg & Fürst, 2005; Stauss & Schoeler, 2004). Furthermore, researches conducted by Lewis and McCann (2004), Naylor (2003), Andreassen (1999) and Tax and Brown (1998) show that the majority of customer complaints are those dissatisfied with the way the company handles their complaints. It seems that the matters of effective complaint handling are not sufficiently addressed by businesses. In the progressively service oriented world economy, companies might be shocked by this apparent disregard of customer complaints, especially when the seriousness of customer dissatisfaction in the short term and long terms are considered: negative word-of-mouth (Blodgett, Wakefield & Barnes, 1995; Sen and Lerman, 2007) and switching to competitors firms (Homburg & Fürst, 2005), companies will suffer from high costs of acquiring new customers (Hart, Heskett & Sasser, 1990) if the customers do not have loyal feelings towards the company (Colgate & Norris, 2001). It is suggested that when the organization deals with customer complaints, they should use a positive approach in order for them to maintain customer relationships and generate positive communication about the company (Boshoff & Allen, 2000; Stauss, 2002). Therefore, one of the service recovery benefits is the prevention of customer defection to other providers as it will lead to customer retention because to gain new customers is more costly than keeping existing ones (Power, 1992) and the customers will become more profitable if she or he keeps staying with the

2.1 Service Recovery
Service failure occurs when the organization cannot meet the customers’ expectations (Bell & Zemke, 1987) and when a service failure happens, the organizations need to use appropriate service recovery strategies in order to keep the customer with them and at the same time, to reduce the customer defection and negative word of mouth towards the organization. Therefore, it is important for the organization to have service recovery strategies which involve those actions that are designed to resolve the customer problem and to remove negative attitudes of dissatisfied consumers and at the same time to build a long term relationship between the customer and organization (Miller, Craighead & Karwan, 2000). Zemke and Bell (1990) defined service recovery as “a thought out, planned process for returning aggrieved customers to a state of satisfaction with the firm after a service or product has failed to live up to expectations.” Michel (2001) has differentiated between complain management and service recovery whereby he found the majority of dissatisfied customers are unwilling to complain even when they are

Copyright (c) 2012 International Journal of Computer Science Issues. All Rights Reserved.

IJCSI International Journal of Computer Science Issues, Vol. 9, Issue 3, No 2, May 2012 ISSN (Online): 1694-0814 www.IJCSI.org

101

company (Reicheld & Sasser, 1990). Hence, Tax et al. (1998) have proposed a three dimensional concept of justice which are distributive justice, procedural justice and interactional justice.

2.1.1

Distributive Justice

Organizations need to develop effective service recovery strategies that can recognize the inconvenience that the service failure has created to its customer, hence conforming to notions of procedural justice and “outcome fairness” which is sometimes called as distributive justice (Tax et al. 1998; McColl-Kennedy & Sparks, 2003; Mattila & Patterson, 2004). Distributive justice can be referred to as customer perception of fairness in the complaint outcomes - notions of equity, equality and need consistency and it involves the perception of equality and fairness when the resources are exchanged among parties (Homburg & Furst, 2005). Different from Blodgett, Hill and Tax (1997); Homburg and Furst (2005) said that distributive justice refers to the customer’s perception of the equity towards the company resources allocation and the tangible outcomes of the service encounter which the company will offer to the customers in order to overcome the service failure. It was found that there were specific outcomes produced by distributive justice which the organizations and service providers did to recover what mistakes they have made to the customers (Greenberg, 1990 & Gilliand, 1993) and this outcomes included compensations which consist of discounts, coupons, refunds, free gifts and apologies (Mattila & Cranage, 2005). In order to know whether the customer receives the appropriate compensation, it can also be determined by looking at how the customers are being treated and how much loss that they have faced (Tax et al., 1998). Thus, by being given the same amount of recovery, customers in a high low quality relationship with the company will perceive lower fairness compared to those individuals in a low quality relationship and it is because of their exacerbated negative disconfirmation (Olson and Dover, 1979). It was also found that customers always expected that the organizations will treat them fairly otherwise they will become angry and skeptical towards the organization (Berry, 1995). According to the group-value Model of Justice Lind and Tyler (1988), if people value their relationships with organizations they will have lost more if the organizations’ actions are perceived to be unfair (Brockner, Tyler & Cooper-Schneider, 1992). Besides, if the organizations did not identify properly the cost in time and effort that the customer spends to seek compensation for inequity, it will lead to customer dissatisfaction (McCollough, Berry & Yadav, 2000; Smith, Bolton & Wagner, 1999). Each customer may expect that they will

receive different levels of compensation depending on how the service failure affects them for example an annoyed customer would expect a fair fix to the problem, while a customer who feels that he is a victim may expect some value-added atonement (Bell & Ridge, 1992). It is supported by Sparks and McColl-Kennedy (2001) whereby the researchers have proven that respondents were satisfied when a 50 percent refund was given to compensate for the service failure. Among to the three dimensions justice, Holloway et al., (2009) in the online shopping at a multichannel retailer website said that distributive justice is the most important dimension of the customers’ evaluation of a service recovery, largely due to the lack of human interactions in the online realm. Additionally, Chebat and Slusarczyk (2005) observed that distributive justice significantly influences customer loyalty through the mediator of such emotions and Kau and Loh (2006) in their research the in mobile phone industry confirmed that distributive justice is significantly related to customer satisfaction outcomes. Finally, Blodgett et al. (1997) found that in a retail setting, distributive justice had a significant influence on customer re-patronage and negative word-of-mouth.

2.1.2

Procedural Justice

Procedural justice is the customer’s perception regarding the equity of the policies and procedures used by an organization in the recovery process that led to the desired outcome (Blodgett et al., 1997; Maxham & Netemeyer, 2002b). According to Tax et al., 1998 procedural justice consists of timeliness and process control as the perceived fairness of customer complain handling process and different from Cropanzano and Greenberg (1997) which said that procedural justice refers to the fairness of the processes by which outcomes are determined. It is found that procedural justice will influence customer satisfaction and trust with an organization’s products or services (Teo & Lim, 2001; Sindhav, Holland, Rodie, Adidam & Pol, 2006; Guiltinan, 2006) and in the retail context, procedural justice (timeliness) did not have significant influence on customers’ re-patronage intentions and negative word of mouth (Blodgett et al., 1997) Leventhal and associates (Leventhal, 1976; Leventhal, 1980; Leventhal, Karuza & Fry, 1980) have identified several procedural justice rules, whereby they propose that, the greater that each of these rules are fulfilled, thus the fairer the procedure will be seen to be. For instance, ethical procedures generally are viewed more favorable than those that are not (Folger & Cropanzano, 1998) where there is a growing body of literature suggesting that participant fairness judgments are linked with their evaluations of both telecommunication procedures (Chen, Rose & Huang, 2007) and surveillance procedures in other contexts (Ambrose & Alder, 2000).

