Vous êtes sur la page 1sur 25

1.

Introduction

Customer satisfaction has emerged as one of the top priority strategies for the majority of business organisations (Fournier and Mick 1999; Woodruff 1993). This is in line with the customer-orientation philosophy that has become the fundamental basis of continuous improvement of the prevailing business approach (Grigoroudis and Siskos 2002; Mittal and Kamakura 2001). However, understanding how and why satisfaction develops remains one of the key challenging and critical management issues today (Bloemer and OdekerkenSchrder 2002).

Researchers regard satisfaction as the focal construct in consumer behaviour models (e.g. Dabholkar 1996; McDougall and Levesque 2000; Oliver 1980a), whilst the practitioners treat it as a key driver for designing successful marketing strategies. Generally, firms are using customer satisfaction data to diagnose product quality, service problems and to improve customer retention rates (McDougall and Levesque 2000; Olsen 2002). In fact, increasingly many organisations admit that customer satisfaction is an important factor in determining the success of businesses and that customers perceptions and judgements must be measured (Wong and Kanji 2001). In a similar voice, Kristensen et al. (1999 p. 602) convincingly assert that: Customer satisfaction is a key issue for every company wishing to increase the value of customer assets and create a better business performancecustomer satisfaction should be measured and managed.

Furthermore, Grigoroudis and Siskos (2002, p. 148) advocate that: Customer satisfaction measurement may be considered as the most reliable feedback system, considering that it provides an effective, direct, meaningful and objective way the clients preference and expectations.

In light of the above assertions, it is clear that customer satisfaction should be measured and regarded as a baseline standard of performance, and a possible standard of excellence for business enterprises. In fact, the new ISO 9000 revision requires firms to collect and act on their customer satisfaction data. Importantly, customer satisfaction has taken on national and international significance with the development of national satisfaction barometers or indices (e.g. American Customer Satisfaction Index (ACSI), European Customer

Satisfaction Index (ECSI)) utilised to reflect customers satisfaction levels for specific firms, sectors or industries (Johnson et al. 2001; Juhl et al. 2002).

Research evidence has revealed that customer satisfaction is an essential determinant in realising desired outcomes such as customer loyalty, customer retention and ultimately, profitability (e.g. Anderson et al. 1994; Burnham 2003; Fornell et al. 1997; Kassim 2001). For example, Bernhardt et al. (2000) suggest that there is a positive relationship between customer satisfaction and profits. Mittal et al. (1999) reveal that maintaining customer satisfaction is the key to retaining customers and in turn improving profitability. In view of this evidence, it is not surprising that there was resurgent interest in understanding the impact of customer satisfaction on a firms performance. The importance of customer satisfaction to business performance was emphasised by Drucker (1988, p.76), who asserts that: The single most important thing to remember about any enterprise is that there are no results inside its walls. The result of a business is a satisfied customer,inside an enterprise there are only cost centres. Result exists only on the outside

Empirically, considerable research supports the linkage between satisfaction and behavioural intentions/loyalty. For instance, Anderson and Sullivan (1993), Fornell (1992) and Taylor and Baker (1994) provide empirical evidence that a positive association has been observed between customer satisfaction and loyalty. Interestingly, Rust and Zahorik (1993) found that retention is the key driver of market share and customer satisfaction is in fact the primary determinant of retention. Noticeably, a vital component in any customer retention programme is satisfaction (Jones et al. 2000). Anderson and Sullivan (1993, p. 140) advocate the significance of satisfying customers by suggesting that: a reputation for satisfying customers makes the firm less vulnerable to temporary quality declines. Investing in customer satisfaction is like taking out an insurance policy. If some hardship temporarily befalls the firms, customers will be more likely to remain loyal

Fundamentally, companies that are able to deliver superior levels of satisfaction could enhance their competitiveness (Anderson and Fornell 1994). Furthermore, nowadays, the satisfied customer is viewed as a crucial means of creating a sustainable advantage in the 2

current competitive marketplace (Patterson et al. 1997). Several studies have substantiated that the long-term success of a business firm is closely correlated to its capability to adapt to customer needs and unpredictable changing preferences (Eklf and Westlund 2002). A growing number of companies have recognised that customers often become more profitable over time (Heskett et al. 1994); hence, this means that developing and maintaining relationship with customer is crucial in order to increase customer retention (Crosby and Stephens 1987; Jones et al. 2000). For marketers, the challenge is identifying the critical factors that determine customer satisfaction, which in turn, leads to behavioural intentions and loyalty. Indeed, recently, Ping (2003, p.237) observed that: It is now difficult to find a branch of marketing that does not stress the importance of satisfaction in the creation and maintenance of exchange relationships.

