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Chapter 2

Literature Review
This chapter will give an overview of literature and models that are related to the
research problem presented in the previous chapter. In this chapter we will introduce
the concepts of service quality, service quality model, service quality dimensions,
E-service quality, customer satisfaction, satisfaction formation, the linkage between
customer satisfaction and service quality, and Internet banking. Moreover, this
chapter will present some information related to the research such as, the conceptual
of real time customer service, characteristics of the Thai retail banking industry and
the company overview in order to give a clear idea about the research area.

2.1 Definition of Service Quality

During the past few decades service quality has become a major area of academic
investigation. There are many researches and analysis that defined the term of
Service Quality.

The important factors of the service quality form the word

SERVICE. That is S stands for satisfaction, E stands for expectation, R is

readiness, V is value, I is Interest, C is courtesy and E is efficiency
(Proomprow, 2003).

Grnroos (1982) described the total service quality as customers perception of

difference between the expected service and the perceived service. Asubanteng,
Mccleary and Swan (1996) defined service quality as the difference between
customers expectations for service performance prior to the service encounter and
their perceptions of the service received. Gefan (2002) defined that service quality as
the subjective comparison that customers make between the quality of the service that
they want to receive and what they actually get.

Parasuraman, Zeithaml, and Berry (1985) defined service quality as the comparison
between customer expectations and perceptions of service. In addition, they suggested
three underlying themes after examination of the previous writing and literature on

(1) service quality is more difficult for customer to evaluate than goods quality,
(2) service quality perceptions result from a comparison of consumer expectations
with actual service performance, and
(3) quality evaluations are not made solely on the outcome of service; they also
involve evaluations of the process of service process of service delivery.

Parasuraman et al. (1985) suggested the Service Quality Model in order to serve as
a framework for further research.
Word of Mouth

Personal Needs


Past Experience

Expected Service
Gap 5

Perceived Service



Gap 4

Gap 3

Gap 1

To customers

Service Quality
Gap 2

Management Perception of
Customer Expectations
Figure 2-1: Service Quality Model
Sources: Parasuraman et al., (1985) p.44

Five gaps are listed below:

Gap 1, consumer expectation-management perception gap:

Management may have inaccurate perceptions of what consumers actually
expect. It requires the appropriate management processes, market analysis
tools and attitude.


Gap 2, service quality specification gap:

There may be an inability on the part of the management to translate customer
expectations into services quality specifications. This gap relates to aspects of
service design.

Gap 3, service delivery gap:

Guidelines for service delivery do not guarantee high-quality service delivery
of performance. Reasons for this include lack of sufficient support for the
frontline staff, process problems, or frontline/contact staff performance

Gap 4, external communication gap:

Consumer expectations are fashioned by the external communications of an

Gap 5, expected service-perceived service gap:

Perceived quality of service depends on the size and direction of Gap5, which
in turn depends on the nature of the gaps associated with marketing, design
and delivery of services

Service Quality Dimensions

According to Parasuraman et al.s (1985), ten detailed dimensions of service quality
through focus group studies are listed as: reliability, responsiveness, competence,
access, courtesy, communication, credibility, security, competence, understanding the
customer and tangibles. Among these ten services quality determinants, reliability is
the most important dimension. Detailed explanation will be described below.
Reliability: It means that the firm performs the service right the first time and the firm
honors its promises.
Responsiveness: It concerns the willingness or readiness of employees to provide

It means that possession of the required skills and knowledge to

perform the service.

Access: It involves approachability and easy of contact.
Courtesy: It involves politeness, respect, consideration, and friendliness of contact


It means keeping customers informed in language they can

understand and listening to them.

Credibility: It involves trustworthiness, believability, honesty.
Security: It is the freedom from danger, risk or doubt.
Understanding: Knowing the customer involves making effort to understand the
customers needs.
Tangibles: It includes the physical evidence of the services. (Parasuranman et.al.,

In their following research (Parasuraman, Zeithaml, and Berry, 1988), then they
purified and distilled the ten dimensions to five:reliability, tangibles, responsiveness,
assurance, and empathy, which constitute the base of global measure for service
quality -SERVQUAL Based on these five dimensions listed above, the researchers
developed 22- item scale with a set of service quality dimensions to quantify a
customers assessment of a companys service quality. However, the traditional
service quality dimensions cannot directly apply to Internet banking, because it
represents a different and unique service delivery process. Different dimensions have
been accepted in previous studies measuring electronic service quality. Nevertheless,
the studies of Parasuranman (1988) offer particularly strong service quality
dimensions for measuring traditional services and could be serve as a good starting
point for further research (Yang and Fang, 2004)


2.2 Definitions of E-service quality

According to Zeithaml et al. (2000), e-service quality is comprehended both from preand post-Web site service perspectives. It can be understood as the evaluation of the
efficiency and effectiveness of online shopping, purchasing, and delivery of products
and service. Santos (2003) defended e-SQ as overall customer evaluations and
judgments of excellence e-service delivery in the virtual marketplace.

