Customer Satisfaction Cues To Support Market

In this paper, customer satisfaction cues in retail banking services in Greece to be positioned in view of existing literature but also to be
are examined. The study proposes an instrument of customer satisfaction differentiated in order to be able to adapt to different business
that contains service quality and such other attributes as price, conve- environments. This reflects the position of Brown, Churchill,
nience, and innovation. The proposed framework of customer satisfaction and Peter (1993). In this paper, customer satisfaction cues in
was verified empirically yielding four distinct facets for business customers retail and banking services in Greece are examined. Therefore,
and five for individual customers. The performance implications of the the conceptual part of the study is customized in the context
customer satisfaction instrument are also explored. What is shown is that of financial services as organized within the Greek national
customer segments, in fact, yield statistically different satisfaction scores, framework.
which verifies the managerial value of customer segmentation practices. Apart from measurement issues, the real value of quality
Finally, the facets of customer satisfaction as explanatory cues for the emanates from its decision-making implications. Service qual
switching behavior of individual and business customers were tested suc- ity can be used as a vehicle of strategic marketing as either
cessfully. J BUSN RES 2000. 47.191–207. © 1999 Elsevier Science Inc. offensive or defensive marketing policies. The offensive scenario
closely resembles the long-standing connection between ad
vertising and sales. There are compelling arguments in the
literature advocating the superiority of defensive strategies
T
he endeavor to establish service quality as a key compo-over offensive ones for particular types of organizations (Rust
nent of the managerial agenda has been successful, and Zahorik, 1993). Furthermore, the strategic marketing ori
(Parasuraman, Zeithaml, and Berry, 1985; Reichheld entation of a service firm is mostly determined by the scale
and Sasser, 1990). Research has given the business world of its operations, its intermediate goals, and life cycle of opera-
many instruments to assess the effect of service quality both tion. An instance where defensive marketing strategy seems
on customers and service providers. The establishment of this to be more attractive is that of the National Bank of Greece
issue in services management has called for new research (40% of total deposits across the Greek banking industry) in
regarding the intended and unintended consequences of ser- contrast to the strategy of the newer retail banks that began
vice quality on the whole range of organizational behavior. operations in Greece 1991. Regardless of the specific tools and
Latest research reports concentrate on the effect of service methods a firm adopts or what quality experts an organization
quality on alternative performance dimensions of the organiza- follows, managing for quality and competitive advantage has
tion (see Greising, 1994; Rust, Zahonik, and Keiningham, the adoption of customer orientation as a prerequisite (Leng
1995; Athanassopoulos, 1997). nick-Hall, 1996).
The development of measurement instruments of service The present research seeks to contribute in several ways.
quality and customer satisfaction and the subsequent research First, customer satisfaction has been adopted as the main
dialogue regarding the appropriateness of these instruments dependent variable of the service encounter as opposed to
is far from conclusive (Cronin and Taylor, 1992; Parasuraman, the more restrictive service quality instrument applied in retail
Zeithaml, and Berry, 1992). The strong effect of context and banking institutions. In effect, all aspects of customer–
content of application, however, leaves little leverage for uni- provider conduct, including service quality, convenience, and
versal measures of service quality and satisfaction. What re- pricing, were considered as distinct dimensions of customer
mains therefore, is not only for any measurement instrument satisfaction. The frame of reference is the banking industry
of the country as a whole and not a single service provider within the industry, as is usual in many research studies.
Athens, Greece. Facets of customer satisfaction are also used in two perfor
Journal of Business Research 47, 191–207 (2000)
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mance-related roles. That is, there has been an attempt to ships, and second, their performance implications. One key
investigate hypotheses concerning the differential satisfaction characteristic of this discussion has been expectancy-theoreti
profile of different customer segments. It was found that the cal models with the explicit recognition that service quality
segmentation of the customer base revealed information about assessment should be considered to be a measure of the differ-
the behavioral patterns of individual and business customers ence between customer expectations and customer percep
that would otherwise have been masked under a universal tions. The lively debate regarding the adequacy of assessing
assessment of satisfaction scores. Because customer segmenta- service quality and customer satisfaction has led to the devel
tion is a focal point of research debate (Wensley, 1995; Saun- opment of such testing instruments as SERVQUAL by Parasur
ders, 1995), what this study brings to the debate is the external aman, Zeithame, and Berry (1985, 1988) and SERVPERF by
validation offered by the statistical differences found in service Cronin and Taylor (1992). Another area of research has been
satisfaction scores of different customer segments. The other identification of the antecedents of service quality and cus
important use of customer statistical measures concerns their tomer satisfaction. In that respect, the Parasuraman, Zeithaml,
explanatory power in assessing switching behavior of individ- and Berry (1985) dimensions of service quality have been
ual and business customers. The search of antecedents of thoroughly tested in different contextual environments across
customer retention has revealed determinants related to both industries and national borders. Asubonteng, McCleary, and
customer satisfaction and sociodemographic characteristics of Swan (1996) review empirical studies based upon the SERV
customers. QUAL instrument and draw some more general conclusions
The paper is organized as follows. In the following section, about problem areas and managerial applications of the mea
the conceptual background of the paper is discussed. The surement tool.
third section includes research propositions and hypotheses Empirical findings concerning facets of service quality indi
and information about the design of the empirical part of the cate acceptance of the SERVQUAL dimensions, subject to addi
paper. The fourth section discusses empirical results regarding tional dimensions that emanate from industry-specific contexts
the antecedents of customer satisfaction in the Greek banking (Carman, 1990). Apart from studies adopting predetermined
sector. In the fifth section, there is an attempt to segment the facets of service quality and customer satisfaction, the research
samples of customers according to their behavioral patterns of Roth and Jackson (1995) and Ennew and Binks (1996)
and then assess the mean satisfaction differences among these adopted tailor-made constructs of service quality and satisfac
segments. Furthermore, this section provides results regarding tion that applied to the retail banking industry. Furthermore,
the predictive ability of the service satisfaction scores with Blanchard and Galloway (1994) developed a 31-item instru
respect to customer switching behavior. This is followed by ment for assessing quality in retail banking, emphasizing its
the conclusion. congruence with known constructs of quality measurement.
Akviran (1994), starting from PZB contentions, identified four
key quality dimensions in banking—staff conduct, credibility,
Research Hypotheses were also identified (physical features and facilities, reliability,
conduct staff characteristics, and responsiveness) in a survey
conducted in 31 major British organizations in the fields of

