customer satisfaction and the services marketing mix

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This article was downloaded by: [T&F Internal Users], [Ollie Walton] On: 25 November 2014, At: 10:03 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Journal of Professional Services Marketing Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/wzps20 Customer Satisfaction and the Services Marketing Mix Rama Yelkur a a Department of Management & Marketing , College of Business, University of Wisconsin-Eau Claire , Eau Claire, WI, 54702-4004 Published online: 24 Oct 2008. To cite this article: Rama Yelkur (2000) Customer Satisfaction and the Services Marketing Mix, Journal of Professional Services Marketing, 21:1, 105-115, DOI: 10.1300/J090v21n01_07 To link to this article: http://dx.doi.org/10.1300/J090v21n01_07 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http:// www.tandfonline.com/page/terms-and-conditions

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Page 1: Customer Satisfaction and the Services Marketing Mix

This article was downloaded by: [T&F Internal Users], [Ollie Walton]On: 25 November 2014, At: 10:03Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House,37-41 Mortimer Street, London W1T 3JH, UK

Journal of Professional Services MarketingPublication details, including instructions for authors and subscription information:http://www.tandfonline.com/loi/wzps20

Customer Satisfaction and the Services Marketing MixRama Yelkur aa Department of Management & Marketing , College of Business, University of Wisconsin-EauClaire , Eau Claire, WI, 54702-4004Published online: 24 Oct 2008.

To cite this article: Rama Yelkur (2000) Customer Satisfaction and the Services Marketing Mix, Journal of Professional ServicesMarketing, 21:1, 105-115, DOI: 10.1300/J090v21n01_07

To link to this article: http://dx.doi.org/10.1300/J090v21n01_07

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) containedin the publications on our platform. However, Taylor & Francis, our agents, and our licensors make norepresentations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of theContent. Any opinions and views expressed in this publication are the opinions and views of the authors, andare not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon andshould be independently verified with primary sources of information. Taylor and Francis shall not be liable forany losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoeveror howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use ofthe Content.

This article may be used for research, teaching, and private study purposes. Any substantial or systematicreproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in anyform to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

Page 2: Customer Satisfaction and the Services Marketing Mix

Customer Satisfactionand the Services Marketing Mix

Rama Yelkur

ABSTRACT. As the U.S. economy continues to shift from a manufac-turing to a service orientation, it is important for marketers to under-stand the importance of reactively adapting to customers through themarketing concept. This manuscript deals with one aspect of that adap-tive process: customer service satisfaction. The purpose of this paper isto develop a model (see Figure 1) that suggests the possible effect ofeach individual element of the services marketing mix on the custom-er’s perception of the service. The customer experiences the servicethrough the marketing mix; the critical elements in the services market-ing mix that influence customer expectations being place, physicalevidence, participants, and process. The customer’s experience of theservice, the feelings and perceptions, have a pervasive influence onattracting new customers and retaining existing customers. The pro-posed model is formulated on the basis of propositions that relate mar-keting mix variables to the customer’s perception of service. The modelincorporates customer expectations derived from his or her own experi-ence or others’ experiences with the service, the service price relative tothe price of other identical services, and the organization’s promotionalmethods for communicating the features of the service offered. [Articlecopies available for a fee from The Haworth Document Delivery Service:1-800-342-9678. E-mail address: <[email protected]> Website:<http://www.HaworthPress.com>]

INTRODUCTION

The intangible nature of services induces customers to seek surrogatemeasures of quality. The appearance of facilities and service delivery person-

Rama Yelkur is affiliated with the Department of Management & Marketing,College of Business, University of Wisconsin-Eau Claire, Eau Claire, WI54702-4004.

Journal of Professional Services Marketing, Vol. 21(1) 2000� 2000 by The Haworth Press, Inc. All rights reserved. 105

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nel, for example, act as cues to the service quality provided by a law firm, abank, or a restaurant (Shostack 1977). Other characteristics of services in-clude simultaneous production and consumption, unpredictable quality dueto the high level of human involvement, and time-related constraints oncapacity (Hart 1988). These characteristics and others distinguish serviceorganizations from manufacturing firms in the way that they reactively adaptto customers through the marketing concept (Borden 1964; Kotler 1980;Houston 1986). As the U. S. economy continues to shift from a manufactur-ing to a service orientation (Davis 1983), the importance to marketers ofunderstanding the distinction between service and manufacturing organiza-tions in reactive adaptation increases.