E-service quality dimensions

Zeithaml et al. (2000) developed e-SERVQUAL for measuring e-service quality.
Through the focus group interview they have identified eleven dimensions of online
service quality: access, easy for navigation, efficiency, flexibility, reliability,
personalization, security/privacy, responsiveness, trust/assurance, site aesthetics, and
price knowledge. They identified four dimensions efficiency, reliability, fulfillment
and privacy- to form the core e-SERVQUAL scale They also found that three
dimensions become significant only when the online customers have questions or run
into problem- they are responsiveness, compensation and contact. (Zethaml et al. 2002)

Yang and Fang (2004) identified six key dimensions of service quality of online
securities brokerage services: reliability, responsiveness, competence, ease of use,
security and product portfolio. Yang, Jun and Peterson (2004) have uncovered six key
online service quality dimensions: reliability, access, ease for use, attentiveness,
security and creditability-employed. Further more, Yang et al.(2004) suggested that if
online retailers want to achieve high level of customers perceived service quality,
four dimensions should be focused on: reliability, attentiveness, ease for use, and

Yang and Fang (2004), have noted that traditional service dimensions, such as
competence, courtesy, cleanliness, comfort and friendliness, are not relevant to online
retailing, whereas other factors, such as reliability, responsiveness, assurance, and
access, are critical to both traditional service quality and e-service quality.


Madu (2002) proposed the following 15 dimensions of online service quality:

performance, features, structure, aesthetics, reliability, storage capacity, serviceability,
security and system integrity, trust, responsiveness, service, differentiation and
customization, Web store policies, reputation, assurance and empathy.

Wolfinbarger and Gilly (2002) have found four online retailing service quality
dimensions through focus group interviews and an online survey. These are website
design, reliability, and privacy/security and customer service. Furthermore,
Wolfinbarger and Gilly (2002) have found that reliability and fulfillment are the
strongest predictor of customer satisfaction.

In order to measure end- user computing satisfaction, Doll and Torkzadeh (1988)
proposed five quality dimensions that influence end-user satisfaction: content,
accuracy, format, ease of use and timeliness. Recently, several studies on e-commerce
have noted that some features of web sites are critical to their business success. D
Angelo and Little (1998) argued that factors such as navigational characteristics,
visual characteristics, and practical consideration (including images, background,
color, sound, video, media, and content) are important considerations in designing a
Web site. Liu and Arnett (2000) considered the following four factors as major
ingredients for the success of a web site as: system use, system design quality,
information quality and playfulness. Jayawardhena and Foley (2000) suggested that
the features of Internet banking Web sites, such as: the speed to download, content,
design, interactivity navigation and security, are critical to enhancing customer

Based on the focus interviews and the insights of previous research, Santos (2003)
developed a conceptual model of e-service quality. This model proposed that e-service
quality consists of incubative and active dimensions, and each dimension is composed
by five or six determinants, as illustrated in Figure2-2.


Figure 2-2 : Conceptual Model of E-service Quality

Source: Santos, (2003). p. 239

Santos (2003) further explains that before the launching of a web site, the incubative
dimension needs to be considered and be ensured that:

The web site is easy to use, search and navigate;

it has an appealing appearance to its target customers;

links are set up and maintained, and the broken links are avoided;

the site has a well-organized structure and layout; and

there is an attractive presentation of factual contents.


When a Web site has been established, the active dimension needs to be maintained
throughout the entire period of active e-commerce on the Web site. The determinants
of activate dimensions are:





security; and


All determinants listed above are presented in descending order of importance-from

high importance to low importance.

Yang, Peterson and Huang (2001) identified and measured six dimensions of customer
perceptions of service quality:

Ease of use means user friendliness, loading/transaction speed, search

capability, and easy navigation.

Content contained on the website, particularly information that matches the

needs of the consumer.

