An Empirical Examination of a Model of

Perceived Service Quality and Satisfaction

RICHARD A. SPRENC
Michigan State University

ROBERT D. MACKOY
Butler University

Perceived service quality and satisfaction have generally been conceptualized to be distinct constructs,
but there isn’t a good understanding of their relationship. While rhe two conswuc[s are very similar, lit-
tle research has empirically examined the distinction. This study discusses the conceprual arguments
for the distinction, and examines the empirical distinction by testing a recently proposed model of ser-
vice quality and satisfaction. Results indicate that the hvo constructs are, in the present case, distinct.
and there is some support for the model, with several modifications.

In recent years there has been a great deal of interest in the conceptualization and measure-
ment of consumer satisfaction and perceived service quality, by both managers and aca-
demic researchers. Consumer satisfaction and service quality have each been the subject of
extensive, but separate, research, although many studies of consumer satisfaction have
been conducted in service settings (Cadotte, Woodruff and Jenkins, 1987; Fomell, 1992;
Oliver, 1980; Oliver and DeSarbo, 1988; Oliver and Swan, 1989; Swan, 1988; Swan and
Trawick, 1980). There seems to be a great deal of similarity between these two concepts,
yet researchers are usually careful to state that these are different constructs (for exceptions
see Dabholkar, 1993; Oliva, Oliver, and MacMillan, 1992; Spreng and Singh, 1993). For
example, Cronin and Taylor (1992, p. 56) state that “This distinction is important to man-
agers and researchers alike because service providers need to know whether their objective
should be to have consumers who are ‘satisfied’ with their performance or to deliver the
maximum level of ‘perceived service quality.“’ Most researchers in the services domain
have maintained that these two constructs are distinct (Bitner, 1990; Boulding, Kalra, Stae-
lin and Zeithaml, 1993; Carman, 1990; Parasuraman, Zeithaml and Berry, 1988; Taylor and

Richard A. Spreng, Michigan State University, Broad Graduate School of Management. Department of Marketing
and Logistics, East Lansing, MI 48824. Robert D. Mackay, Butler University, Department of Marketing,
Indianapolis, IN 46208.

Journal of Retailing, Volume 72(2), pp. 201-214, ISSN: 0022-4359

Copyright 0 1996 by New York University. All rights of reproduction in any form reserved.

201
202 Journal of Retailing Vol. 72, No. 2 1996

Baker, 1994), yet there have been repeated calls for research investigating the relationship
between the two constructs (Anderson and Fomell, 1994; Rust and Oliver, 1994).
Greater understanding of the relationship between perceived service quality and satisfac-
tion is needed. If they are distinct constructs as has generally been claimed, then we need
to understand how they are different. If they are not distinct, then we don’t have to waste
time on surveys asking for both or confuse managers by telling them they have to be con-
cerned with both. Further, researchers in the service quality area continue to state that sat-
isfaction is the result of a comparison with predictive expectations (Bolton and Drew, 1991;
Bitner, 1990; Parasuraman et al., 1988, 1994; Oliver, 1993; Rust and Oliver, 1994; Zeith-
aml, Berry and Parasuraman, 1993), despite many criticisms of the disconfirmation of
expectations model (Barbeau, 1985; Cadotte et al., 1987; LaTour and Peat, 1979; Spreng
and Olshavsky, 1993; Westbrook and Reilly, 1983). If satisfaction is not simply a result of
meeting expectations, then managers may not be focusing on the correct things. Closely
related to this are the recommendations to manage expectations. Those who advocate this
usually mean that managers should attempt to lower expectations so that it will be possible
to provide service that is “better than expected” which will then produce higher satisfaction
(Davidow and Uttal, 1989; Peters, 1987). If this is not a complete picture of how expecta-
tions influence satisfaction, then it may be that managers are being urged to do the wrong
things.
This paper will extend this research by empirically testing a new model of service quality
and satisfaction. Specifically, we will first discuss one of the conceptual distinctions made
in past research between service quality and satisfaction. We then test a model by Oliver
(1993) that proposes to integrate satisfaction and perceived service quality.

