The gradual shift between marketing eras or orientation from a) the production era prior to

1920s, b) the sales era prior to 1950s, c) the marketing era since 1950s, d) the societal
marketing era around 1970s, and e) the relationship era since the 1990s (Bartels, 1974; Kurtz
et al., date; Dibb et al., 2001; Winsor, n.d.). Society gradually shifted away from production
to sales and to more recently market orientation has contributed to public cynicism in
relation to the role of marketing this shifted from a push strategy (products being pushed to
consumers) to a pull strategy (consumer requests product needed).
The evolutionary process had left the organisation a strong entity to deal with continuous
changes in technological innovation and evolving customer preference that are basic forces
driving business and product life cycles have intensified competition in global markets
(Houston, 1986; Barksdale and Darden; 1971; OLeary and Iredale, 1993; Svensson, 2001;
Zakaria and Abdul-Talib, 2010). The three basic elements of the marketing concept consist
of customer orientation, integrative efforts, and profit direction (Bell and Emory, 1971;
Houston, 1986; OLeary and Iredale, 1993). However, while Barksdale and Darden (1971)
question the practicality of the marketing concept and whether it works as well in reality as
advocates promise. Relying on customers to guide the development of new products has
severe limitations as customers have difficulty articulating needs beyond the realm of their
own experience compared to those who come from a science push of research and
development laboratory (Jobber, 2007). This is just one limitation more towards its
implementation with an overdependence on customers as a source for new product ideas then
it is on the marketing concept. Webster (1988) highlights further barriers when implementing
the marketing concept:
Incomplete understanding of the marketing concept itself;
Inherent conflict between short-term and long-term sales and profit goals;
Overemphasis on short-term financial-orientated measures of management
performance; and
Top managements own values and priorities concerning relative importance of
customers and firms other constituencies.
Jobber (2007) states individuals weigh their personal benefits while discounting the societal
impact of their purchases thus providing customer satisfaction is simply a means to achieve
companys profit objective and does not guarantee protection of consumer welfare. In
translating the philosophical statement of the marketing concept into pragmatic operational
guidelines Houston (1986) believes that organisations need to relearn the marketing concept
as it has suffered in two ways. 1) Being established as the optimal management philosophy
when it is not necessarily so in all instances and 2) in seeing examples of poor practice
adopted in the name of the marketing concept. According to Svensson (2001) what scholars
in the twentieth century have failed to create are dynamic theories, models and conceptual
frameworks that reflect a real world context. The narrow approach taken by organisations is
described by Levitt (1975) as Marketing Myopia whereby organisations can continue to
grow if they ascertain to customer needs and not the presumptive longevity of products.
Market orientation (MO) represents the implementation of the marketing concept as its
actions are consistent with the concept (Barksdale and Darden, 1971). Narver and Slater
(1990) state MO is the business culture that most effectively and efficiently creates superior
value for customers as it focuses on customer needs as organizational adaptation is
imperative for survival due to the changing nature of the market (Moutinho and Southern,
2010). Kohli and Jaworski (1990) define MO as the organizationwide generation,
dissemination, and responsiveness to market intelligence across all departments throughout
the firm and its appropriate responsiveness related to current and future customer needs. This
goes in hand with Hurley and Hult (1998) conclusion of MO consisting of three behavioural
components a) customer orientation, b) competitor orientation, and c) interfunctional
coordination but Kohli and Jaworski (1990) also make reference to technology and
regulations.
Nakata (2002) defines MO as the coordination and integration of firm resources directed
towards creating superior customer value and emphasises there has been limited
understanding in activating the marketing concept which refers to the process of building the
orientation within the context of actual organizations. Issues arise when engaging in
innovation and reorientation as to whether MO is a set of behaviours and activities, a
resource, a basis for decision making, or an aspect of organizational culture (Hurley and Hult,
1998). Study conducted by Narver and Slater (1990) concluded that MO and performance are
strongly related thus, validating the market-performance relationship.
3.1.1 Marketing Definitions
3.1.1.1 The Marketing Definition
In 1985 American Marketing Association had defined marketing as the process of planning
and executing the conception, pricing, promotion and distribution of ideas, good and services
to create exchange and satisfy individual and organizational objectives. (ref) The definition
not only recognised the buyers market but emphasised a change in business philosophy
widely known as the marketing concept. Despite the intention to meet and satisfy customer
