A STUDY ON SATISFACTION AND BRAND LOYALTY
TOWARDS DURABLES

A THESIS

Submitted by

V. SURESH
(Reg. No. 8389)

BUSINESS ADMINISTRATION
in partial fulfillment of the requirements for the award of degree of

DOCTOR OF PHILOSOPHY

MANONMANIAM SUNDARANAR UNIVERSITY
TIRUNELVELI–627012

JANUARY 2019


MANONMANIAM SUNDARANAR UNIVERSITY
TIRUNELVELI–627012

CERTIFICATE
The research work embodied in the present Thesis entitled “A STUDY ON
SATISFACTION AND BRAND LOYALTY TOWARDS DURABLES” has been carried out
in the Department of Management Studies, Manonmaniam Sundaranar University, Tirunelveli.
The work reported herein is original and does not form part of any other thesis or dissertation on
the basis of which a degree or award was conferred on an earlier occasion or to any other scholar.

I understand the University’s policy on plagiarism and declare that the thesis and
publications are my own work, except where specifically acknowledged and has not been copied
from other sources or been previously submitted for award or assessment.

V. SURESH
(Reg. No. 8389)
Research Scholar

Dr. C. KATHIRAVAN, M.B.A., Ph.D.,
Assistant Professor,
Department of Business Administration,
Annamalai University.
Chidambaram 608 002.

ii


ACKNOWLEDGEMENT
Completing this doctoral dissertation, amid household chores, financial
commitments and tiring work life was a daunting task for me. Without the grace of God
and the support from the near and dears, completing this dissertation would be a mirage.
Being a fortunate person, I would like to express my sincere gratitude to all those
beloved people who are in diverse ways helped me to earn the doctoral degree.
I would like to express my eternal gratitude to my parents Mr.N.M.Victor and
Mrs. Late S.Jayarani for their everlasting love and support. They bore me, raised me,
supported me, and loved me. I dedicate this dissertation to my PARENTS.
I would like to express my deep sense of gratitude and greatest appreciation to
my research guide, Dr.C.Kathiravan, Assistant Professor, Department of Business
Administration, Annamalai University, Chidambaram for his valuable comments and
constructive suggestions throughout the research. I am grateful for the time and efforts

he devoted for me. Grateful thanks are due to him.
I wish to thank Manonmaniam Sundaranar University for allowing me to
register for Doctorate program in their esteemed institution.

I also thank the

administrative staff members of the Research Section of the University for their
Administrative Help.
I am extremely grateful to Prof. S.Venu Thyagarajan, Dean i/c of SRM
Institute of Science and Technology for his unceasing encouragement and extensive help
to complete this doctoral study. I thank Prof.S.Naresh Head, Associate Professor,
Prof.C.VijayVishnuKumar,Prof.J.Alagiriswamy,AssistantProfessors,SRMInstitute of
Science and Technology for their regular support. I am extremely thankful to
Prof.P.Suresh, Prof.E.Nixon Amirtharaj and Prof. J.Sadeesh for the wonderful ideas
and knowledge that they always share with me.

iv


Data collection was a crucial part of this journey. I thank all the Respondents
who spent some quality time with me to participate in the survey. I also thank friends,
relatives and colleagues who helped me in collecting the data. Especially, I thank to
other college professors for helping me in data collection.
I express my sincere gratitude to my colleagues of Annamalai University for
their advice, kind thoughts, and suggestions. I am grateful to my friends in SRM
Institute of Science and Technology for constant support and caring they provided. I am
sincerely thankful to Madras University, for providing me the SPSS literature required
for the study.
I am thankful to my brothers and sisters and their family for their constant
encouragement.


I thank my beloved wife Mrs.T.Sagaya Kavitha, for providing a

loving environment for me to complete the study. Without the kind help of my Daughter
S.Immaculate Perdita and my son S.Bambino Thanaston Fernando it would not be a
complete one. I thank my brother-in-law Mr.T.Francis Loyola Fernando and my
sister Mrs.A.Arokia Sujitha for helping me in project work. I thank my Mother-inlaw’s contribution for my successful completion of this course.
Finally, my thanks go to all the people who have supported me to complete the
research work directly or indirectly.

V.SURESH

v


Chapter

TABLE OF CONTENTS

No.

Page
No.