Copyright (c) 2012 International Journal of Computer Science Issues. All Rights Reserved.

IJCSI International Journal of Computer Science Issues, Vol. 9, Issue 3, No 2, May 2012 ISSN (Online): 1694-0814 www.IJCSI.org

102

A different context on procedural justice suggests that people use procedural justice beliefs as a surrogate for determining whether they can trust the organization and accept its authority because procedural fairness beliefs act as a heuristic or mental shortcut for more complex trust judgment which the process called the procedural fairness heuristic (Lind, 2001). Therefore, in considering the customer’s needs, it is advisable that the service providers and front liner officers provide a timely response in managing the service failure situation (Bhandari, Tsarenko & Polonsky, 2007). It is said that procedural justice can help in determining the process of handling customer complaints (Blodgett et al., 1997), decision making, accessibility, timing or speed, process control and flexibility to be included in the service recovery (Tax et al. 1998). Most of the procedural justice aims to solve the conflict that appears between the company and the customer and even the outcomes will be unsuccessful (Tax et al., 1998; Bitner, Booms & Tetreault, 1990; Fisk & Coney, 1982). From customer complaint perspective, if a customer finds it difficult to engage in a process, prolonged time involvement or cost, a complaint can be classified as falling into procedural justice dimension. Previous research shows that most of the procedure-related complaints result in the company's timely responses and tend not to be related to monetary compensation such as refund (Smith, Bolton & Wagner, 1999). Another part of procedural justice is by providing a timely feedback about decisions, which is applicable to any service recovery situation. The delivery of timely feedback has been discussed in the management literature (Tyler & Bies, 1990; Sapienza & Lorsgaard, 1996) whose procedures allow individuals to feel that their interest is being protected (Lind & Tyler, 1998). Due to that, it is appropriate if the front-line employees who are empowered to manage a service failure situation can serve better in order to meet the customer’s wants and needs.

context, interactional justice refer to the method of service recovery process which is being operationalized and recovery outcomes presented. Blodgett et al. (1997) confirmed that interactional justice had a significantly large impact on word of mouth intentions as satisfaction with service recovery strategy would encourage positive word of mouth communication. Same goes to Kau and Loh (2006), who have found that higher levels of interactional justice will lead to more favorable re-patronage intentions and decreased likelihood of negative word of mouth. Furthermore, it is found there, that customers who complain will become more loyal with the service provider when only a partial refund, exchange, or discount is given, provided that they are treated with courtesy and respect (Blodgett et al. , 1997). In order to achieve a sense of interactional fairness it is necessary for the organization to include apology and empathy as it associated with customer perceptions so the customer will feel fairly treated (Wirtz & Matilla, 2004). Sources of unfair interactional perceptions include unjustified blame, violation of promises, failure to admit an error, and insults. The literature is inconsistent of the relative importance of each dimension, but it can be argued that they are all important in different situations and settings, and that they interact in predicting customer's reactions (Sparks & McColl-Kennedy, 2001; Tax & Brown, 2000). If the company shows a lack of concern to their customers during service recovery effort, the customer will suffer with negative emotion (McColl-Kennedy & Sparks, 2003).

2.2.

Word of Mouth

2.1.3

Interactional Justice

Interactional justice is defined as dealing with interpersonal behavior in the enactment of procedures and the delivery of outcomes or in other words, it refers to how the recovery outcomes and process are being implemented and presented (Tex et al. 1998). Interactional justice is also related to the customer’s perception of the equity of the personal treatment that the customer receives from the company in terms of respect, honesty, education and dignity when they suffer from service failure (Maxham & Netemeyer, 2002; Smith et al., 1999). According to Tax et al. (1998), there are five elements of interactional justice which are explanations and causal accounts, honesty, politeness, effort and empathy and in a service recovery

Word of mouth can be defined as the message about an organization credibility, trustworthiness, how the company operating its business, communication between one person to another (Gronroos, 1990). In comparison to Anderson & Gerbing (1998), word of mouth is informal communication between private parties concerning evaluations of goods and services rather than formal complaints to firms. Word-of-mouth behaviour has been recognized as an important post purchase behaviour which according to Rosen (2000), customers frequently talks about products which are new, enjoyable, noticeable, personally experienced, complicated, and expensive products and services. Blodgett et al. (1997) confirmed that satisfaction with service recovery would encourage positive word of mouth communication between the customer and the organizations. Westbrook (1987) in the effects of service recovery on consumer satisfaction: a comparison between complainants and non-complainants journal, said word of mouth (WOM) can be referred to as informal

Copyright (c) 2012 International Journal of Computer Science Issues. All Rights Reserved.

IJCSI International Journal of Computer Science Issues, Vol. 9, Issue 3, No 2, May 2012 ISSN (Online): 1694-0814 www.IJCSI.org

103

communication between consumers about the characteristics of a business or a product. According to the previous research by Day (1980) about WOM, it is important for the customers’ post purchase behavior such as face to face communication, as it often provides information that is highly valuable that can help to influence others’ perceptions and beliefs about the other particular firm, and their intentions to purchase from the firm. Since word of mouth (WOM) regarding problem resolution can be either a positive or negative force in building a firm’s reputation and retaining customers, the reward for companies which resolve problems to the customer’s satisfaction appears to be very high (Hart et al., 1990). Moreover, when the customer received a fair treatment of service recovery, they will engage in positive WOM behavior, thus they will help to spread a goodwill on behalf of the service provider and it is found that positive word of mouth always happens with an effective recovery while negative word of mouth follows recovery failures (Blodgett, Granbois & Walters, 1993; Maxham, 2001).

(1970) model which had a population of 11,500, the sample size should have consisted of 373 respondents. Therefore, a total numbers of 500 questionnaires had been distributed.

3.2 Items and Measurement
The instrument for this study was a survey questionnaire. It was designed precisely by the researcher to answer research questions. The questionnaires were distributed by hand to each of the selected respondents involved in this study. The researcher had developed questionnaires that included the service recovery strategies which consist of distributive justice, procedural justice and interactional justice.
Table 3.2: Items for Questionnaires

DIMENSION Distributional Justice Procedural Justice Interactional Justice/ Explanation and Effort Empathy Politeness Word of Mouth and

ITEM

SOURCES

3. Methodology 3.1 Population and Sampling
The population for this study was the business students from three universities located in Kelang Valley which are University of Malaya, MARA University of Technology and Putra Malaysia. The use of these students should be appropriate since students are real-life consumers of the services described in the scenarios and also the behaviors and responses of students and other market segments are likely to be more similar in every service recovery incidents (Miller et al., 2000). The total populations of the students at the three universities are 11,500 students. The sampling technique applied in this study was convenience sampling. Convenience sampling refers to the collection of information from members of the population who are conveniently available to provide it (Sekaran, 2000). Convenience sampling is most often used during the exploratory phase of a research project and is perhaps the best way of getting some basic information quickly and efficiently. The criterion set by the researcher was the respondents must have purchase a mobile phone before For the sample size, the sample was divided into two groups, one group comprising of respondents who had experienced service failure and had complained to the mobile service provider while the other group consisted of respondents who did not lodge any complaint with the service provider. In order to select the sample size, the researcher decided to refer to the Krejcie and Morgan

11 7 7

5 4

Clemmer (1988), Oliver and Swan (1989) Bitner et al. (1990), Taylor, (1994), Goodwin and Ross (1992) Blodgett et al. (1997), Parasuraman et al. (1998) Bies and Shapiro (1987) Blodgett et al. (1997), Walker and Harrison (2001)

4.0Findings

4.1 Survey Return Rate
Out of 500 questionnaires distributed, it is only 350 set of questionnaires returned. Table 4.1 shows the response rate.