needs while businesses make a profit Gronroos (1994b) saw the definition as production-
orientated and not market-orientated at all, badly fulfilling the requirements of the marketing
concept. The consequences of being product-orientated manifests itself in two ways first, it
becomes cost-focused and secondly, defining their company in terms of products produced
failing to understand the meaning buyers attach to specific products or services which often
go beyond the observable functional uses of goods and expresses the perceptions and motives
of consumers (Jobber, 2007).
So while marketing serves to satisfy customers needs through the exchange process the
marketing mix assists marketers to meet customers needs by developing products to satisfy
them, charge the right price, get the product in the right place and making the product known
through promotion (Jobber, 2009). The 1985 AMA definition highlighted a point in time
where the 4Ps also known as the marketing mix (product, price, place and promotion) had
been placed together with the exchange process becoming indisputably the unchallenged
basic theory of marketing. These are a set of controllable, tactical tools used by organisations
to produce a desired response from its target market. The marketing mix variables are used by
marketers who as the mixer of ingredients would use the variables so that the profit function
is optimised (Borden, 1964; Gronroos, 1994b).
3.1.1.2 Marketing Mix
It was believed that in taking this approach a firms survival and growth had been built on as
aspect of consumer orientation which generally improved market success and overall
performance intended to lead organisations to greater long-run profits (Kurtz et al., date). It
was used as part of an organisations strategy (planning and execution) to influence the
demand for its product. Research has shown that specific elements from the marketing mix
does positively affect in attracting customers, customer decision making and customer
satisfaction dependant on industry. For example, factors in the marketing mix have a
significant positive effect in attracting customers to Saderat Bank in Kermanshah Province,
Iran (Pour, et al, date; Nazari and Emami, 2013). Results from Satit (et al., 2012) revealed
that only product and price were associated with customer decision-making over travel agents
based in Indonesia. Product and price had been strongest predictors as the perception of high
product quality and high customer satisfaction directly leads to high levels of purchase
intention and repeat purchases. Having said that, product attributes such as product quality,
complete and accurate information, capability to give suggestions and assistance, superior
service, and so on may influence customer decision-making over travel agents. Price is also
important as it reflects customers perception of the value of products or services and all
other marketing decisions are closely related with the price decision.
Results confirmed the existence of the relationship between the marketing mix of services to
attract customers in banking in a study conducted by Ketabi (2012). Vipuls (2012) study on
Small Manufacturing Firms Product-Mix and Customer Satisfaction further revealed that
customer satisfaction is dependent upon product quality, product features, product image and
product services offered along with the product with a significant mean difference as far as
satisfaction with regards to their age, qualification and profession.
The digital era and illegal downloads of music has changed consumer behaviour indicated by
Kusumawati et al. (2013) revealed in their paper relating to factors affecting customer loyalty
of music products in Indonesia. While product, price, promotion do not have significant
effect on customer satisfaction they do have a significant affect on customer loyalty.
Distribution had a significant affect on customer satisfaction and none on customer loyalty
while the brand variable had an affect on both customer satisfaction and loyalty. Mucai,
Mbaeh and Noor (2013) found that process has a positive influence in the hospitality industry
while physical evidence has no influence on customer satisfaction. Arokiasamy (2012)
research has look at the effects of marketing mix and customer perception on brand loyalty
which concluded price, store image, distribution intensity and price promotion are found to
exert a significant positive influence towards hypermarkets brand loyalty.
The loose foundations, over simplicity, toolbox thinking and inability of the marketing mix to
fit every situation evident in its extensions for example, 5 Ps, 6 Ps or 7 Ps of the marketing
mix which renders the paradigm obsolete emphasising a broader thinking approach needed to
be taken. More importantly the most damaging fact according to Gronroos (1994b) is that
marketing and marketers have become so isolated in the organisations that the marketing
department may become alienated from customers. Rafiq and Ahmed (1992) argue the
criticisms of the marketing mix can be extended to include industrial marketing as these kinds
of activities are not captured in the 4-Ps approach. The interaction approach to understanding
industrial marketing accentuate that success does not come from manipulating marketing mix
components but long-term relationship building whereby a strong buy-seller bond acts as a
barrier to entry for out-supplier.