From the above, it is not surprising that there has been proliferation of satisfaction knowledge over the last three decades. As noted by Woodruff (1993), not were only papers associated with the satisfaction topic most frequently published in established journals, but also there has been an entire journal (Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behaviour) specifically devoted to satisfaction-related research. In essence, judging from the literature accumulated in journals and proceedings, one can argue that the search for knowledge of the customer satisfaction phenomenon has dominated the field of marketing research. It has been a major concern and important agenda of academician and practitioners alike (Babin and Griffin 1998; Mittal and Kamakura 2001; Mittal et al. 1999; Perkin 1993; Woodruff 1993; Yi 1990) and accordingly, is the primary focus of this study. This thesis documents the research stages undertaken by the author in an attempt to add empirical insights of the determinants and consequences of customer satisfaction within the context of consumption experiences from the direct sales marketing channel. Taking a systematic approach, research questions and objectives are formulated and examined from the perspectives of the consumers. Accordingly, by synthesising the Expectancy Disconfirmation Paradigm (EDP) with empirical theories a conceptual model is developed and tested to explore, systematically explain and predict customer satisfaction and its outcomes within the consumption setting examined.

1.2

Research Rationale

The rationale of the current study is based on two perspectives; the research context (i.e. direct sales marketing channel) and the theoretical framework adopted.

1.2.1

Research Context Perspective

Retailing in the 21st century undoubtedly means doing business with consumers on their terms and conditions (Mathwick et al. 2002). In addition, Schultz (2002) points out that today it is not a question of how the marketer wants to sell; but it is a question of how the customers want to buy. In a similar vein, Rosenbloom (1991) convincingly asserts that a critical fact of modern marketing is not what marketers offer to customers, but how they offer it to them, that determines success in the marketplace. In essence, the market-place power has shifted; customers are now in control because they have access to tremendous amounts of market knowledge and the traditional restriction of time and geography has disappeared. Opportunity to access various product distribution channels, particularly through surfing the internet has made it possible for them to shop and compare products and prices, and even to contact marketers around the world.

In the 90s non-store retailing had been predicted to be an important trend which could represent the next revolution in the retail marketplace (Lazer et al. 1990) and experience growth (Bartlett 1994). Evidently, today this anticipated trend is well supported: for instance it was observed by Crittenden and Wilson (2002), that the fundamental practice of retailing has undergone dramatic transformation, particularly with the increase popularity of non-store retailing (e.g. personal selling, catalogues, TV shopping, the Internet, etc.). This burgeoning trend was fuelled by consumers increased willingness to purchase via these alternative channels, greatly influenced by their changing lifestyles and work patterns (Msweli-Mbanga and Lin 2003). In this regard, the traditional bricks-and-mortar stores are not necessarily a requirement in todays retailing environment (Crittenden and Wilson 2002, p. 255). As a result, the famous adage of retailing success, location, location, location is becoming less relevant, perhaps the appropriate adage of todays retailing environment should be, distribution, distribution, distribution.

Noticeably, in highly competitive markets, firms all over the world are competing for the same market share, thus to pursue customers on product differences alone is a thing of the 4

past (Schlesinger 1995). Driven by this fact, most firms today increasingly focus on nonproduct factors, specifically the marketing channels through which products and services are made available to customers. Alternatively, product could be distributed via remote selling channels such as electronic marketing, interactive television, mail order and catalogues as well as the direct sales channel, which is the industry studied in this thesis.

Rosenbloom (1995) describes direct selling as a channel of distribution of consumer goods and services through personal face-to-face (salesperson-to-customer) sales away from fixed business locations (primarily in the home, workplaces or other locations). It represents an important alternative channel of distribution of consumer products, which enables products to be sold not just stocked, recommended not just advertised, and demonstrated not just displayed. Considering the competition from other selling channels, the strength of direct sales channel clearly lies in its superior personal service, its convenience (being independent of locations), opportunities for product trial and the innovative nature of products (e.g. not available in shops) (Direct Selling World Survey 2000).

In this thesis, Malaysian direct sales industry is the research context and it is worth noting that the industry grew significantly in the 90s, but the recent 2001 sales figures have displayed some indication of a downward trend (Figure 2.6, p. 48). According to official statements (Ministry of Domestic Trade and Consumer Affair 2002), this decline in sales of more than 30 per-cent was due to the restructuring of the industry (see Section 2.8). However, as predicted, the sales revenue for year 2002 bounced back by nearly 30 per-cent to Malaysian Ringgit 3.9 Billion (USD1.03 Billion). Similarly, a slight decline in the worldwide sales figure for year 2000 and 2001 was reported but there was no official statement to justify this phenomenon (see Figure 2.3, p. 44). Due to limited literature and supporting empirical evidence, it is very difficult to establish the reasons for this unexpected occurrence. Laggos (2002), one of the industry observers convincingly blames the recession in United States during late 2000 through 2001 as negatively affecting the industry sales performance.

Notably, the only published empirical study that hinted there was some crucial problem within the direct sales industry was that of Raymond and Tanner (1994). They assert that the crucial problem facing the direct sellers is how to generate repeat business. In a similar 5

voice, Reese (1999) conjectures that the slowdown of direct sales in year 2000 and 2001 was mainly due to the major issue experienced by most direct selling companies, that is distributor and customer retention. He suggests that in a situation when recruitment1 of new direct sellers is difficult, alternatively, more emphasis should be focused on generating new customers and importantly on retaining the existing ones by offering greater value products and services. Undoubtedly, the importance of repeat business to a company cannot be overlooked. The following statement from a marketing executive (cf. Rosenberg and Czepiel 1984, p. 45) typifies the short-sightedness of concentrating all the marketing effort on getting new customers rather than taking care of the ones they already have: The many ways companies relate to customers is akin to looking for a needle in a haystack, finding it, and throwing it back to look for it again.