Accuracy of content

Timeless of response

Aesthetics, innovating attractiveness of the site and catalog pictures


Lociacono, Watson and Goodhue (2000) established a scale called WEBQUAL with
the twelve dimensions: informational fit to task, interaction, trust, response time,
design, intuitiveness, visual appeal, innovativeness, flow, integrated communication,
business processes and substitutability. Latimore, Watson and Maver (2000)
mentioned in their study that eighty seven percentage (87%) of Internet Banking
customers want to use a variety of financial transaction including paying their bills
electronically and automatically, viewing their monthly bank statement and
purchasing stocks and insurance.


2.3 Service Quality in Banking

The service quality has been wildly used to assess the service performance of various
service organizations including banks (Newman, Cowling and Leigh, 1998). Joseph,
McClure and Joseph (1999) investigated the influence of technology, such as the
ATM, telephone, and Internet, on the delivery of banking service. Their study
identified six underlying dimensions of electronic banking service quality. These
dimensions are convenience / accuracy, feedback / complaint management, efficiency,
queue management, accessibility and customization.

Bahia and Nantel (2000) also proposed an alternative measure of perceived service
quality in retail banking that comprises thirty one items with six underlying key
dimensions. These dimensions are: effectiveness and assurance, access, price,
tangibles, service portfolio and reliability.

The remaining eight dimensions were previously identified by Parauraman et al.

(1985). Reliability refers correct service, keep service promise, accurate records and
keep promise as advertised. Responsiveness refers prompt service, quickly problems
solving and convenient service. Competence means ability to solve problems and
knowledge to answer questions. Courtesy includes address complains friendly and
consistently courteous. Credibility means confidence in the banks service good
reputation. Access includes availability for help, ATM access, phone access. E-mail
access, account access when going abroad. Communication means clear answer,
informing customer of important information and availability of status of transactions.
Understanding of customer means personal attention. Collaboration includes
external collaboration and internal collaboration. Continuous improvement includes
continuous improvement on online systems, continuous improvement on banking
products and continuous improvement on customer services. Jun and Cai (2001)
identified three broad conceptual categories related to Internet banking service quality:
1. Customer service quality; There are ten dimensions as following: reliability,
responsiveness, competence, courtesy, credibility, access, communication,
understanding the customer, collaboration and continuous improvement. The


two dimensions, collaboration and continuous improvement are found as new

dimensions for Internet banking.
2. Online systems quality: six dimensions are contents, accuracy, ease of use,
timelines, aesthetics and security.
3. Banking service product quality has only one dimension, Product variety /
diverse feature.
Jun and Cai (2001) also suggested that both internet-only banks and traditional
banks offering Internet banking services should focus more on the following
important dimensions : responsiveness, reliability and access.

Service Quality Model on Internet Banking:

One of the key challenges of the internet as a service delivery channel is how to
manage service quality as these remote formats bring significant change in customer
interaction and behavior. Broderick and Vachirapornpuk (2002), presented a service
quality model of Internet banking as listed in Figure 2-3.

Image and





Figure 2-3 : Preliminary Model of Perceived Service Quality in Internet Banking

Source: Broderick and Vachirapornpuk, (2002), p.328

The model showed that in the context of internet banking five key elements are
central dimension of perceived service quality. They are:
1. Customer expectations of the service
2. The image and reputation of the service organization
3. Aspects of the service setting
4. The actual service encounter
5. Customers participation

2.4 Customer satisfaction

Early concepts of satisfaction research have typically defined satisfaction as a post
choice evaluative judgment concerning a specific purchase decision (Churchill and
Sauprenant, 1992; Oliver, 1980).

Most researchers agree that satisfaction is an

attitude or evaluation that is formed by the customer comparing their pre-purchase

expectations of what they would receive from the product with their subjective
perceptions of the performance they actually received (Oliver,1980). Several authors
have defined satisfaction in different way. The following will present some of the
definitions of customer satisfaction and will give us more clear idea about satisfaction

Satisfaction is a persons feelings of pleasure or disappointment resulting from

comparing a products perceived performance (or out come) in relation to his or her
expectations (Kotler, 2000). Customer satisfaction is a collective outcome of
perception, evaluation and psychological reactions to the consumption experience
with a product/service (Yi, 1990). Satisfaction is a function of consumers belief that
he or she have been treated fairly (Morgan and Hunt, 1994). The satisfaction is the
consumers response to the evaluation of the perceived discrepancy between prior
expectations (or some norm of performance) and the actual performance of the
product as perceived after its consumption (Tse and Wilton, 1988)


