A Literature Review and Critique on Customer Satisfaction

LIU Huiqun1, ZHAO Xin2

1. School of Economics, Tianjin University of Commerce, Tianjin, China, 300134
2. Department of Economics and Management, Dezhou Vocational and Technological College, Dezhou,
China, 253000
huiqunliu@tjcu.edu.cn
Abstract: The concept of customer satisfaction has attracted much attention in recent years.
Organizations that try to analyze this concept should begin with an understanding of various customer
satisfaction models. In this paper, the emphasis is on reviewing the main concepts and models of
customer satisfaction.
Keywords: Customer satisfaction, Definition, Macro-models, Micro-models

1 Introduction
Both public and private sectors have given much attention to the concept customer satisfaction in the
past couple of decades. Naturally, administrators have requested their staff to do customer satisfaction
studies for their own organizations. An analyst or researcher must operationalize the concept of
customer satisfaction in order to measure it. More importantly, in order to have validity for any
measurements, the analyst needs to assume some model of the subject matter. The analyst must use very
explicit conceptualizations of the subject matter (in other words, models) if she/he expects to do
research and analysis that has relevance for organizational decisions.
This paper is divided into several sections. First, a brief review of main concepts of customer
satisfaction is provided. Next, we try to provide the analyst an overview of models of customer
satisfaction. Finally, the article concludes with main research findings.

2 Consumer Satisfaction
Customer satisfaction has been a popular topic in marketing practice and academic research since
Cardozo's (1965) initial study of customer effort, expectations and satisfaction. Despite many attempts
to measure and explain customer satisfaction, there still does not appear to be a consensus regarding its
definition (Giese and Cote, 2000). Customer satisfaction is typically defined as a post consumption
evaluative judgement concerning a specific product or service (Gundersen, Heide and Olsson, 1996). It
is the result of an evaluative process that contrasts prepurchase expectations with perceptions of
performance during and after the consumption experience (Oliver, 1980).
The most widely accepted conceptualization of the customer satisfaction concept is the expectancy
disconfirmation theory (McQuitty, Finn and Wiley, 2000). The theory was developed by Oliver, who
proposed that satisfaction level is a result of the difference between expected and perceived performance.
Satisfaction (positive disconfirmation) occures when product or service is better than expected. On the
other hand, a performance worse than expected results is dissatisfaction (negative disconfirmation).
Studies show that customer satisfaction may have direct and indirect impact on business results. Luo and
Homburg (2007) concluded that customer satisfaction positively affects business profitability. The
majority of studies have investigated the relationship with customer behaviour patterns (Dimitriades,
2006; Olorunniwo et al., 2006; Chi and Qu, 2008; Faullant et al., 2008). According to these findings,
customer satisfaction increases customer loyalty, influences repurchase intentions and leads to positive
word-of-mouth.
Given the vital role of customer satisfaction, it is not surprising that a variety of research has been
devoted to investigating the determinants of satisfaction. Satisfaction can be determined by subjective (e.
g. customer needs, emotions) and objective factors (e. g. product and service features). Applying to the
hospitality industry, there have been numerous studies that examine attributes that travellers may find

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important regarding customer satisfaction. Atkinson (1988) found out that cleanliness, security, value for
money and courtesy of staff determine customer satisfaction. Knutson (1988) revealed that room
cleanliness and comfort, convenience of location, prompt service, safety and security, and friendliness of
employees are important. Barsky and Labagh (1992) stated that employee attitude, location and rooms
are likely to influence travellers' satisfaction. A study conducted by Akan (1995) showed that the main
determinants of hotel guest satisfaction are the behaviour of employees, cleanliness and timeliness. Choi
and Chu (2001) concluded that staff quality, room qualities and value are the top three hotel factors that
determine travellers' satisfaction.

