Journal of Services Marketing

Emerald Article: The effects of obtaining one's preferred service brand on consumer satisfaction and brand loyalty Audhesh K. Paswan, Nancy Spears, Gopala Ganesh

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To cite this document: Audhesh K. Paswan, Nancy Spears, Gopala Ganesh, (2007),"The effects of obtaining one's preferred service brand on consumer satisfaction and brand loyalty", Journal of Services Marketing, Vol. 21 Iss: 2 pp. 75 - 87 Permanent link to this document: http://dx.doi.org/10.1108/08876040710737840 Downloaded on: 10-09-2012 References: This document contains references to 60 other documents Citations: This document has been cited by 4 other documents To copy this document: permissions@emeraldinsight.com

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The effects of obtaining ones preferred service brand on consumer satisfaction and brand loyalty
Audhesh K. Paswan, Nancy Spears and Gopala Ganesh
Department of Marketing, College of Business Administration, University of North Texas, Denton, Texas, USA
Abstract Purpose The purpose of this study is to focus on the feeling associated with being rejected by the preferred service brand, and its effect on consumer assessment of the alternate brand. Design/methodology/approach The data were collected using a self-administered questionnaire in the context of higher education services targeted at the international market. Findings Consumers who do manage to get their preferred service brand tend to be more satised with the features of the obtained brand and exhibit higher levels of brand loyalty towards that brand. In comparison, consumers who end up with a service brand that is not their rst choice seem to have lower levels of satisfaction with and loyalty towards the obtained brand. Research limitations/implications A key limitation of this study is the sampling frame. Future studies should replicate this study in different service and product contexts and with different target population. In addition, the disconrmation of expectations or desires within the framework of preferred brand attainment should be explored. Practical implications Managers should ensure that ones service brand is high in the consideration set. This has implications for service branding and brand positioning as well as fullling service brand promise through services elements. It also has implications pertaining to winning over new customers and retaining through superior service delivery particularly the service augmentation elements, and the selection and training of service delivery personnel. Originality/value This study provides answers to a crucial question Can the number two brand ever achieve a prominent position or is it doomed to remain in the second place waiting to be picked only when consumers do not get their rst choice? Keywords Brands, Customer satisfaction, Brand loyalty, Higher education, Consumer behaviour, Overseas students Paper type Research paper

An executive summary for managers can be found at the end of this article. The relationship between consumer satisfaction and brand loyalty has been investigated in the extant literature (cf. Lam et al., 2004; Szymanski and Henard, 2001). The implicit assumption in these studies is that consumers obtain their preferred choice of brand. However, occasionally consumers are not able to buy their rst choice and settle for another brand option. For example:
A consumer tries to book a hotel or motel of choice, nds that there is no room available, and ends up booking a room at another lodging brand, probably equally good, but not the rst option. One reason could be a simple lack of availability of service capacity and may hold true for services such restaurants, camp sites, vacation spots, hair salons, air travel, doctors, and lawyers. Consumers may also be forced to settle for an alternate brand because the service provider rejects the customer for various reasons. Examples include club membership, lawyers, educational institutions, and some B-to-B services such as consulting or advertising services. Irrespective

of the reason, the act of settling for an alternate brand is likely to lead to some disappointment.

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This study focuses on the effect of buying the alternate brand under the last scenario, i.e. disappointment associated with settling for an alternate brand after being rejected by the preferred service brand. We do not focus on brand switching due to a promotion by an alternative brand because, under this circumstance, the brand switching decision is made before the purchase and the chosen brand becomes the rst choice. This idea of settling for an alternate brand has been introduced by researchers such as Dick and Basu (1994), Gounaris and Stathakopoulos (2004), and Reynolds et al. (1974). These investigations, while providing invaluable insights into consumer behavior associated with choice of alternate brands, do not address a key issue How do consumers evaluate the selected alternate (not-the-rst) brand and how do they feel about it in terms of satisfaction with service elements and loyalty towards the obtained service brand? The answer to this question has important implications for brands that are in the consumers
Received: October 2004 Revised: May 2005 Accepted: July 2005

Journal of Services Marketing 21/2 (2007) 75 87 q Emerald Group Publishing Limited [ISSN 0887-6045] [DOI 10.1108/08876040710737840]

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The effects of obtaining ones preferred service brand Audesh K. Paswan, Nancy Spears and Gopala Ganesh

Journal of Services Marketing Volume 21 Number 2 2007 75 87

consideration set but are not the dominant brand. Can the number two brand ever achieve a prominent position or is it doomed to remain in the second place waiting to be picked only when consumers do not get their rst choice? The answer to this question is even more crucial in the case of services because they tend to be low on search quality dimensions and high on experience quality dimensions. For example, tangible products such as toothpaste have physical dimensions that can be used by consumers to assess quality even before the purchase. However, few such cues exist for services such as a hair salon or a medical service. This means that consumers are likely to rely heavily on their experiences during the consumption process to assess the quality of the service received, i.e. experience quality (Lovelock, 1996; Zeithaml, 1981; Zeithaml et al., 1993). For example, consumers can reect on restaurant dining experiences, such as taste, smell, and courteousness of the staff, and feel that they must be getting good quality service. However, even this may not be enough for a consumer to assess the service quality, and they may just have to make a leap of faith, i.e. credence quality. For example, after a dental surgery, a patient may not sure of the quality of the service, but based on factors such as others recommendations, personal experience during the procedure, price paid for it, and other associated factors, a consumer simply makes a leap about the dental service quality. All this suggests that experience with services augmentation elements may play a crucial role in helping consumers assess the quality of service. In addition, service delivery is also constrained by the capacity at the transaction point, i.e. number of seats on an aircraft, movie hall, restaurant, hotels and motels, and a doctors ofce. Examples from the business-to-business services market are advertising agencies, strategic alliances, and consulting rms who cannot take on competing business or may not have the available resources. Hence, the client rms have to settle for an alternate service provider. Given these scenarios and the unique characteristics of services, is it possible for the chosen alternate brand to get a favorable evaluation resulting in loyal customers? This is what the current study will investigate. The ndings of this study provide insight into how the second or alternate brand options in a services market can gain prominence and emerge from the shadows of the leading brand. Towards this endeavor, the paper starts off with a description of the higher education market in order to contextualize the investigation. This is followed by a review of relevant services marketing literature and development of hypotheses concerning consumer satisfaction and loyalty, a description of the research method, and the results. The paper concludes with a discussion of the studys limitations, managerial implications, and suggestions for future research.