3.1.1.3 The Societal Marketing Definition
The inadequacies of the original marketing definition focused on short-term profits, with
customer satisfaction not acting as a goal but a means to an end whereby the gratification of
immediate desires showed no concern and had been indistinguishable for long-term consumer
interests or collective welfare (Abratt and Sacks, 1988; Ward and Lewandowska, 2006). The
simultaneous increase in public knowledge and awareness of social issues business activities
in every aspect of social enterprise are coming under increasingly rigorous scrutiny (Abratt
and Sacks, 1988). Kotler in 1972 introduced societal marketing expressed as the
organisation's task is to determine the needs, wants, and interests of target markets and to
deliver the desired satisfactions more effectively and efficiently than competitors, in a way
that preserves or enhances the consumer's and the society's well-being (Kotler, 1994).
Kotler acknowledged that what was good for the individual consumers might not be good for
society and include areas of social responsibility so that the marketing goal not only
considered individual consumer satisfaction to a wider social good embracing societys
wellbeing (Crane and Desmond, 2002).
Current definitions would be inadequate in dealing with problems of the future due to a) not
distinguishing between short-term customer wants and their own long-term welfare, b) failure
to distinguish between individual consumers needs and society welfare c) failure to integrate
profitability requirements with ecological or environmental considerations, and d) it tends to
concern itself mainly with profit motivated businesses (OLeary and Iredale, 1993).
Consequently, long-run consumer welfare had been the third basic element of the
marketing concept alongside customer satisfaction and profitability (Crane and Desmond,
2002; OLeary and Iredale, 1993). In addressing criticisms relating to the marketing
definition which considers the technical role of the marketing as opposed to social or moral
concerns or ecological and environmental considerations in its products and market planning
in doing good business(Abratt and Sacks, 1988).

3.1.1.4 The relationships marketing definition
Gronroos (1994a) relationship marketing definition is to establish, maintain and enhance
long term customer relationships at a profit, so that the objectives of the parties involved are
met. This is done by mutual exchange and fulfilment of promises. (Gronroos, 1994a).
Having emerged from the fields of service marketing and industrial marketing the premise of
relationship marketing is focused on gaining invaluable information on best serving
customers to achieve customer satisfaction which represent core drivers of customer loyalty
(Christopher et al., 1991; Ndubisi, 2007; Yim et al., 2008). The fulfilment of promises is
important in achieving customer satisfaction which helps build stronger firm-customer
relationships as this aids in fostering customer loyalty (Ndubisi, 2007).
This means of mutual benefit for both parties via keeping of promises coupled with the trust
and commitment to ensure retention of the customer base competitive advantage offered to
the firm ideally would create long-term profitability (Arias, 1996; Gronroos, 1994b; Harwood
and Gary, 2006; McKenna, 1991; Reichheld and Sasser, 1990). Barnes (2003) mentioned that
organisational focus on building customer relationships and customer relationship
management in a customer context is not well understood as it may seem that organisations
use this for long-term profitability. Customers can demonstrate repeat patronage, high level
of retention without a genuine relationship with the brand. Many brands are adequate in
creating functional value but what is missing from the behavioural definition is any kind of
emotional attachment to (emotional value) or connection to the firm; a necessary condition
for the relationship to exist and be strengthened baring in mind that being from a customer
perspective. Vachlos et al., (2010) mentions various authors on how attachment can extend
beyond person-to-person relationship contexts, to possessions, to places, and companies or
brands.
Sheth and Parvatiyar (1995) express how relationship marketing has a natural tendency to
reduce consumer choices to a few (evoked sets). Consumers engaging in relational market
behaviour to achieve greater efficiency in decision making, reducing information processing,
achieving more cognitive consistency in decisions as well as reducing perceived risk
associated with future choices. Family, peer groups and religious tenants influence choice
reduction for individual consumers while customers may terminate relationships due to:
Satiation; seeking novelty as a result of boredom with current consumption
Dissatisfaction; failure to match offerings to expectations
Superior alternatives; higher perceived value of an alternative
Conflict; disagreement with existing marketer
Consumer experience of high exist barriers likely resulting in consumer revolt;
provide opportunity for consumer to voice concern particularly when choices are
restricted or unavailable.

