Journal of Marketing Management, 1995, 11, 817-834 Nigel F. Piercy^ and Customer Satisfaction Neil A.

Morgan^ Measurement and ^ Cardiff Business School, Management: A Processual and ^University of Analysis Cambridge, UK Customer satisfaction (CS) measurement has been widely advocated as central to the pursuit of market orientation, total quaUty management, and competitive advantage by allowing management to monitor and improve performance in the terms most significant to customers. However, relatively little analytical attention has been devoted to the processual issues implicit in the adoption of CS measurement systems by organizations. This paper presents executive workshop data and new survey evidence to support the contention that both research and managerial agenda should be extended to recognize the multi-dimensionality of organizational process, and the implications of that charatteristicfor the adoption and use of CS measurement systems. Introduction The achievement of market orientadon by organizadons remains one of the basic tenets of the conventioneil prescripdve Uterature (e.g. Koder 1994), and has pro vided the focus for infiuendal recent enquiries and conceptual developments (KohU and Jaworski 1990; Narver and Slater 1990). This concem is emphasized by the development of reladonship marketing strategies (e.g. McKenna 1991; Christopher et al. 1992) and the move away from whoUy transacdon-based markedng (Webster 1992). To varying degrees of expUdtness, such prescripdve and analytical treatme nts of market orientadon and reladonship marketing share a focus on customer satisfacdon as a central component of marketing effecdveness and corporate performance. Similarly, memy of the daims for the advantage derivable from Total QuaUty Management rest on achieving a focus on customer sadsfacdon (e.g. Crosby 1979; Garvin 1988; Morgan and Piercy 1995). Indeed, customer sadsfacdon focus is also central to many general management writers (e.g. E>rucker 1958; Day 1990; Johnson and Scholes 1992) as weU as the "exceUence" school (e.g. Peters and Waterman 1982; Peters and Austin 1985), and those studying the formation of networked marketing organizadons and strategic aUiances (Webster 1992; Piercy and Cravens 1995). One famiUar manifestadon of this widespread concem with customer satisfacdon as a test of market orientadon and organizadonal effecdveness has been the widespread advocacy of customer satisfacdon measurement (CSM) systems, leading to the capture and dissemination of such measurements as a basis for marketing control (e.g. Bearden and Teal 1983; Band 1988). Such views are commonly found i n both the techniccd normadve Uterature and the popular management prescriptions

(e.g. Peters and Austin 1985; Peters 1988), and convendonal logic suggests that 0267-257X/95/080817 + 18 $12.00/0 1995 The Dryden Press

Nigel F. Piercy and Neil A. Morgan compeddve advantage is attainable through such management efforts to insdtudon aUze meirket orientadon (e.g. Day 1990). Correspondingly, a large amount of technical and analytical effort has been devoted to such issues as: conceptualizing different customer sadsfacdon constmc ts (Churchill and Suprenant 1982; Tse and Wilton 1988; Griffin and Hauser 1992); designing effective customer sadsfacdon data collecdon systems (VWlson and Nicosia 1986; McQuance and Mclntyre 1992); insdtudonalizing the customer satisfacdon measurement process (Lele and Sheth 1988; Powell 1988); and, analysi ng and respionding to customer dissatisfaction and complaining behaviour (e.g. Rich ins 1983, 1987). However, very Uttle attention has been given to the actual or potendal impad of CSM systems on the orgardzadon itself, other than the largely untested asserdon that the "happy employee" leads to the "happy customer" (e.g. Berry 1981; Gale 1992). This asserdon negleds, in particular, the possibiUty that a trade-off exists bet ween employee and customer interests, and that CSM may itself have adverse effeds on the "corporate environment" (Piercy 1985), or the "intemal market" represented b y the orgardzadon itself (Piercy 1992, 1995). In short, there appears generally to have been Uttle recognidon of the impad of the processual charaderisdcs and structural issues surrounding the implementadon and utilization of CMS approaches. It is certainly true that attention has been paid to the implementation of CSM systems themselves, but a processual analysis suggests tha t the more apposite issue is the ptosidve, negadve, or ambivalent impad of CSM on the implementadon of market orientation and market strategies, rather than the

