Customer satisfaction

Muhannad M.A Abdallat, Ph.D. Assistant Professor Hesham El Sayed El - Emam, Ph.D. Assistant Professor Department of Tourism and Hospitality, Faculty of Tourism and Archeology King Saud University

Customer satisfaction is a post-purchase evaluation of a service offering (Oh, 2000, Bolton and Drew 1991). A traditional definition of customer satisfaction followed the disconfirmation paradigm of consumer satisfaction/dissatisfaction (CS/D), suggesting that CS/D is the result of interaction between the consumers pre-purchase expectations and post purchase evaluation (Cadotte et.al., 1987). Anton (1996) gave a more current approach. He defined customer satisfaction as a state of mind in which the customers needs, wants, and expectations throughout the product of service life haven been met or exceeded, resulting in future repurchase and loyalty. Some researchers support the idea that satisfaction can be measured from a perspective of performance evaluations, making the inclusion of the disconfirmation process needless. Furthermore, satisfaction is not only consists of cognitive element but have to include emotional element in determining customer satisfaction.

Overall business strategy consists of two parts, the offense and the defense. To have a successful business, all firms apply some of the combination of

offensive and defensive strategy the offense for new customer acquisition and the defense to protect the existing customer. Traditionally, firms were putting more effect in acquiring customers than to their retention. However, in a highly competitive market place, good defense is vital. Defensive strategy involves reducing customer defeat and switching, which consequently minimizes customer turn over.

Creating customer satisfaction is a defensive strategy and the behavioral objective for defense is customer loyalty (Fornell, 1992). Fornell discussed that customer satisfaction will be influenced if the demand and supply are different. Satisfaction will be low when the customer demand is heterogeneous and the supply is homogeneous. To retain customer, switching barrier and customer satisfaction are the two basic forms which need to be fulfilled. Switching barriers make it costly for customer to switch to competitors and customer satisfaction makes it costly for competitor to take away another firms customer. According to Fornell, switching barrier is less effective compared to customer satisfaction. He claimed that high customer satisfaction reduces the competition in terms of price promotion whereas switching barrier greatly involves in price promotion. This study concentrates on using defensive strategy, particularly customer satisfaction to win customer loyalty.

1997). While attitudinal dimensions refers to favorable customer intention to repurchase and recommend, which are good indicator of a loyal customer (James and Sasser 1995; Dick and Basu 1994). A customer who has the

intention to repurchase and recommend is very likely yo remain with the company. For a customer to remain loyal he or she must believe that the firms service continues to server the best choice alternative. Furthermore, he/she will be less sensitive to the price of the service.

Customer loyalty A lot of studies on the topic of loyalty have been measured by behavioral aspect of brand loyalty, such as repeat purchase without considering cognitive aspects of brand loyalty (Choong, 1998). For instance, Fader and Schmittlein (1993) conducted a research investigating the advantage of high share brands in brand loyalty, suggesting that high share brands have significantly higher brand loyalty than low hare brands. Newman & Werbel (1973) also described loyal customer as those who repurchase a brand considered only that brand and did not brand related information seeking. However, all of them suffer from a problem that is they measured brand loyalty only by the behavioral aspect of repeat purchase. Another definition of brand loyalty that is offered by Jacoby and chestnut (1978) can balance the incompleteness of Wilkies definition. Jacoby and Chestnut provided a conceptual definition of brand loyalty that brand loyalty is (1) biased (i.e., non-random), (2) behavioral response (i.e., purchase), (3) expressed over time, (4) by some decision- making unit, (5) with respect to one or more brands out of a set of such brands, and is a function of psychological (decision-making, evaluative) processes. In their operational definition of brand loyalty they identified three kids of categories, which can be

placed into behavioral, attitudinal, and composite, both attitudinal and behavioral.

