Customer Satisfaction as Significant Tool in Marketing

Subject: Marketing
Pages: 8
Words: 2202
Reading time:
9 min
Study level: College

There are various tools that can be used in the measure of customer satisfaction. In a hotel, for example, the famous tool that is employed is the guest comment card (Trusov, Bucklin & Pauwells, 2009). It is often referred to as the GCC, and they are very suitable as they are small and easy to handle and distribute. Managers can easily get information the satisfaction of their guests by analyzing the data received from the cards (Trusov, Bucklin & Pauwells, 2009).

Customer satisfaction is a significant tool in marketing, especially in the study of customer expectations, effort, and satisfaction. There have been several attempts to define customer satisfaction. It can be defined as an evaluative judgment conducted after the consumption of particular products and services. It is the summary of a process of evaluation that distinct the expectations of a customer before purchase with the perceptions of performance throughout and after the experience of consumption (Mattila & Choi, 2006).

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Several studies have been conducted with direct and indirect effect on business results. Customer satisfaction has a positive impact on the profitability of business. Further studies have proved customer satisfaction enhances customer loyalty, repeat business, and a healthy word-of-mouth. Several factors contribute to customer satisfaction. Objective factors of customer satisfaction include the customers’ emotions and needs while objective factors may include the features of products and services (Gursoy, McClear, & Lepisto, 2007). Various industries have varying customer satisfaction. In the hospitality field, cleanliness, value for money, staff courtesy, and security may greatly influence customer satisfaction. The comfort of a room, its cleanliness and location may also be determinant factors for customer satisfaction. Cleanliness, employee behaviour and cleanliness are also determining factors of employee satisfaction (Huang & Chiu, 2006).

Giving customers the services they need is a starting point in the achievement of customer satisfaction. This can easily be attained by asking the customers exactly what they need. GCCs are very handy in determining the guest satisfaction in hotels (Ladhari, Morales, & Lakhal, 2005). Guests can be prompted to fill out these cards fully and without bias by offering them incentives. Guests will then indicate which of the services offered was beyond or below their expectations, which services should be included and which ones should be removed (Ladhari, Morales & Lakhal, 2005).

Service Quality

Service quality is the comparison made by customers between what they expect and what they partake of the services they have received. It has various aspects of quality in terms of interactive quality, corporate quality, and physical quality. The corporate image, the technical, and functional image also contributes to service quality. A service quality measurement scale called SERVQUAL was developed, which became very popular (Mohammad, Barker & Kandampully, 2005). This scale is made up of 22 items for assessing the perceptions and expectations of customers on the quality of services which are measured on a Likert scale. The results from the scale are used to identify the gaps. These gaps, whether positive or negative are measured by the difference between the perceptions and expectations of customers. They also show the intensity of service quality (Sriyam, 2010). A negative result implies that the services were of low quality while a positive result implies that the services exceeded the expectations of customers. This instrument therefore implies that service quality takes place when perceived service quality meets or surpasses the expectations of customers (Valdani, 2009).

Customer satisfaction is very important in any business industry hence the urgent need for more prominent ways of measuring it (Fuchs & Reichel, 2006). Although various researchers have approached this subject from different angles, most of them have emphasized its relationship with quality.

Service quality is experienced by customers and is measured comparative to customer-determined standards. Several companies have used it to measure and strengthen their competitive position and maximize its profitability (Guzzo, 2010). Research has also shown that customers who are not satisfied, most of the time will opt to move to competitors. Several models have been developed showing the function of quality and other factors in the development of satisfaction. The perceived discrepancy model was the first of the models to be developed which connects the level of satisfaction to the extent and discrepancy direction between the expectations of customers and perceived quality after consumption (Sanchez-Gutierrez, Gonzalez-Uribe & Hernandez, 2011). The cognitive theory where satisfaction relies on discrepancy and preceding customer expectation was developed from perceived discrepancy model. The additive theory tries to explain why customers who purchase a brand that they regard to be of poor quality will be dissatisfied (Sanchez-Gutierrez, Gonzalez-Uribe & Hernandez, 2011). Dissatisfaction can be explained by the amount of discrepancy and by inferior customer expectations. However, there are limitations in this model as it cannot be used to measure the level of satisfaction with new products or products that are not well known by the customer (Kim, Vogt & Rummel, 2008). This model was later improved by including perceived quality. This model directly links customer satisfaction and perceived quality. This theory suggests that customers usually consume a service or product, evaluate the service or product then experience either a satisfaction or dissatisfaction feeling.

Customer satisfaction can be said to be the appraisal given that the experience gotten was satisfactory and good. Satisfaction has gained a lot of interest in the business industry because high levels of satisfaction can result to brand loyalty. The American consumer satisfaction index model has been employed when analyzing the levels of satisfaction in the tourism industry. This model shows that customer satisfaction consists of customer expectations and has been improved by a customer’s perceived value and quality (Villanueva, Yoo, & Hanssens, 2008). There is a high level of interaction in the hospitality industry between customers and employees thereby giving a very high probability of service failures. Customer perceptions are very important in determining the level of customer satisfaction and customer’s future decisions of purchase (Villanueva, Yoo, & Hanssens, 2008).

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The biggest challenge in the hotel industry is giving and sustaining customer satisfaction. There is an evident increase in the tourism industry in customer’s need for quality services. Customer satisfaction is the basis of a healthy guest-organization relationship. Healthy and positive relationships with customers guarantee repeat business (Wirtz, Theng, & Patterson, 2001). In order to achieve customer loyalty and out do other competitors, customer satisfaction must be achieved. A recently concluded research proved that only four percent customers who are not satisfied directly complain to the organization explaining their expectations, those who do not complain generate create a negative word of mouth to 1000 people.