4.2 Reliability Analyses
In order to test whether the items grouped under a factor are internally consistent and stable, the reliability analysis is established. Consistency indicates how well the items measuring a concept hang together as a set. In general, reliabilities less than 0.6 are considered to be poor, those in the 0.7 range acceptable and those over 0.8 good (Sekaran, 2000). Different to George and Mallery (2003),

Copyright (c) 2012 International Journal of Computer Science Issues. All Rights Reserved.

IJCSI International Journal of Computer Science Issues, Vol. 9, Issue 3, No 2, May 2012 ISSN (Online): 1694-0814 www.IJCSI.org

104

in which the researchers provided the following rules of the thumb: “_ > .9 – Excellent, _ > .8 – Good, _ > .7 – Acceptable, _ > .6 – Questionable, _ > .5 – Poor and _ < .5 – Unacceptable”. Before the researcher runs the reliability analyses, the researcher had first recoded negatively worded scale items to ensure that the items were measured in the same direction. Therefore, the result of this analysis is presented in table 4.1. Thus, for this study the Cronbach’s for procedural justice, interactional justice, distributional justice, word of mouth, loyalty and trust, the range of the reliability was from .5 to .8 which is acceptable. Even though for the explanation and effort the Cronbach Alpha was .637 and word of mouth was .548 which it is considered lower limit of acceptability. But according to Fornell and Larcker (1981) even if the reliability is greater or equal to .5, it is considered lower but it is still acceptable. Table 4.1: Reliability Analyses Variables Procedural Justice Explanation and Effort Empathy and Politeness Distributional Justice Word of Mouth Number of items 11 7 5 5 4 Cronbach’s alpha .787 .637 .728 .764 .548

Table 4.2: Normality result: Skewness and Kurtosis values (n=181) Variables Procedural Justice Explanation and Effort Empathy and Politeness Distributional Justice Word of Mouth Customer Loyalty Trust Skewness .108 .133 -.006 .479 .446 .144 .406 Kurtosis -508 -0.61 -.634 -.031 .324 -.277 .342

4.4 Multiple Regressions Multiple regressions are one of the family techniques that can be used to explore the relationship between one continuous dependant variable and a number of independent variables or predictors (usually continuous). Besides, it is based on correlation, but allows a more sophisticated exploration of the interrelationship among a set of variables. The result of regression is an equation that represents the best prediction of a dependent variable from several independent variables. Thus, regression analysis is used when independent variables are correlated with one another and with the dependent variables. In this study, the researcher used multiple regression to identify the best predictor or most significant factors of service recovery strategies that influence customer satisfaction outcomes.

4.3 Normality Test The assumption of normality is a prerequisite for many inferential statistical techniques (Coakes, Steed & Ong, 2010). Normality is important in knowing the shape of distribution as the normality helps to predict dependent variables scores. To test the normality of the data, a number of statistics can be used which are KomogorovSminorv statistics, with a Lilliefors significance level and the Shapiro-Wilk statistics, skewness and kurtosis. For this study the researcher decided to use skewness and kurtosis in testing test normality. The range for skewness and kurtosis is considered acceptable if it is in range +/- 3 (Hair, Babin, Anderson, Tatham & Black, 2006). Table 4.14 shows the normality result for this study. The result shows the data was normally distributed since the value of kurtosis and skewness were in range.

Table 4.3: Coefficient Model for Customer Word of Mouth

Model

Unstandardi zed Coefficients B Std. Error .313 .086 .109

Standar dized Coeffici ents Beta

t

Sig.

(Constant) Procedural Justice Explanatio n and Effort Compute Empathy and Politeness

2.7 19 .19 8 .01 8 .04 4

.153 -.012

8.68 9 2.28 5 .165

2.719 .198 -.018

.078

.041

.571

.044

Copyright (c) 2012 International Journal of Computer Science Issues. All Rights Reserved.

IJCSI International Journal of Computer Science Issues, Vol. 9, Issue 3, No 2, May 2012 ISSN (Online): 1694-0814 www.IJCSI.org

105

Distributio nal Justice

.02 7

.090

-.021

.298

-.027

Table 4.3 shows that the results of the analyses presented above allow the researcher to answer the question one of the study. The significant result for explanation and effort was (p=-0.18 < 0.05), empathy and politeness, (p=-0.44 < 0.05) and distributional justice, (p=-0.27 < 0.05) and this shows that the significance value is less than .05. It is found that the distributional justice and interactional justice is a significant unique contribution to the prediction of the DV. Thus, this result supports the researcher’s hypothesis one and hypothesis seven. Therefore, hypothesis four was rejected as the significance value is more than 0.05 due to the overlap with the other IV in the model.

4.Discussion, Recommendation

Conclusion

and

The result of the multiple regression analysis above showed that distributional justice and interactional justice as a significant unique contribution to the prediction of customer word of mouth. It is supported by Blodgett et al. (1997) that distributional and interactional justice has a significant effect on customer word of mouth. Moreover, according to Blodgett (1993) once a dissatisfied customer pursues redress, there will be positive or word of mouth and re-patronage intention during the complain process. In addition, Blodgett et al. (1997) in his retailing study confirmed that procedural justice did not have any significant effect on customer word of mouth. For the results stated, it is found that customers will spread positive or negative word of mouth if they are satisfied or dissatisfied with the outcome they received during the recovery effort. The outcome here refers to the compensation in term of coupons, refunds, free gift, replacement and apologies. If the customer found that the outcome they received is fair, they were likely to spread a positive of mouth to the other people, but if they received a bad outcome, it will cause them to spread the word to all the people. In addition, from the result above, it can be seen that interactional justice is also important in determining the customer word of mouth, as, if the customer perceived that they are treated well by the service provider they are likely to spread a positive of mouth. Service providers need to make sure they always include the explanations and efforts, and empathy and politeness during the interaction with their customers so that the customer will feel that they are being appreciated by the organization.