implementadon of CSM systems as such. This paper discusses some exploratory evidence from management workshops, and the processual analytic model currently being evaluated in survey and case study research into CSM systems and other aspeds of marketing control. Some survey findings are presented, examining the managerial use of CS measurements, their impad on market strategy, and the intervening effed of intemal processual barriers. The findings presented have a number of impUcadons for both management practice and for further research in this area. Exploratory Evidence One preliminary source of insight into the CSM issue has been discussions held informally with a variety of executive groups in workshops and similar venues. T his "grounded" approach to generating theory (Glaser and Strauss 1967) has been a fruitful stage in the research process in other areas of market orientadon resea rch (e.g. KohU and Jaworski 1990). The approach also has attracdon in terms of the continuing "relevancy" debate among marketing academics and practidoners. These exploratory discussions suggested a number of areas for further investigad on, linked by a focus on the process of CSM and its use by management, rather than on purely technical issues of measurement and data coUection. ITie execudve views have been grouped around a number of themes concerned with the reasons why CSM is not used in some organizations, and the problems wit h CSM in those organizations where attempts have been made to implement such

Consumer Satisjaction Measurement and Management systems. Prime among the areas uncovered by the exploratory discussions with execudves were the following: Companies Who Do Not Measure Customer Satisfaction Many execudve comments related to the pracdcal problems of customer identificado n, sadsfacdon construct definidon, emd data coUecdon. Others related to a lack of convicdon that CSM would add anything useful to exisdng knowledge of customers and a beUef that CSM would itself sdmiilate customer complaints where there were none before. Yet others saw CSM as simply "not how we run things in this company". Companies Who Trivialize CSM Many execudves in companies pursuing CSM poUdes describe this as a superfidal or tacdcal issue, sigruficant only at the customer service level in "massaging" customers and deaUng with complaints. The suggestion is that CSM forms no part of developing market sfrategies, only in monitoring customer service op>eradons, and responding (sometimes quite dispropwrdonately and inappropriately) to negadve feedback. CSM in Interdepartmental Power Struggles Some execudves describe CSM as a weapon used in the power struggles between funcdonal areas, in attempts to "prove" to management the inadequades of others for example, in the "battle" between Marketing and Opieradons. The Politics of CSM Others describe the gaming behaviour of company persormel to "beat" the system, and to avoid being "blamed" for customer complaints, in ways not anddpated by management, and certainly not suppmrdve to customer sadsfacdon poUdes and markedng sfrategies for example, sales and distribudon pwrsonnel making price and service discount concessions to customers simply to win "brownie p>oints" in the CS quesdonnaire. CSM as a Management Weapon Some saw CSM in a whoHy negadve way as a crude control device with coerdve overtones, used by management to "poUce" lower levels of the organizadon for example, to "blame" p>oint-of-sale op)eradves for low customer satisfacdon.

Nigel F. Piercy and Neil A. Morgan The Isolation of CSM It was not uncommon for CSM output to be coUeded and stored, but not disseminated through the organization for example, evidenced in one company by CS data being held by Marketing and not shared with the QuaUty Department. Poorly Diffused CSM Some described situations of internal discord, where the perception of CSM and i ts gocds and effectiveness differed radicaUy between different parts of the organiz ation for example, shown in one company by distributors completing CS questionnaires themselves, because they did not see the point of the exerdse and did not want to "bother" end-user customers. It is clearly not sensible to suggest any general representativeness or vaUdity for such exploratory discussions with executives, for many obvious reasons. Nonethel ess, there is some suggestion of dysfunction in the adoption and utilization of CSM which does not simply reflect diredly the technical robustness and sophisticatio n of the measurement systems themselves. A Processuai Analysis of CSM Further analysis of this issue adopts the simplified model of process developed in earUer studies of marketing planning (Piercy and Morgan 1994) and resource aUocation in marketing (Piercy 1987fl, 1987b, 1994). This model is summarized in Figure 1 and proposes that process should be studied as a multi-dimensional phenomenon, recogni2ung an analytical dimension of technique, procedure and system, but also a behavioural dimension concemed with attitudes, perceptions an d motivation of the jDeople involved, and an organizational dimension concemed wit h management styles, corporate culture, stmcture and information fiows, i.e. the context in which the formal system operates. The underlying proposal is that gre ater insight into the operation of process is achieved through making expUdt these different aspeds of a process, and the largely ignored question of the consisten cy between them. This logic leads to the model of CSM shown in Figure 2. The logic is that in studying the adoption of CSM, in pursuit of market orientation and customer-base d market strategies, the researdi and managerial agenda should extend beyond the analytical/technical dimension of the process and uncover the behavioural and organizational dimensions of the process. The hypothesis is that barriers to the effectiveness of CSM may be traced not merely to operational and resource issues

but to managerial/poUtical questions and to cultural/structural barriers. The suggestion is that there are potentiaUy both positive and negative outcomes poss ible with CSM, with predictably positive or negative impacts on market strategy. An exploratory study examines the existence and impad of such processual barriers on the management use of CS measurements in dedsion-making and implementing market strategies.