Nevertheless, other factors could exacerbate this unfavourable condition, including those consumers themselves becoming more discerning, knowledgeable and sophisticated, hence having greater expectations related to consumption experiences. They are now spoilt with abundant choices within and outside the industry. This spoiling is illustrated by the fact that in 2001 it was reported by the Ministry of Domestic Trade and Consumer Affairs that there were more than 400 direct selling companies in Malaysia (see Table 2.2, p.48). Furthermore, direct selling companies face increasingly severe competition, not only among themselves, but also from other types of retail channels.

In the quest to retain customers, direct sellers and the direct selling companies have to look one-step backward in order to unearth what are the key determinants of the customers satisfaction, because it has been firmly established and empirically proven that there is a significant relationship between customer satisfaction and behavioural intentions. Prior research suggests that satisfaction is the vital premise for customer retention (Burnham et al. 2003; Rust and Zahorik 1993; Szymanski and Hanard 2001). Furthermore, customer satisfaction with a companys product or services is often seen as the key factor in increasing customer retention, which subsequently creates and improves business performance (Ryan et al. 1995). Similarly, Kotler (1994) forcefully emphasised that

Any activity conducted for the purpose of inducing a person to become a direct seller

customer satisfaction is the key predictor to customer retention.

Simply stated, only

companies that understand what and how to make their customers satisfied will prevail.

Despite the continuing and growing importance of the direct sales channel, very little empirical study has attempted to investigate post-purchase phenomenon in this context (Raymond and Tanner 1994; Young and Albaum 2003). Nevertheless drawing from the limited literature, initial attempts to explore and assess consumer perceptions of this marketing channel have been undertaken (e.g. Kustin and Jones 1995; Peterson et al. 1989; Raymond and Tanner 1994; Sargeant and Msweli 1999). However, there was no further advanced research from the consumer perspective was observed since then with the notable exception of Young and Albaum (2003), who examine the measurement of trust in salesperson-customer relationships in the direct sales setting.

In light of the above reasons, it is clearly worthwhile and timely to study customer consumption satisfaction and its behavioural consequences pertaining to the direct sales distribution channel. To the best of the authors knowledge there has been no published research undertaken or reported to address this issue within the examined context. Admittedly, there has been an abundance of empirical research on customer satisfaction (e.g. Oliver 1980, 1993; Patterson et al. 1997; Patterson and Spreng 1997; Peterson et al. 1996; Spreng et al. 1996; Szymanski and Henard 2001), but the direct sales context has not been subjected to conceptual and empirical scrutiny.

1.2.2

Theoretical Perspective

Customer satisfaction is undeniably a widely researched marketing topic and has been extensively studied in various disciplines and perspectives (Day and Crask 2000; Perkins 1993; Yi 1990). Recently, numerous researchers have attempted to apply and validate Customer Satisfaction (CS) theories developed by consumer behaviourists in the area of patient satisfaction within the healthcare situation (Nitse and Rushing 1996; Singh 1991); holiday satisfaction within the tourism industry (Chu 2002; Pizam and Ellis 1999; Tribe and Snaith 1998), retail banking (Athanassopoulos 1997; Goode and Moutinho 1996; Jamal and Naser 2002) and student satisfaction (Athiyaman 1997; Halstead et al. 1994). Judging from these literature, it appears that the Expectancy Disconfirmation Paradigm has been 7

widely applied and has dominated consumer satisfaction research since its emergence as a field of study in the early 1970s (Erevelles and Levitt 1992; Parker and Matthew 2001).

1.2.2.1

Expectancy Disconfirmation Paradigm (EDP)

According to this paradigm, consumers satisfaction judgements are the result of a discrepancy between prior expectation and actual performance of the product/service after its consumption (Oliver 1980a; Parker and Matthew 2001; Tse and Wilton 1988; Yi 1990). If the performance falls short of expectation, this will yield negative disconfirmation; on the other hand, if performance exceeds expectation, positive disconfirmation is formed. It has been exemplified that positive disconfirmation will be transpired into satisfaction and negative disconfirmation translate into dissatisfaction (Oliver 1980a).

Even though EDP has been the most promising theoretical framework for the assessment of customer satisfaction, no consensus has been reached that pertains to the impact of disconfirmation on satisfaction formation (Erevelles and Leavitt 1992). It has been argued that under certain conditions, disconfirmation fails to operate as an intervening variable affecting satisfaction as postulated by the theory (Churchill and Suprenant 1982; Tse and Wilton 1988). Notwithstanding this, the EDP was used as a theoretical foundation in developing the present conceptual framework. The hypothesised model modifies the traditional EDP satisfaction model (Oliver 1980a) by incorporating multiple performance and disconfirmation to form a systematic approach, but disregard the expectation variable (see Chapter 3). What is more, it was expanded by integrating four pertinent constructs: perceived value, perceived equity and relational commitment and purchase decision involvement. It is very appealing to assess the applicability of the disconfirmation paradigm within the direct sales context.