As for this study, it is revealed that distributional justice significantly influenced customer word of mouth. Thus, what the customers received during the service recovery effort will determine whether they will spread a positive or negative of mouth. Due to that that, the organization needs to makes sure they provide the right outcome during the service recovery effort. The outcome here refers to the compensation in term of refunds, coupon, free gifts or replacements that the customer will receive when they are having service failure. The organization needs to make sure the compensation given can replace the customer dissatisfaction experienced during the service failure. The study also revealed that interactional justice significantly influence customer word of mouth. Thus, the organization needs to make sure their employees use the explanation and effort, empathy and politeness aspect during handling dissatisfied customers. It is because the customers will spread a positive of mouth when they feel they are treated nicely and in a good manner. It will help to lower their dissatisfaction and will continue to spread a good of mouth about the company. The organization needs to make sure that their employees have all those aspects when dealing with the customers, as, the employees are the ones that communicate with the customers during the service failure. Further research should be carried out to identify the other factors of service recovery strategies that will help in increasing the customer satisfaction towards the organization. As this research was conducted in the telecommunication sector, it would be appropriate if further research can investigate if customers from the other sectors can display similar behaviour. It is because different sectors will come out with different outcomes, thus it can help the organization to know the differences between the sectors and then take appropriate actions.

References
[1] Ambrose, M. L. & Alder, G. S. (2000). Designing, implementing, and utilizing computerized performance monitoring: enhancing organizational justice. Research in Personnel and Human Resource Management, 18, 187-220. [2] Anderson, J. C. & Gerbing, D. W. (1988). Structural equation modeling in practice: a review and recommended two-step approach. Psychological Bulletin,103 (3), 41123. [3] Andreassen, T. W. (2001). From disgust to delight: do customers hold a grudge? Journal of Service Research, 4 (1), 39-49. [4] Bell, C. R & Zemke, R. E. (1987). Service breakdown: the road to recovery. Management Review, 32-5.

Copyright (c) 2012 International Journal of Computer Science Issues. All Rights Reserved.

IJCSI International Journal of Computer Science Issues, Vol. 9, Issue 3, No 2, May 2012 ISSN (Online): 1694-0814 www.IJCSI.org

106

[5] Bell, C. R. & Ridge, K. (1992). Service recovery for trainers. Training and Development, May, 58-63. [6] Berry, L.L. (1995). Relationship marketing of services: growing interest, emerging perspectives. Journal of the Academy of Marketing Science, 23 (4). [7] Bhandari, M. S., Tsarenko, Y. & Polonsky, M. J. (2007). A proposed multi- dimensional approach to evaluating service recovery. Journal of Services Marketing, 21 (3), 174-185. [8] Bies, R. J. & Shapiro, D. L. (1987). Interactional fairness judgments: the influence of causal accounts. Social Justice Research, 1, 199-218. [9] Bitner, M. J., Booms, B. H., & Tetreault, M. S. (1990). The service encounter, diagnosing favorable and unfavorable incidents. Journal of Marketing, 54 (January), 71-84. [10] Blodgett, J. G., Granbois, D. H. & Walters, R. G. (1993). The effects of perceived justice on complainants’ negative word-of-mouth behavior and re-patronage intentions. Journal of Retailing, 69 (4), 399-427. [11] Blodgett, J. G., Hill, D. J. & Tax, S. S. (1997). The effects of distributive, procedural, and interactional justice on post-complaint behavior. Journal of Retailing, 73, 185-210. [12] Jeffrey G. Blodgett, Kirk L. Wakefield, James H. Barnes, (1995) "The effects of customer service on consumer complaining behavior", Journal of Services Marketing, Vol. 9 Iss: 4, pp.31 – 42 [13] Boshoff, C., Allen, J. (2000), "The influence of selected antecedents on frontline staff’s perceptions of service recovery performance", International Journal of Service Industry Management, Vol. 11 No.1, pp.63-90. [14] Brockner, J., Tyler, T. R. & Cooper-Schneider, R. (1992). The influence of prior commitment to an institution on reactions to perceived unfairness: the higher they are, the harder they fall. Administrative Science Quarterly, 37 (2), 241- 261. [15] Chebat, J.-C & Slusarczyk, W. (2005). How emotions mediate the effects of perceived justice on loyalty in service recovery situations: an empirical study. Journal of Business Research, 58 (5), 664-673. [16] Chen, J. V., Ross, W. H. & Huang, S. F. (2007). Responding to consumer fairness concerns about number portability policies. International Journal of Mobile Communications, 5 (6), 661-676. [17] Clemmer, E .C. (1988). The role of fairness in customer satisfaction with service, doctoral dissertation,

Psychology Department, University of Maryland, College Park, MD. [18] Coakes, S. J., Steed Lyndall & Ong, C. 2010. SPSS version 17.0 for windows: analysis without anguish. Australia: John & Wiley, Ltd. [19] Colgate, M. Norris, M. (2001) "Developing a comprehensive picture of service failure", International Journal of Service Industry Management, Vol. 12 Iss: 3, pp.215 - 233

[20] Cropanzano, R. & Greenberg, J. (1997). Progress in organizational justice: tunneling through the mze. International Review of Industrial and Organizational Psychology, 12, 317-372. [21] Day, R. (1980). Research perspectives on consumer complaining behavior", in Lamb, C.W., Dunne, P.M. (Eds), Theoretical Developments in Association, Marketing, American Marketing Chicago, IL, 211-5. [22] Fisk, R. P. & Coney, K. A. (1982). Post-choice evaluation: an equity theory analysis of consumer satisfaction/dissatisfaction with service choices, in Hunt, H. K., Day, R. L.(Eds),Conceptual and Empirical Contributions to Consumer Satisfaction and Complaining Behavior, Indiana University School of Business, Bloomington, IN, 9-16. [23] Folger, R. & Cropanzano. (1998). Organizational Justice and Human Resource Management Sage, Thousand Oaks, CA. [24] Fornell, C. & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measure. Journal of Marketing Research, 18, 39-50.

[25] Gilliland, S. W. (1993). The perceived fairness of selection systems: an organizational justice perspective. Academy of Management Review, 18 (4), 697-734. [26] Goodwin, J. C. & Ross, I. (1992). Consumer responses to service failures: influence of procedural and interactional fairness perceptions. Journal of Business Research, 25, 149-63. [27] Greenberg, J. (1990). Organizational justice: yesterday, today, and tomorrow. Journal of Management, 16 (2), 399432. [28] Grönroos, C. (1990). Service Management and Marketing, Lexington Books, Lexington, MA,. [29] Guiltinan, J. (2006). Dimensions of price differential policies and seller trustworthiness: a social justice

Copyright (c) 2012 International Journal of Computer Science Issues. All Rights Reserved.

