Relating strategic market orientation and market performance: role of customer value types

A service provider achieves competitive advantage by configuring appropriate strategic orientation and customer value type. This paper addresses three important issues: (i) which customer value type (economical, relational or technical) is important for bank customers? (ii) which strategic market orientation (customer or competitor) helps in achieving the desired value type? and (iii) which value type significantly predicts market performance? We propose that a strategic market orientation pursued by a firm shall influence the customer value it intends to offer so as to maximize the market performance. Using data collected from 538 bank customers, this study reveals that when there is a perfect match between strategic market orientation and value being perceived by its customers, a firm shall achieve strategy-value fit and realize optimal market outcomes in the form of customer satisfaction, acquisition, retention, cross-selling, and up-selling. Furthermore, a bank shall realize maximum level of market performance if it pursues both customer and competitor orientation and endeavors to deliver technical/functional value to its target customers. The paper concludes with managerial implications and future research directions.     

物业服务质量对顾客价值及顾客忠诚的影响:居住档次的调节作用

在竞争日益加剧的市场环境中如何提供高质量的服务,提升顾客感知价值以及顾客忠诚度是企业获取竞争优势的关键所在.本文以物业服务行业为研究背景,建构服务质量各维度对顾客价值和顾客忠诚的影响机制模型,并检验居住档次对该模型的调节效应.研究结果表明:与其他行业的服务质量维度构成不同,物业服务质量由实体环境、专业保障、服务效率和人文关怀四个维度构成;实体环境对顾客忠诚产生正向显著影响,而专业保障、服务效率、人文关怀三个服务维度虽然对顾客忠诚没有显著的直接影响,但均通过顾客价值对其产生间接影响;顾客价值是解释服务质量影响顾客忠诚的重要中介变量;居住档次部分调节了实体环境、专业保障、服务效率和人文关怀对顾客价值及顾客忠诚的影响.     

Customer Service as a Strategic Weapon in International Operations

Customer service is an important competitive weapon in international markets becuase of its ability to acquire and retain overseas customers (especially intermediate firms) and, thus, enhance companies' revenues. Customer service is especially critical when foreign vendors are perceived as offering similar products at comparable prices, and purchasers have doubts about suppliers' willingness to carry out various post-purchase responsibilities. This paper reports the results of a study of the customer service programs of 151 U.S. non-service companies with international operations in five or more foreign countries. Sixty-nine firms responded to their customer service efforts in international markets and 81 addressed domestic customer service programs, allowing for comparisons to be made between international and domestic customer service operations. The study's results indicate that copmanies realize the importance of customer service in marketing to international customers, yet customer service for international markets is not considered to be appreciable more important than it is for domestic ones. Much similarity in perceptions about international and domestic customer service programs being in place. Whether this similarity occur from a careful analysis of domestic and international markets or simple expediency is uncertain.     

Exploring manager’s perspective of service quality strategies in Malaysian Banking Industry

In service industry, the subject of service quality remains crucial as business strive to maintain a comparative advantage in the marketplace. In aftermath of globalization, the operating environment for banking industry has become more dynamic and competitive. Banks have evolved to become diversified financial providers instead of traditional banking-only service providers. With bank placing emphasis on a mutually beneficial bank–customer relationship, customer loyalty must be pursued through repeat purchases. Central to achieving this is often the quality of services offered by the bank should satisfy the customer’s needs. This article attempts to identify any service gaps in Malaysian banking industry and to recommend effective strategies to close these service gaps from bank mangers’ and executives perspectives based on GAPs Model of Service Quality (GAPs Model). Using qualitative data collected from interviews with 30 bank managers and executives, this article provides effectives strategies to close each of the gaps in GAPs Model. It is hoped that the empirical evidences and recommendations provided in this article shed some light to management of banks to improve upon their customer service quality in order to benefit from customer satisfaction, customer loyalty and other behavioural outcomes which will lead to greater competitive advantage and profitability to the banks concerned.     