This manuscript deals with one aspect of that adaptive process: customerservice satisfaction. The purpose of this paper is to develop a model (seeFigure 1) that suggests the possible effect of each individual element of theservices marketing mix on the customer’s perception of the service. Theproposed model is formulated on the basis of propositions that relate market-ing mix variables to the customer’s perception of service. The model incorpo-rates customer expectations derived from his or her own experience or oth-

FIGURE 1

Organization’s

specification

of theservice

Actual service

provided by

the frontlineemployees

Customer’s/Others’

previous experience

with the service

Participants

Organization’s

perceptions of

customer

expectations

Customer’s

expectation

of the service

Price Promo-tion

Physical

EvidenceService Process

Place

Customer’s

perception

of the service

satisfaction/dissatisfaction

Source: Original

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ers’ experiences with the service, the service price relative to the price ofother identical services, and the organization’s promotional methods for com-municating the features of the service offered.

The customer experiences the service through the marketing mix, includedhere as described by Booms and Bitner (1981). The critical elements in theservices marketing mix that influence customer expectations are: place,physical evidence, participants, and process (Booms and Bitner 1981). Thecustomer’s experience of the service, the feelings and perceptions, have apervasive influence on attracting new customers and retaining existing cus-tomers. Each of the elements in the model is discussed in the sections thatfollow.

Service Firms

Customer service in a service firm is a highly interactive process. Theaspects of the service firm with which the customer may interact include itspersonnel, its physical facilities, and other tangible elements like the price ofthe service. The main concern in a service firm is how its performance isjudged and perceived by the customer (Abelson 1989). The service industryis becoming highly competitive and high quality customer service is essentialfor a firm’s survival.

The well documented characteristics of the services are intangibility, het-erogeneity, inseparability, and perishability (Parasuraman, Zeithaml, andBerry 1985). Most services are intangible because they are performancesrather than objects. Precise production specifications to assure uniform quali-ty can rarely be set. Most services cannot be counted, measured, inventoried,tested, or verified in advance of sale to assure quality (Zeithaml 1981).‘‘Intangibility’’ is a state; intangibles may come with tangible trappings, butno amount of money can buy physical ownership of such intangibles as‘‘experience’’ (movies), ‘‘time’’ (consultants), or ‘‘process’’ (dry cleaning).A service is rendered. A service is experienced. A service cannot be stored ona shelf, touched, tasted, or tried on for size (Bitner 1990). Because of thisintangibility, the firm may find it difficult to know how consumers perceivetheir services.

Most services, especially those with a high labor content, are heteroge-nous: their performance often varies from producer to producer, from cus-tomer to customer, and from day to day. Consistency of behavior from ser-vice personnel (i.e., uniform quality) is difficult to assure (Booms and Bitner1981), because what the firm intends to deliver may be entirely different fromwhat the consumer receives.

Production and consumption of many services are inseparable (Carmenand Langeard 1980; Gronroos 1978; Regan 1963; Upah 1980). Human per-formance is part of the service. Therefore, the service and seller are insepara-

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ble (Lewis 1990). Whereas goods are first produced, then sold, and thenconsumed, services are first sold, then produced and consumed simulta-neously (Regan 1963). Service is not engineered at the manufacturing plantand delivered intact to the consumer. Inseparability also means that the pro-ducer and the seller are the same entity, making only direct distributionpossible in most cases (Upah 1980).

Services are of perishable nature. Services cannot be saved or stored.Motel rooms not occupied, airline seats not purchased, and telephone linesnot used cannot be reclaimed. Because services are performances that cannotbe stored, service businesses frequently find it difficult to synchronize supplyand demand. Sometimes too much demand exists (a popular restaurant on aSaturday night) and sometimes too little demand exists (an income tax ser-vice in the summer) (Zeithaml, Parasuraman, and Berry 1985). Services aresubject to demand fluctuations which can cause problems when organizationstry to match supply and demand (Lewis 1991).

Marketing Mix for a Service Firm

An expanded marketing mix for services was proposed by Booms andBitner (1981), consisting of the 4 traditional elements–product, price, place,and promotion and three additional elements–physical evidence, participants,and process. These additional variables beyond the traditional 4 Ps distin-guish ‘customer service’ for service firms from that of manufacturing firms.

Physical Evidence

Physical evidence such as environmental design, decor, signage, and busi-ness cards/stationery send messages that help establish the firm’s image andinfluence the customer’s expectations (Langeard et al. 1981, Shostack 1977).When a consumer attempts to judge a service, particularly before using orbuying it, that service is ‘‘known’’ by the tangible clues that surround it. Inproduct marketing, tangible evidence is primarily the product itself. But forservices, tangible evidence would encompass broader considerations in con-trast to product marketing (Shostack 1977).

