Academic journal article IUP Journal of Management Research

An Empirical Investigation of the Causal Determinants of Customer Satisfaction: A Study of Indian Banks

Academic journal article IUP Journal of Management Research

An Empirical Investigation of the Causal Determinants of Customer Satisfaction: A Study of Indian Banks

Article excerpt

Introduction

Psychology defines satisfaction as "a state of mind that normally is derived out of a comparison between the expected and the perceived." Past experiences and knowledge play an important part in the formation of satisfaction. Althoug h customer satisfaction theory has made stupendous development, the best way to measure and conceptualize customer satisfaction is still contentious and researches have been going on in this regard. Customer satisfaction, a multidimensional construct can be measured by appraising the factors which are antecedents of customer satisfaction. Factors contributing to satisfaction of customers in service industries are separate and distinct from that of goods industries more so because of tangibility, inseparability and increased human interaction in case of services. The study aims at establishing the antecedents of customer satisfaction in banking industry.

Entry of private and foreign players in Indian banking industry has changed the entire face of the industry. Competition has intensified and the banks are using customer satisfaction as their weapon against the cut-throat competition. In the wake of this dynamic environment, it becomes all the more important to determine factors defining and determining the satisfaction of the customers.

Literature Review

Numerous studies suggested that customer satisfaction is dependent on congruence of expectations and performance of the product or service. As Churchill and Surprenant (1982) put it, "Customer satisfaction is an output, resulting from the customer's pre-purchase comparison of expected performance with perceived actual performance and incurred cost."

Liu (2000) opined that customer satisfaction is a function of service performance relative to the customer expectation. Further, Hernon and Whitwan (2001) defined customer satisfaction as a measure of how the customer perceives service delivery. According to Bruhn (2 003), customer satisfactio n is ''an e xperience-based assessment made by the customer of how far his own expectations about the individual characteristics or the overall functionality of the services obtained from the provider have been fulfilled." Fecikova (2004) stated that customer satisfaction is the feeling that is generated in the process of comparing expectation with what is actually obtained, purchase decision itself and/or fulfillment of needs and wants. Hennig-Thurau (2004) opined that customer satisfaction level is positively influenced when their expectations with regard to service employee's behavior is exceeded by the performance.

Kim et al. (2004) defined customer satisfaction as customer's reaction to the state of satisfaction and customer's judgment of satisfaction level. Gustafsson et al. (2005) opined that customer satisfaction is actually how a customer evaluates the ongoing performance. Kotler and Keller (2006) defined ''customer satisfaction as a person's feeling of pleasure or disappointment that results from comparing a product's performance (outcome) in relation to his or her expectation." Lovelock and Wirtz (2007) defined customer satisfaction as "an attitude like judgment following a purchase act or a series of consumer product interactions." According to Oliver (2010), customer satisfaction is defined as a judgment that a product or service provided a pleasurable level of consumption-related fulfillment.

Martin et al. (2008) stated that customer satisfaction is both cognitive and affective. This view implies that customers not only consume an offering which they cognitively evaluate, but their involvement in the service production and delivery process also allows them to emotionally evaluate the service.

Halstead et al. (1994) defined customer satisfaction as "a transaction-specific affective response resulting from the customer's comparison of the product performance to some pre-purchase standard." Hsu (2008) posits that cumulative customer satisfaction is a fundamental indicator of firms' past, current and future performance instead of specific transactional information about a product or service encounter. …

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