Consumer Satisfaction Measurement and Management Exploratory Empirical Study This paper reports certain findings of an exploratory survey completed in 1992, involving a postal questionnaire study of 300 medium and large UK manufacturing companies. The questionnaire items were generated from executive interviews and the sampling units were chief marketing executives. The sample was generated on a systematic random sampling basis from a company directory. The questiormaire was sent to 925 companies and usable responses were obtained from 299 companies, giving a response rate of 32%. Reasons for non-response were investigated with telephone interviewing to evaluate systematic differences between responding and non-responding companies. This testing suggested that the sample was biased towards those organizations which measured CS, since many companies not measuring CS were unwilling to partidpate in the study. The results below are drawn from the 200 responding companies which did measure CS. The hypotheses evaluated here are drawn from the model in Figure 2, and are concerned with the use of CS measurements in management dedsion-making and the relationship with market strategies, in the light of the intervening process characteristics which prevail. The logic of the various streams of prescriptive literature reviewed earlier suggests that CS is measured so that it may impact on dedsions made by managers. As suggested in Figure 2, if CS measurements are to have any real impact, the us es Analytical dimension * * * * J Tfechniques Systems Procedures Formalization

Behavioural Process dimension consistency en!) Attitudes Beliefs * Participation ^ X X * Commitment ^ < \ /) Or ganiz ational mmension Structure Management style Culture Information

Figure 1. A model for analysing process in marketing.

Nigei F. Piercy and Neil A. Morgan CSM adoption/ implementation Analytical dimension y, 1 Behavioural | . Organizational 'rocess issues 1 dimension ! ^ aimension Process ODiisistency i Positive effects Negative effects on market strategy on market strategy Figure 2. Conceptual model of customer satisfaction measurement process. of the data should be refieded in the market strategies pursued. It is hypothesized: HI: The use of CS measurement data will be related to key elements of market strategy pursued by the company. However, our exploratory interviews and the model in Figure 2, also suggests tha t process barriers wiU intervene between the coUecdon of CS data and their use in management dedsion-making, and hence their impad on market strategies. It is hypothesized: H2: Intemal process barriers wiU be negadvely related to the use of CS data in management dedsion-making and their impad on market strategy. Managerial Uses of CS Measurements Table 1 shows the list of management dedsion-making areas where respondents were asked to evaluate the degree of use of CS data. These variables were fador analysed as shown to produce a fador structure suggesting use of CS data in: Quality/Operations Management, linking the use of CS data in morutoring quaUty a nd developing quaUty strategy and setting quality goals, guiding R&D and managing production and quaUty control; Staff Pay and Promotion, Unking the pajTnent and promotion of operational and managerial sta^ Staff Training and Evaluation, link ing the training and evaluation of operational and managerial staff; and. Strategic Management Control, Unking the development of company-wide strategy, control of the business, and the management of customer service and marketing programmes.