Abstract
Table of Contents
List of Tables
List of Figures
List of Abbreviations
CHAPTER ONE: INTRODUCTION

1.1

Introduction

1

1.2

Customer Satisfaction

2

1.3

Models of Customer Satisfaction measurement

5

1.4

The brand loyalty and the service

11

1.5

Brand Perception

12


1.6

Why it is Importance to study Brand Loyalty

18

1.7

The loyalty typology

26

1.8

Scope of the Study

30

1.9

Significance of the study

30

1.10

Theoretical Frameworks

31


1.11

Conceptual Framework

34

CHAPTER TWO: REVIEW OF LITERATURE
2.1

Customer satisfaction and Brand Loyalty

42

2.2

Customer Preference

56

2.3

Factors determining purchase of durables

64

CHAPTER THREE: RESEARCH METHODOLOGY
3.1

Introduction


70

3.2

Research Design

70

3.3

Research Gap

71

3.4

Statement of the problem

71

3.5

Framework of the study

72

vi


Chapter


TABLE OF CONTENTS

No.

Page
No.

3.6

Objectives of the study

76

3.7

Hypothesis of the study

76

3.8

Sources of Data Collection

77

3.9

Questionnaire Construction


77

3.10

Pre-test

80

3.11

Pilot Study

80

3.12

Population of the study

83

3.13

Sample size determination

83

3.14

Sampling Technique


83

3.15

Sampling Frame of the Study

84

3.16

Statistical Tools

85

3.17

Chapter Summary

88

CHAPTER FOUR : DATA ANALYSIS AND INTERPRETATION
4.1

Profile of the respondents

89

4.2

Socio Economic profile of the respondents


90

4.3

Frequency and Percentage Analysis of Refrigerator

91

4.4

Frequency and Percentage Analysis of Air-Conditioner

93

4.5

Frequency and Percentage Analysis of Washing Machine

95

CHAPTER FIVE: SUMMARYOF FINDINGS, SUGGESTIONS
5.1

The level of customer satisfaction towards durables

204

5.2


Assess the level of brand loyalty towards durables

208

5.3

Identify the influence of factors determining purchase of durables

213

and brand preference on satisfaction and brand loyalty
5.4

Develop a model represents the customer satisfaction and brand
loyalty towards durables

vii

215


Chapter

TABLE OF CONTENTS

No.

Page
No.


5.5

Recommendations

217

5.6

Conclusion

221

5.7

Scope for further study

223

BIBLIOGRAPHY
APPENDIX
QUESTIONNAIRE
LIST OF PUBLICATIONS
REPRINT OF PUBLICATION
BIO DATA

viii


LIST OF TABLES
Table


TITLE

No.

Page
No.