captures aspects of services that potential consumers can and would like to assess before they select a particular product or service. Additionally, search quality encompasses consumers expectations of quality of service. In comparison, experience quality can only be assessed during and after consumption, whereas credence (belief or faith about) qualities are virtually impossible to evaluate even after consumption (Lovelock, 1996; Zeithaml, 1981; Zeithaml et al., 1993). Based on these discussions, we argue that it is often very difcult for consumers to assess the core service quality before purchase and consumption, especially if alternatives are perceived to be very similar in terms of service offer (Mitchell, 2004). Consumers therefore are likely to rely on service augmentation elements that are more visible. Parasuraman (1998) argues that, irrespective of the intangible nature of the core service exchanged, customer augmentation service plays a crucial role in enhancing customer satisfaction. For example, since it is not very easy to assess the services of a barbers shop or a dentist before purchase and consumption, consumers may look at augmentation features such as the building, both internal and external decor, price, discounts, other consumers present, and recommendations from others. This notion of augmented products or services that add value to the core service is well established in the marketing literature (Kotler, 2000; Levitt, 1980; Lovelock, 1996). Literature also suggests that different service industries have their own unique set of service augmentation elements (Lovelock, 1996, 1983; Oliver, 1997). These augmentation service elements frequently help consumers form expectations about core service. In fact, even after consumers purchase and consume the service, it is often not very easy for them to evaluate the quality of core service received. Many times, it comes to simply believing in it, i.e. credence quality. It is not very difcult to imagine that service augmentation elements will have a strong inuence on the post-consumption evaluation of service quality in addition to pre-purchase evaluation. Support for this line of thinking comes from research using service quality measures that include reference to elements that augment the core service (Parasuraman et al., 1988). We next focus on the consumer satisfaction with such service augmentation elements and the resultant feeling of loyalty in the context of whether the focal service is the consumers rst choice or not.

Satisfaction with service augmentation elements and loyalty

Current literature on consumer satisfaction is rich and varied (cf. Szymanski and Henard, 2001). However, despite this plentiful attention, its purported importance, and almost law-like generalizability, the general opinion on the notion of consumer satisfaction and its exact relationship with consumer loyalty, one of its key outcomes, is still fuzzy. Current thinking suggests that mere satisfaction is not enough to ensure an automatic repeat purchase, loyalty, or even a slowdown in consumer defection (Oliver, 1999; Reichheld, 1996; Stewart, 1997). This becomes more pronounced in 76

Service augmentation and service evaluation

Services differ from products (Lovelock, 1996). Services tend to be intangible and very difcult to evaluate in terms of quality, especially before purchase and consumption. In other words, services tend to be low in search quality and high on both experience and credence quality (Lovelock, 1996; Zeithaml, 1981; Zeithaml et al., 1993). Search quality

The effects of obtaining ones preferred service brand Audesh K. Paswan, Nancy Spears and Gopala Ganesh

Journal of Services Marketing Volume 21 Number 2 2007 75 87

markets where consumers have a choice and the freedom to exercise that choice (Jones and Sasser, 1995; Stewart, 1997). Against this backdrop, the concept of a higher level of customer satisfaction or delight has been proposed (Rust and Oliver, 2000; Oliver et al., 1997). Delight encompasses a higher state of positive emotion than mere satisfaction and is a result of a rm surpassing the consumers norm-based expectation. It captures value delivered that often shifts the performance benchmark higher. Some of the studies that have laid the foundation for this enhanced level of satisfaction leading to pleasant surprise or delight are Mano and Oliver (1993), Kumar and Olshavsky (1997), Oliver et al. (1997), Rust and Oliver (2000), Rust et al. (1994) and Westbrook and Oliver (1991). Bitner et al. (2000, p. 146) state, An effective way to satisfy customers during service encounters is to provide them with pleasing experiences they do not expect. These pleasant surprises can result in what we are calling spontaneous delight. In the context of services, we argue that the service augmentation mix is likely to enhance consumer satisfaction and even result in a feeling of delight (cf. Fournier and Mick, 1999; Oliver, 1999; Rust and Oliver, 2000), since consumers may not be expecting augmentation elements (Boulding et al., 1992, 1993). Different conceptualizations and measures of loyalty have been postulated and tested in the marketing and service literature. Some of the most obvious conceptualizations of brand loyalty are repeat purchase, brand insistence, and customer becoming an avid promoter of the brand (Duhan et al., 1997; Oliver, 1999, 1997; Rust and Oliver, 2000). In the context of services, several studies have treated repurchase intentions and willingness to recommend a brand in a synonymous manner (Boulding et al., 1993; Parasuraman et al., 1994, Oliver and Westbrook, 1993; Oliver et al., 1997). Based on these discussions, we take the stance that satisfaction or delight with service augmentation elements is likely to be positively associated with brand loyalty willingness to recommend ones current service provider. We next focus on the relationship between consumer satisfaction with service augmentation elements and resultant loyalty towards the service brand in the context of whether the brand in question is the rst choice or an alternate brand.

Brand choice attainments relationship to satisfaction and loyalty

Several studies have investigated brand switching and have focused on reasons for these changes or switching behavior, such as advertising and promotion, price promotion, loss of credibility, and changes in life events, to name a few (cf. Baker and Lutz, 2000; Erdem and Swait, 2004; Kumar and Leone, 1988; Walters, 1991; Mathur et al., 2003). A large majority of studies investigating the relationship between satisfaction and brand loyalty implicitly assume that the consumers get their preferred brand (Szymanski and Henard, 2001). Even when consumers willingly switch their choice of brand, the brand they switch to then becomes their preferred choice. These studies suggest a positive relationship between the brand chosen and attitude towards it. While we acknowledge that 77