Satisfaction Formation
The disconfirmation theory emerges as the primary foundation for satisfaction models.
According to this theory, satisfaction is determined by the discrepancy between
perceived performance and cognitive standards such as expectation and desires
(Khalifa and Liu, 2003). Customer expectation can be defined as customers pretrial
beliefs about a product (Mckinney, Yoon and Zahedi, 2002). Expectations are viewed
as predictions made by consumers about what is likely to happen during impending
transaction or exchange (Zethaml and Berry, 1988). Perceived performance is defined
as customers perception of how product performance fulfills their needs, wants and
desire (Cadotte, Woodruff and Jenkins, 1987). Perceived quality is the consumers
judgment about an entitys overall excellence or superiority (Zeithaml, 1988).
Disconfirmation is defined as consumer subjective judgments resulting from
comparing their expectations and their perceptions of performance received
(Mckinney et al. 2002, Spreng et al. 1996).

Oliver (1980) described the process by which satisfaction judgments are reached in
the expectancy-disconfirmation framework. Figure2-4 shows how satisfaction
judgment is related to expectancy- disconfirmation approach. Buyers form
expectations of the specific product or service before purchase and perceived quality
level which is influenced by expectations.



- tion



Figure 2-4 : Satisfaction Formation

Source: Oliver referred to in Anderson & Sullivan, (1993) p. 127

The figure 2-4 explains that the arrow drawn from expectations to perceived quality
indicates perceived quality may increase or decrease directly with expectations.
Perceived quality may either confirm or disconfirm pre-purchase expectation. The
determination of the extent to which perceived quality expectations are disconfirmed
is depicted in figure 4-2 by arrows drawn from expectation and perceived quality to
disconfirmation. Satisfaction is positively affected by expectations and the perceived
level of disconfirmation that is also shown by the arrow in the figure 2-4
Disconfirmation and perceived quality have a stronger impact on satisfaction (Oliver

Moreover, Zairi (2000) found that satisfied customers possibly share their experiences
with five or six people while dissatisfied clients might inform another ten. It cost 25
per cent more to recruit new customers than to maintain existing ones. Naumann
(1995) and Dawes and Swailes (1999) also pointed out that retaining an existing
customer costs about five times less in money, time and corporate resources than
attracting a new customer.


Determinant of Customer Satisfaction:

Based on research contributions on original paper of DeLone and McLean
Information System success model and based on changes in the role and management
and information system, DeLone & McLean (2003) have updated their original
success model to meet the challenges of the new e-commerce world (see Figure 2-5).

To Use



User Satisfaction


Figure 2-5 : Updated DeLone & McLean IS Success Model

Source: DeLone & McLean 2003, p.24

Within the e-commerce context, the primary system users are customers or suppliers
rather than internal users. Customers and suppliers use the system to make buying or
selling decisions and execute business transactions. These electronic decisions and
transactions will then impact individual users, organizations, industries and even
national economies. This communication and commerce proves fits nicely into
updated DeLone & McLean IS Success model(2003) and its six success dimensions.
This model describes system quality, information quality, service quality singularly
and jointly affect both use and user satisfaction. Additionally the amount of use can
affect the degree of user satisfaction positively or negatively.


The figure 2-5 explains the six dimensions that are included in the model. The
dimensions are described below:

System Quality in the internet environment measures the desire characteristics of an Ecommerce system. System qualities that are valued by users of and E-commerce
system are usability, availability, reliability, adaptability and response time (e.g.
download time). Information Quality in the Web content should be personalized,
complete, relevant, easy to understand, and secure that will be easy for the customers
to initiate transactions via the Internet and return to site on a regular basis.
Service Quality means the overall support delivered by the service provider, applies
regardless of whether this support is delivered by the Information system department,
a new organizational unit, or outsourced to an internet service provider (ISP). Its
importance is most likely greater than previously since the users are now customers
and poor user support will translate into lost customers and lost sales. (DeLone and
McLean 2003).

Usage means everything from a visit to a web site, to navigation within the site, to
information retrieval, to execution of a transaction.
User satisfaction remains an important means of measuring customers opinions of ecommerce system and should cover the entire customer experience cycle form
information retrieval through purchase, payment, receipt and service.
Net benefits are the most important success measure as they capture the balance of
positive and negative impacts of the e-commerce on customers, suppliers, employees,
organizations, markets, industries, economies and even societies. Net benefits success
measures are most important, but that cannot be analyzed and understood without
System Quality, Information Quality, and Service Quality measurements.


The table 2-1 demonstrates six dimensions of the updated DeLone & McLean (2003)
Information System Success model that can be used as e-commerce success metrics.

