Academic journal article International Journal of Marketing Studies

Customer Satisfaction, Perceived Service Quality and Mediating Role of Perceived Value

Academic journal article International Journal of Marketing Studies

Customer Satisfaction, Perceived Service Quality and Mediating Role of Perceived Value

Article excerpt

Abstract

The main objective of this study is to first find out perceived service quality using SERVQUAL and then the role of perceived value as a mediating variable in the service sector of Pakistan. Both descriptive and inferential statistical techniques are used to analyze the effects of independent variables (i.e. perceived service quality) on customer satisfaction (dependent variable) and the role of mediating variable (i.e. perceived value). Stepwise regression analysis is used to examine the effect of the mediating variable (i.e. perceived value) on customer satisfaction. Perceived value was found strongly correlated with satisfaction. Results suggested that perceived value is an important factor in customers' evaluation of satisfaction. Unlike other studies, I use an aggregate score for perceived service quality instead of service quality characteristics.

Keywords: Perceived service quality, Service expectation, Service perception, Perceived value, Customer satisfaction and SERVQUAL

1. Introduction

It is the regular trend for companies to conduct customer satisfaction surveys to know customer's point of view (Frank and Enkawa, 2007). Ultimately, improvements on the basis of such surveys are usually considered as improvements in the competitive position of the firm, which ultimately results in better offerings and better customer service (Frank and Enkawa, 2007). With the growth in size of the service sector of the global economy, services are distributed regionally, nationally, and globally and are earning a larger portion of an organizations' revenues and the quality of their services plays a very important role in customer satisfaction (Landrum, Prybutok, Zhang and Peak, 2009). This paper seeks to identify the level of customer satisfaction in the services sector. It will enable business owners, managers, decision makers and other researchers to identify the best practices in the service sector.

It is easier to compete on the basis of price for products as compared to services (Edvardsson, Johnson, Gustafsson and Strandvik, 2000). They also suggested that companies should establish a system that ensures that all activities lead towards customer satisfaction. According to a market economy businesses compete to satisfy customers and economic prosperity is based on increase in customer satisfaction (Anderson and Fornell, 2000). An interesting view given by Anderson and Fornell, (2000) is that suppliers compete for shoppers, but shoppers do not fight for products. So Anderson and Fornell, (2000) divided customer satisfaction into three determinants: perceived service quality, perceived value and customer expectations. Perceived service quality is expected to have a direct and positive influence on customer satisfaction. Concept of expectations is the standard against performance outcomes (Szymanski and Henard, 2001). Therefore, if consumer's actual outcomes exceed expectations, the consumer will be considered as satisfied otherwise if expectations exceed outcomes, consumer will be considered as dissatisfied (Szymanski and Henard, 2001). Dagger and Sweeney, 2007 argued that due to intense competition in the service sector, service providers are laying more emphasis on service quality to achieve market leadership.

Matzler, Wurtele and Renzl, (2006) argued out that if perceived quality is more than perceived costs, then customer value is high; but if cost is more than quality, then customer value is low. This concept is also known as price-quality ratio. If price will be high, the satisfaction with price will be high. If there are no hidden costs and if prices do not change unexpectedly customers will perceive high price reliability (Matzler et al, 2006). Hence, measurement of perceived value (i.e. price to quality ratio) is very important. Takala, Bhufhai and Phusavat, (2006) explained another important factor regarding importance of customer satisfaction: that perceived value both directly and indirectly influences customer satisfaction. …

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