most often consumers get what they want, occasionally consumers end up with a brand of product or service that they had not actually wanted. This is particularly true for services where capacity constrains and urgency of the purchase decision force consumers to settle for an alternate brand. Examples of studies that have looked at the phenomenon of consumers settling for their alternate brand choice and the impact of this decision on satisfaction with and subsequent loyalty towards the obtained brand include Dick and Basu (1994), Gounaris and Stathakopoulos (2004), Oliver (1980), Reynolds et al. (1974) and Selnes (1993). These studies suggest that consumer decision making is not a deterministic process but involves consumers making adjustments in their choice set and selection criteria on a continuous basis. Selnes (1993) suggests that seemingly brand loyal consumers might purchase a competing brand when the preferred (rst choice) brand is not available. Oliver (1980) introduced the notion that when consumers are faced with a high degree of uncertainty about the decision-making process and its outcomes, they are likely to delay the actual decision. Reynolds et al. (1974) argue that some consumers might nd the delay in purchase to be costly and hence purchase a competing brand. Similar thoughts have been voiced by Dick and Basu (1994) as well as studies investigating the compromise effect due to contextual factors (Kivetz et al., 2004a, b; Dhar et al., 2004). These studies collectively indicate that consumers who make the switch to competing brands because of contextual and situational factors tend to have lower levels of loyalty, operationalized as willingness to recommend the obtained service brand. The relationship between lower levels of loyalty and settling for the alternate brand has been investigated by Dick and Basu (1994) and Gounaris and Stathakopoulos (2004). Dick and Basu (1994) argue that consumers in spurious and low-loyalty categories are likely to switch brands more readily than the ones in loyal and latent loyal groups, and this relationship is mediated by social norms and situational factors. Gounaris and Stathakopoulos (2004) found that consumers who are high on inertia loyalty are very likely to switch brands. Using these evidences, we argue that consumers who obtain their preferred service brand are likely to have higher levels of loyalty as well as a more positive attitude towards service augmentation elements of the obtained (i.e. preferred) brand. In comparison, consumers who do not obtain their preferred service brand are likely to feel a sense of disappointment and are likely to evaluate the obtained alternate (not the rst choice) brand negatively. They are also likely to exhibit lower levels of loyalty towards this alternate service brand. We also hypothesize that this relationship between brand attainment and brand loyalty would be moderated by consumers postpurchase brand loyalty towards the obtained brand. In other words, the effect of disappointment or elation associated with attainment or non-attainment of the preferred brand will be stronger amongst the group that is exhibits higher loyalty towards their obtained brand. Continuing with this line of argument, we further speculate that the positive relationship between consumer evaluation of service augmentation elements and brand loyalty is likely to be higher for consumers who obtain their preferred brand

The effects of obtaining ones preferred service brand Audesh K. Paswan, Nancy Spears and Gopala Ganesh

Journal of Services Marketing Volume 21 Number 2 2007 75 87

than consumers who do not. Thus, based on these ideas, four hypotheses are presented: H1. Consumers who end up with their alternate service brand choice are likely to have lower levels of satisfaction with service augmentation elements of the obtained brand than consumers who end up with their rst choice. H2. Consumers who end up with their alternate service brand choice are less likely to recommend their obtained brand than consumers who end up with their rst choice, i.e. a negative relationship between non-attainment of the preferred service brand and brand loyalty. H3. The negative relationship between non-attainment of the preferred service brand and brand loyalty (willingness to recommend) towards the obtained service brand will be stronger for consumers who are highly satised with their obtained brand (i.e. exhibit higher levels of post-purchase brand loyalty). H4. Non-attainment of the preferred choice of service brand will have a detrimental effect on relationship between consumer satisfaction with service augmentation elements and brand loyalty.

Method
The context of this study is a higher education service marketed to international students. Studies that have used the education services context for theory testing have acknowledged it to be one of the most intangible exchange items (Boulding et al., 1993, 1992). Due to high levels of intangibility, as well as seemingly high experience and credence qualities (Lovelock, 1996; Zeithaml, 1981), students may nd it extremely difcult to evaluate the quality of (i.e. satisfaction with) the educational service exchange in the pre-purchase stage. The international students market was chosen for this study because there are indications that US higher educational institutions are losing ground to competition from other countries in the recent past (Bourke, 2000; Open Doors, 2004). Most international students apply to universities and programs based primarily on information available through US embassies, ETS, universities web pages, suggestions from friends and relatives, and other related forums (Open Doors, 2004). Consequently, most international students end up on US campuses without any rst-hand experience. Thus, they are likely to be inuenced by augmentation factors such as nancial issues, housing, loneliness, safety on campus, etc. International students also account for a disproportionately higher percentage of students attending graduate schools, particularly in some academic elds such as business management, engineering, mathematics, and computer science (Open Doors, 2004). Further, based on our discussions with international students, we found that they tend to apply to several universities that are comparable, at least from their perspective, knowing that some of the universities will either reject their application or will not be able to offer them assistantships. In addition, the list of 78

universities selected by international students is strongly determined by their GMAT, GRE, and TOEFL scores. These indicate that most international students tend to select a relatively homogenous set of universities (one of these might be a strong favorite) to maximize their chances of getting accepted by at least one of these universities. In any case, some students will be rejected by their preferred university and will settle for the alternate university. Arguably, the international student market is an appropriate setting for this study. The sampling frame consisted of all international students currently enrolled at four major public universities in a large southern state. All four universities have comprehensive programs ranging from undergraduate to doctorate, and enrollments ranging from 25,000 to nearly 50,000. These four universities collectively enroll around 8,000 international students (about 25 percent of all international college students in the state). The survey questionnaire was mailed out to a disproportionate random sample of 4,000 international students, 1,000 from each university. Each mailing list was generated with the help of the International Student Ofce at each university. A pre-notication letter plus the single mailing resulted in 1,400 responses (response rate of 35 percent). It has been suggested that different service industries have their own set of service augmentation elements (Lovelock, 1996, 1983; Oliver, 1997). However, no established framework or classication scheme existed for higher education augmentation services. We found a few studies that have identied some elements of augmentation relevant for higher education, e.g. Borden (1995), Bourke (2000), Browne et al. (1998), Cheng and Tam (1997), Desruisseaux (1999), Eiglier and Langeard (1977), Hartman and Schmidt (1995), Kotler and Fox (1995), Luzio-Lockett (1998), Samdal et al. (1999), Saunders and Walker (1993), Stewart and Felicetti (1991), Tomovick et al. (1996), and Zikopoulos and Barber (1986). We relied on these studies to capture the service augmentation elements applicable to higher education services. In order to make this list a comprehensive one, we also conducted personal interviews with international students and their advisors at the participating universities. Based on these, we classied the elements of augmentation services in the context of higher education service as campus life, nancial, maintenance, health, and social interaction. Campus life augmentors capture core aspects and include quality of classroom instruction, adequacy of instruction support resources, feeling of comfort and safety, etc. Examples of nancial augmentors include nancial aid, assistantships, scholarships, tuition and fees, cost of books and study materials, and personal nance related issues. Maintenance augmentors encompass the cost of basics such as food, clothing, and shelter. Health augmentors captures the activities associated with physical well-being and may even be driven by regulatory issues, particularly in the context of international students (all international students are required to have insurance). Finally, the social interaction augmentors capture the social aspects of the transaction capturing interaction between the international students and local