4.1

Personal profile of the respondents

89

4.2

Socio Economic Profile of the respondents

90

4.3

Frequency and Percentage Analysis of Refrigerator

91

4.4

Frequency and percentage Analysis of Air-Conditioner


93

4.5

Frequency and Percentage Analysis of Washing Machine

95

4.6

U test shows mean rank difference towards satisfaction

97

based on type of washing machine
4.7

H test shows Mean rank difference towards satisfaction based on

100

washing machine brands
4.8

H test shows Mean rank difference towards satisfaction based on

103

using years of air conditioner
4.9


H test shows Mean rank difference towards satisfaction based on

106

Washing machine offer
4.10

U test shows Mean rank difference towards satisfaction

109

based on mode of payment
4.11

U test shows Mean rank difference towards satisfaction based on

112

star rating
4.12

H test shows Mean rank difference towards satisfaction based on

115

type of air conditioner
4.13

H test shows Mean Rank difference towards satisfaction based on


118

brand of air conditioner
4.14

H test shows mean rank difference towards satisfaction based on

121

using years of air conditioner
4.15

H test shows mean rank difference towards satisfaction based on

124

air conditioner offer
4.16

U test shows mean rank difference towards satisfaction based on
mode of payment

ix

127


Table


TITLE

No.
4.17

U test shows mean rank difference towards satisfaction

Page
No.
130

based on air conditioner star rating
4.18

H test shows mean rank difference towards satisfaction based on

133

type of refrigerator brands
4.19

H test shows mean rank difference towards satisfaction based on

136

brand of refrigerator
4.20

H test shows mean rank difference towards satisfaction based


139

on using years of refrigerator
4.21

H test shows mean rank difference towards satisfaction based on

142

refrigerator offer
4.22

U test shows mean rank difference towards satisfaction

145

based on mode of payment
4.23

U test shows mean rank difference towards satisfaction based

148

on refrigerator star rating
4.24

U test shows mean rank difference towards brand loyalty based on

151


type of washing machine
4.25

H test shows mean rank difference towards brand loyalty based on

153

brand of washing machine
4.26

H test shows mean rank difference towards brand loyalty based on

156

using years of washing machine
4.27

H test shows mean rank difference towards brand loyalty based

159

on washing machine offer
4.28

U test shows mean rank difference towards brand loyalty based on

161

mode of payment
4.29


U test shows mean rank difference towards brand loyalty based on

162

washing machine star rating
4.30

U test shows mean rank difference towards brand loyalty based on
type of air conditioner

x

164


Table

TITLE

No.
4.31

H test shows mean rank difference towards brand loyalty based

Page
No.
166

on brands of air conditioner

4.32

H test shows mean rank difference towards brand loyalty based on

168

using years of air conditioner
4.33

H test shows mean rank difference towards brand loyalty based on

170

air conditioner offer
4.34

U test shows mean rank difference towards brand loyalty based on

172

mode of payment
4.35

U test shows mean rank difference towards brand loyalty based on

173

air conditioner star rating
4.36


U test shows mean rank difference towards brand loyalty based on

175

type of refrigerator
4.37

H test shows mean rank difference towards brand loyalty based on

177

brands of refrigerator
4.38

H test shows mean rank difference towards brand loyalty based on

179

using years of refrigerator brands
4.39

H test shows mean rank difference towards brand loyalty based on

181

refrigerator offer
4.40

U test shows mean rank difference towards brand loyalty based on


183

mode of payment
4.41

U test shows mean rank difference towards brand loyalty based

184

on refrigerator star rating
4.42

Factors determining purchase of durables and brand preference

186

on satisfaction with air conditioner
4.43

Factors determining purchase of durables and brand preference on

187

brand loyalty with respect to air conditioner
4.44

Factors determining purchase of durables and brand preference on
satisfaction w.r.t washing machine

xi


188


Table

TITLE

No.
4.45

Factors determining purchase of durables and brand

Page
No.
189

preference on brand loyalty w.r.t. washing machine
4.46

Factors determining purchase of durables and brand preference on

190

satisfaction w.r.t refrigerator
4.47

Factors determining purchase of durables and brand preference and

191


brand loyalty w.r.t refrigerator
4.48

Model fit indication, Regression weights, co-variance w.r.t air

192

conditioner
4.49

Model fit indication, Regression weights, co-variance w.r.t.

193

washing machine
4.50

Model fit indication, Regression weights, co-variance w.r.t.
refrigerator

xii

194


LIST OF FIGURES
Fig.

Page

TITLE

No.

No.

3.1

Conceptual Framework of the study

72

4.1

Path Analysis of Factors determining purchase of durables and brand

192

preference on brand loyalty w.r.t customer satisfaction towards air
conditioner
4.2

Path Analysis of Factors determining towards purchase of durables

195

and brand preference on brand loyalty w.r.t washing machine
4..3

Path Analysis of Factors determining towards purchase of durables and brand

preference on brand loyalty w.r.t customer satisfaction towards refrigerator

xiii

199


LIST OF ABBREVIATIONS

ACSI

:

The American Customer Satisfaction Index

AGFI

:

Adjusted Goodness of fit

AMOS

:

Analysis of Moment Structures

ANOVA

:


Analysis of Variance

CFI

:

Comparative fit index

CR

:

Composite Reliability

CSP

:

Cellular Service Suppliers

FICCI

:

Federation of Indian Chambers of Commerce and Industry

FMCG

:


Fast Moving Client Goods

GFI

:

Goodness of fit

MANOVA

:

Multivariate analysis of variance

NFI

:

Normed fit index

RMSEA

:

Root mean square error of approximation

SCSB

:


Swedish Customer Satisfaction Barometer

SEM

:

Structural Equation Modeling

SPSS

:

Statistical Package for Social Sciences

xiv


CHAPTER I
INTRODUCTION
1.1 Introduction
Opening lines of this first section incorporates almost all the relevant
explanations about the operational definitions which are to be well defined.
Satisfaction is the affective side of the human behavior which is integrated with the
internal feelings of the consumer towards a product/service. Satisfaction prevails
only when the expectations of the customer are satisfied to a satisfactory level even
though not in full. Introducing, developing and maintaining brand qualities with
assurances to the existing consumers is critical for the survival of any company in a
competitive environment (Heskett, 2002; McMullan & Gilmore,2008; Mellens, et al.
1996).After satisfaction brand loyalty buy out as a gratitude by the customer towards

the producer or the service providers. Brand loyalty programs based on underlying
emotional attitude can increase business and its performance (Keiningham, et al.
2008). Reichheld and Sasser (1990) had found out that 5 percent increase in
customer retention had resulted in a 25-125 percent increase in profits. This increase
in profit was due to reduction of sales and marketing costs, increased price
premiums, referrals, and revenue growth (Heskett, 2002; McMullan & Gilmore,
2003, 2008; Reichheld, 2003; Rowley, 2005). In short, brand loyalty is an important
strategy to develop a sustainable competitive advantage for any business (Dick &
Basu, 1994; Gounaris & Stathakopoulos, 2004; Mellens, et al. 1996), Han, et al.
2008; Kandampully & Hu, 2007). Despite the notable impact that brand loyalty has
on business performance, relatively little theoretical and empirical research has
examined service loyalty (Gremler & Brown, 1998; Jones & Taylor, 2007; Oliver,

1


1999). Service loyalty can be considered as an inseparable segment contributing to
the brand loyalty.
1.2 Customer Satisfaction
Customer satisfaction is the one which is related to the individual
consumer’s perception over expected the performance of the product or service in
relation to his or her expectations (Schiffman & Kanuk, 2010; Armstrong & Kotler,
2010). Oliver (2010) opined that the satisfaction is the customer’s fulfillment
response. It is the personal judgment over a product or service feature, or the product
or service itself, which provides a pleasurable level of consumption-related
fulfillment. Zeithaml, et al. (2009) argued that failure to meet customer needs is
assumed to result in dissatisfaction with the product of service. Hoyer and McInnis
(2001) noticed and stated that satisfaction can be associated with feelings of
acceptance, happiness, relief, excitement, and delight.
Customer satisfaction has been attempted for a very long time to understand,

to identify and to recognize in the field of marketing thoughts and practices. From
the past three decades or so customers’ satisfaction was considered as a centralized
concept as well as an important goal to reach the target of sales in all business
activities (Anderson, Fornell, and Lehmann 1994). There are two different
conceptualizations about customer satisfaction; one is transaction-specific
satisfaction and the other is cumulative satisfaction. Transaction- specific
satisfaction provided specific diagnostic information about a particular product or
service encounter by the customer (Lam et al. 2004) Transaction- specific
satisfaction cumulative customer satisfaction is an overall evaluation based on the
total purchase and consumption experiences of the consumer with a product or
service over a span of time (Anderson, Fornell, and Lehmann 1994); this type of
2


satisfaction is more fundamental and useful than that of the transaction – specific
consumer satisfaction. Cumulative customer satisfaction is more comprehensive and
efficient in predicting a consumers’ subsequent behavior as well as a firm’s past,
present and future performances. It is the cumulative customer satisfaction that
motivates a firm to invest its time energy in understanding customer satisfaction
(Wang and Lo 2002).
Customer satisfaction is generally defined as a feeling or judgment or
perception or a state of satisfaction by customers towards specific products or
services, after they have used them (Jamal and Naser 2002). Though customer
satisfaction is essential for survival of any industry or production firms (Rampersad,
2001); but customers who are retained may not always be satisfied due to stereotypic
endeavor and satisfied customers may not or cannot always be retained (Dick and
Basu 1994). Hence this creates a challenge for maintaining possibly higher levels of
service, awareness of customer expectations and improvements in services and
product (Pizam and Ellis 1991). However, satisfied customers are the assets of an
organization that promises and ensure a regular cash flow into the business in the

near future (Rahman 2004). If customers are satisfied with a particular product or
service after its use, they are likely to engage in repeated purchases and try line
extensions. Customers are also likely to convey others about their favorable and
better experiences. The consumers engage in positive word-of-mouth advertising
whereas dissatisfied consumers are likely to switch over to other brands and engage
in negative word-of-mouth advertising (Naser, Jamal, and Al-Khatib 1999).
Customer satisfaction renders so many benefits for the firm. They are like
increased loyalty for current suppliers, reduced price elasticities, insulation of
current suppliers from competitive efforts, lower costs of future transactions,
3