Table 2-1 : E-Commerce Success Metrics

Dimensions of Extended IS

Measurement Variables

success model
System Quality

Information Quality
Service Quality
User Satisfaction

Adaptability, Availability, Reliability, Response

time, usability



Personalization, Relevance, Security.

Assurance, Empathy, Responsiveness.
Nature of use, Navigation patterns, Number of site
visits, number of transactions executed.
Repeat purchases, Repeat visits users surveys.

Net benefits






additional sales, Reduced search costs, Time


Source: DeLone & MacLean 2003, p.26

2.5 Service Quality and Satisfaction

Service quality has been the subject of considerable interest by both practitioners and
researchers in recent years (Parasuraman et al 1985). An important reason for the
interest in service quality by practitioners results from the belief that this has a
beneficial effect on bottom-line performance for the firm. However, practitioners
often tend to use the terms service quality and customer satisfaction inter changeably.
Among academics, the satisfaction construct is recognized as being distinct and has
been developed along fairly independent lines from service quality (Oliver 1980).
Most experts agree that customer satisfaction is short-term, transaction specific


measure, whereas Service quality is an attitude formed by a long-term, overall

evaluation of a performance (Hoffman & Bateson 2002)
Service quality appears to be only one of the service factors contributing to customers
satisfaction judgments (Cronin and Taylor, 1992; Ruyter et al., 2001; Spreng and
Mackoy, 1996). A number of academics such as Parasuraman et al. (1985), Grnroos
(1984), Johnston (1997) and others have tried to identify key determinants by which
customer assesses service quality and consequently results in satisfaction or not.
Jayawardhena & Foley (2000) suggested that service quality feature in Internet
banking web sites are critical to enhance customer satisfaction. In Internet banking
unlimited access to variety of financial transaction and quality levels of bank products
are becoming a key driving force in attracting new customers and enhancing customer
satisfaction (Mols, 2000).

2.6 Definition of loyalty

Jones and Sasser (1995, p. 94) state that customer loyalty is a feeling of attachment
to or affection for a companys people, products, or services. Oliver (1999) defines
brand loyalty as a deeply held commitment to rebuy or repatronize a preferred
product/service consistently in the future, thereby causing repetitive same-brand or
same brand-set purchasing, despite situational influences and marketing efforts having
the potential to cause switching behavior. This definition emphasizes the two
different aspects of brand loyalty that have been described in prior studies on the
concept--behavioral and attitudinal (Aaker, 1991; Jacoby and Chestnut, 1978; Oliver,
1999; Day, 1969). Still, this view is not universally held, as others suggest that the two
constructs are either not related (Oliva et al., 1992) or that they are synonymous and
represent each other (Assael, 1987).

Chaudhuri and Holbrook (2001) suggest that behavioral, or purchase, loyalty consists
of repeated purchases of the brand, whereas attitudinal brand loyalty includes a degree
of dispositional commitment in terms of some unique value associated with the brand.
Hence, an intermediate view on the matter asserts the constructs are related, yet by
definition are distinct, with commitment leading to loyalty (Beatty and Kahle, 1988).
In this study, commitment is defined as a consumers psychological attachment to an


e-service that develops before a customer would be able to determine that their repeat
purchase behavior was derived from a sense of loyalty (Beatty et al., 1988). Loyalty is
defined as the intention of a consumer to repurchase products/services through a
particular e-service vendor.

Service loyalty
Research into customer loyalty has focused primarily on product-related or brand
loyalty, whereas loyalty to service organizations has remained underexposed (Gremler
and Brown, 1996). Frequently, a high positive correlation between the constructs of
satisfaction and product loyalty is reported. With regards to service loyalty, perceived
service quality is often viewed as a key antecedent (Dick and Basu, 1994). However,
there are a number of reasons why findings in the field of product loyalty cannot be
generalized to service loyalty (Keaveney, 1995; Gremler and Brown, 1996). Service
loyalty is more dependent on the development of interpersonal relationships as
opposed to loyalty with tangible products (Macintosh and Lockshin, 1998), for
person-to-person interactions form an essential element in the marketing of services
(Czepiel and Gilmore, 1987; Surprenant and Solomon, 1987; Crosby et al., 1990;
Czepiel, 1990). Gremler and Brown (1996) state that customer loyalty is the degree to
which a customer exhibits repeat purchasing behavior from service provider,
possesses a positive attitudinal disposition toward the provider, and considers using
only this provider when a need for this service exits.
Furthermore, the influence of perceived risk is greater in the case of services, as
customer loyalty may act as a barrier to customer switching behavior (Klemperer,
1987; Guiltinan, 1989). Indeed, it has been demonstrated that loyalty is more
prevalent among service customers than among customers of tangible products
(Snyder, 1986). In the services context, intangible attributes such as reliability and
confidence may play a major role in building or maintaining loyalty (Dick and Basu,