IJCSI International Journal of Computer Science Issues, Vol. 9, Issue 3, No 2, May 2012 ISSN (Online): 1694-0814 www.IJCSI.org

107

perspective. Journal of Product and Brand Management, 15 (6), 367-76. [30] Hair, J. F., Anderson, R.E., Tatham, R.L., Black, W.C. (2006), Multivariate Data Analysis, 7th ed., Prentice Hall, Upper Saddle River, NJ,. [31] Hart, C. W. L., Heskett, J. L., & Sasser, W. E. Jr. (1990). The profitable art of service recovery. Harvard Business Review, 68, 148-56. [32] Hess, J. & Story, J. (2005). Trust-based commitment: multidimensional consumerbrand relationships. Journal of Consumer Marketing, 22 (6), 313–322. [33] Holloway, B. B. & Wang, S. & Beatty, S. E. (2009). Betrayal? Relationship quality implications in service recovery. Journal of Services Marketing, 23 (6), 385-396. [34] Homburg, C. & Furst, A. (2005). How organizational complaint handling drives customer loyalty: an analysis of the mechanistic and the organic approach. Journal of Marketing, 69 (3), 95-114. [35] Kau, A. & Loh, E. W. (2006). The effects of service recovery on consumer satisfaction: a comparison between complainants and non-complainants. Journal of Services Marketing, 20 (2), 101-111. [36] Krejcie, R. & Morgan, D. (1970). Determining sample size for research activities. Educational and Psychological Measurement, 30, 607-10. [37] Lapidus R. S. and Pinkerton L. (1995), Customer complaint situations: An equity theory perspective Psychology and Marketing, Vol. 12, Issue 2, pp. 105-122 [38] Sen. S, and D. Lerman (2007). Why are you telling me this? An examination into negative consumer reviews on the Web, Journal of Interactive Marketing, 21 (4) (2007), pp. 76–94 [39] Leventhal, G. S. (1976). Fairness in social relationships in Thibaut, J. W., Spence J. T. and Carson, R. C. (Eds). Contemporary Topics in Social Psychology. General Press, Morristown, NJ. 211-39. [40] Leventhal, G. S. (1980). What should be done with equity theory? New approaches to the study offairness in social relationships, in Gergen, K., Greenberg, M. and Willis, R. (Eds). Social Exchange:Advances in Theory and Research, Plenum Press, New York, NY, 27-55. [41] Leventhal, G. S., Karuza, J. and Fry, W.R. (1980). Beyond fairness: a theory of allocation preferences, in Mikula, G. (Ed.), Justice and Social Interaction, SpringerVerlag, New York, NY, 167-218.

[42] Lewis, B.R., McCann, P. (2004), “Service failure and recovery: evidence for the hotel sector”, International Journal of Contemporary Hospitality Management, Vol. 16 No. 1, pp. 6-17 [43] Lind, E. A. (2001). Fairness heuristic theory: justice judgments as a pivotal cognition in organizational relations in Greenberg, J and Cropanzano, R. (Eds), Advances in Organizational Justice Stanford. [44] Lind, E. A. & Tyler, T. R. (1988). The Social Psychology New York, of Procedural Justice, Plenum Press, NY. [45] Mattila, A. S. & Cranage, D. (2005). The impact of choice on fairness in the context of service recovery. Journal of Services Marketing, 19 (5), 271-279. [46] Mattila, A. S. & Patterson, P. G. (2004). The impact of culture on consumers’ perceptions of service recovery efforts. Journal of Retailing, 80 (3), 196-206. [47] Maxham, J. G. (2001). Service recovery’s influence on consumer satisfaction positive word of mouth and purchase intentions. Journal of Business Research, 54 (1), 11-24. [48] Maxham, J. G. III & Netemeyer, R. G. (2002). A longitudinal study of complaining customer’s evaluations of multiple service failures and recovery efforts. Journal of Marketing, 66 (4), 57-71. [49] McCollough, M. A., Berry, L. L. & Yadav, M. S. (2000). An empirical investigation of customer satisfaction after service failure and recovery. Journal of Service Research, 3 (2), 121-37. [50] McColl-Kennedy, J. R, Daus, C. S. & Sparks, B. A. (2003). The role of gender in reactions to service failure and recovery. Journal of Service Research, 6 (1), 66-83. [51] Michel, S. (2001). Analyzing service failures and recoveries: a process approach. International Journal of Service Industry Management, 12 (1), 20. [52] Miller, J. L., Craighead, C. W. & Karwan, K. R. (2000). Service recovery: a framework and empirical investigation. Journal of Operation Management, 18 (4), 387-400. [53] Naylor, M. D. (2003). Transitional care of older adults. In J. J. Fitzpatrick, P. G. Archbold, & B. J. Stewart (Eds.), Annual Review of Nursing Research, Vol. 20. New York:Springer. [54] Nikbin D., Ismail, I., & Abu-Jarad, I. Y. (2011). The impact of firm reputation on customer’s responses to service failure: the role of failure attributions. Business Strategy Series, 12 (1), 19-29. [55] Oliver, R. L. & Swan, J. E. (1989). Consumer perceptions of interpersonal equity and satisfaction in transactions: a field survey approach. Journal of Marketing, 53 (2), 31-35. [56] Olson, J. C. & Dover, P. (1979). Disconfirmation of consumer expectations through product trial. Journal of Applied Psychology, 64, 179-89.

Copyright (c) 2012 International Journal of Computer Science Issues. All Rights Reserved.

IJCSI International Journal of Computer Science Issues, Vol. 9, Issue 3, No 2, May 2012 ISSN (Online): 1694-0814 www.IJCSI.org

108

[57] Parasuraman, A., Zeithaml, V. A. & Berry, L. L. (1988). SERVQUAL: a multi- item scale for measuring consumer perceptions of service quality. Journal of Retailing, 64 (1), 12-40. [58] Power, C. (1992) Smart Selling: How Companies are Winning today’s tougher customer Business Week Volume 3277, 3 August, P 46 (3) [59] Reicheld, F. E. & Sasser, W. E. (1990). Zero defections: quality comes to services. Harvard Business Review, 68, 105-11. [60] Rosen, E. (2000). The Anatomy of Buzz, Currency/Doubleday, New York, NY. [61] Ruyter, K. D. & Wetzels, M. (2000). Customer equity considerations in service recovery: a cross-industry perspective. International Journal of Service Industry Management, 11 (1), 91-108. [62] Sapienza, H. J. & Korsgaard, M. A. (1996). Procedural justice in entrepreneur- investor relations. Academy of Management Journal, 39, 544-74. [63] Sekaran, U. (2000). Research Methods for Business 3rd ( Ed.). Carbonadale: University of Southern Illinois. [64] Sindhav, B., Holland, J., Rodie, A. R., Adidam, P. T. & Pol, L. G. (2006). The impact of perceived fairness on satisfaction: are airport security measures fair? Does it matter?’’. Marketing Theory and Practice, 14 (4), 323-336. [65] Smith, A. K., Bolton, R. N. & Wagner, J. (1999). A model of customer satisfaction with service encounters involving failure and recovery. Journal of Marketing Research, 36, 356-72. [66] Sparks, B. A. & McColl-Kennedy, J. (2001). Justice strategy options for increased customer satisfaction in a services recovery setting. Journal of Business Research, 54 (3), 209218. [67] Stauss, B. & Friege, C. (1999). Regaining service customers: costs and benefits of regain management. Journal of Service Research, 1 (4), 347-361. [68] Stauss, B. (2002), "The dimensions of complaint satisfaction: process and outcome complaint satisfaction versus cold fact and warm act complaint satisfaction", Managing Service Quality, Vol. 12 No.3, pp.173-83. [69] Stauss, B., Schoeler, A. (2004), "Complaint management profitability: what do complaint managers know?", Managing Service Quality, Vol. 14 No.2, pp.147-56. [70] Tax, S. S. & Brown, S. W. (2000). Service recovery: research insights and practices, in Swartz, T., Iacobucci, D. (Eds), Handbook of Services Marketing and Management, Sage, Thousand Oaks, CA, 271-86. [71] Tax, S. S. & Brown, S. W. (1998). Recovering and learning from service failure. Sloan Management Review, 40, 75-88. [72] Taylor, S. (1994). Waiting for service: the relationship between delays and evaluations of service. Journal of Marketing, 58, 56-69. [73] Teo, S. H & Lim, V. K. G. (2001). The effects of perceived justice on satisfaction and behavioral intentions: the