1.2.2.2

Conceptualisation of Customer Satisfaction in the Direct Sales Context

It was noted by Singh (1991), much attention in satisfaction study was focused on understanding the process of customer satisfaction formation, that is the antecedents and consequences of satisfaction, but overlooked the importance of its structure (conceptualisation, taxonomy and operationalisation). Westbrook and Oliver (1981) argued 8

that the inadequate development of the satisfaction construct hinders the interpretation and synthesis of satisfaction findings. In addition, they suggested that examining satisfaction from various aspects and product/service may give better understanding and extend its explanatory ability. Furthermore, Oliver and DeSarbo (1988, p. 495) observed that, more than others in related discipline, consumer researchers have advanced and tested the processes underlying satisfaction, placing less emphasis on (its) content. The lack of emphasis of the content of satisfaction evaluation is the reason for the poor conceptualisation and measurement of the satisfaction construct (Hunt 1977). In a similar vein, Singh (1991, p. 242) highlighted his concern and advocated that: Marketing researchers pay greater attention to the structure of satisfaction evaluations. (p. 241) By doing so, our understanding of the process of satisfaction would be more insightful.

Along these lines, the direction of the current study is to emphasise the structural approach by investigating the determinants of customers satisfaction and subsequently integratin g the process perspective in one comprehensive model. This study attempts to incorporate the various aspects/subsystems of the direct sales distribution system into two major steps in the satisfaction evaluation judgements. First is the evaluation of salient attributes and the second evaluation of object-based judgements. As posited by Singh (1991), after the structure of satisfaction evaluation has been clearly conceptualised and measured, the next stage is to investigate the process of satisfaction (i.e. its antecedents and consequences). Following Singhs (1991) recommendations, the present investigation initially aims to examine the structure (conceptualisation and measurement of core constructs), then subsequently investigates the process of satisfaction formation and its behavioural consequences.

1.2.2.3

The Consumption System Approach

Duhaime (1988) recognised that research in the area of consumer satisfaction focuses predominantly on goods and services and has overlooked the importance of the consumption or distribution system as a factor that could influence satisfaction evaluation process. Research investigation from this perspective has received very little attention, with the notably exception of these authors: Crosby and Stephens (1987), Crosby et al. (1990), 9

Mittal et al. (1999) and Singh (1991). Furthermore, Duhaime (1988, p.53) argues that the lack of attention given to the system approach could imply that: an incomplete understanding of the reality of the consumption of good or services since consumption of goods and services is a process which comprises of the evaluation not only of the products consumed but also the different enterprises which produce, distribute and service these products.

Furthermore, Dick et al. (1995) suggest that in the conceptualisation of satisfaction, it is inadequate to take into account just a general feeling and they further assert that it is imperative to distinguish satisfaction judgement with respect to a particular object or referent. In other words, it is necessary to specify that the subject is satisfied with something. Additionally, they suggest that in the decision to base a theory or strategy on measurement of satisfaction, it is crucial that the measures tap the appropriate object(s) of the satisfaction. In their empirical investigation, Aiello and Czepiel (1979) outlined three distinctive types of satisfaction: system satisfaction (based on operations of the company marketing system), enterprise satisfaction (referring to a product/service organisation such as retail stores), and product/service satisfaction (referring to the consumption of a particular product or service). Although these three sources are associated, their magnitude of influence on consumer overall satisfaction differs.

In addition, many business organisations are beginning to recognise the significance of understanding customers from a system perspective (Berry and Parasuraman 1991; Mittal et al. 1999; Rust and Zahorik 1993). They yearn to know the explicit linkages that extend from internal processes to customer perceptions to customer satisfaction to loyalty and ultimately to bottom line performance. In essence, these factors represent a system that must be measured and managed as a whole if firms want to maximise profitability (Johnson and Gustafsson 2000). Similarly, Anderson and Mittal (2000) argue that firms have to place more emphasis on the satisfaction-profit chain approach, which follows the logic of systematic thinking. In this perspective, it is assumed that in the initial stage, a company must focus on improving the critical product or service attributes performance, which will increase customer satisfaction. Subsequently, increased customer satisfaction will result in higher customer retention and ultimately lead to greater bottom-line financial performance.

10

In brief, all these factors form a chain of causes and effects that build on one another, thus they cannot be treated separately (Johnson and Gustafsson 2000).