Service loyalty dimension

With regards to behavioral intentions in a services setting, Zeithaml et al. (1996)
proposed a comprehensive, multi-dimensional framework of customer behavioral
intentions in services.
This framework was initially comprised of the following four main dimensions:
(1) word-of-mouth communications;
(2) purchase intention;
(3) price sensitivity; and
(4) complaining behavior.

These dimensions are rendered in below.

Word-of-mouth communications
1. Say positive things about XYZ to other people
2. Recommend XYZ to someone who seeks your advice
3. Encourage friends and relatives to do business with XYZ
Purchase intentions
4. Consider XYZ your first choice to buy . . . services
5. Do more business with XYZ in the next few years
6. Do less business with XYZ in the next few years
Price sensitivity
7. Take some of your business to a competitor that offers more attractive prices
8. Continue to do business to a competitor that offers more attractive prices
9. Pay a higher price than competitors charge for the benefits you currently receive
from XYZ
Complaining behavior
10. Switch to a competitor if you experience a problem with XYZ's service
11. Complain to other consumers if you experience a problem with XYZ's service
12. Complain to external agencies, such as the Better Business Bureau, if you
experience a problem with XYZ's service
13. Complain to XYZ's employees if you experience a problem with XYZ's service
Source: Zeithaml et al. (1996)


On the basis of factor analysis on the 13-item scale, five dimensions were identified
by Zeithaml et al. (1996):
(1) loyalty to company;
(2) propensity to switch;
(3) willingness to pay more;
(4) external response to problem; and
(5) internal response to problem.
Three properties of Customer Loyalty
Long-Term Purchase: Generally, people often think Long-Term Purchase is the
main performance of Customer Loyalty. Even some managers infer that Long-Term
Purchase parallel with customer's loyalty to enterprises products and service. Many
domestic and foreign scholars adopt actual purchase behavior to measure loyalty. For
instance, Jacoby & Chestnut thinks that the purchase of the high frequency degree is
Customer Loyalty. We think, only Long-Term Purchase is not equal to Customer
Loyalty, yet actually it is an important basis to determine whether the customer is

Recommendation: Canadian scholar Barnes and Closenss (1997) show that the loyal
customer can experience the delicate connection with enterprises, and the connection
of this kind of emotion makes the customer keep loyal. They will also energetically
recommend other customers the products and service of the enterprise. From Barnes
et.al. research we can find that recommendation is an important characteristic of
Customer Loyal, giving recommendation to others helps the enterprises to earn more
customers and to reduce the propaganda and promotion expenses of enterprises, thus it
can stint on expenses indirectly for enterprises and increase the income.
Expected Repurchase: Expectation is taking more and more proportion in customer
loyalty research and the uncertainty of expectation differentiation makes loyalty
manifest dynamic complexity to a certain extent. Olivers (1980) researches indicate
that customer will assess the actual achievements of the products and service
according to one's own expectation in the course of consuming or after consuming. If
expectation is higher than the actual achievement, the customer will possibly give up

purchase; if equal to or less than the actual achievement, the customer will repurchase,
thus loyalty is realized.

Model of loyalty
Dick and Basus Typology of Loyalty
Recent work has continued to support definitions of loyalty that combine behavior and
evaluation. Dick and Basu (1994) have offered an attitude-behavior typology of
loyalty that is shown as Figure 2-6. This divides consumers into four segments using
two levels of behavioural loyalty and two levels of attitude toward the brand. Dick and
Basu state that customer loyalty is viewed as the strength of the relationship between
an individuals relative attitude and their repeat patronage.

Figure 2-6 :Model of loyalty

Source: Dick and Basus, 1994.

Dick and Basu (1994) give attention to the appropriate measure of attitude. To be
chosen, a brand must be liked more than alternatives and therefore the attitude
measure should be relative. In figure 2-6 , customer with high attitudinal and
behavioral loyalty are described as true loyals, those with high behavioral loyalty
but low attitudinal loyalty as spurious loyals, those with high attitudinal loyalty but
low behavioral loyalty as latent loyals, and those with low attitudinal and behavioral
loyalty as non loyals.