The definitions highlights a move from short-term transaction-orientated goal to a long-
term relationship-orientated goal whereby the management of interactions, relationships
and networks are a fundamental which the initial 1985 AMA definition lacked expressed as
the old way of doing business (Gronroos, 1994b; Gummerson, 1993; Kotler, 1992, p3; Sheth
and Parvatiyar, 1995). Marketers need be wary of imposing universal solutions for exchange
bases as relationship marketing would represent different things to different cultures (Palmer,
1997).
Furthermore the revised AMA (2004) definition of marketing recognises the ascendancy of
relationship marketing that expresses the integrative function of the firms department while
introducing the value concept so as to meet and exceed customer expectations (Gronroos
1994a). Marketing is defined as an organizational function and a set of processes for
creating, communicating and delivering value to customers and for managing customer
relationships in ways that benefit the organization and its stakeholders. In creating value the
initial exchange process has been replaced with benefiting customer as the actual concept of
customer value suggests a strong relationship to CS hence, value as an important constituent
of relationship marketing should be emphasised (Arias, 1996; Ravald and Gronroos 1996;
Woodruff, 1997).

3.1.1.5 Consumerism
Bell and Emory (1971) argue that that marketing concept does not imply a commitment to
the kind of customer satisfaction that is now being demanded and if the marketing mix had
been designed to meet the consumers needs, there would not be a consumerism problem
today. Therefore, the firm should assume more responsibility for consumer welfare moving
away from narrowly defined business activities to bring about broader social meaning (Kotler
and Levy, 1969). Bell and Emory revised the marketing concept to consist of three elements,
consumer concern, integrated operations and profit reward. Yani-de-Soriano and Slater
(2009) presents three definitions of consumerism that currently exist in literature which
included the original definition referred to manipulating marketing techniques by marketers
to create customers and entice them to buy and consume more. The second referring to the
organised consumer movement to protect themselves and their rights against the excesses of
marketing and the third referring the consumer culture ideology suggest happiness and
wellbeing can be achieved through suitable consumption (Yani-de-Soriano and Slater, 2009).
The research considers the second definition of consumerism as an organised movement of
concerned citizens and government agencies to protect and improve peoples living
environment which would be beneficial for the firm in the long-term as it reinforces them to
re-examine their social roles and satisfactorily meet consumer needs (Kotler, 2005; Verma
and Nanda, 2007). Consumerism is a dynamic entity which evolves at a rapid rate and not
only emphasises the need to protect individuals from practices (business and government)
that infringe upon their human rights but further affect the relationship between the individual
consumer and the firm negatively if firms do a) not offer consumer protection against clear-
cut abuses, b) not provide adequate information and deceive consumers, and c) not protect
consumers against themselves and other consumers (Day and Aaker, 1970). Often it is the
lack of information that hinders the consumers ability to make an appropriate product
selection which leaves a gap between product expectation, performance and marketing claims
particular today as consumer have become more sophisticated, more price and quality
conscious and cynical about marketers (Verma and Nanda, 2007; Straver; date?). However, it
is an important role of the firm to bridge this gap and in providing adequate information
reduce consumer dissatisfaction and complaints to safeguard consumers who are no longer
passive actors creating a climate of mutual respect and concertation thus, strengthening firm-
consumer relationships (Ali and Wisniesk, 2010; Verma and Nanda, 2007; Straver; date?).

