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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