building a competitive position in service industries, as well as improving organizational performance (Lewis, 1993). The transition from transaction- to relationship-based marketing (as recognized by Berry, 1995 and Gummeson, 1993) is inex
banking, building societies, and retail.
Customer satisfaction is recognized as being highly associ¬ated with “value,” and hence on “price”; whereas service qual¬ity is not generally considered to be dependent upon price

tricably linked with the increased role of quality and satisfac- (Anderson, Fornell, and Lehmann, 1994). The more satisfied
tion given in services. Relationship marketing requires the the customers the more tolerant to price increases (reduced
integration of marketing, quality, and customer service (Chris- price elasticities) they are likely to be, thus resulting in greater
topher, Payne, and Ballantyne, 1991). The apparent distinc- profits (Garvin, 1988). Customer satisfaction is based, concep
tion between core and over-all product is widely used in tually, on the amalgamation of service quality attributes with
services to differentiate the outcome of the service (technical such attributes as price (Fornell, 1992; Lewis, 1993) and conve
quality) from the process of service delivery (functional qual- nience (Cronin and Taylor, 1992). This debate also draws on
ity) (Bowen and Schneider, 1988, 1995; Lehtinen and Lehti- the five-dimensional instrument of Parasuraman, Zeithame, and
nen, 1991). Berry (1985) which evidently needs verification when applied
to particular industries (Schneider, 1990). Banking-specific
Content Effects research by Laroshe, Rosenblatt and Manning (1986) revealed
The conceptual framework relating to the elements of relation¬ speed service, convenient location, staff competence, and bank
ship marketing in services has been followed by intensive friendliness as important determinants of customer satisfac