PERCEIVED SERVICE QUALITY AND SATISFACTION

Perceived service quality is defined by Parasuraman et al. (1988) as “a global judgment, or

attitude, relating to the superiority of the service,” and many researchers in the service qual-
ity literature concur with this definition (Boulding et al., 1993; Bolton and Drew, 1991;
Cronin and Taylor, 1992). The definition of consumer satisfaction is not so clear (see Yi,
1990 for a review). While there is not a clear consensus regarding the definition of satisfac-
tion, most definitions would involve “an evaluative, affective, or emotional response”
(Oliver, 1989, p., 1).
Both satisfaction and service quality literatures have emphasized the idea that consumers
make a comparison between the performance of the product or service and some standard.
The service quality literature has maintained that the distinction between perceived service
quality and satisfaction is that they use different standards of comparison (Bitner, 1990;
Parasuraman et al., 1988; Zeithaml et al., 1993). These authors have argued that the stan-
dard of comparison in forming satisfaction is predictive expectations, or what the consumer
believes wiZEhappen, while perceived service quality is the result of a comparison of per-
formance and what the consumer feels a firm should provide. In a conceptual model that
attempts to integrate service quality and satisfaction, Oliver (1993) similarly argues that
while the antecedent of quality perceptions is the disconfirmation of ideals, the antecedents
An Empirical Examination of a Model of Perceived Service Quality and Satisfaction 203

of satisfaction are disconfirmation of predictive expectations (regarding quality and non-

quality dimensions), and perceived quality. Oliver suggests that the constructs are distinct,
in part, because they use different standards. That is, he claims that one can be satisfied with
low quality if the performance is better than one’s prediction of the performance. However,
Oliver (1993, p. 81) states that “... verification of the use of ideal expectations for quality
and predictive expectations for satisfaction is needed.”
Research in consumer satisfaction has extensively examined the issue of the standard
against which performance is compared in producing satisfaction. While the construct of
predictive expectations has dominated, a number of other standards have been suggested
and tested, such as experience-based norms, ideals, values, desires, equity, and others (for
reviews see Spreng and Dixon, 1992 and Woodruff, Clemons, Schumann, Gardial and
Burns, 1991).

Oliver’s Satisfaction/Service Quaiity Model

Oliver (1993) has proposed a model that is intended to integrate the satisfaction and the
service quality literatures (see Figure 1 for a modified version of this model). He proposes
that while service quality is formed by a ~ompa~son between ideals and perceptions of per-
formance regarding quality dimensions, satisfaction is a function of the disconfkmation of

Disconfirmation

Figure 7. Modified Satisfaction-Service Quality Model

204 Journal of Retailing Vol. 72, No. 2 1996

predictive expectations regarding both quality dimensions and non-quality dimensions.

Further, perceived service quality is proposed to be an antecedent to satisfaction.
There are several limitations to this model. First, Oliver’s model suggests that satisfac-
tion is not related to disconfirmation of ideals, except through service quality perceptions.
However, there is a fair amount of evidence in the satisfaction literature that ideals or
desires are an important antecedent to satisfaction (Barbeau, 1985; Cadotte et al., 1987;
Spreng and Olshavsky, 1993; Swan and Trawick, 1980; Westbrook and Reilly, 1983).
Second, Oliver’s model specifies that expectations do not influence perceptions of perfor-
mance, despite an extensive literature showing this effect (for a review, see Yi, 1990,
pp. 83-84).
In order to investigate these issues, a study was undertaken that would be able to unam-
biguously assess several key aspects of the perceived service quality-satisfaction relation-
ship. The purposes of this study are to assess the distinction between perceived service
quality and satisfaction, and examine the impact of different standards of comparison.
Desires were used to operationalize the standard of comparison that Oliver portrays in his
model as “Ideals.” The service quality literature has used the term “desires” in describing
their standard (Parasuraman et al., 1988), and this standard has had some support in the sat-
isfaction literature (Barbeau, 1985; Spreng and Olshavsky, 1993).