Based on the behavioral element of brand loyalty, Sheth (1968) provides an operational definition of brand loyalty that is brand loyalty is a function of a brands relative frequency of purchase in both time-independent and time dependent situation. An operational definition of brand loyalty based on the attitudinal element was provided by Reynolds et. Al. (1974). They suggested brand loyalty as the tendency for a person to continue over time to show similar attitude in situation similar to those he/she previously encountered. Dick and Basu (1994) proposed that loyalty should be evaluated with both attitudinal and behavioral criteria (Composite brand loyalty). Later, Oliver comes out with his operational definition of loyalty, which is more comprehensive or repatronize a preferred product of service consistently in the future, thereby causing repetitive of same brand or same brand set purchasing despite situational influences and marketing efforts having the potential to cause switching behavior. From the conceptual and operational definition of brand loyalty, we can get the two most important elements of brand loyalty: attitude and behavior.

Customer loyalty consists of brand loyalty (Dick and Basu 1994) has been described as a behavioral response and as a function of psychological processes (Jacoby and Chestnut, 1978). There are two dimensions to customer loyalty: behavioral and attitudinal (Baldinger and Rubinson 1996). The behavioral dimension refers to a customers behavior on repeat

purchase, indicating a preference for a brand or service consistently over time (Oliver 1997). While attitudinal dimensions refers to favorable customer intention to repurchase and recommend, which are good indicator of a loyal customer (James and Sasser 1995; Dick and Basu 1994). A customer who has the intention to repurchase and recommend is very likely yo remain with the company. For a customer to remain loyal he or she must believe that the firms service continues to server the best choice alternative. Furthermore, he/she will be less sensitive to the price of the service.

Satisfaction as antecedent of customer loyalty Customer satisfaction is considered to be one of the most important outcomes of all marketing actinities in a market-oriented firm and become the most important predictor of future behavioral intention (Shamdasani and Balakrishnan 2000, Hamburg and Giering 2001, Gorst, Wallance and Kanji 1998, Oliver 1999, Fornell et al. 1996, Huber and Herman 2001). Sarisfaction remains as a strong predictor for behavioral outcomes (Cronin, Brady, and Hult 2000; Cronin and Taylor 1992; McDougall and Levesque, 2000; Andreas and Wolfgang, 2002). Satisfaction is an outcome of purchase and use resulting from the buyers comparison of the rewards and cost of the purchase in relation to the anticipated consequences. It reflects how much the consumer likes or dislikes the service after experiencing it. When customers are able to have the opportunities to evaluate the quality of the delivered service, satisfaction is expected to have an effect on customer loyalty. Croin & Taylor (1992) proved that customer satisfaction exerts a stronger influence on future purchase intention. They added that loyalty increases with customer

satisfaction at an increasing rate. However, satisfaction-loyalty relationship is not linear. Customer satisfaction leads to customer loyalty is. But how significant to prove that satisfaction predict loyalty remain uncertain.

Besides, there is still some lacking to determine the elements of satisfaction on customer loyalty. It would be meaningless to re-test the same proposition without incorporating recent development in the satisfaction literature. In particular, it is urged that satisfaction includes both cognitive and emotional components. Most of the previous researchers have found that satisfaction is influenced by the quality and value perceived which is determined based on their expectation. (Oh, 2000; Selnes Fred, 1993). The central theme in this definition is the expectancy disconfirmation paradigm and it is recognized as the cognitive response on satisfaction.

But we should not neglect the affective respond in explaining satisfaction as satisfaction is partially explained by psychology element emotion such as happiness, surprise, interest and disappointment (Cronin et al., 2000; Yi and Alison, 2001). Westbrook and Oliver (1992) urge that it is necessary to incorporate the emotional evaluation to determine satisfaction. Similarly, the study of Yi and Alison (2001) found that emotional component of satisfaction is a strong predictor on customer loyalty.