Consumer Satisfaction Measurement and Management Market Strategy Components Table 2 shows a Ust of market strategy items, again generated from the execudve interviews, which was factor analysed to produce the foUowing structiire. The Service and Qi4ality factor linked goals of achieving the highest perceived quaU ty in the market, providing exceUent customer service and achieving high buyer loyalty . The Competitive Differentiation fador links issues of managing distribudon netwo rks, building brand image and differendadon by design and specificadons. The High Profit/Volume fador Unks gocds of sales growth, higher market share and improved profitability. The Low Price/Cost fador Unks strategic imperadves of being price compeddve and minimizing marketing costs. Intemal Processual Barriers Table 3 shows the question items relating to behavioural and organizadonal proce ss charaderisdcs, as generated in the execudve interviews. These were evaluated by respondents In terms of the degree to which they were perceived to be problems i n CS measurement. These items were fador analysed to produce the fador structure discussed below. The Intemal Politics, Market Simplification and Customer Fear fador grouped a number of issues together. First, there is a group of variables describing vario us Table 1. Factor analysis* of the managerial uses of customer satisfaction measur ement Varittblest Factors f To what extent does the company use the results of CS measurement in making decisions in the following areas: I 2 3 4 V153 Monitoring quality performance 0-88 Usel=Quality/operations V154 Developing our quedity strategy 0-85 management V152 Setting quality goals 0-84 V151 Managing quality control 0-82 V155 Guiding R& D investments 0-64 0-34 V150 Maruiging production 046 031 V139 Payment of operational staff 086 Use2=Staff pay and V14fl Payment of managerial staff 085 promotion VI41 Promotion of operational staff 068 0-52 V142 Promotion of managerial staff 064 0-50 V143 Training operational staff 0-79 Use3=Staff training and V144 Training managerial staff 074 evaluation V137 Evaluating performance of operational staff 0-64 V138 Evaluating performance of managerial staff 064 V146 Developing company-wide strategy 0-87 Use4= Strategic V147 Developing marketing programmes 0-82 management control V145 Controlling the business as a whole 064

V148 Managing customer service operations 0-50 Eigenvalues 844 2-70 134 102 Cumulative pe2x:entage of variance explained 444 586 657 710 'Vaiimax rotation, converging in eight iterations; tLoadings less than 0 3 are s uppressed; Measured on i 5-point scale where I="not used at all" and 5="the single most important input".

824 Nigel F. Piercy and Neil A. Morgan Table 2. Factor analysis* qf marketing strategy components Variables} Fadorsf The most important parts of our marketing strategy in this market: 1 2 3 4 V212 Achieving the highest perceivedquality in the market V210 Providing excellent customer serviceV208 Achieving buyer loyalty O ^ 0 73 0 63 Stratl=Service and quaUty V214 Managing product distributionnetworics 0-84 Strat2= Competitive differentiation V213 Building brand imageV211 Differentiating our product by design and specifications 0 46 0 83 0-50 V215 Achieving sales growthV216 Building higher market shareV217 Improving profi tobility 0 35 0-85 0 45 030 Strat3=High profit/ volume V209 Being price competitiveV218 Minimizing marketing costs 0-79 0-72 Strat4=Low price/cost EigenvaluesCumulative percentage of variance explained 324 29 4 146 42 7 122 53 8 102 630 Varimax rotation with Kaiser normalization, converging in six iterations; tLoadin gs less than 0 3 are suppressed; ^Measured on a 5-point scale where 1="completely unimportant" and 5= "lughest possible priority". dimensions of intemal pioUdcs: CS generates intemal confUct and poUdcal squabble s, CS provides a "hostage to fortune" and means increased management control, areas of customer complaint are poUdcaUy sensidve and CS undermines management, cind people cheat the system. Second, there are variables describing simpUfied assumptions about the market, which render CS unatfracdve: word-of-mouth recommendadon is beUeved unimportcuit, customer loyalty is thought non-existent,

rep>eat sales do not matter, the company is not beUeved to be a service and quaU ty player, the company cannot change, and people do not beUeve in CS meastirement. Third, related to this, are a set of variables describing fear of the customer a nd the customer's reacdon to CS measurement: customers think something is wrong (if asked about CS), asking customers quesdons wiU reduce CS, it wiU raise uru^aUsdc expectadons and invite unwelcome complaints, and CS is badly received by people in the company. The second factor is labeUed Corporate Culture. This Unks together such items as : a lack of maruigement support for CS measurement, a percepdon that CS measurement is not appropriate to the company or the market, a lack of attendon to the results, a lack of a customer service poUcy and a low priority for CS measurement. The third factor is Market Complacency. This Unks issues of beUef that the compa ny already knows what matters in the market and what customers think, and that what matiers is having the best product, while CS is beUeved to be difficult and to i nvite unwarranted cridcism from customers. The Resources/Capability factor Unks issues of requirements in CS measurement fo r technical expertise, systems, people and time. The Logistics factor is concerned with the problems of identifying the customer suid whether CS measurement should be