METHOD

Setting and Subjects

The study examined student assessment of undergraduate advising, and subjects received
extra credit in an undergraduate marketing class for participating. A total of 273 usable
responses were obtained. The students in the study were all Juniors (36%) or Seniors
(64%), and thus had at least one previous year of personal experience with the undergrad-
uate advising office. Most students (95%) had had at least one previous appointment in the
last year. While this is clearly a service setting, some may argue that there is not an
exchange taking place. This is incorrect, since students view the services they receive as
something they pay for through their tuition fees. This would be similar to a situation in
which someone sees a physician, but the actual payment for the service comes from money
the patient has paid to an insurance company. Further, there is ad~tional sacrifice by the
students in terms of time and effort in seeing an advisor. Finally, if the level of service is
poor (e.g., students get wrong or incomplete advice) the service failure can have extremely
adverse consequences to the student (e.g., the student may not graduate on time, may waste
money taking the wrong classes, etc.). Thus, we believe that the elements necessary for
developing real reactions to a service are present in this situation.
Subjects filled out a pre-experience questionnaire immediateIy before an ap~in~ent
with an advisor. To prevent advisors from knowing that they were being evaluated, these
questionnaires were filled out in offices that were in another part of the building from the
An Empirical Examination of a Model of Perceived Service Quality and Satisfaction 205

advising offices. After completing the pre-experience questionnaire, subjects went to their
appointment, and then immediately returned to fill out the post-experience questionnaire.
Our procedure has some advantages over many past studies of perceived service quality.
First, we have measures of pre-experience constructs that were taken before the experience.
Second, the subjects had a real, naturally occurring service experience, with perceptions
collected both before and after the service encounter.

Measures

Desires, predictive expectations, perceived performance, desires congruency and expec-

tations disconfirmation were each measured for ten attributes. These attributes were devel-
oped from reviewing past research in the academic advising literature, discussions with the
director of the undergraduate advising office, and two focus groups with undergraduate stu-
dents. Previous administration of the questionnaire permitted the measures to be refined,
and this resulted in a set of 10 attributes of advising (convenience in making an appoint-
ment, friendliness of the staff, advisor listened to my questions, the advisor provided accu-
rate information, the knowledge of the advisor, the advice was consistent, advisor helped
in long range planning, the advisor helped in choosing the right courses for career, advisor
was interested in personal life, and the offices were professional).
The pre-experience questionnaire asked about students’ desires and expectations regard-
ing the 10 attributes. The desires questions asked for the level of service the student wants
to receive, while the expectations questions asked about the level of service the student
believed they would actually receive, each on seven-point Likert scales (see Appendix).
After their advising appointment, subjects filled out the post-experience questionnaire. Per-
ceived performance was measured by asking for the student’s perception of their advising
experience, and used seven-point Likert scales for the 10 attributes. For all three of these
measures (Desires, Expectations, and Perceive Performance) the average over the ten
scales was the measure used in the analysis described below.
There has been a great deal of criticism of gap scores as measures of disconfirmation con-
structs (Teas, 1993), although not all researchers agree that difference scores are problem-
atic, and in fact can provide more diagnostic information (Parasuraman et al., 1994). In
order to measure desires congruency and expectations disconfirmation in a way that avoids
some of the problems with past measures, they were both measured in a new way.
To measure desires congruency for each attribute the subjects were asked for their sub-
jective assessment of the “...difference between what you desired and what you received”
on seven-point scales anchored, 1 = “Exactly as I desired,” and 7 = “Extremely different
than I desired,” with “Somewhat different than I desired’ as the midpoint. This asked the
subject to assess how close the product was to what was desired. Following this scale for
each attribute was an eleven-point scale that asked “How good or bad was this difference?’
with -5 labeled as “Very bad,” +5 labeled “Very good,” and 0 labeled as “Neither good nor
bad.” Desires congruency was operationalized by multiplying these two scales for each
attribute. The ten products were then averaged to get an “Average Desires Congruency”
score that was used in the analysis. Thus, these measures represent a belief regarding the
206 Journal of Retailing Vol. 72, No. 2 1996

degree to which the attribute matched the subject’s desires and an evaluation of this belief.
See Appendix for an example of these measures.
Expectations congruency was operationalized in a similar way. Subjects were first asked
to assess the difference between what they anticipated they would receive and what they
actually received, and then to evaluate this difference. The two scores for each attribute
were multiplied for each attribute. The ten products were then averaged to get an “Average
Expectations Congruency” score that was used in the analysis.
Overall satisfaction was measured by asking “Overall, how do you feel about the advis-
ing services you just received?’ Following this stem there were four seven-point scales
anchored by “Very dissatisfied/very satisfied,” “Terrible/delighted,” “Very dissatisfied/not
at all dissatisfied,” and “Not at all satisfied/very satisfied.” These are all widely used scales
for measuring the level of satisfaction and dissatisfaction.
Overall service quality was measured with respect to a long term, overall evaluation, and
asked “Overall, what is the level of service quality you receive from advising services?’
Following this stem were three seven-point scales anchored by “Extremely poor/extremely
good, ” “Awful/excellent,” and “Very low/very high.” Table 1 shows the correlations, stan-
dard deviations, and means of the variables.