In response to the above notion, in seeking a better understanding of customer satisfaction, the system approach should be adopted, thus the current study is built on a system approach within the EDP framework. In addition, even though the previous isolated studies contribute some useful insights, they leave many important theoretical and empirical questions unanswered (Kustin and Jones 1995; Raymond and Tanner 1994). In view of the relevance and the importance of the current investigation to theory and practices in consumer marketing, this study makes an initial attempt to explore, understand and examine the structure and process of how customers evaluate their satisfaction within the context of direct sales distribution channel. Essentially, this attempt will provide great challenges because unlike tangible products or pure services, the consumption experience within the direct selling distribution channel is an amalgam of three factors. Those are the product, the direct salespeople who deliver products and services, coupled with the direct sales firm, which offer corporate customer services, and indirectly mirrors its corporate image.

Although the direct sales company could sometimes be the manufacturer of the products (e.g. Anway, Avon, Zhulian) that are distributed by their direct sellers, the companies generally, have no direct contact with their retail customers. Customers are serviced directly by direct sellers. There have been no research studies in the direct sales context that explore the linkage between satisfaction with product, salesperson and firm, thus there is no comparable study that could indicate that all these three components are drivers to overall satisfaction within this particular distribution channel. The nearest domain that could be referred to is the traditional in-store retailing, which in very few studies they attempt to examine the relationships between the product offerings, services rendered by their sales associates and the retail store image. It has been demonstrated empirically that through customer-salesperson interactions, a salesperson could influence the customers perception of the selling firm (Anderson and Robertson 1995; Crosby and Stephens 1987).

Undoubtedly, the company itself is important because the customer may use the company image as a surrogate cue in their decision making process. The judgement on the company 11

could comprise of the attributes of the companies general practices, ethics and social responsibility. A positive evaluation creates positive outcomes; conversely, a negative one may create uncertainty and risk to the customer. In their study, Andreassen and Lindestad (1998) claim that corporate image impacts on customer loyalty directly and has a positive relationship with customer satisfaction. In addition, it has been suggested that with the transaction-driven nature of satisfaction experience, corporate image has a cumulative effect on customer satisfaction (e.g. Bolton and Drew 1991 and Johnson and Fornell 1991). For these reasons, it would be fertile to investigate the relationship between company and overall satisfaction and subsequently on behavioural intentions. In the direct sales marketing channel, there is no store available. Therefore, the direct sellers with whom the customers are in personal contact are very important not only to initiate sales, but also to generate repeat sales. Unlike the in-store retailers who hope the prospective buyers will try to find them, the direct selling firms distribute products by utilising salespeople who make personal visits to the prospects home or workplace for the purpose of product demonstrations and ultimately to close sales. The principal trading asset of a direct selling organisation is its sales force (Berry 1998). If an established direct selling organisation loses its sales force, it will lose its business instantly. Even the loyal retail customers would have no accessibility to a product without a sales force. Ingram (1992) describes the direct sellers in the direct sales organisation as playing a role somewhat like athletes for a successful sports team. Clearly, the direct sellers play a critical role in the success or failure of their organisations. Given the critical role of the direct sellers, their contributions towards overall satisfaction to the direct sales channel cannot be downplayed.

1.2.2.4

The Relational Paradigm

Previous research suggests that product satisfaction is affected not only through product evaluation and information but also through indirect peripheral influences such as interaction with salespeople (Humphreys and Williams 1996; Petty et al. 1983). Both practitioners and academics have shown interest in the salespersons role in building customer relationships (e.g. Brown and Peterson 1993; Crosby and Stephen 1987; Johnson et al. 2001). Direct selling being a people business, which involves lots of personal touch (better known as high touch), means interaction between the direct seller and customer is 12

paramount (Bartlett 1994). Interestingly, Priluck (2003) provides evidence that the quality of relationships between consumer and seller could lead to a greater level of satisfaction in the consumer purchase experience. Understanding such relational impacts on customer satisfaction is particularly important in the direct sales situation. Despite its importance, no attempts have been made by prior research to investigate the selling relationship within the direct sales consumption setting. Given the absence of empirical studies on selling relationships in the direct sales environment, the relationship marketing literature was consulted for guidance and directions.

Broadly speaking, many studies of customer satisfaction implicitly assume that satisfaction is a sufficiently important and independent phenomenon that should be examined as a single area for research (Olsen 2002; Woodruff 1993). However, some emerging evidence suggests that satisfaction may be integral part of a larger phenomenon, which is the postpurchase evaluation process (Woodruff 1993). Accordingly, it was suggested by several scholars, for example Anderson and Mittal (2000), Day and Crask (2000), Olsen (2002) and Woodruff (1993) that relevant theories such as equity, value, attitude and the relational paradigm should be included to augment the traditional customer satisfaction framework, in order to address it from a broader perspective. Parallel to this suggestion, the current investigation includes several pertinent constructs, such as perceived value, perceived equity, relational commitment and purchase decision involvement in the aim to understand the antecedents and outcomes of customer satisfaction within a broader scope of postconsumption behaviour.