reduced failure costs, lower costs of attracting new customers and an enhanced
reputation for the firm (Anderson, Fornell, and Lehmann 1994). Moreover, it is also
believed that customer satisfaction is comparatively good, even though not the best
forms the indicator of firms’ future profits (Chan, et al. 2003).
Levesque and Mc Dougall (1996) had found and announced that service
problems and bank’s service recovery ability have a major impact on customer
satisfaction and intentions to switch to the other banks. Mooradian and Oliver (1997)
through their study had revealed that satisfaction had led to repeat purchase
intentions. Naser, Jamal, and Al-Khatib (1999) had indicated that a vast majority of
respondents are satisfied with most aspects of the Islamic bank’s products and
services. Chiou, Droge, and Hanvanich (2002) had revealed that service quality
only influences purchase intentions only through satisfaction. Mai and Ness (2006)
had indicated that customer satisfaction is associated with service and product
features of mail order specialty food. Suh and Yi (2006) had showed that customer
satisfaction has greater effect on brand loyalty and brand attitudes when product
involvement is low i.e. household goods. In contrast, corporate image and attitudes
toward the advertisement have had more effect on brand attitudes and attitude has
more effect on loyalty when product involvement is high, i.e. cosmetics. Bontis,

Booker, and Serenko (2007) had found out that customer satisfaction enhances
reputation in the service environment. Molina, Consuegra, and Estaben (2007) had
showed that confidence benefits of the benefitted consumers had a direct, positive
effect on the satisfaction of customers with their bank. Dapkevicius and Melnikas
(2009) had revealed that price and quality are important factors for customer
satisfaction received through Pepsi, Coke and Wine; whereas Naik, Gantasala, and

4


Prabhakar (2010) had revealed that services offered by retail units have positive
impact and are significant in building customer.
Satisfied customers will often repeat the purchase, probably be brand loyal,
and convey positive word-of-mouth advertising, and all these will enhance sales
Almossawi, 2012). Customer’s satisfaction may also be associated with feelings of
ambivalence when there is a mix of positive and negative experiences associated
with the product or service (Zeithaml, et al. 2009). According to Schneider and
Bowen (1999), most customers range from moderately dissatisfied to moderately
satisfy and it is most likely that with additional factors, like: better price or more
convenient store location the customer will eventually defect.
There remained a dire need for the perpetual enhancement Customers’
satisfaction and experience, and even then it is often not enough to retain them
because even satisfied customers are not always loyal, and what more defect at a
high rate. Heskett, et al. (2008) opined that the relationship between scores and
loyalty depend on whether customers are “very satisfied” or only “satisfied” with the
product or service. Customers being “very satisfied” are five times more likely to
repurchase. Satisfaction is a dynamic phenomenon, that may fluctuate over time, and
may be influenced by a variety of factors, and these will be further investigated in
this research with respect to well-known retailer- ZARA.
1.3 Models of customer satisfaction measurement

Organizations analyze the recent trends in customer satisfaction with various
customer satisfaction models since the concept is very dynamic involving more
changes. Different models are based on some theories of customer satisfaction.
Some of the vital models are like 1) The Servqual model; 2) The Kano model; 3)
The American Customer Satisfaction Index (ACSI); 4) The Servperf scale; 5)
5


Swedish Customer Satisfaction Barometer (SCSB) and 6) The Hotelzot (A modified
version of SERVQUAL).
The Servqual model
The SERVQUAL instrument has been widely applied in a variety of service
industries. Parasuraman, Zeithamal and Berry (1988) built a 22-item instrument
called SERVQUAL for measuring consumer perceptions of service quality.
SERVQUAL addresses many elements of service quality divided into the
dimensions namely tangibility, reliability, responsiveness, assurance, and empathy.
A number of researchers have applied the SERVQUAL model to measure service
quality. The most widely accepted conceptualization of the customer satisfaction
concept is based on the expectancy disconfirmation theory. This theory was
postulated by Oliver (1980), who proposed that satisfaction level is the result of the
differences between the expectation and the perception of the experiences or
performances. Satisfaction is the positive disconfirmation which occurs when a
product or service is better than expected. On the other hand, if a performance was
felt as worse than expected results with dissatisfaction this is the negative
disconfirmation. A relatively easy way to determine what type of services the
customer prefers is simply to ask them through the interactions. Schall (2003)
discusses the issues of question clarity, scaling, validity, survey timing, question
order, and sample size. “According to the SERVQUAL model, service quality can
be measured by identifying the gaps between customers’ expectations of the service
to be rendered and their perceptions of the actual performance of service.