Consumer Satisfaction Measurement and Management 825 Table 5. Factor analysis* of internal processual barriers to customer satisfacti on measurement Variables^ Factors f Problems with measuring CS: 1 2 3 4 5 6 7 8 F4] In our company, people think 0 82 measuring CS is unproductive because it generates too much internal conflict politics, market simplification and customer fear F40 In our company, people think 0 78 measuring CS is improductive because it leads to political squabbles between departments F39 In this type of market, people 0-76 think measuring CS is a waste of time because word-of-mouth recommendations do not matter F47 In our company, people think 0-76 measuring CS is unproductive because it creates a "hostage to fortune" for the marketing department F32 hi this type of market, people 0-76 0-31 think measuring CS is a waste of time because asking customers about satisfaction makes them think something is Vk^rong F31 In this type of market, people 0 76 0-32 think measuring CS is a waste of time because it makes satisfied customers less satisfied F36 In this type of market, people 0-72 think measuring CS is a waste of time because they think that customer loyalty does not exist F33 In this type of market, people 0-72 0-31 think measuring CS is a waste of time because it raises customer expectations uniealisticaily F46 In our company, people think 0-72 measuring CS is unproductive because complaints and criticisms from outside are unwelcome F35 In this type of market, people think 0 72 0-37 measuring CS is a waste of time because people thirJc repeat sales are not vital F43 In our company, people think 0 71 measuring CS is unproductive because people just cheat the system to get "lwownie points" F42 In our company, people think 0-69 measuring CS is unproductive because people see it as increased

management control F44 In our company, people think 0-69 0-37 measuring CS is unproductive because the things customers complain about are politically sensitive

826 Nigel F. Pittty and Neil A. Morgan Table 3. Continued Variablest Factorsf Problems with measuring CS: 1 2 3 4 5 6 7 8 F48 In our company, people think 0 62 0 51 measuring CS is unproductive because the people vi^ho run things here do not support it F23 In our company, problems in 0-59 0-38 measuring CS; it undermines management's "right to manage" F15 In our company, problems in 0-58 0-48 measuring CS: our employees do not like it F34 In this type of market, people think 0-58 0-38 0-31 measuring CS is a waste of time because people think we are not a service and quality player F24 In our company, problems in 0-56 038 0 46 measuring CS: people do not like the results F45 In our company, people thirJc 0-56 0-48 measuring CS is unproductive because people don't agree on what we should measure F30 In this type of market, people 0 50 0 50 think measuring CS is a waste of time because it just invites complaints from customers F19 In our company, problems in 0 49 0-48 0-46 measuring CS: people think we can t change it, so we shouldn't measure it F25 In oirr company, problems in 0-48 0-38 0-44 0-32 measuring CS: people don't really believe in it F29 In this type of market, people 0-42 0-41 0-37 think measuring CS is a waste of time because ncKjne eise does it in this nriarket F14 In our company, problems in 0-37 0-74 Pioc2=Corporate measuring CS are: management culture does not support it F16 In our company, problems in 0-41 0-70 measuring CS are: it is not how we do things in this company FI7 In our company, problems in 0-45 0-63 0-30 measuring CS are: people think it is not appropriate in this kind of business F18 In our company, problems in 0-31 0-60 0-36 measuring CS are: people think it has a lower priority than other things F13 In our company, problems in 0-30 0-60 0-31 measuring CS are: we have no clear "customer satisfaction" policy F22 In our company, problems in 0-42 0-55 0-34 0-41 0-34

measuring CS are: no-one takes any notice of the results

Consumer Satisfaction Measurement and Management Table 3. Continued Variablest Factorsf Problems with measuring CS: 1 2 3 4 5 6 7 8 F27 In this type of market, people 0-77 Proc3=Market think measuring CS is a waste of complacency time because: we already know what really matters in this market F26 In this type of market, people 0-76 think measuring CS is a waste of time because: we already know what customers think 0-63 F28 In this type of market, people think measuring CS is a waste of time because: if you produce the t)est product that is what matters 031 0-63 F20 In our company, problems in measuring CS are: people don t like inviting criticisms 0-47 046 F8 The problems about measuring 0-45 CS are: customer satisfaction is difficult to measure 0-84 Proc4=Resources/ capability F5 The problems about measuring CS are: the technical expertise you need F6 The problems about measuring CS 0-81 are: the systems you need 0-63 0-44 F4 The problems about measuring CS 0-62 041 are: the people you need F3 The problems about measuring CS 077 Proc5=Logistics are: the time it takes F9 The problems about measuring CS are: it is difficult to identify the real 075 customer who matters

