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Dual Emphasis and the Long-Term Financial Impact of Customer Satisfaction

Published on Oct 1, 2005in Marketing Science2.49
· DOI :10.1287/mksc.1050.0142
Vikas Mittal36
Estimated H-index: 36
(University of Pittsburgh),
Eugene W. Anderson21
Estimated H-index: 21
(UM: University of Michigan)
+ 1 AuthorsPandu R. Tadikamalla20
Estimated H-index: 20
(University of Pittsburgh)
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Abstract
This paper draws on the quality profitability emphasis framework of Rust, Moorman, and Dickson (2002) (Rust, Roland T., Christine Moorman, Peter R. Dickson. 2002. Getting returns from service quality: Revenue expansion, cost reduction, or both. J. Marketing66(October) 7-24.) to examine the association between customer satisfaction and long-term financial performance among firms that achieve a dual emphasis (focusing on both revenue-expansion and cost-reduction simultaneously, rather than solely emphasizing one over the other). Using a longitudinal data set of 77 firms from the United States, we test this hypothesis and find that the association between customer satisfaction and long-term financial performance is positive and relatively stronger for firms that successfully achieve a dual emphasis. We build on the work of Rust, Moorman, and Dickson (2002), who investigated the financial impact of engaging in the process of achieving a dual emphasis. Collectively, these studies show that while achieving a dual emphasis is desirable for long-run financial success, the process of achieving a dual emphasis may not be as financially rewarding in the short run. Firms pursuing a dual emphasis need to consider both short- and long-term consequences of their strategy.
  • References (54)
  • Citations (229)
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References54
Newest
Published on Jan 21, 2015
David P. Norton80
Estimated H-index: 80
Various surveys over the past two decades indicate that 60–80% of organizations fall far short of the targets expressed in their strategic plans. Keywords: Balanced Scorecard
Published on Oct 1, 2006in Journal of Business Research4.03
Roland T. Rust55
Estimated H-index: 55
(UMD: University of Maryland, College Park),
Francine Espinoza2
Estimated H-index: 2
(UMD: University of Maryland, College Park)
Abstract Technology has a profound impact on business research, and especially on marketing, because (1) technology changes the way marketing managers do their job, (2) these changes lead to major changes in the topics that are important to study, and (3) technology provides new ways of doing research. The most important result of technological advance is the increasing impact of information technology, resulting in the growing importance of service and relationships in the economy. Future advan...
Published on Jan 1, 2006
Christian M. Ringle44
Estimated H-index: 44
(TUHH: Hamburg University of Technology)
Partial least squares-based path modeling with latent variables is a methodology that allows to estimate complex cause-effect relationships using empirical data. The assumption that the data is collected from a single homogeneous population is often unrealistic. Identification of different groups of consumers in connection with estimates in the inner path model constitutes a critical issue for applying the path modeling methodology to form effective marketing strategies. Sequential clustering st...
Published on Oct 1, 2004in Journal of Marketing7.82
Eugene W. Anderson21
Estimated H-index: 21
,
Claes Fornell38
Estimated H-index: 38
(UM: University of Michigan),
Sanal K. Mazvancheryl1
Estimated H-index: 1
(Georgetown University)
Abstract In this article, the authors develop a theoretical framework that specifies how customer satisfaction affects future customer behavior and, in turn, the level, timing, and risk of future cash flows. Empirically, they find a positive association between customer satisfaction and shareholder value. They also find significant variation in the association across industries and firms.
Published on May 1, 2004in Statistica Neerlandica0.43
Cora J. M. Maas22
Estimated H-index: 22
(UU: Utrecht University),
Joop J. Hox45
Estimated H-index: 45
(UU: Utrecht University)
A multilevel problem concerns a population with a hierarchical structure. A sample from such a population can be described as a multistage sample. First, a sample of higher level units is drawn (e.g. schools or organizations), and next a sample of the sub-units from the available units (e.g. pupils in schools or employees in organizations). In such samples, the individual observations are in general not completely independent. Multilevel analysis software accounts for this dependence and in rece...
Published on Jan 1, 2004in Marketing Science2.49
J. Miguel Villas-Boas23
Estimated H-index: 23
(University of California, Berkeley)
In several markets, consumers can gain further information regarding how well a product fits their preferences only by experiencing it after purchase. This could then generate loyalty for the products tried first. This paper considers a model in which consumers learn in the first period about the product they buy and then make choices in the second period about the competing products, given what they learned in the first period. The paper finds that if the distribution of valuations for each pro...
Published on Nov 1, 2003in Marketing Science2.49
Peter J. Danaher32
Estimated H-index: 32
(University of Auckland),
Isaac W. Wilson1
Estimated H-index: 1
(Wellington Management Company),
Robert Davis12
Estimated H-index: 12
(University of Auckland)
In this study we compare consumer brand loyalty in online and traditional shopping environments for over 100 brands in 19 grocery product categories. The online purchase data come from a large traditional grocery retailer that also operates an online store for its products. The offline data corresponds to the exact same brands and categories bought in traditional stores by a panel of homes operated by ACNielsen for purchases made in the same city and over the same time period. We compare the obs...
Published on Nov 1, 2003in Marketing Science2.49
Ran Kivetz19
Estimated H-index: 19
(Columbia University)
People often need to trade off between the probability and magnitude of the rewards that they could earn for investing effort. The present paper proposes that the conjunction of two simple assumptions relating effort-induced reward expectations to prospect theory's value function provides a parsimonious theory that predicts that the nature of the required effort will have a systematic effect on such trade-offs. Using the case of frequency or loyalty programs, a series of five studies involving b...