The effects of obtaining ones preferred service brand Audesh K. Paswan, Nancy Spears and Gopala Ganesh

Journal of Services Marketing Volume 21 Number 2 2007 75 87

public in general and local students in particular. These ve service augmentation elements, when delivered well, result in a high level of consumer satisfaction in the context of higher educational services. This is in synch with suggestions made in the literature that different service industries have their own unique set of service augmentation elements (Lovelock, 1996, 1983; Oliver, 1997). The measurement scales were developed based on the personal interviews with foreign students and their advisors (these were not included in the nal study). During this exploratory stage, the international students were asked to list all the possible areas of conict or delight they had encountered or they had heard about from their friends. They were instructed to limit themselves to augmentation aspects and not get into topics or areas associated with the core of service exchanged, i.e. knowledge base in their eld of study. This resulted in a total of 18 distinct areas of satisfaction beyond the core of the exchange (please see Table I for a listing). These items were incorporated in the survey questionnaire and the respondents were asked to rate their experiences at the current US educational institution on a nine-point semantic differential satisfaction scale anchored by Very Satised (1) and Very Dissatised (9). Loyalty was measured by the students willingness to recommend their current university as a place for higher education to a close relative or a friend. The responses were obtained on a nine-point semantic differential scale anchored by Denite Yes (1) and Denite No (9).

Analyses and results

The data were rst tested for non-response error by matching the prole of the respondents with the known prole characteristics (i.e. age, gender, country of origin, academic discipline) of the population of nearly 4,000 students. There were no signicant differences. The 18 scale items for measuring satisfaction with the education service augmentation elements were then subjected to the principal component factor analysis that resulted in (as hypothesized) the extraction of ve factors labeled nancial, maintenance, campus life, health, and social interaction augmentors. Table I presents the rotated factor matrix. Total percentage of variance explained by these ve factors was 66.4 percent, and all the Coefcient alpha scores were above 0.77. Table II presents the inter-item correlation amongst these 18 scale items, and we note that within-factor correlation gures are generally higher than the across factor. These indicate that the measurement scales have acceptable levels of internal consistency as well as discriminant and convergent validity. The factors variables were next averaged, and these composite scores were used for further analyses. ANOVA, MANOVA, and multiple regressions analyses were used to test the hypotheses (H1 through H4). MANOVA was run with the composite satisfaction scores with the ve education service augmentation elements as dependent variables and the preferred brand attainment as the grouping variable (results in Table III). ANOVA was run with brand loyalty (measured by the respondents willingness

Table I Factor structure for the satisfaction scale, reliability assessment and descriptive statistics
Items measuring satisfaction 5j 5k 5c 5i 5d 5l 5f 5g 5e 5h 5b 5a 5n 5m 5p 5o 5r 5s Awareness of nancial aid, scholarships Ability to apply, get assistantships, scholarships Tuition and fees Personal nances $ books, study materials Ability to nd job, upon graduation $ clothing $ housing $ food Availability of housing Other instructional resources Classroom instruction Physical safety Campus recreational facilities Availability of family health insurance Availability of self health insurance Opportunities for interaction with US/TX others Opportunities for interaction with US/TX students % of variance explained (total 66.440) Cronbachs Alpha Scale mean Scale SD F-1 0.76 0.74 0.74 0.63 0.57 0.52 F-2 F-3 F-4 F-5 Mean 4.76 4.67 4.88 4.76 5.84 4.7 3.96 4.37 3.98 3.73 3.2 3.35 3.42 3.7 4.03 3.39 4.62 4.75 SD Factor content/label 2.23 2.49 2.46 2.28 2.19 2.3 1.83 2.22 1.97 2.06 1.62 1.69 2 2.19 2.31 2.12 2.24 2.23 Factor-1 Financial well being Financial augmentors

0.35 0.85 0.81 0.77 0.63 0.82 0.79 0.64 0.54

Factor-2 Maintenance augmentors Factor-3 Instruction, campus, & college issues Campus Life augmentors Factor-4 Health augmentors Factor-5 Social interaction augmentors

0.37 0.83 0.82 0.90 0.90

16.28 15.58 13.38 10.63 10.57 (These percentages 0.79 0.80 0.77 0.84 0.92 are variance 4.85 4.07 3.29 3.41 4.37 after rotation) 1.63 1.58 1.43 1.99 2.17

Note: The measurement scale ranged from very satised (1) to very dissatised (9)

79

The effects of obtaining ones preferred service brand Audesh K. Paswan, Nancy Spears and Gopala Ganesh