Destination Choice

Most models on tourism destination choice include a reference to the importance of previous experience on the destination choice process, often symbolized by a feedback loop after the actual destination experience into the evaluative stages of future destination decisions (e.g., Chon 1990; Mansfeld 1992; Woodside and Lysonski 1989). Woodside and Lysonski's (1989) model of traveler destination choice included previous destination experience in the traveler's variables that influence destination awareness as well as traveler destination preferences. They also hypothesized, "Previous travel to a destination relates positively to inclusion of the destination in a consumers consideration set versus other mental categories [inert, inept, and unavailable sets] of vacation destinations"

Destination Loyalty Destination loyalty essentially places the emphasis on a longitudinal perspective, looking at lifelong visitation behavior of travelers rather than just at a cross-sectional perspective in which today's visitation is completely unrelated to previous visitation or, in a more general perspective, to previous experience parse, destination loyalty is seen in a behavioral view as discussed above. Behavioral approaches do have the advantage of being fairly easy to implement by the industry, as some of the data are already available to them (i.e., the purchase or even purchase history). While Ryan (1995) noted that multiple repeat vacationers also expressed a high level of identification with the destination, an attitudinal dimension, this area has not been further investigated, and other commentators have commented that

despite the advance in attitude measurement, a methodological robust measure has yet to be developed (Pritchard, Howard, and Havitz 1992).

Hence, the behavioral characteristic of destination visitation will be used as a measure for destination loyalty. Proponents of the attitudinal or composite measure would argue that it is important what attitude a person has about a destination and that those with a positive attitude toward a destination, even though they may not be visiting it (again), will provide positive word-of-mouth. While the latter cannot be disputed, tourists who keep on returning to the same destinations are likely to provide more positive word-of-mouth simply because that is the place they visited on their last holiday and not a destination that they visited 5, 8, or 15 years ago. Wheres the actual amount of word-of-mouth-generated business would be a worthwhile avenue of enquiry, from a practitioner point of view, the more immediate returns in terms of actual visitors or customers seem more important. Thus, apart from the word-of-mouth promotion generated, what good is a person who has a positive attitude toward a destination but does not return? On the other hand, a person who may have a less positive attitude toward the destination but returns year after year provides the demand and turnover needed.

In addition, whereas for many products and services that require a lowinvolved decision, the presence of spurious loyalty (not very positive attitude but high repeat purchase) is quite widespread, in high-involved decision such as overseas, short-haul holidays, spurious loyalty is little likely to occur and,

therefore, rendering the main critique point of behavioral approaches by supporters of attitudinal and composite measure immaterial.

The behavioral dimension of loyalty inherently acknowledges that previous experience is influential on todays and tomorrow's travel decisions and, specifically, destination choice. Several authors (e.g., Schmidhauser 1976-77; Woodside and MacDonald 1994) have suggested that there are at least two different types of tourists based on their destination choice history--continuous repeaters and continuous switchers--or in Brown's (1952) terminology, undivided loyalty and no loyalty. Obviously, these two types of destination choice history patterns might be considered the endpoints of a spectrum, with a number of other types in between.

Influence of Customer Satisfaction on Destination Loyalty Practitioners and researchers have not explicitly detailed the factors that could lead to loyalty. Nevertheless, there is a consensus that satisfaction could lead to loyalty (Gremlen and Brown, 1997; Cronin and Taylor, 1992). Satisfied customers exhibit loyalty through promoting repeat visitation and referrals regarding the destination. In the lodging industry, Getty and Thompson (1994) found that repeat business is generated through the satisfaction towards the service quality). However, results of a completed survey of 364 participants revealed only a weak connection between the two (Strauss, 2004). Further, in examining such factors as purpose of travel and demographics, the study found business travelers to be the least loyal guests. Nonetheless, in our study satisfaction indeed has a positive influence in explaining destination

loyalty. Although we did not explicitly test the various tourist demographics (e.g. business or leisure travelers) and how it impacts on the destination loyalty, yet through interviews we discovered that loyalty can be attributed mostly to their staying experience. The interviewees tend to explain satisfaction in terms of the service that they receive in the hotels. Their views on the satisfaction of the destination (i.e. Penang) are somewhat limited to the service they received while purchasing souvenirs, dining at restaurants and staying at hotels. However, they were generally satisfied with their stay in Penang and this has place a significant influence on them to revisit and recommend Penang to their family and friends.

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