Published on Aug 1, 2003in Journal of Marketing Research4.20
Rebecca J. Slotegraaf11
Estimated H-index: 11
(IU: Indiana University Bloomington),
Christine Moorman31
Estimated H-index: 31
(Duke University),
J. Jeffrey Inman34
Estimated H-index: 34
(University of Pittsburgh)
Abstract Researchers in marketing tend to adopt one of two approaches to examining competitive advantage: a focus on a firm’s resources or a focus on a firm’s strategic or tactical actions. The authors suggest that neither of these approaches by itself fully captures the drivers of competitive advantage. Focusing on marketing-specific actions referred to as market deployment, the authors investigate the roles of both resources and action by examining how the nature and level of a firm’s resource...
Published on Mar 27, 2003
Judith D. Singer31
Estimated H-index: 31
(Harvard University),
John B. Willett47
Estimated H-index: 47
(Harvard University)
PART I 1. A framework for investigating change over time 2. Exploring Longitudinal Data on Change 3. Introducing the multilevel model for change 4. Doing data analysis with the multilevel mode for change 5. Treating TIME more flexibly 6. Modelling discontinuous and nonlinear change 7. Examining the multilevel model's error covariance structure 8. Modelling change using covariance structure analysis PART II 9. A Framework for Investigating Event Occurrence 10. Describing discrete-time event occur...
Cited By229
Newest
Published on Aug 19, 2019in Tourism and Hospitality Research
Vo Thi Ngoc Thuy (VNUHCM: Vietnam National University, Ho Chi Minh City), Ho Huy Tuu8
Estimated H-index: 8
(Nha Trang University)
+ 1 AuthorsHoang Doan Phuong Thao (VNUHCM: Vietnam National University, Ho Chi Minh City)
This study extends SERVQUAL and ECOSERV models to include interaction and experience attributes in an ecotourism context and to identify how ecotourism service attributes can affect Vietnamese ecot...
Published on Apr 22, 2019in Journal of Marketing Research4.20
Martin Mende8
Estimated H-index: 8
,
Maura L. Scott9
Estimated H-index: 9
+ 2 AuthorsIlana Shanks1
Estimated H-index: 1
Interactions between consumers and humanoid service robots (HSRs; i.e., robots with a human-like morphology such as a face, arms, and legs) will soon be part of routine marketplace experiences. It ...
Ming-Hui Huang (NTU: National Taiwan University), Michael Trusov10
Estimated H-index: 10
(UMD: University of Maryland, College Park)
Abstract Customer satisfaction contributes to firm financial performance, but does it contribute to top executives' pay? Our empirical evidence shows that it may not. Customer-satisfying executives tend to have lower pay than their productive peers, even if both satisfaction and productivity contribute to firm financial performance. Thus, customer satisfaction is underappreciated, which may result in both less societal welfare and worse company performance. We propose a board myopia mechanism to...
Published on Jun 17, 2019
Vo Thi Ngoc Thuy (VNUHCM: Vietnam National University, Ho Chi Minh City), Hoang Doan Phuong Thao (VNUHCM: Vietnam National University, Ho Chi Minh City)
Purpose The purpose of this paper is to identify and classify ecotourism service elements according to their instrumentality to customer satisfaction. Design/methodology/approach Drawing on the ECOSERV model, the authors conduct further qualitative and quantitative research to find additional dimensions of service quality. Kano’s model and Customer Satisfaction Index are then employed with a sample of 324 ecotourists to categorize these service quality elements. Findings A new scale of ecotouris...
Published on Jun 7, 2019
Munywoki Lilian Mumbua (Kenya Methodist University), Maore Stephen (Kenya Methodist University), Murithi Simon (Kenya Methodist University)
Understanding the role of branding on customer preference in the soft drink industry is important in brand management, not only for protecting brand image for genuine products, particularly in the wake of rising counterfeit products in the soft drinks industry, but also for maintaining customer preference hence superior performance in the volatile industry. Yet literature, both international and in the Kenyan context lacks in exploring this relationship, which is the problem motivating the prese...
Published on Jun 1, 2019in Service Business2.29
Chanho Song (CSUSB: California State University, San Bernardino), Sungha Jang (KSU: Kansas State University)+ 1 AuthorsEdward L. Nowlin3
Estimated H-index: 3
(KSU: Kansas State University)
Research demonstrates a tradeoff between service quantity and service quality that creates a tension for firms who wish to incentivize both aspects of service performance. We propose a category of speed-intensive services in which prompt responsiveness is the primary driver of service quality. In these firms, service quantity and quality should exhibit a positive interrelationship. Daily data on service quantity and quality performance were collected for 24 months, for a total of 1414 observatio...
Published on Apr 1, 2019in International Journal of Bank Marketing
Jaewon Yoo6
Estimated H-index: 6
(Soongsil University),
Yeonsung Jung (DU: Dankook University)
Purpose The purpose of this paper is to test the effects of the service orientation on bank-employee behaviors; to empirically examine the moderating role of the productivity orientation in an effort to explain when and why the simultaneous pursuit of the service orientation and the productivity orientation negatively affect the financial service employee psychological empowerment; and to explore any contextual factors that can suppress or facilitate the bank–employee behaviors. Design/methodolo...
Published on Apr 1, 2019in International Journal of Bank Marketing
Anastasia Golovkova (SPbU: Saint Petersburg State University), Jan Eklöf9
Estimated H-index: 9
+ 1 AuthorsOlga Podkorytova1
Estimated H-index: 1
(European University)
Purpose The purpose of this paper is to examine the relationship between customer satisfaction measured as Extended Performance Satisfaction Index (EPSI) and the financial performance of the banking sector for seven European countries over the period 2004–2014. Design/methodology/approach Using panel models, this study finds a significant positive influence of EPSI on banking financial performance at the country level. Findings Findings suggest that the value of the customer satisfaction index i...
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