Journal of Services Marketing Volume 21 Number 2 2007 75 87

Table II Customer satisfaction factors: inter-item correlation

5j Awareness of nancial aid, scholarships Ability to apply, get assistantships, scholarships Tuition and fees Personal nances $ books, study materials Ability to nd job, upon graduation $ clothing $ housing $ food Availability of housing Other instructional resources Classroom instruction Physical safety Campus recreational facilities Availability of family health insurance Availability of self health insurance Opportunities for interaction with US/TX students Opportunities for interaction with US/TX others Note: All correlations are signicant at p , 0.05 1.00 0.65 0.39 0.46 0.32 0.34 0.21 0.24 0.25 0.26 0.24 0.24 0.19 0.24 0.27 0.32 0.22 0.18 5k 3.61 1.00 0.36 0.41 0.29 0.39 0.22 0.19 0.24 0.24 0.20 0.21 0.17 0.20 0.35 0.31 0.15 0.12 5c 2.09 2.23 1.00 0.43 0.55 0.31 0.23 0.28 0.27 0.19 0.22 0.21 0.22 0.19 0.20 0.21 0.15 0.12 5i 2.18 2.25 2.29 1.00 0.34 0.34 0.32 0.36 0.34 0.32 0.21 0.25 0.22 0.21 0.28 0.29 0.20 0.18 5d 1.51 1.61 2.89 1.63 1.00 0.25 0.36 0.34 0.37 0.24 0.18 0.20 0.19 0.17 0.23 0.26 0.17 0.17 5l 1.75 2.27 1.72 1.70 1.24 1.00 0.25 0.27 0.25 0.23 0.19 0.14 0.21 0.25 0.26 0.25 0.23 0.20 5f 0.83 1.00 1.01 1.24 1.40 1.03 1.00 0.57 0.67 0.39 0.25 0.19 0.22 0.21 0.18 0.26 0.21 0.18 5g 1.16 1.05 1.48 1.75 1.63 1.35 2.23 1.00 0.50 0.55 0.16 0.14 0.17 0.16 0.27 0.24 0.20 0.20 5e 1.05 1.18 1.27 1.41 1.56 1.09 2.31 2.13 1.00 0.35 0.23 0.21 0.22 0.24 0.21 0.30 0.20 0.16 5h 1.17 1.26 0.91 1.43 1.04 1.08 1.41 2.46 1.34 1.00 0.20 0.20 0.22 0.21 0.23 0.24 0.21 0.20 5b 0.83 0.82 0.84 0.72 0.61 0.67 0.70 0.56 0.69 0.64 1.00 0.66 0.45 0.42 0.28 0.32 0.29 0.28 5a 0.89 0.91 0.88 0.94 0.75 0.57 0.58 0.54 0.71 0.72 1.80 1.00 0.35 0.30 0.28 0.29 0.27 0.27 5n 5m 5p 0.83 0.84 1.05 0.93 0.81 0.98 0.79 0.73 0.84 0.86 1.41 1.23 1.00 0.54 0.30 0.36 0.23 0.22 1.11 1.08 1.00 0.97 0.80 1.25 0.79 0.74 0.98 0.90 1.41 1.10 2.29 1.00 0.34 0.33 0.27 0.25 1.43 2.06 1.16 1.52 1.21 1.38 0.80 1.44 1.00 1.11 1.08 1.15 1.42 1.72 1.00 0.72 0.27 0.25 5o 1.38 1.59 1.02 1.25 1.14 1.17 0.94 1.06 1.13 0.97 1.02 1.00 1.43 1.41 3.63 1.00 0.25 0.19 5r 1.08 0.88 0.81 0.98 0.82 1.22 0.85 1.00 0.86 0.97 1.05 1.07 1.05 1.32 1.45 1.13 1.00 0.85 5s 0.87 0.66 0.68 0.88 0.82 1.04 0.72 0.96 0.67 0.92 1.00 1.04 0.97 1.19 1.32 0.86 4.35 1.00

Table III Attainment of preferred brand and consumer satisfaction with brand features: MANOVA results
Brand features fwb Brand choice attainment 1.00 Current 2.00 Current Total 1.00 Current 2.00 Current Total 1.00 Current 2.00 Current Total 1.00 Current 2.00 Current Total 1.00 Current 2.00 Current Total brand not my rst choice brand my rst choice brand not my rst choice brand my rst choice brand not my rst choice brand my rst choice brand not my rst choice brand my rst choice brand not my rst choice brand my rst choice Mean 4.93 4.79 4.85 4.16 3.99 4.07 3.47 3.16 3.29 3.50 3.33 3.40 4.53 4.27 4.38 Std dev. 1.58 1.66 1.63 1.62 1.55 1.58 1.50 1.36 1.43 1.98 1.99 1.99 2.19 2.16 2.17 F-stats 2.29

p-value
0.13

MANOVA test Test of equality of variance Box M 18.57 F-stats 1.23 p-value 0.24

Maint

3.47

0.06

Campus

14.22

0.00

Health

2.08

0.15

Multivariate test stats Pillais Trace, Wilks Lambda, & Hotellings Trace p-value 0.01

Intus

4.37

0.04

to recommend the current university as a place of higher education) as the dependent variable and the preferred brand attainment as the grouping variable (results in Table IV). The multivariate regression analysis was rst run with brand loyalty as the dependent variable and the composite satisfaction scores with the ve education service augmentation elements as independent variables (Model 3.1), and then by including the preferred brand attainment as a dummy independent variable along with composite satisfaction scores (Model 3.2). Table V presents the results of these analyses. We next ran ve multivariate regression analyses (Models 4.1 through 4.5) with loyalty as dependent variables, and the composite satisfaction scores with the ve education service 80

augmentation elements and the dummy coded preferred brand attainment as independent variable, under different levels of loyalty towards the obtained brand (see Table VI). Finally, we ran three multivariate regression analyses (Models 5.1 through 5.3) with loyalty as dependent variables and the composite satisfaction scores with the ve education service augmentation elements as independent variables, for two separate groups one who had obtained their preferred brand choice and another who obtained their alternate brand choice (see Table VII). The MANOVA results ((Box M p-value 0.24 and multivariate test statistics p-value 0.01) indicate that the respondents who obtained their preferred brand clearly differ on more service augmentation factors from the respondents

The effects of obtaining ones preferred service brand Audesh K. Paswan, Nancy Spears and Gopala Ganesh

Journal of Services Marketing Volume 21 Number 2 2007 75 87

Table IV Attainment of preferred brand and brand loyalty: ANOVA results

Brand loyalty q07c recommend: study at current university Brand choice attainment 1.00 Current brand not my rst choice 2.00 Current brand my rst choice Total Mean 3.77 3.00 3.33 Std dev. 2.19 1.91 2.07 Brown Forsyth-stats 42.34

p-value
0.00

Notes: Scale range: Consumer Satisfaction: 1 Very Satised and 9 Very Dissatised; Brand Loyalty: 1 Denite Yes and 9 Denite No (to the question Would you recommend your current university to your friends and family?); Brand Choice Attainment: 1 Current Brand (University) not my First Choice and 2 Current Brand (University) is my First Choice

Table V Attainment of preferred brand, satisfaction with brand features, and brand loyalty: multivariate regression results
Model-3.1 (base model) Model-3.2 with brand without brand attainment attainmen Unstd Std Unstd Std B Beta t-stats Sig. B Beta t-stats Sig. (Constant) 20.09 2 0.52 Fwb 0.26 0.20 7.05 Maint 20.07 2 0.05 2 1.88 Campus 0.58 0.41 14.36 Health 20.03 2 0.03 2 1.10 Intus 0.14 0.15 5.86 Brandcr Not incl. R R-sq. Adj. R-sq. 0.56 0.31 0.31 0.60 0.28 0.00 0.26 0.20 0.06 2 0.07 2 0.05 0.00 0.57 0.39 0.27 2 0.03 2 0.03 0.00 0.14 0.15 2 0.52 2 0.12 0.57 0.32 0.32 1.46 7.14 21.99 14.00 21.05 5.83 25.26 0.15 0.00 0.05 0.00 0.30 0.00 0.00