The relationship marketing literature reveals that some attempts have been made to extend the customer satisfaction framework by incorporating perceived equity as an antecedent to satisfaction (Oliver 1997; Oliver and Swan 1989a, 1989b; Morgan and Hunt 1994). Equity has been identified as a key component in signifying whether or not the exchange is fair (Gassenheimer et al. 1998). In addition, Oliver (1997) points out that in the interpersonal social exchanges situation, equity becomes more salient in influencing satisfaction. In a similar vein, Johnson et al. (2001) postulate that the feeling of being treated fairly (perceived equity) by the salesperson is an important driver of relationship satisfaction. More importantly, equity was reported to be positively related to customer satisfaction (Oliver and Swan 1989) and empirical evidence supports the assertion that perceived equity 13

is positively related to repatronage behaviour (Blodgett et al. 1997) which, in turn manifests itself as commitment.

Commitment is formed when the relationship is considered important and the customer wants to maintain it indefinitely (Morgan and Hunt 1994). A customer is less likely to be committed to a relationship if he/she believes that he/she is not being treated equitably by the salesperson (Anderson and Weitz 1992). Given the importance of these variables, is surprising upon reviewing the existing literature it was found that only Johnson et al. (2001) attempt to examine the perceived equity-relational commitment in their study. Hence, due to very little attention given to these two relational constructs (perceived equity and relational commitment) in the customer satisfaction framework, it is envisaged that it would be fruitful to examine their roles in the direct sales consumption situation.

1.2.2.5

Perceived Value

It has been widely reported that determinants of customer satisfaction include expectations, disconfirmations, performance, involvement, service quality, equity, trust, customer familiarity and customer expertise (Anderson and Sullivan 1993; Churchill and Suprenant 1982; Halstead et al. 1994; Jamal and Naser 2002; Oliver 1980, 1993; Oliver and Swan 1989; Sderlund and Julander 2003; Tse and Wilton, 1988; Yi 1991). A review of the existing literature found that perceived value has become an emerging topic in the late 90s and has a role in forming customers satisfaction and purchase intention (Day 2002; Day and Crask 2000; Spreng et al. 1993; Woodruff 1997; Zeithmal et al. 1988). In fact, Reichheld (1996, p. 57) clearly states that: What keeps customers loyal is the value they received. One of the reasons so many businesses fail is that too much of their measurement, analysis and learning revolve around profit and too little around value creation.

It is firmly established that the future of retail business lies in delivering genuine value to customers and the survival of most retail business will depend prominently on selling the right products at the right prices in the right way (Barlett 1994, p. 3). Apparently, a new paradigm has emerged for the nineties and beyond; which demonstrates that the customer

14

will pay more for acceptable quality, but will also demand a fair price and convenience of purchase (Barlett 1994). Additionally, Neal (1999, p. 23) asserts that: If you are measuring and reporting satisfaction, but not value, you may be in the right woods but barking up the wrong tree.

According to Zeithmal (1988), perceived value is derived from a customers overall assessment of the utility of a product based on perceptions of what is received and what is given. Furthermore, Holbrook (1994), Spreng and Olshavsky (1991), Woodruff (1997) suggest that customers assessment of value is based on sacrifice (i.e. the money and non monetary cost related to using the service). A considerable amount of the literature focused on the service setting, i.e. service value (Bolton and Drew 1991; McDougall and Levesque 2000 and Zeithaml 1988). This clearly indicates that researchers pay less attention to the tangible products perceived value. While several authors have presented definitions and conceptual models of value perceptions (e.g. Day and Crask 2000; Day 2002; Spreng et al. 1993; Woodruff 1997; Woodall 2003; Zeithaml 1988), very little empirical research has been undertaken to explore its role within the satisfaction process, specifically in the EDP framework. Against this backdrop, this study attempts to fill this gap by positioning perceived value from both aspects (i.e. tangible product and services) into one comprehensive customer satisfaction model, and to explore its relationship to customer satisfaction and other pertinent constructs.

1.2.2.6

Consequences of Customer Satisfaction

In light of the difficulty in retaining current customers in todays hyper-competitive market, understanding what factors influence customer satisfaction judgement and its consequences is not a choice but a necessity; managers have to implement decision-making processes closer to the end customer (Tippins and Su 1998). It was noted that business firms are increasingly demonstrating their interest to understand and investigate customer postpurchase behaviour. It is widely acknowledged that customer satisfaction is closely linked to some sort of behavioural intention, such as intention to repurchase, increase purchase and disseminate favourable word of mouth (Halstead et al. 1994; Mittal et al. 1999; Zeithaml et al. 1996).

15

In addition, many studies regard customer satisfaction as the ultimate dependent variable and fail to examine the outcomes of satisfaction. In fact, the consequences of customer satisfaction are of higher value to the business organisation because of their impacts on profitability (Jones and Sasser 1995). If this causal conception is true, strategically increasing performance on antecedents of satisfaction will translate into satisfaction at the dimensional level (e.g. product satisfaction, salesperson satisfaction) and in turn realised global (overall) satisfaction. Consequently, satisfied customers will have high propensity to engage in desirable behaviours (e.g. repurchase, positive word of mouth) and ultimately this could generate profitability for the business (Rust and Zahorik 1993; Zeithmal et al. 1996). A simple generic diagram that depicts the above contention is visually illustrated in Figure 1.1.

