Academic journal article Business and Economics Research Journal

Analysis of Service Recovery Failure: From Minority Perspective

Academic journal article Business and Economics Research Journal

Analysis of Service Recovery Failure: From Minority Perspective

Article excerpt

1.Introduction

Marketing literature has been revolving around the consumer for the past decade. Finding the perfect fit between the service provider and the customer together with increasing emphasis on diversity has been a challenge. Adapting to the reality of diverse business environment required restructuring. In order to customize their services for the diverse consumer groups, firms have been spending billions of dollars for recruiting and training the workforce for the market. However, literature has not emphasized the diversity issue enough in order to lead the way for executives in the market place.

The literature in general has recognized the value in customer and market orientation. Organizations are constantly learning to adapt to the market that they are operating in. When the organization is able to function the way that fits in with the expectations of the market, they benefit from this. The key in adapting towards the needs and wants of customers is all about finding out the expectations of them. Service failure literature has investigated this issue deeply. Customer's expectations have a great impact on how they perceive the service received by the service provider. For instance, Bolton and Mattila (2015), reports that warmth in communal relationships between the customer and the failed service provider is needed for rapid service recovery. According to the authors, how customers perceive the company, even in areas not directly related to consumer-buyer relationships, such as corporate social responsibility, shapes customers' perceptions and in return their willingness forgive in case of a service failure.

The strategy literature talks about the advantages of early entrants and how when under certain circumstances, late entrants can also be successful in the same market despite all the advantages of the early entrants (Varadarajan et al., 2008). The main reason for their success remains to be able to adapt and offer a cost efficient product that serves the same function with the competitor, in other words creating a competitive advantage. A competitive advantage can truly serve its purpose when it is hard to imitate and it serves as a differential advantage that is appealing to the target market.

Customer expectations change based on both the market and the quality and the type of service that the firm offers. Even though the goods and services offered may be similar, the expectations of the customers may be different. In a service failure situation, the recovery expectations of customers also vary based even when the goods and services are very similar. The reason for this is because of cultural differences between the customer and the service provider. Therefore the service provider should be aware of the varying service recovery expectations and adapt to these in order to gain the customer for a returned purchase (Ringberg et al., 2007).

Service recovery literature has long found evidence that when customers experience a series of service failures and recovery attempts, their perception changes based on the most recent recovery attempt. The repurchase intent of the customers increases when they experience satisfactory recovery attempts. A study has tested the impacts when customers experience two service failures. The findings indicate that, when customers experience a satisfactory recovery effect after an unsatisfactory recovery effect the recent experience is the one remembered in future purchasing decisions (Maxham and Netemeyer, 2002). In addition, after a service failure, when poor service recoveries are present, this creates a double deviation effect and has a compounding effect on the already low customer evaluations (Maxham and Netemeyer, 2002).

Experiencing a service failure with a recognized brand also changes the perceptions of the customers toward the service failure. Roehm et al. (2007) indicated that when the responses or recovery attempts are timed immediately after the failure, high equity brands fare the best. …

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