Service marketers should be focussed on enhancing and differentiating‘‘realities’’ through manipulation of tangible clues. The management of evi-dence comes first for service marketers because service ‘‘reality’’ is arrived atby the consumer mostly through a process of deduction, based on the totalimpression that the evidence creates (Shostack 1977).

The more tangible elements there are, the more the marketer must endeav-or to stand in the consumer’s shoes, thinking, through and gaining control ofall the inputs to the consumer’s mind that can be classified as material evi-

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dence (Shostack 1977). The organization should emphasize on this tangibleevidence when establishing service standards. The environment of the facili-ty and the attitude of the customer will determine to a great extent theultimate quality of the service experience.

Physical evidence such as noise level, odors, temperature, colors, textures,and comfort of furnishings may influence perceived performance in the ser-vice encounter (Bitner 1990). Shostack (1985), defines ‘‘service encounter’’as ‘‘a period of time during which a consumer directly interacts with aservice.’’

Participants

The participants in the service environment also provide clues about whatthe customer should expect. Visual inspection of their dress and nonverbalcues as to the demeanor of both the service firm personnel and other custom-ers in the service facility aid the customers in categorizing the firm andforming pre-experience expectations for the service encounter (Bitner 1990).

There is more variability among service outcomes in labor-intensive ser-vices than in machine-dominated service delivery; bank customers who usehuman tellers will experience far more service variability than those usingautomatic teller machines (Berry, Parasuraman, and Zeithaml 1988). Trainingthe personnel adequately is a major factor influencing the provision of qualityservice. Hence, providing customer service in a service industry depends notonly on recognizing customer desires and establishing appropriate standards,but also on maintaining a workforce of people both willing and able toperform at specified levels (Berry, Parasuraman, and Zeithaml 1988).

What has happened in Moscow since McDonald’s opened a store a shortwalk from the Kremlin is a good example of the behavior of the personnel inproviding good quality customer service. McDonald’s expected that the store,the chain’s largest in the world, would serve perhaps 15,000 Muscovites aday; it has instead been serving twice as many. From all accounts it is not justthe quality of the french fries that thousands of Russians have found soriveting. It is instead what goes on behind the counter. Young Russianstrained by McDonald’ s smiling and trying hard to give the customers a levelof service they have never experienced before (Nation’s Business, ed., 1990,pp. 791).

Process

The how of service delivery is called the ‘process’ or the ‘functional’quality. The attitudes and behavior of service personnel influence perceivedservice performance. These behaviors are usually associated with what is

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called the ‘process’ (Bitner 1990). For example, when things go wrong in aservice encounter, employees frequently attempt to sooth disgruntled custom-ers by apologizing, offering to compensate, and explaining why the servicedelivery failure occurred (Clemmer and Schneider 1989). Any of these be-haviors may influence customer attributions about the firm’s responsibilityfor the failure and the likelihood of it occurring again (Bitner 1990).

CUSTOMER SERVICE IN RELATION TO THE 7 PsOF THE SERVICES MARKETING MIX

The customer service for a service firm cannot be explicitly divided intopre-transaction and post-transaction elements, because production and con-sumption of a service occurs at the same time. The service provided canprove effective in terms of satisfying the customer, only if the gap betweenexpected service and perceived service is bridged. The wider this gap–themore the number of disappointed customers; and disappointed customersmay cause the image of the firm to deteriorate (Gronroos 1978).

Product/Service

Most services are intangible because they are performances rather thanobjects, precise manufacturing specifications concerning uniform quality canrarely be set. Because of this intangibility, the firm may find it difficult tounderstand how consumers perceive their services (Zeithaml 1981). For de-veloping a good customer service, the service marketer should stress ontangible cues and also create a strong organizational image (Berry 1980;Booms and Bitner 1982; Thomas 1978). This can be done by communicatingclearly to the customers the features of the service being provided.

Price

Because of the intangible nature of the service–price becomes a pivotalquality indicator in situations where other information is not available(McConnel 1968; Olander 1970; Zeithaml 1981). It is essential, therefore thatthe service firm engage in competitive pricing. Being an important tangiblecue, price of the service is an area in which the service marketer can concen-trate to get a competitive edge. In the case of pure services, as in the presentcontext, like medical services or legal services price is an important factorbecause it is a basis for the customer to make a final choice among severalcompeting service organizations.

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Place

Because services are performances that cannot be stored, service busi-nesses frequently find it difficult to synchronize supply and demand. Also,services cannot be inventoried for the same reason (Zeithaml, Parasuraman,and Berry 1985). Consequently the service firms must make simultaneousadjustments in demand and capacity to achieve a closer match between thetwo (Sasser 1976). Also, the firm could use multisite locations (Carman andLangeard 1980; Langeard et al. 1981; Upah 1980) to make the service moreaccessible to the users. If the service is located in a remote area, regardless ofthe other advantages of the service, customers would not be motivated to usethe service.