3.1.2 Consumer Buying Decision

Several comprehensive theories/models have been developed within the field of consumer
behaviour (Engel et al., 1995; Howard and Sheth, 1969; Nicosia, 1966). As these models
vary in details there are five stages that consistently occur represented in figure 5 (Dibb et al.,
1994; Mitchell and Boustani, 1994). The important elements of the consumer decision
process consist of (see Figure 1):

Problem recognition identification of motives or underlying need
Information search internal (previous experience) and external (public sources)
search to resolve problem
Evaluation of alternatives against criterion as buyer assess, ranks and establishes in
evoked set that has the potential of satisfying the buyers needs or motives.
Purchase on basis of set criteria but can be influenced by random factors
Post-purchase customer motives and underlying needs are satisfied or dissatisfied
when measuring desired and actual performance.

Marketing and environmental stimuli do enter the buyers consciousness but it is the buyers
characteristics and decision process that leads to certain purchase decisions as personal,
psychological and social factors that affect the consumer buying decision process which
includes religious influence that can take place to form ones perception, attitudes and
personality (Kotler, 2000; Rowley, 1997). The internet has enabled enormous amount of
information to be made available to consumers this has changed consumer information search
behaviour (Lauraeus-Niinivaara, Saarinen and Oorni, 2007).


Figure 1: The Buying Decision Process
Ref: Dibb et al., 2001

It is important to analyse consumer buying behaviour and understand the factors that affect
the decision-making process for firms not only so that they can match product offering with
buyer needs but the process aids in revealing what happens to consumers between their
exposure to marketing stimuli and actual decision to purchase (Dibb et al., 2001; Fletcher,
1993). Core to the firms marketing strategy brands need to convince customers that the
actual value of benefits offered when purchasing products or services is that which the
consumer intends and via positively satisfying those needs to encourages repeat purchases
(Rowley, 1997; Howard and Sheth, 1969). Consumer decision to make repeat purchases is
not habitual or characterised by an absence of any pre-purchase deliberation but instead
research suggests that choice is the result of numerous experiences and evaluations which
occur over a repeat number of purchases and not always the cognitive evaluation of the
evoked set performed prior to each choice (Hoyer, 1984). Hoyer (1984) research
demonstrated the consumer use of simple choice tactics which permits a quick yet
satisfactory decision when making low-involvement decisions optimising time and effort as
opposed to consequences.

Despite this, Vinson, Scott and Lamont (1977) suggest the personal values are centrally held
cognitive elements which stimulate consumer motivation for behavioural response. It is
generally accepted in consumer behaviour research that product attributes represent the basic
elements ordering an individual's attitude toward products and services therefore an
individual's attributes are ultimately based upon his values, and changing values could have a
pro-found impact upon these attitudes and upon behaviour as well (Vinson, Scott and
Lamont, 1977). It is also said according to Rokeach (1973) that values are responsible for the
selection and maintenance of goals towards which we strive and regulate the manner, at the
same time, in which this striving takes place.

Purchasing is also influenced by individuals attitudes towards perceived risk as first
introduced by Brauer (1960) as Mitchell (1999) suggested that perceived (subjective) risk is
more powerful at explaining consumer behaviour as consumers are more often motivated to
avoid mistakes than maximise utility in purchasing particularly under conditions of imperfect
information in which a consumer attempts to identify buying goals and match such goals with
product or brand offerings (Cox, 1967). Perceived risk does not remain constant and instead
varies through the different stages of the buying process, in relation to pre- and post-
purchasing (Mitchell and Boustani, 1994; Rowley, 1997). For example, when actively or
passively collating information during the information search (pre-purchase) stage this is
done so to alert consumers to risks and pitfalls within the product choice of which previously
they had been unaware thus, lessening decision-related uncertainty that may otherwise lead to
bad purchases (Mitchell and Boustani, 1994). While risk and uncertainty must be understood
as distinct from one another Mitchell (1999) states that perceived risk is a necessary
antecedent for trust to be operative while the outcome of trust building will lead to a
reduction of perceived risk of the transaction or relationship as it is believed that as a
relationships develop and trust builds, risk will decrease.