case of computer purchase. International Journal of Retail & Distribution, 29 (2), 109-125. [74] Tyler, T. R. & Bies, R. J. (1990). Beyond formal procedures: the interpersonal context of procedural justice, in Carroll, J. (Eds), Advances in Applied Lawrence Social Psychology: Business Settings, 98. Erlbaum, Hillsdale, NJ, 77[75] Walker, L. & Harrison, J. (2001). The measurement of word of mouth communication and an investigation of service quality and customer commitment as potential antecedents. Journal of Service Research, 4, 60-75. [76] Westbrook, R. A. (1987). Product/consumption-based affective responses and postpurchase processes. Journal of Marketing Research, 24, 258-270. [77] Wirtz, J. & Mattila, A. S. (2004). Consumer responses to compensation, speed of recovery and apology after a service failure. International Journal of Service Industry Management, 15 (2), 150-66. [78] Zemke R. and Bell C. (1990), Service Recovery: Doing it Right at Second Time, Training. Vol. 27, pp. 428.

First Author a senior lecturer at Center of Applied Management Studies, Faculty of Business Management, MARA University Technology, Malaysia: hold a bachelor degree in Agribusiness (1989), MBA (2001) and PhD in Management (2010): Working as a teacher in 1995, Poly-technique lecturer in 2000 and MARA University lecturer in 2001: Achieved best paper awards from Postgraduate Colloquium in 2009 , Young Researcher Award in international symposium in service management in 2011: the authors for 16 management books between; current research interests is on e commerce, technology management; a members of Malaysian Qualitative Research Association and IACSIT. Second Author a young lecturer in MARA University of Technology, Terengganu Malaysia. Actively involved in international conference and journal writing. .

Copyright (c) 2012 International Journal of Computer Science Issues. All Rights Reserved.

Similar Documents

Premium Essay

Services Marketing

...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. ------------------------------------------------------------------------------------------------------------------------------------- Abstract: Customer expectations play a crucial role in shaping satisfaction evaluation. The expectations are formed through past experiences, brand image, word of mouth, advertising or promotions. Customer expectations need to be thoroughly explored by the management for several reasons, it gives them accurate picture of the customer wants, and how the expectations are formed, how the company can influence or manage the expectation. The expectations can also change with cultural roots of the customer. In today’s global market it is beneficial to develop and market the company to diverse market segment. Introduction: In today’s fast paced world the biggest challenge faced by service industry is to retain its customer loyalty. It is easy to see why customer loyalty is of utmost importance, simply put it guarantees future revenue and shareholder value. Customer loyalty is strongly linked to customer satisfaction and service quality. In order to be competitive in...

Words: 2671 - Pages: 11

Premium Essay

Mister

...I have quoted from the work of others, I have included the source in the references/bibliography. Any views expressed in the dissertation are those of the author. Business Report Contents Introduction p 2 Discussion p 3 Conclusion p 8 References p 9 Appendices p 10 Appendix 1 – Strategic Management Model p 10 Appendix 2 – Swot Analysis Chart p 10 Appendix 3 – Service Recovery System p 10 Appendix 4 – Pareto’s law p 11 Appendix 5 – Kellog’s Square Dealer p 11 Introduction The aim of this business report is to write about a performance, indicating areas and recommendations for improvements. In this report Service Recovery Process (SRP) will be reviewed and how it impacts on hotel operations and strategic planning will be investigated. How its implementation is beneficial to instil specific processes and systems within the hotel organization will be considered. Policies, procedures and methods for handling complaints will be assessed. Thereafter the repercussions of business ethics related to the Service Recovery (SR) process on decision making will be evaluated. Hence how Revenue per available...

Words: 3465 - Pages: 14

Free Essay

Service Recovery in Healthcare

...SERVICE RECOVERY IN HEALTHCARE Customers’ satisfaction with a company can be profoundly impacted due to service failures and subsequent efforts of recovery. This is especially so in the healthcare industry where service recovery covers a vast range of complex issues and highly emotional patients (Berry and Bendapudi, 2007) whose level of tolerance is usually lower after a service failure (Matilla, 2004). Therefore, the need for service recovery strategies is very important. The purpose of this essay is to discuss the concept of service recovery, particularly in healthcare. This purpose will be achieved through utilising, exploring and analysing a wide range of literature written on the topics of service recovery and service recovery in healthcare. It will look at service recovery – its definitions and its dimensions, and it will discuss it as it is applied to healthcare. Finally, it will look at generational differences and their possible effects on service recovery. Failure often takes place when a customer’s experience and their expectations of a service are different. Maxham (2001) defined service failure as ‘any service related mishaps or problems – real and/or perceived – that occur during a customer’s experience with the firm’. It is believed that the single most important factor that leads to service failure lies within the nature of service itself, which creates endless possibilities for errors and consequently the need for service recovery. Smith and Bolton...

Words: 4009 - Pages: 17

Free Essay

Aaaa

...where indicated, the work I am submitting in this assignment is my own work and has not been submitted for assessment in another unit.• This submission complies with Murdoch University's academic integrity commitments. I am aware that information about plagiarism and associated penalties can be found at http://www.murdoch.edu.au/teach/plagiarism/. If I have any doubts or queries about this, I am further aware that I can contact my Unit Coordinator prior to submitting the assignment.• I acknowledge that the assessor of this assignment may, for the purpose of assessing this assignment:o reproduce this assignment and provide a copy to another academic staff member; and/oro submit a copy of this assignment to a plagiarism-checking service. This web-based service may retain a copy of this work for the sole purpose of subsequent plagiarism checking, but has a legal agreement with the University that it will not share or reproduce it in any form.• I have retained a copy of this assignment.• I will retain a copy of the notification of receipt of this assignment. If you have not received a receipt within three days, please check with your Unit Coordinator. | I am aware that I am making this declaration by submitting this document electronically and by using my Murdoch ID and password it is deemed equivalent to executing this declaration with my written signature. | Optional Comments to Tutor: | In Foundation units, this completed...