Notes: Scale range: Consumer Satisfaction: 1 Very Satised and 9 Very Dissatised; Brand Loyalty: 1 Denite Yes and 9 Denite No (to the question Would you recommend your current university to your friends and family?); Brand Choice Attainment: 1 Current Brand (University) not my First Choice and 2 Current Brand (University) is my First Choice

who did not obtain their preferred brand, especially for campus, social interaction, and to some extent, maintenancerelated augmentation factors (see Table III). Further, the ANOVA results (Table IV) indicate that loyalty towards the obtained service brand (Brown Forsyth p-value 0.00) also differs across respondents who obtained their preferred brand and the ones who ended up with the alternate brand. Respondents who obtained their preferred brand tend to have a more positive opinion about the service augmentation elements and higher levels of loyalty towards their obtained brand than respondents who did not get their preferred brand. The augmentation variables that did not differ across the two groups are nancial well-being ( p-value 0.13) and health ( p-value 0.15) augmentation elements. Maintenance augmentation elements had a p-value of 0.06. Table V reports the results of two multiple regression analyses with brand loyalty as the dependent variable and satisfaction scores with service augmentation factors (Model 3.1) and satisfaction plus the dummy coded consumer brand attainment (Model 3.2) as independent variables. All the estimates (R-squares, Adjusted R-squares and beta weights for service augmentation elements) remained stable across 81

both models. The beta weight for consumer brand attainment was negative and signicant (Model 3.2). These ndings provide support for H1 and H2. Table VI presents the results of the regression models (with both service augmentation elements and dummy coded brand attainment score) across four subgroups with lowest to highest brand loyalties towards their current brand of service providers (Models 4.2 through 4.5 with 4.1 serving as the overall base model). Once again, the R-squares and adjusted R-squares did not signicantly differ across Models 4.2 through 4.5 (tested using Fishers Z-transformation statistics), although these estimates did increase with increasing loyalty scores. What is interesting is that the beta weight associated with (dummy coded) brand attainment variable was insignicant for groups with lower levels of brand loyalty, and signicant for higher levels of brand loyalty. This provides support for H3. Finally, Table VII presents the results of the multiple regression models with loyalty as the dependent variable and only composite scores of service augmentation factors (ve of them) as independent variables across two groups, one containing respondents whose obtained brand was their preferred brand choice, i.e. their rst choice (Model 5.3), and another with respondents whose current brand was not their rst choice, i.e. they ended up with the alternate brand (Model 5.2). The R, R-square, and Adjusted R-square estimates were higher for the group where the (current) obtained brand was their rst choice (0.57, 0.33, 0.32) in comparison to the group where the (current) obtained brand was not their rst choice (0.53, 0.29, 0.28), although the difference was not signicant using Fishers Z transformation. Thus, even though H4 is not statistically supported, the shift in the magnitude of relationship does indicate the hypothesized relationship to be somewhat true.

Discussion
This study clearly indicates that attainment of ones preferred service brand does inuence consumer satisfaction with the service augmentation factors as well as loyalty towards the obtained service brand. However, the results also suggest that the effect is somewhat complex. To start with, as expected, consumers who obtained their preferred service brand were more satised with the service augmentation elements of their obtained service brand. In addition, consumers who obtained their preferred brand also exhibited higher loyalty levels towards their obtained service brand. In comparison, consumers who did not get their preferred service brand

Table VI Attainment of preferred brand, satisfaction with brand features, and brand loyalty across brands with different levels of loyalty: multivariate regression results

The effects of obtaining ones preferred service brand

Audesh K. Paswan, Nancy Spears and Gopala Ganesh

Model-4.1 (base model) Full Model-4.3 Second lowest Model-4.4 Second highest sample Model-4.2 Lowest loyalty loyalty level loyalty level Model-4.5 Highest loyalty level Unstd B Std. Beta t-stats Sig. Unstd B Std Beta t-stats Sig. Unstd B Std Beta t-stats Sig. Unstd B Std Beta t-stats Sig. Unstd B Std Beta t-stats Sig.

82
0.53 0.28 0.27 4.07 Lowest loyalty 2.18 0.53 0.29 0.27 3.73 2.09

(Constant) fwb maint campus health intus brandcr 0.54 0.29 0.28 3.07 1.92

0.28 0.26 2 0.07 0.57 2 0.03 0.14 2 0.52

0.20 2 0.05 0.39 2 0.03 0.15 2 0.12

1.46 7.14 21.99 14.00 21.05 5.83 25.26

0.15 0.21 0.00 0.23 0.05 0.03 0.00 0.58 0.30 2 0.15 0.00 0.20 0.00 2 0.42

0.44 0.66 0.47 0.18 2.89 0.00 0.22 0.02 0.39 0.70 0.00 0.38 6.48 0.00 0.62 2 0.13 2 2.21 0.03 20.05 0.20 3.64 0.00 0.06 2 0.10 2 1.87 0.06 20.39

0.98 0.33 0.75 0.18 2.88 0.00 0.39 0.00 0.03 0.98 2 0.22 0.40 5.79 0.00 0.44 20.05 2 0.84 0.40 0.00 0.07 1.11 0.27 0.13 20.09 2 1.64 0.10 2 0.75

2.20 0.03 2 0.06 0.31 5.47 0.00 0.22 20.17 2 3.01 0.00 2 0.01 0.29 5.25 0.00 0.45 0.00 0.08 0.94 0.01 0.15 2.84 0.00 0.17 20.19 2 4.12 0.00 2 0.49

2 0.20 0.85 0.19 3.37 0.00 20.01 2 0.18 0.86 0.29 5.18 0.00 0.01 0.20 0.85 0.20 3.78 0.00 20.14 2 2.88 0.00 0.55 0.30 0.29 2.63 Highest loyalty 1.76