RESULTS

Measurement Results

A confirmatory factor analysis model of the constructs was estimated using LISRELS
(Jbreskog and S&born, 1993). The fit of the model was good: chi-square = 45.00, 38 d.f.
(p = .20), GFI = .97, AGFI = .95, CFI = 1 .OO(Table 2). All indicator factor loadings were
significant, and the squared multiple correlations ranged from .7 1 to .93, indicating accept-
able reliability. The average variance extracted (Fomell and Larcker, 198 1) for the satisfac-
tion construct was .78 and for the overall service quality construct was .92. The average
variance extracted (AVE) can also be used to evaluate discriminant validity (Fomell and
Larcker, 1981). The AVE for each construct should be greater than the squared correlation
between the construct and any other construct. Examining the correlations between the sat-
isfaction and the perceived service quality constructs from Table 3 it is clear that this test
holds, since the squared correlation between these two constructs is .53 (.732). Further evi-
dence of the discriminant validity comes from an examination of the standardized residuals.
There were no standardized residuals with an absolute value greater than 3.0. Only three
out of 78 (4%) of the standardized residuals were over 2.0, and the largest positive residual
was 2.99 and the largest negative residual was -2.82. Finally, note from the correlation
matrix of the individual items in Table 1 that there are no measures of satisfaction that have
a correlation with a measure of another construct that is higher than its correlation with the
other satisfaction items. Likewise, none of the perceived service quality measures is more
highly correlated with another measure than it is with the other perceived service quality
measures. Therefore, measures of latent variables of Overall Satisfaction and Perceived
Service Quality were used in structural equation model.
TABLE 1

Correlations, Means and Standard Deviations for Measures

7. 2. 3. 4. 5. 6. 7. 8. 9. 10. I?. 12.
1. Desires 1 .oo
2. Perceived Performance .13 l.ocl
3. Expectations .23 .55 1.oo
4. Desires Congruency -.I3 .70 .38 1.00
5. Expectations Congruency .oo .61 .I7 .73 1.oo
6. Satisfaction1 -.ov .65 .27 .61 57 1 .OO
7. Satisfaction2 -.06 .64 .31 SV .!i6 .?8 1.00
8. Satisfaction3 -.ov .6l .30 .59 51 .79 .69 1 .oo
9. Satisfaction4 -.05 .67 .36 .66 .58 .83 .80 .77 1.00
10. Perceived SQl -.03 .62 .51 .58 .41 .61 .64 .61 .65 1 .oo
11. Perceived SQ2 -.04 .62 .51 58 .42 .59 .64 .59 .62 .92 1 .oo
12. Perceived SQ3 -.06 .63 -51 .59 .43 .60 .66 .60 .64 .93 .91 1.00

Mean 5.93 4.37 4.00 -2.04 1.52 5.00 4.70 5.30 5.00 4.51 4.46 4.46
SD $89 1.17 1.08 7.12 6.13 1.55 1.19 1.51 1.62 1.47 1.36 1.45

Satisfartionl: ‘Thy dissatisfied/verysatisfied.”

SatisfactionZ:“Terrible/delighted.”
Satisfaction3:“Very dissatisfied/notat all dissatisfied.”
Satisfaction4:“Not at all satisfied/verysatisfied.”
Perceived Service Quality 1: “Extremely poor/extremely good
PerceivedService Quality 2: “Awful/excellent.”
Perceived Service Quality 3: “Very low/very high.”
208 Journal of Retailing Vol. 72, No. 2 1996

TABLE2

Measurement Model Parameters for Constructs

Completely Average
Standardized Variance
Construct Measure Coefficient t-value Extracted

Desires’ 1 .oo
Perceived Performance’ 1 .oo -
Expectations 1 .oo -
Desires Congruency’ 1 .oo -
Expectations Disconfirmation’ 1 .oo -
Satisfaction .78
SAT1 .91 -
SAT2 .86 20.88
SAT3 .84 19.99
SAT4 .92 24.28
Perceived Service Quality .92
PSQI .97 -
PSQ2 .95 37.5
PSQ3 .96 41.02

Notes: 1. Construct used an average of 10 attributes as a single item mesure.