Words: 10037 - Pages: 41

Premium Essay

Service Recovery

...Introduction Service recovery is now recognized as a significant determinant of customer satisfaction and loyalty. As a result, stabilizing the endangered relationship with dissatisfied customers by using the effective service recovery strategies and procedures became the main focus of much customer retention to improve the competitive advantage of the hospitality organizations. In this research paper, we firstly indicate the unambiguous interpretation and crucial role of service recovery in hospitality industry. Therewith the paper point out the predict variables of service recovery which means the possible factors having great impact on the effectiveness of employee’s service recovery performance. Furthermore, the paper indicates the road to the effective service recovery which shows the viewpoints such as the customer-oriented commitment, empower the front-line employee and how to make brilliant recoveries. All of these statements are based on the numerous authority investigations with the real cases existing in today’s hospitality industry. The paper also discuss the failure prevention and service guarantees which are closely related to service recovery and introduce the dominant point “prevention is better than cure” . The goal of this article is able to help the hospitality firms develop better complaint handling policies, improve recovery procedures and recovery training, increase customer loyalty and ultimately improve their competitive advantage. ...

Words: 4124 - Pages: 17

Premium Essay

Services Are Deeds, Processes and Performances

...Chapter-1 SUMMERY Services means- Services are deeds, processes and performances. For example, Intel officers repair services for its equipments, consulting services for IT and E-commerce applications, web design services and training services for mass people. All these are deeds, processes and utilities comprise primary deeds and actions performed for customers. Compatible with this simple definition, services include economic activities whose output is not a physical product, are generally consumed at the time they are produced, provide added value in the form of amusement, comfort and convenience etc. and are essentially intangible concerns of the first purchaser. Difference between Service and customer service Services are deeds, processes, performances, and performances of a wide range of industries. Customer service is the service provided in support of a company’s core products. Customer services includes answering questions, taking orders, dealing with billing issues, handling complaints and scheduling repairs or maintenance. Why service marketing is essential for: Service based economy: Service marketing concepts and strategy developed in response to the tremendous growth of service industries, resulting their increased importance to the world economy. Service as a business imperative in manufacturing and IT: Early in the development of service, marketing most of the interest came from service industries like banking and health care. Now manufacturing and IT industries...

Words: 12979 - Pages: 52

Premium Essay

Assignment 2

...| MKT5709 Service Marketing | Assignment 2 | Customer Satisfaction: A major challenge for marketing managers | | | | Student Name: Jui-Kang Yu (Bill) Student Number: 10133163 Lecture: Gleen Swift Submit date: 09/10/2011 Abstract Service sector is playing a leading position in the global market these days. It gradually becomes a core factor which needs to be considered while doing businesses. Customers also begin focusing more on service rather than the product itself when they go shopping. Most of the time, some businesses are more successful than others because they know that offering good quality of goods is no longer the issue which has to be taken into consideration. The reason is because it is the most basic thing which all organisations have to accomplish. Instead, providing premium services to customers has become the main issue which everyone is struggling with. This situation compels marketing managers to come up with better ideas to do promotion and build good relationship with customers. The purpose of this article is to aids all marketing managers to know the ways of satisfying consumers by employing some useful concepts and models. Researches will be conducting by collecting secondary data from books and journal articles. Topics such as the basic concepts of service and its characteristics, consumer behaviors, service models to monitor service quality, and service recovery will be discussed in the article. The results prove that those models...

Words: 3133 - Pages: 13

Premium Essay

Current Issue

...Introduction Word-of-mouth (WOM) is the communication between a perceived noncommercial communicator and a receiver regarding a brand, product, organization, or service; whereas electronic word-of-mouth (eWOM), includes online reviews, online recommendations or online opinions. The main differences between WOM and eWOM can be identified in the reach of the reviews’ impact in number of people who can be influenced and the speed of interaction. EWOM is better due to its speed, convenience, one-to-many reach, and its absence of face to face human pressure. For instance, customer chooses hotel not only based on the location factors, brand name, facilities, price but also the past ratings allocated by the previous vacationers through eWOM or WOM. Drivers of eWOM The main drivers of eWOM can be grouped into five categories: self-directed, help other vacationers, social benefit, consumer empowerment, and lastly helping the companies. People also write reviews online to help other vacationers. To those who does not have any clue where to go, online reviews come in handy and very useful in providing information. Other than the star ratings, the vacationers can also check for the comments left by the past customers whether it expressed customer satisfaction or dissatisfaction. In this case, customer satisfaction and dissatisfaction are also the drivers of eWOM, and has a direct relationship to the review given. Compared to satisfaction, customer dissatisfaction gives a larger...

Words: 703 - Pages: 3

Premium Essay

Electonic Word of Mouth in Hospiatlity & Tourism Sector

...ELECTRONIC WORD-OF-MOUTH IN HOSPITALITY AND TOURISM MANAGEMENT Stephen W. Litvin College of Charleston Ronald E. Goldsmith Florida State University Bing Pan College of Charleston Stephen W. Litvin is Professor of Hospitality and Tourism Management in the School of Business and Economics, at the College of Charleston (South Carolina); Ronald E. Goldsmith is the Richard M. Baker Professor of Marketing at Florida State University; and Bing Pan is Assistant Professor and the Director of the Office of Tourism Analysis at the College of Charleston. Address correspondence to: Steve Litvin, Department of Hospitality and Tourism Management, College of Business and Economics, College of Charleston, 66 George Street, Charleston, SC 29424. Phone 843-953-7317; Email litvins@cofc.edu Submitted June, 20, 2005 to Tourism Management Revised and resubmitted May 09, 2006 Second revision October 1, 2006 ELECTRONIC WORD-OF-MOUTH IN HOSPITALITY AND TOURISM MANAGEMENT Abstract Interpersonal influence and word-of-mouth (WOM) are ranked the most important information source when a consumer is making a purchase decision. This influence may be especially important in the hospitality and tourism industry, whose intangible products are difficult to evaluate prior to their consumption. When WOM becomes digital, the largescale, anonymous, ephemeral nature of the Internet induces new ways of capturing, analyzing, interpreting, and managing online WOM. This paper describes online interpersonal...