Competitiveness vis-à-vis service quality as drivers of customer loyalty mediated by perceptions of regulation and stability in steady and volatile markets

The purpose of this research is to investigate predictors of customer loyalty in order to identify alternatives to customer satisfaction with service quality, which has been traditionally accepted as the primary predictor of customer loyalty, particularly for services. A stratified sample of bank customers was surveyed to collect information on customer perceptions and behaviors in relation to satisfaction with service quality, competitiveness, risk, regulation, stability and loyalty. Partial least squares path modelling (PLSPM) was applied to develop loyalty models for a steady market (Australia) and a volatile market (Greece). This study's empirical findings support theoretical arguments for the inclusion of customer perceptions of competitiveness in loyalty modelling. Perceptions of regulation and stability intervene in the relationship between drivers of loyalty and loyalty itself. For bankers, the study emphasizes the need to move away from customer satisfaction with service quality to explain customer loyalty, towards focusing efforts on achieving relative superiority in competitiveness, namely competitive productivity and products. Profiling customers based on their perceptions of a bank's competitiveness can provide additional explanatory power beyond traditional satisfaction based loyalty models. Services marketing has focused on the service components, and there is no doubt about its crucial role. But given this focus, other factors, such as the actual product component, have been somewhat overlooked in services research. The study makes a unique contribution to understanding and modelling customer loyalty by demonstrating the importance of the inclusion of customer perceptions of other factors as appropriate to market conditions.     

Internal Relationship Management

SUMMARY

In the quest for sustainable competitive advantage, managers have sought to differentiate themselves through a customer (as opposed to product) focus. This has given rise to successive strategies designed to improve the customer experience (e.g., objective quality, service quality, customer satisfaction, customer retention, customer loyalty, etc.). The problem, however, is that a satisfied, loyal customer who is persuaded to consistently buy a firm's product or service over and over again because of its quality can be and often is unprofitable. Therefore, using such strategies does not guarantee increased profits. As a result, firms will increasingly rely on the measurement and management of customers' lifetime values to guide their customer loyalty efforts.     

Psychological comfort in service relationships: A mixed-method approach

Psychological comfort reflects the customer's peace of mind and a sense of ease during a service encounter that helps in maintaining strong relationships. However, the role of psychological comfort (PC) in retail service relationships is not fully explored. To fill this research gap, this study presents a unique conceptual model grounded in the stimulus organism response (S–O-R) framework to empirically explore the stimulating effect of customer experience on psychological comfort (PC), which influences relationships quality and customer retention as the response. To evaluate the model a quantitative survey was administered on 432 bank customers followed by in depth interviews of 10 bank employees. It was found that customer experience stimulates customer's PC that leads to relationship quality and retention as the response. It was also found that relationship duration influences the customer experience-PC relationship. The theoretical and managerial implications of the findings are discussed.     

“Do not impose on others what you desire.” Research on the influence of service Personnel's interactive orientation on customer comfort

Comfort carries many positive consequences, and a vital issue is how to stimulate it. Because service personnel are direct service providers, which means they have a significant impact on the customer. Apparently, it is critical to improve customer comfort from the perspective of service personnel. Based on the Service Encounter theory and Regulatory Fit Theory, this paper explores how service personnel's interactive orientation, including interaction orientation, task orientation, self-orientation, influences customer comfort and examines the mediating role of perceived control and the moderating role of self-construal. We analyzed the data collected from 257 consumers using a self-reported survey using SEM with SPSS17.0 and AMOS21.0. The results show that interaction orientation has a significant positive effect on customer comfort, self-orientation has a significant negative impact on customer comfort, and task orientation has no significant impact. Perceived control plays a mediating role in the relationship between service personnel's interactive orientation and customer comfort. The moderating effect of self-construal is significant. We discussed the implications of the findings for academics and managers.     

Zone of tolerance for banks: a diagnostic model of service quality

Service quality has become an increasingly important factor for success and survival in the banking sector. Provision of high-quality service aids in meeting several requirements such as customer satisfaction and its consequent loyalty and market share, soliciting new customers, financial performance, and profitability (Cui, C.C., Lewis, B.R., & Park, W. (2003). Service quality measurement in the banking sector in South Korea. International Journal of Bank Marketing, 21(4), 191–201.). This paper presents the bank service quality measurement in its extended form. It deals with the concept of ‘zone of tolerance’ in judgments of service quality proposed by Zeithaml, Berry, and Parasuraman (1993, The nature and determinants of customer expectations of service. Journal of the Academy of Marketing Science, 21(1), 1–12.). The ‘zone of tolerance’ is recognized in the service quality literature as representing a range of expectations and an area of acceptable outcomes in service interactions. The present study describes the zone of tolerance for young customers’ service expectations and determines the customer satisfaction level for banks. The study focusses only on the youth market to formulate long-term strategies because young customers tend to keep themselves up to date with latest technological developments. A conceptual model BANKZOT is presented in this study, and the results demonstrate that evaluation of services can be scaled according to different types of expectations – ‘desired' and ‘adequate’ – and that customers use these two types of expectations as a comparison standard in evaluating bank services. The findings reveal that young customers have a narrow zone of tolerance with regard to the services provided by the banks. The results with respect to gap analysis reveal that there was a shortfall in the service quality provided by the banks in the sample, with the largest gap being found in tangibles and empathy of service quality dimensions. The results of exploratory factor analysis reveal that the SERVQUAL model is found to be uni-dimensional in this study. The results, managerial implications, and future research implications are discussed in detail.     