P1: The service should be conveniently located so as to reach as manytarget consumers as possible.

Promotion

The service marketer should constantly simulate word-of-mouth commu-nications (Davis, Guiltinan, and Jones 1979; George and Berry 1981) apartfrom using regular advertising. If customers in an existing market, for somereason or another have an image of the firm which does not correspond withreality, traditional marketing activities (advertising, field selling, pricing) canbe expected to be an effective way of communicating the real image to themarket (Gronroos 1978). Communication includes informing the customersin a language they can understand (Parasuraman, Zeithaml, and Berry 1984).Specially in services post-purchase communication is very important, be-cause retaining existing customers is as important, or even more importantthan attracting potential customers.

P2: Constant reminding is essential for the customer to develop or main-tain their expectations of the service, however excellent the servicequality may be.

Physical Evidence

Physical evidence, as already discussed under the services marketing mix,like the environmental décor and design significantly influence the custom-er’s expectations of the service (Shostack 1977). Since services cannot bereadily displayed (Rathmell 1974), firms should create a conducive environ-ment that help the customers to develop a positive perception of the service.For example, people would not like to wait for a medical service or a legal

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service, if the atmosphere of the place they are made to wait is unpleasant.Customers can be put off by a mere change in the layout of the service facilityor even the absence of clear signboards.

P3: If the physical evidence provided by the service matches the consumerexpectations, the consumer is more likely to develop a positive attitudetowards the service provided.

Participants

Most services are highly labor intensive; the behavior of the personnelproviding the service and the customers involved in production (due to theinseparable nature of services), have an effect on providing efficient custom-er service. To achieve customer-oriented personnel, the organization needs torecruit and select the right people, and offer an appropriate package of em-ployment, in order to enhance their skills and encourage them. Because of theconstant interaction between the employees involved in the service, and thecustomers–there is a mutual dependence between the two. If the customersare dissatisfied, employees experience discomfort working with unhappycustomers, and customers are unhappy because the employees were nottrained in customer satisfaction. The extent of this mutual dependence in-fluences the customer’s perception of the service.

P4: The ‘people’ factor directly influences the customer’s perception ofthe service provided.

P5: The way the employees present themselves at the service encounter isan important physical evidence at the service facility. It can signifi-cantly influence the customer’s perception of the service since it is oneof the few tangible cues on which the customer can base his judgementon.

Process

In the ‘how’ of the service delivery is extremely important because theservice and the seller are inseparable. The functional quality, or the ‘how’ ofservice delivery is especially important to service industries, as it is difficultto differentiate the technical quality, or the ‘what’ of service delivery (Gron-roos 1978).

Previous experience with a service also influences the expectations of thecustomer (Gronroos 1978). If the customer has had a bad experience with theservice on any previous occasion, it will influence his or her future percep-

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tions of the service. It is essential to train the front line employees, whoseactions and behavior influence the customer’s opinions of the organizationand the actual service provided.

P6: The image of the service that the customer already has and his/herperceptions of the service together influence whether or not the ser-vice is satisfactory to the customer.

P7: The conduct of the sellers/employees will affect the customer’s futureperception of the service, since the service and seller are inseparable.

DISCUSSION

When promises are made in services, customers generally take them forgranted. If the service organization fails to keep the promises it makes, itimmediately influences the opinion of the customer about the service, whichin turn changes the customer’s perception of the service. According to theAmerican Management Association 65% of the business comes from existingcustomers. Attracting potential customers is of course important, but retain-ing current clientele has a greater impact on the service operation. Manybusiness executives believe that, by definition, services simply cannot beguaranteed. This belief is entirely justified because a service mainly dependsupon human performance, which is not always predictable. A service thatputs consumer first, does not necessarily lead to chaos and failure. With cleargoals and an information network that gives the necessary data to improveperformance, it is entirely possible to provide a nearly perfect service.

CONCLUSION

As discussed in the proposed model, customer perception of a service isentirely subjective. What the customer actually gets out of the service, andhow he or she perceives the service may not always match. So the customer’sjudgement or evaluation of the service is the crucial factor in the delivery of aservice. But service marketers can influence these perceptions to a largeextent by controlling favorably the service marketing mix variables. It is allthe more difficult because a service cannot be broken down into logical stepsor sequences (Shostack 1987).

This model is limited to the marketing mix and customer satisfactionvariables affecting service delivery. If service organizations pay more atten-tion to their employees as well as their customers, it would increase bothemployee motivation as well as customer satisfaction.

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t 10:

03 2

5 N

ovem

ber

2014