R R-Sq Adj. R-sq. Loyalty mean Loyalty SD

0.57 0.32 0.32 3.33 2.06

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Note: Scale range: Consumer Satisfaction: 1 Very Satised and 9 Very Dissatised; Brand Loyalty: 1 Denite Yes and 9 Denite No (to the question Would you recommend your current university to your friends and family?); Brand Choice Attainment: 1 Current Brand (University) not my First Choice and 2 Current Brand (University) is my First Choice

The effects of obtaining ones preferred service brand Audesh K. Paswan, Nancy Spears and Gopala Ganesh

Journal of Services Marketing Volume 21 Number 2 2007 75 87

Table VII Satisfaction with brand features and brand loyalty across attainment of the rst choice: multivariate regression results
Model-5.1 (base model) Full sample Unstd B Std Beta t-stats Sig. (Constant) fwb maint campus health intus R R-sq. Adj. R-sq. 20.09 0.26 20.07 0.58 20.03 0.14 0.56 0.31 0.31 0.20 20.05 0.41 20.03 0.15 2 0.52 7.05 2 1.88 14.36 2 1.10 5.86 0.60 0.00 0.06 0.00 0.27 0.00 Model-5.2 Current brand not their rst choice Unstd B Std Beta t-stats Sig. 0.14 0.34 2 0.13 0.52 2 0.06 0.20 0.53 0.29 0.28 0.24 2 0.10 0.36 2 0.06 0.20 0.46 5.43 22.22 8.23 21.36 5.00 0.65 0.00 0.03 0.00 0.18 0.00 Model-5.3 Current brand their rst choice Unstd B Std Beta t-stats Sig. 20.18 0.21 20.03 0.61 20.01 0.10 0.57 0.33 0.32 0.18 20.03 0.44 20.01 0.11 2 0.85 4.80 2 0.72 11.76 2 0.23 3.28 0.39 0.00 0.47 0.00 0.82 0.00

Notes: Scale range: Consumer Satisfaction: 1 Very Satised and 9 Very Dissatised; Brand Loyalty: 1 Denite Yes and 9 Denite No (to the question Would you recommend your current university to your friends and family?); Brand Choice Attainment: 1 Current Brand (University) not my First Choice and 2 Current Brand (University) is my First Choice

(i.e. ended up with their alternate brand) were less satised with and less loyal to their obtained service brand. Clearly, the disappointment of not being able to get ones preferred service brand has a negative effect on evaluations and feelings about the obtained brand. What the results of this study indicate is that consumers feel disappointment when they do not get their preferred brand, and they take out this disappointment on the alternate brand. In other words, brand buy-in inuences evaluation of the obtained brand. Further, the effect of non-attainment or attainment of ones preferred brand on satisfaction and loyalty is stronger and signicant for brands with high brand loyalty. For brands with lower levels of loyalty, the effect of brand attainment on satisfaction and loyalty is not signicant. A possible explanation could be that brands with higher levels of loyalty may have higher consumer involvement and expectations (cf. Aaker et al., 2004; Thorbjrsen and Supphellen, 2004), and when the consumers get their preferred brand, they feel elated. In comparison, for brands with lower levels of loyalty, consumers are likely to have lower levels of involvement and expectation. Hence, the feeling of disappointment is not strong enough to inuence loyalty towards the obtained brand, and the disappointment does not lead to strong emotions or disconrmation. Finally, we tested the effect of satisfaction with service augmentation factors on brand loyalty across two groups those who attained their preferred brand and those who did not. Even though the overall effect size estimates (R, R-square, and adjusted R-square) did not signicantly differ across these two groups, the changes in these estimates were in the hypothesized direction and were larger for the group that obtained their preferred brand and smaller for the ones that did not. The results suggest that the feelings of disappointment or elation associated with brand attainment or non-attainment is not strong enough to overcome the effect due to experience quality associated with service augmentation factors. This provides support for the existence of and salience associated with experience quality in the services context such as satisfaction with service 83

provider culminating in loyalty. In addition, existing literature also suggests that dissatisfaction leads to complaining behavior and negative word-of-mouth (Oliver and Desarbo, 1989; Oliver and Westbrook, 1993; Szymanski and Henard, 2001). This makes the relationship between experience quality and loyalty even more crucial. Throughout this paper, we have used the term satisfaction. Depending upon how well a rm delivers the core of the exchange, a consumers experience is likely to be within a continuum of extreme satisfaction to extreme dissatisfaction. However, the feeling captured here is not just satisfaction with the core of the exchange relationship. The service augmentation elements are likely to take the consumer beyond mere satisfaction. Their presence is likely to enhance the consumer satisfaction with the core. However, the absence of augmentors is not likely to take away this feeling of satisfaction with the core, at least in the short run. We believe that augmentors, such as the ones detailed in this study, are likely to enhance satisfaction or perhaps delight, and hence have a stronger effect on loyalty than either attainment or non-attainment of the preferred brand.

Limitations
A key limitation of this study is the sampling frame that consists exclusively of international students attending four large universities. However, since the focus of this study is to investigate the nomological relationships between service brand attainment, consumer satisfaction with service augmentation elements, and brand loyalty as opposed to specic service augmentation elements (which may be difcult to generalize because these tend to be different for different industries (Lovelock, 1996, 1983; Oliver, 1997)), the sampling frame should not pose any serious problems. Nevertheless, future studies should investigate this phenomenon in different service and product contexts and with different target population. Future studies should also try to replicate using different populations (non-international students). Finally, this study concentrates on the affective

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Journal of Services Marketing Volume 21 Number 2 2007 75 87

aspects of satisfaction and links these to specic performance areas (Szymanski and Henard, 2001). We do not investigate the expectation and the disconrmation of expectations or desires within the framework of preferred brand attainment. Having identied the limitations, we believe that these do not confound our ndings in a signicant manner. We also believe that our ndings concerning the relationships between consumer satisfaction with service augmentation factors and the outcome variable consumer loyalty, within the context of preferred brand attainment have important implications both for managers and future researchers.