TABLE3

Factor Intercorrelations
Factor
lntercorrelations 1. 2. 3. 4. 5. 6. 7.

1. Desires 1 .oo
2. Perceived Performance .13 1 .oo
3. Expectations .23 .55 1.00
4. Desires Congruency -.13 .70 .38 1 .oo
5. Expectations Disconfirmation .oo .61 .17 .73 1.00
6. Satisfaction -.08 .73 .35 .70 .63 1 .oo
7. Perceived Service Quality -.05 .65 .53 .61 .44 .73 1 .oo

Table 3 shows the correlations between the constructs, and indicates that while the cor-
relation between perceived service quality and satisfaction is high (.73), they do seem to be
distinct. A model was estimated that constrained this parameter to be equal to 1.O, and the
fit was significantly worse.

The Oliver (1993) Model of Perceived Service Quality and Satisfaction

Figure 1 shows a modified version of the model proposed by Oliver (1993). Here, no
“non-quality” dimensions are specified as determinants of satisfaction. Note that, in accor-
dance with Oliver’s model, desires congruency is not specified to influence overall satis-
An Empirical Examination of a Model of Perceived Service Quality and Satisfaction 209

faction, expectations disconfirmation is not specified to affect perceived service quality,

and expectations are not specified to affect perceived performance.
The fit of this model was only mediocre, with a chi-square of 276.66, 51 d.f. (pc.OOl),
GFI = .86, AGFI = .79, and CFI = .93. When the relationship between expectations and per-
ceived performance was allowed to be estimated, the fit improved greatly (chi-square =
177.13, 50 d.f., p<.OOl, GFI = .91, AGFI = .86, and CFI = .96). Thus, as we anticipated,
expectations have a significant effect on perceptions of performance.
Next, the path between desires congruency and overall satisfaction, and the path between
expectations congruency and overall service quality were freed. The resulting decrease in
chi-square was significant (change of 11.19, 2 d.f., p x.01). Desires congruency had a sig-
nificant effect on satisfaction, while expectations disconfirmation did not affect overall ser-
vice quality. Figure 2 shows the parameters of this model after the expectations
disconfhmation-perceived service quality path was constrained to zero (chi-square =
164.94,49 d.f., GFI = .91, AGFI = .86, and CFl = .96). The amount of variation explained
in overall satisfaction and in overall service quality is 67 percent and 37 percent respec-
tively. While desires congruency and expectations disconfirmation have comparable direct
effects on satisfaction, the total effects of desires congruency are stronger (standardized
total effects of .52 (t = 7.87) than the total effects of expectations disconfirmation (standard-
ized total effects of .26 (t = 3.94). This is due, of course, to the indirect effect of desires
congruency on satisfaction through perceived service quality.

(10.96) Disconfwmation

figure 2. Final Model, Completely Standardized Parameters (t-values)