While other determinant such as search benefits and costs, imperfect information about
product quality, wealth or income, past experience, prior knowledge and education have been
related to pre-purchase consumer search Lauraeus-Niinivaara, Saarinen and Oorni (2007)
establishes uncertainty as the motive of consumer search. Thus, research indicates two
general types of uncertainty; knowledge uncertainty, regarding information about alternatives
and choice uncertainty, in relation to which alternative to choose which increases consumer
search behaviour (Lauraeus-Niinivaara, Saarinen and Oorni, 2007; Mitchell and Boustani,
1994). However, consumer behaviour is not only limited to ones buying behaviour as
Mugge, Schifferstein and Schoormans (2010) emphasises that knowledge of all phases in the
consumption cycle, from acquisition, through use, to disposition is valuable are necessary
with less being understood about the customer-product relationship during ownership (post-
purchase behaviour) which plays an important role in repeat purchase.

3.1.2.1 Customer Satisfaction
Consumer satisfaction (CS) occupies a central position in the marketing concept and practice
through satisfying customer needs as customers are the ultimate judge of the organisations
performance (Moutinho, 2010). However, the term itself if rather ambiguous as it does not
emphasise short-term or long-term satisfaction (Moutinho, 2010). CS is generally
conceptualised as an attitude-like judgement following a post-purchase act or a series of
consumer-product interactions (Fournier and Mick, 1999; Yi, 1990). Rust and Oliver (1994)
state that satisfaction reflects the degree to which one believes that an experience evokes
positive feelings due to the use of a product or service. CS is defined as a customers overall
evaluation of the performance of an offering to date expressing the consumers overall
judgement which may include for example, service features, the service product and sales
personnel (Backs and Parks, 2003; Johnson and Fornell 1991). While such attributes such as
quality and value are cognitive responses to an experience of a product or service, satisfaction
is an affective response (Baker and Crompton, 2000; Cronin et al., 2000).

Fornell and Wernerfelt (1987, 1988) had examined and confirmed the interplay of
satisfaction to profits using complaint handling programs for customer retention. CS serves to
link processes culminating in purchase and consumption with post-purchase experiences
determining attitude change, repeat purchases and loyalty (Churchill and Surprenant, 1982;
Backs and Parks, 2003) while a variety of studies revealed that higher levels of CS lead to
greater customer loyalty towards brands (Anderson and Suillivan, 1993; Bearden and Teel,
1983; Bolton and Drew, 1991; Boulding et al., 1993; Fornell, 1992; Oliver, 1980; Yi, 1991).
Satisfied customers will engage in word-of-mouth which ultimately lowers the cost of
attracting new customers and enhances the firms overall reputation (Anderson, Fornell and
Rust, 1997). Adversely, customer dissatisfaction demonstrates to have a two-fold impact on
the likelihood that a consumer will engage in negative post-switching following bad word of
mouth behaviour due to dissatisfactory experience therefore, harming the firm long-term via
preventing the acquisition of future customers (Wangenheim, 2005; Yu, 2007). Therefore,
marketing resources are better spent on keeping existing customer than attracting new ones
particularly since Peters (1988) stated that it may by five times more costly to attract new
customers than to keep an old one.
Customer relationship management literature explores the relationship with consumers via
commitment-inducing bonds and attachments with brands (Esch et al., 2006; Nevin, 1995)
Mugge et al (2010) sheds light on to consumer-products relationship. Satisfaction is an
evaluative judgement of the products performance as findings revealed that product
attachment is distinct from satisfaction while sharing two determinants consisting of utility
and appearance. Product utility has a direct and indirect effect with satisfaction and
attachment only an indirect effect. It is the product attachment what represents the emotion-
laden bond that develops if the product has special meaning to the owner as findings had been
based on the expectation-confirmation model (Mugge et al., 2010). The popular view is that
disconfirmation of pre-consumption product standards, with reference to Olivers (1977,
1980) expectancy-disconfirmation paradigm in Figure 2, is the essential determinant of
satisfaction. While the paradigm suggests that positive disconfirmed standards lead to high
satisfaction when expectations are exceeded and negative disconfirmed standards lead to
dissatisfaction when expectations are underachieved (Fournier and Mick, 1999; Oliver, 1996,
1999). The phenomenon that came about highlighted a unit of negative disconfirmation has a
much greater effect on dissatisfaction that a unit of positive disconfirmation on satisfaction
(Anderson and Sullivan, 1993).