Implications
In terms of research implications, we hope that future investigations focus on external augmentors along with the internal ones. In a services context, consumer satisfaction is certainly inuenced by internal factors that the rm can actually have signicant control over. However, numerous external factors, such as the deterioration of the surrounding locality, run down conditions of other shops nearby, etc., often outside the control of a service rm, also impinge on customer satisfaction. Future research should also investigate customer loyalty in the context of other services both runof-the-mill services such as tax preparation and lawn care as well as not so mundane services such as turnkey projects like civic amenities contracts, once-in-a-lifetime services such as extended medical treatment, and social services such as family planning or projects to bring about changes in social behavior such as drug abuse. These not so mundane services typically take a long time to complete, with little certainty in terms of the quality of the actual outcome. Other antecedents to consumer satisfaction such as expectation, and expectation disconrmation should also be investigated in this service context. Future research should also investigate whether brands with higher loyalty levels have higher consumer involvement and expectation. As regards managerial implications, at a broader level, the ndings of this study indicate that whether consumers attain their preferred service brand or not has an inuence on their satisfaction with service augmentation factors and the resultant feeling of loyalty towards the attained brand. Consumers who attain their preferred brand tend to be more satised with their attained service brand. They are also likely to be more loyal towards the attained brand (which is their preferred brand). One clear message for managers is to ensure that ones service brand is high (preferably number one) in the consideration set. This has implications for service branding and brand positioning as well as fullling service brand promise through service-mix elements (e.g. product, price, promotion, place, and people). In contrast, the manager, especially of a brand that is not the most preferred brand, must be cognizant of this phenomenon in order to take remedial actions. What can the manager of the second brand do in terms of inuencing consumer satisfaction and loyalty? Thankfully, the results of the study indicate that the disappointment of not getting the preferred service brand by itself is not powerful enough to counter the consumer evaluation of service augmentation factors. That is, 84

experience quality helps the alternate brand to overcome consumer disappointment over not attaining the preferred brand. In other words, just because the attained service brand is not the rst choice does not mean that it will continue to stay in the alternate brand category. The second brand, in terms of choice, can overcome this handicap by providing a superior experience quality via trying harder. However, the managers of the alternate brand must be aware of the fact that they have to try harder since the odds are against them. This is important to a large extent because services tend to be high on experience quality and low on search quality factors (Lovelock, 1996; Zeithaml, 1981; Zeithaml et al., 1993). In fact, the notion behind Hertzs campaign, We try harder because we are number two, tries to capture the notion of the second choice brand trying harder to please customers. This nding has implications for managerial decisions pertaining to winning over new customers and retaining through superior service delivery particularly the service augmentation elements. These ndings also have implications for selection and training of service delivery personnel. It has been suggested in the extant literature that mere deliverance of the core service to the fullest possible extent is not enough to retain customers or generate customer loyalty to such an extent that the customer becomes the rms advocate, especially in a mature market or markets with strong competition (Bitner et al., 2000; Lovelock, 1996). We contend that in order to achieve such enviable outcomes, rms must go beyond the core of the exchange and offer service augmentation elements that delight the customers. Only then can the number two hope to overcome the odds stacked against them.

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Executive summary and implications for managers and executives

This summary has been provided to allow managers and executives a rapid appreciation of the content of the article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benet of the material present. Human nature being what it is, it comes as no surprise that people who dont get the service, or product, they want when they want it are disappointed and that disappointment can make them well, in a word, curmudgeonly. That lovely word which describes all sorts of ill-natured attitudes such as being sour, miserable, gruff, brusque or surly can be attributed to many of us when we have to make do with what we regard as second best. Even if that second best turns out to be quite splendid, how many of us will be reluctant to admit it simply because were still smarting from the rejection of not being able to access the service or product that was our rst choice? If you try to book a hotel, only to be told the place is full, do you get over the disappointment, even if the hotel you do eventually stay in is all you could expect of it and more? If your favorite hairdresser cant t you in, so you settle for someone who wouldnt have been your rst choice, are you overjoyed if their service turns out to be surprisingly good, or are you still a bit disgruntled that you couldnt get your preferred choice? If your business needs the services of the advertising agency you regard as the best, but they cant take you on because they work for a rival company or are just too busy, are you satised if the agency that does the job for you does it exceptionally well, maybe even better than your preferred choice would have done? In short, is it possible for a chosen alternate brand to get a favorable evaluation resulting in loyal customers? Thats what Audhesh K. Paswan et al. try to nd out in their investigation of international students accessing services in the higher education market a study which considers the relationship between service brand attainment, consumer satisfaction with service augmentation elements, and brand loyalty. The study focuses on the effect of buying an alternate brand following the disappointment of rejection not being able to get the preferred service. They ask if the number two brand can ever achieve a prominent position or is it doomed to remain in second place waiting to be picked up only when consumers do not get their rst choice? The answer is even more crucial for services, rather than products, because they tend to be low on search quality dimensions and high on experience quality dimensions. Tangible products such as toothpaste have physical dimensions that can be used to assess quality even before the purchase. However, few such cues exist for services such as a hair salon, medical service or college course. This means that consumers are likely to rely heavily on their experiences during the consumption process to assess the quality of the service received, i.e. experience quality. 86

Corresponding author
Audhesh K. Paswan can be contacted at: paswana@unt.edu

The effects of obtaining ones preferred service brand Audesh K. Paswan, Nancy Spears and Gopala Ganesh

Journal of Services Marketing Volume 21 Number 2 2007 75 87

Because of the difculty for consumers in assessing the core service quality before buying, they are likely to rely on service augmentation elements that are more visible. At a barbers shop or dentist, for instance, augmentation features might include the buildings appearance or recommendations from others. But even after receiving it, customers sometimes nd it difcult to evaluate the quality of the core service, and many times it just comes to simply believing it, i.e., credence quality. If most customers get the service from the provider they prefer and feel loyalty towards, what about those who have to settle for an alternative brand? The ndings indicate that whether consumers attain their preferred service brand or not has an inuence on their satisfaction with service augmentation factors and the resultant feeling of loyalty towards the attained brand. Consumers who attain their preferred brand tend to be more satised with it and are also likely to be more loyal towards it.

Thankfully, the study results indicate that the disappointment of net getting the preferred service brand by itself is not powerful enough to counter the consumer evaluation of service augmentation factors. That is, experience quality helps the alternate brand to overcome consumer disappointment over not attaining the preferred brand. In other words, just because the attained service brand is not the rst choice does not mean that it will continue to stay in the alternative brand category. It can overcome this handicap by providing a superior experience quality via trying harder. However, the managers of the alternate brand must be aware of the fact that they have to try harder since the odds are against them. This is important because services tend to be high on experience quality and low on search quality factors. (A precis of the article The effects of obtaining ones preferred service brand on consumer satisfaction and brand loyalty. Supplied by Marketing Consultants for Emerald.)

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