SERVQUAL is based on five dimensions of service:

6


1. Tangibility
Tangibility refers to the physical characteristics which can be felt by the
sense organs; summation of these senses leads to satisfaction or dissatisfaction in the
mindset of the consumer.
2. Reliability
The service provider’s ability to provide accurate, uniform and dependable
services/products almost equally to all the consumers as they promised.
3. Responsiveness
A firm’s willingness to assist its customers by providing fast and efficient
products/related services/ service performances; and it is the total willingness that
the service providers exhibit to solve customers’ expectations/ requests promptly
and efficiently to a satisfactory level;
4. Assurance
Diverse features that provide confidence in the mindset of the customers
such as the firm’s specific service knowledge polite and trustworthy behavior from
employees.
5. Empathy
The service firm’s readiness to provide each customer with personalized
service; it means the transcendental approach of the firm and its related services
offered to the consumers.

Criticisms related to SERVQUAL
Zeithaml and Bitner (1196) commented that even though SERVQUAL has
been considered as a measure of service quality, the instrument had been criticized
on conceptual as well as methodological grounds. The main criticism over


7


SERVQUAL has been focused on the use of ‘expectation’ as a comparison standard;
it is not objective. It had been stated that expectation is dynamic in nature that is
why it is said to be subjective. One of the main problems mentioned in the literatures
are about the reliable and valid applicability of the five SERVQUAL dimensions to
different service sectors and replication studies done by other investigators failed to
support the five-dimensional factor structure as was obtained by Parasuraman, et al.
in their development of SERVQUAL”.
Kano Model
The Kano model is a theory developed in the decade 1980’s by the Professor
Noriaki Kano and his colleagues of Tokyo Rika University. The Kano, et al. (1996)
model of customer satisfaction classified product and service attributes based on
how they are perceived by customers and their effect on customer satisfaction. The
model was based on three types of attributes namely 1) basic or expected attributes,
(2) performance or spoken attributes, and (3) surprise and delight attributes. The
performance or spoken attributes were considered as the expressed expectations of
the customer. The basic or expected attributes implies the basic attributes without
any major significance of worth mentioning. The surprise and delight attributes are
those, which are beyond the customers’ expectations. Kano model measures
satisfaction against customer perceptions of attribute and its performance. Kano
model grades the customer requirements and determines the levels of satisfaction.
The underlying assumption behind Kano model is that the customer satisfaction is
not always proportional to how fully functional the product or service is. In this
model, Kano (Kano, 1984) distinguishes between three types of basic requirements,
which influence customer satisfaction. They are:

8



(1) Must be requirements: Must be requirements are considered as the
primary attribute among several attributes. If these requirements are not fulfilled, the
customers will be extremely dissatisfied. On the other hand, if the customer feels
that these requirements are served, to their fulfillment will increase his satisfaction;
2) Dimensional Requirement:

Dimensional requirements are usually

explicitly demanded by the customer the higher the level of fulfillment, the higher
the customer’s satisfaction and vice versa.
(3) Attractive Requirement – These requirements are the product/service
criteria which have the greatest influence on how a satisfied customer will be with a
given product. The additional attributes, which Kano had mentioned are: Indifferent
attributes, Questionable attributes, and Reverse attributes.
The American Customer Satisfaction Index (ACSI)
The American Customer Satisfaction Index (ACSI) was launched in 1994, by
the University of Michigan’s Ross School of Business. The American Customer
Satisfaction Index uses customer interviews as input to a multi-equation econometric
model. The ACSI was based on a model originally implemented in 1989 in Sweden
called the ‘Swedish Customer Satisfaction Barometer (SCSB). The ACSI model is a
cause-and-effect model with indices for drivers of satisfaction; on the left side,
customer expectations, perceived quality, and perceived value are found, satisfaction
(ACSI) in the center, and outcomes of satisfaction on the right side, customer
complaints and customer loyalty, including customer retention and price tolerance
are found. The ACSI uses two interrelated and complementary methods to measure
and analyze customer satisfaction: customer interviewing and econometric
modeling.