FIO The prc4>!ems about measuring CS are: finding out who the customers 0-66 are FIl The problems about measuring CS are: when there are too few 0-48 customers F12 In our company, problems in 0 31 measuring CS are: people think it is 0-87 Proc6=Cost barriers a matter for distributors, not for us F2 The problems about measuring CS 085 are: the finandal resources needed FI The problems about measuring 0-65 Proc7=Pen:eived market drivers CS are: the expense F7 The problems about measuring CS are: in our business people consider 055 technical specifications matter more than what customers think F38 In this type of market, people think 0 51 measuring CS is a waste of time 049 because: they think the market is driven by technical specifications F37 In this type of market, people think 0 48 measuring CS is a waste of time because: they think the market is driven by price

828 Nigel F. Piercy and Neil A. Morgan Table 3. Continued Variablest Faclarsf Problems with measuring C5: 1 2 3 4 5 6 7 8 F21 bl our company, problems in 0 41 0 35 0 60 Proc8=CrEdibility measuring CS are: people don't believe the results Eigenvalues 21-99 3-41 1-91 174 166 1-52 1-17 1-07 Cumulative percentage of variance explained 45 8 52 9 56 9 60-5 64-0 67-1 69-6 71-8 Varimax rotation with Kaiser normalization, converging in 12 iterations; tLoading s less than 0 3 are suppressed; ^Measured on 5-point scales where l="a very minor problem" and 5="a very major problem". done by distributors rather than the manufacturer. The Cost Barriers fador links the finance and expense impUcadons of CS measurement. The Perceived Market Drivers factor Unks beUefs that the market is driven by technical spedficadons and price. The Credibility fador is one variable only: be lief in the results of CS measurement. Index Reliability Table 4 shows the Cronbach Alpha scores for the indices created from the fadors described above. These suggest that the factor indices are robust, with the exce ption of STRAT4, which is dropped from the analysis. Results In a preliminary evaluadon of HI, Table 5 suggests a number of significant relationships between the use of CS data in management dedsion-making and the Table 4. Index reliability Cronbach Alpa n Mean SD Procl intemal politics, market simplification and 0-97 200 1-92 0-76 customer fear Proc2 Corporate culture 0-93 200 214 1-03 Ptoc3 Market complacency 0-88 200 2-38 0-99 Proc4 Resources/capabibty 082 200 2-79 0-93 Proc5 Logistics 072 200 1-69 0-63 Proc6 Cost barriers 0-90 200 2-45 1-05 Proc7 Perceived market drivers 0-74 200 2-34 1-01 Proc8 Credibility N/A 200 211 1-17

Usel Use2 Use3 Use4

Quality/operations management 0-90 163 3-25 0-91 Staff pay and promotion 0-90 163 2-02 0-91 Staff training and evaluation 0-88 163 2-89 0-95 Strategic management control 0-81 163 3-15 073 Service and quality 0-64 187 4-15 0-69 Competitive differentiation 0-65 187 3-07 1-14 High profit/volume 0-67 187 4-01 1-71 Low price/cost 0-33 187 3-04 076

Strati Strat2 Strat3 Strat4

N/A, not applicable.

Consumer Satisfaction Measurement and Management 829 Table 5. Correlation* matrix: Managerial uses of customer satisfaction measureme nt and market strategy components Strati Straa Strat3 Service and Cojnpetitwe Migh profiti Cjuality differentiation volume Usel Use2 Use3 Use4 Quality/operations management 0-29+ 0-221: 0-26+ Staff pay and promotion 0-16 0-17 0-14 Staff training and evaluation 0-20t 0-12 0-17 Strategic management control 0-29+ 0-36+ 0-33+