3 Customer Satisfaction Models

Models of customer satisfaction come from a vast literature from the marketing research discipline. This
pool of research includes models that integrate the concept of customer satisfaction in a network of
related concepts, such as value, quality, complaining behavior, and loyalty. In this paper, we will label
these kinds of models as macro-models. Macro-models have special importance for the policy-level
implications of an organizations research in customer satisfaction. Macro-models give the researcher
the strategic context of the design and of the results for a study of customer satisfaction. The marketing
research literature extensively covers the elements that make up the concept of customer satisfaction,
such as disconfirmation of expectations, equity, attribution, affect, and regret. Because these elements
explain the composition of the customer satisfaction concept (or construct), we will label these kinds
of models as micro-models. Micro-models enable an analyst to properly operationalize measurements
of customer satisfaction, thus helping her/him to achieve construct validity in the eventual satisfaction
survey.
3.1 Macro-models
Figure 1 underlies much of the research in customer satisfaction over the past decade. Note the
following:
perceived
performance
perceived
dsconfirm

perceived
performance

outcomes

comparison
standards

Figure 1: Traditional Macro-Model of Customer Satisfaction

1. Perceived performance often differs from objective or technical performance, especially when a
product/service is complex, intangible, and when the consumer is unfamiliar with the product/service.
2. Comparison standards can come from numerous sources that can vary widely by individual, by
situation, and by product/service type.
3. Perceived disconfirmation is the evaluation of perceived performance according to one or more
comparison standards. Disconfirmation can have a positive effect (generally implying a satisfying result),
a negative effect (generally implying a dissatisfying result), or a zero effect.
4. Satisfaction feeling is a state of mind, an attitude. The phrase mixed feelings applies here, as a
consumer may have different levels of satisfaction for different parts of a product/service experience.
5. Outcomes of satisfaction feelings may involve intent to repurchase, word-of-mouth (the consumers
communication with her/his network of her/his approval/disapproval for a product/service), and
complaints. These outcomes also are moderated by other variables.
For example, extreme dissatisfaction will not necessarily generate complaint behavior, especially if the

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consumer believes complaining will be futile.

Later research has produced a new model shown in Figure 2. This model highlights the concept of value
as a driving force in product choice and satisfactions relationship to it as a brief psychological reaction
to a component of a value chain (or hierarchy). Oliver (1999) provides another version of this model,
which appears in an abbreviated form as Figure 3 below. An important point about customer value
models is the use of gross benefit-cost judgments by consumers.

value chain

product
attributes

consequences
of use

desired end
state

customer
satisfaction

feeling for
attributes

feeling for
consequences

feeling for
end-state

Figure 2: Model of Linkage of Customer Value Chain to Customer Satisfaction

input

output

quality

consumption value

performance outcomes

formation of
stisfaction

cost-based value

extended value
Value-based satisfaction

Figure 3: Model of Link Between Satisfaction and Value (adapted from Oliver, 1999)
overall service
satisfaction

Service encounter
satisfaction

perceived service
quality
Figure 4: Model of Two Levels of Satisfaction and Perceived Service Quality
(based on a study by Bitner & Hubbert, 1994)

Another important macro-model would be the linkage of overall service satisfaction, encounter
satisfaction, and perceived service quality, as shown in Figure 4. Research for this model supports the
conceptualization of perceived quality as a separate construct, distinct from satisfaction (Bitner &
Hubbert, 1994). Furthermore, it highlights the construct of a global level of satisfaction (the overall
service satisfaction) in contrast to the construct of a component level of satisfaction (the encounter
service satisfaction). This model helps explain survey results that indicate different levels of satisfaction
for a service that one individual may experience.
The above models are a sample of the many models that give the analyst the context for the meaning
and analysis of customer satisfaction. In the next section, we deal with narrower issues in customer
satisfaction. Because these models provide explicit detail about the formation of satisfaction itself, this
paper refers to them as micro-models.