210 Journal of Retailing Vol. 72, No. 2 1996

DISCUSSION

The results indicate that service quality and satisfaction, as operationalized here, are dis-
tinct. A confirmatory factor analysis showed that the two constructs were, in this case,
distinct, and structural equations modeling showed that they have different antecedents.
Our results also provide some support for Oliver’s model of service quality and satisfac-
tion. As he proposed, the discon~~ation of expectations does not have a significant
effect on perceived service quality. Contrary to his model, desires cong~ency does
influence satisfaction. However, this result supports past research in satisfaction showing
that desires congruency is an important antecedent of satisfaction (Barbeau, 1985;
Spreng and Olshavsky, 1993; Swan and Trawick, 1980). Thus, our results also address
Anderson and Fornell’s (1994) call for continued research on the antecedents of satisfac-
tion.
While the discon~~ation of expectations did not have a direct effect on service qual-
ity, this does not mean that expectations are unimportant in the formation of perceived
service quality. The effect of expectations is indirect, through perceived performance
(indirect standardized effects of .24, t = 7.16). Thus, the indirect effect of expectations
on perceived service quality is positive. Conversely, the indirect effects of desires is neg-
ative (st~d~diz~ effect of -.12, c = -4.92), as there is not a si~~c~t relationship
between desires and perceived performance. Therefore, as found by Boulding et al.
(1993), the two types of standards (i.e., desires and predictive expectations) have oppo-
site effects.
The above results have a number of implications for research and management. First, fur-
ther evidence is presented that desires congruency is an important antecedent of consumer
satisfaction. The service quality literature continues to state that satisfaction is formed by a
comparison with predictive expectations (Bolton and Drew, 1991; Bitner, 1990; Parasura-
man et al., 1988, 1994; Oliver, 1993; Rust and Oliver, 1994; Zeithaml et al., 1993), despite
a great deal of contrary evidence (Barbeau, 198.5; Cadotte et al., 1987; LaTour and Peat,
1979; Spreng and Olshavsky, 1993; Westbrook and Reilly, 1983). Since this is one of the
ways perceived service quality and satisfaction are suppose to differ, it is important to rec-
ognize that predictive expectations are not the only antecedent of satisfaction. Thus, man-
agers should not believe that merely meeting (or exceeding) predictive expectations wil1
satisfy consumers.
Second, the results show the importance of expectations in influencing perceptions of
performance. However, note that expectations have a negative effect on satisfaction,
through ~scon~~ation, but a positive effect on both satisfaction and perceived service
quality, through perceived performance. Most consultants or authors who advocate “man-
aging expectations” mean that firms should seek to lower expectations so that it will be pos-
sible to provide service that is “better than expected” which will then produce higher
satisfaction (Davidow and Uttal, 1989; Peters, 1987). Thus, these people are focusing on
the negative impact of expectations on satisfaction through discon~~ation {i.e., lower
ex~tations causes higher positive discon~~ation, which causes higher satisfaction).
However, the positive effect of expectations on satisfaction through perceived performance
is being ignored. By lowering expectations a firm might also lower perceptions of perfor-
An Empirical Examination of a Model of Perceived Service Quality and Satisfaction 211

mance, leading to lower levels of satisfaction. Thus, managing expectations down can
result in lower, not higher satisfaction. It appears that managers must balance the positive
and negative effects of expectations. That is, in terms of satisfaction, it appears that raising
expectations can increase satisfaction through perceived performance, but at the same time
lower satisfaction through disconfirmation. This indicates that it may be problematic to
“manage expectations” as some suggest. The prescription regarding desires is more
straightforward and intuitive: a key determinant of both satisfaction and service quality is
meeting customers’ desires.

APPENDIX

The desires and the predictive expectations questions were asked in a two-column format
(see Parasuraman et al., 1994). This was deemed to be better than separate pages for each
set of measures because the two-column method makes it clearer to respondents the distinc-
tion between predictive expectations and desires. The questionnaire was as follows:

DIRECTIONS:

Below are a series of statements about the advising center and the services offered. For
each of the statements:

l on the first scale, indicate how much you agree/disagree that this is the amount of
service you would want to receive.
l on the second scale, indicate how much you agree/disagree that this is the amount
of service you believe you will actually receive.

1. It will be extremely convenient to make an advising appointment.

The level of service The level of service I believe

I WANT TO RECEIVE I WILL ACTUALLY RECEIVE

Strongly Strongly Strongly Strongly
Agree Disagree Agree Disagree
1 2 3 4 5 6 7 1 2 3 4 5 6 7

The desires congruency and the expectations congruency pages were similar, and were as
follows:

DIRECTIONS:

The following questions are related to the difference between what you desire (wanted
to receive) from advising and how well you think the advising center met your des&es. In
comparison to what you desired, how big was the difference between what you wanted,
and what the advising center actually provided? Since this difference can be either good or
212 Journal of Retailing Vol. 72, No. 2 1996

bad, following each question is a scale that asks you to rate how good or bad this difference
is. Put a circle around the number that represents your answer.

2. The degree to which it was extremely convenient to make an advising appointment.

Difference between what I How good or bad

Desired and what I received is this difference?
Exactly Somewhat Extremely Neither
as I different different than Very bad nor Very
desired than I desired I desired bad good good

1 2 3 4 5 6 7 -5 -4 -3 -2 -1 0 1 2 3 4 s

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