Essentially, the most successful organizations today focus on their relationship with their customers. Customer orientation is the putting of all the needs of customers first in all the decisions made by the firm (Göthesson & Riman, 2004). A firm practicing customer orientation monitors the needs of customers in terms and strive to maximize customer satisfaction tailor making their services and products to suit the needs of their customers, this referred to as yield management. Therefore, all employees need to be trained on the need of putting the needs of customers first. Employees should constantly be trained and retrained to understand that the price of a product should balance with its intended value as price reflects the value of products and services (Riscinto-Kozub, 2011). Employees should understand that it is not about giving the customers a cheaper price but consulting the customer to ascertain that the price and value of services offered suit their needs. Using yield management can result to price fluctuations which may cause customer dissatisfaction. It is important to hire employees who understand all these concepts.

Customer satisfaction and Price

Price is the money paid in order to access a particular service or product. It is also the total amount paid by the customer in exchange of services or products. The concept of price in relation to loyalty is a flexible element of the marketing mix that can be easily altered, after altering particular characteristics of services and products. When price decisions are combined with other elements of the marketing mix, they become very efficient. The development of products and services, their promotion and sale are fundamental when starting up a business. The determination of the most favourable price guarantees income. The only marketing mix that brings forth income to an organization is price (Wirtz, Theng, & Patterson, 2001). It is necessary to first of all, to look at the concepts of price acceptance and price fairness. Customers may regard the determination of prices from conditions, linked with revenue generation, as a violation of the customers’ confidence, linked with dual principle of obligation. The principle of dual obligation implies that many customers believe that they need to know the base of the profits earned in the organization.

Increasing the price of products and services is seen to be fair and agreeable to customers. In such circumstances, the status quo of prices should not be initiated at once. With regard to this, it is anticipated that the increasing of price would not be fair, if the reason behind it is linked to the individual benefits of the organization. Customers prefer quoted prices as compared to other prices based on the situation at hand. Price fairness is the assessment of customers on whether the price offered is acceptable and just. Price fairness plays a big role towards customer satisfaction. Giving of fair prices helps in building customer loyalty and satisfaction. Various studies that have been conducted show that the decision of customers to agree to certain prices has a direct influence on the level of satisfaction and loyalty. The satisfaction of customers has also been confirmed to be influenced directly by price and indirectly through the perception of how fair the price of a product is. Customers, who are not sensitive to prices, often buy products because of their brand loyalty. Increase of prices is more agreeable for customers if greater satisfaction is gotten from the purchased products and services (Gursoy, McClear & Lepisto, 2007).

Repeat purchase and customer satisfaction

In the hospitality industry especially in tourism, repeat customer visit can be used to judge guest destination loyalty (Wirtz, Theng, & Patterson, 2001). Repeat visitation often implies that the customer intends to continue purchasing the product or service in question or intends to purchase more. However, repeat purchase or repeat visit may not necessarily represent lack of loyalty to customers. For instance, a tourist may not visit the same location not because it was not satisfying but because he wants to visit other places too to have a different experience. Loyal tourists, however, are likely to use the same airline and use the same hotel or its franchise when they travel. This may not be used when looking at a tourist’s choice of travel destinations. In order to measure a customer’s loyalty to travel destinations, a measure of their willingness to advocate a destination was used as a show of their loyalty (Riscinto-Kozub, 2011). The promotion of loyalty engaging the prices of services conceal the flexible discount systems, financial aid and, offering of discounts to loyal customers. Based on research, customers who consume services form particular organizations because of their striking price, the long term goals of such organizations cannot be achieved (Guzzo, 2010). Competitors may give the similar price or even cheaper price for the same product making its competitors lose their customers. Customers more knowledgeable and need their prices justified. Extra services become important basis for the achievement of competitive advantage.

Customer Conflicts and their management

When an organization uses a yield management program that differentiates on inventory and price availability to various customers, and takes in customers beyond their capacity, conflicts with customers will definitely come up. Such kinds of conflicts would negatively destroy the long term success of an organization. Such kinds of conflicts often arise when an organization applies discriminatory prices in relation to the customer’s ability to pay, inventory control in order to retain spare for the customer with more money and, overbooking to cater for cancellations (Wirtz, Theng, & Patterson, 2001).

Conclusion

From the above it can be concluded that customer services and customer satisfactions are positively related. Relational marketing is therefore important especially now that it is known that a strong relationship exists between customer satisfaction and the services offered in an organization. In the hotel industry, it is very important to develop a healthy relationship with customers. From the above discussion it can be validated that when customers are valued, they reciprocate by developing a strong relationship with an organization’s brand. In this case, value does not only imply during the time of purchase by the customer but also in cases of dissatisfaction with the services or products purchased. Therefore, when customers are happy with the services offered, they feel that they are valued by the organization, leading to a positive image thus enhancing customer satisfaction.

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Price fairness as discussed contributes to customer satisfaction. Likewise, customer satisfaction and customer services are connected. Good services give customers satisfaction through price fairness. These variables complement each other in giving more satisfaction to the customers. When customers are satisfied by the prices offered, they are willing to pay even more for the consumed products or services.

References

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Huang, H., & Chiu, C. (2006). Exploring customer satisfaction, trust and destination

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