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3.2 Micro-models
Table 1 lists the seven types of models they review in their article, and we will briefly comment on each
type.
1
2
3
4
5
6
7

Table 1 Current Type of Micro-models for Satisfaction

Expections Disconfirmation Model
Perceived Performance Model
Norms Models
Multiple Process Models
Attribution Models
Affective Models
Equity Models

1. The Expectations Disconfirmation Model has been the dominant model in satisfaction research. The
model has consumers using pre-consumption expectations in a comparison with post-consumption
experiences of a product/service to form an attitude of satisfaction or dissatisfaction toward the
product/service. In this model, expectations originate from beliefs about the level of performance that a
product/service will provide. This is the predictive meaning of the expectations concept.
2. The Perceived Performance Model deviates from the above model in that expectations play a less
significant role in satisfaction formation. The model performs especially well in situations where a
product/service performs so positively that the consumers expectations get discounted in her/his
post-consumption reaction to the product/service.
3. Norms Models resemble the Expectations Disconfirmation Model in that the consumer compares
perceived performance with some standard for performance. In this case, however, the standard is not a
predictive expectation. Rather than considering what will happen in the consumption experience, the
consumer uses what should happen as the comparison standard. This is the normative meaning of
should rather than its occasional chronological connotation in the English language.
4. Multiple Process Models characterize the satisfaction formation process as multidimensional. That is,
consumers use more than one standard of comparison in forming a (dis)confirmation judgment about an
experience with a product/service.
5. Attribution Models integrate the concept of perceived causality for a product/service performance into
the satisfaction process. Consumers use three factors to determine attributions effect in satisfaction.
These are locus of causality, stability, and controllability. The locus of causality can be external (that is,
the service provider gets the credit or blame) or internal (that is, the consumer is responsible for the
product/service performance). Stable causes would tend to have more impact in satisfaction because
consumers tend to be more forgiving of product/service failures that appear to be rare events. Finally,
controllability affects attribution in that a poor outcome in a consumption experience may mean that the
consumer will be unsatisfied with the product/service provider if the consumer believes the provider had
the capacity, that is, control, to perform in a better fashion.
6. Affective Models differ from previous models in that it goes beyond rational processes. In these
models, emotion, liking, and mood influence (dis)satisfaction feelings following the consumption
experience.
7. Equity Models emphasize the consumers attitude about fair treatment in the consumption process.
Fair treatment can use the concept of the equity ratio (that is, the amount of her/his return for her/his
effort made) or the concept of social comparison (that is, the perceived, relative level of product/service
performance that other consumers experience).
The above listing is extensive but not all-inclusive. Oliver (1997) also has summarized the comparison
standards from his perspective, and these appear in Table 2. Table 2 introduces the comparison standards
of needs, regret, and nothing.
Table 2 Basic Sources of Comparison
Comparison Operator
Resulting Cognition
expectations
discomfirmation

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needs
excellence(ideals)
fairness
events that might have happened
nothing

need fulfillment
quality
equity/inequity
regret
unapprised cognition

In the needs standard, consumers evaluate whether a consumption experience gave them what they need.
Of course, need can be defined in different ways, with Maslows hierarchy of needs being just one
typology for needs. The standard of excellence refers to technical perfection, that is, some objective,
widely recognized criteria. The standard of regret refers basically to the what might have been
scenario for a consumer. This commonly occurs when a consumer realizes that what she/he got in one
encounter could well have been improved if she/he had chosen a different provider. Finally, the nothing
standard denotes the situation where consumers form a (dis)satisfaction feeling without cognition.

4 Conclusion
This paper has covered a vast pool of marketing research in customer satisfaction. The coverage by
necessity is partial. We grouped satisfaction models into either a macro level or a micro level to simplify
our presentation. Logically speaking, the macro-models subsume the micro-models, and overlap in
concepts should occur. Other analysts may well approach the conceptualization of these models in an
entirely different manner.
An analyst who plans to do a customer satisfaction study could benefit from consulting the insightful
works as well as the works previously cited. The mountain of information that the analyst can review
may consume a huge chunk in time and effort, but the benefits of understanding customer satisfaction
models may pay commensurate dividends in useful analyses in the future. At the very least, use of the
above material will supply a basic footing in any effort to understand customer satisfaction.
Acknowledgments:
Supported by University of International Business and Economics 211 Project (No.73200008) and
the National Social Science Fund of China (No. 07BJL047).

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