Academic journal article International Review of Management and Business Research

The Synergistic Impact of Customer Orientation and Supplementary Services on Competitive Advantage and Organizational Performance (Pilot Survey)

Academic journal article International Review of Management and Business Research

The Synergistic Impact of Customer Orientation and Supplementary Services on Competitive Advantage and Organizational Performance (Pilot Survey)

Article excerpt

Introduction

The mature Jordanian banking industry is experiencing a dynamic and competitive environment. As it continues offering core products as commodities and standardized that are indistinguishable from each other (Tarabieh & Ahmad, 2015). The commodities and standardized core products have increased the level of competition in the industry, as well as customer expectations (Lovelock, 1996). Due to the many alternatives available, customers now demand increasingly higher level of service and expect service providers to exceed customers' expectations. Consequently, customer orientation is imperative to ensure survival, but it could not provide a competitive advantage in service companies (Kirca, Jayachandran, & Bearden, 2005). This is because a core competency is a bundling of resources and customer orientation as one resource is not likely to be sufficient to create a competitive advantage which, in turn, leads to better organizational performance (Baker & Sinkula, 2005; Tsiotsou & Vlachopoulou, 2011).

To succeed in the mature stage, the management in the banking industry faces numerous challenges. Banks are developing new marketing strategies to differentiate their service products in order to survive in this mature stage. One of the marketing strategies that could provide competitive advantages is that of adding value to a company's core products. Lovelock (1996) referred to these added values as supplementary services in his concept flower of service.

In fact, to date, this assumption (flower of service concept) has not been empirically tested. Therefore, this study attempts to fill this gap by adapting flower of service concept (originally consists of eight variables of supplementary services) which is specially developed to address the impact of customer orientation and supplementary services on gaining competitive advantage which, in turn, lead to organizational performance in the Jordanian banking industry (see Figure 1.1).

Theoretical Background

Customer Orientation

The general purpose of customer orientation is to provide companies with a solid basis of intelligence pertaining to current and future customers for executive actions (Sorensen, 2009). This is because customers' perceptions of the benefits of a product change over time. What a company offers today may not match the needs of the customers tomorrow (Zhou, Kin, & Tse, 2005). Customer is essential but difficult to sustain. If it is not sustained, the company runs the risk of losing customers to competitors (Zebal & Goodwin, 2012). Robledo (2001) suggested that understanding customer expectations is a prerequisite for delivering superior service, since customers evaluate the services of a company by comparing their perceptions of the service with their expectations. Narver and Slater (1990) point out on how this understanding is necessary to identify existing and potential customers and focus on their present and future needs, and the perception that will lead customers to obtain satisfaction today and in the future. Therefore, a company must ascertain the changing preferences of customers continuously and adjust its products and/or services offerings accordingly.

Deshpande, Farley, and Webster Jr (1993) identified customer orientation as a set of beliefs that puts the interest of customers first, while not excluding those of all other stakeholders such as owners, managers, and employees, for the development of a long-term profitable business. Although customer orientation is a part of an overall, it is much more fundamental. A simple focus on information about the needs of actual and potential customers is inadequate without the consideration of a more deeply rooted set of values and beliefs that are likely to reinforce such a customer focus consistently (Deshpande et al., 1993). Furthermore, customer orientation is a matter of degree, as no company can ignore customers completely, and complete customer orientation in the view of the customer is probably neither achievable nor economically desirable (Narver & Slater, 1990). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.