Words: 8988 - Pages: 36

Premium Essay

Managing Services

...Contents Assignment question 2 Introduction 3 Question 1 4 Question 2 7 Total product concept 7 Price 8 In Malaysia: 8 Quality of product 9 Place 11 Packaging 13 Delivery and warranty services 13 Question 3 14 Situational Factors 14 References 16 Assignment question Choose ONE (1) of the following items (presented in bulleted points) and answer ALL the THREE questions below: * A popular brand of cosmetic product * An international car brand * A popular branded clothing line 1. Base on the product of your choice, discuss and describe the following: * Market segmentation * Target market * Product positioning . 2. For your selected product, identify and discuss a complete picture of the benefits consumer seeks based on different market segments in any TWO countries and experiences in the terms of the total product concept. Your discussion may also include the following: * Price * Quality of product * Promotion * Place * Packaging * Delivery and warranty services 3. Discuss the factors that influencing buyer behavior towards the product that chosen. Please provide one internal and one external factor. Introduction This paperwork would like to describe about market segmentation, targeting and positioning of the product that chosen. Also need to determine a complete picture of the benefits consumer seeks based on different market segments in different countries and experiences in...

Words: 3394 - Pages: 14

Premium Essay

Relationship Marketing and the Uk Telecommunications Market

...Relationship Marketing in Action: The UK Mobile Telecommunications Market [pic] [pic] [pic] Managing Business Relationships Word Count: 1918 Relationship Marketing (RM) is a strategy designed to foster customer loyalty, interaction and long-term engagement. It focuses more on customer retention rather than customer acquisition; in other words, it is about keeping your existing customers happy. Christopher et al. (1991) proposed that RM is where “customer service, quality management and marketing come together” whereas Grönroos (1994), cited by Varey (2002, p.17) includes the concept of other stakeholders, not just customers. He states that it involves “identifying and establishing, maintaining and enhancing and, when necessary, terminating relationships with customers and stakeholders...so that the objectives of all parties involved are met,” and that this is achieved through mutual exchange and fulfilment of promises. A greater need for RM is observed in saturated markets such as the UK mobile telecommunications market (MTM). It has been estimated that approximately 27% of a given provider’s customers are lost each year (Vandenbosch and Dawar, 2002). According to Andic (2006), in the UK, mobile phone operators are losing more than a third of their young customers to other rivals’ networks every year, which costs them over £949m in revenue. Thus, the main challenges that face mobile operators in today’s competitive...

Words: 2410 - Pages: 10

Premium Essay

Service Quality

...Service Quality Service quality is a term which describes a comparison of expectations with performance. A business with high service quality will meet customer needs whilst remaining economically competitive. Improved service quality may increase economic competitiveness. This aim may be achieved by understanding and improving operational processes; identifying problems quickly and systematically; establishing valid and reliable service performance measures and measuring customer satisfaction and other performance outcomes. Definition Service quality is a business administration term used to describe achievement in service.It reflects both objective and subjective aspects of service. The accurate measurement of an objective aspect of customer service requires the use of carefully predefined criteria. The measurement of subjective aspects of customer service depends on the conformity of the expected benefit with the perceived result. This in turns depends upon the customer's imagination of the service they might receive and the service provider's talent to present this imagined service. Pre-defined objective criteria may be unattainable in practice, in which case, the best possible achievable result becomes the ideal. The objective ideal may still be poor, in subjective terms. Service quality can be related to service potential (for example, worker's qualifications); service process (for example, the quickness of service) and service result (customer satisfaction)...

Words: 1332 - Pages: 6

Premium Essay

Service Marketing

...SERVICES MARKETING : CHAPTER – 2 Consumer Behaviour in Services Marketing INTRODUCTION : In this chapter we’ll study Consumer Behaviour (CB). This is defined as the actions & beliefs that guide a person to purchase a particular product or service. The emphasis on services by companies across the worlds has lead to a growth in the expectations of customers today. The customer seeks customised services at his doorstep & is himself involved in defining the kind of service he expects. The purchase decisions of customers are not made in isolation, but rather they are influenced by environmental factors such as culture, social class, family & other institutional factors. The study of CB requires inputs from various disciplines, such as sociology, psychology & economy. CB deals with the study of the factors that influence a customer in purchasing a product, service and the process that he goes thro’, to evaluate the product/service prior to & even after its purchase & use. Difference between Characteristics of Goods & Services : There are three basic attributes on the basis of which the differentiation of evaluation of goods & services take place. They are Search, Experience & Credence (SEC). As explained below : 1. Search qualities : This is a characteristic that can estimated before the purchase or consumption of a product. This is the quality on the basis of which some goods/services can be searched. Goods have a higher degree of this search qualities as compared to services...

Words: 4829 - Pages: 20

Premium Essay

Branding Satisfaction in the Airline Industry: a Comparative Study of Malaysia Airlines and Air Asia

...of Malaysia Airlines and Air Asia Kee Mun, Wong* and Ghazali, Musa Faculty of Business and Accountancy, University of Malaya, 50603 Kuala Lumpur, Malaysia. Accepted 23 March, 2011 Brand is crucial in differentiating the superiority of products or services over others. This is an exploratory study examining the differences in brand satisfaction between Malaysian Airlines (full service airlines) and Air Asia (low cost airlines) in Malaysia. 350 usable questionnaires were obtained from respondents in the two main airlines terminals in Kuala Lumpur. Exploratory factor analysis revealed seven brand satisfaction dimensions which are tangibles, price, core service, reputation, publicity, word-of-mouth, and employee. Generally, respondents were not satisfied with all brand dimensions of both airlines. The level of brand dissatisfaction is also higher for Malaysian Airlines compared with Air Asia. Air Asia was perceived better than Malaysian Airlines in price, publicity, and word-of-mouth. On the other hand, Malaysian Airlines was perceived better in tangibles, core service, reputation, and employee. The paper highlights some of its theoretical, managerial and marketing implications to the development of airline industry. Key words: Airlines, branding, satisfaction, Malaysia Airlines, Air Asia. INTRODUCTION The world airline industry has gone through a rollercoaster ride for the past few years. Among factors contributing to the situation are, increasing fuel prices, escalating...

Words: 10614 - Pages: 43

Premium Essay

Asia Pacific Viewpoint

...CHAPTER 03 Customer expectations of service L EARNING O BJECTIVES This chapter’s objectives are to: 1 Recognize that customers hold different types of expectations for service performance. 2 Discuss the sources of customer expectations of service, including those that are controllable and uncontrollable by marketers. 3 Acknowledge that the types and 54 sources of expectations are similar for end consumers and business customers, for pure service and product-related service, for experienced customers and inexperienced customers. 4 Delineate the most important current issues surrounding customer expectations. Importance of customer expectations CASE STUDY: CUSTOMER EXPECTATIONS OF VIRGIN TRAINS V irgin Trains is a brand that has had the major challenge of bringing the UK rail industry into the twentieth century. The company is responsible for linking towns and cities across the length and breadth of the country with over 35 million passenger journeys each year. It has therefore undertaken a significant level of marketing research to identify what people expect from train travel. Many passengers have now had the experience of travelling on airlines or on overseas railways and as a result their expectations from long-distance train travel have increased. The research has highlighted the significant and highly diverse expectations that customers have of train travel. No longer is a seat and access to toilets and basic refreshments...

Words: 10169 - Pages: 41