Matching the Personal Initiative Capabilities of FLEs to Their Self-Regulatory Processes and the Firm's Initiative Climate

Frontline employees (FLEs) — the people behind the counter, on the phone, or walking the shop floor — can profoundly affect the customer experience. Harnessing the capability of FLEs to positively shape customer experiences is critical for service firms.However, placing the right employee in the right frontline role is not an easy task. To deliver positive service experiences, FLEs must be customer-oriented, placing customers’ interests first. In addition, FLEs need to demonstrate personal initiative by going beyond prescribed job roles to find solutions to customer problems. We propose that personal initiative is an important mediating variable in the relationship between customer orientation and FLE performance. Further, we examine whether this relationship is strengthened or weakened when a firm’s climate encourages initiative-taking behavior and FLEs have a prove or avoid orientation, or engage in deep or surface acting. We test the model across two studies using a multi-respondent data collection procedure within the retail banking sector. Our findings demonstrate that personal initiative mediates the relationship between customer orientation and FLE performance. Notably, this effect is stronger when a firm’s climate encourages initiative-taking and when FLEs have a prove orientation or engage in deep acting, and that the effect is weaker when FLEs have an avoid orientation or engage in surface acting. Our findings underscore that it is only when the fit between FLEs, their roles, and the work climate is right that firms will get the best out of their employees (c.f., Arthur et al. 2006; Kristof-Brown et al., 2005).     

Operations in banking: the service quality and effects on satisfaction and loyalty

This paper studies the service quality provided by the banks. The objectives are (i) to identify which aspects of the transactions carried out by the banks are important for the service quality perceived by the customers, taking into account some aspects that are sometimes ignored (online channels) and (ii) to observe how service quality influences customer satisfaction and how customer satisfaction affects the loyalty towards the bank. Using a factor analysis, the research identifies the operative, physical, new technologies and human factors. Next, using structural equations models with AMOS, the results show an influence of the operative aspects and the new technologies on service quality, as well as the confirmation of quality as a precedent to customer satisfaction, and how such satisfaction influences on customer's loyalty towards the bank.     

Measurement of Customer Perceptions of the Retail Bank Service Delivery System

The purpose of this research was to develop measures of concepts related to retail bank customers' perceptions of retail bank services delivery systems. The results of the research indicate four potentially important aspects of the retail bank services delivery system are (1) general bank personal service, (2) teller personal service, (3) reactton capacity , and (4) location convenience. The research results support the hypotheses that retail bank customers' perceptions of these issues may be related to customer satisfaction and intentions to do business with the bank in the future, intentions to purchase additional products and services, and intentions to give the bank a larger percentage of the customer's business.     

Understanding organization-customer links in a service setting in Russia

This study examines the effect of management commitment to service quality on customer satisfaction through the mediating links of service climate and core and relational service performance in a high-power distance culture. Data were collected using a survey distributed to the FLEs and customers of branches of a Russian retail bank. Study findings demonstrate that branch service climate mediates the management commitment to service quality – service performance relationship and that this indirect effect is stronger on core service performance relative to relational service performance. Contrary to expectations, our findings demonstrate the importance of relational service performance relative to core service performance as a mediator of the branch service climate – branch customer satisfaction relationship. Implications of these novel findings and future research directions are discussed.     

What the eye does not see,the mind cannot reject: Can call center location explain differences in customer evaluations?

Moving call centers offshore may be an effective way to increase service productivity by lowering costs, yet recent research suggests that customers associate offshore call centers with lower service quality. This study clarifies customer evaluations of call centers with a field study that examines how customer perceptions of a foreign accent, call center location, and the agent's customer orientation relate to nonmonetary performance outcomes. Multivariate analysis of data collected from more than 800 customers using call centers located in three countries suggests that neither accent detection nor call center location relates to customer satisfaction, trust, or word-of-mouth communication; only perceived customer orientation has an effect on these outcomes. These findings suggest offshore call center locations are not necessarily associated with lower performance outcomes and that service firms should place a higher priority on ensuring call center agents have a strong customer orientation, rather than on avoiding the use of call centers abroad.     