Figure 1.1

Generic Hierarchical View of Customer Satisfaction


Profitability $$$$$$$

Desired Customer Behaviours

Realise these
Overall Satisfaction

Subsystem Satisfaction

Manipulate these

Satisfaction Antecedents

Source: Adapted from Grisaffe (2000)

The relationship between satisfaction and retention has been explored and examined by a number of researchers and interestingly, this notion has been empirically supported (Anderson and Fornell 1992; Anderson and Mittal 2000; Anderson and Sullivan 1993; Bolton and Drew 1994; Burnham et al. 2003; Cronin and Taylor 1992; Taylor and Baker 1994). Furthermore, there is evidence to support the assertion that high retention rates 16

produce significant economic returns to a company (Ryan et al. 1995). Customers who make repeat purchases are crucial because they provide some stability to an organisations bottom line performance and also act as a platform to higher sales volume by increasing the size of order through cross purchase (buy other product category) and up purchase (buy higher value product). The empirical evidence highlights the need to understand and examine what makes customers ultimately form favourable behaviours such as disseminating positive word of mouth, making cross-buy and up-purchases, being less price sensitive and being less likely to switch to competitors or to complain. This lends support for advanced investigation to assess the link between satisfaction and behavioural intentions within the direct sales environment.

In summary, evidence indicates that the research topic is one worthy of investigation. The author has identified several shortcomings of the existing literature in the area of customer satisfaction, clearly reinforcing the need for this study. Table 1.1 provides further quotes that support the justification of the current research.

17

Table 1.1

Quotes Supporting Research Rationale


Quotes References
Jones and Suh (2000)

Future research should investigate the relationships among transaction -specific satisfaction, overall satisfaction and other related outcomes such as word-of mouth, trust, commitment and value model should be refined to explicate the cognitive processes that link attribute -level evaluations to satisfaction judgements a replication of the current study in different industries and settings and using different measures to increase generalisability applied Customer Satisfaction /Dissatisfaction (CS/D) research especially useful in generating a variety of insights and potentially fruitful avenues for future academic CS/D research Extant research on direct selling is predominantly dominated by studies conducted in the United States on direct selling firms, direct selling salespeople and direct selling customers. This research must be expanded to other market and countries and the resulting findings integrated into a comprehensive data base What factors produce a strong and lasting relationship between a direct salespeople and his or her customers? Is there any link between reasons why individuals buy from direct salespeople? Is it possible to construct an index of propensity to purchase through direct selling? Consumer characteristics that enhance or inhibit the likelihood of repeat purchases should be examined in the future

Mittal,Kumar andTsiros(1999)

Westbrook (1997)

Wotruba (1996)

Raymond and Tanner (1994)

there does not yet exist a body of knowledge that needs to be tied together for the Album (1992) purpose of understanding what direct selling is all about direct sellers are increasingly interested in the international market as well as demographics, lifestyle and buying habit will differ, perhaps markedly, in different countries and market..primary research into consumer behaviour is likely to be required . Enis (1992)

1.3

Research Problems, Objectives and Research Questions

It is clear that despite the fact that conceptual and empirical research efforts quite extensively addressed the customer satisfaction issues, several areas for improvement could still be recognised. The research problems that are explored and investigated in this study are especially focused on this specific area. The following issues will be examined:

18

1)

How are customer satisfaction and behavioural intentions constructed and associated in the direct sales consumption system? What are the roles of purchase decision involvement, perceived value, perceived equity and relational commitment in influencing customer satisfaction judgement and behavioural intentions when integrated into the traditional ExpectancyDisconfirmation Paradigm?

2)

The research problems as represented above form the building blocks of the current investigation. Table 1.2 briefly illustrates how the research problems are decomposed into nine research questions. Given the research problems as stated above, this thesis seeks to address the research questions with the main objective of this investigation being to identify and examine the key determinants and consequences of customer satisfaction at subsystem and overall abstraction levels in a consumption system setting. In order to accomplish this objective, valid and reliable multidimensional measures have to be established and validated (Churchill 1979; Gerbing and Anderson 1988; Ping 2004). Ultimately, the thesiss primary goal is to develop and generate a plausible model that could be characterised as having statistical and explanatory power (McQuitty 2004), to exemplify the determinants of customer satisfaction and predict its consequences within the direct sales environment. In response to the postulated research questions, Figure 1.2 visually illustrates the hypothesised linkages among constructs in the conceptual model.

Table 1.2 The Research Questions

Research Questions (1) What are the key attributes and factors that influence customers satisfaction judgements and which of the attributes have the greatest impact on each pertinent factor that constitutes a direct sales consumption system?

(2)

What are the determinants and consequences of product, direct seller and direct 19

selling company satisfaction?

(3)

How do product satisfaction, direct seller satisfaction and direct selling company satisfaction judgements aggregate to form a global (overall) satisfaction and which of these aspects is the most predictive of the customers overall satisfaction with the direct sales marketing system?

(4)

What are the determinants and consequences of overall satisfaction and how are these determinants interrelated to each other to provide explanation of customers overall satisfaction with the direct sales channel?