(EUGENE W ANDERSON; MARY W SULLIVAN)
Figure 2: Olivers (1977, 1980) expectancy-disconfirmation paradigm

3.1.2.2 Customer Value
In being effective in meeting customer needs and satisfying those needs the brand can acquire
added values of familiarity, reliability, risk reduction and character through a customers
experience with the brand (Jones, 1986; Tuominen, 1999). For suppliers differentiating
offerings aid in creating brand loyalty which reduces the firms costs associated with
attracting new customers, with positive word-of-mouth referrals and the ability to command
higher prices resulting in cash-flow becoming easier in the firms ability to secure income
(Back and Parks, 2003;Clifton et al., 2009; Tuominen, 1999).
For an organization to achieve consistently above-normal market performance it must create
in todays global market a sustainable competitive advantage and this can be done so by
creating superior value while measuring and acting on results of customer satisfaction
measurements (Narver and Slater, 1990; Woodruff, 1997). Customers make purchasing
decisions when choosing between offerings forming certain expectations about the value of
competing offers and if product performs better than expected customer experience more
satisfaction (Mugge et al., 2010). Satisfaction depends on value with a greater emphasis by
firms on functional and emotional value; value is multifaceted and individualistic (personal)
in nature as it is the customers who co-creates the value therefore, should not be
mainstreamed by brands for a firms benefit (Barnes, 2003; Moutinho, 2010). The term itself
is complicated and takes on a narrow perspective with evidence suggesting that it is used
without any efforts or commitments to understand really what it means to provide value to
customers, how added value should be related to customer needs and the achievement of
profitability for the parties involved (Monroe, 1991; Ravald and Gronroos, 1996).
Creating superior value it is one of the drivers of CS as research highlighted a strong link
between the creation of value for customers, loyalty and the firms profits (Parasuraman and
Grewal, 2000; Reichheld, 2000). Sometimes satisfaction data do not correlate highly with
organisational performance (Jones and Sasser, 1995) with Woodrff (1997) emphasising the
decline of this relationship overtime if organisations do not keep up with changes of customer
needs and wants. Butz and Goodstein (1996) describe customer value as an emotional bond
established between a customer and a producer which looks at the product and service
experienced that adds value. Woodruff (1997) defines customer value as a customer
perceived preference for the evaluation of those product attributes, attribute performances,
and consequences arising from use that facilitate (or block) achieving customer goals and
purpose in the situation. Woodruff (1997) definition is taken from a customer-perspective
derived from empirical research of how customers think about value and anchored the
definition into a conceptual framework by a means-end model (Gardial et al. 1994; Richins,
1994a, 1994b; Woodruff et al., 1990; Zeithaml, 1988 cited in Woodruff, 1997).