Pearson correlations; +significance level of 0-001; ^significance level of 0-05. market sfrategy components identified. This is pardcularly strong for USEl (QuaUty/Op>eradons Management) and USE4 (Sfrategjc Management Control). In considering H2, the correladons in Table 6 show a number of sigruficant reladonships between the processual barrier factors and the CS measurement use factors, although almost none with the market sfrategy components. These reladonships are negadve, and strongest for the use of CS data for dedding steif f pay and promodon and for staff training and evaluadon. Discussion The underlying point of the case argued in this paper is that the use of CS measurement in pursuit of market orientadon and customer-based or customerdriven market strategies requires a research and managerial agenda which extends beyond the current focus on technique and system. The argument is that CS measurement may potendaUy create posidve or negadve effects in a company, and these may be traced not simply to operadonal and resource issues but to managerial/poUdcal problems and cultural/stmctural characterisdcs. The exploratory evidence gathered in execudve workshops suggested the existence of an agenda of covert fadors currendy ignored by the Uterature, yet potentiaUy highly sigiuficant in determirung the effects and effecdveness of CS measurement. To this may be added the evidence from an exploratory survey of UK manufacturing companies. Perhaps the most notable finding in the data presented here are the intemal processual barriers identified. These were identified as: I ntemal Politics, Market Simplification and Customer Fear, concemed with the impact of C S measurement on poUdcs and coxvfUct in the company, and simpUficadon devices adopted in percepdons of the customer; Corporate Culture, and its rejecdon of CS measurement; Market Complacency, which suggests CS measurement is redundant; Resources/Capability, Logistics and Cost Barriers fadors, concemed with the oper adonal aspeds of implementing CS measurement; Perceived Market Drivers, representing a corporate beUef that the market is driven only or primarily by technical spedficadons and price; and. Credibility, or whether the results of CS measureme nt

are beUeved in the company. While only exploratory, this fador structure offers a new insight into the real context perceived by execudves for the implementadon of CS measurements systems, and a potendal diagnosdc for studying individual cases. In addidon, the survey showed a reasonably strong posidve reladoriship between the use of CS data and market sfrategy components, and a negadve reladonship

Nigel F. Piercy and Neil A. Morgan S 2 2 S ^-1S 1 ;5 2 2 3 3 So 8 lO o Lfi >.c ^ ^ ^ ^ l l ll-i I

Consumer Satisfaction Measurement and Management between the internal processual barriers and the use of CS data in management dedsion-making. What was not clear was a relationship between the processual characteristics and market strategy elements, and this remains a question for fu rther analysis. In essence, what we have found is that the measurement and use of CS data is significantly and positively associated with market strategies of service and qu eility, competitive differentiation, and high profit/volume, and this is applied most particularly to dedsion-making in the quality/operations area, and in overall strategic management control. This suggests that when it is measured, CS is a significant factor in dedsion-making in these areas. However, what we also find paradoxically is that the more CS data are used in dedsion-making, the more significant are the negative assodations with informal processual barriers. However, these latter relationships are overwhelmingly with the use of CS data in nwking dedsions on staff pay and promotion, and training and evaluation. This suggests a number of specxilative explanations. It may be that CS data are used by companies in situations where internal barriers are low giving negative assodations between use of CS data and the existence of barriers. This may also explain why the clearest relationships aie found for the use of CS data in staff -related issues. Cross-sectional data can tell us little about the emergence or reduction of internal processual barriers over time, or the role that the use of CS data may play in stimulating or overcoming the barriers identified. This also remains an issue for further analysis, requiring a longitudinal design. Implications Perhaps the most notable implication of this work is that a new research agenda is emerging, based on the contention that the present literature is myopic in its c oncern with the technical aspects of CS measurement alone, at the expense of an analysi s of processual aspects. A start has been made in developing such an agenda through t he executive workshop data and the exploratory survey evidence presented here. This work is to be continued in two ways. Firstly, a more detailed analysis of proces sual characteristics is to be undertaken, and secondly, a longitudinal case study is being developed to examine the internal and external effects of the implementation of CS measurement over a 2-year period. The managerial implications of the work to-date are that: the issues to be considered in implementing and extending CS measurement systems may be more diverse and complex than previously suggested in the literature. In particular i

t may be necessary to think far more of the behavioural and organizational aspects of CS measurement, if such approaches are to be successful and effective in assisting the development of market orientation and customer-based market strategies. In particular, the potential tension between the demands and requirements of the internal market (employees, managers, distributors) and the external market (end user and intermediary customers) should be recognized as a focus for management attention. For example, the structure shown in Figure 3 is one which has proved insightful in discussions with managers. This suggests four possible scenarios w hen internal and external customer satisfaction levels are compared: Syner^ internal

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