9


Vavra, T.G. (2007) viewed that the ACSI initiative has at least three primary
objectives:
1.

Measurement to quantify the quality of economic output based on subjective
consumer input;

2.

Contribution to provide a conceptual framework for understanding how
service and product quality relate to economic indicators

3.

Forecasting: to provide an indicator of future economic variability by
measuring the intangible value of the buyer-seller relationship”. The ACSI
survey process involves collecting data at the individual customer level.
Casual sequence begins with customer expectations and perceived quality
measures, which are presumed to affect, perceived value and customer
satisfaction. Customer satisfaction, as measured by the ACSI index, has two
antecedents: customer complaints, and ultimately, customer loyalty. The
ACSI is an economic indicator that measures the satisfaction of customers
across the U.S. Economy. “The ACSI interviews about 80,000 Americans
annually and asks about their satisfaction with the goods and services they
have recently consumed. ACSI data is used by academic researchers,
corporations and government agencies, market analysts and investors,
industry trade association, and consumers. This differs from Parasuraman, et

al. (1988) conceptualization, which referred only to what the service ‘should
be’. Adequate expectations represent a lower level of expectations.

SERVPERF
SERVPERF is the performance based service quality (SERVPERF) was
identified by Cronin and Taylor (1992). Cronin and Taylor proposed the
SERVPERF instrument, which is a more concise performance-based scale; this is an
10


alternative to the SERVQUAL model. The perceived quality model postulates that
an individual’s perception of the quality is only a function of its performance.
Cronin, et al. (1994) continues to debate between the effectiveness of SERVQUAL
and SERVPERF for assessing service quality. The authors remained unconvinced of
both, that including customer expectations in measures of service quality is a
position to be supported, and that SERVPERF scale provides a useful tool for
measuring overall service quality. Kim, et al. (2000) empirically compared
SERVQUAL (performance minus expectations) with performance-only model
(SERVPERF). The authors also concluded that the results from the latter appeared to
be superior to the former. It has been acknowledged that such approach limits the
explanatory power of service-quality measurement.

1.4 The brand loyalty and the service
The research agenda related to the service brand loyalty is specifically
challenging due to the complexity of those structures and those determinants of
customer’s loyalty behavior (Oliver, 1999).
The four characteristics of the service and its loyalty are:
1.

intangibility, the evaluation of services avoids the five senses,


2.

inseparability, the production of a service is simultaneously with
consumption,

3.

perish ability, services cannot be saved, stored, resold, or returned, and

4.

Heterogeneity, services are naturally difficult to standardize (Parasuraman, et
al. 1988).

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A Brief History of the Brand
Several authors had traced the evolution of brands and identified that the
word ‘brand’ probably derived from the Norse word ‘brand’. Symbolic branding
emerged even from the Shakespearian times onwards. The development of modern
brands and brand management was the industrial revolution. Low and Fullerton
(1994) pointed and stated that various macroeconomic factors allowed innovative
companies to lay the foundations of modern brand strategy. Packaging
improvements provided necessary protection. Manufacturers could make their
products instantly recognizable. This enabled the beginning of the cycle of
consumers asking for the same product by name and repeat purchase. In the past,
newspapers provided mass communication about these brands and these initiations
were supported by the establishment of the advertising industry as a legitimate form

of persuading customers to support a brand. Legal factors, such as the recognition
and registration of trademarks have assisted in the building of brands. Rights were
patented through registration. Time has developed, the law to allow the trade
marking and copywriting of not just names but shapes and colors used in packaging
thus further protecting the differences between the brands. Stuart Roper and Cathy
Parker developed Evolution of Branding Theory. Modern day consumers relate
themselves to brands; and modern day brands communicate in a myriad of ways
with consumers. The brand has a valuable relationship with its customers that would
exist even if the tangible assets of a company were destroyed. Brands are now
recognized on balance sheets as assets. Kim (1990) had described branding as the
“attribution of social and symbolic meaning to a product.” Therefore, a full and clear
appreciation of consumers and the markets in which they exist is necessary to
develop and maintain a successful brand Thelen (2010) insisted that a brand is a
“synthesis of all the, physical, aesthetic, rational and emotional elements,” Branding
however is more than merely a method of differentiation.
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