Figure 3:

The trade-off between perceived benefits and perceived costs not only looks at the value
gained from the product but would concern other aspects of what the company delivers
tangible and intangible (Moutinho and Southern, 2010). Customer value, satisfaction and
quality have been shown to be the most important indicator for repurchase intentions
however customer value is more subjective and individualistic than satisfaction and quality
(Jayanti and Ghosh, 1996; Oh, 2000; Petrick and Backman 2002). The benefits are to satisfy
the core need of the customer and incorporates benefits deriving from the product, associated
service, convenience, company image, brand image even organization-customer relationships
(Monroe, 1990; Gale, 1994). The perceived costs which is referred to as perceived sacrifice
looks at the total cost monetary and non-monetary value associated with the product for
instance, time and energy involved in purchase, use and dispose of product, information
regarding the product and its uncertainties that increases the customer perceived risk when
purchasing (Butz and Goodstein, 1996; Carothers and Adams, 1991; Gronroos, 1997; Kotler,
1996, Naumannm 1995; Treacy and Wiersema, 1995; Zeithaml, 1998).



3.1.2.3 Customer Loyalty
When increasing loyalty, CS aids in securing future revenues, reduces marketing costs
through customer retention, decreases price elasticities and minimises the likelihood
customers will defect if quality falters (Anderson, Fornell and Rust, 1997). However, it is
important to note that customers who describe themselves as satisfied are not necessarily
loyal (Reicheld, 1994). Represented in figure 2 the pay off from higher-levels of CS lays in
higher level of customer loyalty as the consumer perceives the brand offers the right product
features, image, or levels of quality at the right price (Solomon et al. 2006). Customer loyalty
can aid consumers to identify specific products and their function, enabling buyers to
purchase items that will satisfy their needs and reduce the time required to purchase the
product reducing the buyers perceived risk (Dibb et al., 2006).

Strategies had been pursued by firms to deliver mere satisfaction as it had been thought that
this impacted bottom line profitability by increasing loyalty. Jones and Sasser (1995) found
satisfaction and loyalty are not directly correlated and in order to achieve loyalty
organisations need to completely satisfy their customers. This ideology which emphasised
high levels of satisfaction as a fundamental component of loyalty it had not been the only one
(Oliver, 1999; Fredericks, 2001; Coyles and Gokey, 2002) as ultimate loyalty is a
combination of perceived product superiority, personal fortitude, social bonding and their
synergistic effects (Jones and Sasser, 1995).

Figure 2 - The value - satisfaction - loyalty relationship


Reference: Montinho, L. and Southern, G. (2010) Strategic Marketing Management: A Business Process
Approach. Hampshire: Cengage-Learning



Nonetheless loyalty have two aspects consisting of behavioural and attitudinal with its
importance in positive disconfirmation of expectations post-purchase so as to encourage
future repeat purchase patterns supplemented with the consequences of multi-dimensional
cognitive attitudes towards a brand which can lead to brand switching and future intentions
for high relational customers (Back and Parks, 2003; Garbarino and Johnson, 1999). The
often neglected attitudinal measures of trust and commitment (Dick & Basu, 1994; Jacoby &
Chestnut, 1978; Kahn & Meyer, 1991; Louis and Lombart, 2010; Vlachlos et al., 2010) are
components of the attitudinal typology are also central determinants that aid in reducing
consumer perceived risks whether it be related to uncertainty of an outcome or negative
consequences associated with the outcome (Dalgado-Ballester and Munuera-Aleman, 2001
Marzler et al., 2008; Morgan and Hunt, 1994). Whereby trust of keeping the promise which
the firm has to fulfil to increase consumer confidence and a betrayal of the trust would lead to
defection. Commitment can also strengthen a relationship implying a high level of obligation
to make the relationship succeed and is useful for predicting future purchase frequency,
measuring the likelihood of customer loyalty (Ndubisi, 2007).

Four factors of a) trust, b) commitment, c) communication, and d) conflict handling or
sharing of secrets is described by Ndubisi (2007) as the underpinnings of relationship
marketing that can predict customer loyalty despite the study being applied to the banking
sector however, a hindrance of any of the four factors would lead to defection and weakening
of the firm-customer relationship. Communication provided in a timely and trustworthy
information during pre-selling, selling, consuming and post-consuming while communicating
proactively if a problem occurs. Handling conflict to avoid potential conflicts and solving
them as soon as problems arise as Ndubisi (2007) found a significant relationship between
conflict handling and customer loyalty, indirectly through trust and perceived relationship
quality.