(5)

What are the determinants of behavioural intentions and which of these determinants has the most influential impact on the intentional behaviour propensity?

(6)

What is the role of Purchase Decision Involvement (PDI) in the proposed customer satisfaction model?

(7) What is the role of Perceived Equity in the proposed customer satisfaction model?

(8) What is the role of Perceived Value in the proposed customer satisfaction model?

(9) What is the role of Relational Commitment in the proposed customer satisfaction model?

20

Figure 1.2: The Conceptual Model

perceived equity direct seller satisfaction

relational commitment

direct seller performance

direct seller disconfirmation

perceived value

overall satisfaction

product performance

product disconfirmation Purchase Decision Involvement

product satisfaction

behavioural intentions

company performance company disconfirmation

company satisfaction

21

1.3

Scope of the Research

The research scope is described in terms of research setting and unit of analysis.

1.3.1 Research Setting This study focuses upon customer satisfaction related to consumption experience with the direct sales channel. Two product categories were selected (beauty and health care) for the study, with the assumption that they are considered as high purchase involvement products which means respondents will take into consideration the importance of their consumption experience. Furthermore, these product categories were reported as the top two most popular products purchased by direct sales customers (Rehanstat 1999).

The study was conducted in the context of customer consumption experience from the direct sales channel in Malaysia, specifically within three urban districts in Klang Valley. The direct sales channel was specifically chosen for this study because it is one of the most prevalent and the most popular alternative shopping channels among Malaysians particularly working women. Furthermore, despite this channel being popular and contributing economically to the nation, academic research is relatively sparse. Additionally, this distribution channel and the industry at large was chosen because of its uniqueness, as it involves high touch, which means that relationships between buyerseller play an important role in the success of this channel. Essentially, by incorporating the various aspects of this system, product, direct seller, and the direct sales organisation/firm, a better understanding of the evaluation and formation of satisfaction could be formed along with an understanding of how important these aspects are in the system in contributing to the overall satisfaction judgements and subsequent outcomes.

1.3.2

Unit of Analysis

The research questions in this study are based on the perceptions of one single consumer with respect to one particular product a (beauty or healthcare product that they last bought within the twelve months prior to data collection). The product categories under study are purchased by the consumer for their own consumption. Hence, they can be regarded as a suitable unit of analysis for the current research purpose.

22

In addition, the study investigates the consumers judgement of one particular direct seller, (as clearly stipulated in the questionnaire) from whom the last purchase of the beauty/health care product was made. With regards to the satisfaction judgement of the direct selling company, the question on this aspect would frame the respondents reference to one particular direct sales company which the direct seller represents. It is expected the validity and reliability of a consumers responses to be higher for transaction specific questions.

1.5

Organisation of Thesis

The thesis is organised into 2 parts: Theoretical Framework and Empirical Research. Figure 1.3 visualises the structure of the thesis.

Chapter 1 presented the introduction to the thesis, the rationale of the study, research problems, objectives and research questions, the scope of study and the structure of the thesis.

In part one the theoretical framework of the thesis is discussed. Chapter 2 provides definitions and description of the nature of the direct sales channel and presents an overview of the direct sales industry. Chapter 3 documents a critical review of the satisfaction literature. Its objective is to provide a basis for selecting relevant satisfaction constructs and to select an appropriate theory to build a model for the direct sales channel. Finally, chapter 4 provides a conceptualisation of the constructs investigated in the study. A conceptual model, which illustrates the proposed association of constructs, is presented. A series of hypothesis statements for the research is presented accordingly.

In part two, the empirical research of this study is described. Chapter 5 documents the research design and methodology utilised, which includes exploratory research and a detailed description of quantitative data collection techniques in the main phase. Chapter 6 reveals the overview of the research sample profile and provides an account of descriptive results on the research sample profile and of data generated from the questionnaire survey. Chapter 7 describes the procedure undertaken in evaluating the validity and reliability of scales employed for measurement of the constructs examined in the study and provides a

23

detailed description of utilising SEM for testing the research hypotheses formulated in chapter 4.

Chapter 8 presents the research summary, conclusions and discussions on the research questions. Finally, Chapter 9 concludes the study by delineating the studys contributions and implications to the marketing theory and the industry practitioners, and subsequently offers suggestions for future research directions.

24

Figure 1.3

Organisation of Thesis

Chapter 1

Introduction to Thesis

Part 1: Theoretical Framework Chapter 2

The Direct Selling Industry - The Hidden Industry -

Chapter 3

Part 1: Customer Satisfaction and core constructs Part 2: OtherChapter constructs 3 under study

Chapter 4

Conceptual Model and Hypotheses

Part 2: Empirical Research


Chapter 5

Research Design and Methodology

Descriptive Analysis Chapter 6

Chapter 7

The Structural Equation Modelling Part I: The Measurement Model Part II: The Structural Model

Chapter 8

Discussions and Conclusions

Chapter 9

Contributions/ Implications and Suggestions for Future Research

Source: Developed by author for this thesis

25

Vous aimerez peut-être aussi