The role of love in satisfied customers' relationships with retailers

This study proposes and tests a model that includes customer love as a measure of satisfied customers' emotional responses to retailers specifically in apparel and grocery store contexts. Customer love was found to partially mediate the effect of service quality on positive word-of-mouth and willingness to pay more. In contrast, customer love was proven to fully mediate the effect of service quality on self-disclosure and competitive insulation. As a control variable, emotional intensity had a positive effect on customer love. The implications of the customer love construct are discussed, as well as limitations and areas for future research.     

Market orientation, competitive advantage, and performance: A demand-based perspective

This study assesses how customer value affects a firm's market orientation and consequently, competitive advantage and organizational performance in a service industry — the global hotel industry. The findings show that if a firm perceives its customers as valuing service, the firm is more likely to adopt both a customer and a competitor orientation; if the firm thinks its customers are price sensitive, the firm tends to develop a competitor orientation. Moreover, the greater a firm's customer orientation, the more the firm is able to develop a competitive advantage based on innovation and market differentiation. In contrast, a competitor orientation has a negative effect on a firm's market differentiation advantage. Finally, innovation and market differentiation advantages lead to greater market performance (e.g., perceived quality, customer satisfaction) and in turn, higher financial performance (e.g., profit, market share).     

Quality management as a driver of innovation in the service industry

This study identifies the combination of factors that lead to quality management reinforcing innovation capability as an organization’s strength. The results from 133 Spanish service organizations show that competitive strategy, manager’s motivation to adopt quality management, and customer orientation are the key factors that explain the presence of innovation capability as a firm’s strength. As some pioneering research points out, the impact of quality management on innovation depends mainly on managers’ interpretation of this management philosophy. When quality management focuses on discovering new customer needs and even new markets, it contributes to strengthen the organization’s innovation capability.     

Cooperation versus competition: do buyers and suppliers really see eye-to-eye?

Purchasers have used a variety of tools to help improve the performance of their suppliers’ processes and products. Results of two large-scale surveys that compare buyer and supplier perceptions of a common customer firm's supplier development and its supply base's adoption of total quality management are reported here. One customer, known for its cooperative (partnership-like) approach to supplier relations, is contrasted with another firm that uses supplier switching to meet its procurement needs. Analysis of the survey data indicates that buyers and suppliers have a better “shared understanding” (smaller satisfaction gap) within the “competitive” relationship than within the “cooperative” relationship.     

Service Orientation: Its Impact on Business Performance in the Medical Service Industry

From the viewpoint of internal marketing, employees who are content in their job may be motivated to satisfy their customers better than ones who are not content. Another relevant premise is that the content employees, because of their work motivation, would eventually help improve the performance of their firm. To verify these relationships, some previous studies looked into the effects of organisational service orientation on employee's satisfaction. But only few of them investigated the mediating effects of variables such as service value and customer orientation for their role in linking service orientation to business performance. This study examines how an organisation's service orientation had an effect on its performance at hospitals. For this purpose, verification of the mediating role of service value perceived by employees as well as the role of customer orientation on the firm's performance was attempted. For this study, a total of 292 usable questionnaires were collected from hospital staffs located in metropolitan cities of Korea. The hypotheses concerning relationships among service orientation, service value, employee satisfaction and customer orientation were verified by covariance structural modelling, using SPSS 10.0 and AMOS 4.0 programs. The result is as follows. First, organisational service orientation had a positive effect on both employee satisfaction and service value perceived by hospital staff. Second, employee satisfaction had a positive impact on service value and customer orientation. Finally, service value as well as employee's customer orientation were found to exert positive influence on the medical firm's performance.     

The customer wants service: Why technology is no longer enough

In today's marketplace, the customer is presented with a myriad of products and services of greater variety and value than ever before. As competition becomes more intense, product and service providers are increasingly turning towards “service” or “service quality” as a means of achieving competitive advantage. Even in industries such as telecommunications, where significant technological advances have characterized the industry, companies are realizing that the best product no longer guarantees an advantage over the competition. The key ingredient in the formulation of a competitive service strategy is the proper measurement of service quality dimensions, as defined by the customer, and the continual monitoring of company performance along those dimensions. This article describes the process of identifying service quality dimensions as applied in two telecommunications network providers, one in Canada and one in Ireland. Results are compared and contrasted between the two countries.